(In thousands) September 30, 2018 December 31, 2017
Raw materials and precious metals $ 5,362
$ 6,333
Finished goods 19,911
13,594
Parts and supplies 31,632
34,170
Total inventories $ 56,905
$ 54,097
September 30, 2019 | 10

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~(Continued)~~

(unaudited)

~~(5) Property, Plant~~Effect of Initial Adoption of New Lease Standard - January 1, 2019

ROU Assets. Upon initial recognition, our ROU assets for operating and ~~Equipment~~finance leases were comprised of the following:



(in thousands)	January 1, 2019 (initial recognition)
Railcar leases	$	14,255
Real Estate and other leases	18
Total ROU assets	$	14,273

Lease Liabilities. Upon initial recognition, our lease liabilities for operating and finance leases were comprised of the following:



(in thousands)	January 1, 2019 (initial recognition)
Current liabilities:
Operating leases	$	3,462
Long-term liabilities:
Operating leases	10,811
Total lease liabilities	$	14,273

Balance Sheet Summary for the Period Ended September 30, 2019

The following tables summarize the ROU asset and lease liability balances for the Partnership’s operating and finance leases at September 30, 2019:

(In thousands) September 30, 2018 December 31, 2017
Land and improvements $ 13,092
$ 13,092
Buildings and improvements 16,707
16,990
Machinery and equipment 1,362,014
1,352,573
Other 31,411
28,101
1,423,224
1,410,756
Less: Accumulated depreciation 393,822
341,230
Total property, plant and equipment, net $ 1,029,402
$ 1,069,526



(in thousands)	September 30, 2019
Operating Leases:
ROU asset, net
Railcars	$	11,454
Real estate and other	2,396
Lease liability
Railcars	$	11,666

Financing Leases:
ROU asset, net
Real estate and other	$	226
Lease liability
Real estate and other	$	229

~~Capitalized interest recognized as a reduction in interest expense was $0.1 million and $0.0 million for the three months ended~~

September 30, ~~2018 and 2017, respectively. Capitalized interest recognized as a reduction in interest expense was $0.5 million and $0.2 million for the nine months ended September 30, 2018 and 2017, respectively.~~

~~(6) Accrued Expenses and Other Current Liabilities~~

~~Accrued expenses and other current liabilities were as follows:~~

2019 | 11

(In thousands) September 30, 2018 December 31, 2017
Deferred revenue $ 31,611
$ 12,895
Share-based compensation 3,077
3,928
Personnel accruals 6,520
7,533
Accrued interest 17,635
2,683
Other accrued expenses and liabilities 5,172
5,538
Total accrued expenses and other current liabilities $ 64,015
$ 32,577

Accrued expenses and other current liabilities include amounts owed by the Partnership to CVR Energy under the shared services agreement and affiliate balances of $3.8 million and $4.7 million at September 30, 2018 and December 31, 2017, respectively. Refer to Note 12 ("Related Party Transactions") for additional discussion.

~~(7) Debt~~

Debt Balance, Net of Current Maturities and Unamortized Discount and Issuance Costs
(In thousands) September 30, 2018 December 31, 2017
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 (a) 647,240
647,240
Less:
Unamortized discount and debt issuance costs 19,048
21,336
Total long-term debt, net of current portion $ 628,192
$ 625,904

Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~(Continued)~~

(unaudited)

Lease Expense Summary for the Three and Nine months ended September 30, 2019

We recognize lease expense on a straight-line basis over the lease term. For the three and nine months ended September 30, 2019, we recognized lease expense comprised of the following components:



(in thousands)	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease expense	$	1,023	$	3,069
Financing lease expense:
Amortization of ROU asset	$	25	$	297
Interest expense on lease liability	2		17

Short-term lease expense, recognized within direct operating expenses, was $0.2 million and $0.3 million for the three and nine months ended September 30, 2019, respectively.

Lease Terms and Discount Rates

The following outlines the remaining lease terms and discount rates used in the measurement of the Partnership’s ROU assets and liabilities:



	September 30, 2019		January 1, 2019 (initial recognition)
Weighted-average remaining lease term (years)
Operating Leases	3.7		4.3
Finance Leases	2.5		0.5
Weighted-average discount rate
Operating Leases	5.1	%	5.1	%
Finance Leases	3.9	%	8.0	%

Maturities of Lease Liabilities

The following summarizes the remaining minimum lease payments through maturity of the Partnership’s ROU assets and liabilities at September 30, 2019:



(in thousands)	Operating Leases			Financing Leases
Remainder of 2019	$	1,023		$	27
2020	3,602			107
2021	3,430			107
2022	2,990			—
2023	1,133			—
Thereafter	648			—
Total lease payments	12,826			241
Less: imputed interest	(1,160		)	(12		)
Total lease liability	$	11,666		$	229

September 30, 2019 | 12

Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(7) Other Current Liabilities

Other current liabilities consisted of the following:



(in thousands)	September 30, 2019		December 31, 2018
Accrued interest	$	17,470	$	2,516
Personnel accruals	7,099		7,993
Share-based compensation	4,959		2,667
Operating lease liabilities	3,220		—
Sales incentives	613		1,727
Prepaid revenue contracts	459		5,863
Other accrued expenses and liabilities	2,867		3,300
Total other current liabilities	$	36,687	$	24,066

Other current liabilities include amounts accrued by the Partnership and owed to CVR Energy and its affiliates of $4.7 million and $3.5 million at September 30, 2019 and December 31, 2018, respectively. See Note 13 (“Related Party Transactions”) for additional discussion.

(8) Long-Term Debt

Long-term debt consists of the following:



(in thousands)	September 30, 2019			December 31, 2018
9.25% Senior Secured Notes, due 2023 (1)	$	645,000		$	645,000
6.50% Notes, due 2021	2,240			2,240
Unamortized discount and debt issuance costs	(15,720		)	(18,251		)
Total long-term debt	$	631,520		$	628,989


~~(a)~~(1)	The estimated fair value of ~~total~~ long-term debt outstanding was approximately ~~$683.7~~$672.4 million and ~~$694.2~~$670.8 million as of September 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively.

Credit Facility

Credit Facilities Outstanding
(In thousands) Total Capacity Amount Borrowed as of September 30, 2018 Outstanding Letters of Credit Available Capacity as of September 30, 2018 Maturity Date
Asset based credit facility (b) $ 50,000
$ —
$ —
$ 50,000
�� September 30, 2021



(in thousands)	Total Capacity		Amount Borrowed as of September 30, 2019		Outstanding Letters of Credit		Available Capacity as of September 30, 2019		Maturity Date
Asset Based (“AB”) Credit Facility (2)	$	47,517	$	—	$	—	$	47,517	September 30, 2021


~~(b)~~(2)	At the option of the borrowers, loans under the ~~asset based credit facility~~AB 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.

Covenant Compliance

The Partnership is in compliance with all covenants of the ~~asset based credit facility~~AB Credit Facility, the 9.25% Senior Secured Notes, and the ~~9.250% senior secured notes and 6.500% notes~~6.50% Notes as of September 30, ~~2018.~~2019.

September 30, 2019 | 13

~~(8) Supplemental Cash Flow Information~~

~~Cash flows related to interest and construction in process were as follows:~~

Nine Months Ended September 30,
(In thousands) 2018 2017
Supplemental disclosures:
Cash paid for interest $ 30,244
$ 30,123
Non-cash investing and financing activities:
Construction in process additions included in accounts payable 1,920
608
Change in accounts payable related to construction in process additions 1,032
(3,263 )

~~(9) Commitments and Contingencies~~

There have been no material changes in the Partnership’s commitments and contingencies disclosed in the 2017 Form 10-K. In the ordinary course of business, the Partnership may become party to lawsuits, administrative proceedings and governmental investigations, including environmental, regulatory and other matters. The outcome of these matters cannot always be predicted accurately, but the Partnership accrues liabilities for these matters if the Partnership has determined that it is probable a loss has been incurred and the loss can be reasonably estimated. While it is not possible to predict the outcome of such proceedings, if one or more of them were decided against us, the Partnership believes there would be no material impact on its consolidated financial statements.

In 2018, the Partnership submitted a business interruption claim for losses under its insurance policies, related to damage and resulting reduced equipment production rates experienced during the second half of 2017 and early 2018. At this time, the Partnership cannot estimate either the outcome of this claim or the timing of any potential recoveries.

In September 2018, the Kansas Court of Appeals upheld property tax determinations by the Kansas Board of Tax Appeals in connection with the Partnership’s dispute with Montgomery County, Kansas over prior year property tax payments as previously disclosed. The Partnership continues to monitor this matter.

Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~(Continued)~~

(unaudited)

~~(10)~~(9) Revenue

The following table presents the Partnership’s revenue, disaggregated by major product:



	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2019		2018		2019		2018
Ammonia	$	11,110	$	11,391	$	74,416	$	51,361
UAN	61,970		52,681		199,576		156,838
Urea products	4,575		4,987		14,251		14,834
Net sales, exclusive of freight and other	77,655		69,059		288,243		223,033
Freight revenue	8,752		8,805		23,909		23,908
Other revenue	2,175		2,045		5,963		6,024
Net sales	$	88,582	$	79,909	$	318,115	$	252,965

(In thousands) Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018
Ammonia $ 11,391
$ 51,361
UAN 52,681
156,838
Urea products 4,987
14,834
Fertilizer sales, exclusive of freight 69,059
223,033
Freight revenue 8,805
23,908
Other revenue 2,045
6,024
Total net sales $ 79,909
$ 252,965

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 for freight is included in ~~cost~~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.

The Partnership has an immaterial amount of fee-based revenue, included in other revenue in the table above, that is recognized based on the net amount of the proceeds received.

