UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☑

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended

March 31, ~~2020~~2021

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number: 001-35120

CVR PARTNERS, LP

(Exact name of registrant as specified in its charter)

Delaware

56-2677689

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

2277 Plaza Drive, Suite 500, Sugar Land, Texas 77479

(Address of principal executive offices) (Zip Code)

(281) 207-3200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common units representing limited partner interests	UAN	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☑

Non-Accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

There were ~~113,282,973~~10,681,332 common units representing limited partner interests of CVR Partners, LP (“common units”) outstanding at ~~May 5, 2020.~~April 30, 2021.

Table of Contents

TABLE OF CONTENTS

CVR PARTNERS, LP - Quarterly Report on Form 10-Q

March 31, ~~2020~~2021

PART I. Financial Information

PART II. Other Information

PART I. Financial Information

PART II. Other Information

Item 1.

Condensed Consolidated Balance Sheets - March 3 1, 2020 and December 31, 201 9 (unaudited)

Item 1A.

Risk Factors

Condensed Consolidated Balance Sheets - March 31, 2021 and December 31, 2020 (unaudited)

Item 1A.

Risk Factors

Condensed Consolidated Statements of Operations - Three Months Ended March 31, 2020 and 201 9 (unaudited)

Item 5.

Other Information

Condensed Consolidated Statements of Operations - Three Months Ended March 31, 2021 and 2020 (unaudited)

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Condensed Consolidated Statements of Partners’ Capital - Three Months Ended March 31, 2020 and 2019 (unaudited)

Item 6.

Exhibits

Condensed Consolidated Statements of Partners’ Capital - Three Months Ended March 31, 2021 and 2020 (unaudited)

Item 5.

Other Information

Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2020 and 2019 (unaudited)

Signatures

Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2021 and 2020 (unaudited)

Item 6.

Exhibits

Notes to the Condensed Consolidated Financial Statements - Marc h 31 , 2020 (unaudited)

Notes to the Condensed Consolidated Financial Statements (unaudited)

Signatures

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

Item 4.

Controls and Procedures

This Quarterly Report on Form 10-Q (including documents incorporated by reference herein) contains statements with respect to our expectations or beliefs as to future events. These types of statements are “forward-looking” and subject to uncertainties. See “Important Information Regarding Forward-Looking Statements” section of this filing.

March 31, ~~2020~~2021 | 2

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Important Information Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements ~~within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),~~ including, but not limited to, those under Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. All statements other than statements of historical fact, including without limitation, statements regarding future operations, financial position, estimated revenues and losses, growth, capital projects, unit repurchases, impacts of legal proceedings, projected costs, prospects, plans, and objectives of management are forward-looking statements. The words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “may,” “continue,” “predict,” “potential,” “project,” and similar terms and phrases are intended to identify forward-looking statements.

Although we believe our assumptions concerning future events are reasonable, a number of risks, uncertainties and other factors could cause actual results and trends to differ materially from those projected or forward-looking. Forward-looking statements, as well as certain risks, contingencies, or uncertainties that may impact our forward-looking statements, include, but are not limited to, the following:

•our ability to generate distributable cash or make cash distributions on our common units;

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

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

•the severity, magnitude, duration, and impact of the novel coronavirus 2019 (“COVID-19”) pandemic and of businesses’ and governments’ responses to such pandemic on our operations, personnel, commercial activity, and supply and demand across our and our customers’ and suppliers’ businesses;

•changes in market conditions and market volatility arising from the COVID-19 pandemic, including fertilizer, natural gas, and other commodity prices and the impact of such changes on our operating results and financial position;

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

•~~the~~ cyclical and seasonal nature of our business;

•the impact of weather on our business including our ability to produce, market, sell, transport or ~~sell~~deliver fertilizer products profitably or at all;

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

•our reliance on, or our ability to procure economically or at all, pet coke we purchase from CVR Energy, Inc. (together with its subsidiaries, but excluding the Partnership and its subsidiaries, “CVR Energy”) and other third-party ~~suppliers or~~ suppliers;

•our reliance on the natural gas, electricity, oxygen, nitrogen, sulfur processing, compressed dry air and other products that we purchase from third parties;

•the supply, availability, and ~~price levels~~prices of essential raw materials;

•our production levels, including the risk of a material decline in those ~~levels;~~levels, including our ability to upgrade ammonia to UAN;

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

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

•our ability to obtain, retain, or renew permits, licenses and authorizations to operate our business;

•competition in the nitrogen fertilizer businesses including potential impacts of domestic and global supply and demand;and/or domestic or international duties, tariffs, or similar costs;

