Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 25, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | CVR Partners, LP | |
Entity Central Index Key | 1,425,292 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 113,282,973 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 81,538 | $ 55,595 |
Accounts receivable, net of allowance for doubtful accounts of $49 and $46 at March 31, 2017 and December 31, 2016, respectively | 15,115 | 13,924 |
Inventories | 64,071 | 58,167 |
Prepaid expenses and other current assets, including $480 and $750 with affiliates at March 31, 2017 and December 31, 2016, respectively | 6,160 | 6,845 |
Total current assets | 166,884 | 134,531 |
Property, plant, and equipment, net of accumulated depreciation | 1,114,374 | 1,130,121 |
Goodwill | 40,969 | 40,969 |
Other long-term assets, including $553 and $598 with affiliates at March 31, 2017 and December 31, 2016, respectively | 6,203 | 6,596 |
Total assets | 1,328,430 | 1,312,217 |
Current liabilities: | ||
Accounts payable, including $2,800 and $2,402 due to affiliates at March 31, 2017 and December 31, 2016, respectively | 25,753 | 28,815 |
Personnel accruals, including $1,175 and $1,968 with affiliates at March 31, 2017 and December 31, 2016, respectively | 5,325 | 9,256 |
Deferred revenue | 31,886 | 12,571 |
Accrued expenses and other current liabilities, including $1,261 and $2,515 with affiliates at March 31, 2017 and December 31, 2016, respectively | 26,004 | 12,374 |
Total current liabilities | 88,968 | 63,016 |
Long-term liabilities: | ||
Long-term debt, net of current portion | 623,780 | 623,107 |
Other long-term liabilities | 1,111 | 1,187 |
Total long-term liabilities | 624,891 | 624,294 |
Commitments and contingencies | ||
Partners’ capital: | ||
Common unitholders, 113,282,973 units issued and outstanding at March 31, 2017 and December 31, 2016 | 614,570 | 624,906 |
General partner interest | 1 | 1 |
Total partners’ capital | 614,571 | 624,907 |
Total liabilities and partners’ capital | $ 1,328,430 | $ 1,312,217 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 49 | $ 46 |
Prepaid expenses and other current assets, from affiliates | 480 | 750 |
Other long-term assets, with affiliates | 553 | 598 |
Accounts payable, due to affiliates | 2,800 | 2,402 |
Personnel accruals, with affiliates | 1,175 | 1,968 |
Accrued expenses and other current liabilities, with affiliates | $ 1,261 | $ 2,515 |
Common unitholders, units issued (in units) | 113,282,973 | 113,282,973 |
Common unitholders, units outstanding (in units) | 113,282,973 | 113,282,973 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Net sales | $ 85,321 | $ 73,092 |
Operating costs and expenses: | ||
Cost of materials and other | 21,737 | 16,381 |
Direct operating expenses (exclusive of depreciation and amortization) | 35,910 | 23,690 |
Depreciation and amortization | 15,412 | 6,976 |
Cost of sales | 73,059 | 47,047 |
Selling, general and administrative expenses | 6,914 | 6,392 |
Total operating costs and expenses | 79,973 | 53,439 |
Operating income | 5,348 | 19,653 |
Other income (expense): | ||
Interest expense and other financing costs | (15,706) | (1,635) |
Interest income | 3 | 2 |
Other income, net | 42 | 23 |
Total other expense | (15,661) | (1,610) |
Income (loss) before income tax expense | (10,313) | 18,043 |
Income tax expense | 23 | 1 |
Net income (loss) | $ (10,336) | $ 18,042 |
Net income (loss) per common unit — basic and diluted (in dollars per unit) | $ (0.09) | $ 0.25 |
Weighted-average common units outstanding — basic and diluted (in units) | 113,283 | 73,128 |
Affiliates | ||
Operating costs and expenses: | ||
Cost of materials and other | $ 2,146 | $ 821 |
Direct operating expenses (exclusive of depreciation and amortization) | 832 | 852 |
Selling, general and administrative expenses | 3,886 | 3,462 |
Third Parties | ||
Operating costs and expenses: | ||
Cost of materials and other | 19,591 | 15,560 |
Direct operating expenses (exclusive of depreciation and amortization) | 35,078 | 22,838 |
Selling, general and administrative expenses | $ 3,028 | $ 2,930 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ (10,336) | $ 18,042 |
Other comprehensive income (loss): | ||
Net loss reclassified into income on settlement of interest rate swaps | 0 | 119 |
Other comprehensive income | 0 | 119 |
Total comprehensive income (loss) | $ (10,336) | $ 18,161 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL - 3 months ended Mar. 31, 2017 - USD ($) $ in Thousands | Total | General Partner Interest | Common Units |
Beginning balance (in units) at Dec. 31, 2016 | 113,282,973 | ||
Beginning balance at Dec. 31, 2016 | $ 624,907 | $ 1 | $ 624,906 |
Increase (Decrease) in Partners' Capital | |||
Net income (loss) | (10,336) | $ (10,336) | |
Ending balance (in units) at Mar. 31, 2017 | 113,282,973 | ||
Ending balance at Mar. 31, 2017 | $ 614,571 | $ 1 | $ 614,570 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (10,336) | $ 18,042 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 15,412 | 6,976 |
Allowance for doubtful accounts | 3 | 231 |
Amortization of deferred financing costs and original issue discount | 735 | 241 |
Loss on disposition of fixed assets | 13 | 0 |
Change in assets and liabilities: | ||
Accounts receivable | (1,194) | (2,110) |
Inventories | (3,106) | 4,937 |
Prepaid expenses and other current assets | 685 | 722 |
Other long-term assets | 178 | (131) |
Accounts payable | (1,372) | 648 |
Deferred revenue | 19,315 | (2,291) |
Accrued expenses and other current liabilities | 9,016 | (4,273) |
Other long-term liabilities | 23 | 0 |
Net cash provided by operating activities | 30,055 | 23,640 |
Cash flows from investing activities: | ||
Capital expenditures | (4,112) | (1,733) |
Net cash used in investing activities | (4,112) | (1,733) |
Cash flows from financing activities: | ||
Payment of financing costs | 0 | (150) |
Cash distributions to common unitholders – Affiliates | 0 | (10,509) |
Cash distributions to common unitholders – Non-affiliates | 0 | (9,236) |
Net cash used in financing activities | 0 | (19,895) |
Net increase (decrease) in cash and cash equivalents | 25,943 | 2,012 |
Cash and cash equivalents, beginning of period | 55,595 | 49,967 |
Cash and cash equivalents, end of period | 81,538 | 51,979 |
Supplemental disclosures: | ||
Cash paid for income taxes, net | 0 | 0 |
Cash paid for interest | 0 | 1,545 |
Non-cash investing and financing activities: | ||
Construction in progress additions included in accounts payable | 2,181 | 767 |
Change in accounts payable related to construction in progress additions | (1,690) | (263) |
Affiliates | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Share-based compensation | 516 | 495 |
Third Parties | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Share-based compensation | $ 167 | $ 153 |
Organization and Nature of Busi
Organization and Nature of Business | 3 Months Ended |
Mar. 31, 2017 | |
Formation of the Partnership, Organization and Nature of Business | |
Organization and Nature of Business | (1) Organization and Nature of Business CVR Partners, LP (referred to as "CVR Partners" or the "Partnership") is a Delaware limited partnership, formed by CVR Energy, Inc. (together with its subsidiaries, but excluding the Partnership and its subsidiaries, "CVR Energy") to own, operate and grow its nitrogen fertilizer business. Nitrogen fertilizer is used by farmers to improve the yield and quality of their crops, primarily corn and wheat. The Partnership principally produces ammonia and urea ammonium nitrate ("UAN"), an aqueous solution of urea and ammonium nitrate. The Partnership's product sales are sold on a wholesale basis in North America. The Partnership produces nitrogen fertilizer products at two manufacturing facilities, which are located in Coffeyville, Kansas (the "Coffeyville Facility") and East Dubuque, Illinois (the "East Dubuque Facility"). On April 1, 2016, the Partnership completed the merger (the "East Dubuque Merger") with CVR Nitrogen, LP (formerly known as East Dubuque Nitrogen Partners, L.P. and also formerly known as Rentech Nitrogen Partners, L.P.) ("CVR Nitrogen") and with CVR Nitrogen GP, LLC (formerly known as East Dubuque Nitrogen GP, LLC and also formerly known as Rentech Nitrogen GP, LLC) ("CVR Nitrogen GP"), whereby the Partnership acquired the East Dubuque Facility. See Note 4 ("East Dubuque Merger") for further discussion. The Partnership's subsidiaries include Coffeyville Resources Nitrogen Fertilizers, LLC ("CRNF"), which owns and operates the Coffeyville Facility, and East Dubuque Nitrogen Fertilizers, LLC ("EDNF"), which owns and operates the East Dubuque Facility. Both facilities manufacture ammonia and are able to further upgrade to other nitrogen fertilizer products, principally UAN. Immediately subsequent to the East Dubuque Merger and as of March 31, 2017 , public security holders held approximately 66% of the Partnership's outstanding limited partner interests and Coffeyville Resources, LLC ("CRLLC"), a wholly-owned subsidiary of CVR Energy, held approximately 34% of the Partnership's outstanding limited partner interests and 100% of the noneconomic general partner interest. As of March 31, 2017 , Icahn Enterprises L.P. ("IEP") and its affiliates owned approximately 82% of the shares of CVR Energy. Management and Operations CVR GP, LLC ("CVR GP" or the "general partner") manages and operates the Partnership. Common unitholders have only limited voting rights on matters affecting the Partnership. In addition, common unitholders have no right to elect the general partner's directors on an annual or continuing basis. The Partnership is operated by a combination of the general partner's senior management team and CVR Energy's senior management team pursuant to a services agreement among CVR Energy, CVR GP and the Partnership. The various rights and responsibilities of the Partnership's partners are set forth in the limited partnership agreement. The Partnership also is party to a number of agreements with CVR Energy and CVR GP to regulate certain business relations between the Partnership and the other parties thereto. See Note 13 ("Related Party Transactions") for further discussion. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | (2) Basis of Presentation The accompanying Partnership condensed consolidated financial statements include the accounts of CVR Partners and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying condensed consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC"). These condensed consolidated financial statements should be read in conjunction with the December 31, 2016 audited consolidated financial statements and notes thereto included in CVR Partners’ Annual Report on Form 10-K for the year ended December 31, 2016 , which was filed with the SEC on February 21, 2017 (the "2016 Form 10-K"). The condensed consolidated financial statements include certain selling, general and administrative expenses and direct operating expenses that CVR Energy and its subsidiaries incurred on behalf of the Partnership. These related party transactions are governed by the services agreement. See Note 13 ("Related Party Transactions") for additional discussion of the services agreement and billing and allocation of certain costs. In the opinion of the Partnership’s management, the accompanying condensed consolidated financial statements and related notes reflect all adjustments (consisting only of normal recurring adjustments) that are necessary to fairly present the financial position of the Partnership as of March 31, 2017 and December 31, 2016 , the results of operations and comprehensive income (loss) of the Partnership for the three months ended March 31, 2017 and 2016 , the cash flows of the Partnership for the three months ended March 31, 2017 and 2016 and the changes in partners’ capital for the Partnership for the three months ended March 31, 2017 . The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Results of operations and cash flows for the interim periods presented are not necessarily indicative of the results that will be realized for the year ending December 31, 2017 or any other interim or annual period. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | (3) Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, creating a new topic, FASB Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers , which supersedes revenue recognition requirements in FASB ASC Topic 605, "Revenue Recognition." This ASU requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. In addition, an entity is required to disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The standard is effective for interim and annual periods beginning after December 15, 2017. The Partnership has developed an implementation plan to adopt the new standard. As part of this plan, the Partnership is currently assessing the impact of the new guidance on its business processes, business and accounting systems, and consolidated financial statements and related disclosures, which involves review of existing revenue streams, evaluation of accounting policies and identification of the types of arrangements where differences may arise in the conversion to the new standard. The Partnership expects to complete the assessment phase of its implementation plan within the next several months, after which the Partnership will initiate the design and implementation phases of the plan, including implementing any changes to existing business processes and systems to accommodate the new standard, during 2017. The Partnership will adopt this standard as of January 1, 2018 using the modified retrospective application method. To date, the Partnership has not identified any material differences in its existing revenue recognition methods that would require modification under the new standard. In February 2016, the FASB issued ASU No. 2016-02, " Leases" ("ASU 2016-02") . The new standard revises accounting for operating leases by a lessee, among other changes, and requires a lessee to recognize a liability to make lease payments and an asset representing its right to use the underlying asset for the lease term in the balance sheet. The standard is effective for the first interim and annual periods beginning after December 15, 2018, with early adoption permitted. At adoption, ASU 2016-02 will be applied using the modified retrospective application method. The Partnership is formulating an assessment and implementation plan to adopt the new standard. The Partnership expects its assessment and implementation plan to be ongoing during 2017 and 2018 and is currently unable to reasonably estimate the impact of adopting the new leases standard on its consolidated financial statements and footnote disclosures. In January 2017, the FASB issued ASU No. 2017-04, " Simplifying the Test for Goodwill Impairment ". The new standard simplifies the accounting for goodwill impairments by eliminating step 2 from the goodwill quantitative impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The standard is effective for interim and annual periods beginning after December 15, 2019 and early adoption is permitted. The Partnership adopted this standard as of January 1, 2017. |
East Dubuque Merger
East Dubuque Merger | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
East Dubuque Merger | (4) East Dubuque Merger On April 1, 2016, the Partnership completed the East Dubuque Merger as contemplated by the Agreement and Plan of Merger, dated as of August 9, 2015 (the "Merger Agreement"), whereby the Partnership acquired CVR Nitrogen and CVR Nitrogen GP. Under the terms of the Merger Agreement, holders of CVR Nitrogen common units eligible to receive consideration received 1.04 common units representing limited partner interests in CVR Partners and $2.57 in cash, without interest, for each CVR Nitrogen common unit. Pursuant to the Merger Agreement, CVR Partners issued approximately 40.2 million CVR Partners common units and paid approximately $99.2 million in cash consideration to CVR Nitrogen common unitholders and certain holders of CVR Nitrogen phantom units. The aggregate merger consideration was approximately $802.4 million , including the fair value of CVR Partners common units issued of $335.7 million , a cash contribution of $99.2 million and $367.5 million fair value of assumed debt. The East Dubuque Facility contributed net sales of $26.8 million and an operating loss of $0.6 million to our Condensed Consolidated Statements of Operations for the three months ended March 31, 2017 . Merger-Related Indebtedness CVR Nitrogen’s debt arrangements that remained in place after the closing date of the East Dubuque Merger included $320.0 million of its 6.500% notes due 2021 (the "2021 Notes"). The majority of the 2021 Notes were repurchased in June 2016, as discussed further in Note 11 ("Debt") . Immediately prior to the East Dubuque Merger, CVR Nitrogen also had outstanding balances under a credit agreement with Wells Fargo Bank, National Association, as successor-in-interest by assignment from General Electric Company, as administrative agent (the "Wells Fargo Credit Agreement"). In connection with the closing of the East Dubuque Merger, the Partnership paid $49.4 million for the outstanding balance, accrued interest and fees under the Wells Fargo Credit Agreement, and the Wells Fargo Credit Agreement was terminated. Pro Forma Financial Information The summary pro forma financial information for the period presented below gives effect to the East Dubuque Merger as if it had occurred on January 1, 2016. The pro forma financial information was adjusted to give effect to pro forma events that are i) directly attributable to the East Dubuque Merger, ii) factually supportable and iii) expected to have a continuing impact on the consolidated results of operations. Pro forma net income has been adjusted to exclude $1.9 million of merger-related costs incurred during the three months ended March 31, 2016. Incremental interest expense for financing the cash merger consideration and financing the payoff of the Wells Fargo Credit Agreement has also been adjusted for in the pro forma financial information, as well as incremental depreciation resulting from increased fair value of the property, plant and equipment as noted in the purchase price allocation. The summary pro forma financial information is for informational purposes only and does not purport to represent what the Partnership's consolidated results of operations actually would have been if the East Dubuque Merger had occurred at any date, and such data does not purport to project the Partnership's results of operations for any future period. The basic and diluted units outstanding used to calculate the pro forma net income per unit amounts presented below have been adjusted to assume units issued at the closing of the East Dubuque Merger were outstanding since January 1, 2016. Three Months Ended (in thousands, except per unit data) Net sales $ 107,940 Net income 14,844 Net income per common unit — basic and diluted 0.13 Expenses Associated with the East Dubuque Merger During the three months ended March 31, 2016 , the Partnership incurred approximately $1.2 million of legal and other professional fees and other merger-related expenses, which were included in selling, general and administrative expenses. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | (5) Share‑Based Compensation Certain employees of CVR Partners and employees of CVR Energy who perform services for the Partnership under the services agreement with CVR Energy participate in equity-based compensation plans of CVR Partners' affiliates. Accordingly, CVR Partners has recorded compensation expense for these plans. All compensation expense related to these plans for full-time employees of CVR Partners has been attributed 100% to the Partnership. For employees of CVR Energy, the Partnership records share-based compensation relative to the percentage of time spent by each employee providing services to the Partnership as compared to the total calculated share-based compensation by CVR Energy. The Partnership recognizes the costs of share-based compensation in selling, general and administrative expenses and direct operating expenses (exclusive of depreciation and amortization). Allocated expense amounts related to plans for which the Partnership is responsible for payment are reflected as an increase or decrease to accrued expenses and other current liabilities. Long-Term Incentive Plan – CVR Energy CVR Energy has a Long-Term Incentive Plan ("CVR Energy LTIP") that permits the grant of options, stock appreciation rights, restricted shares, restricted stock units, dividend equivalent rights, share awards and performance awards (including performance share units, performance units and performance based restricted stock). As of March 31, 2017 , only grants of 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’ employees, officers, consultants and directors. Performance Unit Awards In December 2015, CVR Energy entered into a performance unit award agreement (the "2015 Performance Unit Award Agreement") with its Chief Executive Officer. Compensation cost for the 2015 Performance Unit Award Agreement was recognized over the performance cycle from January 1, 2016 to December 31, 2016. The awards were fully vested at December 31, 2016 and the Partnership reimbursed CVR Energy $0.5 million for its allocated portion of the performance unit award during the first quarter of 2017. As of December 31, 2016, the Partnership had a liability of $0.5 million , for its allocated portion of the 2015 Performance Unit Award Agreement, which was recorded in accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets. Compensation expense recorded for the three months ended March 31, 2016 related to the awards was approximately $0.1 million . In December 2016, CVR Energy entered into a performance unit award agreement (the "2016 Performance Unit Award Agreement") with its Executive Chairman, Mr. Lipinski. Compensation cost for the 2016 Performance Unit Award Agreement will be recognized over the performance cycle from January 1, 2017 to December 31, 2017. The performance unit award represents the right to receive, upon vesting, a cash payment equal to a defined threshold in accordance with the award agreement, multiplied by a performance factor that is based upon the achievement of certain operating objectives. The Partnership will be responsible for reimbursing CVR Energy for its allocated portion of the performance unit award. Assuming a target performance threshold and that the allocation of costs from CVR Energy remains consistent with the allocation percentages in place at March 31, 2017 , there was approximately $0.4 million of total unrecognized compensation cost related to the 2016 Performance Unit Award Agreement to be recognized over approximately 0.8 years . Compensation expense recorded for the three months ended March 31, 2017 related to the awards was approximately $0.1 million . The Partnership will be