Transaction price allocated to remaining performance obligations

As of September 30, ~~2018,~~2019, the Partnership had approximately ~~$11.9~~$7.3 million of remaining performance obligations for contracts with an original expected duration of more than one year. The Partnership expects to recognize approximately ~~51%~~20% of these performance obligations as revenue by the end of 2019, an additional ~~25% by~~40% in 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

~~Table of Contents~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(unaudited)~~

product to the customer. An associated receivable is recorded for uncollected prepaid contract amounts. Contracts

September 30, 2019 | 14

Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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. At September 30, 2019, $0.4 million of the deferred revenue balance pertained to prepaid contracts where the associated receivable was recognized as it had not yet been collected by the Partnership.

A summary of the deferred revenue activity ~~during~~for the nine months ended September 30, ~~2018~~2019 is presented below:



(in thousands)
Balance at December 31, 2018	$	68,804
Add:
New prepay contracts entered into during the period (1)	24,121
Less:
Revenue recognized that was included in the contract liability balance at the beginning of the period	67,823
Revenue recognized related to contracts entered into during the period	8,174
Other changes	480
Balance at September 30, 2019	$	16,448

(In thousands) Nine Months Ended September 30, 2018
Balance at January 1, 2018 $ 34,270
Add:
New prepay contracts entered into during the period 35,665
Less:
Revenue recognized that was included in the contract liability balance at the beginning of the period 33,761
Revenue recognized related to contracts entered into during the period 4,321
Other changes 242
Balance at September 30, 2018 $ 31,611

(1) Includes $23.7 million where payment associated with prepaid contracts was collected.

~~(11)~~(10) Share-Based Compensation

A summary of compensation expense ~~during~~for the three and nine months ended September 30, ~~2018~~2019 and ~~2017~~2018 is presented below:



	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2019		2018		2019		2018
Phantom Units	$	544	$	710	$	2,089	$	1,663
Other Awards (1)	208		486		881		1,032
Total share-based compensation expense	$	752	$	1,196	$	2,970	$	2,695


(1)	Other awards include the allocation of compensation expense for certain employees of CVR Energy and certain of its subsidiaries who perform services for the Partnership under the services agreement with CVR Energy and the Limited Partnership Agreement, respectively, and participate in equity compensation plans of CVR Partners’ affiliates.

(11) Commitments and Contingencies

Except as noted below, there have been no material changes in the Partnership’s commitments and contingencies disclosed in the 2018 Form 10-K. In the ordinary course of business, the Partnership may become party to lawsuits, administrative proceedings, and governmental investigations, including environmental, regulatory, and other matters. The outcome of these matters cannot always be predicted accurately, but the Partnership accrues liabilities for these matters if the Partnership has determined that it is probable a loss has been incurred and the loss can be reasonably estimated. While it is not possible to predict the outcome of such proceedings, if one or more of them were decided against us, the Partnership believes there would be no material impact on its consolidated financial statements.

Litigation

In 2008, Coffeyville Resources Nitrogen Fertilizer LLC (“CRNF”), a subsidiary of CVR Partners LP, protested the reclassification and reassessment by Montgomery County, Kansas (the “County”) of CRNF’s nitrogen fertilizer plant following expiration of its ten year property tax abatement that expired on December 31, 2007, which reclassification and reassessment resulted in an increase in CRNF’s annual property tax expense in excess of $10 million per year for the 2008 through 2012 tax years. Despite its protest, CRNF fully accrued and paid these property taxes. In February 2013, the County and CRNF agreed to a settlement for tax years 2009 through 2012 which resulted in decreased property taxes through 2017, leaving 2008 in dispute. In 2013, the Kansas Court of Appeals overturned an adverse ruling of the Kansas Board of Tax Appeals (“BOTA”) and instructed BOTA to classify each CRNF asset on an asset-by-asset basis. In March 2015, BOTA concluded its classification and determined a substantial majority of CRNF’s assets in dispute were personal property for the 2008 tax year. In September 2018, the Kansas

Three Months Ended September 30, Nine Months Ended September 30,
(In thousands) 2018 2017 2018 2017
Phantom Units $ 710
$ 268
$ 1,663
$ 684
Other Awards (a) 486
367
1,032
1,064
Total Share-Based Compensation Expense $ 1,196
$ 635
$ 2,695
$ 1,748
September 30, 2019 | 15

Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Court of Appeals upheld BOTA’s property tax determinations in CRNF’s favor. In October 2018, the County petitioned the Kansas Supreme Court to review the Court of Appeals determination. Subsequent briefs were filed by CRNF and the County. In April 2019, CRNF and the County executed an agreement under which the County agreed to withdraw its petition to the Kansas Supreme Court and CRNF is expected to recover $7.9 million through favorable property tax assessments from 2019 through 2028, subject to the terms of the settlement agreement.

(12) Supplemental Cash Flow Information

Cash flows related to interest, leases, and capital expenditures included in accounts payable are as follows:



	Nine Months Ended September 30,
(in thousands)	2019		2018
Supplemental disclosures:
Cash paid for interest	$	30,102	$	30,244
Cash paid for amounts included in the measurement of lease liabilities (1):
Operating cash flows from operating leases	3,069
Operating cash flows from finance leases	17
Financing cash flows from finance leases	297
Non-cash investing activities:
Change in capital expenditures included in accounts payable	2,087		734

~~(a)~~(1)

~~Other awards include~~The lease standard was adopted on January 1, 2019 on a prospective basis. Therefore only 2019 disclosures are applicable to be included within the allocation of compensation expense for certain employees of CVR Energy who perform services for the Partnership under the services agreement with CVR Energy and participate in equity compensation plans of CVR Partners’ affiliates.table above.

~~Table of Contents~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(unaudited)~~

~~(12)~~(13) Related Party Transactions

Activity associated with the Partnership’s related party arrangements for the three and nine ~~month periods~~months ended September 30, ~~2018~~2019 and ~~2017~~2018 is summarized ~~below:~~below.

Sales to related parties

Expenses from related parties
Three Months Ended September 30, Nine Months Ended September 30,
(In thousands) Related Party 2018 2017 2018 2017
Cost of materials and other
Coke Supply Agreement CRRM (a) $ 1,057
$ 586
$ 2,133
$ 1,566
Hydrogen Purchase and Sale Agreement CRRM 1,072
933
3,157
3,042
Railcar Lease Agreements ARI (b) 361
236
1,082
683

Direct operating expenses (exclusive of depreciation and amortization)
Services Agreement CVR Energy $ 761
$ 766
$ 2,145
$ 2,158
Limited Partnership Agreement CVR GP 242
127
572
428

Selling, general and administrative expenses
Services Agreement CVR Energy $ 3,595
$ 3,239
$ 10,353
$ 9,398
Limited Partnership Agreement CVR GP 626
677
1,920
2,001



		Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	Related Party	2019		2018		2019		2018
Net Sales
Feedstock and Shared Services Agreement	CRRM (1)	$	113	$	—	$	115	$	292

September 30, 2019 | 16

Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Expenses from related parties



		Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	Related Party	2019		2018		2019		2018
Cost of materials and other
Coke Supply Agreement	CRRM (1)	$	705	$	1,057	$	3,255	$	2,133
Hydrogen Purchase and Sale Agreement	CRRM (1)	984		1,072		3,719		3,157

Direct operating expenses (exclusive of depreciation and amortization)
Services Agreement	CVR Energy	$	797	$	761	$	2,586	$	2,145
Limited Partnership Agreement	CVR GP	219		242		595		572

Selling, general and administrative expenses
Services Agreement	CVR Energy	$	3,915	$	3,595	$	11,724	$	10,353
Limited Partnership Agreement	CVR GP	651		626		2,191		1,920

Amounts due to related parties



(in thousands)	Related Party	September 30, 2019		December 31, 2018
Prepaid expenses and other current assets
Feedstock and Shared Services Agreement	CRRM (1)	$	128	$	—

Accounts payable to affiliates
Feedstock and Shared Services Agreement	CRRM (1)	$	681	$	1,106
Hydrogen Purchase and Sale Agreement and other	CRRM (1)	348		324
Coke Supply Agreement	CRRM (1)	132		138
Services Agreement	CVR GP	970		1,372

Other current liabilities
Limited Partnership Agreement	CVR GP	$	1,697	$	1,179
Services Agreement	CVR Energy	3,009		2,352

Other long-term liabilities
Limited Partnership Agreement	CVR Energy	$	530	$	503


~~(a)~~(1)	Coffeyville Resources Refining & Marketing, LLC, aan indirect, wholly-owned subsidiary of CVR ~~Refining~~Energy



~~(b)~~	~~ARI Leasing, LLC, a company controlled by IEP~~

Amounts due to related parties

(In thousands) Related Party September 30, 2018 December 31, 2017
Accounts payable
Feedstock and Shared Services Agreement CRRM $ 747
$ 1,020
Hydrogen Purchase and Sale Agreement CRRM 313
324
Limited Partnership Agreement:

CVR GP 955
771

Accrued expenses and other current liabilities
Limited Partnership Agreement CVR GP $ 1,346
$ 1,521
Services Agreement CVR Energy 2,497
3,221
September 30, 2019 | 17

Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Distributions to CVR Partners’ Unitholders

The following table presents distributions paid by the Partnership to CVR Partners’ unitholders, including amounts paid to CVR Energy, as of September 30, 2019.



				Dividends Paid (in thousands)
Related Period	Date Paid	Dividend Per Common Unit		Unitholders		CVR Energy		Total
2018 - 4th Quarter	March 11, 2019	$	0.12	$	8,924	$	4,670	$	13,594
2019 - 1st Quarter	May 13, 2019	0.07		5,205		2,724		7,929
2019 - 2nd Quarter	August 12, 2019	0.14		10,411		5,449		15,860
Total		$	0.33	$	24,540	$	12,843	$	37,383

For the third quarter of 2019, the Partnership, upon approval by the Board of Directors of CVR Partners’ general partner on October 22, 2019, declared a distribution of $0.07 per common unit, or $7.9 million, which is payable November 12, 2019 to unitholders of record as of November 4, 2019. Of this amount, CVR Energy will receive approximately $2.7 million, with the remaining amount payable to public unitholders.

Distributions, if any, including the payment, amount and timing thereof, are subject to change at the discretion of the Board of Directors of CVR Partners’ general partner.