•foreign wheat and coarse grain production, including increases thereto and farm planting acreage;

•capital expenditures;

•existing and future laws, rulings and regulations, including but not limited to those relating to the environment, climate change, and/or the transportation or production of hazardous chemicals like ammonia, including potential liabilities or capital requirements arising from such laws, rulings, or regulations;

•alternative energy or fuel sources and impacts on corn prices (ethanol), and the end-use and application of fertilizers;

•risks of terrorism, cybersecurity attacks, the security of chemical manufacturing facilities and other matters beyond our control;

•our lack of asset diversification;

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

•our potential loss of transportation cost advantage over our competitors;

•~~our partial dependence on customers and distributors, including to transport goods and equipment;~~

•risks associated with third party operation of or control over important facilities necessary for operation of our nitrogen fertilizer facilities;

•~~The~~the volatile nature of ammonia, potential liability for accidents involving ammonia including damage or injury to persons, property, the environment or human health and increased costs related to the transport or production of ammonia;

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

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

•control of our general partner by CVR Energy;

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

•restrictions in our debt agreements;

•asset impairments and impacts thereof;

March 31, ~~2020~~2021 | 3

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•~~risks associated with noncompliance with continued listing standards~~asset useful life;

•realizable inventory value;

•the number of ~~the New York Stock Exchange (“NYSE”) including potential suspension~~investors willing to hold or ~~delisting and the impacts thereof on~~acquire our common ~~unit price, valuation, access~~units;

•our ability to ~~capital~~issue securities or ~~liquidity;~~obtain financing;

•the possibility of changes in tax and other law, regulations and policies;

•ability to qualify for 45Q tax credits;

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

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

•instability and volatility in the capital and credit markets;

•competition with CVR Energy and its affiliates;

•transactions and/or conflicts with CVR Energy’s controlling shareholder;

•the value of payouts under our equity and non-equity incentive plans;

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

•the factors described in greater detail under “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2019 and this Report~~2020 and our other filings with the Securities and Exchange Commission (the “SEC”).

All forward-looking statements included in this Report are based on information available to us on the date of this Report. Except as required by law, we undertake no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.

Information About Us

Investors should note that we make available, free of charge on our website at cvrenergy.com, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. We also post announcements, updates, events, investor information and presentations on our website in addition to copies of all recent news releases. We may use the Investor Relations section of our website to communicate with investors. It is possible that the financial and other information posted there could be deemed to be material information. Documents and information on our website are not incorporated by reference herein.

The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers, including us, that file electronically with the SEC.

March 31, ~~2020~~2021 | 4

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CVR PARTNERS, LP AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)


(in thousands)	(in thousands)	March 31, 2020		December 31, 2019		(in thousands)	March 31, 2021		December 31, 2020
ASSETS	ASSETS									ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	58,014	$	36,994	Cash and cash equivalents	$	52,561	$	30,559
Accounts receivable	Accounts receivable	14,868		34,264		Accounts receivable	15,491		36,896
Inventories	Inventories	55,092		48,296		Inventories	57,184		42,349
Prepaid expenses and other current assets	Prepaid expenses and other current assets	5,266		5,406		Prepaid expenses and other current assets	7,494		8,410
Total current assets	Total current assets	133,240		124,960		Total current assets	132,730		118,214
Property, plant, and equipment, net	Property, plant, and equipment, net	940,328		951,959		Property, plant, and equipment, net	883,336		897,847

Goodwill		40,969		40,969

Other long-term assets	Other long-term assets	19,437		20,067		Other long-term assets	15,816		16,819
Total assets	Total assets	$	1,133,974	$	1,137,955	Total assets	$	1,031,882	$	1,032,880

