Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | Apr. 30, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'CVR Partners, LP | ' |
Entity Central Index Key | '0001425292 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 73,112,951 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $85,919 | $85,142 |
Accounts receivable, net of allowance for doubtful accounts of $55 and $50, at March 31, 2014 and December 31, 2013, respectively | 10,622 | 7,549 |
Inventories | 33,535 | 33,064 |
Prepaid expenses and other current assets, including $2,182 and $3,104 from affiliates at March 31, 2014 and December 31, 2013, respectively | 8,759 | 10,025 |
Total current assets | 138,835 | 135,780 |
Property, plant, and equipment, net of accumulated depreciation | 409,121 | 412,956 |
Goodwill | 40,969 | 40,969 |
Deferred financing costs, net | 998 | 1,236 |
Other long-term assets, including $1,091 and $1,136 with affiliates at March 31, 2014 and December 31, 2013, respectively | 2,692 | 2,513 |
Total assets | 592,615 | 593,454 |
Current liabilities: | ' | ' |
Accounts payable, including $2,924 and $4,289 due to affiliates at March 31, 2014 and December 31, 2013, respectively | 14,062 | 17,137 |
Personnel accruals, including $146 and $2,025 with affiliates at March 31, 2014 and December 31, 2013, respectively | 2,271 | 4,494 |
Deferred revenue | 9,965 | 696 |
Accrued expenses and other current liabilities, including $1,643 and $323 with affiliates at March 31, 2014 and December 31, 2013, respectively | 10,170 | 5,059 |
Total current liabilities | 36,468 | 27,386 |
Long-term liabilities: | ' | ' |
Long-term debt, net of current portion | 125,000 | 125,000 |
Other long-term liabilities, including $17 and $67 with affiliates at March 31, 2014 and December 31, 2013, respectively | 878 | 1,147 |
Total long-term liabilities | 125,878 | 126,147 |
Commitments and contingencies | ' | ' |
Partners’ capital: | ' | ' |
Common unitholders, 73,112,951 units issued and outstanding at March 31, 2014 and December 31, 2013 | 431,994 | 441,819 |
General partner interest | 1 | 1 |
Accumulated other comprehensive loss | -1,726 | -1,899 |
Total partners’ capital | 430,269 | 439,921 |
Total liabilities and partners’ capital | $592,615 | $593,454 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Accounts receivable, allowance for doubtful accounts | $55 | $50 |
Prepaid expenses and other current assets, from affiliates | 2,182 | 3,104 |
Other long-term assets, with affiliates | 1,091 | 1,136 |
Accounts payable, due to affiliates | 2,924 | 4,289 |
Personnel accruals, with affiliates | 146 | 2,052 |
Accrued expenses and other current liabilities, with affiliates | 1,643 | 323 |
Other long-term liabilities, with affiliates | $17 | $67 |
Common unitholders, units issued (in units) | 73,112,951 | 73,112,951 |
Common unitholders, units outstanding (in units) | 73,112,951 | 73,112,951 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
Share data in Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Net sales | $80,316,000 | $81,411,000 |
Operating costs and expenses: | ' | ' |
Cost of product sold (exclusive of depreciation and amortization) | 21,708,000 | 10,654,000 |
Direct operating expenses (exclusive of depreciation and amortization) | 24,189,000 | 22,557,000 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 4,654,000 | 5,630,000 |
Depreciation and amortization | 6,667,000 | 5,767,000 |
Total operating costs and expenses | 57,218,000 | 44,608,000 |
Operating income | 23,098,000 | 36,803,000 |
Other income (expense): | ' | ' |
Interest expense and other financing costs | -1,659,000 | -1,280,000 |
Interest income | 6,000 | 30,000 |
Other income, net | 15,000 | 9,000 |
Total other expense | -1,638,000 | -1,241,000 |
Income before income tax expense | 21,460,000 | 35,562,000 |
Income tax expense | 7,000 | 9,000 |
Net income | 21,453,000 | 35,553,000 |
Net income per common unit – basic (in usd per units) | $0.29 | $0.49 |
Net income per common unit – diluted (in usd per units) | $0.29 | $0.49 |
Weighted-average common units outstanding: | ' | ' |
Basic (in units) | 73,113 | 73,065 |
Diluted (in units) | 73,145 | 73,223 |
Affiliates | ' | ' |
Operating costs and expenses: | ' | ' |
Cost of product sold (exclusive of depreciation and amortization) | 2,246,000 | 3,089,000 |
Direct operating expenses (exclusive of depreciation and amortization) | 753,000 | 1,003,000 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 3,536,000 | 4,219,000 |
Third parties | ' | ' |
Operating costs and expenses: | ' | ' |
Cost of Goods Sold, Excluding Depreciation, Depletion, and Amortization | 19,462,000 | 7,565,000 |
Direct operating expenses (exclusive of depreciation and amortization) | 23,436,000 | 21,554,000 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | $1,118,000 | $1,411,000 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' |
Net income | $21,453 | $35,553 |
Other comprehensive income (loss): | ' | ' |
Change in fair value of interest rate swap | -95 | -46 |
Net loss reclassified into income on settlement of interest rate swap | 268 | 258 |
Other comprehensive income (loss) | 173 | 212 |
Total comprehensive income | $21,626 | $35,765 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL (USD $) | Total | Common Units | General Partner Interest | Accumulated Other Comprehensive Income/(Loss) |
In Thousands, except Share data, unless otherwise specified | ||||
Balance at Dec. 31, 2013 | $439,921 | $441,819 | $1 | ($1,899) |
Balance (in units) at Dec. 31, 2013 | ' | 73,112,951 | ' | ' |
Increase (Decrease) in Partners' Capital | ' | ' | ' | ' |
Cash distributions to common unitholders – Affiliates | -16,736 | -16,736 | ' | ' |
Cash distributions to common unitholders – Non-affiliates | -14,703 | -14,703 | ' | ' |
Share-based compensation – Affiliates | 161 | 161 | ' | ' |
Net income | 21,453 | 21,453 | ' | ' |
Net gains (losses) on interest rate swaps | 173 | ' | ' | 173 |
Balance at Mar. 31, 2014 | $430,269 | $431,994 | $1 | ($1,726) |
Balance (in units) at Mar. 31, 2014 | ' | 73,112,951 | ' | ' |
CONDENSED_CONSOLIDATED_STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operating activities: | ' | ' |
Net income | $21,453 | $35,553 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 6,667 | 5,767 |
Allowance for doubtful accounts | 5 | -14 |
Amortization of deferred financing costs | 238 | 238 |
Share-based compensation – Affiliates | 786 | 1,186 |
Share-based compensation | 147 | 93 |
Change in assets and liabilities: | ' | ' |
Accounts receivable | -3,078 | -4,601 |
Inventories | -471 | -3,275 |
Prepaid expenses and other current assets | 1,266 | -229 |
Other long-term assets | -182 | -82 |
Accounts payable | -3,895 | -3,497 |
Deferred revenue | 9,269 | 27,639 |
Accrued expenses and other current liabilities | 3,445 | -1,229 |
Other long-term liabilities | -49 | -64 |
Net cash provided by operating activities | 35,601 | 57,485 |
Cash flows from investing activities: | ' | ' |
Capital expenditures | -3,385 | -18,063 |
Net cash used in investing activities | -3,385 | -18,063 |
Cash flows from financing activities: | ' | ' |
Cash distributions to common unitholders – Affiliates | -16,736 | -9,776 |
Cash distributions to common unitholders – Non-affiliates | -14,703 | -4,252 |
Net cash used in financing activities | -31,439 | -14,028 |
Net increase (decrease) in cash and cash equivalents | 777 | 25,394 |
Cash and cash equivalents, beginning of period | 85,142 | 127,848 |
Cash and cash equivalents, end of period | 85,919 | 153,242 |
Supplemental disclosures: | ' | ' |
Cash paid for income taxes | 1 | 6 |
Cash paid for interest, net of capitalized interest of $35 and $422 in 2014 and 2013, respectively | 1,440 | 1,064 |
Non-cash investing and financing activities: | ' | ' |
Construction in progress additions included in accounts payable | 1,309 | 10,176 |
Change in accounts payable related to construction in progress | ($556) | ($8,495) |
CONDENSED_CONSOLIDATED_STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Statement of Cash Flows [Abstract] | ' | ' |
Capitalized interest | $35 | $422 |
Formation_of_the_Partnership_O
Formation of the Partnership, Organization and Nature of Business | 3 Months Ended |
Mar. 31, 2014 | |
Formation of the Partnership, Organization and Nature of Business | ' |
Formation of the Partnership, Organization and Nature of Business | ' |
(1) Formation of the Partnership, Organization and Nature of Business | |
Organization | |
CVR Partners, LP (referred to as "CVR Partners" or the "Partnership") is a Delaware limited partnership, formed in June 2007 by CVR Energy, Inc. (together with its subsidiaries, but excluding the Partnership and its subsidiaries, "CVR Energy") to own Coffeyville Resources Nitrogen Fertilizers, LLC ("CRNF"). CRNF is an independent producer and marketer of upgraded nitrogen fertilizer products sold in North America. CRNF operates a dual-train coke gasifier plant that produces high-purity hydrogen, most of which is subsequently converted to ammonia and upgraded to urea ammonium nitrate ("UAN"). | |
CRNF produces and distributes nitrogen fertilizer products, which are used primarily by farmers to improve the yield and quality of their crops. CRNF's principal products are UAN and ammonia. These products are manufactured at CRNF's facility in Coffeyville, Kansas. CRNF's product sales are heavily weighted toward UAN and all of its products are sold on a wholesale basis. | |
Operation of Partnership | |
Subsequent to the closing of the Partnership's initial public offering (the "Initial Public Offering"), in April 2011 and through May 27, 2013, public security holders held approximately 30% of the Partnership's common units and Coffeyville Resources, LLC ("CRLLC"), a wholly-owned subsidiary of CVR Energy, held approximately 70% of the Partnership's common units and the general partner interest. As of March 31, 2014, IEP Energy LLC and certain affiliates (collectively "IEP") owned approximately 82% of the shares of CVR Energy. | |
On May 28, 2013, CRLLC sold 12,000,000 of our common units to the public at a price of $25.15 per unit in a registered public offering (the "Secondary Offering"). The net proceeds to CRLLC from the Secondary Offering were approximately $292.6 million, after deducting approximately $9.2 million in underwriting discounts and commissions. We did not receive any of the proceeds from the sale of common units by CRLLC. | |
Subsequent to the closing of the Secondary Offering and as of March 31, 2014, public security holders held approximately 47% of the Partnership's common units and CRLLC held approximately 53% of the Partnership's common units and the general partner interest. | |
CVR GP, LLC (“CVR GP” or the “general partner”) manages and operates the Partnership. Common unitholders have only limited voting rights on matters affecting the Partnership. In addition, common unitholders have no right to elect the general partner's directors on an annual or continuing basis. | |
The Partnership is operated by a combination of the general partner's senior management team and CVR Energy's senior management team pursuant to a services agreement among CVR Energy, CVR GP and the Partnership. In October 2007, the Partnership's partners at that time entered into an amended and restated limited partnership agreement setting forth their various rights and responsibilities. The Partnership also entered into a number of agreements with CVR Energy and CVR GP to regulate certain business relations between the Partnership and the other parties thereto. See Note 12 ("Related Party Transactions") for further discussion. |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2014 | |
Basis of Presentation | ' |
Basis of Presentation | ' |
(2) Basis of Presentation | |
The accompanying Partnership condensed consolidated financial statements include the accounts of CVR Partners and CRNF, its wholly-owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying condensed consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), including Article 3 of Regulation S-X, “General Instructions as to Consolidated Financial Statements.” These condensed consolidated financial statements should be read in conjunction with the December 31, 2013 audited consolidated financial statements and notes thereto included in CVR Partners’ Annual Report on Form 10-K for the year ended December 31, 2013, which was filed with the SEC on February 26, 2014 (the "2013 Form 10-K"). | |