September 30, 2019 | 18

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition andResults of Operations

The following discussion and analysis of our financial condition, results of operations, and cash flows should be read in conjunction with the unaudited condensed consolidated financial statements and related notes and with the statistical information and financial data appearing in this Report, as well as our Annual Report on Form 10-K for the year ended December 31, ~~2017~~2018 filed with the Securities and Exchange Commission (“SEC”) on February 21, 2019 (the ~~“2017~~“2018 Form 10-K”). Results of operations for the three and nine months ended September 30, ~~2018~~2019 and cash flows for the nine months ended September 30, ~~2018~~2019 are not necessarily indicative of results to be attained for any other period. ~~Refer to the section entitled “Forward-Looking~~See “Important Information Regarding Forward Looking Statements” ~~below.~~.

Partnership Overview

CVR Partners, LP (“CVR ~~Partners,”~~Partners” or the ~~“Partnership,” “we,” “us” or “our”~~“Partnership”) is a Delaware limited partnership formed in 2011 by CVR Energy, Inc. (“CVR Energy”) to own, operate, and grow our nitrogen fertilizer business. We produce and distribute nitrogen fertilizer products, which are used by farmers to improve the yield and quality of their crops. The Partnership produces these products at two manufacturing facilities, which are located in Coffeyville, Kansas and East Dubuque, Illinois. Our principal products are ammonia and urea ammonium nitrate (“UAN”). Ammonia is a direct application fertilizer and is primarily used as a building block for other nitrogen products for industrial applications and finished fertilizer products. UAN is an aqueous solution of urea and ammonium nitrate. All of our products are sold on a wholesale basis. ~~We produce our nitrogen fertilizer products at two manufacturing facilities, which are located in Coffeyville, Kansas (the “Coffeyville Facility”)~~References to CVR Partners, the Partnership, “we”, “us”, and ~~East Dubuque, Illinois (the “East Dubuque Facility”).~~

~~Our Coffeyville Facility includes a 1,300 ton-per-day capacity ammonia unit, a 3,000 ton-per-day capacity UAN unit, and a gasifier complex having a capacity~~“our” may refer to consolidated subsidiaries of ~~89 million standard cubic feet per day of hydrogen. Our gasifier is a dual-train facility, with each gasifier able to function independently~~CVR Partners or one or both of the ~~other, thereby providing redundancy and improving our reliability. Strategically located adjacent~~facilities, as the context may require. Additionally, as the context may require, references to a refinery owned by CVR Refining, LP (“CVR Refining”) in Coffeyville, Kansas, our Coffeyville Facility is the only operation in North America that utilizes a petroleum coke, or pet coke, gasification process to produce nitrogen fertilizer.

Our East Dubuque Facility includes a 1,075 ton-per-day capacity ammonia unit and a 1,100 ton-per-day capacity UAN unit. The facility is located on a bluff above the Mississippi River, with access to the river for loading certain products. The East Dubuque Facility uses natural gas as its primary feedstock. The East Dubuque Facility has the flexibility to significantly vary its product mix. This enables us to upgrade our ammonia production into varying amounts of UAN, nitric acid and liquid and granulated urea each season, depending on market demand, pricing and storage availability. Product sales are heavily weighted toward sales of ammonia and UAN.

CVR Energy may refer to CVR Energy and its consolidated subsidiaries which ~~indirectly owns CVR GP, LLC (our “general partner”)~~include its petroleum refining, marketing, and ~~approximately 34% of our outstanding common units, also indirectly owns approximately 81% of the outstanding common units of CVR Refining at September 30, 2018.~~

logistics operations.

~~Major Influences~~Strategy and Goals

Mission and Core Values

Our mission is to be a top tier North American nitrogen-based fertilizer company as measured by safe and reliable operations, superior performance and profitable growth. The foundation of how we operate is built on ~~Results~~five core values:


•	Safety - We always put safety first. The protection of our employees, contractors and communities is paramount. We have an unwavering commitment to safety above all else. If it’s not safe, then we don’t do it.


•	Environment - We care for our environment. Complying with all regulations and minimizing any environmental impact from our operations is essential. We understand our obligation to the environment and that it’s our duty to protect it.


•	Integrity - We require high business ethics. We comply with the law and practice sound corporate governance. We only conduct business one way—the right way with integrity.


•	Corporate Citizenship - We are proud members of the communities where we operate. We are good neighbors and know that it’s a privilege we can’t take for granted. We seek to make a positive economic and social impact through our financial donations and the contributions of time, knowledge and talent of our employees to the places where we live and work.


•	Continuous Improvement - We believe in both individual and team success. We foster accountability under a performance-driven culture that supports creative thinking, teamwork and personal development so that employees can realize their maximum potential. We use defined work practices for consistency, efficiency and to create value across the organization.

Our core values are driven by our people, inform the way we do business each and every day and enhance our ability to accomplish our mission and related strategic objectives.

Strategic Objectives

We have outlined the following strategic objectives to drive the accomplishment of ~~Operations~~our mission:

Safety - We aim to achieve continuous improvement in all environmental, health and safety areas through ensuring our people’s commitment to environmental, health and safety comes first, the refinement of existing policies, continuous training, and enhanced monitoring procedures.

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Reliability - Our goal is to achieve industry-leading utilization rates at both of our facilities through safe and reliable operations. We are focusing on improvements in day-to-day plant operations, identifying alternative sources for plant inputs to reduce lost time due to third-party operational constraints, and optimizing our commercial and marketing functions to maintain plant operations at their highest level.

Market Capture - We continuously evaluate opportunities to improve the facilities’ realized pricing at the gate and reduce variable costs incurred in production to maximize our capture of market opportunities.

Financial Discipline - We strive to be efficient as possible by maintaining low operating costs and disciplined deployment of capital.

Achievements

During 2019, we successfully executed a number of achievements in support of our strategic objectives shown below through the date of this filing:



	Safety	Reliability	Market Capture	Financial Discipline
Safely completed the East Dubuque turnaround	ü
Maintained high asset reliability and utilization at both facilities through the third quarter of 2019	ü	ü		ü
Achieved monthly record ammonia volumes at the East Dubuque nitrogen fertilizer facility for April 2019			ü
Generated positive cash available for distribution for three consecutive quarters in 2019		ü	ü	ü
Declared cash distributions of 40 cents per unit in 2019				ü

Industry Factors and Market Conditions

Within the nitrogen fertilizer business, earnings and cash flows from operations are primarily affected by the relationship between nitrogen fertilizer product prices, ~~on-stream factors~~utilization, and operating costs and ~~expenses.~~expenses, including petroleum coke and natural gas feedstock costs.

The price at which ~~our~~nitrogen fertilizer products are ultimately sold depends on numerous factors, including the global supply and demand for nitrogen fertilizer products which, in turn, depends on, among other factors, world grain demand and production levels, changes in world population, the cost and availability of fertilizer transportation infrastructure, weather conditions, the availability of imports, and the extent of government intervention in agriculture markets.

Nitrogen fertilizer prices are also affected by local factors, including local market conditions, weather patterns, and the operating levels of competing facilities. An expansion or upgrade of competitors’ facilities, new facility development, political and economic developments, and other factors are likely to continue to play an important role in nitrogen fertilizer industry economics. These factors can impact, among other things, the level of inventories in the market, resulting in price volatility and a reduction in product margins. Moreover, the industry typically experiences seasonal fluctuations in demand for nitrogen fertilizer products.

~~Consistent, safe~~2019 Market Conditions

While there is risk of shorter-term volatility given the inherent nature of the commodity cycle, the Partnership believes the longer-term fundamentals for the U.S. nitrogen fertilizer industry remain intact. The Partnership views the anticipated combination of (i) increasing global population, (ii) decreasing arable land per capita, (iii) continued evolution to more protein-based diets in developing countries, (iv) sustained use of corn as feedstock for the domestic production of ethanol, and ~~reliable operations are critical to our financial performance and results of operations. In addition, operations~~(v) positioning at the ~~Linde air separation unit, which supplies oxygen,~~lower end of the global cost curve should continue to provide a solid foundation for nitrogen fertilizer producers in the U.S. over the longer term.

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During 2019, weather impacted the business by causing delays in the planting conditions. Increased amounts of rain led to ineffective planting of corn and ~~compressed dry air to our Coffeyville Facility, is critical to our financial performance~~soybean crops, resulting in an anticipated lower yield per planted acre in 2019. Furthermore, the severe flooding in Kansas and results of operations. Downtime at either of our facilities or at the Linde facility may result in lost margin opportunity, increased maintenance expense and a temporary increase in working capital investment and related inventory position. Unplanned downtime at the East Dubuque Facility during the periods presented included a reformer repairOklahoma curtailed UAN rail shipments in the second ~~quarter~~quarter. Despite these conditions, there was still strong demand for nitrogen due to the catchup from the poor fall application and late start to spring. The late planting season extended well into July and fertilizer consumption brought customer inventories to very low levels by the end of ~~2018 and a boiler feed water coil leak~~the season, creating strong demand for fertilizer in the first quarter of 2018. Unplanned downtime at the Coffeyville Facility during the periods presented included gasifier repairs during the second quarter of 2018 and UAN unit downtime during the second quarter of 2017.third quarter.

The table below shows relevant market indicators by month through September 30, 2019:

~~Table of Contents~~


(1)	Information used in the charts was obtained from various third-party sources, including Pace Petroleum Coke Quarterly, Green Markets (a Bloomberg Company) and the U.S. Energy Information Administration.

Historically, our facilities have each undergone a full facility turnaround approximately every two to three years. The Coffeyville Facility underwent a full facility turnaround in the second quarter of 2018, and the East Dubuque Facility underwent a full facility turnaround during the third quarter of 2017. See Note 2 ("Basis of Presentation") to Part I, Item 1 of this Report for further information.

Our largest raw material expense used in the production of ammonia at our East Dubuque Facility is natural gas, which we purchase from third parties. Pet coke is required to operate the Coffeyville Facility. We purchase the majority of our pet coke from CVR Refining, typically at a discount when compared to pet coke purchased from third parties. The price and availability of natural gas and pet coke can significantly impact our profitability.