LIABILITIES AND PARTNERS’ CAPITAL	LIABILITIES AND PARTNERS’ CAPITAL									LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	22,500	$	21,069	Accounts payable	$	20,603	$	19,544
Accounts payable to affiliates	Accounts payable to affiliates	1,585		2,578		Accounts payable to affiliates	1,061		5,217
Deferred revenue	Deferred revenue	37,634		27,841		Deferred revenue	40,383		30,631
Other current liabilities	Other current liabilities	30,863		24,043		Other current liabilities	37,781		20,949
Total current liabilities	Total current liabilities	92,582		75,531		Total current liabilities	99,828		76,341
Long-term liabilities:	Long-term liabilities:					Long-term liabilities:
Long-term debt		633,315		632,406
Long-term debt, net of current portion						Long-term debt, net of current portion	634,946		633,942
Other long-term liabilities	Other long-term liabilities	9,384		10,474		Other long-term liabilities	8,780		8,356
Total long-term liabilities	Total long-term liabilities	642,699		642,880		Total long-term liabilities	643,726		642,298
Commitments and contingencies (See Note 11)	Commitments and contingencies (See Note 11)					Commitments and contingencies (See Note 11)	0		0
Partners’ capital:	Partners’ capital:					Partners’ capital:
Common unitholders, 113,282,973 units issued and outstanding at March 31, 2020 and December 31, 2019		398,692		419,543
Common unitholders, 10,681,332 and 10,705,710 units issued and outstanding at March 31, 2021 and December 31, 2020, respectively						Common unitholders, 10,681,332 and 10,705,710 units issued and outstanding at March 31, 2021 and December 31, 2020, respectively	288,327		314,240
General partner interest	General partner interest	1		1		General partner interest	1		1
Total partners’ capital	Total partners’ capital	398,693		419,544		Total partners’ capital	288,328		314,241
Total liabilities and partners’ capital	Total liabilities and partners’ capital	$	1,133,974	$	1,137,955	Total liabilities and partners’ capital	$	1,031,882	$	1,032,880

The accompanying notes are an integral part of these condensed consolidated financial statements.

March 31, ~~2020~~2021 | 5

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CVR PARTNERS, LP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


		Three Months Ended March 31,					Three Months Ended March 31,
(in thousands, except unit data)		2020		2019
(in thousands, except per unit data)						(in thousands, except per unit data)	2021		2020
Net sales	Net sales	$	75,080	$	91,873	Net sales	$	60,921	$	75,080
Operating costs and expenses:	Operating costs and expenses:					Operating costs and expenses:
Cost of materials and other	Cost of materials and other	23,991		23,730		Cost of materials and other	17,766		23,991
Direct operating expenses (exclusive of depreciation and amortization)	Direct operating expenses (exclusive of depreciation and amortization)	35,123		34,820		Direct operating expenses (exclusive of depreciation and amortization)	37,075		35,123
Depreciation and amortization	Depreciation and amortization	15,597		16,584		Depreciation and amortization	14,123		15,597
Cost of sales	Cost of sales	74,711		75,134		Cost of sales	68,964		74,711
Selling, general and administrative expenses	Selling, general and administrative expenses	5,354		6,846		Selling, general and administrative expenses	5,891		5,354
(Gain) loss on asset disposals		(13)		454
Operating (loss) income		(4,972)		9,439
Loss (gain) on asset disposal						Loss (gain) on asset disposal	72		(13)

Operating loss						Operating loss	(14,006)		(4,972)
Other (expense) income:	Other (expense) income:					Other (expense) income:
Interest expense, net	Interest expense, net	(15,783)		(15,650)		Interest expense, net	(15,916)		(15,783)
Other income, net	Other income, net	27		20		Other income, net	4,557		27
Loss before income taxes		(20,728)		(6,191)
Income tax expense (benefit)		7		(112)
Loss before income tax expense						Loss before income tax expense	(25,365)		(20,728)
Income tax expense						Income tax expense	19		7
Net loss	Net loss	$	(20,735)	$	(6,079)	Net loss	$	(25,384)	$	(20,735)

Basic and diluted loss per unit data		$	(0.18)	$	(0.05)
Distributions declared and paid per common unit		$	—	$	0.12
Basic and diluted loss per unit						Basic and diluted loss per unit	$	(2.37)	$	(1.83)

Weighted-average common units outstanding:	Weighted-average common units outstanding:					Weighted-average common units outstanding:
Basic and Diluted	Basic and Diluted	113,283		113,283		Basic and Diluted	10,695		11,328

The accompanying notes are an integral part of these condensed consolidated financial statements.

March 31, ~~2020~~2021 | 6

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CVR PARTNERS, LP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(unaudited)

Common Units General
Partner
Interest Total Partners’ Capital
(in thousands, except unit data) Issued Amount
Balance at December 31, 2019 113,282,973 $ 419,543 $ 1 $ 419,544
Land exchange with affiliate — (116) — (116)
Net loss — (20,735) — (20,735)
Balance at March 31, 2020 113,282,973 $ 398,692 $ 1 $ 398,693


	Common Units			General Partner Interest		Total Partners’ Capital
(in thousands, except unit data)	Issued	Amount
Balance at December 31, 2020	10,705,710	$	314,240	$	1	$	314,241



