Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 19, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-35120 | ||
Entity Registrant Name | CVR Partners, LP | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 56-2677689 | ||
Entity Address, Address Line One | 2277 Plaza Drive, Suite 500 | ||
Entity Address, City or Town | Sugar Land | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 77479 | ||
City Area Code | 281 | ||
Local Phone Number | 207-3200 | ||
Title of 12(b) Security | Common units representing limited partner interests | ||
Trading Symbol | UAN | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 62.3 | ||
Entity Common Stock, Shares Outstanding | 10,692,332 | ||
Entity Central Index Key | 0001425292 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 30,559,000 | $ 36,994,000 |
Accounts receivable | 36,896,000 | 34,264,000 |
Inventories | 42,349,000 | 48,296,000 |
Prepaid expenses and other current assets | 8,410,000 | 5,406,000 |
Total current assets | 118,214,000 | 124,960,000 |
Property, plant, and equipment, net | 897,847,000 | 951,959,000 |
Goodwill | 0 | 40,969,000 |
Other long-term assets | 16,819,000 | 20,067,000 |
Total assets | 1,032,880,000 | 1,137,955,000 |
Current liabilities: | ||
Current portion of long-term debt | 2,240,000 | 0 |
Accounts payable | 19,544,000 | 21,069,000 |
Accounts payable to affiliates | 5,217,000 | 2,578,000 |
Deferred revenue | 30,631,000 | 27,841,000 |
Other current liabilities | 18,709,000 | 24,043,000 |
Total current liabilities | 76,341,000 | 75,531,000 |
Long-term liabilities: | ||
Long-term debt, net of current portion | 633,942,000 | 632,406,000 |
Other long-term liabilities | 8,356,000 | 10,474,000 |
Total long-term liabilities | 642,298,000 | 642,880,000 |
Commitments and contingencies (See Note 8) | ||
Partners’ capital: | ||
Common unitholders, 10,705,710 and 11,328,297 units issued and outstanding as of December 31, 2020 and 2019, respectively | 314,240,000 | 419,543,000 |
General partner interest | 1,000 | 1,000 |
Total partners’ capital | 314,241,000 | 419,544,000 |
Total liabilities and partners’ capital | $ 1,032,880,000 | $ 1,137,955,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common units issued (in units) | 10,705,710 | 11,328,297 |
Common units outstanding (in units) | 10,705,710 | 11,328,297 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | |||
Net sales | $ 349,953,000 | $ 404,177,000 | $ 351,082,000 |
Operating costs and expenses: | |||
Cost of materials and other | 91,117,000 | 94,103,000 | 88,461,000 |
Direct operating expenses (exclusive of depreciation and amortization) | 157,916,000 | 173,629,000 | 159,319,000 |
Depreciation and amortization | 76,077,000 | 79,839,000 | 71,575,000 |
Cost of sales | 325,110,000 | 347,571,000 | 319,355,000 |
Selling, general and administrative expenses | 18,174,000 | 25,829,000 | 25,023,000 |
Loss on asset disposals | 582,000 | 3,397,000 | 390,000 |
Goodwill impairment | 40,969,000 | 0 | 0 |
Operating (loss) income | (34,882,000) | 27,380,000 | 6,314,000 |
Other (expense) income: | |||
Interest expense, net | (63,428,000) | (62,636,000) | (62,588,000) |
Other income, net | 159,000 | 269,000 | 6,201,000 |
Loss before income taxes | (98,151,000) | (34,987,000) | (50,073,000) |
Income tax expense (benefit) | 30,000 | (18,000) | (46,000) |
Net loss | $ (98,181,000) | $ (34,969,000) | $ (50,027,000) |
Net loss per common unit - basic and diluted (in dollars per unit) | $ (8.77) | $ (3.09) | $ (4.42) |
Distributions declared per common unit (in dollars per unit) | $ 0 | $ 4 | $ 0 |
Weighted-average common units outstanding: | |||
Basic and diluted (in units) | 11,195 | 11,328 | 11,328 |
CONSOLIDATED STATEMENTS OF PART
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL - USD ($) $ in Thousands | Total | Common Units | General Partner Interest |
Balance (in units) at Dec. 31, 2017 | 11,328,297 | ||
Balance at Dec. 31, 2017 | $ 549,853 | $ 549,852 | $ 1 |
Increase (Decrease) in Shareholders' Equity | |||
Net loss | (50,027) | $ (50,027) | |
Balance (in units) at Dec. 31, 2018 | 11,328,297 | ||
Balance at Dec. 31, 2018 | 499,826 | $ 499,825 | 1 |
Increase (Decrease) in Shareholders' Equity | |||
Cash distributions to common unitholders – Affiliates | (15,568) | (15,568) | |
Cash distributions to common unitholders – Non-affiliates | (29,745) | (29,745) | |
Net loss | (34,969) | $ (34,969) | |
Balance (in units) at Dec. 31, 2019 | 11,328,297 | ||
Balance at Dec. 31, 2019 | 419,544 | $ 419,543 | 1 |
Increase (Decrease) in Shareholders' Equity | |||
Net loss | (98,181) | $ (98,181) | |
Repurchase of common units (in units) | (623,177) | ||
Repurchase of common units | (7,076) | $ (7,076) | |
Fractional unit impact of reverse unit split (in units) | 590 | ||
Other | (46) | $ (46) | |
Balance (in units) at Dec. 31, 2020 | 10,705,710 | ||
Balance at Dec. 31, 2020 | $ 314,241 | $ 314,240 | $ 1 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net loss | $ (98,181,000) | $ (34,969,000) | $ (50,027,000) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 76,077,000 | 79,839,000 | 71,575,000 |
Amortization of deferred financing costs and original issue discount | 4,049,000 | 3,666,000 | 3,333,000 |
Goodwill impairment | 40,969,000 | 0 | 0 |
Loss on asset disposals | 582,000 | 3,397,000 | 390,000 |
Share-based compensation | 1,035,000 | 3,445,000 | 3,017,000 |
Other adjustments | 964,000 | (5,000) | 1,690,000 |
Changes in assets and liabilities: | |||
Accounts receivable | 2,892,000 | 936,000 | (6,698,000) |
Inventories | 538,000 | 9,914,000 | (8,670,000) |
Prepaid expenses and other current assets | (4,514,000) | 1,582,000 | (1,196,000) |
Accounts payable | (1,635,000) | (8,077,000) | 5,215,000 |
Deferred revenue | (1,612,000) | (14,575,000) | 10,828,000 |
Accrued expenses and other current liabilities | (1,726,000) | (6,542,000) | 1,367,000 |
Other long-term assets and liabilities | 302,000 | 546,000 | 1,410,000 |
Net cash provided by operating activities | 19,740,000 | 39,157,000 | 32,234,000 |
Cash flows from investing activities: | |||
Capital expenditures | (18,598,000) | (18,656,000) | (19,806,000) |
Proceeds from the sale of assets | 48,000 | 127,000 | 175,000 |
Net cash used in investing activities | (18,550,000) | (18,529,000) | (19,631,000) |
Cash flows from financing activities: | |||
Repurchase of common units | (7,076,000) | 0 | 0 |
Cash distributions to common unitholders – Affiliates | 0 | (15,568,000) | 0 |
Cash distribution to common unitholders – Non-affiliates | 0 | (29,745,000) | 0 |
Payment of deferred financing costs | (448,000) | 0 | 0 |
Other financing activities | (101,000) | (97,000) | 0 |
Net cash used in financing activities | (7,625,000) | (45,410,000) | 0 |
Net (decrease) increase in cash and cash equivalents | (6,435,000) | (24,782,000) | 12,603,000 |
Cash and cash equivalents, beginning of period | 36,994,000 | 61,776,000 | 49,173,000 |
Cash and cash equivalents, end of period | $ 30,559,000 | $ 36,994,000 | $ 61,776,000 |
Organization and Nature of Busi
Organization and Nature of Business | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Business | (1) Organization and Nature of Business CVR Partners, LP (“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. 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”). Both facilities manufacture ammonia and are able to further upgrade to other nitrogen fertilizer products, principally urea ammonium nitrate (“UAN”). Nitrogen fertilizer is used by farmers to improve the yield and quality of their crops, primarily corn and wheat. The Partnership’s products are sold on a wholesale basis in the United States of America. As used in these financial statements, references to CVR Partners, the Partnership, “we”, “us”, and “our” may refer to consolidated subsidiaries of CVR Partners or one or both of the facilities, as the context may require. NYSE Listing Requirements and Reverse Unit Split The Partnership’s common units are listed on the New York Stock Exchange (the “NYSE”) under the symbol “UAN.” On April 20, 2020, the average closing price of the Partnership’s common units over a 30 consecutive trading-day period fell below $1.00 per common unit, resulting in noncompliance with the continued listing standards in Section 802.01C of the NYSE Listed Company Manual. The Partnership received written notification of this noncompliance from the NYSE on April 22, 2020, and had until January 1, 2021 to regain compliance or be subject to the NYSE’s suspension and delisting procedures. On November 2, 2020, the Partnership announced that the board of directors of its general partner (the “Board”) had approved a 1-for-10 reverse split of the Partnership’s common units that was completed on November 23, 2020, pursuant to which each ten common units of the Partnership were converted into one common unit of the Partnership (the “Reverse Unit Split”). In accordance with the Partnership’s Agreement of Limited Partnership, as amended (the “Partnership Agreement”), following the Reverse Unit Split, any fractional units of record holders were rounded up or down, as applicable, to the nearest whole common unit, with any fraction equal to or above 0.5 common units rounding up to the next higher common unit. Following the Reverse Unit Split, the number of common units outstanding decreased from approximately 111 million common units to approximately 11 million common units, with proportionate adjustments to the common units under the Partnership’s long-term incentive plan and outstanding awards thereunder. The Partnership’s common units began trading on a split-adjusted basis when markets opened on November 24, 2020, under the symbol “UAN” and a new CUSIP number. As of November 30, 2020, the Reverse Unit Split enabled the Partnership to regain compliance with NYSE listing requirements ahead of the January 1, 2021 deadline. All references to common units and per unit amounts in the consolidated financial statements and notes related thereto have been retrospectively adjusted to reflect the effect of the Reverse Unit Split for all periods presented. Interest Holders As of December 31, 2020, public common unit holders held approximately 64% of the Partnership’s outstanding limited partner interests; CVR Services, LLC (“CVR Services”) (formerly Coffeyville Resources, LLC), a wholly-owned subsidiary of CVR Energy, held approximately 36% of the Partnership’s outstanding limited partner interests; and CVR GP, LLC (“CVR GP” or the “general partner”), a wholly owned subsidiary of CVR Energy, held 100% of the Partnership’s general partner interest. As of December 31, 2020, Icahn Enterprises L.P. (“IEP”) and its affiliates owned approximately 71% of the common stock of CVR Energy. Unit Repurchase Program On May 6, 2020, the Board, on behalf of the Partnership, authorized a unit repurchase program (the “Unit Repurchase Program”). The Unit Repurchase Program enables the Partnership to repurchase up to $10 million of the Partnership’s common units. Repurchases under the Unit Repurchase Program may be made from time-to-time through open market transactions, block trades, privately negotiated transactions, or otherwise in accordance with applicable securities laws. The timing, price, and amount of repurchases (if any) will be made at the discretion of management of our general partner and are subject to market conditions, as well as corporate, regulatory, and other considerations. During the year ended December 31, 2020, adjusted to reflect the impact of the Reverse Unit Split, the Partnership repurchased 623,177 common units on the open market in accordance with a repurchase agreement under Rules 10b5-1 and 10b-18 of the Exchange Act at a cost of $7.1 million, inclusive of transaction costs, or an average price of $11.35 per common unit. At December 31, 2020, the Partnership had $2.9 million in authority remaining under the Unit Repurchase Program. On February 22, 2021, the Board authorized an additional $10 million for the Unit Repurchase Program. This Unit Repurchase Program does not obligate the Partnership to acquire any common units and may be cancelled or terminated by the Board at any time. Management and Operations The Partnership, including CVR GP, is led by the Board, and its committees and managed by the general partner’s executive officers, CVR Services (as sole member of the general partner), and certain officers of CVR Energy and its subsidiaries, pursuant to the Partnership Agreement, as well as a number of agreements between the Partnership, CVR GP, CVR Energy, and certain of their respective subsidiaries, including a service agreement. See Note 9 (“Related Party Transactions”) for further discussion. Common unitholders have limited voting rights on matters affecting the Partnership and have no right to elect the general partner’s directors or officers, whether on an annual or continuing basis or otherwise. Subsequent Events The Partnership evaluated subsequent events, if any, that would require an adjustment to the Partnership’s consolidated financial statements or require disclosure in the notes to the consolidated financial statements through the date of issuance of these consolidated financial statements. Where applicable, the notes to these consolidated financial statements have been updated to discuss all significant subsequent events which have occurred. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements, 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”), include the accounts of CVR Partners and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. Reclassifications Certain reclassifications have been made within the consolidated financial statements for the years ended December 31, 2019 and 2018 to conform with current presentation. Catalyst inventory with a value of $5.6 million as of December 31, 2019 was reclassified in the first quarter of 2020 to Other long-term assets to conform to current presentation. Use of Estimates The consolidated financial statements are prepared in conformity with GAAP, which requires management to make estimates and assumptions that affect the reported amounts and disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are reviewed on an ongoing basis, based on currently available information. Changes in facts and circumstances may result in revised estimates and actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and on deposit, investments in highly liquid money market accounts, and debt instruments with original maturities of three months or less. Accounts Receivable, net Accounts receivable, net primarily consist of customer accounts receivable recorded at the invoiced amounts and generally do not bear interest. Also included within Accounts Receivable are unbilled fixed price contracts which is discussed further within Note 6 (“Revenue”). Allowances for doubtful accounts are generally recorded when it becomes probable the receivable will not be collected and is booked to bad debt expense. The largest concentration of credit for any one customer was approximately 20% and 18% of the net accounts receivable balance at December 31, 2020 and 2019, respectively. Bad debt expense was $0.1 million and $0.1 million for the years ended December 31, 2020 and 2019, respectively. A recovery was recognized during the year ended 2018 of $1.1 million related to bad debt expense previously written off. Inventories Inventories consist of fertilizer products which are valued at the lower of FIFO cost, or net realizable value. Inventories also include raw materials (primarily gauze, natural gas, and pet coke) and parts and supplies that are valued at the lower of moving-average cost, which approximates FIFO, or net realizable value. The cost of inventories includes inbound freight costs. Inventories consisted of the following: December 31, (in thousands) 2020 2019 Finished goods $ 9,815 $ 17,612 Raw materials 152 243 Parts, supplies and other 32,382 30,441 Total Inventories $ 42,349 $ 48,296 At December 31, 2020 and 2019, inventories included depreciation of approximately $2.0 million and $4.5 million, respectively. Property, Plant and Equipment, net Additions to property, plant and equipment, including capitalized interest and certain costs allocable to construction and property purchases, are recorded at cost. Expenditures for improvements that increase economic benefit or returns and/or extend useful life are capitalized. Depreciation is computed using the straight-line method over the estimated useful lives of the various classes of depreciable assets. The lives used in computing depreciation for significant asset classes are as follows: Asset Range of Useful Lives, in Years Land and improvements 10 to 30 Buildings and improvements 3 to 30 Automotive equipment 5 to 30 Machinery and equipment 2 to 30 Other 3 to 10 Property, plant and equipment, net consisted of the following: December 31, (in thousands) 2020 2019 Machinery and equipment $ 1,388,735 $ 1,378,651 Buildings and improvements 17,598 17,221 Automotive equipment 16,608 16,691 Land and improvements 14,132 14,075 Construction in progress 12,098 5,198 Other 1,721 1,752 1,450,892 1,433,588 Less: Accumulated depreciation 553,045 481,629 Total Property, plant and equipment, net $ 897,847 $ 951,959 Leasehold improvements and assets held under finance leases are depreciated or amortized on the straight-line method over the shorter of the contractual lease term or the estimated useful life of the asset. Expenditures for routine maintenance and repair costs are expensed when incurred. Such expenses are reported in Direct operating expenses (exclusive of depreciation and amortization) in the Partnership’s Consolidated Statements of Operations. As of December 31, 2020, the Partnership had not identified the existence of an impairment indicator for our long-lived asset groups as outlined under Accounting Standards Codification (“ASC”) Topic 360, Property, Plant, and Equipment . Leases At inception, the Partnership determines whether an arrangement is a lease and the appropriate lease classification. Operating leases are included as operating lease right-of-use (“ROU”) assets within Other long-term assets and lease liabilities within Other current liabilities and Other long-term liabilities on our Consolidated Balance Sheets. Finance leases are included as ROU finance leases within Property, plant, and equipment, net, and finance lease liabilities within Other current liabilities and Long-term debt, net of current portion on our Consolidated Balance Sheets. Leases with an initial expected term of 12 months or less are considered short-term and are not recorded on our Consolidated Balance Sheets. The Partnership recognizes lease expense for these leases on a straight-line basis over the expected lease term. ROU assets represent the Partnership’s right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value of minimum lease payments over the lease term. The lease term is modified to reflect options to extend or terminate the lease when it is reasonably certain we will exercise such option. The depreciable life of assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise, in which case the depreciation policy in the “Property, Plant and Equipment, net” section above is applicable. The periodic lease payments are treated as payments of the lease obligation and interest is recorded as interest expense. Impairment of Long-Lived Assets and Goodwill Long-lived assets used in operations are assessed for impairment whenever changes in facts and circumstances indicate a possible significant deterioration in future expected cash flows. If the sum of the undiscounted expected future cash flows of an asset group is less than the carrying value, including applicable liabilities, the carrying value is written down to its estimated fair value. Individual assets are grouped for impairment purposes based on a judgmental assessment of the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other assets (for example, at a fertilizer facility level). The Partnership tests goodwill for impairment annually impairment annually on November 1 of each year, or more frequently if events or changes in circumstances indicate the asset might be impaired. One of the Partnership’s reporting units, the Coffeyville Facility, had a goodwill balance of $41.0 million at December 31, 2019. During the second quarter of 2020, following completion of the spring planting season, the market pricing for ammonia and UAN, which are the facility’s two primary products, experienced significant pricing declines driven by updated market expectations around supply and demand fundamentals which were expected to continue into the second half of 2020. Additionally, significant uncertainty remained as to the nature and extent of impacts to be seen on the overall demand for corn and soybean given reduced ethanol production and broader economic conditions which had negatively impacted demand. Therefore, in connection with the preparation of the financial statements for the three months ended June 30, 2020, given the pricing declines experienced in the second quarter of 2020, further muting of the Partnership’s near-term economic recovery assumptions, including revised forecasts for product pricing in 2020 and beyond, and market price performance of the Partnership’s common units, the Partnership concluded an impairment indicator was present and a triggering event under ASC Topic 350, Intangibles-Goodwill and Other , had occurred as of June 30, 2020 and an interim quantitative impairment assessment was performed. Significant assumptions inherent in the valuation methodologies for goodwill included, but are not limited to, prospective financial information, growth rates, discount rates, inflationary factors, and cost of capital. Based on the interim quantitative analysis, it was determined that the estimated fair value of the Coffeyville Facility reporting unit did not exceed its carrying value. As a result, the Partnership recorded a full non-cash impairment charge of $41.0 million during the three months ended June 30, 2020. There was no goodwill remaining as of December 31, 2020. The Partnership performed the annual impairment reviews of goodwill for 2019 and 2018 and concluded no impairments. For the period ended December 31, 2019, the Partnership performed a qualitative assessment and concluded there were no events or circumstances which would trigger the performance of a quantitative analysis after reviewing all factors impacting the Coffeyville Facility, including improved market conditions and financial results in 2019 as compared to the financial forecasts from those used in the fair value analysis at December 31, 2018 where the estimated fair value of the Coffeyville Facility reporting unit exceeded its carrying value by approximately 36% based upon the results of the Partnership’s quantitative goodwill impairment test. Loss Contingencies In the ordinary course of business, CVR Partners may become party to lawsuits, administrative proceedings, and governmental investigations, including environmental, regulatory, and other matters. The outcome of these matters cannot always be predicted accurately, but the Partnership accrues liabilities for these matters if the Partnership has determined that it is probable a loss has been incurred and the loss can be reasonably estimated. As of December 31, 2020 and 2019, there are no matters or contingencies that require recognition or disclosure. The Partnership is subject to various stringent federal, state, and local environmental, health, and safety rules and regulations. Liabilities related to future remediation costs of past environmental contamination of properties are recognized when the related costs are considered probable and can be reasonably estimated. Estimates of these costs are based upon currently available facts, internal and third-party assessments of contamination, available remediation technology, site-specific costs, and currently enacted laws and regulations. In reporting environmental liabilities, no offset is made for potential recoveries. Loss contingency accruals, including those for environmental remediation, are subject to revision as further information develops or circumstances change and such accruals can take into account the legal liability of other parties. Management periodically reviews and, as appropriate, revises its environmental accruals. Environmental expenditures for capital assets are capitalized at the time of the expenditure when such costs provide future economic benefits. As of December 31, 2020 and 2019, no liabilities have been recognized for environmental remediation matters as no matters have been identified that are considered to be probable or estimable. Revenue Recognition The Partnership recognizes revenue based on consideration specified in contracts or agreements with customers when performance obligations are satisfied by transferring control over products or services to a customer. The adoption of ASC Topic 606, Revenue from Contracts with Customers , resulted in the recognition of deferred revenue and related receivables, on a gross basis, associated with contracts that guarantee a price and supply of nitrogen fertilizer products in quantities expected to be delivered in the normal course of business. Other accounting policies relevant to revenue include: • Revenue transactions that pass control at customers’ designated facilities; • Non-monetary product exchanges which are entered into in the normal course of business are included on a net cost basis in operating expenses on the Consolidated Statements of Operations; and • Pass-through finished goods delivery costs reimbursed by customers are reported in net sales, while an offsetting expense is included in cost of materials and other. Other considerations - Excise and other taxes collected from customers and remitted to governmental authorities are excluded from reported revenues. Cost Classifications Cost of materials and other consist primarily of freight and distribution expenses, feedstock expenses, purchased ammonia, and purchased hydrogen. Direct operating expenses (exclusive of depreciation and amortization) consist primarily of energy and other utility costs, direct costs of labor, property taxes, plant-related maintenance services, including turnaround, and environmental and safety compliance costs, as well as catalyst and chemical costs. Each of these financial statement line items are also impacted by changes in inventory balances. Direct operating expenses also include allocated share-based compensation from CVR Energy and its subsidiaries, as discussed in Note 7 (“Share-Based Compensation”). Selling, general and administrative expenses consist primarily of legal expenses, treasury, accounting, marketing, human resources, information technology, and maintaining the corporate and administrative offices in Texas and Kansas. Share-Based Compensation The Partnership accounts for share-based compensation in accordance with ASC Topic 718, Compensation — Stock Compensation (“ASC 718”). Currently, all of the Partnership’s share-based compensation awards are liability-classified and are measured at fair value at the end of each reporting period based on the applicable closing unit price. Compensation expense will fluctuate based on changes in the applicable unit price value and expense reversals resulting from employee terminations prior to award vesting. See Note 7 (“Share-Based Compensation”) for further discussion. Income Taxes CVR Partners accounts for income taxes utilizing the asset and liability approach. Under this method, deferred tax assets and liabilities are recognized for the anticipated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred amounts are measured using enacted tax rates expected to apply to taxable income in the year those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Allocation of Costs CVR Energy and its subsidiaries provide a variety of services to the Partnership, including employee benefits provided through CVR Energy’s benefit plans, administrative services provided by CVR Energy’s employees and management, insurance, and office space leased by CVR Energy. As such, the accompanying consolidated financial statements include costs that have been incurred by CVR Energy on behalf of the Partnership. These amounts incurred by CVR Energy are then billed or allocated to the Partnership and are classified on the Consolidated Statements of Operations as either Direct operating expenses (exclusive of depreciation and amortization) or as Selling, general and administrative expenses. See Note 9 (“Related Party Transactions”) for a detailed discussion of the billing procedures and the basis for calculating the charges for specific products and services. Recent Accounting Pronouncements - Adoption of Credit Losses Standard In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326). The ASU replaces the incurred loss model with a current expected credit loss model for more timely recognition of expected impairment losses for most financial assets and certain other instruments that are not measured at fair value through net income. Effective January 1, 2020, we adopted this ASU with no material impact on the Partnership’s consolidated financial position or results of operations. Recent Accounting Pronouncements - Adoption of Fair Value Measurement Standard In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820). The ASU eliminates such disclosures as the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy. Certain disclosures are required to be applied on a retrospective basis and others on a prospective basis. Effective January 1, 2020, we adopted this ASU with no material impact on the Partnership’s disclosures. Recent Accounting Pronouncements - New Accounting Standards Issued But Not Yet Implemented In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740). The ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and modifies other areas of the topic to clarify the application of GAAP. Certain amendments within the standard are required to be applied on a retrospective basis and others on a prospective basis. This standard is effective for the Partnership beginning January 1, 2021, with early adoption permitted. The Partnership is evaluating the effect of adopting this new accounting guidance on its consolidated financial statements, but does not currently expect adoption will have a material impact on the Partnership’s consolidated financial position or results of operations. The Partnership does not intend to early adopt this ASU. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). This ASU was issued because, by the end of 2021, banks will no longer be required to report information that is used to determine London Interbank Offered Rate (“LIBOR”), which is used globally by all types of entities. As a result, LIBOR could be discontinued, as well as other interest rates used globally. ASU 2020-04 provides companies with optional expedients for contract modifications under Topics 310, 470, 842, and 815-15, excluded components of certain hedging relationships, fair value hedges, and cash flow hedges, as well as certain exceptions, which are intended to help ease the potential accounting burden associated with transitioning away from these reference rates. Companies can apply the ASU immediately. However, the guidance will only be available for a limited time (generally through December 31, 2022). The Partnership is currently evaluating the impact that adopting this new accounting standard will have on its consolidated financial statements and related disclosures. In October 2020, the FASB issued ASU 2020-10, Codification Improvements. The ASU amends various sections of the codification in the Boards ongoing efforts to simplify and improve guidance. This standard is effective for the Partnership beginning January 1, 2021, with early adoption permitted. The Partnership is evaluating the effect of adopting this new accounting guidance on its consolidated financial statements, but does not currently expect adoption will have a material impact on the Partnership’s consolidated financial position or results of operations. The Partnership does not intend to early adopt this ASU. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | (3) Leases Lease Overview We lease railcars and certain facilities to support the Partnership’s operations. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one Balance Sheet Summary at December 31, 2020 and 2019 The following tables summarize the ROU asset and lease liability balances for the Partnership’s operating and finance leases at December 31, 2020 and 2019: December 31, (in thousands) 2020 2019 Operating Leases: ROU asset, net Railcars $ 7,327 $ 10,826 Real estate and other 3,040 2,581 Lease liability Railcars $ 7,696 $ 11,088 Real estate and other 867 228 Finance Leases: ROU asset, net Real estate and other $ 101 $ 201 Lease liability Real estate and other $ 105 $ 205 Lease Expense Summary for the Year Ended December 31, 2020 and 2019 We recognize lease expense on a straight-line basis over the lease term. For the year ended December 31, 2020 and 2019, we recognized lease expense comprised of the following components: Year Ended December 31, (in thousands) 2020 2019 Operating lease expense $ 4,113 $ 3,122 Finance lease expense: Amortization of ROU asset $ 101 $ 322 Interest expense on lease liability 6 10 Short-term lease expense, recognized within Direct operating expenses (exclusive of depreciation and amortization), was $0.4 million and $0.4 million for the year ended December 31, 2020 and 2019, respectively. Lease Terms and Discount Rates The following outlines the remaining lease terms and discount rates used in the measurement of the Partnership’s ROU assets and liabilities: Year Ended December 31, 2020 2019 Weighted-average remaining lease term (years) Operating Leases 2.9 3.4 Finance Leases 1.3 2.3 Weighted-average discount rate Operating Leases 5.1 % 5.1 % Finance Leases 4.0 % 3.9 % Maturities of Lease Liabilities The following summarizes the remaining minimum lease payments through maturity of the Partnership’s ROU assets and liabilities at December 31, 2020: (in thousands) Operating Leases Finance Leases 2021 $ 3,672 $ 107 2022 3,236 — 2023 1,367 — 2024 684 — 2025 263 — Thereafter — — Total lease payments 9,222 107 Less: imputed interest (659) (2) Total lease liability $ 8,563 $ 105 On July 31, 2020, the Partnership and Messer LLC (“Messer”) entered into an On-Site Product Supply Agreement (the “Messer Agreement”). Under the Messer Agreement, among other obligations, Messer is obligated to supply and make certain capital improvements during the term of the Messer Agreement, and the Partnership is obligated to take as available and pay for, oxygen, nitrogen, and compressed dry air from Messer’s facility. This arrangement for the Partnership’s purchase of oxygen, nitrogen, and dry air from Messer does not meet the definition of a lease under FASB ASC Topic 842, Leases, (“Topic 842”), as the Partnership does not expect to receive substantially all of the output of Messer’s on-site production from its air separation unit over the life of the Messer Agreement. The Messer Agreement also obligates Messer to install a new oxygen |
Leases | (3) Leases Lease Overview We lease railcars and certain facilities to support the Partnership’s operations. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one Balance Sheet Summary at December 31, 2020 and 2019 The following tables summarize the ROU asset and lease liability balances for the Partnership’s operating and finance leases at December 31, 2020 and 2019: December 31, (in thousands) 2020 2019 Operating Leases: ROU asset, net Railcars $ 7,327 $ 10,826 Real estate and other 3,040 2,581 Lease liability Railcars $ 7,696 $ 11,088 Real estate and other 867 228 Finance Leases: ROU asset, net Real estate and other $ 101 $ 201 Lease liability Real estate and other $ 105 $ 205 Lease Expense Summary for the Year Ended December 31, 2020 and 2019 We recognize lease expense on a straight-line basis over the lease term. For the year ended December 31, 2020 and 2019, we recognized lease expense comprised of the following components: Year Ended December 31, (in thousands) 2020 2019 Operating lease expense $ 4,113 $ 3,122 Finance lease expense: Amortization of ROU asset $ 101 $ 322 Interest expense on lease liability 6 10 Short-term lease expense, recognized within Direct operating expenses (exclusive of depreciation and amortization), was $0.4 million and $0.4 million for the year ended December 31, 2020 and 2019, respectively. Lease Terms and Discount Rates The following outlines the remaining lease terms and discount rates used in the measurement of the Partnership’s ROU assets and liabilities: Year Ended December 31, 2020 2019 Weighted-average remaining lease term (years) Operating Leases 2.9 3.4 Finance Leases 1.3 2.3 Weighted-average discount rate Operating Leases 5.1 % 5.1 % Finance Leases 4.0 % 3.9 % Maturities of Lease Liabilities The following summarizes the remaining minimum lease payments through maturity of the Partnership’s ROU assets and liabilities at December 31, 2020: (in thousands) Operating Leases Finance Leases 2021 $ 3,672 $ 107 2022 3,236 — 2023 1,367 — 2024 684 — 2025 263 — Thereafter — — Total lease payments 9,222 107 Less: imputed interest (659) (2) Total lease liability $ 8,563 $ 105 On July 31, 2020, the Partnership and Messer LLC (“Messer”) entered into an On-Site Product Supply Agreement (the “Messer Agreement”). Under the Messer Agreement, among other obligations, Messer is obligated to supply and make certain capital improvements during the term of the Messer Agreement, and the Partnership is obligated to take as available and pay for, oxygen, nitrogen, and compressed dry air from Messer’s facility. This arrangement for the Partnership’s purchase of oxygen, nitrogen, and dry air from Messer does not meet the definition of a lease under FASB ASC Topic 842, Leases, (“Topic 842”), as the Partnership does not expect to receive substantially all of the output of Messer’s on-site production from its air separation unit over the life of the Messer Agreement. The Messer Agreement also obligates Messer to install a new oxygen |
Other Current Liabilities
Other Current Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Other Current Liabilities | (4) Other Current Liabilities Other current liabilities were as follows: December 31, (in thousands) 2020 2019 Personnel accruals $ 7,475 $ 8,187 Operating lease liabilities 3,309 3,523 Accrued interest 2,506 2,518 Sales incentives 2,215 1,614 Share-based compensation 442 5,011 Prepaid revenue contracts 197 277 Other accrued expenses and liabilities 2,565 2,913 Total other current liabilities $ 18,709 $ 24,043 Other current liabilities include amounts accrued by the Partnership and owed to CVR Energy and its affiliates of $5.4 million at December 31, 2019. The Partnership had no separate affiliate liabilities owed to CVR Energy and its affiliates at December 31, 2020, as allocation of affiliate accruals is part of the amount charged to the Partnership under the new Corporate Master Service Agreement, which became effective January 1, 2020 (the “Corporate MSA”). Refer to Note 9 (“Related Party Transactions”) for additional discussion. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | (5) Long-Term Debt Long-term debt consists of the following: December 31, (in thousands) 2020 2019 9.25% Senior Secured Notes, due June 2023 (1)(2) $ 645,000 $ 645,000 6.50% Senior Notes, due April 2021, net of current portion (3) — $ 2,240 Unamortized discount and debt issuance costs (4) (11,058) (14,834) Total long-term debt 633,942 632,406 Current portion of long-term debt (3) 2,240 — Total long-term debt, including current portion $ 636,182 $ 632,406 (1) This debt was issued at a $16.1 million discount which is being amortized, as interest expense, over the remaining term of the debt. Debt issuance costs associated with this debt totaled $9.4 million. (2) The estimated fair value of total long-term debt outstanding was approximately $645.7 million and $673.8 million as of December 31, 2020 and 2019, respectively. This estimate of fair value is a Level 2 measurement as it was determined by quotations obtained from a broker-dealer who makes a market in these and similar securities. (3) The 6.50% Senior Notes, due April 2021, mature within 12 months, and, therefore, the outstanding balance of $2.2 million has been classified as short-term as of December 31, 2020. (4) For the years ended December 31, 2020, 2019, and 2018, amortization of the discount on debt and amortization of deferred financing costs reported as Interest expense, net totaled approximately $3.8 million, $3.4 million, and $3.1 million, respectively. Credit Agreements (in thousands) Total Capacity Amount borrowed as of December 31, 2020 Outstanding Letters of Credit Available capacity as of December 31, 2020 Maturity Date ABL Credit Agreement (1)(2) $ 20,146 $ — $ — $ 20,146 September 30, 2022 (1) At the option of the borrowers, loans under the ABL Credit Agreement initially bear interest at an annual rate equal to (i) 1.00% plus a base rate, Thereafter, loans will bear interest (i) at such rates if our quarterly excess availability is greater than 50% and (ii) 1.50% plus a base rate, otherwise. (2) The ABL Credit Agreement was amended on September 29, 2020 to, among other things, reduce the commitments thereunder to $35 million and extended the maturity date to September 30, 2022. Deferred financing costs of $0.4 million were capitalized related to this amendment and will be amortized from Prepaid expenses and other current assets and Other long-term assets over the remaining term of the ABL Credit Agreement. Amortization expense was $0.2 million for the years ended December 31, 2020, 2019, and 2018. 9.25% Senior Secured Notes due 2023 On June 10, 2016, CVR Partners and CVR Nitrogen Finance Corporation (“CVR Nitrogen Finance”), an indirect wholly-owned subsidiary of CVR Partners (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 million aggregate principal amount of 9.25% 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. On or after June 15, 2019, the 2023 Notes Issuers may on any one or more occasions, redeem all or part of the 2023 Notes at the redemption prices set forth below expressed as a percentage of the principal amount of the 2023 Notes plus accrued and unpaid interest to the applicable redemption date. 12-month period beginning June 15, Percentage 2020 102.313% 2021 and thereafter 100% The 2023 Notes contain customary covenants for a financing of this type that, among other things, restrict CVR Partners’ 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 Partnerships’ restricted subsidiaries to the Partnership; (vii) consolidate, merge or transfer all or substantially all of the Partnerships’ assets; (viii) engage in transactions with affiliates; and (ix) create unrestricted subsidiaries. In addition, the indenture contains customary events of default, the occurrence of which would result in or permit the trustee or the holders of at least 25% of the 2023 Notes to cause the acceleration of the 2023 Notes, in addition to the pursuit of other available remedies. ABL Credit Agreement On September 29, 2020, CVR Partners amended the ABL Credit Agreement, a senior secured asset based revolving credit facility (the “ABL Credit Facility”) with a group of lenders and UBS AG (“UBS”), as administrative agent and collateral agent. The ABL Credit Amendment amended the aggregate principal amount of availability of up to $35 million with an incremental facility, which permits an increase in borrowings of up to $25 million in the aggregate subject to additional lender commitments and certain other conditions. The ABL Credit Amendment is scheduled to mature on September 30, 2022. The Partnership is in compliance with all covenants of the 9.25% Senior Secured Notes, the 6.50% Senior Notes, and the ABL Credit Agreement as of December 31, 2020. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | (6) Revenue The following table presents the Partnership’s revenue, disaggregated by major product: Year Ended December 31, (in thousands) 2020 2019 2018 Ammonia $ 94,117 $ 94,467 $ 66,254 UAN 198,258 251,199 222,329 Urea products 14,115 17,430 20,633 Net sales, exclusive of freight and other 306,490 363,096 309,216 Freight revenue 33,329 33,436 33,567 Other revenue 10,134 7,645 8,299 Net sales $ 349,953 $ 404,177 $ 351,082 The Partnership sells its products on a wholesale basis under a contract or by purchase order. The Partnership’s contracts with customers generally contain fixed pricing and most have terms of less than one year. The Partnership recognizes revenue at the point in time at which the customer obtains control of the product, which is generally upon delivery and acceptance by the customer. The customer acceptance point is stated in the contract and may be at one of the Partnership’s manufacturing facilities, at one of the Partnership’s off-site loading facilities, or at the customer’s designated facility. Freight revenue recognized by the Partnership represents the pass-through finished goods delivery costs incurred prior to customer acceptance and is reimbursed by customers. An offsetting expense for freight is included in Cost of materials and other. Qualifying taxes collected from customers and remitted to governmental authorities are not included in reported revenues. Depending on the product sold and the type of contract, payments from customers are generally either due prior to delivery or within 15 to 30 days of product delivery. The Partnership generally provides no warranty other than the implicit promise that goods delivered are free of liens and encumbrances and meet the agreed upon specifications. Product returns are rare, and as such, the Partnership does not record a specific warranty reserve or consider activities related to such warranty, if any, to be a separate performance obligation. The Partnership has an immaterial amount of variable consideration for contracts with an original duration of less than a year. A small portion of the Partnership’s revenue includes contracts extending beyond one year, some of which contain variable pricing in which the majority of the variability is attributed to the market-based pricing. The Partnership’s contracts do not contain a significant financing component. The Partnership has an immaterial amount of fee-based revenue, included in other revenue in the table above, that is recognized based on the net amount of the proceeds received. Transaction Price - Allocation to Remaining Performance Obligations As of December 31, 2020, the Partnership had approximately $6.1 million of remaining performance obligations for contracts with an original expected duration of more than one year. The Partnership expects to recognize approximately $3.5 million of these performance obligations as revenue by the end of 2021, an additional $2.3 million in 2022, and the remaining balance thereafter. The Partnership has elected to not disclose the amount of transaction price allocated to remaining performance obligations for contracts with an original expected duration of less than one year. The Partnership has elected to not disclose variable consideration allocated to wholly unsatisfied performance obligations that are based on market prices that have not yet been determined. Contract Balances The Partnership’s deferred revenue is a contract liability that primarily relates to nitrogen fertilizer sales contracts requiring customer prepayment prior to product delivery to guarantee a price and supply of nitrogen fertilizer. Deferred revenue is recorded at the point in time in which a prepaid contract is legally enforceable and the associated right to consideration is unconditional prior to transferring product to the customer. An associated receivable is recorded for uncollected prepaid contract amounts. Contracts requiring prepayment are generally short-term in nature and, as discussed above, revenue is recognized at the point in time in which the customer obtains control of the product. A summary of the deferred revenue activity during the year ended December 31, 2020 is presented below: (in thousands) Balance at December 31, 2019 $ 27,841 Add: New prepay contracts entered into during the period (1) 56,490 Less: Revenue recognized that was included in the contract liability balance at the beginning of the period (27,060) Revenue recognized related to contracts entered into during the period (26,141) Other changes (499) Balance at December 31, 2020 $ 30,631 (1) Includes $33.4 million where payment associated with prepaid contracts was collected. Major Customers CVR Partners has two customers who comprised 26%, 28%, and 20% of net sales for the years ended December 31, 2020, 2019, and 2018, respectively. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | (7) Share-Based Compensation CVR Partners’ Phantom Unit Awards CVR Partners has a Long-Term Incentive Plan (“LTIP”) which permits the granting of options, stock and unit appreciation rights (“SARs”), restricted shares, restricted stock units, phantom units, unit awards, substitute awards, other unit-based awards, cash awards, dividend and distribution equivalent rights, share awards, and performance awards (including performance share units, performance units, and performance-based restricted stock). As of December 31, 2020, only phantom unit awards under the LTIP remained outstanding. Individuals who are eligible to receive awards and grants under the LTIP include CVR Energy’s and the Partnership’s employees, officers, consultants, advisors, and directors. A summary of phantom unit award activity and changes under the LTIP during the year ended December 31, 2020 is presented below: (in thousands, except per unit data) Units Weighted- Average Grant Date Fair Value Aggregate Intrinsic Value Non-vested at December 31, 2019 155,707 $ 30.71 $ 4,827 Granted 444,385 12.12 Vested (62,594) 31.31 Forfeited (18,617) 31.23 Non-vested at December 31, 2020 518,881 $ 14.70 $ 8,312 Unrecognized compensation expense associated with the phantom units at December 31, 2020 was approximately $7.4 million, which is expected to be recognized over a weighted average period of 2.8 years. Compensation expense recorded for the years ended December 31, 2020, 2019, and 2018 related to awards under the CVR Partners LTIP was approximately $0.6 million, $2.3 million, and $1.9 million, respectively. As of December 31, 2020 and 2019, the Partnership had a liability of $0.9 million and $1.2 million, respectively, for cash settled non-vested phantom unit awards and associated distribution equivalent rights. For the years ended December 31, 2020, 2019, and 2018, the Partnership paid cash of $0.8 million, $1.7 million, and $1.7 million, respectively, to settle liability-classified awards upon vesting. Incentive Unit Awards — CVR Energy CVR Energy grants awards of incentive units and dividend and distribution equivalent rights to certain of its employees and those of its subsidiaries, including CVR GP, who provide shared services for CVR Energy and its subsidiaries, including the Partnership. Costs related to these incentive unit awards are allocated to the Partnership based on time spent on Partnership business. Total compensation expense allocated to the Partnership for the years ended December 31, 2020, 2019, and 2018 related to the incentive units was $0.4 million, $1.0 million and $0.5 million, respectively. The Partnership had no separate liabilities related to these incentive unit awards as of December 31, 2020, as the allocation of compensation expense for incentive unit awards is part of the amount charged to the Partnership under the Corporate MSA. The Partnership had a liability of $1.4 million as of December 31, 2019, which is recorded in Other current liabilities. For the years ended December 31, 2020 and 2018, the Partnership made reimbursements to CVR Energy of $2.2 million and $0.8 million, respectively, and no reimbursements for the year ended December 31, 2019 related to its allocated portion of CVR Energy’s incentive unit awards payments. See Note 9 (“Related Party Transactions”) for further discussion of the Corporate MSA. Performance Unit Awards In connection with an employment agreement with the Partnership’s Executive Chairman dated November 1, 2017, CVR Energy entered into a performance unit award agreement (the “2017 Performance Unit Award Agreement”) on November 1, 2017, with our Executive Chairman representing the right to receive upon vesting, a cash payment equal to $10.0 million if the average closing price of CVR Energy’s common stock over the 30 day trading period from January 4, 2022 to February 15, 2022 is equal to or greater than $60 per share. There were no compensation costs recognized for the years ended December 31, 2020 and 2019 under the 2017 Performance Unit Award Agreement. Compensation costs recognized for the year ended December 31, 2018 were $0.4 million. Under the 2017 Performance Unit Award Agreement, as of December 31, 2020, the Partnership had no outstanding liability, and an outstanding liability of $0.4 million as of December 31, 2019, which was recorded in Other current liabilities on the Consolidated Balance Sheets. At December 31, 2020, there was approximately $2.3 million of total unrecognized compensation costs related to the 2017 Performance Unit Award Agreement. Other Benefit Plans CVR Energy sponsors and administers two defined contribution 401(k) plans, the CVR Energy 401(k) Plan and the CVR Energy 401(k) Plan for Represented Employees (the “Plans”), in which employees of the general partner, CVR Partners and its subsidiaries may participate. Participants in the Plans may elect to contribute a designated percentage of their eligible compensation in accordance with the Plans, subject to statutory limits. CVR Partners provides a matching contribution of 100% of the first 6% of eligible compensation contributed by participants. Participants in both Plans are immediately vested in their individual contributions. The Plans provide for a three-year vesting schedule for the Partnership’s matching contributions and contain a provision to count service with predecessor organizations. The Partnership’s contributions under the Plans were approximately $1.9 million, $1.8 million, and $1.8 million for the years ended December 31, 2020, 2019, and 2018, respectively. Effective January 1, 2021, the matching contributions for the Plans have been suspended. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | (8) Commitments Supply Commitments The minimum required payments for unconditional purchase obligations, including the natural gas purchases outlined below, are as follows: (in thousands) Unconditional Purchase Obligations Year Ending December 31, 2021 $ 36,132 2022 11,207 2023 9,540 2024 5,006 2025 5,006 Thereafter 33,244 $ 100,135 Supply Commitments - The Partnership is a party to various supply agreements with both related and third parties which commit the Partnership to purchase minimum volumes of hydrogen, oxygen, nitrogen, pet coke, and natural gas to run its plants’ operations. The Partnership is also party to a natural gas supply agreement with various third-parties. Natural gas expense for the years ended December 31, 2020, 2019, and 2018 totaled approximately $32.4 million, $33.1 million, and $42.4 million, respectively, and is included in Cost of materials and other and Direct operating expenses (exclusive of depreciation and amortization). The Partnership entered into the Coffeyville Master Service Agreement (“Coffeyville MSA”) with Coffeyville Resources Refining & Marketing, LLC, an indirect, wholly-owned subsidiary of CVR Energy (“CRRM”), pursuant to which, it agrees to pay a monthly fee for pet coke purchases. The Partnership’s Coffeyville Facility obtains a significant amount (60% on average during last five years, 33% in 2020) of the pet coke it needs from the Coffeyville MSA. Any remaining pet coke needs are required to be purchased from various third parties. The price paid pursuant to the Coffeyville MSA 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. See Note 9 (“Related Party Transactions”) for further discussion of the Coffeyville MSA. Pursuant to the Coffeyville MSA, the Partnership agreed, with respect to the Coffeyville Facility, to pay CRRM for hydrogen purchases. The committed hydrogen 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 the Coffeyville Facility fails to take delivery of the full committed volume in a month, the Partnership 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, the Partnership will be entitled to a pro-rata reduction of the monthly fixed fee. See Note 9 (“Related Party Transactions”) for further discussion. The Partnership, with respect to the Coffeyville Facility, is also party to the Messer Agreement, pursuant to which, it is required to take as available and pay for the supply of oxygen and nitrogen to the plant. This agreement was renewed and commenced in July 2020 for an initial term of 15 years with annual renewals thereafter. Expenses associated with this agreement are included in Direct operating expenses (exclusive of depreciation and amortization), and, for the years ended December 31, 2020, 2019, and 2018, totaled approximately $4.2 million, $4.2 million, and $3.8 million, respectively. In addition to the related party Coffeyville MSA, the Coffeyville Facility has pet coke supply agreements with multiple third-party refineries to purchase approximately 275,000 tons of pet coke at a fixed price for delivery at different dates through December 2021. The Coffeyville Facility has historically purchased third-party pet coke based on spot purchases and supply agreements in place at the time. The delivered cost of third-party pet coke purchases is included in Cost of materials and other and totaled approximately $17.9 million, $10.3 million, and $4.8 million for the years ended December 31, 2020, 2019, and 2018, respectively. During 2019, the Partnership, with respect to the East Dubuque Facility, entered into a utility service agreement with a new third-party energy cooperative. The new utility service agreement does not contain purchase commitments. The cost of utilities, including natural gas purchases, is included in Direct operating expenses (exclusive of depreciation and amortization). Prior to entering into the new utility service agreement, the East Dubuque Facility had a utility service agreement with a third-party energy cooperative which included certain charges on a take-or-pay basis and amounts associated with this agreement totaled approximately $3.7 million and $10.6 million for the years ended December 31, 2019 and 2018, respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | (9) Related Party Transactions Limited Partnership Agreement The Partnership’s general partner manages the Partnership’s operations and activities as specified in CVR Partners’ limited partnership agreement. The general partner of the Partnership, CVR GP, is managed by its board of directors. The partnership agreement provides that the Partnership will reimburse CVR GP 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. Omnibus Agreement We are party to an omnibus agreement with CVR Energy and our general partner, pursuant to which we have agreed that CVR Energy will have a preferential right to acquire any assets or group of assets that do not constitute assets used in a fertilizer restricted business. In determining whether to exercise any preferential right under the omnibus agreement, CVR Energy will be permitted to act in its sole discretion, without any fiduciary obligation to us or the unitholders whatsoever. These obligations will continue so long as CVR Energy owns at least 50% of our general partner. There was no activity reported under this agreement during the years ended 2020, 2019, and 2018. Coffeyville MSA Effective January 1, 2020, the Conflicts Committee of the Board and the audit committee of CVR Energy approved, and CRNF and CRRM entered into the Coffeyville MSA which is comprised of various supply and service agreements effectively replacing, on substantially equivalent terms, other related party agreements in place during 2019 and 2018 as (the “Replaced Coffeyville Agreements”). In addition to affirming the terms and services described in the Replaced Coffeyville Agreements and resetting the durations thereof, as applicable, commencing January 1, 2020, the Coffeyville MSA provides for monthly payments, subject to netting, for all goods and services supplied under the Coffeyville MSA. The Coffeyville MSA will continue in effect until terminated in writing, in whole or in part, by either party, or until terminated automatically in the event a party falls out of common control with the other party. The Coffeyville MSA provides the following services: • Cross Easements - Both CRNF and CRRM can access and utilize each other’s land in certain circumstances in order to operate their respective businesses. • Hydrogen Purchase and Sale - CRRM agrees to sell and deliver a committed hydrogen volume of 90,000 mscf per month to CRNF and CRNF agrees to purchase and receive the committed volume. CRNF also has the option