Non-GAAP Measures

Our management uses certain non-GAAP performance measures, and reconciliations to those measures, to evaluate current and past performance and prospects for the future to supplement our GAAP financial information presented in accordance with U.S. GAAP. These non-GAAP financial measures are important factors in assessing our operating results and ~~profitability.~~

~~We use~~profitability and include the ~~following~~ performance and liquidity ~~measures:~~measures defined below.

The following are non-GAAP measures presented for the period ended September 30, 2019:

EBITDA~~. EBITDA is defined as net loss~~ - Net income (loss) before (i) interest ~~(income)~~ expense, net, (ii) income tax expense (benefit) and (iii) depreciation and amortization expense.

Adjusted EBITDA. - EBITDA adjusted to exclude turnaround expenses and other significant, nonrecurring items which management believes are material to an investor’s understanding of the Partnership’s underlying operating results.

Reconciliation of Net Cash Provided By Operating Activities to EBITDA - Net cash provided by operating activities reduced by (i) interest expense, net, (ii) income tax expense (benefit), (iii) change in working capital, and (iv) other non-cash adjustments.

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Available Cash for Distribution - Adjusted EBITDA ~~is defined as EBITDA further adjusted~~reduced for the impact of (i) major scheduled turnaround expenses, (ii) gain or loss on extinguishment of debt and (iii) business interruption insurance recovery, when applicable. Adjusted EBITDA represents the starting point usedcash reserves established by the board of directors of our general partner ~~when calculating our available cash for distribution.~~

~~Available cash for distribution.~~ ~~This performance and liquidity measure is equal to 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;~~expenditures, (iii) turnaround expenses and, ~~(iii)~~ to the extent applicable, ~~major scheduled turnaround expenses and~~(iv) reserves for future operating or capital needs that the board of directors of ~~the~~our general partner deems necessary or appropriate, if ~~any.~~any, in its sole discretion. Available cash for distribution ~~(if any)~~ may be increased by the release of previously established cash reserves, if any, and other excess cash, at the discretion of the board of directors of our general ~~partner,~~partner.

Factors Affecting Comparability of Our Financial Results

Our historical results of operations for the periods presented may not be comparable with prior periods or to our results of operations in the future for the reason discussed below.

Major Scheduled Turnaround Activities

On September 14, 2019, the East Dubuque facility began a major scheduled turnaround and ~~available cash is increased by~~ the ~~business interruption insurance proceeds when applicable.~~ammonia and UAN units were down for approximately 17 days during the quarter. This turnaround was completed in October. Overall, quarterly results were negatively impacted due to the lost production during the downtime that resulted in lost sales and certain reduced variable expenses included in Cost of materials and other and Direct operating expenses (exclusive of depreciation and amortization). Exclusive of the impacts due to the lost production during the turnaround downtime, costs of approximately $6.8 million and $7.0 million are included in Direct operating expenses (exclusive of depreciation and amortization) in the Consolidated Statements of Operations for the three and nine months ended September 30, 2019, respectively.

~~Table of Contents~~

Results of Operations

Three Months Ended September 30, Nine Months Ended September 30,
(In thousands) 2018 2017 2018 2017
Consolidated Statements of Operations Data:
Net sales $ 79,909
$ 69,393
$ 252,965
$ 252,610

Cost of materials and other 19,590
19,495
61,198
63,373
Direct operating expenses (exclusive of depreciation and amortization) 35,334
40,249
121,468
113,941
Depreciation and amortization 16,035
19,483
52,866
54,877
Cost of sales 70,959
79,227
235,532
232,191
Selling, general and administrative expenses 6,393
6,083
18,955
18,750
Loss on asset disposals 28
19
160
58
Operating income (loss) 2,529
(15,936 ) (1,682 ) 1,611
Interest expense, net (15,693 ) (15,723 ) (47,080 ) (47,111 )
Other income, net 30
22
100
81
Loss before income tax (13,134 ) (31,637 ) (48,662 ) (45,419 )
Income tax expense (benefit) 12
(35 ) (6 ) (36 )
Net loss $ (13,146 ) $ (31,602 ) $ (48,656 ) $ (45,383 )

EBITDA (1) $ 18,594
$ 3,569
$ 51,284
$ 56,569
Adjusted EBITDA (1) $ 18,594
$ 5,005
$ 57,689
$ 58,094
Available cash for distribution (1) $ (130 ) $ (1,252 ) $ (4,274 ) $ 557

Reconciliation to net sales:
Fertilizer sales, exclusive of freight $ 69,059
$ 59,422
$ 223,033
$ 223,002
Freight in revenue 8,805
8,313
23,908
23,638
Other 2,045
1,658
6,024
5,970
Total net sales $ 79,909
$ 69,393
$ 252,965
$ 252,610

~~(1) See “Non-GAAP Reconciliations” section below for further information regarding this non-GAAP financial measure.~~

~~Table of Contents~~

The following ~~table shows selected~~sections should be read in conjunction with the information ~~about~~outlined in Part I, Item 2 and the financial statements and related notes thereto in Part I, Item 1 of this Report.

Key Operating Data

Utilization - The following charts summarize our ammonia utilization rates on a consolidated basis and at each of our facilities. Utilization is an important measure used by management to assess operational output at each of the Partnership’s facilities. Utilization is calculated as actual tons produced divided by capacity adjusted for planned turnarounds.

We present our utilization on a two-year rolling average to take into account the impact of our planned and unplanned outages on any specific period. We believe the two-year rolling average is a more useful presentation of the long-term utilization performance of our plants.

We present utilization solely on ammonia production rather than each nitrogen product as it provides a comparative baseline against industry peers and eliminates the disparity of plant configurations for upgrade of ammonia into other nitrogen products. With our efforts being primarily focused on ammonia upgrade capabilities, we believe this measure provides a meaningful view of how well we operate.

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Consolidated Ammonia Utilization - The consolidated ammonia utilization decreased 2% to 93% for the two years ended September 30, 2019 compared to the two years ended September 30, 2018. This decrease was primarily a result of ammonia storage capacity constraints at the East Dubuque facility in the first quarter of 2019 due to inclement weather impacting customers’ ability to apply ammonia.

Sales and Pricing per Ton - Two of our key operating ~~statistics~~metrics are total sales for ammonia and ~~market indicators~~UAN along with the product pricing per ton realized at the gate. Product pricing at the gate represents net sales less freight revenue divided by product sales volume in tons and is shown in order to provide a pricing measure that is comparable across the fertilizer industry.

Operating Highlights (three months ended September 30, 2019 versus September 30, 2018)

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Operating Highlights (nine months ended September 30, 2019 versus September 30, 2018)

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Production Volumes -Gross tons produced for ~~our business:~~

ammonia represent the total ammonia produced, including ammonia produced, that was upgraded into other fertilizer products. Net tons available for sale represent the ammonia available for sale that was not upgraded into other fertilizer products.

Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 2018 2017
Key Operating Statistics:
Consolidated sales (thousand tons):
Ammonia 38
65
156
202
UAN 310
299
925
952
Consolidated product pricing at gate (dollars per ton) (1):
Ammonia $ 297
$ 214
$ 329
$ 287
UAN $ 170
$ 138
$ 169
$ 158
Consolidated production volume (thousand tons):
Ammonia (gross produced) (2) 212
181
584
615
Ammonia (net available for sale) (2) 63
46
187
204
UAN 338
307
919
962
Feedstock:
Petroleum coke used in production (thousand tons) 117
114
325
371
Petroleum coke used in production (dollars per ton) $ 26
$ 18
$ 23
$ 18
Natural gas used in production (thousands of MMBtu) (3)(4) 2,118
1,555
5,933
5,781
Natural gas used in production (dollars per MMBtu) (3)(4) $ 3.03
$ 3.12
$ 3.01
$ 3.25
Natural gas in cost of materials and other (thousands of MMBtu) (3) 1,439
1,935
5,268
5,898
Natural gas in cost of materials and other (dollars per MMBtu) (3) $ 2.98
$ 3.15
$ 3.03
$ 3.30
Coffeyville Facility on-stream factors (4):
Gasification 100 % 96 % 91 % 98 %
Ammonia 100 % 94 % 90 % 97 %
UAN 97 % 94 % 88 % 93 %
East Dubuque Facility on-stream factors (4):
Ammonia 99 % 76 % 93 % 92 %
UAN 98 % 77 % 93 % 92 %

Market Indicators:
Ammonia - Southern plains (dollars per ton) $ 337
$ 238
$ 354
$ 314
Ammonia - Corn belt (dollars per ton) $ 398
$ 303
$ 407
$ 364
UAN - Corn belt (dollars per ton) $ 203
$ 165
$ 208
$ 192
Natural gas - NYMEX (dollars per MMBtu) $ 2.87
$ 2.95
$ 2.85
$ 3.05



	Three Months Ended September 30,		Nine Months Ended September 30,
(in thousands of tons)	2019	2018	2019	2018
Ammonia (gross produced)	196	212	586	584
Ammonia (net available for sale)	56	63	168	187
UAN	318	338	969	919



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Petroleum coke used in production (thousand tons)	137		117		404		325
Petroleum coke (dollars per ton)	$	37.75	$	25.65	$	36.68	$	22.89
Natural gas used in production (thousands of MMBtu) (1)	1,700		2,118		5,210		5,933
Natural gas used in production (dollars per MMBtu) (1)	$	2.40	$	3.03	$	2.88	$	3.01
Natural gas in cost of materials and other (thousands of MMBtu) (1)	1,294		1,439		5,487		5,268
Natural gas in cost of materials and other (dollars per MMBtu) (1)	$	2.46	$	2.98	$	3.22	$	3.03


(1)	Product pricing at gate (also referred to as “netback”) represents net sales less freight revenue divided by product sales volume in tons and is shown in order to provide a pricing measure that is comparable across the fertilizer industry.