The condensed consolidated financial statements include certain selling, general and administrative expenses (exclusive of depreciation and amortization) and direct operating expenses that CVR Energy incurred on behalf of the Partnership. These related party transactions are governed by the services agreement. See Note 12 ("Related Party Transactions") for additional discussion of the services agreement and billing and allocation of certain costs. The amounts charged or allocated to the Partnership are not necessarily indicative of the cost that the Partnership would have incurred had it operated as an independent entity. | |
In the opinion of the Partnership’s management, the accompanying condensed consolidated financial statements and related notes reflect all adjustments (consisting only of normal recurring adjustments) that are necessary to fairly present the financial position of the Partnership as of March 31, 2014 and December 31, 2013, the results of operations and comprehensive income of the Partnership for the three months ended March 31, 2014 and 2013, the cash flows of the Partnership for the three months ended March 31, 2014 and 2013 and the changes in partners’ capital for the Partnership for the three months ended March 31, 2014. | |
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from those estimates. Results of operations and cash flows are not necessarily indicative of the results that will be realized for the year ending December 31, 2014, or any other interim or annual period. |
ShareBased_Compensation
Share-Based Compensation | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||
Share-Based Compensation | ' | ||||||
(3) Share‑Based Compensation | |||||||
Certain employees of CVR Partners and employees of CVR Energy who perform services for the Partnership participate in equity compensation plans of CVR Partners' affiliates. Accordingly, CVR Partners has recorded compensation expense for these plans in accordance with Staff Accounting Bulletin ("SAB") Topic 1-B (“Allocations of Expenses and Related Disclosures in Financial | |||||||
Statements of Subsidiaries, Divisions or Lesser Business Components of Another Entity”) and in accordance with guidance regarding the accounting for share-based compensation granted to employees of an equity method investee. All compensation expense related to these plans for full-time employees of CVR Partners has been allocated 100% to the Partnership. For employees of CVR Energy, the Partnership records share-based compensation relative to the percentage of time spent by each employee providing services to the Partnership as compared to the total calculated share-based compensation by CVR Energy. The Partnership is not responsible for | |||||||
payment of the allocated share-based compensation for certain plans as discussed below. Allocated expense amounts related to plans for which the Partnership is not responsible for payment are reflected as an increase or decrease to partners' capital. | |||||||
Long-Term Incentive Plan – CVR Energy | |||||||
CVR Energy has a Long-Term Incentive Plan (“CVR Energy LTIP”) that permits the grant of options, stock appreciation rights, restricted shares, restricted stock units, dividend equivalent rights, share awards and performance awards (including performance share units, performance units and performance based restricted stock). As of March 31, 2014, only grants of restricted stock units and performance units under the CVR Energy LTIP remain outstanding. Individuals who are eligible to receive awards and grants under the CVR Energy LTIP include CVR Energy’s or its subsidiaries’ (including the Partnership) employees, officers, consultants and directors. | |||||||
Restricted Stock Units | |||||||
Through the CVR Energy LTIP, restricted shares have been granted to employees of CVR Energy and the Partnership. The IEP acquisition of CVR Energy and related Transaction Agreement dated April 18, 2012 between CVR Energy and IEP (“Transaction Agreement”) triggered a modification to outstanding awards under the CVR Energy LTIP. Pursuant to the Transaction Agreement, restricted shares scheduled to vest in 2013, 2014 and 2015 were converted to restricted stock units whereby the awards will be settled in cash upon vesting in an amount equal to the lesser of the offer price of $30.00 per share or the fair market value as determined at the most recent valuation date of December 31 of each year. The awards, which generally vest over a three-year period, will be remeasured at each subsequent reporting date until they vest. | |||||||
In December 2012 and during 2013, restricted stock units and dividend equivalent rights were granted to certain employees of CVR Energy and its subsidiaries (including the Partnership). The awards are scheduled to vest over three years, with one-third of the award vesting each year with the exception of awards granted to certain executive officers scheduled to vest over one year. Awards granted in December 2012 to Mr. Lipinski, CVR Energy's Chief Executive Officer and President, were canceled in connection with the issuance of certain performance unit awards as discussed further below. Each restricted stock unit and dividend equivalent right represents the right to receive, upon vesting, a cash payment equal to (a) the fair market value of one share of CVR Energy's common stock, plus (b) the cash value of all dividends declared and paid per share of CVR Energy's common stock from the grant date to and including the vesting date. The awards will be remeasured at each subsequent reporting date until they vest. | |||||||
Assuming the allocation of costs from CVR Energy remains consistent with the allocation percentages in place at March 31, 2014, there was approximately $0.3 million of total unrecognized compensation cost related to restricted stock units and associated dividend equivalent rights to be recognized over a weighted-average period of approximately 1.1 years. Inclusion of a vesting table would not be meaningful due to changes in allocation percentages that occur from time to time. The unrecognized compensation expense has been determined by the number of restricted stock units and associated dividend equivalent rights and respective allocation percentage for individuals for whom, as of March 31, 2014, compensation expense has been allocated to the Partnership. Compensation expense recorded for the three months ended March 31, 2014 and 2013, related to the awards, was approximately $16,000 and $0.6 million, respectively. The Partnership is not responsible for the payment of CVR Energy restricted stock units and associated dividend equivalent rights, and accordingly, the expenses recorded for the three months ended March 31, 2014 and 2013 have been reflected as an increase to partners' capital. | |||||||
Performance Unit Awards | |||||||
In December 2013, CVR Energy entered into Performance Unit Award Agreements with Mr. Lipinski. Certain of the Performance Unit Awards were entered into in connection with the cancellation of Mr. Lipinski's December 2012 restricted stock unit award, as discussed above. In accordance with accounting guidance related to the modification of share-based and other compensatory award arrangements, CVR Energy concluded that the cancellation and concurrent issuance of the performance awards created a substantive service period from the original grant date of the December 2012 restricted stock unit award through the end of the performance period for the related performance awards. Compensation cost for the related awards is being recognized over the substantive service period. Compensation expense recorded for the three months ended March 31, 2014 related to the performance unit awards was $0.4 million. The Partnership will be responsible for reimbursing CVR Energy for its allocated portion of the performance unit awards. As of March 31, 2014 this obligation of $0.7 million is recorded in accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheet. | |||||||
Incentive Unit Awards | |||||||
In December 2013, CVR Energy granted awards of incentive units and distribution equivalent rights to certain employees of CRLLC and CVR Energy who provide shared services to CVR Energy and its subsidiaries (including the Partnership). The awards are expected to vest over three years, with one-third of the award vesting each year. Each incentive unit and distribution equivalent right represents the right to receive, upon vesting, a cash payment equal to (a) the average fair market value of one common unit of CVR Refining, LP ("CVR Refining") for the first ten trading days in the month of vesting, plus (b) the per unit cash value of all distributions declared and paid by CVR Refining from the grant date to and including the vesting date. The awards, which are liability-classified, will be remeasured at each subsequent reporting date until they vest. | |||||||
Assuming the allocation of costs from CVR Energy remains consistent with the allocation percentages in place at December 31, 2013, there was approximately $0.8 million of total unrecognized compensation cost related to the incentive units and associated distribution equivalent rights to be recognized over a weighted-average period of approximately 1.7 years. Inclusion of a vesting table would not be meaningful due to changes in allocation percentages that occur from time to time. The unrecognized compensation expense has been determined by the number of incentive units and associated distribution equivalent rights and respective allocation percentage for individuals for whom, as of March 31, 2014, compensation expense has been allocated to the Partnership. Compensation expense recorded for the three months ended March 31, 2014 related to the awards was $0.1 million. The Partnership will be responsible for reimbursing CVR Energy for its allocated portion of the awards. As of March 31, 2014 this obligation of $0.1 million is recorded in accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheet. | |||||||
Long-Term Incentive Plan – CVR Partners | |||||||
In connection with the Initial Public Offering, the board of directors of the general partner adopted the CVR Partners, LP Long-Term Incentive Plan ("CVR Partners LTIP"). Individuals who are eligible to receive awards under the CVR Partners LTIP include (1) employees of the Partnership and its subsidiaries, (2) employees of the general partner, (3) members of the board of directors of the general partner, and (4) CVR Partners' parent's employees, consultants and directors. The CVR Partners LTIP provides for the grant of options, unit appreciation rights, distribution equivalent rights, restricted units, phantom units and other unit-based awards, each in respect of common units. Through the CVR Partners LTIP, phantom and common units have been awarded to employees of the Partnership and the general partner and to members of the board of directors of the general partner. Phantom unit awards made to employees and members of the board of directors of the general partner are considered a non-employee equity based award and are required to be marked-to-market each reporting period until they vest. Awards to employees of the Partnership and the general partner vest over a three year period and awards to members of the board of directors of the general partner generally vest immediately on the grant date. The maximum number of common units issuable under the CVR Partners LTIP is 5,000,000. As of March 31, 2014, there were 4,809,862 common units available for issuance under the CVR Partners LTIP. | |||||||