Unit repurchases	(24,378)	(529)		—		(529)
Net loss	—	(25,384)		—		(25,384)
Balance at March 31, 2021	10,681,332	$	288,327	$	1	$	288,328

Common Units General
Partner
Interest Total Partners’ Capital
(in thousands, except unit data) Issued Amount
Balance at December 31, 2018 113,282,973 $ 499,825 $ 1 $ 499,826
Cash distributions to common unitholders - Affiliates — (4,670) — (4,670)
Cash distributions to common unitholders - Non-affiliates — (8,924) — (8,924)
Net loss — (6,079) — (6,079)
Balance at March 31, 2019 113,282,973 $ 480,152 $ 1 $ 480,153


	Common Units			General Partner Interest		Total Partners’ Capital
(in thousands, except unit data)	Issued	Amount
Balance at December 31, 2019	11,328,297	$	419,543	$	1	$	419,544


Land exchange with affiliate	—	(116)		—		(116)
Net loss	—	(20,735)		—		(20,735)
Balance at March 31, 2020	11,328,297	$	398,692	$	1	$	398,693

The accompanying notes are an integral part of these condensed consolidated financial statements.

March 31, ~~2020~~2021 | 7

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CVR PARTNERS, LP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


		Three Months Ended March 31,							Three Months Ended March 31,
(in thousands)	(in thousands)	2020		2019		(in thousands)	2021		2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net loss	Net loss	$	(20,735)	$	(6,079)	Net loss	$	(25,384)	$	(20,735)
Adjustments to reconcile net loss to net cash provided by operating activities:	Adjustments to reconcile net loss to net cash provided by operating activities:					Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	15,597		16,584		Depreciation and amortization	14,123		15,597

Share-based compensation	Share-based compensation	(477)		1,108		Share-based compensation	3,592		(477)
Other adjustments	Other adjustments	1,262		1,212		Other adjustments	1,259		1,262
Change in assets and liabilities:	Change in assets and liabilities:					Change in assets and liabilities:
Current assets and liabilities	Current assets and liabilities	32,645		38,253		Current assets and liabilities	33,782		32,645
Non-current assets and liabilities	Non-current assets and liabilities	(585)		846		Non-current assets and liabilities	(1,821)		(585)
Net cash provided by operating activities	Net cash provided by operating activities	27,707		51,924		Net cash provided by operating activities	25,551		27,707
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Capital expenditures	Capital expenditures	(6,710)		(3,500)		Capital expenditures	(2,994)		(6,710)

Proceeds from sale of assets	Proceeds from sale of assets	48		—		Proceeds from sale of assets	0		48
Net cash used in investing activities	Net cash used in investing activities	(6,662)		(3,500)		Net cash used in investing activities	(2,994)		(6,662)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Cash distributions to common unitholders - Affiliates		—		(4,670)
Cash distributions to common unitholders - Non-affiliates		—		(8,924)
Repurchase of common units						Repurchase of common units	(529)		0

Other financing activities	Other financing activities	(25)		—		Other financing activities	(26)		(25)
Net cash used in financing activities	Net cash used in financing activities	(25)		(13,594)		Net cash used in financing activities	(555)		(25)
Net increase in cash and cash equivalents	Net increase in cash and cash equivalents	21,020		34,830		Net increase in cash and cash equivalents	22,002		21,020
Cash and cash equivalents, beginning of period	Cash and cash equivalents, beginning of period	36,994		61,776		Cash and cash equivalents, beginning of period	30,559		36,994
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	58,014	$	96,606	Cash and cash equivalents, end of period	$	52,561	$	58,014

The accompanying notes are an integral part of these condensed consolidated financial statements.

March 31, ~~2020~~2021 | 8

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(1) Organization and Nature of Business

CVR Partners, LP ~~(referred to as “CVR~~(“CVR Partners” or the “Partnership”) is a Delaware limited partnership ~~and~~ 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 2 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 ~~product sales~~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.

The Partnership’s common units are listed on the New York Stock Exchange (“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 had fallen below $1.00 per share, resulting in noncompliance with the continued listing compliance standards in Section 802.01C of the NYSE Listing Company Manual. The Partnership received written notification of this noncompliance from the NYSE on April 22, 2020, and currently has until January 1, 2021 to regain compliance or be subject to the NYSE’s suspension and delisting procedures. See the Form 8-K filed by the Partnership with the SEC on April 24, 2020 for further discussion.Interest Holders