~~(2)~~	Gross tons produced for ammonia represent total ammonia produced, including ammonia produced that was upgraded into other fertilizer products. Net tons available for sale represent ammonia available for sale that was not upgraded into other fertilizer products.


~~(3)~~	The feedstock natural gas shown above does not include natural gas used for fuel. The cost of fuel natural gas is included in direct operating ~~expenses~~expense (exclusive of depreciation and amortization).

Financial Highlights (three months ended September 30, 2019 versus September 30, 2018)

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Financial Highlights (nine months ended September 30, 2019 versus September 30, 2018)


~~(4)~~(1)	~~On-stream factor is~~See “Non-GAAP Reconciliations” section below for reconciliations of the ~~total number of hours operated divided by the total number of hours in the reporting period and is included as a measure of operating efficiency.~~non-GAAP measures shown above.

~~Coffeyville Facility~~

Excluding the impact of the full facility turnaround at the Coffeyville Facility, the on-stream factors at the Coffeyville Facility would have been 96% for gasification, 96% for ammonia and 94% for UAN for the nine months ended September 30, 2018.

The Linde air separation unit experienced a shut down during the second quarter of 2017. Following the Linde outage, the Coffeyville Facility UAN unit experienced a number of operational challenges, resulting in approximately 11 days of UAN downtime during the second quarter of 2017. Excluding the impact of the Linde air separation unit outage at the Coffeyville Facility, the UAN unit on-stream factors at the Coffeyville Facility would have been 97% for the nine months ended September 30, 2017.

~~East Dubuque Facility~~

Excluding the impact of approximately 14 days of downtime associated with the 2017 full facility turnaround at the East Dubuque Facility, the on-stream factors at the East Dubuque Facility would have been 91% for ammonia and 92% for UAN for the three months ended September 30, 2017 and 97% for ammonia and 96% for UAN for the nine months ended September 30, 2017.

Three Months Ended September 30, ~~2018~~2019 Compared to the Three Months Ended September 30, ~~2017~~2018

Net Sales.Net sales ~~were $79.9~~increased by $8.7 million to $88.6 million for the three months ended September 30, ~~2018~~2019compared to ~~$69.4 million for~~ the three months ended September 30, ~~2017. For the three months ended September 30, 2018, UAN~~2018. This increase was primarily due to favorable pricing and ~~ammonia made up $60.8~~volume conditions which contributed $5.5 million and ~~$12.0~~$3.5 million, ~~of our consolidated net sales,~~ respectively, ~~including freight. For~~in higher revenues in the ~~three months ended September 30, 2017, UAN and ammonia made up $48.8 million and $14.9 million of our consolidated net sales, respectively, including freight.~~current period as compared to 2018.

The following table demonstrates the impact of changes in sales volumes and pricing for the primary components of net sales, excluding freight, for the three months ended September 30, ~~2018~~2019 as compared to the three months ended September 30, ~~2017:~~2018:


(In thousands)	Price Variance		Volume Variance
(in thousands)						Price Variance		Volume Variance
UAN	$	10,229	$	1,835		$	4,188	$	5,100
Ammonia	$	3,292	$	(6,131	)	$	1,321	$	(1,602	)

The increase in UAN and ammonia sales ~~prices~~pricing for the three months ended September 30, ~~2018~~2019 as compared to the three months ended September 30, ~~2017~~2018 was primarily attributable to ~~favorable market conditions. The decrease~~inclement weather throughout the region in ~~ammonia~~the first quarter of 2019, delaying the crop cycle and also continuing nitrogen demand during the three months ended September 30, 2019. As a result of the aforementioned delay in the crop cycle, UAN sales volumes increased for the three months ended September 30, ~~2018~~2019 as compared to the three months ended September 30, 2017 was primarily attributable to less inventory available for sale at the beginning of the third quarter of 2018 as compared to the same quarter in the prior year. There was more inventory available for sale at the beginning of the third quarter in 2017 due to relatively bad weather conditions which drove a lower application of ammonia in 2017 in addition to an outage at the Coffeyville Facility in the second quarter of 2017.2018.

Cost of ~~Materials~~materials and ~~Other.~~ other. Cost of materials and other for the three months ended September 30, 2019 was ~~consistent at~~$21.6 million compared to $19.6 ~~million and $19.5~~ million for the three months ended September 30, ~~2018~~2018. The $2.0 million increase was comprised of a $2.1 million increase in pet coke costs at our Coffeyville facility, a $0.6 million increase in freight costs representing additional shipments made to our off-premise storage facilities, and a $1.5 million increase due to a draw in inventory resulting from increased demand. These amounts were partially offset by favorable natural gas pricing at our East Dubuque facility, contributing $2.3 million for the three months ended September 30, ~~2017, respectively.~~2019.

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Direct ~~Operating Expenses (Exclusive~~operating expenses (exclusive of ~~Depreciation~~depreciation and ~~Amortization)~~amortization).Direct operating expenses (exclusive of depreciation and amortization) for the three months ended September 30, ~~2018~~2019were ~~$35.3~~$47.6 million as compared to ~~$40.2~~$35.3 million for the three months ended September 30, ~~2017.~~2018. The ~~$4.9 million decrease~~increase was primarily due to ~~the third quarter 2017~~ turnaround costs at the East Dubuque ~~Facility, which resulted in turnaround expenses~~facility of ~~$2.5~~$6.8 million coupled with ~~decreases~~an inventory draw contributing $3.8 million due to increased sales in ~~repairs and maintenance costs and personnel costs as a result~~the third quarter of ~~turnaround activities.~~2019.

Nine Months Ended September 30, ~~2018~~2019 Compared to the Nine Months Ended September 30, ~~2017~~2018

Net Sales.Net sales ~~were $253.0~~increased by $65.2 million to $318.1 million for the nine months ended September 30, ~~2018~~2019 compared to ~~$252.6 million for~~ the nine months ended September 30, ~~2017. For the nine months ended September 30, 2018, UAN~~2018. This increase wasprimarily due to favorable pricing and ~~ammonia made up $178.5~~volume conditions which contributed $51.0 million and ~~$53.5~~$14.7 million, ~~of our consolidated net sales,~~ respectively, ~~including freight. For~~in higher revenues in the ~~nine months ended September 30, 2017, UAN and ammonia made up $171.7 million and $60.2 million of our consolidated net sales, respectively, including freight.~~current period as compared to 2018.

~~Table of Contents~~

The following table demonstrates the impact of changes in sales volumes and pricing for the primary components of net sales, excluding freight, for the nine months ended September 30, ~~2018~~2019 as compared to the nine months ended September 30, ~~2017:~~2018:


(In thousands)	Price Variance		Volume Variance
(in thousands)						Price Variance		Volume Variance
UAN	$	12,029	$	(4,725	)	$	35,499	$	7,234
Ammonia	$	6,865	$	(13,687	)	$	15,546	$	7,509

The ~~decrease~~increase in UAN and ammonia sales pricing for the nine months ended September 30, 2019 as compared to the nine months ended September 30, 2018 was primarily attributable to a shift in the timing of demand from the fourth quarter of 2018 to the second quarter of 2019, as customers delayed receipt of nitrogen products due to continued inclement weather. As a result, customer demand for ammonia increased in the second quarter of 2019 as customers attempted to make up for the missed application. In addition, the aforementioned ammonia application coupled with freezing temperatures and flooding throughout the Midwest and Southern Plains in the current period shifted the demand for ammonia, resulting in increased sales volumes for the nine months ended September 30, ~~2018~~2019 compared to the nine months ended September 30, ~~2017 was primarily attributable to lower production resulting from planned and unplanned downtime during the nine months ended September 30,~~ 2018. The decrease in ammonia sales volumes for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 was also attributable to less product available from lower inventory as of December 31, 2017 due to a strong Fall 2017 application as compared to December 31, 2016 and downtime for the nine months ended September 30, 2018. The increase in UAN and ammonia sales prices for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 was primarily attributable to more favorable market conditions in the current quarter.

Cost of ~~Materials~~materials and ~~Other.~~ other. Cost of materials and other for the nine months ended September 30, ~~2018~~2019 was ~~$61.2~~$71.3 million, compared to ~~$63.4~~$61.2 million for the nine months ended September 30, ~~2017.~~2018. The ~~$2.2~~$10.1 million ~~decrease~~increase was comprised primarily ~~due to an overall decrease~~of a $6.3 million increase in pet coke costs ~~from lower sales volumes as well~~at our Coffeyville facility, coupled with a draw in ammonia inventories as a ~~$1.0 million decrease in distribution costs to offsite inventory locations.~~result of increased sales contributing $4.5 million.

Direct Operating Expenses ~~(Exclusive~~(exclusive of ~~Depreciation~~depreciation and ~~Amortization)~~amortization).Direct operating expenses (exclusive of depreciation and amortization) for the nine months ended September 30, ~~2018~~2019were ~~$121.5~~$128.0 million as compared to ~~$113.9~~$121.5 million for the nine months ended September 30, ~~2017.~~2018. The ~~$7.6~~$6.5 million increase was primarily due to ~~an increase in turnaround expenses of $3.8~~spare part inventory write-offs totaling $1.3 million, ~~higher~~increased personnel costs of ~~$2.4~~$1.9 million, ~~attributable~~and an inventory draw contributing $3.3 million due to ~~higher workloads along with inventory overhead allocations during downtime, higher repair and maintenance costs~~increased sales in the second quarter of $1.6 million resulting from outages during the 2018 period and $1.1 million in business interruption recovery received during the 2017 period. Additionally, we experienced lower utility costs of $1.8 million primarily associated with the 2018 downtime and lower natural gas prices.2019.

Non-GAAP Reconciliations

~~Our management uses certain non-GAAP performance measures~~Reconciliation of Net Loss to evaluate past performance and prospects for the future to supplement our GAAP financial information presented in accordance with U.S. GAAP. These financial non-GAAP measures are important factors in assessing our operating results and profitability.