In December 2012, the board of directors of the general partner approved an amendment to modify the terms of certain phantom unit awards granted to employees of the Partnership and its subsidiaries. Prior to the amendment, the phantom units, when granted, were valued at the closing market price of the Partnership's common units on the date of issuance and amortized to compensation expense on a straight-line basis over the vesting period of the units. These phantom units generally vest over a three-year period. The amendment triggered a modification to the awards by providing that the phantom units would be settled in cash rather than in common units of the Partnership. For awards vesting subsequent to the amendment, the awards will be remeasured at each subsequent reporting date until they vest. As a result of the modification of the awards, the classification changed from equity-classified awards to liability-classified awards. | |||||||
In December 2013, awards of phantom units and distribution equivalent rights were granted to certain employees of the Partnership and its subsidiaries' employees and the employees of the general partner. The awards are expected to vest over three years on the basis of one-third of the award each year. Each phantom unit and distribution equivalent right represents the right to receive, upon vesting, a cash payment equal to (a) the fair market value of one unit of the Partnership's common unit, plus (b) the per unit cash value of all distributions declared and paid by the Partnership from the grant date to and including the vesting date. The awards, which are liability-classified, will be remeasured at each subsequent reporting date until they vest. | |||||||
A summary of the common units and phantom units (collectively “Units”) activity during the three months ended March 31, 2014 is presented below: | |||||||
Units | Weighted-Average | ||||||
Grant Date Fair Value | |||||||
Non-vested at January 1, 2014 | 171,119 | $ | 21.34 | ||||
Granted | — | — | |||||
Vested | — | — | |||||
Forfeited | (64,629 | ) | 23.36 | ||||
Non-vested at March 31, 2014 | 106,490 | $ | 20.12 | ||||
Unrecognized compensation expense associated with the unvested common and phantom units at March 31, 2014 was approximately $1.4 million and is expected to be recognized over a weighted average period of 1.4 years. In conjunction with Mr. Kelley's resignation that was effective January 1, 2014, all awards granted to him that were non-vested at the resignation date were forfeited. Due to the timing of this event, the Partnership had reflected the impact of this event in determining the unrecognized compensation expense as the resignation was expected at December 31, 2013. The associated change to the non-vested units forfeited was reflected at the resignation date and is included in the summary presented above. Compensation expense recorded for the three months ended March 31, 2014 and 2013 related to the awards under the CVR Partners LTIP was approximately $0.4 million and $0.6 million, respectively. As of March 31, 2014 and December 31, 2013 the Partnership had a liability of $0.4 million and $0.2 million, respectively, for cash settled non-vested phantom unit awards and associated distribution equivalent rights, which is recorded in personnel accruals on the Condensed Consolidated Balance Sheets. |
Inventories
Inventories | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Inventories | ' | |||||||
(4) Inventories | ||||||||
Inventories consisted of the following: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Finished goods | $ | 10,995 | $ | 8,849 | ||||
Raw materials and precious metals | 8,120 | 8,546 | ||||||
Parts and supplies | 14,420 | 15,669 | ||||||
$ | 33,535 | $ | 33,064 | |||||
Property_Plant_and_Equipment
Property, Plant, and Equipment | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Property, Plant, and Equipment | ' | |||||||
(5) Property, Plant, and Equipment | ||||||||
A summary of costs for property, plant, and equipment is as follows: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Land and improvements | $ | 5,026 | $ | 5,032 | ||||
Buildings and improvements | 2,237 | 2,191 | ||||||
Machinery and equipment | 549,156 | 548,282 | ||||||
Automotive equipment | 450 | 450 | ||||||
Furniture and fixtures | 888 | 893 | ||||||
Railcars | 7,902 | 7,902 | ||||||
Construction in progress | 7,206 | 5,294 | ||||||
$ | 572,865 | $ | 570,044 | |||||
Less: Accumulated depreciation | 163,744 | 157,088 | ||||||
Total property, plant and equipment, net | $ | 409,121 | $ | 412,956 | ||||
Capitalized interest recognized as a reduction of interest expense for the three months ended March 31, 2014 and 2013 totaled approximately $35,000 and $0.4 million, respectively. | ||||||||
Direct operating expenses exclude depreciation and amortization of approximately $6.6 million and $5.7 million for the three months ended March 31, 2014 and 2013, respectively. |
Partners_Capital_and_Partnersh
Partners' Capital and Partnership Distributions | 3 Months Ended | |
Mar. 31, 2014 | ||
Equity [Abstract] | ' | |
Partners' Capital and Partnership Distributions | ' | |
(6) Partners’ Capital and Partnership Distributions | ||
The Partnership has two types of partnership interests outstanding: | ||
• | common units; and | |
• | a general partner interest, which is not entitled to any distributions, and which is held by the general partner. | |
At March 31, 2014, the Partnership had a total of 73,112,951 common units issued and outstanding, of which 38,920,000 common units were owned by CRLLC, representing approximately 53% of the total Partnership units outstanding. | ||
The board of directors of the Partnership's general partner has adopted a policy for the Partnership to distribute all available cash generated on a quarterly basis. Cash distributions will be made to the common unitholders of record on the applicable record date, generally within 60 days after the end of each quarter. Available cash for each quarter will be determined by the board of directors of the general partner following the end of such quarter. | ||
Available cash for each quarter will generally begin with Adjusted EBITDA reduced for cash needed for: (i) net interest expense (excluding capitalized interest) and debt service and other contractual obligations; (ii) maintenance capital expenditures; and (iii) to the extent applicable, major scheduled turnaround expense incurred and reserves for future operating or capital needs that the board of directors of the general partner deems necessary or appropriate, if any. Adjusted EBITDA is defined as EBITDA (net income before interest expense, net, income tax expense, depreciation and amortization) further adjusted for the impact of non-cash share-based compensation, and, where applicable, major scheduled turnaround expense and loss on disposition of assets. Available cash for distributions may be increased by previously established cash reserves, if any, at the discretion of the board of directors of our general partner. | ||
On March 10, 2014, the Partnership paid out a cash distribution to the Partnership's unitholders of record on the close of business on March 3, 2014 for the fourth quarter of 2013 in the amount of $0.43 per common unit, or $31.4 million in aggregate. | ||
On April 30, 2014, the Board of Directors of the general partner of the Partnership declared a cash distribution for the first quarter of 2014 in the amount of $0.38 per common unit, or $27.8 million in aggregate. The cash distribution will be paid on May 19, 2014 to the Partnership's unitholders of record at the close of business on May 12, 2014. |
Net_Income_Per_Common_Unit
Net Income Per Common Unit | 3 Months Ended |
Mar. 31, 2014 | |
Earnings Per Share [Abstract] | ' |
Net Income Per Common Unit | ' |
(7) Net Income per Common Unit | |
The Partnership's net income is allocated wholly to the common units as the general partner does not have an economic interest. Basic and diluted net income per common unit is calculated by dividing net income by the weighted-average number of common units outstanding during the period and, when applicable, gives effect to phantom units and unvested common units granted under the CVR Partners LTIP. The common units issued during the period are included on a weighted-average basis for the days in which they were outstanding. |
Accrued_Expenses_and_Other_Cur
Accrued Expenses and Other Current Liabilities | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Accrued Expenses and Other Current Liabilities | ' | |||||||
Accrued Expenses and Other Current Liabilities | ' | |||||||
(8) Accrued Expenses and Other Current Liabilities | ||||||||
Accrued expenses and other current liabilities were as follows: | ||||||||
March 31, | 31-Dec-13 | |||||||
2014 | ||||||||
(in thousands) | ||||||||
Property taxes | $ | 1,815 | $ | 1,373 | ||||
Current interest rate swap | 930 | 883 | ||||||
Accrued interest | 439 | 458 | ||||||
Other accrued expenses and liabilities (1) | 6,986 | 2,345 | ||||||
$ | 10,170 | $ | 5,059 | |||||
____________ | ||||||||
-1 | Other accrued expenses and liabilities include amounts owed by the Partnership to Coffeyville Resources Refining & Marketing, LLC (“CRRM”), a related party, under the feedstock and shared services agreement. Refer to Note 12 ("Related Party Transactions") for additional discussion. |
Credit_Facility
Credit Facility | 3 Months Ended |
Mar. 31, 2014 | |
Debt Disclosure [Abstract] | ' |
Credit Facility | ' |
(9) Credit Facility | |
The Partnership's credit facility includes a term loan facility of $125.0 million and a revolving credit facility of $25.0 million with an uncommitted incremental facility of up to $50.0 million. No amounts were outstanding under the revolving credit facility at March 31, 2014. There is no scheduled amortization and the credit facility matures in April 2016. | |
Borrowings under the credit facility bear interest at either a Eurodollar rate or a base rate plus in either case a margin based on a pricing grid determined by the trailing four quarter leverage ratio. The margin for borrowings under the credit facility ranges from 3.50% to 4.25% for Eurodollar loans and 2.50% to 3.25% for base rate loans. Currently, the interest rate is either the Eurodollar rate plus a margin of 3.50% or, for base rate loans, the prime rate plus 2.50%. Under its terms, the lenders under the credit facility were granted a first priority security interest (subject to certain customary exceptions) in substantially all of the assets of CVR Partners and CRNF. | |
The credit facility requires CVR Partners to maintain a minimum interest coverage ratio and a maximum leverage ratio and contains customary covenants for a financing of this type. The credit facility provides that the Partnership can make distributions to holders of the Partnership's common units provided the Partnership is in compliance with its leverage ratio and interest coverage ratio covenants on a pro forma basis after giving effect to such distribution and there is no default or event of default under the facility. As of March 31, 2014, CVR Partners was in compliance with the covenants contained in the credit facility. |
Interest_Rate_Swap
Interest Rate Swap | 3 Months Ended |
Mar. 31, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' |
Interest Rate Swap | ' |
(10) Interest Rate Swap Agreements | |
CRNF is subject to two floating-to-fixed interest rate swap agreements for the purpose of hedging the interest rate risk associated with a portion of its $125.0 million floating rate term debt which matures in April 2016. See Note 9 ("Credit Facility"). The aggregate notional amount covered under these agreements, which commenced on August 12, 2011 and expire on February 12, 2016, totals $62.5 million (split evenly between the two agreement dates). Under the terms of the interest rate swap agreement entered into on June 30, 2011, CRNF will receive a floating rate based on three month LIBOR and pay a fixed rate of 1.94%. Under the terms of the interest rate swap agreement entered into on July 1, 2011, CRNF will receive a floating rate based on three month LIBOR and pay a fixed rate of 1.975%. Both swap agreements are settled every 90 days. The effect of these swap agreements is to lock in a fixed rate of interest of approximately 1.96% plus the applicable margin paid to lenders over three month LIBOR as calculated under the credit facility. At March 31, 2014, the effective rate was approximately 4.56%. The agreements were designated as cash flow hedges at inception, and accordingly, the effective portion of the gain or loss on the swap is reported as a component of accumulated other comprehensive income (loss) (“AOCI”) and will be reclassified into interest expense when the interest rate swap transaction affects earnings. Any ineffective portion of the gain or loss will be recognized immediately in interest expense. The realized loss on the interest rate swap reclassified from AOCI into interest expense and other financing costs on the Condensed Consolidated Statements of Operations was $0.3 million for both the three months ended March 31, 2014 and 2013, respectively. | |