As of March 31, ~~2020,~~2021, public ~~security holders~~common unitholders held approximately ~~66%~~64% of the Partnership’s outstanding limited partner ~~interests and Coffeyville Resources,~~interests; CVR Services, LLC (“~~CRLLC”~~CVR Services”), a wholly-owned subsidiary of CVR Energy, held approximately ~~34%~~36% of the Partnership’s outstanding limited partner ~~interests~~interests; and ~~100% of the Partnership’s general partner interest is held by~~ CVR GP, LLC (“CVR GP” or the “general partner”), a wholly owned subsidiary of CVR ~~Energy.~~Energy, held 100% of the Partnership’s general partner interest. As of March 31, ~~2020,~~2021, 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 of directors of the Partnership’s general partner (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~~On February 22, 2021, the Board authorized an additional $10 million for the Unit Repurchase Program. During the three months ended March 31, 2021, the Partnership repurchased 24,378 common units on the open market, in accordance with a repurchase agreement under Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), at a cost of $0.5 million, inclusive of transaction costs, or an average price of $21.70 per common unit. As of March 31, 2021, the Partnership had $12.4 million in authority remaining 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.Program. This Unit Repurchase Program does not obligate the Partnership to acquire any common units and may be cancelled or terminated by ~~our general partner’s board of directors~~the Board at any time.

Management and Operations

The Partnership, including CVR GP, is ~~party~~managed by a combination of the Board, the general partner’s executive officers, CVR Services (as sole member of the general partner), and certain officers of CVR Energy, pursuant to the Partnership Agreement, as well as a number of agreements ~~with~~between the Partnership, CVR GP, CVR Energy, and ~~its~~certain of their respective subsidiaries, to manage certain business relationships between the Partnership and the other parties thereto. The various rights and responsibilities of the Partnership, and its partners, are set forth in the Partnership’s limited partnership agreement and, as applicable, those agreements with CVR Energy. CVR GP manages and operates the Partnership via a combination of the general partner’s senior management team and CVR Energy’s senior management team pursuant toincluding a services ~~agreement among CVR Energy, CVR GP, and the Partnership.~~agreement. See Part II, Item 8 of CVR Partners’ Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 (the ~~“2019~~“2020 Form 10-K”) 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.~~basis or otherwise.

(2) Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission ~~(the “SEC”~~(“SEC”). These condensed consolidated financial statements should be read in conjunction with the December 31, ~~2019~~2020 audited consolidated financial statements and notes thereto included in the ~~2019~~2020 Form 10-K.

~~March 31, 2020 |~~ 9

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~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

In the opinion of the Partnership’s management, the accompanying condensed consolidated financial statements reflect all adjustments that are necessary for fair presentation of the financial position and results of operations of the Partnership for the periods presented. Such adjustments are of a normal recurring nature, unless otherwise disclosed.

~~Certain reclassifications have been made within the condensed consolidated balance sheets as of December 31, 2019 and the condensed consolidated statements of operations for the three months ended~~

March 31, ~~2019. As~~2021 | 9

Table of ~~December 31, 2019, catalyst inventory of $5.6 million has been reclassified to Other long-term assets to conform to current presentation.~~Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Results of operations and cash flows for the interim periods presented are not necessarily indicative of the results that will be realized for the year ending December 31, ~~2020~~2021 or any other interim or annual period.

(3) Recent Accounting Pronouncements

Recent Accounting Pronouncements - Adoption of ~~Credit Losses~~Income Taxes Standard

In ~~June 2016,~~December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) ~~2016-13, Financial Instruments - Credit Losses~~2019-12, Income Taxes (Topic ~~326)~~740). The ASU ~~replaces~~simplifies the ~~incurred loss model with~~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 ~~current expected credit loss model for more timely recognition of expected impairment losses for most financial assets~~retrospective basis and ~~certain other instruments that are not measured at fair value through net income.~~others on a prospective basis. Effective January 1, ~~2020,~~2021, 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~~Codification Improvements Standard

In ~~August 2018,~~October 2020, the FASB issued ASU ~~2018-13, Fair Value Measurement (Topic 820).~~2020-10, Codification Improvements. The ASU ~~eliminates such disclosures as the amount of, and reasons for, transfers between Level 1 and Level 2~~amends various sections of the ~~fair value hierarchy. Certain disclosures are required~~codification in the Boards ongoing efforts to ~~be applied on a retrospective basis~~simplify and ~~others on a prospective basis.~~improve guidance. Effective January 1, ~~2020,~~2021, we adopted this ASU with no material impact on the Partnership’s ~~disclosures.~~consolidated financial position or results of operations.

Recent Accounting Pronouncements - New Accounting Standards Issued But Not Yet Implemented

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. ASU 2021-01 clarifies certain optional expedients and exceptions for contract modifications and hedge accounting. 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.