to purchase excess volume from CRRM, if available. • Raw Water and Facilities Sharing - CRNF and CRRM are each owners of an undivided one-half interest in and to the water rights and agree to (i) allocate raw water resources between CVR Energy’s Coffeyville Refinery and our Coffeyville Facility and (ii) provide for the management of the water intake system which draws raw water from the Verdigris River for both our Coffeyville Facility and CVR Energy’s Coffeyville Refinery. • Coke Supply - Our Coffeyville Facility purchases pet coke from CVR Energy’s Coffeyville Refinery which provides that CRRM must deliver, and the Coffeyville Facility must purchase, during each calendar year an annual required amount of pet coke equal to the lesser of (i) 100 percent of the pet coke or (ii) 500,000 tons of pet coke. If during a calendar month, more than 41,667 tons of pet coke is produced and available for purchase, then the Coffeyville Facility will have the option to purchase the excess at the purchase price provided for in the agreement. If the option is declined, CRRM may sell the excess to a third-party. • Feedstock and Shared Services - CRNF and CRRM provide feedstock and other services to one another. These feedstocks and services are utilized in the respective production processes of CRRM’s Coffeyville Refinery and our Coffeyville Facility. Feedstocks provided under the agreement include, among others, hydrogen, high-pressure steam, nitrogen, instrument air, oxygen, and natural gas. • Lease - CRNF leases certain office and laboratory space from CRRM. Corporate MSA Also effective January 1, 2020, the Conflicts Committee of the Board and the audit committee of CVR Energy approved, and the parties entered into the Corporate MSA between CVR Services and certain of its affiliates, including CVR Energy, CVR GP and the Partnership and its subsidiaries, which is comprised of various management and service agreements effectively replacing other related party agreements, on substantially equivalent terms, in place for 2019 and 2018 as (the “Replaced Corporate Agreements”). In addition to affirming the terms and services described in the Replaced Corporate Agreements and resetting the durations thereof, as applicable, commencing January 1, 2020, the Corporate MSA provides for payment by each service recipient under the Corporate MSA of a monthly fee for goods and services supplied under the Corporate MSA, subject to netting and an annual true up, as well as pass-through of any direct costs incurred on behalf of a service recipient without markup. Under the Corporate MSA, CVR GP and the Partnership and its subsidiaries obtain certain management and other professional services from CVR Services, including the following, among others: • services from CVR Services’ employees in capacities equivalent to the capacities of corporate executive officers, except that those who serve in such capacities under the agreement will serve the Partnership on a shared, part-time basis only, unless the Partnership and CVR Services agree otherwise; • administrative and professional services, including legal, accounting, SOX compliance, financial reporting, human resources, information technology, communications, insurance, tax, credit, finance, corporate compliance, enterprise risk management, consulting, and government and regulatory affairs; • recommendations on capital raising activities to the board of directors of the general partner, including the issuance of debt or equity interests, the entry into credit facilities, and other capital market transactions; • managing or overseeing litigation and administrative or regulatory proceedings, investigations and other reviews in the ordinary course of business or operations, establishing appropriate insurance policies for the Partnership, and providing safety and environmental advice; • recommending the payment of distributions; and • managing or providing advice for other projects, including acquisitions, as may be agreed by the general partner and CVR Services from time to time. • permitting the use of the CVR Energy and CVR Partners trademarks by CVR GP and the Partnership at no cost. For services performed in connection with the services agreement, the Partnership recognized personnel costs, excluding amounts related to share based compensation (refer to Note 7 (“Share-Based Compensation”)), of $6.6 million, $7.3 million, and $6.6 million, respectively, for the years ended December 31, 2020, 2019, and 2018. Related Party Activity Activity associated with the Partnership’s related party arrangements for the years ended December 31, 2020, 2019, and 2018 is summarized below: Year Ended December 31, (in thousands) 2020 2019 2018 Sales to related parties (1) $ 993 $ 119 $ 371 Purchases from related parties (2) 22,365 30,876 27,315 December 31, 2020 2019 Prepaid expenses (3) $ — $ 249 Due to related parties (4) 1,446 7,826 (1) Sales to related parties, included in Net sales, consist primarily of sales of feedstocks and services to CRRM under the Coffeyville MSA. (2) Purchases from related parties, included in Cost of materials and other, Direct operating expenses (exclusive of depreciation and amortization), and Selling, general and administrative expenses, consist primarily of pet coke and hydrogen purchased from CRRM under the Coffeyville MSA. (3) Prepaid expenses, included in Prepaid expenses and other current assets, are amounts paid for feedstocks and services provided by CRRM under the Coffeyville MSA. (4) Due to related parties, included in Accounts payable to affiliates, Other current liabilities, and Other long-term liabilities, consist primarily of amounts payable for feedstocks and other supplies and services provided by CRRM and CVR Services under the Coffeyville MSA and Corporate MSA. Environmental Agreement Our Coffeyville Facility is a party to an environmental agreement with CRRM which provides for certain indemnification and access rights in connection with environmental matters affecting CVR Energy’s Coffeyville refinery and our Coffeyville Facility. To the extent that liability arises from environmental contamination that is caused by CRRM but is also commingled with environmental contamination caused by our Coffeyville Facility, CRRM may elect, in its sole discretion and at its own cost and expense, to perform government mandated environmental activities relating to such liability, subject to certain conditions and provided that CRRM will not waive any rights to indemnification or compensation otherwise provided for in the agreement. No liability under this agreement was recorded as of December 31, 2020 and 2019. Terminal and Operating Agreement Our Coffeyville Facility entered into a lease and operating agreement with Coffeyville Resources Terminal, LLC, an indirect wholly owned subsidiary of CVR Energy (“CRT”), under which it leases the premises located at Phillipsburg, Kansas to be utilized as a UAN terminal. The initial term of the agreement will expire in May 2032, provided, however, we may terminate the lease at any time during the initial term by providing 180 days prior written notice. In addition, this agreement will automatically renew for successive five-year terms, provided that we may terminate the agreement during any renewal term with at least 180 days written notice. We will pay CRT $1.00 per year for rent, $4.00 per ton of UAN placed into the terminal, and $4.00 per ton of UAN taken out of the terminal. Property Exchange On October 18, 2019, the Conflicts Committee of the Board and on October 22, 2019, the audit committee of CVR Energy, each agreed to authorize the exchange of certain parcels of property owned by subsidiaries of CVR Energy with an equal number of parcels owned by subsidiaries of CVR Partners, all located in Coffeyville, Kansas (the “Property Exchange”). On February 19, 2020, a subsidiary of CVR Energy and a subsidiary of CVR Partners executed the Property Exchange agreement. This Property Exchange will enable each such subsidiary to create a more usable, contiguous parcel of land near its own operating footprint. CVR Energy and the Partnership accounted for this transaction in accordance with the ASC Topic 805-50, Business Combinations (“ Topic 805-50”), guidance on transferring assets between entities under common control. This transaction had a net impact to the Partnership’s partners’ capital of less than $0.1 million. Distributions to CVR Partners’ Unitholders The Board has a policy for the Partnership to distribute all available cash generated on a quarterly basis. Cash distributions are 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 is determined by the Board following the end of such quarter. Distributions, if any, including the payment, amount, and timing thereof, are subject to change at the discretion of the Board. There were no distributions declared or paid by the Partnership during the year ended December 31, 2020 related to the fourth quarter of 2019 or the first, second, and third quarters of 2020. No distributions were declared for the fourth quarter of 2020. The Partnership paid distributions totaling $4.00 per common unit on a split-adjusted basis, or $45.3 million during the year ended December 31, 2019. Of these distributed amounts, CVR Energy received $15.6 million. During the year ended December 31, 2018, the Partnership did not pay distributions. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | (10) Supplemental Cash Flow Information Cash flows related to income taxes, interest, leases, and capital expenditures included in accounts payable are as follows: Year Ended December 31, (in thousands) 2020 2019 2018 Supplemental disclosures: Cash paid for income taxes, net of refunds $ 69 $ 40 $ 26 Cash paid for interest 59,850 60,057 60,168 Cash paid for amounts included in the measurement of lease liabilities (1): Operating cash flows from operating leases 4,117 4,019 Operating cash flows from finance leases 6 20 Financing cash flows from finance leases 100 321 Non-cash investing and financing activities: Change in capital expenditures included in accounts payable $ (2,167) $ 1,618 $ (1,031) (1) The lease standard was adopted on January 1, 2019 on a prospective basis. Therefore, only 2020 and 2019 are applicable to be included within the table above. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements, 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”), include the accounts of CVR Partners and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. |
Reclassifications | ReclassificationsCertain reclassifications have been made within the consolidated financial statements for the years ended December 31, 2019 and 2018 to conform with current presentation. |
Use of Estimates | Use of Estimates The consolidated financial statements are prepared in conformity with GAAP, which requires management to make estimates and assumptions that affect the reported amounts and disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are reviewed on an ongoing basis, based on currently available information. Changes in facts and circumstances may result in revised estimates and actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash EquivalentsCash and cash equivalents include cash on hand and on deposit, investments in highly liquid money market accounts, and debt instruments with original maturities of three months or less. |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable, net primarily consist of customer accounts receivable recorded at the invoiced amounts and generally do not bear interest. Also included within Accounts Receivable are unbilled fixed price contracts which is discussed further within Note 6 (“Revenue”). |
Inventories | InventoriesInventories consist of fertilizer products which are valued at the lower of FIFO cost, or net realizable value. Inventories also include raw materials (primarily gauze, natural gas, and pet coke) and parts and supplies that are valued at the lower of moving-average cost, which approximates FIFO, or net realizable value. The cost of inventories includes inbound freight costs. |
Property, Plant and Equipment, net | Property, Plant and Equipment, net Additions to property, plant and equipment, including capitalized interest and certain costs allocable to construction and property purchases, are recorded at cost. Expenditures for improvements that increase economic benefit or returns and/or extend useful life are capitalized. Depreciation is computed using the straight-line method over the estimated useful lives of the various classes of depreciable assets. The lives used in computing depreciation for significant asset classes are as follows: Asset Range of Useful Lives, in Years Land and improvements 10 to 30 Buildings and improvements 3 to 30 Automotive equipment 5 to 30 Machinery and equipment 2 to 30 Other 3 to 10 Property, plant and equipment, net consisted of the following: December 31, (in thousands) 2020 2019 Machinery and equipment $ 1,388,735 $ 1,378,651 Buildings and improvements 17,598 17,221 Automotive equipment 16,608 16,691 Land and improvements 14,132 14,075 Construction in progress 12,098 5,198 Other 1,721 1,752 1,450,892 1,433,588 Less: Accumulated depreciation 553,045 481,629 Total Property, plant and equipment, net $ 897,847 $ 951,959 Leasehold improvements and assets held under finance leases are depreciated or amortized on the straight-line method over the shorter of the contractual lease term or the estimated useful life of the asset. Expenditures for routine maintenance and repair costs are expensed when incurred. Such expenses are reported in Direct operating expenses (exclusive of depreciation and amortization) in the Partnership’s Consolidated Statements of Operations. As of December 31, 2020, the Partnership had not identified the existence of an impairment indicator for our long-lived asset groups as outlined under Accounting Standards Codification (“ASC”) Topic 360, Property, Plant, and Equipment . |
Leases | Leases At inception, the Partnership determines whether an arrangement is a lease and the appropriate lease classification. Operating leases are included as operating lease right-of-use (“ROU”) assets within Other long-term assets and lease liabilities within Other current liabilities and Other long-term liabilities on our Consolidated Balance Sheets. Finance leases are included as ROU finance leases within Property, plant, and equipment, net, and finance lease liabilities within Other current liabilities and Long-term debt, net of current portion on our Consolidated Balance Sheets. Leases with an initial expected term of 12 months or less are considered short-term and are not recorded on our Consolidated Balance Sheets. The Partnership recognizes lease expense for these leases on a straight-line basis over the expected lease term. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets and GoodwillLong-lived assets used in operations are assessed for impairment whenever changes in facts and circumstances indicate a possible significant deterioration in future expected cash flows. If the sum of the undiscounted expected future cash flows of an asset group is less than the carrying value, including applicable liabilities, the carrying value is written down to its estimated fair value. Individual assets are grouped for impairment purposes based on a judgmental assessment of the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other assets (for example, at a fertilizer facility level). |