The interest rate swap agreements held by the Partnership also provide for the right to setoff. However, as the interest rate swaps are in a liability position, there are no amounts offset in the Condensed Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||||
Commitments and Contingencies | ' | |||||||
(11) Commitments and Contingencies | ||||||||
Leases and Unconditional Purchase Obligations | ||||||||
The minimum required payments for the Partnership’s operating leases and unconditional purchase obligations are as follows: | ||||||||
Operating | Unconditional | |||||||
Leases | Purchase | |||||||
Obligations(1) | ||||||||
(in thousands) | ||||||||
Nine months ending December 31, 2014 | $ | 4,060 | $ | 15,245 | ||||
Year ending December 31, 2015 | 5,191 | 14,002 | ||||||
Year ending December 31, 2016 | 4,466 | 14,253 | ||||||
Year ending December 31, 2017 | 2,827 | 14,547 | ||||||
Year ending December 31, 2018 | 2,014 | 14,505 | ||||||
Thereafter | 4,917 | 94,227 | ||||||
$ | 23,475 | $ | 166,779 | |||||
_____________ | ||||||||
-1 | This includes the Partnership’s purchase obligation for pet coke from CVR Refining and has been derived from a calculation of the average pet coke price paid to CVR Refining over the preceding two year period. | |||||||
CRNF leases railcars and facilities under long-term operating leases. Lease expense for the three months ended March 31, 2014 and 2013 totaled approximately $1.2 million and $1.4 million, respectively. The lease agreements have various remaining terms. Some agreements are renewable, at CRNF’s option, for additional periods. It is expected, in the ordinary course of business, that leases will be renewed or replaced as they expire. | ||||||||
CRNF has an agreement with the City of Coffeyville pursuant to which it must make a series of future payments for the supply, generation and transmission of electricity based upon agreed upon rates. This agreement expires on July 1, 2019. | ||||||||
During 2005, CRNF entered into the Amended and Restated On-Site Product Supply Agreement with The BOC Group, Inc. (as predecessor in interest to Linde LLC). Pursuant to the agreement, which expires in 2020, CRNF is required to take as available and pay approximately $0.3 million to $0.4 million per month, which amount is subject to annual inflation adjustments, for the supply of oxygen and nitrogen to the fertilizer operation. Expenses associated with this agreement are included in direct operating expenses (exclusive of depreciation and amortization) and for both the three months ended March 31, 2014 and 2013 totaled approximately $1.0 million. | ||||||||
The Partnership entered into a pet coke supply agreement with HollyFrontier Corporation. The term of this agreement ends in December 2014 and may be renewed. Expenses related to the pet coke supply agreement totaled approximately $1.3 million and $1.5 million for the three months ended March 31, 2014 and 2013, respectively, which are recorded in cost of product sold (exclusive of depreciation and amortization). | ||||||||
Litigation | ||||||||
From time to time, the Partnership is involved in various lawsuits arising in the normal course of business, including matters such as those described below under "Environmental, Health, and Safety ("EHS") Matters." Liabilities related to such litigation are recognized when the related costs are probable and can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. It is possible that management’s estimates of the outcomes will change due to uncertainties inherent in litigation and settlement negotiations. Except as described below, there were no new proceedings or material developments in proceedings that we previously reported in our 2013 Form 10-K. In the opinion of management, the ultimate resolution of any other litigation matters are not expected to have a material adverse effect on the accompanying condensed consolidated financial statements. There can be no assurance that management’s beliefs or opinions with respect to liability for potential litigation matters are accurate. | ||||||||
Environmental, Health, and Safety (“EHS”) Matters | ||||||||
CRNF is subject to various stringent federal, state, and local EHS rules and regulations. Liabilities related to EHS matters are recognized when the related costs are probable and can be reasonably estimated. Estimates of these costs are based upon currently available facts, existing technology, site-specific costs, and currently enacted laws and regulations. In reporting EHS liabilities, no offset is made for potential recoveries. | ||||||||
CRNF owns and operates a facility utilized for the manufacture of nitrogen fertilizers. Therefore, CRNF has exposure to potential EHS liabilities related to past and present EHS conditions at this location. Under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), the Resource Conservation and Recovery Act, and related state laws, certain persons may be liable for the release or threatened release of hazardous substances. These persons can include the current owner or operator of property where a release or threatened release occurred, any persons who owned or operated the property when the release occurred, and any persons who disposed of, or arranged for the transportation or disposal of, hazardous substances at a contaminated property. Liability under CERCLA is strict, and under certain circumstances, joint and several, so that any responsible party may be held liable for the entire cost of investigating and remediating the release of hazardous substances. | ||||||||
CRNF is also subject to extensive and frequently changing federal, state and local, environmental and health and safety laws and regulations governing the emission and release of hazardous substances into the environment, the treatment and discharge of waste water, and the storage, handling, use and transportation of nitrogen products. The ultimate impact of complying with evolving laws and regulations is not always clearly known or determinable due in part to the fact that our operations may change over time and certain implementing regulations for laws, such as the federal Clean Air Act, have not yet been finalized, are under governmental or judicial review or are being revised. These laws and regulations could result in increased capital, operating and compliance costs. | ||||||||
There have been no new developments or material changes to the environmental accruals or expected capital expenditures related to compliance with the foregoing environmental matters from those provided in our 2013 Form 10-K. CRNF believes it is in substantial compliance with existing EHS rules and regulations. There can be no assurance that the EHS matters described or referenced herein or other EHS matters which may develop in the future will not have a material adverse effect on the Partnership's business, financial condition, or results of operations. | ||||||||
EHS expenditures are capitalized when such expenditures are expected to result in future economic benefits. EHS capital expenditures for the three months ended March 31, 2014 and 2013 were approximately $57,000 and $0, respectively. These expenditures were incurred for environmental compliance and efficiency of the operations. |
Related_Party_Transactions
Related Party Transactions | 3 Months Ended | |
Mar. 31, 2014 | ||
Related Party Transactions [Abstract] | ' | |
Related Party Transactions | ' | |
(12) Related Party Transactions | ||
Related Party Agreements | ||
In connection with the formation of CVR Partners and the initial public offering of CVR Energy in October 2007, CVR Partners and CRNF entered into several agreements with CVR Energy and its subsidiaries (including CRRM) that govern the business relations among CVR Partners, its general partner and CRNF on the one hand, and CVR Energy and its subsidiaries, on the other hand. Certain of the agreements described below were subsequently amended and restated. Amounts owed to CVR Partners and CRNF from CVR Energy and its subsidiaries with respect to these agreements are included in prepaid expenses and other current assets, and other long-term assets, on the Condensed Consolidated Balance Sheets. Conversely, amounts owed to CVR Energy and its subsidiaries by CVR Partners and CRNF with respect to these agreements are included in accounts payable, accrued expenses and other current liabilities, and other long-term liabilities, on the Partnership's Condensed Consolidated Balance Sheets. | ||
CVR Refining completed its initial public offering (the "Refining Partnership IPO") in January 2013. CVR Energy currently indirectly owns the general partner of CVR Refining and the majority of CVR Refining's outstanding common units. Although certain of CVR Energy's subsidiaries that are parties to the related party agreements discussed below were contributed to CVR Refining in connection with the Refining Partnership IPO and are now subsidiaries of CVR Refining, the Refining Partnership IPO had no impact on the Partnership's business relations with these subsidiaries. | ||
Feedstock and Shared Services Agreement | ||
CRNF entered into a feedstock and shared services agreement with CRRM which was most recently amended in December 2013, under which the two parties provide feedstock and other services to one another. These feedstocks and services are utilized in the respective production processes of CRRM's Coffeyville, Kansas refinery and CRNF's nitrogen fertilizer plant. | ||
Pursuant to the feedstock and shared services agreement, CRNF and CRRM have agreed to transfer hydrogen to one another; provided, CRNF is not required to sell hydrogen to CRRM if such hydrogen is required for operation of CRNF's nitrogen fertilizer plant, if such sale would adversely affect the Partnership's classification as a partnership for federal income tax purposes, or if such sale would not be in CRNF's best interest. Net monthly sales of hydrogen to CRRM have been reflected as net sales for CVR Partners. Net monthly receipts of hydrogen from CRRM have been reflected in cost of product sold for CVR Partners. For the three months ended March 31, 2014 and 2013, the net sales generated from the sale of hydrogen to CRRM were approximately $5.9 million and $29,000, respectively. For the three months ended March 31, 2014 and 2013, CVR Partners also recognized $0 and $0.2 million, respectively, of cost of product sold related to the transfer of excess hydrogen from the Coffeyville refinery. At March 31, 2014 and December 31, 2013, there were approximately $1.9 million and $2.6 million, respectively, of receivables included in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets associated with unpaid balances related to hydrogen sales. | ||
CRNF is also obligated to make available to CRRM any nitrogen produced by the Linde air separation plant that is not required for the operation of the nitrogen fertilizer plant, as determined by CRNF in a commercially reasonable manner. Reimbursed direct operating expenses associated with nitrogen for the three months ended March 31, 2014 and 2013, were approximately $0.2 million and $0.2 million, respectively. No amounts were paid by CRNF to CRRM for any of the periods presented. | ||
The agreement also provides a mechanism pursuant to which CRNF transfers a tail gas stream to CRRM. CRNF receives the benefit of eliminating a waste gas stream and recovers the fuel value of the tail gas system. For the three months ended March 31, 2014 and 2013, there were net sales of approximately $1,000 and $0.1 million, respectively, generated from the sale of tail gas to CRRM. | ||