responsible for reimbursing CVR Energy for its allocated portion of the awards. As of March 31, 2017 , the Partnership had a liability of $0.1 million , for its allocated portion of the 2016 Performance Unit Award Agreement, which is recorded in accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets. Incentive Unit Awards – CVR Energy CVR Energy has granted awards of incentive units and distribution equivalent rights to certain employees of CRLLC, CVR Energy and the Partnership's general partner who provide shared services to CVR Energy and its subsidiaries (including the Partnership). The awards are generally graded vesting awards, which are expected to vest over three years, with one-third of the award vesting each year. Compensation expense is recognized on a straight-line basis over the vesting period of the respective tranche of the award. Each incentive unit and distribution equivalent right represents the right to receive, upon vesting, a cash payment equal to (i) the average fair market value of one common unit of CVR Refining, LP ("CVR Refining") in accordance with the award agreement, plus (ii) the per unit cash value of all distributions declared and paid by CVR Refining from the grant date to and including the vesting date. The awards, which are liability-classified, are remeasured at each subsequent reporting date until they vest. Assuming the portion of time spent on CVR Partners related matters by CVR Energy employees providing services to CVR Partners remains consistent with the amount of services provided during March 31, 2017 , there was approximately $1.1 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 1.5 years . Inclusion of a vesting table would not be meaningful due to changes in allocation percentages that may occur from time to time. The unrecognized compensation expense has been determined by the number of incentive units and respective allocation percentage for individuals for whom, as of March 31, 2017 , compensation expense has been allocated to the Partnership. Compensation expense recorded for the three months ended March 31, 2017 was approximately $0.2 million , and compensation expense was nominal for the three months ended March 31, 2016 . The Partnership is responsible for reimbursing CVR Energy for its allocated portion of the awards. As of March 31, 2017 and December 31, 2016 , the Partnership had a liability related to these awards of $0.6 million and $0.4 million , respectively, which is recorded in accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets. Long-Term Incentive Plan – CVR Partners The Partnership has a long-term incentive plan ("CVR Partners LTIP") that provides for the grant of options, unit appreciation rights, distribution equivalent rights, restricted units, phantom units and other unit-based awards, each in respect of common units. Individuals eligible to receive awards pursuant to the CVR Partners LTIP include (i) employees of the Partnership and its subsidiaries, (ii) employees of the general partner, (iii) members of the board of directors of the general partner, and (iv) certain CVR Partners' parent's employees, consultants and directors who perform services for the benefit of the Partnership. Through the CVR Partners LTIP, phantom unit awards outstanding include awards granted to employees of both the Partnership and the general partner. Phantom unit awards made to employees of the general partner are considered non-employee equity based-awards. The phantom unit awards outstanding vest over a three -year period. The maximum number of common units issuable under the CVR Partners LTIP is 5,000,000 . As of March 31, 2017 , there were 4,820,215 common units available for issuance under the CVR Partners LTIP. As all phantom unit awards discussed below are cash settled awards, they do not reduce the number of common units available for issuance. Each phantom unit and distribution equivalent right represents the right to receive, upon vesting, a cash payment equal to (i) the average fair market value of one unit of the Partnership's common units in accordance with the award agreement, plus (ii) the per unit cash value of all distributions declared and paid by the Partnership from the grant date to and including the vesting date. The awards, which are liability-classified, are remeasured at each subsequent reporting date until they vest. The phantom unit awards are generally graded vesting awards, which are expected to vest over three years with one-third of the award vesting each year. Compensation expense is recognized on a straight-line basis over the vesting period of the respective tranche of the award. A summary of the phantom unit activity during the three months ended March 31, 2017 is presented below: Phantom Units Weighted-Average Non-vested at January 1, 2017 771,786 $ 6.47 Granted — — Vested (7,333 ) 8.03 Forfeited (2,316 ) 7.77 Non-vested at March 31, 2017 762,137 $ 6.45 Unrecognized compensation expense associated with the unvested phantom units at March 31, 2017 was approximately $2.5 million and is expected to be recognized over a weighted average period of 1.5 years . Compensation expense recorded for the three months ended March 31, 2017 and 2016 related to the awards under the CVR Partners LTIP was approximately $0.3 million and $0.5 million , respectively. Compensation expense related to the awards to employees of the Partnership and its subsidiaries under the CVR Partners LTIP has been recorded in selling, general and administrative expenses - third parties and direct operating expenses (exclusive of depreciation and amortization) - third parties. Compensation expense related to the awards issued to employees of the general partner under the CVR Partners LTIP has been recorded in selling, general and administrative expenses - affiliates and direct operating expenses (exclusive of depreciation and amortization) - affiliates. As of March 31, 2017 and December 31, 2016 , the Partnership had a liability of $1.3 million and $1.0 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, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | (6) Inventories Inventories consisted of the following: March 31, December 31, (in thousands) Finished goods $ 23,263 $ 15,860 Raw materials and precious metals 7,883 8,818 Parts and supplies 32,925 33,489 Total inventories $ 64,071 $ 58,167 |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | (7) Property, Plant and Equipment A summary of costs and accumulated depreciation for property, plant and equipment is as follows: March 31, December 31, (in thousands) Land and improvements $ 12,987 $ 12,995 Buildings and improvements 14,881 14,881 Machinery and equipment 1,345,714 1,343,980 Automotive equipment 599 599 Furniture and fixtures 1,421 1,437 Railcars 16,261 16,261 Construction in progress 10,172 9,588 1,402,035 1,399,741 Less: Accumulated depreciation 287,661 269,620 Total property, plant and equipment, net $ 1,114,374 $ 1,130,121 Capitalized interest recognized as a reduction of interest expense was approximately $42,000 for the three months ended March 31, 2017 . |
Partners' Capital and Partnersh
Partners' Capital and Partnership Distributions | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Partners' Capital and Partnership Distributions | (8) 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. Immediately subsequent to the East Dubuque Merger and as of March 31, 2017 , the Partnership had a total of 113,282,973 common units issued and outstanding, of which 38,920,000 common units were owned by CRLLC, representing approximately 34% of the total Partnership common units outstanding. The board of directors of the Partnership's general partner has a policy for the Partnership to distribute all available cash generated on a quarterly basis. Cash distributions will be made to the common unitholders of record on the applicable record date, generally within 60 days after the end of each quarter. Available cash for each quarter will be determined by the board of directors of the general partner following the end of such quarter. Available cash begins with Adjusted EBITDA reduced for cash needed for (i) net cash interest expense (excluding capitalized interest) and debt service and other contractual obligations; (ii) maintenance capital expenditures; and (iii) to the extent applicable, major scheduled turnaround expenses, reserves for future operating or capital needs that the board of directors of the general partner deems necessary or appropriate, and expenses associated with the East Dubuque Merger, if any. Adjusted EBITDA is defined as EBITDA (net income before interest expense, net, income tax expenses, depreciation and amortization) further adjusted for the impact of major scheduled turnaround expense, gain or loss on extinguishment of debt, loss on disposition of assets, expenses associated with the East Dubuque Merger and business interruption insurance recovery, when applicable. Available cash for distribution may be increased by the release of previously established cash reserves, if any, at the discretion of the board of directors of the general partner, and available cash is increased by the business interruption insurance proceeds and the impact of purchase accounting. Actual distributions are set by the board of directors of the general partner. The board of directors of the general partner may modify the cash distribution policy at any time, and the partnership agreement does not require the board of directors of the general partner to make distributions at all. On April 26, 2017 , the Board of Directors of the general partner of the Partnership declared a cash distribution for the first quarter of 2017 in the amount of $ 0.02 per common unit, or approximately $2.3 million in aggregate. The cash distribution will be paid on May 15, 2017 to the Partnership's unitholders of record at the close of business on May 8, 2017 . |
Net Income (Loss) per Common Un