~~A reconciliation of consolidated net loss to consolidated~~ EBITDA and ~~consolidated~~ Adjusted EBITDA ~~is as follows:~~


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2018			2017			2018			2017
(in thousands)													2019			2018			2019			2018
Net loss	$	(13,146	)	$	(31,602	)	$	(48,656	)	$	(45,383	)	$	(22,976	)	$	(13,146	)	$	(10,087	)	$	(48,656	)
Add:
Interest expense, net	15,693			15,723			47,080			47,111			15,621			15,693			46,870			47,080
Income tax expense (benefit)	12			(35		)	(6		)	(36		)	12			12			(88		)	(6		)
Depreciation and amortization	16,035			19,483			52,866			54,877			18,418			16,035			60,032			52,866
EBITDA	$	18,594		$	3,569		$	51,284		$	56,569		$	11,075		$	18,594		$	96,727		$	51,284
Add:
Major scheduled turnaround expenses	$	—		$	2,497		$	6,405		$	2,586
Less:
Insurance recovery - business interruption	—			(1,061		)	—			(1,061		)
Turnaround expenses													6,805			—			6,956			6,405
Adjusted EBITDA	$	18,594		$	5,005		$	57,689		$	58,094		$	17,880		$	18,594		$	103,683		$	57,689

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~~A reconciliation~~Reconciliation of ~~consolidated available cash for distribution is as follows:~~Net Cash Provided By Operating Activities to EBITDA

Three Months Ended September 30, Nine Months Ended September 30,
(in thousands, except per unit data) 2018 2017 2018 2017
Adjusted EBITDA $ 18,594
$ 5,005
$ 57,689
$ 58,094
Adjustments:
Net cash interest expense (excluding capitalized interest) and debt service (14,873 ) (14,967 ) (44,664 ) (44,882 )
Maintenance capital expenditures (4,526 ) (2,716 ) (10,894 ) (11,130 )
Major scheduled turnaround expenses —
(2,497 ) (6,405 ) (2,586 )
Add:
Insurance recovery - business interruption —
1,061
—
1,061
Release of previously established cash reserves, net 675
12,862
—
—
Available cash for distribution $ (130 ) $ (1,252 ) $ (4,274 ) $ 557
Distribution declared, per common unit $ —
$ —
$ —
$ 0.02
Common units outstanding 113,283
113,283
113,283
113,283



	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2019			2018			2019			2018
Net cash provided by operating activities	$	33,991		$	39,588		$	68,672		$	27,118
Add:
Interest expense, net	15,621			15,693			46,870			47,080
Income tax expense (benefit)	12			12			(88		)	(6		)
Change in assets and liabilities	(34,649		)	(34,615		)	(10,501		)	(17,573		)
Other non-cash adjustments	(3,900		)	(2,084		)	(8,226		)	(5,335		)
EBITDA	$	11,075		$	18,594		$	96,727		$	51,284

Reconciliation of Adjusted EBITDA to Available Cash for Distribution



	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2019			2018			2019			2018
Adjusted EBITDA	$	17,880		$	18,594		$	103,683		$	57,689
Current reserves for amounts related to:
Debt service	(14,833		)	(14,873		)	(44,525		)	(44,664		)
Maintenance capital expenditures	(6,594		)	(4,526		)	(11,409		)	(10,894		)
Turnaround expenses	(6,805		)	—			(6,956		)	(6,405		)
Other:
Future cash reserves	—			—			(28,000		)	—
Release of previously established cash reserves	18,399			675			18,399			—
Available Cash for distribution (1) (2)	$	8,047		$	(130	)	$	31,192		$	(4,274	)

Common units outstanding	113,283			113,283			113,283			113,283


(1)	Amount represents the cumulative Available Cash based on quarter-to-date and year-to-date results, respectively. Available Cash for distribution is calculated quarterly, with distributions (if any) being paid in the following period.


(2)	The Partnership declared and paid cash distributions totaling $0.21 per common unit related to the first two quarters of 2019 for a total of $23.8 million.

Liquidity and Capital Resources

Our principal source of liquidity has historically been cash from operations, which can include cash advances from customers resulting from ~~forward sales.~~prepay contracts. Our principal uses of cash are for working capital, capital expenditures, funding our debt service obligations, and paying distributions to our unitholders, as further discussed below.

We believe that our cash from operations and existing cash and cash equivalents, along with borrowings, as necessary, under ~~our asset based credit facility~~the AB Credit Facility, will be sufficient to satisfy anticipated cash ~~commitments~~requirements associated with our existing operations for at least the next 12 months. However, our future capital expenditures and other cash requirements could be higher than we currently expect as a result of various factors. Additionally, our ability to generate sufficient cash from our operating activities and secure additional financing depends on our future performance, which is subject to general economic, political, financial, competitive, and other factors, ~~outside~~some of which may be beyond our control.

Depending on the needs of our ~~control.~~business, contractual limitations, and market conditions, we may from time to time seek to issue equity securities, incur additional debt, issue debt securities, or otherwise refinance our existing debt. There can be no assurance that we will seek to do any of the foregoing or that we will be able to do any of the foregoing on terms acceptable to us or at all.

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There have been no material changes in liquidity ~~from our 2017 10-K.~~for the three months ended September 30, 2019. The Partnership was in compliance with all covenants under its debt instruments as of September 30, ~~2018.~~2019.

Cash and Other Liquidity

As of September 30, ~~2018,~~2019, we had cash and cash equivalents of ~~$61.4~~$83.7 million, including ~~$24.8~~$16.0 million from customer ~~advances and $50.0~~advances. Combined with $47.5 million available under our ~~asset based credit facility for~~AB Credit Facility less $25.0 million in cash included in our borrowing base, we had total liquidity of ~~$86.4 million.~~$106.2 million as of September 30, 2019.



Debt, including current maturities	September 30, 2019			December 31, 2018
(in thousands)	September 30, 2019			December 31, 2018
9.25% Senior Notes due 2023	$	645,000		$	645,000
6.50% Senior Notes due 2021	2,240			2,240
Unamortized discount and debt issuance costs	(15,720		)	(18,251		)
Total debt	$	631,520		$	628,989

AB Credit Facility - The Partnership has an AB Credit Facility, the proceeds of which may be used to fund working capital, capital expenditures and for other general corporate purposes. The AB Credit Facility is a senior secured asset-based revolving credit facility with an aggregate principal amount of availability of up to $50 million with an incremental facility, which permits an increase in borrowings of up to $25 million in the aggregate subject to additional lender commitments and certain other conditions. The AB Credit Facility matures in September 2021.

2023 Notes - CVR Partners issued $645 million aggregate principal amount of 9.25% Senior Secured Notes due 2023 (the “2023 Notes”) in 2016. The 2023 Notes are guaranteed on a senior secured basis by all of the Partnership’s existing subsidiaries. On or after June 15, 2019, we may on any one or more occasions, redeem all or part of the 2023 Notes at the redemption prices set forth below expressed as a percentage of the principal amount of the 2023 Notes plus accrued and unpaid interest to the applicable redemption date.



12-month period beginning June 15,	Percentage
2019	104.625%
2020	102.313%
2021 and thereafter	100.000%

Upon the occurrence of certain change of control events as defined in the 2023 Indenture (including the sale of all or substantially all of the properties or assets of the Partnership and its subsidiaries taken as a whole), each holder of the 2023 Notes will have the right to require that the Partnership repurchase all or a portion of such holder’s 2023 Notes in cash at a purchase price equal to 101% of the aggregate principal amount thereof plus any accrued and unpaid interest to the date of repurchase.

Capital Spending

We divide ~~our~~ capital spending needs into two categories: maintenance and growth. Maintenance capital spending includes ~~only~~ non-discretionary maintenance projects and projects required to comply with environmental, health, and safety regulations. ~~We also treat maintenance capital spending as a reduction of cash available for distribution to unitholders.~~ Growth capital projects generally involve an expansion of existing capacity ~~improvement in product yields~~ and/or a reduction in direct operating expenses. We undertake growth capital spending based on the expected return on incremental capital employed. Our total capital expenditures for the nine months ended September 30, ~~2018 were approximately $15.0 million, including $10.9 million of maintenance capital spending~~2019 and ~~the remainder~~our estimated expenditures for ~~growth capital projects.~~

2019 are as follows:



	Nine Months Ended September 30,		Estimated full year
(in thousands)	2019		2019
Maintenance capital	$	10,763	$ 18,000 - 20,000
Growth capital	811		2,000 - 5,000
Total capital expenditures	$	11,574	$ 20,000 - 25,000

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Capital spending for our business has been and will be determined by the Board of Directors of our general partner. Our estimated maintenance and growth capital expenditures are expected to be approximately $17.0 to $20.0 million and $3.0 to $5.0 million, respectively, for the year ending December 31, 2018. Our estimated capital expenditures are subject to change due to unanticipated changes in the cost, scope and completion time for ~~our~~ capital projects. For example, we may experience unexpected changes in labor or equipment costs necessary to comply with government regulations or to complete projects that sustain or improve the profitability of the refineries or nitrogen fertilizer plants. We may also accelerate or defer some capital expenditures from time to time. Capital spending is determined by the board of directors of the Partnership’s general partner.

On September 14, 2019, the East Dubuque facility began a major scheduled turnaround, which was completed in October. We have incurred $7.0 million in the nine months ended September 30, 2019 related to this turnaround and estimate total costs of approximately $9.3 million, with the remaining costs to be incurred in the fourth quarter of 2019.

Distributions to Unitholders

The current policy of the board of directors of the Partnership’s general partner is to distribute all Available Cash the Partnership generated on a quarterly basis. Available Cash for each quarter will be determined by the board of directors of the Partnership’s general partner following the end of such quarter. Available Cash for each quarter is calculated as Adjusted EBITDA reduced for cash needed for (i) debt service, (ii) maintenance capital expenditures, (iii) turnaround expenses, and, to the extent applicable, (iv) reserves for future operating or capital needs that the board of directors of our ~~facilities.~~general partner deems necessary or appropriate, if any, in its sole discretion. Available Cash for distribution may be increased by the release of previously established cash reserves, if any, and other excess cash, at the discretion of the board of directors of our general partner.