In April 2011, in connection with the tail gas stream transfers to CRRM, CRRM installed a pipe between the Coffeyville, Kansas refinery and the nitrogen fertilizer plant to transfer the tail gas. CRNF agreed to pay CRRM the cost of installing the pipe over the next three years and, in 2014, provide an additional 15% to cover the cost of capital. At March 31, 2014 and December 31, 2013, there were assets of approximately $0.2 million and $0.2 million included in other current assets, approximately $1.1 million and $1.1 million included in other non-current assets, an offset liability of approximately $0.2 million and $0.3 million in other current liabilities and approximately $17,000 and $0.1 million of other non-current liabilities in the Condensed Consolidated Balance Sheets. | ||
When CRNF retains excess sulfur from its operations, CRRM agrees to handle such sulfur in exchange for a fee payable to transport, store and sell the excess sulfur when possible. CRRM reimburses CRNF for any excess in the sales price of the sulfur above its costs. Approximately $83,000 and $34,000 were reimbursed by CRRM for the sale of excess sulfur for the three months ended March 31, 2014 and 2013. These reimbursements were recorded as reductions to direct operating expenses. | ||
The agreement has an initial term of 20 years, which will be automatically extended for successive five year renewal periods. Either party may terminate the agreement, effective upon the last day of a term, by giving notice no later than three years prior to a renewal date. The agreement will also be terminable by mutual consent of the parties or if one party breaches the agreement and does not cure within applicable cure periods and the breach materially and adversely affects the ability of the terminating party to operate its facility. Additionally, the agreement may be terminated in some circumstances if substantially all of the operations at the nitrogen fertilizer plant or the Coffeyville, Kansas refinery are permanently terminated, or if either party is subject to a bankruptcy proceeding or otherwise becomes insolvent. | ||
At March 31, 2014 and December 31, 2013, receivables of $0.1 million and $0.3 million, respectively, were included in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets for amounts yet to be received related to components of the feedstock and shared services agreement other than amounts related to hydrogen sales and pet coke purchases. At March 31, 2014 and December 31, 2013, current obligations of $1.3 million and $1.0 million, respectively, were included in accounts payable on the Condensed Consolidated Balance Sheets associated with unpaid balances related to components of the feedstock and shared services agreement, other than amounts related to hydrogen sales and pet coke purchases. | ||
Coke Supply Agreement | ||
CRNF entered into a coke supply agreement with CRRM pursuant to which CRRM supplies CRNF with pet coke. This agreement provides that CRRM must deliver to CRNF during each calendar year an annual required amount of pet coke equal to the lesser of (i) 100 percent of the pet coke produced at CRRM's Coffeyville, Kansas petroleum refinery or (ii) 500,000 tons of pet coke. CRNF is also obligated to purchase this annual required amount. If during a calendar month CRRM produces more than 41,667 tons of pet coke, then CRNF will have the option to purchase the excess at the purchase price provided for in the agreement. If CRNF declines to exercise this option, CRRM may sell the excess to a third party. | ||
CRNF obtains most (over 70% on average during the last five years) of the pet coke it needs from CRRM's adjacent crude oil refinery pursuant to the pet coke supply agreement, and procures the remainder through a contract with HollyFrontier Corporation and on the open market. The price CRNF pays pursuant to the pet coke supply agreement is based on the lesser of a pet coke price derived from the price received for UAN, or the UAN-based price, and a pet coke price index. The UAN-based price begins with a pet coke price of $25 per ton based on a price per ton for UAN (exclusive of transportation cost), or netback price, of $205 per ton, and adjusts up or down $0.50 per ton for every $1.00 change in the netback price. The UAN-based price has a ceiling of $40 per ton and a floor of $5 per ton. | ||
CRNF will pay any taxes associated with the sale, purchase, transportation, delivery, storage or consumption of the pet coke. CRNF is entitled to offset any amount payable for the pet coke against any amount due from CRRM under the feedstock and shared services agreement between the parties. | ||
The agreement has an initial term of 20 years and will be automatically extended for successive five year renewal periods. Either party may terminate the agreement by giving notice no later than three years prior to a renewal date. The agreement is also terminable by mutual consent of the parties or if a party breaches the agreement and does not cure within applicable cure periods. Additionally, the agreement may be terminated in some circumstances if substantially all of the operations at the nitrogen fertilizer plant or the Coffeyville, Kansas refinery are permanently terminated, or if either party is subject to a bankruptcy proceeding or otherwise becomes insolvent. | ||
The cost of pet coke associated with the transfer of pet coke from CRRM to CRNF was approximately $2.2 million and $2.6 million for the three months ended March 31, 2014 and 2013, respectively. Payables of $0.1 million and $0.6 million related to the coke supply agreement were included in accounts payable on the Condensed Consolidated Balance Sheets at March 31, 2014 and December 31, 2013, respectively. | ||
Environmental Agreement | ||
CRNF entered into an environmental agreement with CRRM which provides for certain indemnification and access rights in connection with environmental matters affecting the Coffeyville, Kansas refinery and the nitrogen fertilizer plant. Generally, both CRNF and CRRM have agreed to indemnify and defend each other and each other’s affiliates against liabilities associated with certain hazardous materials and violations of environmental laws that are a result of or caused by the indemnifying party’s actions or business operations. This obligation extends to indemnification for liabilities arising out of off-site disposal of certain hazardous materials. Indemnification obligations of the parties will be reduced by applicable amounts recovered by an indemnified party from third parties or from insurance coverage. | ||
The agreement provides for indemnification in the case of contamination or releases of hazardous materials that were present but unknown at the time the agreement was entered into to the extent such contamination or releases were identified in reasonable detail through October 2012. The agreement further provides for indemnification in the case of contamination or releases which occur subsequent to the execution of the agreement. | ||
The term of the agreement is for at least 20 years, or for so long as the feedstock and shared services agreement is in force, whichever is longer. | ||
Services Agreement | ||
CVR Partners obtains certain management and other services from CVR Energy pursuant to a services agreement between the Partnership, CVR GP and CVR Energy. Under this agreement, the Partnership’s general partner has engaged CVR Energy to conduct a substantial portion of its day-to-day business operations. CVR Energy provides CVR Partners with the following services under the agreement, among others: | ||
• | services from CVR Energy’s employees in capacities equivalent to the capacities of corporate executive officers, except that those who serve in such capacities under the agreement shall serve the Partnership on a shared, part-time basis only, unless the Partnership and CVR Energy agree otherwise; | |
• | administrative and professional services, including legal, accounting services, human resources, insurance, tax, credit, finance, government affairs and regulatory affairs; | |
• | management of the Partnership’s property and the property of its operating subsidiary in the ordinary course of business; | |
• | recommendations on capital raising activities to the board of directors of the Partnership’s general partner, including the issuance of debt or equity interests, the entry into credit facilities and other capital market transactions; | |
• | managing or overseeing litigation and administrative or regulatory proceedings, establishing appropriate insurance policies for the Partnership and providing safety and environmental advice; | |
• | recommending the payment of distributions; and | |
• | managing or providing advice for other projects, including acquisitions, as may be agreed by CVR Energy and the Partnership’s general partner from time to time. | |
As payment for services provided under the agreement, the Partnership, its general partner or CRNF must pay CVR Energy (i) all costs incurred by CVR Energy or its affiliates in connection with the employment of its employees, other than administrative personnel, who provide the Partnership services under the agreement on a full-time basis, but excluding certain share-based compensation; (ii) a prorated share of costs incurred by CVR Energy or its affiliates in connection with the employment of its employees, including administrative personnel, who provide the Partnership services under the agreement on a part-time basis, but excluding certain share-based compensation, and such prorated share shall be determined by CVR Energy on a commercially reasonable basis, based on the percentage of total working time that such shared personnel are engaged in performing services for the Partnership; (iii) a prorated share of certain administrative costs, including office costs, services by outside vendors, other sales, general and administrative costs and depreciation and amortization; and (iv) various other administrative costs in accordance with the terms of the agreement, including travel, insurance, legal and audit services, government and public relations and bank charges. | ||
Either CVR Energy or the Partnership's general partner may temporarily or permanently exclude any particular service from the scope of the agreement upon 180 days' notice and either CVR Energy or the Partnership's general partner may terminate the agreement upon at least 180 days' notice, but not more than one year's notice. Furthermore, the Partnership's general partner may terminate the agreement immediately if CVR Energy becomes bankrupt or dissolves or commences liquidation or winding-up procedures. | ||
In order to facilitate the carrying out of services under the agreement, CVR Partners and CVR Energy have granted one another certain royalty-free, non-exclusive and non-transferable rights to use one another’s intellectual property under certain circumstances. | ||
Net amounts incurred under the services agreement for the three months ended March 31, 2014 and 2013 were approximately $4.0 million and $3.3 million, respectively. Of these charges approximately $3.1 million and $2.2 million, respectively, are included in selling, general and administrative expenses (exclusive of depreciation and amortization). In addition, $0.9 million and $1.1 million, respectively, of these charges are included in direct operating expenses. For services performed in connection with the services agreement, the Partnership recognized personnel costs of $1.2 million and $0.9 million, respectively, for the three months ended March 31, 2014 and 2013. At each of March 31, 2014 and December 31, 2013, current obligations of $2.8 million and $2.7 million were included in accounts payable and accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets with respect to amounts billed in accordance with the services agreement. | ||
GP Services Agreement | ||