Net Income (Loss) per Common Unit | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) per Common Unit | (9) Net Income (Loss) per Common Unit The Partnership's net income (loss) is allocated wholly to the common units, as the general partner does not have an economic interest. Basic and diluted net income (loss) per common unit is calculated by dividing net income (loss) by the weighted-average number of common units outstanding during the period and, when applicable, gives effect to certain 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 Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | (10) Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities were as follows: As of As of (in thousands) Property taxes $ 2,224 $ 1,742 Accrued interest 17,634 2,683 Railcar maintenance accruals 1,309 2,502 Affiliates (1) 1,261 2,515 Other accrued expenses and liabilities 3,576 2,932 Total accrued expenses and other current liabilities $ 26,004 $ 12,374 ____________ (1) Accrued expenses and other current liabilities include amounts owed by the Partnership to CVR Energy under the feedstock and shared services agreement. Refer to Note 13 ("Related Party Transactions") for additional discussion. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | (11) Debt Long-term debt consisted of the following: As of As of (in thousands) 9.250% senior secured notes, due 2023 $ 645,000 $ 645,000 6.500% notes, due 2021 2,240 2,240 Total long-term debt, before debt issuance costs and discount 647,240 647,240 Less: Unamortized discount 14,796 15,220 Unamortized debt issuance costs 8,664 8,913 Total long-term debt, net of current portion $ 623,780 $ 623,107 For the three months ended March 31, 2017 and 2016 , amortization of the discount on debt and amortization of debt issuance costs reported as interest expense and other financing costs totaled approximately $0.7 million and $0.2 million , respectively. 2023 Notes On June 10, 2016, the Partnership and CVR Nitrogen Finance Corporation ("CVR Nitrogen Finance"), an indirect wholly-owned subsidiary of the Partnership, (together the "2023 Notes Issuers"), certain subsidiary guarantors named therein and Wilmington Trust, National Association, as trustee and as collateral trustee, completed a private offering of $645.0 million aggregate principal amount of 9.250% Senior Secured Notes due 2023 (the "2023 Notes"). The 2023 Notes mature on June 15, 2023, unless earlier redeemed or repurchased by the issuers. Interest on the 2023 Notes is payable semi-annually in arrears on June 15 and December 15 of each year. The 2023 Notes are guaranteed on a senior secured basis by all of the Partnership’s existing subsidiaries. The 2023 Notes contain customary covenants for a financing of this type that, among other things, restrict the Partnership’s ability and the ability of certain of its subsidiaries to: (i) sell assets; (ii) pay distributions on, redeem or repurchase the Partnership’s units or redeem or repurchase its subordinated debt; (iii) make investments; (iv) incur or guarantee additional indebtedness or issue preferred units; (v) create or incur certain liens; (vi) enter into agreements that restrict distributions or other payments from the Partnership’s restricted subsidiaries to the Partnership; (vii) consolidate, merge or transfer all or substantially all of the Partnership’s assets; (viii) engage in transactions with affiliates; and (ix) create unrestricted subsidiaries. The indenture governing the 2023 Notes prohibits us from making distributions to unitholders if any default or event of default (as defined in the indenture) exists. In addition, the indenture limits our ability to pay distributions to unitholders. The covenants will apply differently depending on our fixed charge coverage ratio (as defined in the indenture). If the fixed charge coverage ratio is not less than 1.75 to 1.0, we will generally be permitted to make restricted payments, including distributions to our unitholders, without substantive restriction. If the fixed charge coverage ratio is less than 1.75 to 1.0, we will generally be permitted to make restricted payments, including distributions to our unitholders, up to an aggregate $75.0 million basket plus certain other amounts referred to as "incremental funds" under the indenture. As of March 31, 2017 , the ratio was less than 1.75 to 1.0, and therefore, certain payments can be made up to an aggregate of $75.0 million as noted above. No restricted payments have been made as of March 31, 2017 , and this basket was fully available. As of March 31, 2017 , the Partnership was in compliance with the covenants contained in the 2023 Notes. Included in other current liabilities on the Condensed Consolidated Balance Sheets is accrued interest payable totaling approximately $17.6 million and $2.7 million as of March 31, 2017 and December 31, 2016, respectively, related to the 2023 Notes. At March 31, 2017 and December 31, 2016, respectively, the estimated fair value of the 2023 Notes was approximately $661.9 million and $664.4 million . This estimate of fair value is Level 2 as it was determined by quotations obtained from a broker-dealer who makes a market in these and similar securities. 2021 Notes The $320.0 million of 2021 Notes were issued by CVR Nitrogen and CVR Nitrogen Finance prior to the East Dubuque Merger. The 2021 Notes bear interest at a rate of 6.500% per annum, payable semi-annually in arrears on April 15 and October 15 of each year. The 2021 Notes are scheduled to mature on April 15, 2021, unless repurchased or redeemed earlier in accordance with their terms. The substantial majority of the 2021 Notes were repurchased in 2016. As of March 31, 2017 and December 31, 2016, $2.2 million of principal amount of the 2021 Notes remained outstanding and accrued interest was nominal. Asset Based (ABL) Credit Facility On September 30, 2016, the Partnership entered into a senior secured asset based revolving credit facility (the "ABL Credit Facility") with a group of lenders and UBS AG, Stamford Branch ("UBS"), as administrative agent and collateral agent. The ABL Credit Facility has an aggregate principal amount of availability of up to $50.0 million with an incremental facility, which permits an increase in borrowings of up to $25.0 million in the aggregate subject to additional lender commitments and certain other conditions. The proceeds of the loans may be used for capital expenditures and working capital and general corporate purposes of the Partnership and its subsidiaries. The ABL Credit Facility provides for loans and standby letters of credit in an amount up to the aggregate availability under the facility, subject to meeting certain borrowing base conditions, with sub-limits of the lesser of 10% of the total facility commitment and $5.0 million for swingline loans and $10.0 million for letters of credit. The ABL Credit Facility is scheduled to mature on September 30, 2021. At the option of the borrowers, loans under the ABL Credit Facility initially bear interest at an annual rate equal to (i) 2.00% plus LIBOR or (ii) 1.00% plus a base rate, subject to a 0.50% step-down based on the previous quarter’s excess availability. The borrowers must also pay a commitment fee on the unutilized commitments and also pay customary letter of credit fees. The ABL Credit Facility also contains customary covenants for a financing of this type that limit the ability of the Partnership and its subsidiaries to, among other things, incur liens, engage in a consolidation, merger, purchase or sale of assets, pay dividends, incur indebtedness, make advances, investments and loans, enter into affiliate transactions, issue equity interests or create subsidiaries and unrestricted subsidiaries. The ABL Credit Facility also contains a fixed charge coverage ratio financial covenant, as defined therein. The Partnership was in compliance with the covenants of the ABL Credit Facility as of March 31, 2017 . As of March 31, 2017 , the Partnership and its subsidiaries had availability under the ABL Credit Facility of $50.0 million . There were no borrowings outstanding under the ABL Credit Facility as of March 31, 2017 . CRLLC Facility On April 1, 2016, in connection with the closing of the East Dubuque Merger, the Partnership entered into a $300.0 million senior term loan credit facility (the "CRLLC Facility") with CRLLC, as the lender, the proceeds of which were used by the Partnership (i) to fund the repayment of amounts outstanding under the Wells Fargo Credit Agreement discussed in Note 4 ("East Dubuque Merger") (ii) to pay the cash consideration and to pay fees and expenses in connection with the East Dubuque Merger and related transactions and (iii) to repay all of the loans outstanding under the Credit Agreement discussed below. The CRLLC Facility had a term of two years and an interest rate of 12.0% per annum. Interest was calculated on the basis of the actual number of days elapsed over a 360 -day year and payable quarterly. In April 2016, the Partnership borrowed $300.0 million under the CRLLC Facility. On June 10, 2016, the Partnership paid off the $300.0 million outstanding under the CRLLC Facility, paid $7.0 million in interest, and terminated the CRLLC Facility. Credit Agreement On April 13, 2011, CRNF, as borrower, and CVR Partners, as guarantor, entered into a credit facility with a group of lenders including Goldman Sachs Lending Partners LLC, as administrative and collateral agent (the "Credit Agreement"). The Credit Agreement included 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 . Previous borrowings under the Credit Agreement bore 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 Agreement ranges from 3.50% to 4.25% for Eurodollar loans and 2.50% to 3.25% for base rate loans. During the periods presented, the interest rate was either the Eurodollar rate plus a margin of 3.50% or, for base rate loans, the prime rate plus 2.50% . On April 1, 2016, the Partnership repaid all amounts outstanding under the Credit Agreement and the Credit Agreement was terminated. At March 31, 2016, the effective rate of the term loan was approximately 3.98% . |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (12) Commitments and Contingencies Leases and Unconditional Purchase Obligations The minimum required payments for the Partnership’s operating leases and unconditional purchase obligations are as follows: Operating Leases Unconditional Purchase Obligations (in thousands) Nine months ending December 31, 2017 $ 3,233 $ 17,925 Year Ending December 31, 2018 3,731 15,524 2019 3,115 12,738 2020 2,589 7,768 2021 2,409 6,498 Thereafter 2,675 59,890 $ 17,752 $ 120,343 _____________ CRNF leases railcars and facilities under long-term operating leases. Lease expense included in cost of materials and other for the three months ended March 31, 2017 and 2016 totaled approximately $1.3 million and $1.2 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 may be renewed or replaced as they expire. The Partnership leases 115 UAN railcars from a related party, which is included in the operating lease commitments shown above. See Note 13 ("Related Party Transactions") for further discussion. CRNF’s purchase obligation for pet coke from a subsidiary of CVR Refining has been derived from a calculation of the average pet coke price paid to such subsidiary over the preceding two -year period. See Note 13 ("Related Party Transactions") for further discussion of the coke supply agreement. CRNF is party to a hydrogen purchase and sale agreement with a subsidiary of CVR Refining, pursuant to which CRNF agrees to purchase and receive a committed volume. See Note 13 ("Related Party Transactions") for further discussion of the hydrogen purchase and sale agreement. CRNF is party to the Amended and Restated On-Site Product Supply Agreement with The BOC Group, Inc. (as predecessor in interest to Linde LLC). Pursuant to the agreement, which expires in 2020, CRNF is required to take as available and pay for the supply of oxygen and nitrogen to the fertilizer operation. Expenses associated with this agreement are included in direct operating expenses (exclusive of depreciation and amortization), and, for the three months ended March 31, 2017 and 2016 , totaled approximately $1.1 million and $1.0 million , respectively. CRNF is a party to a pet coke supply agreement with HollyFrontier Corporation. The term of this agreement ends in December 2017 . The delivered cost of this pet coke is included in cost of materials and other and totaled approximately $0.9 million and $1.4 million , respectively, for the three months ended March 31, 2017 and 2016 . EDNF is a party to a utility service agreement with Jo-Carroll Energy, Inc. The term of this agreement ends in 2019 and includes certain charges on a take-or-pay basis. The cost of utilities is included in direct operating expenses (exclusive of depreciation and amortization) and amounts associated with this agreement totaled approximately $2.5 million for the three months ended March 31, 2017. Commitments for natural gas purchases consist of the following: March 31, (in thousands, except weighted average