Goodwill | The Partnership tests goodwill for impairment annually impairment annually on November 1 of each year, or more frequently if events or changes in circumstances indicate the asset might be impaired. One of the Partnership’s reporting units, the Coffeyville Facility, had a goodwill balance of $41.0 million at December 31, 2019. During the second quarter of 2020, following completion of the spring planting season, the market pricing for ammonia and UAN, which are the facility’s two primary products, experienced significant pricing declines driven by updated market expectations around supply and demand fundamentals which were expected to continue into the second half of 2020. Additionally, significant uncertainty remained as to the nature and extent of impacts to be seen on the overall demand for corn and soybean given reduced ethanol production and broader economic conditions which had negatively impacted demand. Therefore, in connection with the preparation of the financial statements for the three months ended June 30, 2020, given the pricing declines experienced in the second quarter of 2020, further muting of the Partnership’s near-term economic recovery assumptions, including revised forecasts for product pricing in 2020 and beyond, and market price performance of the Partnership’s common units, the Partnership concluded an impairment indicator was present and a triggering event under ASC Topic 350, Intangibles-Goodwill and Other , had occurred as of June 30, 2020 and an interim quantitative impairment assessment was performed. Significant assumptions inherent in the valuation methodologies for goodwill included, but are not limited to, prospective financial information, growth rates, discount rates, inflationary factors, and cost of capital. Based on the interim quantitative analysis, it was determined that the estimated fair value of the Coffeyville Facility reporting unit did not exceed its carrying value. As a result, the Partnership recorded a full non-cash impairment charge of $41.0 million during the three months ended June 30, 2020. There was no goodwill remaining as of December 31, 2020. |
Loss Contingencies | Loss Contingencies In the ordinary course of business, CVR Partners may become party to lawsuits, administrative proceedings, and governmental investigations, including environmental, regulatory, and other matters. The outcome of these matters cannot always be predicted accurately, but the Partnership accrues liabilities for these matters if the Partnership has determined that it is probable a loss has been incurred and the loss can be reasonably estimated. As of December 31, 2020 and 2019, there are no matters or contingencies that require recognition or disclosure. |
Environmental, Health & Safety (EHS) Matters | The Partnership is subject to various stringent federal, state, and local environmental, health, and safety rules and regulations. Liabilities related to future remediation costs of past environmental contamination of properties are recognized when the related costs are considered probable and can be reasonably estimated. Estimates of these costs are based upon currently available facts, internal and third-party assessments of contamination, available remediation technology, site-specific costs, and currently enacted laws and regulations. In reporting environmental liabilities, no offset is made for potential recoveries. Loss contingency accruals, including those for environmental remediation, are subject to revision as further information develops or circumstances change and such accruals can take into account the legal liability of other parties. Management periodically reviews and, as appropriate, revises its environmental accruals. Environmental expenditures for capital assets are capitalized at the time of the expenditure when such costs provide future economic benefits. |
Revenue Recognition and Cost Classifications | Revenue Recognition The Partnership recognizes revenue based on consideration specified in contracts or agreements with customers when performance obligations are satisfied by transferring control over products or services to a customer. The adoption of ASC Topic 606, Revenue from Contracts with Customers , resulted in the recognition of deferred revenue and related receivables, on a gross basis, associated with contracts that guarantee a price and supply of nitrogen fertilizer products in quantities expected to be delivered in the normal course of business. Other accounting policies relevant to revenue include: • Revenue transactions that pass control at customers’ designated facilities; • Non-monetary product exchanges which are entered into in the normal course of business are included on a net cost basis in operating expenses on the Consolidated Statements of Operations; and • Pass-through finished goods delivery costs reimbursed by customers are reported in net sales, while an offsetting expense is included in cost of materials and other. Other considerations - Excise and other taxes collected from customers and remitted to governmental authorities are excluded from reported revenues. Cost Classifications Cost of materials and other consist primarily of freight and distribution expenses, feedstock expenses, purchased ammonia, and purchased hydrogen. Direct operating expenses (exclusive of depreciation and amortization) consist primarily of energy and other utility costs, direct costs of labor, property taxes, plant-related maintenance services, including turnaround, and environmental and safety compliance costs, as well as catalyst and chemical costs. Each of these financial statement line items are also impacted by changes in inventory balances. Direct operating expenses also include allocated share-based compensation from CVR Energy and its subsidiaries, as discussed in Note 7 (“Share-Based Compensation”). Selling, general and |
Share-Based Compensation | Share-Based Compensation The Partnership accounts for share-based compensation in accordance with ASC Topic 718, Compensation — Stock Compensation |
Income Taxes | Income Taxes CVR Partners accounts for income taxes utilizing the asset and liability approach. Under this method, deferred tax assets and liabilities are recognized for the anticipated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred amounts are measured using enacted tax rates expected to apply to taxable income in the year those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. |
Allocation of Costs | Allocation of Costs CVR Energy and its subsidiaries provide a variety of services to the Partnership, including employee benefits provided through CVR Energy’s benefit plans, administrative services provided by CVR Energy’s employees and management, insurance, and office space leased by CVR Energy. As such, the accompanying consolidated financial statements include costs that have been incurred by CVR Energy on behalf of the Partnership. These amounts incurred by CVR Energy are then billed or allocated to the Partnership and are classified on the Consolidated Statements of Operations as either Direct operating expenses (exclusive of depreciation and amortization) or as Selling, general and administrative expenses. See Note 9 (“Related Party Transactions”) for a detailed discussion of the billing procedures and the basis for calculating the charges for specific products and services. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements - Adoption of Credit Losses Standard In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326). The ASU replaces the incurred loss model with a current expected credit loss model for more timely recognition of expected impairment losses for most financial assets and certain other instruments that are not measured at fair value through net income. Effective January 1, 2020, we adopted this ASU with no material impact on the Partnership’s consolidated financial position or results of operations. Recent Accounting Pronouncements - Adoption of Fair Value Measurement Standard In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820). The ASU eliminates such disclosures as the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy. Certain disclosures are required to be applied on a retrospective basis and others on a prospective basis. Effective January 1, 2020, we adopted this ASU with no material impact on the Partnership’s disclosures. Recent Accounting Pronouncements - New Accounting Standards Issued But Not Yet Implemented In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740). The ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and modifies other areas of the topic to clarify the application of GAAP. Certain amendments within the standard are required to be applied on a retrospective basis and others on a prospective basis. This standard is effective for the Partnership beginning January 1, 2021, with early adoption permitted. The Partnership is evaluating the effect of adopting this new accounting guidance on its consolidated financial statements, but does not currently expect adoption will have a material impact on the Partnership’s consolidated financial position or results of operations. The Partnership does not intend to early adopt this ASU. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). This ASU was issued because, by the end of 2021, banks will no longer be required to report information that is used to determine London Interbank Offered Rate (“LIBOR”), which is used globally by all types of entities. As a result, LIBOR could be discontinued, as well as other interest rates used globally. ASU 2020-04 provides companies with optional expedients for contract modifications under Topics 310, 470, 842, and 815-15, excluded components of certain hedging relationships, fair value hedges, and cash flow hedges, as well as certain exceptions, which are intended to help ease the potential accounting burden associated with transitioning away from these reference rates. Companies can apply the ASU immediately. However, the guidance will only be available for a limited time (generally through December 31, 2022). The Partnership is currently evaluating the impact that adopting this new accounting standard will have on its consolidated financial statements and related disclosures. In October 2020, the FASB issued ASU 2020-10, Codification Improvements. The ASU amends various sections of the codification in the Boards ongoing efforts to simplify and improve guidance. This standard is effective for the Partnership beginning January 1, 2021, with early adoption permitted. The Partnership is evaluating the effect of adopting this new accounting guidance on its consolidated financial statements, but does not currently expect adoption will have a material impact on the Partnership’s consolidated financial position or results of operations. The Partnership does not intend to early adopt this ASU. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of inventories | Inventories consisted of the following: December 31, (in thousands) 2020 2019 Finished goods $ 9,815 $ 17,612 Raw materials 152 243 Parts, supplies and other 32,382 30,441 Total Inventories $ 42,349 $ 48,296 |
Schedule of lives used in computing depreciation for depreciable assets and components of property, plant and equipment, net | The lives used in computing depreciation for significant asset classes are as follows: Asset Range of Useful Lives, in Years Land and improvements 10 to 30 Buildings and improvements 3 to 30 Automotive equipment 5 to 30 Machinery and equipment 2 to 30 Other 3 to 10 Property, plant and equipment, net consisted of the following: December 31, (in thousands) 2020 2019 Machinery and equipment $ 1,388,735 $ 1,378,651 Buildings and improvements 17,598 17,221 Automotive equipment 16,608 16,691 Land and improvements 14,132 14,075 Construction in progress 12,098 5,198 Other 1,721 1,752 1,450,892 1,433,588 Less: Accumulated depreciation 553,045 481,629 Total Property, plant and equipment, net $ 897,847 $ 951,959 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Summary of right of use asset and lease liability balances for operating and finance leases | The following tables summarize the ROU asset and lease liability balances for the Partnership’s operating and finance leases at December 31, 2020 and 2019: December 31, (in thousands) 2020 2019 Operating Leases: ROU asset, net Railcars $ 7,327 $ 10,826 Real estate and other 3,040 2,581 Lease liability Railcars $ 7,696 $ 11,088 Real estate and other 867 228 Finance Leases: ROU asset, net Real estate and other $ 101 $ 201 Lease liability Real estate and other $ 105 $ 205 |
Lease expense, terms, and discount rates | For the year ended December 31, 2020 and 2019, we recognized lease expense comprised of the following components: Year Ended December 31, (in thousands) 2020 2019 Operating lease expense $ 4,113 $ 3,122 Finance lease expense: Amortization of ROU asset $ 101 $ 322 Interest expense on lease liability 6 10 The following outlines the remaining lease terms and discount rates used in the measurement of the Partnership’s ROU assets and liabilities: Year Ended December 31, 2020 2019 Weighted-average remaining lease term (years) Operating Leases 2.9 3.4 Finance Leases 1.3 2.3 Weighted-average discount rate Operating Leases 5.1 % 5.1 % Finance Leases 4.0 % 3.9 % |
Summary of remaining minimum lease payments for operating leases | The following summarizes the remaining minimum lease payments through maturity of the Partnership’s ROU assets and liabilities at December 31, 2020: (in thousands) Operating Leases Finance Leases 2021 $ 3,672 $ 107 2022 3,236 — 2023 1,367 — 2024 684 — 2025 263 — Thereafter — — Total lease payments 9,222 107 Less: imputed interest (659) (2) Total lease liability $ 8,563 $ 105 |