The Partnership is party to a GP Services Agreement dated November 29, 2011 between the Partnership, CVR GP and CVR Energy. As payment for services provided under the agreement, CVR Energy must pay a prorated share of costs incurred by the Partnership or its general partner in connection with the employment of the Partnership's employees who provide CVR Energy services on a part-time basis, as determined by the Partnership's general partner on a commercially reasonable basis based on the percentage of total working time that such shared personnel are engaged in performing services for CVR Energy. CVR Energy is not required to pay any compensation, salaries, bonuses or benefits to any of the Partnership’s general partner’s employees who provide services to CVR Energy on a full-time or part-time basis; the Partnership will continue to pay their compensation. | ||
Limited Partnership Agreement | ||
The Partnership's general partner manages the Partnership's operations and activities as specified in the partnership agreement. The general partner of the Partnership is managed by its board of directors. CRLLC has the right to select the directors of the general partner. Actions by the general partner that are made in its individual capacity are made by CRLLC as the sole member of the general partner and not by its board of directors. The members of the board of directors of the general partner are not elected by the unitholders and are not subject to re-election on a regular basis in the future. The officers of the general partner manage the day-to-day affairs of the Partnership's business. | ||
The partnership agreement provides that the Partnership will reimburse its general partner for all direct and indirect expenses it incurs or payments it makes on behalf of the Partnership (including salary, bonus, incentive compensation and other amounts paid to any person to perform services for the Partnership or for its general partner in connection with operating the Partnership). The Partnership reimbursed its general partner for the three months ended March 31, 2014 and 2013 approximately $0.4 million and $1.0 million, respectively, pursuant to the partnership agreement for personnel costs related to the compensation of executives at the general partner, who manage the Partnership's business. At March 31, 2014 and December 31, 2013, current obligations of $0.1 million and $2.0 million, respectively, were included in personnel accruals on the Condensed Consolidated Balance Sheets related to amounts outstanding in accordance with the limited partnership agreement. | ||
Railcar Lease Agreement | ||
From March 2009 through June 2013, the Partnership leased 199 railcars from American Railcar Leasing, LLC (“ARL”), a company controlled by Mr. Carl C. Icahn, CVR Energy's majority stockholder. The agreement was scheduled to expire on March 30, 2014. On June 13, 2013, the Partnership purchased the railcars from ARL for approximately $5.0 million. Rent expense is included in cost of product sold (exclusive of depreciation and amortization) in the Condensed Consolidated Statement of Operations. For the three months ended March 31, 2013, $0.3 million of rent expense was recorded related to this agreement. | ||
Registration Rights Agreement | ||
For the three months ended March 31, 2013, the Partnership recognized approximately $0.3 million in expenses for the benefit of CRLLC in connection with CRLLC’s Secondary Offering in accordance with CVR Partners’ Registration Rights Agreement. These amounts included filing fees, printer fees and external accounting and external legal fees incurred in conjunction with the filing of the registration statement for the Secondary Offering. | ||
Insight Portfolio Group | ||
Insight Portfolio Group LLC ("Insight Portfolio Group") is an entity formed by Mr. Icahn in order to maximize the potential buying power of a group of entities with which Mr. Icahn has a relationship in negotiating with a wide range of suppliers of goods, services and tangible and intangible property at negotiated rates. In January 2013, CVR Energy acquired a minority equity interest in Insight Portfolio Group. The Partnership participates in Insight Portfolio Group’s buying group through its relationship with CVR Energy. The Partnership may purchase a variety of goods and services as members of the buying group at prices and on terms that management believes would be more favorable than those which would be achieved on a stand-alone basis. Transactions with Insight Portfolio Group for each of the years on a gross basis were nominal. |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Fair Value Measurements | ' | |||||||||||||||
(13) Fair Value Measurements | ||||||||||||||||
In accordance with ASC Topic 820 — Fair Value Measurements and Disclosures (“ASC 820”), the Partnership utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets, liabilities or a group of assets or liabilities, such as a business. | ||||||||||||||||
ASC 820 utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: | ||||||||||||||||
• | Level 1 — Quoted prices in active markets for identical assets and liabilities | |||||||||||||||
• | Level 2 — Other significant observable inputs (including quoted prices in active markets for similar assets or liabilities) | |||||||||||||||
• | Level 3 — Significant unobservable inputs (including the Partnership’s own assumptions in determining the fair value). | |||||||||||||||
The following table sets forth the assets and liabilities measured at fair value on a recurring basis, by input level, as of March 31, 2014 and December 31, 2013. | ||||||||||||||||
March 31, 2014 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Financial Statement Caption and Description | ||||||||||||||||
Cash equivalents (money market account) | $ | 65,304 | $ | — | $ | — | $ | 65,304 | ||||||||
Other current liabilities (interest rate swap) | — | 930 | — | 930 | ||||||||||||
Other long-term liabilities (interest rate swap) | — | 796 | — | 796 | ||||||||||||
Total Liabilities | — | 1,726 | — | 1,726 | ||||||||||||
Accumulated other comprehensive loss (interest rate swap) | $ | — | $ | 1,726 | $ | — | $ | 1,726 | ||||||||
December 31, 2013 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Financial Statement Caption and Description | ||||||||||||||||
Cash equivalents (money market account) | $ | 65,299 | $ | — | $ | — | $ | 65,299 | ||||||||
Other current liabilities (interest rate swap) | — | 883 | — | 883 | ||||||||||||
Other long-term liabilities (interest rate swap) | — | 1,016 | — | 1,016 | ||||||||||||
Total Liabilities | — | 1,899 | — | 1,899 | ||||||||||||
Accumulated other comprehensive loss (interest rate swap) | $ | — | $ | 1,899 | $ | — | $ | 1,899 | ||||||||
As of March 31, 2014 and December 31, 2013, the only financial assets and liabilities that are measured at fair value on a recurring basis are the Partnership’s money market accounts and derivative instruments. The carrying value of the Partnership’s debt approximates fair value. The Partnership has an interest rate swap that is measured at fair value on a recurring basis using Level 2 inputs (see Note 10 “Interest Rate Swap Agreements”). The fair values of these interest rate swap instruments are based on discounted cash flow models that incorporate the cash flows of the derivatives, as well as the current LIBOR rate and a forward LIBOR curve, along with other observable market inputs. The Partnership's cash and cash equivalents are all Level 1. The Partnership had no transfers of assets or liabilities between any of the above levels during the three months ended March 31, 2014 and 2013. |
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||
Summary of the common units and phantom units activity | ' | ||||||
A summary of the common units and phantom units (collectively “Units”) activity during the three months ended March 31, 2014 is presented below: | |||||||
Units | Weighted-Average | ||||||
Grant Date Fair Value | |||||||
Non-vested at January 1, 2014 | 171,119 | $ | 21.34 | ||||
Granted | — | — | |||||
Vested | — | — | |||||
Forfeited | (64,629 | ) | 23.36 | ||||
Non-vested at March 31, 2014 | 106,490 | $ | 20.12 | ||||
Inventories_Tables
Inventories (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Schedule of inventories | ' | |||||||
Inventories consisted of the following: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Finished goods | $ | 10,995 | $ | 8,849 | ||||
Raw materials and precious metals | 8,120 | 8,546 | ||||||
Parts and supplies | 14,420 | 15,669 | ||||||
$ | 33,535 | $ | 33,064 | |||||
Property_Plant_and_Equipment_T
Property, Plant, and Equipment (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Summary of costs for property, plant, and equipment | ' | |||||||
A summary of costs for property, plant, and equipment is as follows: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Land and improvements | $ | 5,026 | $ | 5,032 | ||||
Buildings and improvements | 2,237 | 2,191 | ||||||
Machinery and equipment | 549,156 | 548,282 | ||||||
Automotive equipment | 450 | 450 | ||||||
Furniture and fixtures | 888 | 893 | ||||||
Railcars | 7,902 | 7,902 | ||||||
Construction in progress | 7,206 | 5,294 | ||||||
$ | 572,865 | $ | 570,044 | |||||
Less: Accumulated depreciation | 163,744 | 157,088 | ||||||
Total property, plant and equipment, net | $ | 409,121 | $ | 412,956 | ||||
Accrued_Expenses_and_Other_Cur1
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Accrued Expenses and Other Current Liabilities | ' | |||||||
Schedule of accrued expenses and other current liabilities | ' | |||||||
Accrued expenses and other current liabilities were as follows: | ||||||||
March 31, | 31-Dec-13 | |||||||
2014 | ||||||||
(in thousands) | ||||||||
Property taxes | $ | 1,815 | $ | 1,373 | ||||
Current interest rate swap | 930 | 883 | ||||||
Accrued interest | 439 | 458 | ||||||
Other accrued expenses and liabilities (1) | 6,986 | 2,345 | ||||||
$ | 10,170 | $ | 5,059 | |||||
____________ | ||||||||
-1 | Other accrued expenses and liabilities include amounts owed by the Partnership to Coffeyville Resources Refining & Marketing, LLC (“CRRM”), a related party, under the feedstock and shared services agreement. Refer to Note 12 ("Related Party Transactions") for additional discussion. |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||||
Schedule of minimum required payments for operating leases and unconditional purchase obligations | ' | |||||||
The minimum required payments for the Partnership’s operating leases and unconditional purchase obligations are as follows: | ||||||||
Operating | Unconditional | |||||||
Leases | Purchase | |||||||
Obligations(1) | ||||||||
(in thousands) | ||||||||
Nine months ending December 31, 2014 | $ | 4,060 | $ | 15,245 | ||||
Year ending December 31, 2015 | 5,191 | 14,002 | ||||||
Year ending December 31, 2016 | 4,466 | 14,253 | ||||||
Year ending December 31, 2017 | 2,827 | 14,547 | ||||||
Year ending December 31, 2018 | 2,014 | 14,505 | ||||||
Thereafter | 4,917 | 94,227 | ||||||
$ | 23,475 | $ | 166,779 | |||||
_____________ | ||||||||
-1 | This includes the Partnership’s purchase obligation for pet coke from CVR Refining and has been derived from a calculation of the average pet coke price paid to CVR Refining over the preceding two year period. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis | ' | |||||||||||||||
The following table sets forth the assets and liabilities measured at fair value on a recurring basis, by input level, as of March 31, 2014 and December 31, 2013. | ||||||||||||||||
March 31, 2014 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Financial Statement Caption and Description | ||||||||||||||||
Cash equivalents (money market account) | $ | 65,304 | $ | — | $ | — | $ | 65,304 | ||||||||
Other current liabilities (interest rate swap) | — | 930 | — | 930 | ||||||||||||
Other long-term liabilities (interest rate swap) | — | 796 | — | 796 | ||||||||||||
Total Liabilities | — | 1,726 | — | 1,726 | ||||||||||||
Accumulated other comprehensive loss (interest rate swap) | $ | — | $ | 1,726 | $ | — | $ | 1,726 | ||||||||
December 31, 2013 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Financial Statement Caption and Description | ||||||||||||||||