rate) MMBtus under fixed-price contracts 600 Commitments to purchase natural gas $ 1,687 Weighted average rate per MMBtu (1) $ 2.81 ____________ (1) Weighted average rate per MMBtu is based on the fixed rates applicable to each contract, exclusive of transportation costs. Litigation From time to time, the Partnership is involved in various lawsuits arising in the normal course of business, including environmental, health and safety ("EHS") matters described below under "Environmental, Health and Safety Matters." Liabilities, if any, related to such litigation are recognized when the related costs are probable and can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. It is possible that management’s estimates of the outcomes will change within the next year due to uncertainties inherent in litigation and settlement negotiations. There were no new proceedings or material developments in proceedings from those provided in the 2016 Form 10-K. In the opinion of management, the ultimate resolution of any other litigation matters is not expected to have a material adverse effect on the accompanying condensed consolidated financial statements. There can be no assurance that management’s beliefs or opinions with respect to liability for potential litigation matters are accurate. Environmental, Health and Safety Matters The Partnership's subsidiaries are subject to various stringent federal, state and local EHS rules and regulations. Liabilities related to EHS matters are recognized when the related costs are probable and can be reasonably estimated. Estimates of these costs are based upon currently available facts, existing technology, site-specific costs and currently enacted laws and regulations. In reporting EHS liabilities, no offset is made for potential recoveries. All liabilities are monitored and adjusted regularly as new facts emerge or changes in laws or technology occur. There have been no new developments or material changes to the environmental accruals or expected capital expenditures related to compliance with environmental matters from those provided in the 2016 Form 10-K. The Partnership believes its subsidiaries are in material compliance with existing EHS rules and regulations. There can be no assurance that the EHS matters which may develop in the future will not have a material adverse effect on the Partnership's business, financial condition or results of operations. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | (13) Related Party Transactions Related Party Agreements CVR Partners is party to, or otherwise subject to certain agreements with CVR Energy and its subsidiaries (including CVR Refining and its subsidiary Coffeyville Resources Refining & Marketing, LLC ("CRRM")) that govern the business relations among each party including: the (i) Feedstock and Shared Services Agreement; (ii) Hydrogen Purchase and Sale Agreement (iii) Coke Supply Agreement; (iv) Environmental Agreement; (v) Services Agreement; (vi) GP Services Agreement and (vii) Limited Partnership Agreement. The agreements are described as in effect at March 31, 2017 . Except as otherwise described below, there have been no new developments or material changes to these agreements from those provided in the 2016 Form 10-K. Amounts owed to CVR Partners and its subsidiaries from CVR Energy and its subsidiaries with respect to these agreements are included in prepaid expenses and other current assets and other long-term assets on the Condensed Consolidated Balance Sheets. Conversely, amounts owed to CVR Energy and its subsidiaries by CVR Partners and its subsidiaries with respect to these agreements are included in accounts payable, personnel accruals and accrued expenses and other current liabilities on the Partnership's Condensed Consolidated Balance Sheets. Feedstock and Shared Services Agreement CRNF is party to a feedstock and shared services agreement with CRRM under which the two parties provide feedstock and other services to one another. These feedstocks and services are utilized in the respective production processes of CRRM's Coffeyville, Kansas refinery and CRNF's Coffeyville Facility. The agreement was amended and restated effective January 1, 2017. Prior to January 1, 2017, CRNF and CRRM transferred hydrogen to one another pursuant to the feedstock and shared services agreement. CRNF is not required to sell hydrogen to CRRM if such hydrogen is required for operation of CRNF's Coffeyville Facility, 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, when applicable. Net monthly receipts of hydrogen from CRRM have been reflected in cost of materials and other for CVR Partners, when applicable. For the three months ended March 31, 2016 , the net sales generated from the sale of hydrogen to CRRM were approximately $1.1 million . At December 31, 2016 , there was approximately $0.1 million included in accounts payable on the Condensed Consolidated Balance Sheets associated with net hydrogen purchases. Beginning January 1, 2017, hydrogen purchases from CRRM are governed pursuant to the hydrogen purchase and sale agreement discussed below, but hydrogen sales to CRRM remain governed pursuant to the feedstock and shared services agreement. For the three months ended March 31, 2017 , the gross sales generated from the sale of hydrogen to CRRM pursuant to the feedstock and shared services agreement were approximately $0.1 million and were included in net sales in the Condensed Consolidated Statements of Operations. The monthly hydrogen sales are cash settled net on a monthly basis with hydrogen purchases, pursuant to the hydrogen purchase and sale agreement. The feedstock and shared services 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, 2017 and 2016 , the net sales generated from the sale of tail gas to CRRM were nominal. In April 2011, in connection with the tail gas stream transfers to CRRM, CRRM installed a pipe between the Coffeyville, Kansas refinery and the Coffeyville Facility to transfer the tail gas. CRNF agreed to pay CRRM the cost of installing the pipe and provide an additional 15% to cover the cost of capital, which was due from CRNF to CRRM over four years . At March 31, 2017 and December 31, 2016 , there were assets of approximately $0.2 million included in prepaid expenses and other current assets and approximately $0.6 million included in other long-term assets in the Condensed Consolidated Balance Sheets. At March 31, 2017 and December 31, 2016 , 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 transfers and tail gas discussed above. At March 31, 2017 and December 31, 2016 , current obligations of approximately $0.8 million and $0.9 million , respectively, were included in accounts payable on the Condensed Consolidated Balance Sheets associated with unpaid balances related to components of the feedstock and shared services agreement. Hydrogen Purchase and Sale Agreement CRNF and CRRM entered into a hydrogen purchase and sale agreement that was effective on January 1, 2017, pursuant to which CRRM agrees to sell and deliver a committed hydrogen volume of 90,000 mscf per month, and CRNF agrees to purchase and receive the committed volume. The committed volume pricing is based on a monthly fixed fee (based on the fixed and capital charges associated with producing the committed volume) and a monthly variable fee (based on the natural gas price associated with hydrogen actually received). In the event CRNF fails to take delivery of the full committed volume in a month, CRNF remains obligated to pay CRRM for the monthly fixed fee and the monthly variable fee based upon the actual hydrogen volume received, if any. In the event CRRM fails to deliver any portion of the committed volume for the applicable month for any reason other than planned repairs and maintenance, CRNF will be entitled to a pro-rata reduction of the monthly fixed fee. CRNF also has the option to purchase excess volume of up to 60,000 mscf per month, or more upon mutual agreement, from CRRM, if available for purchase. A portion of the monthly variable fee, as defined in the terms of the agreement, is determined according to the natural gas costs incurred by CRRM in operation of the hydrogen plant, which will reflect market-driven changes in the natural gas prices. In addition, certain fixed fees will be adjusted on an annual basis according to the changes in a cost index, as defined in the terms of the agreement. CRRM is not required to sell hydrogen to CRNF if such sale would adversely affect CVR Refining’s classification as a partnership for federal income tax purposes, and is not required to sell hydrogen to CRNF in excess of the committed volume if such volumes are needed for CRRM’s operations. The agreement has an initial term of 20 years and will be automatically extended following the initial term for additional successive five -year renewal terms unless either party gives 180 days written notice. Certain fees under the agreement are subject to modification after this initial term. The agreement contains customary terms related to indemnification, as well as termination for breach, by mutual consent, or due to insolvency or cessation of operations. For the three months ended March 31, 2017 , the cost of hydrogen purchases from CRRM was approximately $1.2 million was included in cost of materials and other in the Condensed Consolidated Statement of Operations. The monthly hydrogen purchases are cash settled net on a monthly basis with hydrogen sales pursuant to the feedstock and shared services agreement. At March 31, 2017 , current obligations, net of any amounts due to CRNF under the feedstock and shared services agreement for hydrogen, of approximately $0.5 million were included in accounts payable on the Condensed Consolidated Balance Sheets associated with net hydrogen purchases from the CRRM. Coke Supply Agreement CRNF is party to 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 (the "UAN-based price") or 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 that excludes transportation cost ("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 cost of pet coke associated with the transfer of pet coke from CRRM to CRNF were approximately $0.5 million and $0.7 million for the three months ended March 31, 2017 and 2016 , respectively, which was recorded in cost of materials and other. Payables of $0.1 million related to the coke supply agreement were included in accounts payable on the Condensed Consolidated Balance Sheets at December 31, 2016 and a nominal amount was outstanding at March 31, 2017 . Services Agreement CVR Partners obtains certain management and other services from CVR Energy pursuant to a services agreement between the Partnership, CVR GP and CVR Energy. Net amounts incurred under the services agreement for the three months ended March 31, 2017 and 2016 were as follows: Three Months Ended 2017 2016 (in thousands) Direct operating expenses (exclusive of depreciation and amortization) — Affiliates $ 610 $ 665 Selling, general and administrative expenses — Affiliates 3,152 2,563 Total $ 3,762 $ 3,228 For services performed in connection with the services agreement, the Partnership recognized personnel costs, excluding amounts related to share-based compensation that are disclosed in Note 5 ("Share‑Based Compensation") , of $1.7 million and $1.4 million , respectively, for the three months ended March 31, 2017 and 2016 . At March 31, 2017 and December 31, 2016 , current obligations of $2.6 million and $3.5 million , respectively, were included in accounts payable and accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets with respect to amounts billed in accordance with the services agreement. Limited Partnership Agreement The partnership agreement provides that the Partnership will reimburse its general partner for all direct and indirect expenses it incurs or payments it makes on behalf of the Partnership (including salary, bonus, incentive compensation and other amounts paid to any person to perform services for the Partnership or for its general partner in connection with operating the Partnership). Pursuant to the partnership agreement, the Partnership incurred approximately $0.9 million and $1.1 million for the three months ended March 31, 2017 and 2016 , respectively, primarily for personnel costs related to the compensation of executives at the general partner, who manage the Partnership's business. At March 31, 2017 and December 31, 2016 , current obligations of $1.2 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. Insight Portfolio Group Insight Portfolio Group LLC ("Insight Portfolio Group") is an entity formed by Mr. Carl C. Icahn in order to maximize the potential buying power of a group of entities with which Mr. Icahn has a relationship in negotiating with a wide range of suppliers of goods, services and tangible and intangible property at negotiated rates. In January 2013, CVR Energy acquired a minority equity interest in Insight Portfolio Group. The Partnership participates in Insight Portfolio Group’s buying group through its relationship with CVR Energy. The Partnership may purchase a variety of goods and services as members of the buying group at prices and on terms that management believes would be more favorable than those which would be achieved on a stand-alone basis. Transactions with Insight Portfolio Group for each of the reporting periods were nominal. CRLLC Facility On April 1, 2016, in connection with the closing of the East Dubuque Merger, the Partnership entered into the CRLLC Facility. See Note 11 ("Debt") for further discussion. Parent Affiliate Units In March 2016, CVR Energy purchased 400,000 CVR Nitrogen common units, representing approximately 1% of the outstanding CVR Nitrogen limited partner interests. CVR Energy did not receive merger consideration for these designated CVR Nitrogen common units. Subsequent to the East Dubuque Merger, the Partnership purchased 400,000 CVR Nitrogen common units from CVR Energy during the second quarter of 2016 for $5.0 million . Railcar Lease Agreements and Maintenance In the second quarter of 2016, the Partnership entered into agreements to lease a total of 115 UAN railcars from American Railcar Leasing, LLC ("ARL"), a company controlled by IEP. The lease agreements have a term of approximately seven years. The Partnership received the 115 UAN railcars during the second half of 2016. For the three months ended March 31, 2017 , rent expense of approximately $0.2 million was recorded in cost of materials and other in the Condensed Consolidated Statement of Operations related to these agreements. ARI Leasing, LLC, a company controlled by IEP, assumed the lease from ARL beginning March 30, 2017. American Railcar Industries, Inc., a company controlled by IEP, performed railcar maintenance for the Partnership and the expenses associated with this maintenance were approximately $0.2 million for the three months ended March 31, 2017 and were included in cost of materials and other in the Condensed Consolidated Statement of Operations. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying Partnership condensed consolidated financial statements include the accounts of CVR Partners and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying condensed consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC"). These condensed consolidated financial statements should be read in conjunction with the December 31, 2016 audited consolidated financial statements and notes thereto included in CVR Partners’ Annual Report on Form 10-K for the year ended December 31, 2016 , which was filed with the SEC on February 21, 2017 (the "2016 Form 10-K"). The condensed consolidated financial statements include certain selling, general and administrative expenses and direct operating expenses that CVR Energy and its subsidiaries incurred on behalf of the Partnership. These related party transactions are governed by the services agreement. See Note 13 ("Related Party Transactions") for additional discussion of the services agreement and billing and allocation of certain costs. In the opinion of the Partnership’s management, the accompanying condensed consolidated financial statements and related notes reflect all adjustments (consisting only of normal recurring adjustments) that are necessary to fairly present the financial position of the Partnership as of March 31, 2017 and December 31, 2016 , the results of operations and comprehensive income (loss) of the Partnership for the three months ended March 31, 2017 and 2016 , the cash flows of the Partnership for the three months ended March 31, 2017 and 2016 and the changes in partners’ capital for the Partnership for the three months ended March 31, 2017 . The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Results of operations and cash flows for the interim periods presented are not necessarily indicative of the results that will be realized for the year ending December 31, 2017 or any other interim or annual period. |
Recent Accounting Pronouncements | In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, creating a new topic, FASB Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers , which supersedes revenue recognition requirements in FASB ASC Topic 605, "Revenue Recognition." This ASU requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. In addition, an entity is required to disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The standard is effective for interim and annual periods beginning after December 15, 2017. The Partnership has developed an implementation plan to adopt the new standard. As part of this plan, the Partnership is currently assessing the impact of the new guidance on its business processes, business and accounting systems, and consolidated financial statements and related disclosures, which involves review of existing revenue streams, evaluation of accounting policies and identification of the types of arrangements where differences may arise in the conversion to the new standard. The Partnership expects to complete the assessment phase of its implementation plan within the next several months, after which the Partnership will initiate the design and implementation phases of the plan, including implementing any changes to existing business processes and systems to accommodate the new standard, during 2017. The Partnership will adopt this standard as of January 1, 2018 using the modified retrospective application method. To date, the Partnership has not identified any material differences in its existing revenue recognition methods that would require modification under the new standard. In February 2016, the FASB issued ASU No. 2016-02, " Leases" ("ASU 2016-02") . The new standard revises accounting for operating leases by a lessee, among other changes, and requires a lessee to recognize a liability to make lease payments and an asset representing its right to use the underlying asset for the lease term in the balance sheet. The standard is effective for the first interim and annual periods beginning after December 15, 2018, with early adoption permitted. At adoption, ASU 2016-02 will be applied using the modified retrospective application method. The Partnership is formulating an assessment and implementation plan to adopt the new standard. The Partnership expects its assessment and implementation plan to be ongoing during 2017 and 2018 and is currently unable to reasonably estimate the impact of adopting the new leases standard on its consolidated financial statements and footnote disclosures. In January 2017, the FASB issued ASU No. 2017-04, " Simplifying the Test for Goodwill Impairment ". The new standard simplifies the accounting for goodwill impairments by eliminating step 2 from the goodwill quantitative impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The standard is effective for interim and annual periods beginning after December 15, 2019 and early adoption is permitted. The Partnership adopted this standard as of January 1, 2017. |
East Dubuque Merger (Tables)
East Dubuque Merger (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Summary pro forma financial information | The summary pro forma financial information is for informational purposes only and does not purport to represent what the Partnership's consolidated results of operations actually would have been if the East Dubuque Merger had occurred at any date, and such data does not purport to project the Partnership's results of operations for any future period. The basic and diluted units outstanding used to calculate the pro forma net income per unit amounts presented below have been adjusted to assume units issued at the closing of the East Dubuque Merger were outstanding since January 1, 2016. Three Months Ended (in thousands, except per unit data) Net sales $ 107,940 Net income 14,844 Net income per common unit — basic and diluted 0.13 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of the phantom units activity | A summary of the phantom unit activity during the three months ended March 31, 2017 is presented below: Phantom Units Weighted-Average Non-vested at January 1, 2017 771,786 $ 6.47 Granted — — Vested (7,333 ) 8.03 Forfeited (2,316 ) 7.77 Non-vested at March 31, 2017 762,137 $ 6.45 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories consisted of the following: March 31, December 31, (in thousands) Finished goods $ 23,263 $ 15,860 Raw materials and precious metals 7,883 8,818 Parts and supplies 32,925 33,489 Total inventories $ 64,071 $ 58,167 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Summary of costs and accumulated depreciation for property, plant, and equipment | A summary of costs and accumulated depreciation for property, plant and equipment is as follows: March 31, December 31, (in thousands) Land and improvements $ 12,987 $ 12,995 Buildings and improvements 14,881 14,881 Machinery and equipment 1,345,714 1,343,980 Automotive equipment 599 599 Furniture and fixtures 1,421 1,437 Railcars 16,261 16,261 Construction in progress 10,172 9,588 1,402,035 1,399,741 Less: Accumulated depreciation 287,661 269,620 Total property, plant and equipment, net $ 1,114,374 $ 1,130,121 |
Accrued Expenses and Other Cu26
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities were as follows: As of As of (in thousands) Property taxes $ 2,224 $ 1,742 Accrued interest 17,634 2,683 Railcar maintenance accruals 1,309 2,502 Affiliates (1) 1,261 2,515 Other accrued expenses and liabilities 3,576 2,932 Total accrued expenses and other current liabilities $ 26,004 $ 12,374 ____________ (1) Accrued expenses and other current liabilities include amounts owed by the Partnership to CVR Energy under the feedstock and shared services agreement. Refer to Note 13 ("Related Party Transactions") for additional discussion. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Long-term debt consisted of the following: As of As of (in thousands) 9.250% senior secured notes, due 2023 $ 645,000 $ 645,000 6.500% notes, due 2021 2,240 2,240 Total long-term debt, before debt issuance costs and discount 647,240 647,240 Less: Unamortized discount 14,796 15,220 Unamortized debt issuance costs 8,664 8,913 Total long-term debt, net of current portion $ 623,780 $ 623,107 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