Summary of remaining minimum lease payments for finance leases | The following summarizes the remaining minimum lease payments through maturity of the Partnership’s ROU assets and liabilities at December 31, 2020: (in thousands) Operating Leases Finance Leases 2021 $ 3,672 $ 107 2022 3,236 — 2023 1,367 — 2024 684 — 2025 263 — Thereafter — — Total lease payments 9,222 107 Less: imputed interest (659) (2) Total lease liability $ 8,563 $ 105 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Other current liabilities | Other current liabilities were as follows: December 31, (in thousands) 2020 2019 Personnel accruals $ 7,475 $ 8,187 Operating lease liabilities 3,309 3,523 Accrued interest 2,506 2,518 Sales incentives 2,215 1,614 Share-based compensation 442 5,011 Prepaid revenue contracts 197 277 Other accrued expenses and liabilities 2,565 2,913 Total other current liabilities $ 18,709 $ 24,043 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Long-term debt consists of the following: December 31, (in thousands) 2020 2019 9.25% Senior Secured Notes, due June 2023 (1)(2) $ 645,000 $ 645,000 6.50% Senior Notes, due April 2021, net of current portion (3) — $ 2,240 Unamortized discount and debt issuance costs (4) (11,058) (14,834) Total long-term debt 633,942 632,406 Current portion of long-term debt (3) 2,240 — Total long-term debt, including current portion $ 636,182 $ 632,406 (1) This debt was issued at a $16.1 million discount which is being amortized, as interest expense, over the remaining term of the debt. Debt issuance costs associated with this debt totaled $9.4 million. (2) The estimated fair value of total long-term debt outstanding was approximately $645.7 million and $673.8 million as of December 31, 2020 and 2019, respectively. This estimate of fair value is a Level 2 measurement as it was determined by quotations obtained from a broker-dealer who makes a market in these and similar securities. (3) The 6.50% Senior Notes, due April 2021, mature within 12 months, and, therefore, the outstanding balance of $2.2 million has been classified as short-term as of December 31, 2020. (4) For the years ended December 31, 2020, 2019, and 2018, amortization of the discount on debt and amortization of deferred financing costs reported as Interest expense, net totaled approximately $3.8 million, $3.4 million, and $3.1 million, respectively. Credit Agreements (in thousands) Total Capacity Amount borrowed as of December 31, 2020 Outstanding Letters of Credit Available capacity as of December 31, 2020 Maturity Date ABL Credit Agreement (1)(2) $ 20,146 $ — $ — $ 20,146 September 30, 2022 (1) At the option of the borrowers, loans under the ABL Credit Agreement initially bear interest at an annual rate equal to (i) 1.00% plus a base rate, Thereafter, loans will bear interest (i) at such rates if our quarterly excess availability is greater than 50% and (ii) 1.50% plus a base rate, otherwise. (2) The ABL Credit Agreement was amended on September 29, 2020 to, among other things, reduce the commitments thereunder to $35 million and extended the maturity date to September 30, 2022. Deferred financing costs of $0.4 million were capitalized related to this amendment and will be amortized from Prepaid expenses and other current assets and Other long-term assets over the remaining term of the ABL Credit Agreement. Amortization expense was $0.2 million for the years ended December 31, 2020, 2019, and 2018. |
Schedule of redemption prices as percentage of principal amount | On or after June 15, 2019, the 2023 Notes Issuers may on any one or more occasions, redeem all or part of the 2023 Notes at the redemption prices set forth below expressed as a percentage of the principal amount of the 2023 Notes plus accrued and unpaid interest to the applicable redemption date. 12-month period beginning June 15, Percentage 2020 102.313% 2021 and thereafter 100% |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | The following table presents the Partnership’s revenue, disaggregated by major product: Year Ended December 31, (in thousands) 2020 2019 2018 Ammonia $ 94,117 $ 94,467 $ 66,254 UAN 198,258 251,199 222,329 Urea products 14,115 17,430 20,633 Net sales, exclusive of freight and other 306,490 363,096 309,216 Freight revenue 33,329 33,436 33,567 Other revenue 10,134 7,645 8,299 Net sales $ 349,953 $ 404,177 $ 351,082 |
Summary of deferred revenue activity | A summary of the deferred revenue activity during the year ended December 31, 2020 is presented below: (in thousands) Balance at December 31, 2019 $ 27,841 Add: New prepay contracts entered into during the period (1) 56,490 Less: Revenue recognized that was included in the contract liability balance at the beginning of the period (27,060) Revenue recognized related to contracts entered into during the period (26,141) Other changes (499) Balance at December 31, 2020 $ 30,631 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of the phantom unit award activity and changes under the LTIP | A summary of phantom unit award activity and changes under the LTIP during the year ended December 31, 2020 is presented below: (in thousands, except per unit data) Units Weighted- Average Grant Date Fair Value Aggregate Intrinsic Value Non-vested at December 31, 2019 155,707 $ 30.71 $ 4,827 Granted 444,385 12.12 Vested (62,594) 31.31 Forfeited (18,617) 31.23 Non-vested at December 31, 2020 518,881 $ 14.70 $ 8,312 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of minimum required payments for unconditional purchase obligations | The minimum required payments for unconditional purchase obligations, including the natural gas purchases outlined below, are as follows: (in thousands) Unconditional Purchase Obligations Year Ending December 31, 2021 $ 36,132 2022 11,207 2023 9,540 2024 5,006 2025 5,006 Thereafter 33,244 $ 100,135 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | Activity associated with the Partnership’s related party arrangements for the years ended December 31, 2020, 2019, and 2018 is summarized below: Year Ended December 31, (in thousands) 2020 2019 2018 Sales to related parties (1) $ 993 $ 119 $ 371 Purchases from related parties (2) 22,365 30,876 27,315 December 31, 2020 2019 Prepaid expenses (3) $ — $ 249 Due to related parties (4) 1,446 7,826 (1) Sales to related parties, included in Net sales, consist primarily of sales of feedstocks and services to CRRM under the Coffeyville MSA. (2) Purchases from related parties, included in Cost of materials and other, Direct operating expenses (exclusive of depreciation and amortization), and Selling, general and administrative expenses, consist primarily of pet coke and hydrogen purchased from CRRM under the Coffeyville MSA. (3) Prepaid expenses, included in Prepaid expenses and other current assets, are amounts paid for feedstocks and services provided by CRRM under the Coffeyville MSA. (4) Due to related parties, included in Accounts payable to affiliates, Other current liabilities, and Other long-term liabilities, consist primarily of amounts payable for feedstocks and other supplies and services provided by CRRM and CVR Services under the Coffeyville MSA and Corporate MSA. |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of supplemental cash flow information | Cash flows related to income taxes, interest, leases, and capital expenditures included in accounts payable are as follows: Year Ended December 31, (in thousands) 2020 2019 2018 Supplemental disclosures: Cash paid for income taxes, net of refunds $ 69 $ 40 $ 26 Cash paid for interest 59,850 60,057 60,168 Cash paid for amounts included in the measurement of lease liabilities (1): Operating cash flows from operating leases 4,117 4,019 Operating cash flows from finance leases 6 20 Financing cash flows from finance leases 100 321 Non-cash investing and financing activities: Change in capital expenditures included in accounts payable $ (2,167) $ 1,618 $ (1,031) (1) The lease standard was adopted on January 1, 2019 on a prospective basis. Therefore, only 2020 and 2019 are applicable to be included within the table above. |
Organization and Nature of Bu_2
Organization and Nature of Business (Details) | Nov. 23, 2020shares | Dec. 31, 2020USD ($)manufacturing_facility$ / sharesshares | Dec. 31, 2019shares | Feb. 22, 2021USD ($) | Nov. 22, 2020shares | May 06, 2020USD ($) |
Formation of the Partnership, Organization and Nature of Business | ||||||
Number of manufacturing facilities | manufacturing_facility | 2 | |||||
Reverse Unit Split, conversion ratio | 0.1 | |||||
Common units outstanding (in units) | shares | 11,000,000 | 10,705,710 | 11,328,297 | 111,000,000 | ||
Percentage of limited partner interest held by the public | 64.00% | 64.00% | ||||
Unit Repurchase Program, authorized amount | $ 10,000,000 | |||||
Common units repurchased on open market (in units) | shares | 623,177 | |||||
Cost, inclusive of transaction costs, of repurchase of outstanding common units | $ 7,100,000 | |||||
Average price per common unit (in dollars per unit) | $ / shares | $ 11.35 | |||||
Amount remaining in authority under Unit Repurchase Program | $ 2,900,000 | |||||
Subsequent Event | ||||||
Formation of the Partnership, Organization and Nature of Business | ||||||
Unit Repurchase Program, authorized amount | $ 10,000,000 | |||||
CVR Energy, Inc | IEP Energy LLC | ||||||
Formation of the Partnership, Organization and Nature of Business | ||||||
Aggregate ownership percentage | 71.00% | |||||
CVR Partners | CVR Service | ||||||
Formation of the Partnership, Organization and Nature of Business | ||||||
Limited partner interest | 36.00% | |||||
CVR Partners | CVR GP | ||||||
Formation of the Partnership, Organization and Nature of Business | ||||||
General partner interest | 100.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Reclassifications (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Reclassification from inventories | $ (42,349) | $ (48,296) | |
Reclassification to other long-term assets | $ 16,819 | $ 20,067 | |
Reclassification Adjustment | Catalyst Inventory | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Reclassification from inventories | $ 5,600 | ||
Reclassification to other long-term assets | $ 5,600 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Accounts Receivable, net and Inventories (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Bad debt expense | $ 100 | $ 100 | |
Recovery recognized related to bad debt expense previously written off | $ 1,100 | ||
Inventory, Net [Abstract] | |||
Finished goods | 9,815 | 17,612 | |
Raw materials | 152 | 243 | |
Parts, supplies and other | 32,382 | 30,441 | |
Total Inventories | 42,349 | 48,296 | |
Inventory depreciation | $ 2,000 | $ 4,500 | |
Accounts receivable | Customer concentration | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Percentage of concentration risk | 20.00% | 18.00% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Property, Plant and Equipment, net and Impairment of Long-Lived Assets (Details) | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2020USD ($)product | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Property, Plant, and Equipment | ||||
Gross property, plant and equipment | $ 1,450,892,000 | $ 1,433,588,000 | ||
Less: Accumulated depreciation | 553,045,000 | 481,629,000 | ||
Total Property, plant and equipment, net | 897,847,000 | 951,959,000 | ||
Goodwill [Line Items] | ||||
Goodwill | 0 | 40,969,000 | ||
Goodwill impairment | $ 41,000,000 | 40,969,000 | 0 | $ 0 |
Approximate percentage by which fair value of Coffeyville reporting unit exceeded carrying value | 36.00% | |||
Coffeyville Facility | ||||
Goodwill [Line Items] | ||||
Goodwill | 41,000,000 | |||
Number of primary products that experienced significant pricing declines | product | 2 | |||
Machinery and equipment | ||||
Property, Plant, and Equipment | ||||
Gross property, plant and equipment | $ 1,388,735,000 | 1,378,651,000 | ||
Machinery and equipment | Minimum | ||||
Property, Plant, and Equipment | ||||
Useful life (in years) | 2 years | |||
Machinery and equipment | Maximum | ||||
Property, Plant, and Equipment | ||||
Useful life (in years) | 30 years | |||
Buildings and improvements | ||||
Property, Plant, and Equipment | ||||
Gross property, plant and equipment | $ 17,598,000 | 17,221,000 | ||
Buildings and improvements | Minimum | ||||
Property, Plant, and Equipment | ||||
Useful life (in years) | 3 years | |||
Buildings and improvements | Maximum | ||||
Property, Plant, and Equipment | ||||
Useful life (in years) | 30 years | |||
Automotive equipment | ||||
Property, Plant, and Equipment | ||||
Gross property, plant and equipment | $ 16,608,000 | 16,691,000 | ||
Automotive equipment | Minimum | ||||
Property, Plant, and Equipment | ||||
Useful life (in years) | 5 years | |||
Automotive equipment | Maximum | ||||
Property, Plant, and Equipment | ||||
Useful life (in years) | 30 years | |||
Land and improvements | ||||
Property, Plant, and Equipment | ||||
Gross property, plant and equipment | $ 14,132,000 | 14,075,000 | ||
Land and improvements | Minimum | ||||
Property, Plant, and Equipment | ||||
Useful life (in years) | 10 years | |||
Land and improvements | Maximum | ||||
Property, Plant, and Equipment | ||||
Useful life (in years) | 30 years | |||
Construction in progress | ||||
Property, Plant, and Equipment | ||||
Gross property, plant and equipment | $ 12,098,000 | 5,198,000 | ||
Other | ||||
Property, Plant, and Equipment | ||||
Gross property, plant and equipment | $ 1,721,000 | $ 1,752,000 | ||
Other | Minimum | ||||
Property, Plant, and Equipment | ||||
Useful life (in years) | 3 years | |||
Other | Maximum | ||||
Property, Plant, and Equipment | ||||
Useful life (in years) | 10 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Environmental Matters (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Environmental Matters | ||
Liabilities recognized for environmental remediation matters | $ 0 | $ 0 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Jul. 31, 2020 | |
Lessee, Lease, Description [Line Items] | |||
Short-term lease expense | $ 0.4 | $ 0.4 | |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Renewal term | 1 year | ||
Financing lease not yet commenced, amount expected to be capitalized at commencement | $ 20 | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Renewal term | 20 years | ||
Financing lease not yet commenced, amount expected to be capitalized at commencement | $ 25 |
Leases - Balance Sheet Summary
Leases - Balance Sheet Summary (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Operating Leases: | ||
Lease liability | $ 8,563 | |
Finance Leases: | ||
Lease liability | 105 | |
Railcars | ||
Operating Leases: | ||
ROU asset, net | 7,327 | $ 10,826 |
Lease liability | 7,696 | 11,088 |
Real estate and other | ||
Operating Leases: | ||
ROU asset, net | 3,040 | 2,581 |
Lease liability | 867 | 228 |
Finance Leases: | ||
ROU asset, net | 101 | 201 |
Lease liability | $ 105 | $ 205 |
Leases - Lease Expense (Details
Leases - Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease expense | $ 4,113 | $ 3,122 |
Finance lease expense: | ||
Amortization of ROU asset | 101 | 322 |
Interest expense on lease liability | $ 6 | $ 10 |
Leases - Lease Terms and Discou
Leases - Lease Terms and Discount Rates (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Weighted-average remaining lease term (years) | ||
Operating Leases | 2 years 10 months 24 days | 3 years 4 months 24 days |
Finance Leases | 1 year 3 months 18 days | 2 years 3 months 18 days |
Weighted-average discount rate | ||
Operating Leases | 5.10% | 5.10% |
Finance Leases | 4.00% | 3.90% |
Leases - Remaining Minimum Leas
Leases - Remaining Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Operating Leases | |
2021 | $ 3,672 |
2022 | 3,236 |
2023 | 1,367 |
2024 | 684 |
2025 | 263 |
Thereafter | 0 |
Total lease payments | 9,222 |
Less: imputed interest | (659) |
Total lease liability | 8,563 |
Finance Leases | |
2021 | 107 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
Thereafter | 0 |
Total lease payments | 107 |
Less: imputed interest | (2) |
Total lease liability | $ 105 |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Personnel accruals | $ 7,475,000 | $ 8,187,000 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesCurrent | us-gaap:OtherLiabilitiesCurrent |
Operating lease liabilities | $ 3,309,000 | $ 3,523,000 |
Accrued interest | 2,506,000 | 2,518,000 |
Sales incentives | 2,215,000 | 1,614,000 |
Share-based compensation | 442,000 | 5,011,000 |
Prepaid revenue contracts | 197,000 | 277,000 |
Other accrued expenses and liabilities | 2,565,000 | 2,913,000 |
Total other current liabilities | 18,709,000 | 24,043,000 |
Affiliate balances | $ 0 | $ 5,400,000 |
Long-Term Debt - Summary of Deb