(4) Inventories

Inventories consisted of the following:


(in thousands)	(in thousands)	March 31, 2020		December 31, 2019		(in thousands)	March 31, 2021		December 31, 2020
Finished goods	Finished goods	$	26,583	$	17,612	Finished goods	$	24,490	$	9,815
Raw materials	Raw materials	124		243		Raw materials	100		152
Parts, supplies and other	Parts, supplies and other	28,385		30,441		Parts, supplies and other	32,594		32,382
Total inventories	Total inventories	$	55,092	$	48,296	Total inventories	$	57,184	$	42,349

March 31, ~~2020~~2021 | 10

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(5) Property, Plant and Equipment

Property, plant and equipment consisted of the following:


(in thousands)	(in thousands)	March 31, 2020		December 31, 2019		(in thousands)	March 31, 2021		December 31, 2020
Machinery and equipment	Machinery and equipment	$	1,384,588	$	1,378,651	Machinery and equipment	$	1,392,503	$	1,388,735
Buildings and improvements	Buildings and improvements	17,399		17,221		Buildings and improvements	17,598		17,598
Automotive equipment	Automotive equipment	16,637		16,691		Automotive equipment	16,608		16,608
Land and improvements	Land and improvements	14,040		14,075		Land and improvements	14,132		14,132

Construction in progress	Construction in progress	6,121		5,198		Construction in progress	10,746		12,098
Other	Other	1,752		1,752		Other	2,027		1,721
		1,440,537		1,433,588			1,453,614		1,450,892
Less: Accumulated depreciation		500,209		481,629
Less: Accumulated depreciation and amortization						Less: Accumulated depreciation and amortization	570,278		553,045
Total property, plant and equipment, net	Total property, plant and equipment, net	$	940,328	$	951,959	Total property, plant and equipment, net	$	883,336	$	897,847

As of March 31, 2021, the Partnership had not identified the existence of an impairment indicator for our long-lived asset groups as outlined under ASC Topic 360, Property, Plant, and Equipment.

(6) 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 to 20 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Certain of our lease agreements include rental payments which are adjusted periodically for factors such as inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Additionally, we do not have any material lessor or sub-leasing arrangements.

Balance Sheet Summary as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020

The following tables summarize the ROU asset and lease liability balances for the Partnership’s operating and finance leases at March 31, ~~2020~~2021 and December 31, ~~2019~~2020:

(in thousands) March 31, 2020 December 31, 2019
Operating Leases:
ROU asset, net
Railcars $ 9,835 $ 10,826
Real estate and other 2,492 2,581
Lease liability
Railcars $ 10,137 $ 11,088
Real estate and other 183 288
Finance Leases:
ROU asset, net
Real estate and other $ 176 $ 201
Lease liability
Real estate and other $ 180 $ 205


	March 31, 2021				December 31, 2020
(in thousands)	Operating Leases		Finance Leases		Operating Leases		Finance Leases
ROU asset, net

Railcars	$	6,558	$	0	$	7,327	$	0
Real estate and other	2,944		95		3,040		101
Lease liability

Railcars	$	6,931	$	0	$	7,696	$	0
Real estate and other	817		70		867		105

March 31, ~~2020~~2021 | 11

Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Lease Expense Summary for the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020

We recognize lease expense on a straight-line basis over the lease ~~term.~~term and short-term lease expense within Direct operating expenses (exclusive of depreciation and amortization). For the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, we recognized lease expense comprised of the following components:

Three Months Ended March 31,
(in thousands) 2020 2019
Operating lease expense $ 1,111 $ 1,023
Finance lease expense:
Amortization of ROU asset $ 27 $ 105
Interest expense on lease liability 2 6

Short-term lease expense, recognized within Direct operating expenses (exclusive of depreciation and amortization), was $0.1 million and $0.1 million for the three months ended March 31, 2020 and 2019, respectively.