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 Leases Unconditional Purchase Obligations (in thousands) Nine months ending December 31, 2017 $ 3,233 $ 17,925 Year Ending December 31, 2018 3,731 15,524 2019 3,115 12,738 2020 2,589 7,768 2021 2,409 6,498 Thereafter 2,675 59,890 $ 17,752 $ 120,343 _____________ |
Commitments for natural gas purchases | Commitments for natural gas purchases consist of the following: March 31, (in thousands, except weighted average rate) MMBtus under fixed-price contracts 600 Commitments to purchase natural gas $ 1,687 Weighted average rate per MMBtu (1) $ 2.81 ____________ (1) Weighted average rate per MMBtu is based on the fixed rates applicable to each contract, exclusive of transportation costs. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Amounts incurred under related party service agreements | Net amounts incurred under the services agreement for the three months ended March 31, 2017 and 2016 were as follows: Three Months Ended 2017 2016 (in thousands) Direct operating expenses (exclusive of depreciation and amortization) — Affiliates $ 610 $ 665 Selling, general and administrative expenses — Affiliates 3,152 2,563 Total $ 3,762 $ 3,228 |
Organization and Nature of Bu30
Organization and Nature of Business (Details) | 3 Months Ended |
Mar. 31, 2017manufacturing_facility | |
Formation of the Partnership, Organization and Nature of Business | |
Number of manufacturing facilities | 2 |
Percentage of limited partner interest held by the public | 66.00% |
CRLLC | |
Formation of the Partnership, Organization and Nature of Business | |
Limited partner interest | 34.00% |
General partner interest | 100.00% |
IEP Energy LLC | CVR Energy, Inc | |
Formation of the Partnership, Organization and Nature of Business | |
Aggregate ownership percentage | 82.00% |
East Dubuque Merger - Additiona
East Dubuque Merger - Additional Information (Details) - USD ($) | Apr. 01, 2016 | Mar. 31, 2017 | Mar. 31, 2016 |
Business Acquisition [Line Items] | |||
Net sales | $ 85,321,000 | $ 73,092,000 | |
Operating loss | (5,348,000) | (19,653,000) | |
Senior Notes | 6.500% notes, due 2021 | |||
Business Acquisition [Line Items] | |||
Debt instrument face amount | $ 320,000,000 | $ 320,000,000 | |
Debt instrument, percentage rate | 6.50% | 6.50% | |
Line of Credit | Wells Fargo Credit Agreement | |||
Business Acquisition [Line Items] | |||
Payment of revolving debt | $ 49,400,000 | ||
East Dubuque Merger | |||
Business Acquisition [Line Items] | |||
Expected issuance of common units (in units) | 40,200,000 | ||
Cash payment to CVR Nitrogen common unitholders and certain phantom unitholders | $ 99,200,000 | ||
Consideration transferred | 802,400,000 | ||
Fair value of common units issued in a business combination | 335,700,000 | ||
Fair value of assumed debt | $ 367,500,000 | ||
Net sales | $ 26,800,000 | ||
Operating loss | $ 600,000 | ||
Merger related costs excluded from pro forma net income | 1,900,000 | ||
East Dubuque Merger | Selling, General and Administrative Expenses | |||
Business Acquisition [Line Items] | |||
Merger related expenses | $ 1,200,000 | ||
East Dubuque Merger | CVR Nitrogen | |||
Business Acquisition [Line Items] | |||
CVR Partners common units eligible per CVR Nitrogen common unit (in units) | 1.04 | ||
Unit price (in dollars per unit) | $ 2.57 |
East Dubuque Merger - Summary P
East Dubuque Merger - Summary Pro Forma Financial Information (Details) - East Dubuque Merger $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($)$ / shares | |
Business Acquisition, Pro Forma Information [Abstract] | |
Net sales | $ | $ 107,940 |
Net income | $ | $ 14,844 |
Net income per common unit, basic (in dollars per unit) | $ / shares | $ 0.13 |
Net income per common unit, diluted (in dollars per unit) | $ / shares | $ 0.13 |
Share-Based Compensation - Ince
Share-Based Compensation - Incentive Plan and Awards, CVR Energy (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Share-Based Compensation | |||
Percentage of allocation of share-based compensation expense | 100.00% | ||
CVR Energy, Inc | Incentive Unit Award | |||
Share-Based Compensation | |||
Personnel accruals | $ 0.6 | $ 0.4 | |
Compensation expense | 0.2 | $ 0 | |
Unrecognized compensation costs | $ 1.1 | ||
Period for amortization of unrecognized compensation cost | 1 year 6 months | ||
Vesting period | 3 years | ||
Number of units considered for determining cash payment for each award upon vesting | 1 | ||
CVR Energy, Inc | CVR Energy LTIP | Performance Shares | Chief Executive Officer | |||
Share-Based Compensation | |||
Share-based liabilities paid | $ 0.5 | ||
Personnel accruals | $ 0.5 | ||
Compensation expense | $ 0.1 | ||
CVR Energy, Inc | CVR Energy LTIP | Performance Shares | Board of Directors Chairman | |||
Share-Based Compensation | |||
Personnel accruals | 0.1 | ||
Compensation expense | 0.1 | ||
Unrecognized compensation costs | $ 0.4 | ||
Period for amortization of unrecognized compensation cost | 10 months | ||
CVR Energy, Inc | CVR Energy LTIP | Incentive Unit Award | Tranche One | |||
Share-Based Compensation | |||
Vesting percentage | 33.33% | ||
CVR Energy, Inc | CVR Energy LTIP | Incentive Unit Award | Tranche Two | |||
Share-Based Compensation | |||
Vesting percentage | 33.33% | ||
CVR Energy, Inc | CVR Energy LTIP | Incentive Unit Award | Tranche Three | |||
Share-Based Compensation | |||
Vesting percentage | 33.33% |
Share-Based Compensation - Long
Share-Based Compensation - Long-Term Incentive Plan, CVR Partners (Details) - CVR Partners LTIP - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Share-Based Compensation | |||
Vesting period | 3 years | ||
Common units authorized for issuance (in units) | 5,000,000 | ||
Common units available for issuance (in units) | 4,820,215 | ||
Phantom Units | |||
Share-Based Compensation | |||
Vesting period | 3 years | ||
Number of units considered for determining cash payment for each award upon vesting | 1 | ||
Unrecognized compensation expense | $ 2.5 | ||
Weighted average period for amortization of unrecognized compensation cost | 1 year 6 months | ||
Phantom Units | Tranche One | |||
Share-Based Compensation | |||
Vesting percentage | 33.33% | ||
Phantom Units | Tranche Two | |||
Share-Based Compensation | |||
Vesting percentage | 33.33% | ||
Phantom Units | Tranche Three | |||
Share-Based Compensation | |||
Vesting percentage | 33.33% | ||
Phantom Stock and Common Units | |||
Share-Based Compensation | |||
Compensation expense | $ 0.3 | $ 0.5 | |
Personnel accruals | $ 1.3 | $ 1 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Phantom Unit Activity (Details) - CVR Partners LTIP - Phantom Units | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Non-vested shares activity | |
Non-vested at the beginning of the period (in shares) | shares | 771,786 |
Granted (in units) | shares | 0 |
Vested (in units) | shares | (7,333) |
Forfeited (in units) | shares | (2,316) |
Non-vested at the end of the period (in shares) | shares | 762,137 |
Weighted-Average Grant-Date Fair Value | |
Non-vested at the beginning of the period (in dollars per unit) | $ / shares | $ 6.47 |
Granted (in dollars per unit) | $ / shares | 0 |
Vested (in dollars per unit) | $ / shares | 8.03 |
Forfeited (in dollars per unit) | $ / shares | 7.77 |
Non-vested at the end of the period (in dollars per unit) | $ / shares | $ 6.45 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 23,263 | $ 15,860 |
Raw materials and precious metals | 7,883 | 8,818 |
Parts and supplies | 32,925 | 33,489 |
Total inventories | $ 64,071 | $ 58,167 |
Property, Plant and Equipment37
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Property, Plant, and Equipment | ||
Total property, plant and equipment, gross | $ 1,402,035 | $ 1,399,741 |
Less: Accumulated depreciation | 287,661 | 269,620 |
Total property, plant and equipment, net | 1,114,374 | 1,130,121 |
Capitalized interest | 42 | |
Land and improvements | ||
Property, Plant, and Equipment | ||
Total property, plant and equipment, gross | 12,987 | 12,995 |
Buildings and improvements | ||
Property, Plant, and Equipment | ||
Total property, plant and equipment, gross | 14,881 | 14,881 |
Machinery and equipment | ||
Property, Plant, and Equipment | ||
Total property, plant and equipment, gross | 1,345,714 | 1,343,980 |
Automotive equipment | ||
Property, Plant, and Equipment | ||
Total property, plant and equipment, gross | 599 | 599 |
Furniture and fixtures | ||
Property, Plant, and Equipment | ||
Total property, plant and equipment, gross | 1,421 | 1,437 |
Railcars | ||
Property, Plant, and Equipment | ||
Total property, plant and equipment, gross | 16,261 | 16,261 |
Construction in progress | ||
Property, Plant, and Equipment | ||
Total property, plant and equipment, gross | $ 10,172 | $ 9,588 |
Partners' Capital and Partner38
Partners' Capital and Partnership Distributions - Additional Information (Details) $ / shares in Units, $ in Millions | Apr. 26, 2017USD ($)$ / shares | Mar. 31, 2017partnership_interestshares | Dec. 31, 2016shares |
Related Party Transaction [Line Items] | |||
Number of types of partnership interests outstanding | partnership_interest | 2 | ||
Common units issued (in units) | 113,282,973 | 113,282,973 | |
Common units outstanding (in units) | 113,282,973 | 113,282,973 | |
Maximum period after the end of each quarter of cash distribution to common unitholders | 60 days | ||
CRLLC | |||
Related Party Transaction [Line Items] | |||
Common units outstanding (in units) | 38,920,000 | ||
Percentage of common units owned by CRLLC | 34.00% | ||
Subsequent Event | |||
Related Party Transaction [Line Items] | |||
Cash distribution declared to Partnership unitholders (in dollars per unit) | $ / shares | $ 0.02 | ||
Cash distribution declared to Partnership unitholders | $ | $ 2.3 |
Accrued Expenses and Other Cu39
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Property taxes | $ 2,224 | $ 1,742 |
Accrued interest | 17,634 | 2,683 |
Railcar maintenance accruals | 1,309 | 2,502 |
Affiliates | 1,261 | 2,515 |
Other accrued expenses and liabilities | 3,576 | 2,932 |
Total accrued expenses and other current liabilities | $ 26,004 | $ 12,374 |
Debt - Summary of Debt (Details
Debt - Summary of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | Jun. 10, 2016 | Apr. 01, 2016 |
Debt Instrument [Line Items] | ||||
Total long-term debt, before debt issuance costs and discount | $ 647,240 | $ 647,240 | ||
Unamortized discount | 14,796 | 15,220 | ||
Unamortized debt issuance costs | 8,664 | 8,913 | ||
Long-term debt, net of current portion | 623,780 | 623,107 | ||
Senior Notes | 9.250% senior secured notes, due 2023 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt, before debt issuance costs and discount | $ 645,000 | 645,000 | ||
Debt instrument, percentage rate | 9.25% | 9.25% | ||
Senior Notes | 6.500% notes, due 2021 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt, before debt issuance costs and discount | $ 2,240 | $ 2,240 | ||
Debt instrument, percentage rate | 6.50% | 6.50% |
Debt - Amortization of Discount
Debt - Amortization of Discount and Debt Issuance Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Debt Instrument [Line Items] | ||
Amortization of discount and debt issuance costs | $ 735 | $ 241 |
Interest Expense and Other Financing Costs | ||
Debt Instrument [Line Items] | ||