Long-Term Debt - Summary of Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 10, 2016 | |
Debt Instrument [Line Items] | ||||
Unamortized discount and debt issuance costs | $ (11,058) | $ (14,834) | ||
Total long-term debt | 633,942 | 632,406 | ||
Current portion of long-term debt | 2,240 | 0 | ||
Total long-term debt, including current portion | 636,182 | 632,406 | ||
Amortization of deferred financing costs and original issue discount | 4,049 | 3,666 | $ 3,333 | |
Level 2 | ||||
Debt Instrument [Line Items] | ||||
Estimated fair value of total long-term debt outstanding | 645,700 | 673,800 | ||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Amortization of deferred financing costs and original issue discount | 3,800 | 3,400 | $ 3,100 | |
Senior Notes | 9.25% Senior Secured Notes due June 2023 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt, net of current portion, before debt issuance costs and discount | $ 645,000 | 645,000 | ||
Debt instrument, percentage rate | 9.25% | 9.25% | ||
Unamortized debt discount | $ 16,100 | |||
Debt issuance costs | 9,400 | |||
Senior Notes | 6.50% Senior Notes due April 2021, net of current portion | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt, net of current portion, before debt issuance costs and discount | 0 | $ 2,240 | ||
Current portion of long-term debt | $ 2,200 | |||
Debt instrument, percentage rate | 6.50% |
Long-Term Debt - Credit Agreeme
Long-Term Debt - Credit Agreements (Details) - Line of Credit - Revolving credit facility - USD ($) | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 29, 2020 | |
ABL Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Total Capacity | $ 20,146,000 | $ 35,000,000 | ||
Amount Borrowed | 0 | |||
Outstanding Letters of Credit | 0 | |||
Available Capacity | 20,146,000 | |||
Deferred financing costs | $ 400,000 | |||
Amortization expense | $ 200,000 | $ 200,000 | $ 200,000 | |
ABL Credit Agreement, Through December 31, 2020 | Base Rate | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate (as a percent) | 1.00% | |||
ABL Credit Agreement, After December 31, 2020 | Base Rate | Quarterly Excess Availability Greater Than 50% | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate (as a percent) | 1.00% | |||
ABL Credit Agreement, After December 31, 2020 | Base Rate | Quarterly Excess Availability Not Greater Than 50% | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate (as a percent) | 1.50% |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) | Dec. 31, 2020 | Sep. 29, 2020 | Jun. 10, 2016 |
Senior Notes | 2023 Notes | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 645,000,000 | ||
Debt instrument, percentage rate | 9.25% | 9.25% | |
Minimum percentage of notes held in order to cause acceleration of notes upon occurrence of events of default | 25.00% | ||
Senior Notes | 2021 Notes | |||
Debt Instrument [Line Items] | |||
Debt instrument, percentage rate | 6.50% | ||
Line of Credit | ABL Credit Agreement | Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 35,000,000 | ||
Available increase in borrowing limit | $ 25,000,000 |
Long-Term Debt - Redemption Pri
Long-Term Debt - Redemption Price (Details) - Senior Notes - 2023 Notes | 12 Months Ended |
Dec. 31, 2020 | |
12-Month Period Beginning June 15, 2020 | |
Debt Instrument, Redemption [Line Items] | |
Redemption prices as percentage of principal amount | 102.313% |
12-Month Period Beginning June 15, 2021 and thereafter | |
Debt Instrument, Redemption [Line Items] | |
Redemption prices as percentage of principal amount | 100.00% |
Revenue - Revenue Disaggregated
Revenue - Revenue Disaggregated by Product (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 349,953 | $ 404,177 | $ 351,082 |
Net sales, exclusive of freight and other | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 306,490 | 363,096 | 309,216 |
Ammonia | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 94,117 | 94,467 | 66,254 |
UAN | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 198,258 | 251,199 | 222,329 |
Urea products | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 14,115 | 17,430 | 20,633 |
Freight revenue | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 33,329 | 33,436 | 33,567 |
Other revenue | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 10,134 | $ 7,645 | $ 8,299 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Minimum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Payment terms | 15 days |
Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Payment terms | 30 days |
Revenue - Remaining performance
Revenue - Remaining performance obligations (Details) $ in Millions | Dec. 31, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 6.1 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 3.5 |
Remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 2.3 |
Remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 0.3 |
Remaining performance obligation, expected timing of satisfaction, period |
Revenue - Summary of Deferred R
Revenue - Summary of Deferred Revenue Activity (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Change in Contract with Customer, Liability [Roll Forward] | |
Balance at beginning of period | $ 27,841 |
Add: | |
New prepay contracts entered into during the period | 56,490 |
Less: | |
Revenue recognized that was included in the contract liability balance at the beginning of the period | (27,060) |
Revenue recognized related to contracts entered into during the period | (26,141) |
Other changes | (499) |
Balance at end of period | 30,631 |
Prepaid contracts where payment was collected | $ 33,400 |
Revenue - Sales to Major Custom
Revenue - Sales to Major Customers (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Total Net Sales | Customer concentration | Two Customers | |||
Major Customers and Suppliers | |||
Concentration risk | 26.00% | 28.00% | 20.00% |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Phantom Unit Award Activity (Details) - CVR Partners LTIP - Phantom Unit Awards - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Units | ||
Non-vested at the beginning of the period (in units) | 155,707 | |
Granted (in units) | 444,385 | |
Vested (in units) | (62,594) | |
Forfeited (in units) | (18,617) | |
Non-vested at the end of the period (in units) | 518,881 | |
Weighted- Average Grant Date Fair Value | ||
Non-vested at the beginning of the period (in dollars per unit) | $ 30.71 | |
Granted (in dollars per unit) | 12.12 | |
Vested (in dollars per unit) | 31.31 | |
Forfeited (in dollars per unit) | 31.23 | |
Non-vested at the end of the period (in dollars per unit) | $ 14.70 | |
Aggregate Intrinsic Value | $ 8,312 | $ 4,827 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) | Nov. 01, 2017USD ($)trading_day$ / shares | Dec. 31, 2020USD ($)plan | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Liabilities for unvested awards related to employees | $ 442,000 | $ 5,011,000 | ||
Outstanding liability | $ 7,475,000 | 8,187,000 | ||
Number of plans | plan | 2 | |||
Employer match of employee contribution of the first 6% of the participant's contribution | 100.00% | |||
Percentage of eligible compensation, matched by employer | 6.00% | |||
Vesting schedule for employer's matching funds | 3 years | |||
Matching contributions made during the year | $ 1,900,000 | 1,800,000 | $ 1,800,000 | |
Phantom Unit Awards | CVR Partners LTIP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense | $ 7,400,000 | |||
Weighted-average period for amortization of unrecognized compensation cost | 2 years 9 months 18 days | |||
Compensation expense | $ 600,000 | 2,300,000 | 1,900,000 | |
Liabilities for unvested awards related to employees | 900,000 | 1,200,000 | ||
Amount paid to settle liability-classified awards upon vesting | 800,000 | 1,700,000 | 1,700,000 | |
Incentive Unit Awards | CVR Energy, Inc | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | 400,000 | 1,000,000 | 500,000 | |
Liabilities for unvested awards related to employees | 0 | 1,400,000 | ||
Share-based liabilities paid | 2,200,000 | 0 | 800,000 | |
Performance Unit Awards | 2017 Performance Unit Award Agreement | CVR Energy, Inc | Executive Chairman | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense | 2,300,000 | |||
Compensation expense | 0 | 0 | $ 400,000 | |
Maximum cash payment | $ 10,000,000 | |||
Period for determination of cash payment value | trading_day | 30 | |||
Maximum price per share to trigger maximum cash payment (in dollars per unit) | $ / shares | $ 60 | |||
Outstanding liability | $ 0 | $ 400,000 |
Commitments - Minimum Required
Commitments - Minimum Required Payments (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Unconditional Purchase Obligations | |
2021 | $ 36,132 |
2022 | 11,207 |
2023 | 9,540 |
2024 | 5,006 |
2025 | 5,006 |
Thereafter | 33,244 |
Unconditional Purchase Obligations | $ 100,135 |
Commitments - Additional Inform
Commitments - Additional Information (Details) T in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)T$ / T | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Pet Coke Purchase Agreement | |||
Long-term Purchase Commitment [Line Items] | |||
Expenses related to agreement | $ | $ 17.9 | $ 10.3 | $ 4.8 |
Utility Service Agreement | |||
Long-term Purchase Commitment [Line Items] | |||
Expenses related to agreement | $ | 3.7 | 10.6 | |
The Coffeyville Facility | Messer Agreement | |||
Long-term Purchase Commitment [Line Items] | |||
Initial term of agreement | 15 years | ||
Expenses related to agreement | $ | $ 4.2 | 4.2 | 3.8 |
Natural Gas | |||
Long-term Purchase Commitment [Line Items] | |||
Cost of materials and other and direct operating expenses (exclusive of depreciation and amortization) | $ | $ 32.4 | $ 33.1 | $ 42.4 |
Petroleum coke | Pet Coke Purchase Agreement | |||
Long-term Purchase Commitment [Line Items] | |||
Number of tons of pet coke agreed to purchase at fixed price through end of term | T | 275 | ||
Petroleum coke | The Coffeyville Facility | Coffeyville MSA | CRRM | |||
Long-term Purchase Commitment [Line Items] | |||
Average percentage of pet coke obtained during the last five years | 60.00% | ||
Period for which average percentage of product obtained | 5 years | ||
Average percentage of pet coke obtained during the current year | 33.00% | ||
Rate petroleum coke price used to determine urea ammonium nitrate based price (in dollars per ton) | 25 | ||
UAN-based netback price, exclusive of transportation cost, under the related party agreement (in dollars per ton) | 205 | ||
Pet coke price adjustment for every $1.00 change in the UAN netback price, exclusive of transportation cost, used to calculate the UAN-based price under the related party agreement (in dollars per ton) | 0.50 | ||
UAN-based netback price change, exclusive of transportation cost, under the related party agreement (in dollars per ton) | 1 | ||
Petroleum coke | The Coffeyville Facility | Coffeyville MSA | Minimum | CRRM | |||
Long-term Purchase Commitment [Line Items] | |||
Rate petroleum coke price used to determine urea ammonium nitrate based price (in dollars per ton) | 40 | ||
Petroleum coke | The Coffeyville Facility | Coffeyville MSA | Maximum | CRRM | |||
Long-term Purchase Commitment [Line Items] | |||
Rate petroleum coke price used to determine urea ammonium nitrate based price (in dollars per ton) | 5 |
Related Party Transactions - Co
Related Party Transactions - Coffeyville MSA (Details) - The Coffeyville Facility | Jan. 01, 2020TMcf | Dec. 31, 2020 |
Hydrogen Purchase and Sale Agreement | CRRM | Hydrogen | ||
Related Party Transaction [Line Items] | ||
Monthly production volume of product to be delivered (in mscf) | Mcf | 90,000 | |
Raw Water and Facilities Sharing | CRNF | ||
Related Party Transaction [Line Items] | ||
Percentage interest in water rights | 50.00% | |
Raw Water and Facilities Sharing | CRRM | ||
Related Party Transaction [Line Items] | ||
Percentage interest in water rights | 50.00% | |
Coke Supply Agreement | CRRM | Petroleum coke | ||
Related Party Transaction [Line Items] | ||
Percentage of annual production of pet coke to be delivered | 100.00% | |
Annual production of pet coke (in tons) | 500,000 | |
Coke Supply Agreement | CRRM | Petroleum coke | Minimum | ||
Related Party Transaction [Line Items] | ||
Monthly production volume of product which allows for the purchasing party the option to purchase any excess at rates stated in the agreement (in tons) | 41,667 |
Related Party Transactions - _2
Related Party Transactions - Corporate MSA (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Corporate MSA | |||
Related Party Transaction [Line Items] | |||
Personnel costs | $ 6.6 | $ 7.3 | $ 6.6 |
Related Party Transactions - Re
Related Party Transactions - Related Party Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |||
Sales to related parties | $ 993 | $ 119 | $ 371 |
Purchases from related parties | 22,365 | 30,876 | $ 27,315 |
Related Party Transaction [Line Items] | |||
Prepaid expenses | 8,410 | 5,406 | |
Due (from) to related parties | 1,446 | 7,826 | |
Related Parties | |||
Related Party Transaction [Line Items] | |||
Prepaid expenses | $ 0 | $ 249 |
Related Party Transactions - En
Related Party Transactions - Environmental Agreement (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
The Coffeyville Facility | Environmental Agreement | CRRM | ||
Related Party Transaction [Line Items] | ||
Liability recorded under agreement | $ 0 | $ 0 |
Related Party Transactions - Te
Related Party Transactions - Terminal and Operating Agreement (Details) - CRT - Terminal and Operating Agreement - The Coffeyville Facility | 12 Months Ended |
Dec. 31, 2020USD ($)$ / T | |
Related Party Transaction [Line Items] | |
Prior written notice required to terminate initial lease term | 180 days |
Automatic renewal of agreement, term of each successive renewal | 5 years |
Prior written notice required to terminate renewal lease term | 180 days |
Amount required to pay per year for rent | $ | $ 1 |
Amount required to pay per ton of UAN placed into the terminal (in dollars per ton) | 4 |
Amount required to pay per ton of UAN taken out of the terminal (in dollars per ton) | 4 |
Related Party Transactions - Pr
Related Party Transactions - Property Exchange (Details) $ in Millions | Feb. 19, 2020USD ($) |
Property Exchange | |
Related Party Transaction [Line Items] | |
Property exchange, net impact on partners' capital (less than) | $ 0.1 |
Related Party Transactions - Di
Related Party Transactions - Distributions Paid (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Distribution Made to Limited Partner [Line Items] | ||||
Distributions declared | $ 0 | $ 0 | ||
Distributions paid | $ 0 | $ 45,300,000 | $ 0 | |
Distributions paid per common unit (in dollars per unit) | $ 4 | |||
CVR Energy | ||||
Distribution Made to Limited Partner [Line Items] | ||||
Distributions paid | $ 15,600,000 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Supplemental disclosures: | |||
Cash paid for income taxes, net of refunds | $ 69 | $ 40 | $ 26 |
Cash paid for interest | 59,850 | 60,057 | 60,168 |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | 4,117 | 4,019 | |
Operating cash flows from finance leases | 6 | 20 | |
Financing cash flows from finance leases | 100 | 321 | |
Non-cash investing and financing activities: | |||
Change in capital expenditures included in accounts payable | $ (2,167) | $ 1,618 | $ (1,031) |