Cash equivalents (money market account) | $ | 65,299 | $ | — | $ | — | $ | 65,299 | ||||||||
Other current liabilities (interest rate swap) | — | 883 | — | 883 | ||||||||||||
Other long-term liabilities (interest rate swap) | — | 1,016 | — | 1,016 | ||||||||||||
Total Liabilities | — | 1,899 | — | 1,899 | ||||||||||||
Accumulated other comprehensive loss (interest rate swap) | $ | — | $ | 1,899 | $ | — | $ | 1,899 | ||||||||
Formation_of_the_Partnership_O1
Formation of the Partnership, Organization and Nature of Business (Details) (USD $) | Mar. 31, 2014 | 27-May-13 | 27-May-13 | Mar. 31, 2014 | 28-May-13 | Mar. 31, 2014 |
In Millions, except Share data, unless otherwise specified | CVR Energy, Inc | Initial public offering | Initial public offering | Secondary offering | Secondary offering | Secondary offering |
Offer | CRLLC | CRLLC | CRLLC | |||
Formation of the Partnership, Organization and Nature of Business | ' | ' | ' | ' | ' | ' |
Percentage of limited partner interest held by the public | ' | 30.00% | ' | 47.00% | ' | ' |
Limited partner interest (as a percent) | ' | ' | 70.00% | ' | ' | 53.00% |
Aggregate ownership percentage | 82.00% | ' | ' | ' | ' | ' |
Number of limited partner units sold in public offering | ' | ' | ' | ' | 12,000,000 | ' |
Offering price per unit (in dollars per share) | ' | ' | ' | ' | $25.15 | ' |
Net proceeds from offering | ' | ' | ' | ' | $292.60 | ' |
Underwriting fees paid | ' | ' | ' | ' | $9.20 | ' |
ShareBased_Compensation_Detail
Share-Based Compensation (Details) (USD $) | 3 Months Ended | |||||||||
Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | |
CVR Energy, Inc | CVR Energy, Inc | CVR Energy, Inc | CVR Energy, Inc | CVR Energy, Inc | CVR Energy, Inc | CVR Energy, Inc | Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities | ||
CVR Energy LTIP | CVR Energy LTIP | CVR Energy LTIP | CVR Energy LTIP | CVR Energy LTIP | CVR Energy LTIP | CVR Energy LTIP | CVR Energy, Inc | CVR Energy, Inc | ||
Restricted Stock | Restricted Stock | Restricted stock units | Restricted stock units | Performance Shares | Incentive Unit Award | Incentive Unit Award | CVR Energy LTIP | CVR Energy LTIP | ||
Executive Officer | Board of Directors Chairman | trading_day | Performance Shares | Incentive Unit Award | ||||||
Board of Directors Chairman | ||||||||||
Share-Based Compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of allocation of share-based compensation expense | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Price at which holders of Shares will receive upon vesting of award (in dollars per share) | ' | ' | $30 | ' | ' | ' | ' | ' | ' | ' |
Vesting period | ' | '3 years | ' | '3 years | '1 year | ' | '3 years | ' | ' | ' |
Share based Compensation Arrangement by Share based Payment Award, Number of Shares Considered for Determining Cash Payment for Each Award Upon Vesting | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Period for Determination of Cash Payment Value | ' | ' | ' | ' | ' | ' | 10 | ' | ' | ' |
Share Based Compensation Arrangement by Share Based Payment Award Number of Shares Right to Receive Cash Payment on Vesting Equal to Fair Market Value Is Received Per Award | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' |
Vesting percentage | ' | ' | ' | 33.33% | ' | ' | 33.33% | ' | ' | ' |
Unrecognized compensation cost | ' | $300,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average period for amortization of unrecognized compensation cost | ' | '1 year 1 month | ' | ' | ' | ' | '1 year 8 months | ' | ' | ' |
Compensation expense | ' | 16,000 | 600,000 | ' | ' | 400,000 | ' | 100,000 | ' | ' |
Share-based arrangements liability | ' | ' | ' | ' | ' | ' | ' | ' | 700,000 | 100,000 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | ' | ' | ' | ' | ' | ' | ' | $800,000 | ' | ' |
ShareBased_Compensation_Detail1
Share-Based Compensation (Details 2) (CVR Partners LTIP, USD $) | 3 Months Ended | 1 Months Ended | 3 Months Ended | ||||
Mar. 31, 2014 | Dec. 31, 2012 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | |
Phantom Stock Units | Phantom Stock Units | Phantom Stock and Common Units | Phantom Stock and Common Units | Personnel Accruals | Personnel Accruals | ||
Phantom Stock and Common Units | Phantom Stock and Common Units | ||||||
Share-Based Compensation | ' | ' | ' | ' | ' | ' | ' |
Vesting percentage | ' | ' | 33.33% | ' | ' | ' | ' |
Vesting period | '3 years | '3 years | '3 years | ' | ' | ' | ' |
Common stock authorized for issuance (in shares) | 5,000,000 | ' | ' | ' | ' | ' | ' |
Common units available for issuance (in shares) | 4,809,862 | ' | ' | ' | ' | ' | ' |
Unrecognized compensation cost | ' | ' | ' | $1,400,000 | ' | ' | ' |
Weighted-average period for amortization of unrecognized compensation cost | ' | ' | ' | '1 year 5 months | ' | ' | ' |
Compensation expense | ' | ' | ' | 400,000 | 600,000 | ' | ' |
Personnel Accruals | ' | ' | ' | ' | ' | $400,000 | $200,000 |
ShareBased_Compensation_Detail2
Share-Based Compensation (Details 3) (CVR Partners LTIP, USD $) | 1 Months Ended | 3 Months Ended |
Dec. 31, 2012 | Mar. 31, 2014 | |
Share-Based Compensation | ' | ' |
Vesting period | ' | '3 years |
Phantom Stock Units | ' | ' |
Share-Based Compensation | ' | ' |
Vesting period | '3 years | '3 years |
Phantom and common units | ' | ' |
Non-vested shares activity | ' | ' |
Non-vested at the beginning of the period (in shares) | ' | 171,119 |
Granted (in shares) | ' | 0 |
Vested (in shares) | ' | 0 |
Forfeited (in shares) | ' | -64,629 |
Non-vested at the end of the period (in shares) | ' | 106,490 |
Weighted-Average Grant-Date Fair Value | ' | ' |
Non-vested at the beginning of the period (in dollars per share) | ' | 21.34 |
Granted (in dollars per share) | ' | 0 |
Vested (in dollars per share) | ' | 0 |
Forfeited (in dollars per share) | ' | 23.36 |
Non-vested at the end of the period (in dollars per share) | ' | 20.12 |
Inventories_Details
Inventories (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ' | ' |
Finished goods | $10,995 | $8,849 |
Raw materials and precious metals | 8,120 | 8,546 |
Parts and supplies | 14,420 | 15,669 |
Inventories | $33,535 | $33,064 |
Property_Plant_and_Equipment_D
Property, Plant, and Equipment (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property, Plant, and Equipment | ' | ' |
Gross property, plant and equipment | $572,865 | $570,044 |
Less: Accumulated depreciation | 163,744 | 157,088 |
Total property, plant and equipment, net | 409,121 | 412,956 |
Land and improvements | ' | ' |
Property, Plant, and Equipment | ' | ' |
Gross property, plant and equipment | 5,026 | 5,032 |
Buildings and improvements | ' | ' |
Property, Plant, and Equipment | ' | ' |
Gross property, plant and equipment | 2,237 | 2,191 |
Machinery and equipment | ' | ' |
Property, Plant, and Equipment | ' | ' |
Gross property, plant and equipment | 549,156 | 548,282 |
Automotive equipment | ' | ' |
Property, Plant, and Equipment | ' | ' |
Gross property, plant and equipment | 450 | 450 |
Furniture and fixtures | ' | ' |
Property, Plant, and Equipment | ' | ' |
Gross property, plant and equipment | 888 | 893 |
Railcars | ' | ' |
Property, Plant, and Equipment | ' | ' |
Gross property, plant and equipment | 7,902 | 7,902 |
Construction in progress | ' | ' |
Property, Plant, and Equipment | ' | ' |
Gross property, plant and equipment | $7,206 | $5,294 |
Property_Plant_and_Equipment_D1
Property, Plant, and Equipment (Details 2) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Property, Plant and Equipment [Abstract] | ' | ' |
Capitalized interest | $35,000 | $400,000 |
Depreciation and amortization not included in direct operating expenses | $6,600,000 | $5,700,000 |
Partners_Capital_and_Partnersh1
Partners' Capital and Partnership Distributions (Details) (USD $) | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Mar. 10, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Apr. 30, 2014 | Mar. 31, 2014 |
partnership_interest | CRLLC | Subsequent Event | Secondary offering | |||
CRLLC | ||||||
Equity [Abstract] | ' | ' | ' | ' | ' | ' |
Number of types of partnership interests outstanding | ' | 2 | ' | ' | ' | ' |
Partners' Capital | ' | ' | ' | ' | ' | ' |
Common units issued (in units) | ' | 73,112,951 | 73,112,951 | ' | ' | ' |
Common units outstanding (in units) | ' | 73,112,951 | 73,112,951 | 38,920,000 | ' | ' |
Percentage of common units owned by CRLLC | ' | ' | ' | ' | ' | 53.00% |
Maximum period after the end of each quarter of cash distribution to common unitholders | ' | '60 days | ' | ' | ' | ' |
Distribution made to limited partner (per unit) | $0.43 | ' | ' | ' | ' | ' |
Amount of distribution made to limited partner | $31.40 | ' | ' | ' | ' | ' |
Declared distribution made to limited partner (per unit) | ' | ' | ' | ' | $0.38 | ' |
Amount of declared distribution made to limited partner | ' | ' | ' | ' | $27.80 | ' |
Accrued_Expenses_and_Other_Cur2
Accrued Expenses and Other Current Liabilities (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Accrued Expenses and Other Current Liabilities | ' | ' | ||
Property taxes | $1,815 | $1,373 | ||
Current interest rate swap | 930 | 883 | ||
Accrued interest | 439 | 458 | ||
Other accrued expenses and liabilities | 6,986 | [1] | 2,345 | [1] |
Accrued expenses and other current liabilities | $10,170 | $5,059 | ||
[1] | Other accrued expenses and liabilities include amounts owed by the Partnership to Coffeyville Resources Refining & Marketing, LLC (“CRRMâ€), a related party, under the feedstock and shared services agreement. Refer to Note 12 ("Related Party Transactions") for additional discussion. |
Credit_Facility_Details
Credit Facility (Details) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
quarter | |
Credit Facility | ' |
Number of trailing quarters used in calculating the leverage ratio | 4 |
CRNF | Eurodollar | ' |
Credit Facility | ' |
Basis spread on variable rate (as a percent) | 3.50% |
Variable rate basis | 'Eurodollar rate |
CRNF | Eurodollar | Minimum | ' |
Credit Facility | ' |
Basis spread on variable rate (as a percent) | 3.50% |
CRNF | Eurodollar | Maximum | ' |
Credit Facility | ' |
Basis spread on variable rate (as a percent) | 4.25% |
CRNF | Prime | ' |
Credit Facility | ' |
Basis spread on variable rate (as a percent) | 2.50% |
Variable rate basis | 'prime rate |
CRNF | Prime | Minimum | ' |
Credit Facility | ' |
Basis spread on variable rate (as a percent) | 2.50% |
CRNF | Prime | Maximum | ' |
Credit Facility | ' |
Basis spread on variable rate (as a percent) | 3.25% |
Term loan facility | CRNF | ' |
Credit Facility | ' |
Borrowing capacity | 125,000,000 |
Revolving credit facility | CRNF | ' |
Credit Facility | ' |
Borrowing capacity | 25,000,000 |
Amounts outstanding | 0 |
Revolving credit facility | CRNF | Maximum | ' |
Credit Facility | ' |
Uncommitted incremental facility | 50,000,000 |
Interest_Rate_Swap_Details
Interest Rate Swap (Details) (CRNF, USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Jun. 30, 2011 | |
agreement | |||
Term loan facility | ' | ' | ' |
Interest rate swap | ' | ' | ' |
Borrowing capacity on credit facility | $125,000,000 | ' | ' |
Designated as hedges | Interest rate swap agreements entered into on June 30, 2011 | ' | ' | ' |
Interest rate swap | ' | ' | ' |
Floating rate basis | 'three month LIBOR | ' | ' |
Fixed rate (as a percent) | 1.94% | ' | ' |
Settlement period | '90 days | ' | ' |
Designated as hedges | Interest rate swap agreements entered into on July 1, 2011 | ' | ' | ' |
Interest rate swap | ' | ' | ' |
Floating rate basis | 'three month LIBOR | ' | ' |
Fixed rate (as a percent) | 1.98% | ' | ' |
Settlement period | '90 days | ' | ' |
Designated as hedges | Interest rate swap agreements | ' | ' | ' |
Interest rate swap | ' | ' | ' |
Number of agreements | ' | ' | 2 |
Aggregate notional amount | 62,500,000 | ' | ' |
Floating rate basis | 'three month LIBOR | ' | ' |
Average fixed rate of interest (as a percent) | 1.96% | ' | ' |
Effective rate (as a percent) | 4.56% | ' | ' |
Interest Rate Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net | ($300,000) | ($300,000) | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | ||
Operating Leases | ' | ' | |