The following table presents distributions paid by the Partnership to CVR Partners’ unitholders, including amounts paid to CVR Energy, as of September 30, 2019.



				Dividends Paid (in thousands)
Related Period	Date Paid	Dividend Per Common Unit		Unitholders		CVR Energy		Total
2018 - 4th Quarter	March 11, 2019	$	0.12	$	8,924	$	4,670	$	13,594
2019 - 1st Quarter	May 13, 2019	0.07		5,205		2,724		7,929
2019 - 2nd Quarter	August 12, 2019	0.14		10,411		5,449		15,860
Total		$	0.33	$	24,540	$	12,843	$	37,383

Distributions, if any, including the payment, amount and timing thereof, are subject to change at the discretion of the board of directors of CVR Partners’ general partner.

Cash Flows

The following table sets forth our cash flows for the periods indicated below:


	Nine Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2018			2017
(in thousands)							2019			2018			Change
Net cash flow provided by (used in):
Operating activities	$	27,118		$	28,104		$	68,672		$	27,118		$	41,554
Investing activities	(14,850		)	(11,456		)	(9,398		)	(14,850		)	5,452
Financing activities	—			(2,266		)	(37,383		)	—			(37,383		)
Net increase in cash and cash equivalents	$	12,268		$	14,382		$	21,891		$	12,268		$	9,623

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Cash Flows Provided by Operating Activities

~~Net~~The change in net cash flows ~~provided by~~from operating activities for the nine months ended September 30, 2018 were approximately $27.1 million compared to net cash provided by operating activities of $28.1 million for the nine months ended September 30, 2017. Net cash flows from our operating activities decreased from the nine months ended September 30, 20172019 as compared to the nine months ended September 30, 2018 is primarily due to ~~decreased~~improved operating results leading to a net ~~income offset by changes~~loss of $10.1 million in ~~working capital.~~2019 compared to a net loss of $48.7 million in 2018.

Cash Flows Used in Investing Activities

~~Net~~The change in net cash used in investing activities for the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018, was ~~$14.9 million compared~~primarily due to ~~$11.5 million~~decreased capital expenditures during 2019 of $5.5 million.

Cash Flows Used in Financing Activities

The change in net cash used in financing activities for the nine months ended September 30, ~~2017, and the increase between these periods was due~~2019 compared to ~~increased capital expenditures in 2018.~~

~~Cash Flows Used in Financing Activities~~

~~Net cash used in financing activities was $0.0 million for~~ the nine months ended September 30, 2018 ~~compared to $2.3~~was the result of cash distributions totaling $37.4 million ~~for~~paid during the nine months ended September 30, ~~2017 and the decrease between these periods was the result of quarterly cash~~2019, compared to no distributions paid ~~in 2017 with none being paid in~~during 2018.

~~Table of Contents~~

Off-Balance Sheet Arrangements

~~Forward-Looking Statements~~

~~This Report, including this Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains “forward-looking statements”~~We do not have any “off-balance sheet arrangements” as such term is defined bywithin the ~~SEC, including statements concerning contemplated transactions and strategic plans, expectations and objectives for future operations. Forward-looking statements include, without limitation:~~

~~statements, other than statements of historical fact, that address activities, events or developments that we expect, believe or anticipate will or may occur in the future;~~

~~statements relating to future financial or operational performance, future distributions, future capital sources and capital expenditures; and~~

any other statements preceded by, followed by or that include the words “anticipates,” “believes,” “expects,” “plans,” “intends,” “estimates,” “projects,” “could,” “should,” “may” or similar expressions.

Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this Report, including this Management’s Discussion and Analysis of Financial Condition and Results of Operations, are reasonable, we give no assurance that such plans, intentions or expectations will be achieved. These statements are based on assumptions made by us based on our experience and perception of historical trends, current conditions, expected future developments and other factors that we believe are appropriate in the circumstances. Such statements are subject to a number of risks and uncertainties, many of which are beyond our control. You are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements as a result of various factors, including but not limited to those set forth under the section captioned “Risk Factors” in the 2017 Form 10-K, filed with the SEC on February 23, 2018. Such factors include, among others:

~~our ability to make cash distributions on the common units;~~

~~the volatile nature of our business and the variable nature of our distributions;~~

~~the ability of our general partner to modify or revoke our distribution policy at any time;~~

~~the cyclical nature of our business;~~

~~the seasonal nature of our business;~~

~~the dependence of our operations on a few third-party suppliers, including providers of transportation services and equipment;~~

~~our reliance on pet coke that we purchase from CVR Refining;~~

~~our reliance on the natural gas, electricity, oxygen, nitrogen and compressed dry air that we purchase from third parties;~~

~~the supply and price levels of essential raw materials;~~

~~the risk of a material decline in production at our nitrogen fertilizer plants;~~

~~accidents or other unscheduled shutdowns or distributions affecting our facilities, machinery, or equipment, or those of our suppliers or customers;~~

~~potential operating hazards from accidents, fire, severe weather, tornadoes, floods or other natural disasters;~~

~~our ability to obtain or renew permits to operating our business.;~~

~~competition in the nitrogen fertilizer businesses;~~

~~Table of Contents~~

~~capital expenditures and potential liabilities arising from environmental laws and regulations;~~

~~existing and proposed laws, rulings~~rules and regulations ~~including but not limited to those relating to climate change, alternative energy or fuel sources, and the end-use and application of fertilizers;~~

~~new regulations concerning the transportation of hazardous chemicals, risks of terrorism, the security of chemical manufacturing facilities and other matters beyond our control;~~

~~the risk of security breaches;~~

~~our lack of asset diversification;~~

~~our dependence on significant customers and the creditworthiness and performance by counterparties;~~

~~the potential loss of our transportation cost advantage over our competitors;~~

~~our partial dependence on customer and distributor transportation of purchased goods;~~

~~our potential inability to successfully implement our business strategies, including the completion of significant capital programs;~~

~~our reliance on CVR Energy’s senior management team and conflicts of interest they face operating each of CVR Partners, CVR Refining and CVR Energy;~~

~~the risk of labor disputes and adverse employee relations;~~

~~risks relating to our relationships with CVR Energy and CVR Refining;~~

~~control of our general partner by CVR Energy;~~

~~our ability to continue to license the technology used in our operations;~~

~~restrictions in our debt agreements;~~

~~changes in our treatment as a partnership for U.S. federal income or state tax purposes;~~

~~rulings, judgments or settlements in litigation, tax or other legal or regulatory matters;~~

~~instability and volatility in the capital and credit markets;~~

~~competition with CVR Energy and its affiliates; and~~

~~our ability to recover under our insurance policies for damages or losses in full or at all.~~

~~All forward-looking statements contained in this Report speak only as~~ of the date of this Report. We undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that occur after the date of this Report, or to reflect the occurrence of unanticipated events, except to the extent required by law.SEC.

~~Table of Contents~~

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our market risks as of ~~September 30, 2018~~ and for the three and nine months ended September 30, ~~2018 from~~2019 as compared to the risks discussed in Part II, Item 7A of our ~~2017~~2018 Form 10-K.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of September 30, ~~2018,~~2019, we have evaluated, under the direction of our Executive Chairman, Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, the effectiveness of our disclosure controls and procedures, as defined in Exchange Act Rule 13a-15(e). Based upon and as of the date of that evaluation, our Executive Chairman, Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Partnership’s management, including our Executive Chairman, Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There ~~has~~have been no material ~~change~~changes in the Partnership’s internal ~~control~~controls over financial reporting required by Rule 13a-15 of the Exchange Act that occurred during the fiscal quarter ended September 30, ~~2018~~2019 that ~~has~~ materially affected, or is reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

~~Table of Contents~~

~~Part II. Other Information~~

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

See Note ~~9 ("~~11 (“Commitments and ~~Contingencies"~~Contingencies”) to Part I, Item 1 of this Report, which is incorporated by reference into this Part II, Item 1, for a description of certain litigation, legal, and administrative proceedings and environmental matters.

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Item 1A. Risk Factors

There have been no material changes ~~from the~~to our risk factors ~~previously disclosed~~as of and for the three and nine months ended September 30, 2019 as compared to the risks discussed in ~~the “Risk Factors” section~~Part I, Item 1A of our ~~2017~~2018 Form 10-K.

Item 5. Other Information

~~None.~~On October 22, 2019, the Audit Committee of CVR Energy and the Conflicts Committee of the Board of Directors of the general partner of CVR Partners each agreed to authorize the exchange of certain parcels of property owned by subsidiaries of CVR Energy with an equal number of parcels owned by subsidiaries of CVR Partners, all located in Coffeyville, Kansas (the “Property Swap”). This Property Swap will enable each such subsidiary to create a more usable contiguous parcel of land near its own operating footprint. The Partnership will account for this transaction in accordance with the ASC 805-50 guidance on transferring assets between entities under common control.

~~Table of Contents~~

Item 6. Exhibits



~~EXHIBIT INDEX~~
Exhibit ~~Number~~		Exhibit Description

10.131.1		~~CVR Energy, Inc. Change in Control and Severance Plan, effective September 12, 2018.~~
10.2*		~~CVR Partners, LP 2018 Performance-Based Bonus Plan, effective September 12, 2018.~~
10.3*		~~Amendment to the Performance Unit Agreement, dated September 17, 2018, by and between CVR Energy, Inc. and David L. Lamp~~
31.1*		Rule 13a-14(a)/15d-14(a) Certification of Executive Chairman.
31.2*		Rule 13a-14(a)/15d-14(a) Certification of President and Chief Executive Officer.
31.3*		Rule 13a-14(a)/15d-14(a) Certification of Executive Vice President and Chief Financial Officer.
31.4*		Rule 13a-14(a)/15d-14(a) Certification of Chief Accounting Officer and Corporate Controller.
32.1†		Section 1350 Certification of Executive Chairman, President and Chief Executive Officer, Executive Vice President and Chief Financial Officer, and the Chief Accounting Officer and Corporate Controller.
101*		The following financial information for CVR Partners, LP’s Quarterly Report on Form 10-Q for the quarter ended September 30, ~~2018,~~2019, formatted in XBRL (“Extensible Business Reporting Language”) includes: (1) Condensed Consolidated Balance Sheets (unaudited), (2) Condensed Consolidated Statements of Operations (unaudited), (3) Condensed Consolidated Statements of Partners’ Capital (unaudited), (4) Condensed Consolidated Statements of Cash Flows (unaudited) and ~~(4)~~(5) the Notes to Condensed Consolidated Financial Statements (unaudited), tagged in detail.