	Three Months Ended March 31,
(in thousands)	2021		2020
Operating lease expense	$	916	$	1,111
Finance lease expense:
Amortization of ROU asset	$	22	$	27
Interest expense on lease liability	1		2
Short-term lease expense	$	160	$	77

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 at March 31, ~~2020~~2021 and December 31, ~~2019:~~2020:

March 31, 2020 December 31, 2019
Weighted-average remaining lease term (years)
Operating Leases 3.2 3.4
Finance Leases 2.0 2.3
Weighted-average discount rate
Operating Leases 5.1 % 5.1 %
Finance Leases 4.0 % 3.9 %


	March 31, 2021				December 31, 2020
	Operating Leases		Finance Leases		Operating Leases		Finance Leases
Weighted-average remaining lease term	2.7 years		1.1 years		2.9 years		1.3 years
Weighted-average discount rate	5.1	%	3.9	%	5.1	%	4.0	%

Maturities of Lease Liabilities

The following summarizes the remaining minimum lease payments through maturity of the Partnership’s ROU assets and liabilities at March 31, ~~2020:~~2021:


(in thousands)	(in thousands)	Operating Leases		Financing Leases		(in thousands)	Operating Leases		Finance Leases
Remainder of 2020		$	2,901	$	80
2021		3,459		107
Remainder of 2021						Remainder of 2021	$	2,754	$	71
2022	2022	3,020		—		2022	3,236		0
2023	2023	1,163		—		2023	1,367		0
2024	2024	486		—		2024	684		0
2025						2025	263		0
Thereafter	Thereafter	162		—		Thereafter	0		0
Total lease payments	Total lease payments	11,191		187		Total lease payments	8,304		71
Less: imputed interest	Less: imputed interest	(871)		(7)		Less: imputed interest	(556)		(1)
Total lease liability	Total lease liability	$	10,320	$	180	Total lease liability	$	7,748	$	70

March 31, ~~2020~~2021 | 12

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(7) Other Current Liabilities

Other current liabilities consisted of the following:

(in thousands) March 31, 2020 December 31, 2019
Accrued interest $ 17,469 $ 2,518
Personnel accruals 4,246 8,187
Operating lease liabilities 3,318 3,523
Sales incentives 2,611 1,614
Prepaid revenue contracts 309 277
Share-based compensation 358 5,011
Other accrued expenses and liabilities 2,552 2,913
Total other current liabilities $ 30,863 $ 24,043

Other current liabilities include amounts accrued by the Partnership and owed to CVR Energy and its affiliates of $5.5 million at December 31, 2019, with 0 such amounts accrued as Other current liabilities at March 31, 2020. See Note 13 (“Related Party Transactions”) for additional discussion.


(in thousands)	March 31, 2021		December 31, 2020
Accrued interest	$	17,470	$	2,506
Personnel accruals	5,287		7,475
Operating lease liabilities	3,356		3,309
Sales incentives	2,954		2,215
Share-based compensation	2,313		442
Current portion of long-term debt and finance lease obligations	2,310		2,240
Prepaid revenue contracts	138		197
Other accrued expenses and liabilities	3,953		2,565
Total other current liabilities	$	37,781	$	20,949

(8) Long-Term Debt

Long-term debt consists of the following:

(in thousands) March 31, 2020 December 31, 2019
9.25% Senior Secured Notes, due 2023 (1) $ 645,000 $ 645,000
6.50% Notes, due 2021 2,240 2,240
Unamortized discount and debt issuance costs (13,925) (14,834)
Total long-term debt $ 633,315 $ 632,406


(in thousands)	March 31, 2021		December 31, 2020
9.25% Senior Secured Notes, due June 2023 (1)	$	645,000	$	645,000


Unamortized discount and debt issuance costs (2)	(10,054)		(11,058)
Total long-term debt and finance lease obligations, net of current portion	634,946		633,942
Current portion of long-term debt and finance lease obligations (3)(4)	2,310		2,240
Total long-term debt and finance lease obligations, including current portion	$	637,256	$	636,182

(1)The estimated fair value of long-term debt outstanding was approximately ~~$506.3~~$650.6 million and ~~$673.8~~$645.7 million as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, 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. The call price of the 2023 Notes decreases to par on June 15, 2021.

(2)For the three months ended March 31, 2021 and 2020, amortization of the discount on debt and amortization of deferred financing costs reported as Interest expense, net totaled approximately $1.0 million and $0.9 million, respectively.

(3)The 6.50% Notes, due April 2021, mature within 12 months, and, therefore, the outstanding balance of $2.2 million has been classified as short-term debt as of March 31, 2021 and December 31, 2020. Amounts are reported in Other current liabilities. On April 15, 2021, the 2021 Notes matured, and the Partnership paid the outstanding balance, plus accrued and unpaid interest.

(4)Current portion of finance lease obligations recognized was approximately $0.1 million as of March 31, 2021. Amounts reported in Other current liabilities.