Nine months ending December 31, 2014 | $4,060,000 | ' | |
Year ending December 31, 2015 | 5,191,000 | ' | |
Year ending December 31, 2016 | 4,466,000 | ' | |
Year ending December 31, 2017 | 2,827,000 | ' | |
Year ending December 31, 2018 | 2,014,000 | ' | |
Thereafter | 4,917,000 | ' | |
Operating leases | 23,475,000 | ' | |
Year ending December 31, 2013 | ' | ' | |
Nine months ending December 31, 2014 | 15,245,000 | [1] | ' |
Year ending December 31, 2015 | 14,002,000 | [1] | ' |
Year ending December 31, 2016 | 14,253,000 | [1] | ' |
Year ending December 31, 2017 | 14,547,000 | [1] | ' |
Year ending December 31, 2018 | 14,505,000 | [1] | ' |
Thereafter | 94,227,000 | [1] | ' |
Unconditional purchase obligations | 166,779,000 | [1] | ' |
CRNF | ' | ' | |
Unrecorded purchase agreements | ' | ' | |
Lease expense | $1,200,000 | $1,400,000 | |
Purchase obligation for pet coke | CVR Refining, LP | ' | ' | |
Unrecorded purchase agreements | ' | ' | |
Period for calculation of the average pet coke price paid to CVR Refining | '2 years | ' | |
[1] | This includes the Partnership’s purchase obligation for pet coke from CVR Refining and has been derived from a calculation of the average pet coke price paid to CVR Refining over the preceding two year period. |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 2) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
HollyFrontier Corporation | ' | ' |
Long-term commitments | ' | ' |
Expenses related to agreement | $1,300,000 | $1,500,000 |
Material | Linde, Inc. | CRNF | ' | ' |
Long-term commitments | ' | ' |
Expenses related to agreement | 1,000,000 | 1,000,000 |
Minimum | Material | Linde, Inc. | CRNF | ' | ' |
Long-term commitments | ' | ' |
Committed contractual payments per month | 300,000 | ' |
Maximum | Material | Linde, Inc. | CRNF | ' | ' |
Long-term commitments | ' | ' |
Committed contractual payments per month | $400,000 | ' |
Commitments_and_Contingencies_3
Commitments and Contingencies (Details 3) (EHS, USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
EHS | ' | ' |
Commitments and Contingencies | ' | ' |
Expenses related to environmental, health and safety (EHS) matters | $57,000 | $0 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 1 Months Ended | 3 Months Ended | ||
Apr. 30, 2011 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Related party transactions | ' | ' | ' | ' |
Number of parties | ' | 2 | ' | ' |
Revenue from related party | ' | $80,316,000 | $81,411,000 | ' |
Cost of product sold (exclusive of depreciation and amortization) | ' | 21,708,000 | 10,654,000 | ' |
Receivables | ' | 2,182,000 | ' | 3,104,000 |
Other long-term assets, with affiliates | ' | 1,091,000 | ' | 1,136,000 |
Accounts payable, due to affiliates | ' | 2,924,000 | ' | 4,289,000 |
Hydrogen | Feedstock and Shared Services Agreement | ' | ' | ' | ' |
Related party transactions | ' | ' | ' | ' |
Cost of product sold (exclusive of depreciation and amortization) | ' | 0 | 200,000 | ' |
Receivables | ' | 1,900,000 | ' | 2,600,000 |
Hydrogen | CRNF | Feedstock and Shared Services Agreement | CRRM | ' | ' | ' | ' |
Related party transactions | ' | ' | ' | ' |
Revenue from related party | ' | 5,900,000 | 29,000 | ' |
Nitrogen | Feedstock and Shared Services Agreement | ' | ' | ' | ' |
Related party transactions | ' | ' | ' | ' |
Net reimbursed or (paid) direct operating expenses | ' | 200,000 | 200,000 | ' |
Tail gas | CRNF | Feedstock and Shared Services Agreement | CRRM | ' | ' | ' | ' |
Related party transactions | ' | ' | ' | ' |
Revenue from related party | ' | 1,000 | 100,000 | ' |
Receivables | ' | 200,000 | ' | 200,000 |
Period for payment of cost of installation of pipe | '3 years | ' | ' | ' |
Percentage of payment agreed to be paid for cost of capital in fourth year | ' | 15.00% | ' | ' |
Other long-term assets, with affiliates | ' | 1,100,000 | ' | 1,100,000 |
Accounts payable, due to affiliates | ' | 200,000 | ' | 300,000 |
Due to Related Parties, Noncurrent | ' | 17,000 | ' | 100,000 |
Sulfur | CRNF | Feedstock and Shared Services Agreement | CRRM | ' | ' | ' | ' |
Related party transactions | ' | ' | ' | ' |
Reimbursed of direct operating expenses | ' | 83,000 | 34,000 | ' |
Petroleum coke | Coke Supply Agreement | ' | ' | ' | ' |
Related party transactions | ' | ' | ' | ' |
Cost of product sold (exclusive of depreciation and amortization) | ' | 2,200,000 | 2,600,000 | ' |
Accounts payable, due to affiliates | ' | 100,000 | ' | 600,000 |
Petroleum coke | CRNF | Coke Supply Agreement | CRRM | ' | ' | ' | ' |
Related party transactions | ' | ' | ' | ' |
Initial term of agreement | ' | '20 years | ' | ' |
Renewal period of agreement | ' | '5 years | ' | ' |
Notice period for termination of agreement | ' | '3 years | ' | ' |
Products and services, excluding hydrogen | Feedstock and Shared Services Agreement | ' | ' | ' | ' |
Related party transactions | ' | ' | ' | ' |
Receivables | ' | 100,000 | ' | 300,000 |
Accounts payable, due to affiliates | ' | $1,300,000 | ' | $1,000,000 |
Related_Party_Transactions_Det1
Related Party Transactions (Details 2) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Related party transactions | ' | ' | ' |
Cost of product sold (exclusive of depreciation and amortization) | $21,708,000 | $10,654,000 | ' |
Accounts payable, due to affiliates | 2,924,000 | ' | 4,289,000 |
Petroleum coke | Coke Supply Agreement | ' | ' | ' |
Related party transactions | ' | ' | ' |
Cost of product sold (exclusive of depreciation and amortization) | 2,200,000 | 2,600,000 | ' |
Accounts payable, due to affiliates | $100,000 | ' | $600,000 |
Petroleum coke | CRNF | Coke Supply Agreement | CRRM | ' | ' | ' |
Related party transactions | ' | ' | ' |
Percentage of annual production of pet coke to be delivered | 100.00% | ' | ' |
Annual production of pet coke | 500,000 | ' | ' |
Period for which average percentage of pet coke is obtained from CRRM's adjacent crude oil refinery | '5 years | ' | ' |
Pet coke price used to calculate the UAN-based price under the related party agreement (in dollars per ton) | 25 | ' | ' |
UAN-based netback price, exclusive of transportation cost, under the related party agreement (in dollars per ton) | 205 | ' | ' |
Pet coke price adjustment for every $1.00 change in the UAN netback price, exclusive of transportation cost, used to calculate the UAN-based price under the related party agreement (in dollars per ton) | 0.5 | ' | ' |
UAN-based netback price change, exclusive of transportation cost, under the related party agreement (in dollars per ton) | 1 | ' | ' |
Initial term of agreement | '20 years | ' | ' |
Renewal period of agreement | '5 years | ' | ' |
Notice period for termination of agreement | '3 years | ' | ' |
Minimum | Petroleum coke | CRNF | Coke Supply Agreement | CRRM | ' | ' | ' |
Related party transactions | ' | ' | ' |
Monthly production volume of product which allows for the purchasing party the option to purchase any excess at rates stated in the agreement | 41,667 | ' | ' |
Average percentage of pet coke obtained during the last five years from CRRM's adjacent crude oil refinery | 70.00% | ' | ' |
Pet coke price used to calculate the UAN-based price under the related party agreement (in dollars per ton) | 5 | ' | ' |
Maximum | Petroleum coke | CRNF | Coke Supply Agreement | CRRM | ' | ' | ' |
Related party transactions | ' | ' | ' |
Pet coke price used to calculate the UAN-based price under the related party agreement (in dollars per ton) | 40 | ' | ' |
Related_Party_Transactions_Det2
Related Party Transactions (Details 3) (Environmental Agreement, CRNF, Minimum, CRRM) | 3 Months Ended |
Mar. 31, 2014 | |
Environmental Agreement | CRNF | Minimum | CRRM | ' |
Related party transactions | ' |
Initial term of agreement | '20 years |
Related_Party_Transactions_Det3
Related Party Transactions (Details 4) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Related party transactions | ' | ' | ' |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | $4,654,000 | $5,630,000 | ' |
Direct operating expenses (exclusive of depreciation and amortization) | 24,189,000 | 22,557,000 | ' |
Accounts payable, due to affiliates | 2,924,000 | ' | 4,289,000 |
Services Agreement | ' | ' | ' |
Related party transactions | ' | ' | ' |
Expenses from transaction with related party | 4,000,000 | 3,300,000 | ' |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 3,100,000 | 2,200,000 | ' |
Direct operating expenses (exclusive of depreciation and amortization) | 900,000 | 1,100,000 | ' |
Personnel costs | 1,200,000 | 900,000 | ' |
Accounts payable, due to affiliates | $2,800,000 | ' | $2,700,000 |
Services Agreement | CVR Energy, Inc | CVR GP, LLC | ' | ' | ' |
Related party transactions | ' | ' | ' |
Notice period for exclusion of service from agreement | '180 days | ' | ' |
Minimum | Services Agreement | CVR Energy, Inc | CVR GP, LLC | ' | ' | ' |
Related party transactions | ' | ' | ' |
Notice period for termination of agreement | '180 days | ' | ' |
Maximum | Services Agreement | CVR Energy, Inc | CVR GP, LLC | ' | ' | ' |
Related party transactions | ' | ' | ' |
Notice period for termination of agreement | '1 year | ' | ' |
Related_Party_Transactions_Det4
Related Party Transactions (Details 6) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Related party transactions | ' | ' | ' |
Personnel accruals, with affiliates | $146,000 | ' | $2,052,000 |
Limited Partnership Agreement | ' | ' | ' |
Related party transactions | ' | ' | ' |
Personnel costs | 400,000 | 1,000,000 | ' |
Personnel accruals, with affiliates | $100,000 | ' | $2,000,000 |
Related_Party_Transactions_Det5
Related Party Transactions (Details 7) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | |||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2013 | Jun. 30, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | |
Railcar Lease Agreement | Railcar Lease Agreement | Railcar Lease Agreement | Secondary offering | |||
American Railcar Leasing, LLC | American Railcar Leasing, LLC | |||||
railcar | ||||||
Related party transactions | ' | ' | ' | ' | ' | ' |
Operating leases number of railcars | ' | ' | ' | ' | 199 | ' |
Purchased railcars which were previously leased | ' | ' | ' | $5,000,000 | ' | ' |
Cost of product sold (exclusive of depreciation and amortization) | 21,708,000 | 10,654,000 | 300,000 | ' | ' | ' |
Offering costs paid | ' | ' | ' | ' | ' | $300,000 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Accumulated other comprehensive loss (interest rate swap) | $1,726,000 | ' | $1,899,000 |
Tranfers of assets or liabilities between any of input levels | 0 | 0 | ' |
Recurring | Level 1 | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Cash equivalents (money market account) | 65,304,000 | ' | 65,299,000 |
Other current liabilities (interest rate swap) | 0 | ' | 0 |
Other long-term liabilities (interest rate swap) | 0 | ' | 0 |
Total Liabilities | 0 | ' | 0 |
Accumulated other comprehensive loss (interest rate swap) | 0 | ' | 0 |
Recurring | Level 2 | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Cash equivalents (money market account) | 0 | ' | 0 |
Other current liabilities (interest rate swap) | 930,000 | ' | 883,000 |
Other long-term liabilities (interest rate swap) | 796,000 | ' | 1,016,000 |
Total Liabilities | 1,726,000 | ' | 1,899,000 |
Accumulated other comprehensive loss (interest rate swap) | 1,726,000 | ' | 1,899,000 |
Recurring | Level 3 | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Cash equivalents (money market account) | 0 | ' | 0 |
Other current liabilities (interest rate swap) | 0 | ' | 0 |
Other long-term liabilities (interest rate swap) | 0 | ' | 0 |
Total Liabilities | 0 | ' | 0 |
Accumulated other comprehensive loss (interest rate swap) | 0 | ' | 0 |
Recurring | Total | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Cash equivalents (money market account) | 65,304,000 | ' | 65,299,000 |
Other current liabilities (interest rate swap) | 930,000 | ' | 883,000 |
Other long-term liabilities (interest rate swap) | 796,000 | ' | 1,016,000 |
Total Liabilities | 1,726,000 | ' | 1,899,000 |
Accumulated other comprehensive loss (interest rate swap) | $1,726,000 | ' | $1,899,000 |