*	Filed herewith.


†	Furnished herewith.

PLEASE NOTE: Pursuant to the rules and regulations of the SEC, we may file or incorporate by reference agreements referenced as exhibits to the reports that we file with or furnish to the SEC. The agreements are filed to provide investors with information regarding their respective terms. The agreements are not intended to provide any other factual information about the Partnership, its business or operations. In particular, the assertions embodied in any representations, warranties and covenants contained in the agreements may be subject to qualifications with respect to knowledge and materiality different from those applicable to investors and may be qualified by information in confidential disclosure schedules not included with the exhibits. These disclosure schedules may contain information that modifies, qualifies and creates exceptions to the representations, warranties and covenants set forth in the agreements. Moreover, certain representations, warranties and covenants in the agreements may have been used for the purpose of allocating risk between the parties, rather than establishing matters as facts. In addition, information concerning the subject matter of the representations, warranties and covenants may have changed after the date of the respective agreement, which subsequent information may or may not be fully reflected in the Partnership’s public disclosures. Accordingly, investors should not rely on the representations, warranties and covenants in the agreements as characterizations of the actual state of facts about the Partnership, its business or operations on the date hereof.

September 30, 2019 | 32

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	CVR Partners, LP

	By:	CVR GP, LLC, its general partner



October ~~25, 2018~~24, 2019	By:	/s/ ~~TRACY~~Tracy D. ~~JACKSON~~Jackson
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)


October ~~25, 2018~~24, 2019	By:	/s/ ~~MATTHEW~~Matthew W. ~~BLEY~~Bley
		Chief Accounting Officer and Corporate Controller
		(Principal Accounting Officer)

September 30, 2019 | 33



(Mark One)
þ ☑	QUARTERLY REPORT PURSUANT TOSECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended	September 30, ~~2018~~
	2019
OR

¨ ☐	TRANSITION REPORT PURSUANT TOSECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period fromto .



Delaware				56-2677689
(State or other jurisdiction of incorporation or organization)				(I.R.S. Employer Identification No.)



~~Delaware~~	~~56-2677689~~
~~(State or other jurisdiction~~Title of ~~incorporation or organization)~~ each class	~~(I.R.S. Employer~~ ~~Identification No.)~~ Trading Symbol(s)	Name of each exchange on which registered
~~2277 Plaza Drive, Suite 500~~Common units representing limited partner interests
~~Sugar Land, Texas~~ ~~(Address of principal executive offices)~~ UAN	~~77479~~ ~~(Zip Code)~~ The New York Stock Exchange



Large accelerated filero	☐	Accelerated filerþ	~~Non-accelerated~~☑	Non-Accelerated filero	☐
Smaller reporting companyo	☐	Emerging growth companyo	☐


(In thousands)	September 30, 2018		December 31, 2017
(in thousands)					September 30, 2019		December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	61,441	$	49,173	$	83,667	$	61,776
Accounts receivable, net of allowance for doubtful accounts	20,564		9,855
Accounts receivable					14,909		61,662
Inventories	56,905		54,097		56,864		63,554
Prepaid expenses and other current assets	4,817		5,793		4,608		6,989
Total current assets	143,727		118,918		160,048		193,981
Property, plant, and equipment, net of accumulated depreciation	1,029,402		1,069,526
Property, plant, and equipment, net					964,502		1,015,240
Goodwill	40,969		40,969		40,969		40,969
Other long-term assets	4,414		4,863		14,803		4,198
Total assets	$	1,218,512	$	1,234,276	$	1,180,322	$	1,254,388
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Accounts payable	$	20,019	$	21,295	$	29,389	$	26,789
Accounts payable to Affiliates	2,170		2,223
Accrued expenses and other current liabilities	64,015		32,577
Accounts payable to affiliates					2,131		2,976
Deferred revenue					16,448		68,804
Other current liabilities					36,687		24,066
Total current liabilities	86,204		56,095		84,655		122,635
Long-term liabilities:
Long-term debt, net of current portion	628,192		625,904
Long-term debt					631,520		628,989
Other long-term liabilities	2,919		2,424		11,791		2,938
Total long-term liabilities	631,111		628,328		643,311		631,927
Commitments and contingencies (see Note 9)
Partners’ capital	501,197		549,853
Commitments and contingencies (see Note 11)
Partners’ capital:
Common unitholders, 113,282,973 units issued and outstanding at September 30, 2019 and December 31, 2018					452,355		499,825
General partner interest					1		1
Total partners’ capital					452,356		499,826
Total liabilities and partners’ capital	$	1,218,512	$	1,234,276	$	1,180,322	$	1,254,388



PART I. Financial Information			PART II. Other Information

Item 1.	Financial Statements	4	Item 1.	Legal Proceedings	31
	Condensed Consolidated Balance Sheets - September 30, 2019 and December 31, 2018 (unaudited)	4	Item 1A.	Risk Factors	31
	Condensed Consolidated Statements of Operations - Three and Nine Months Ended September 30, 2019 and 2018 (unaudited)	5	Item 5.	Other Information	32
	Condensed Consolidated Statements of Partners’ Capital - Three and Nine Months Ended September 30, 2019 and 2018 (unaudited)	6	Item 6.	Exhibits	32
	Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2019 and 2018 (unaudited)	7	Signatures		33
	Notes to the Condensed Consolidated Financial Statements - September 30, 2019 (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31


~~Part I. Financial Information~~
~~Item 1.~~	~~Financial Statements~~	3



	Common Units				General Partner Interest		Total Partners’ Capital
(in thousands, except unit data)	Issued	Amount			General Partner Interest		Total Partners’ Capital
Balance at December 31, 2018	113,282,973	$	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	113,282,973	$	480,152		$	1	$	480,153
Cash distributions to common unitholders - Affiliates	—	(2,724		)	—		(2,724		)
Cash distributions to common unitholders - Non-affiliates	—	(5,205		)	—		(5,205		)
Net income	—	18,968			—		18,968
Balance at June 30, 2019	113,282,973	$	491,191		$	1	$	491,192
Cash distributions to common unitholders - Affiliates	—	(5,449		)	—		(5,449		)
Cash distributions to common unitholders - Non-affiliates	—	(10,411		)	—		(10,411		)
Net loss	—	(22,976		)	—		(22,976		)
Balance at September 30, 2019	113,282,973	$	452,355		$	1	$	452,356



	September 30, 2018
(In thousands)	As Reported		Balances without adoption of ASC 606		Effect of Change
Assets
Accounts receivable	$	20,564	$	13,791	$	6,773
Liabilities
Deferred revenue	$	31,611	$	24,838	$	6,773



(in thousands)	December 31, 2018 As Stated		Effect of Adoption of Topic 842 - Leases (Unaudited)				January 1, 2019 As Adjusted
Current assets:
Prepaid expenses and other current assets	$	6,989	$	(2,650	)	(1)	$	4,339
Total currents assets	193,981		(2,650		)		191,331
Other long-term assets	4,198		16,923			(2)	21,121
Total assets	$	1,254,388	$	14,273			$	1,268,661
Current liabilities:
Other current liabilities	$	24,066	$	3,462		(3)	$	27,528
Total current liabilities	122,635		3,462				126,097
Long-term liabilities:
Other long-term liabilities	2,938		10,811			(3)	13,749
Total long-term liabilities	631,927		10,811				642,738
Equity:
Total liabilities and partners’ capital	$	1,254,388	$	14,273			$	1,268,661


(2)	Represents recognition of initial ROU assets for operating leases, including the reclassification of certain lease prepayments.



Credit Facilities Outstanding
(In thousands)	Total Capacity		Amount Borrowed as of September 30, 2018		Outstanding Letters of Credit		Available Capacity as of September 30, 2018			Maturity Date
Asset based credit facility (b)	$	50,000	$	—	$	—	$	50,000	��	September 30, 2021



(In thousands)	Three Months Ended September 30, 2018		Nine Months Ended September 30, 2018
Ammonia	$	11,391	$	51,361
UAN	52,681		156,838
Urea products	4,987		14,834
Fertilizer sales, exclusive of freight	69,059		223,033
Freight revenue	8,805		23,908
Other revenue	2,045		6,024
Total net sales	$	79,909	$	252,965



(In thousands)	Nine Months Ended September 30, 2018
Balance at January 1, 2018	$	34,270
Add:
New prepay contracts entered into during the period	35,665
Less:
Revenue recognized that was included in the contract liability balance at the beginning of the period	33,761
Revenue recognized related to contracts entered into during the period	4,321
Other changes	242
Balance at September 30, 2018	$	31,611



	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands, except per unit data)	2018			2017			2018			2017
Adjusted EBITDA	$	18,594		$	5,005		$	57,689		$	58,094
Adjustments:
Net cash interest expense (excluding capitalized interest) and debt service	(14,873		)	(14,967		)	(44,664		)	(44,882		)
Maintenance capital expenditures	(4,526		)	(2,716		)	(10,894		)	(11,130		)
Major scheduled turnaround expenses	—			(2,497		)	(6,405		)	(2,586		)
Add:
Insurance recovery - business interruption	—			1,061			—			1,061
Release of previously established cash reserves, net	675			12,862			—			—
Available cash for distribution	$	(130	)	$	(1,252	)	$	(4,274	)	$	557
Distribution declared, per common unit	$	—		$	—		$	—		$	0.02
Common units outstanding	113,283			113,283			113,283			113,283



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