Amortization of discount and debt issuance costs | $ 700 | $ 200 |
Debt - 2023 Notes (Details)
Debt - 2023 Notes (Details) - Senior Notes - 2023 Notes | Jun. 10, 2016USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 645,000,000 | ||
Debt instrument, percentage rate | 9.25% | 9.25% | |
Minimum fixed charge coverage ratio required to make restricted payments | 1.75 | 1.75 | |
Maximum aggregated restricted payments basket permitted | $ 75,000,000 | $ 75,000,000 | |
Interest payable | 17,600,000 | $ 2,700,000 | |
Level 2 | |||
Debt Instrument [Line Items] | |||
Fair value of debt | $ 661,900,000 | $ 664,400,000 |
Debt - 2021 Notes (Details)
Debt - 2021 Notes (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | Apr. 01, 2016 |
Debt Instrument [Line Items] | |||
Debt instrument, carrying amount | $ 647,240,000 | $ 647,240,000 | |
Senior Notes | 6.500% notes, due 2021 | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 320,000,000 | $ 320,000,000 | |
Debt instrument, percentage rate | 6.50% | 6.50% | |
Debt instrument, carrying amount | $ 2,240,000 | 2,240,000 | |
Interest payable | $ 0 | $ 0 |
Debt - ABL Credit Facility (Det
Debt - ABL Credit Facility (Details) - ABL Credit Facility - Line of Credit - USD ($) | Sep. 30, 2016 | Mar. 31, 2017 |
Revolving credit facility | ||
Line of Credit Facility [Line Items] | ||
Debt instrument face amount | $ 50,000,000 | |
Available increase in borrowing limit | $ 25,000,000 | |
Sub-limit as a percent of total facility | 10.00% | |
Available borrowing capacity | $ 50,000,000 | |
Borrowings outstanding | $ 0 | |
Swingline loan | ||
Line of Credit Facility [Line Items] | ||
Debt instrument face amount | $ 5,000,000 | |
Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Debt instrument face amount | $ 10,000,000 | |
LIBOR | Revolving credit facility | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 2.00% | |
Base Rate | Revolving credit facility | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 1.00% | |
Step-down percentage based on the previous quarter's excess availability | 0.50% |
Debt - CRLLC Facility (Details)
Debt - CRLLC Facility (Details) - CRLLC - Senior Notes - CRLLC Facility - USD ($) | Jun. 10, 2016 | Apr. 01, 2016 | Apr. 30, 2016 |
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 300,000,000 | ||
Loan term | 2 years | ||
Debt instrument, percentage rate | 12.00% | ||
Interest calculation period | 360 days | ||
Debt instrument, carrying amount | $ 300,000,000 | ||
Repurchased face amount | $ 300,000,000 | ||
Interest paid | $ 7,000,000 |
Debt - Credit Agreement (Detail
Debt - Credit Agreement (Details) - Line of Credit - CRNF Credit Facility - USD ($) | Apr. 13, 2011 | Mar. 31, 2016 |
Eurodollar | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 3.50% | |
Eurodollar | Minimum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 3.50% | |
Eurodollar | Maximum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 4.25% | |
Base Rate | Minimum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 2.50% | |
Base Rate | Maximum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 3.25% | |
Prime | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 2.50% | |
Term Loan | ||
Line of Credit Facility [Line Items] | ||
Debt instrument face amount | $ 125,000,000 | |
Revolving credit facility | ||
Line of Credit Facility [Line Items] | ||
Borrowing capacity | 25,000,000 | |
Uncommitted incremental facility | $ 50,000,000 | |
Effective rate | 3.98% |
Commitments and Contingencies -
Commitments and Contingencies - Minimum Required Payments (Details) $ in Thousands | Mar. 31, 2017USD ($) |
Operating Leases | |
Nine months ending December 31, 2017 | $ 3,233 |
2,018 | 3,731 |
2,019 | 3,115 |
2,020 | 2,589 |
2,021 | 2,409 |
Thereafter | 2,675 |
Operating leases | 17,752 |
Unconditional Purchase Obligations | |
Nine months ending December 31, 2017 | 17,925 |
2,018 | 15,524 |
2,019 | 12,738 |
2,020 | 7,768 |
2,021 | 6,498 |
Thereafter | 59,890 |
Unconditional purchase obligations | $ 120,343 |
Commitments and Contingencies48
Commitments and Contingencies - Additional Information (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2017USD ($)railcar | Mar. 31, 2016USD ($) | |
CRNF | ||
Long-term Purchase Commitment [Line Items] | ||
Lease expense | $ 1.3 | $ 1.2 |
Linde, Inc. | CRNF | ||
Long-term Purchase Commitment [Line Items] | ||
Expenses related to agreement | 1.1 | 1 |
HollyFrontier Corporation | CRNF | ||
Long-term Purchase Commitment [Line Items] | ||
Expenses related to agreement | $ 0.9 | $ 1.4 |
Subsidiary of CVR Refining, LP | Purchase obligation for pet coke | ||
Long-term Purchase Commitment [Line Items] | ||
Period for calculation of the average pet coke price paid to CVR Refining | 2 years | |
Jo-Carroll Energy, Inc | ||
Long-term Purchase Commitment [Line Items] | ||
Expenses related to agreement | $ 2.5 | |
Affiliates | ||
Long-term Purchase Commitment [Line Items] | ||
Lease arrangement, number of railcars to be leased | railcar | 115 |
Commitments and Contingencies49
Commitments and Contingencies - Natural Gas Purchases (Details) MMBTU in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($)MMBTU | |
Long-term Purchase Commitment [Line Items] | |
Commitments to purchase natural gas | $ 1,687,000 |
Weighted average rate per MMBtu | $ 2.81 |
MMBtus under fixed-price contracts | |
Long-term Purchase Commitment [Line Items] | |
MMBtus under fixed-price contracts | MMBTU | 600 |
Related Party Transactions - Fe
Related Party Transactions - Feedstock and Shared Services Agreement (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Apr. 30, 2011 | Mar. 31, 2017USD ($)affiliate | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Related Party Transaction [Line Items] | ||||
Number of parties | affiliate | 2 | |||
Revenue from related party | $ 85,321 | $ 73,092 | ||
Receivables | 480 | $ 750 | ||
Other long-term assets, with affiliates | 553 | 598 | ||
Accounts payable, due to affiliates | 2,800 | 2,402 | ||
Feedstock and Shared Services Agreement | Hydrogen | CRRM | ||||
Related Party Transaction [Line Items] | ||||
Receivables | 100 | |||
Feedstock and Shared Services Agreement | Hydrogen | CRNF | CRRM | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related party | 100 | $ 1,100 | ||
Feedstock and Shared Services Agreement | Tail gas | CRNF | CRRM | ||||
Related Party Transaction [Line Items] | ||||
Receivables | 200 | 200 | ||
Percentage of payment agreed to be paid for cost of capital in fourth year | 15.00% | |||
Period for payment of cost of installation of pipe | 4 years | |||
Other long-term assets, with affiliates | 600 | 600 | ||
Feedstock and Shared Services Agreement | Products and services, excluding hydrogen and tail gas | ||||
Related Party Transaction [Line Items] | ||||
Receivables | 100 | 300 | ||
Accounts payable, due to affiliates | $ 800 | $ 900 |
Related Party Transactions - Hy
Related Party Transactions - Hydrogen Purchase and Sale Agreement (Details) $ in Thousands | Jan. 01, 2017Mcf | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Related Party Transaction [Line Items] | |||
Accounts payable | $ 25,753 | $ 28,815 | |
CRNF | Hydrogen | CRRM | Hydrogen Purchase and Sale Agreement | |||
Related Party Transaction [Line Items] | |||
Monthly production volume of product to be delivered | Mcf | 90,000 | ||
Optional excess volume that can be purchased | Mcf | 60,000 | ||
Term of agreement | 20 years | ||
Additional renewal term | 5 years | ||
Minimum notice period for termination of agreement | 180 days | ||
Cost of purchases | 1,200 | ||
Accounts payable | $ 500 |
Related Party Transactions - Co
Related Party Transactions - Coke Supply Agreement (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017USD ($)T$ / T | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Related Party Transaction [Line Items] | |||
Prepaid expenses and other current assets, from affiliates | $ | $ 480 | $ 750 | |
Cost of product sold | $ | 21,737 | $ 16,381 | |
Accounts payable, due to affiliates | $ | 2,800 | 2,402 | |
Coke Supply Agreement | Petroleum coke | |||
Related Party Transaction [Line Items] | |||
Cost of product sold | $ | 500 | $ 700 | |
Accounts payable, due to affiliates | $ | $ 0 | $ 100 | |
Coke Supply Agreement | Petroleum coke | CRNF | CRRM | |||
Related Party Transaction [Line Items] | |||
Percentage of annual production of pet coke to be delivered | 100.00% | ||
Annual production of pet coke | T | 500,000 | ||
Period for which 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 (in dollars per ton) | 25 | ||
UAN-based netback price, exclusive of transportation cost (in dollars per ton) | 205 | ||
Pet coke price adjustment for every $1.00 change in the UAN netback price, exclusive of transportation cost, used to calculate the UAN-based price (in dollars per ton) | 0.5 | ||
UAN-based netback price change, exclusive of transportation cost, under the related party agreement (in dollars per ton) | 1 | ||
Coke Supply Agreement | Petroleum coke | Minimum | CRNF | CRRM | |||
Related Party Transaction [Line Items] | |||
Monthly production volume of product which allows for the purchasing party the option to purchase any excess at rates stated in the agreement | T | 41,667 | ||
Percentage of pet coke obtained during the last five years from CRRM's adjacent crude oil refinery | 70.00% | ||
Pet coke price used to calculate the UAN-based price (in dollars per ton) | 5 | ||
Coke Supply Agreement | Petroleum coke | Maximum | CRNF | CRRM | |||
Related Party Transaction [Line Items] | |||
Pet coke price used to calculate the UAN-based price (in dollars per ton) | 40 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Services Agreement (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Related Party Transaction [Line Items] | ||
Direct operating expenses (exclusive of depreciation and amortization) — Affiliates | $ 35,910 | $ 23,690 |
Selling, general and administrative expenses — Affiliates | 6,914 | 6,392 |
Services Agreement | ||
Related Party Transaction [Line Items] | ||
Direct operating expenses (exclusive of depreciation and amortization) — Affiliates | 610 | 665 |
Selling, general and administrative expenses — Affiliates | 3,152 | 2,563 |
Total | $ 3,762 | $ 3,228 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017USD ($) | Jun. 30, 2016USD ($)railcarshares | Mar. 31, 2016USD ($)shares | Dec. 31, 2016USD ($)railcar | |
Related Party Transaction [Line Items] | ||||
Accounts payable, due to affiliates | $ 2,800 | $ 2,402 | ||
Personnel accruals, with affiliates | 1,175 | 1,968 | ||
Services Agreement | ||||
Related Party Transaction [Line Items] | ||||
Personnel costs | 1,700 | $ 1,400 | ||
Accounts payable, due to affiliates | 2,600 | 3,500 | ||
Limited Partnership Agreement | ||||
Related Party Transaction [Line Items] | ||||
Personnel costs | 900 | $ 1,100 | ||
Personnel accruals, with affiliates | 1,200 | $ 2,000 | ||
American Railcar Leasing LLC | Railcar Lease Agreement | ||||
Related Party Transaction [Line Items] | ||||
Lease arrangement, number of railcars to be leased | railcar | 115 | |||
Lease agreement, term contract | 7 years | |||
Lease arrangement, number of railcars received | railcar | 115 | |||
Rent expense | 200 | |||
Maintenance expense | $ 200 | |||
CVR Energy, Inc | CVR Nitrogen | ||||
Related Party Transaction [Line Items] | ||||
Units purchased (in units) | shares | 400,000 | |||
Limited partner interest | 1.00% | |||
Purchase of noncontrolling interest (in units) | shares | 400,000 | |||
Purchase of noncontrolling interest | $ 5,000 |