Credit ~~Facility~~Agreements


(in thousands)	(in thousands)	Total Capacity		Amount Borrowed as of March 31, 2020		Outstanding Letters of Credit		Available Capacity as of March 31, 2020		Maturity Date	(in thousands)	Total Available Borrowing Capacity		Amount Borrowed as of March 31, 2021		Outstanding Letters of Credit		Available Capacity as of March 31, 2021		Maturity Date
Asset Based (AB) Credit Facility (2)		$	49,607	$	—	$	—	$	49,607	September 30, 2021
ABL Credit Agreement (1)(2)											ABL Credit Agreement (1)(2)	$	24,609	$	0	$	0	$	24,609	September 30, 2022

~~(2)~~(1)~~At the option of the borrowers,~~Beginning January 1, 2021, loans under the ABPartnership’s ABL Credit ~~Facility initially~~Agreement (the “ABL Credit Agreement”) bear interest at an annual rate equal to (i) (a) 2.00% plus LIBOR, to the extent available, or ~~(ii)~~(b) 1.00% plus a base rate, ~~subject~~if our quarterly excess availability is greater than 50% and (ii) (a) 2.50% plus LIBOR, to the extent available, or (b) 1.50% plus a ~~0.50% step-down based on~~base rate, otherwise.

(2)Amortization expense was $0.1 million and $0.1 million for the ~~previous quarter’s excess availability.~~three months ended March 31, 2021 and 2020, respectively.

Covenant Compliance

The Partnership and its subsidiaries were in compliance with all covenants under their respective debt instruments as of March 31, ~~2020.~~2021.

March 31, ~~2020~~2021 | 13

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(9) Revenue

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

Three Months Ended
March 31,
(in thousands) 2020 2019
Ammonia $ 14,147 $ 13,352
UAN 47,014 64,064
Urea products 3,533 4,671
Net sales, exclusive of freight and other 64,694 82,087
Freight revenue 7,722 8,018
Other revenue 2,664 1,768
Net sales $ 75,080 $ 91,873

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.~~


	Three Months Ended March 31,
(in thousands)		2021		2020
Ammonia		$	9,534	$	14,147
UAN		38,062		47,014
Urea products		4,758		3,533
Net sales, exclusive of freight and other		52,354		64,694
Freight revenue		6,114		7,722
Other revenue		2,453		2,664
Net sales		$	60,921	$	75,080

Transaction Price Allocated to Remaining Performance Obligations

As of March 31, ~~2020,~~2021, the Partnership had approximately ~~$9.5~~$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 ~~$3.0~~$3.5 million of these performance obligations as revenue by the end of ~~2020,~~2021, an additional ~~$3.7~~$2.3 million in ~~2021,~~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

~~March 31, 2020 |~~ 14

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~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

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 for the three months ended March 31, ~~2020~~2021 is presented below:


(in thousands)
Balance at December 31, ~~2019~~2020	$	~~27,841~~30,631
Add:
New prepay contracts entered into during the period (1)	~~16,725~~20,094
Less:
Revenue recognized that was included in the contract liability balance at the beginning of the period	~~5,581~~ (7,505)
Revenue recognized related to contracts entered into during the period	~~1,185~~ (2,800)
Other changes	~~166~~ (37)
Balance at March 31, ~~2020~~2021	$	~~37,634~~40,383

(1) Includes ~~$15.6~~$18.6 million where payment associated with prepaid contracts was collected as of March 31, ~~2020.~~2021.

March 31, 2021 | 14

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(10) Share-Based Compensation

A summary of compensation expense for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 is presented below:


		Three Months Ended March 31,					Three Months Ended March 31,
(in thousands)	(in thousands)	2020		2019		(in thousands)	2021		2020
Phantom Units	Phantom Units	$	(259)	$	790	Phantom Units	$	3,145	$	(259)
Other Awards (1)	Other Awards (1)	(218)		318		Other Awards (1)	447		(218)
Total share-based compensation expense	Total share-based compensation expense	$	(477)	$	1,108	Total share-based compensation expense	$	3,592	$	(477)

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

(11) Commitments and Contingencies

There have been no material changes in the Partnership’s commitments and contingencies disclosed in the ~~2019~~2020 Form 10-K. In the ordinary course of business, the Partnership may become party to lawsuits, administrative proceedings, and governmental investigations, including environmental, regulatory, and other matters. The outcome of these matters cannot always be predicted accurately, but the Partnership accrues liabilities for these matters if the Partnership has determined that it is probable a loss has been incurred and the loss can be reasonably estimated. While it is not possible to predict the outcome of such proceedings, if one or more of them were decided against us, the Partnership believes there would be no material impact on its consolidated financial statements.

The Partnership continues to monitor its contractual arrangements and customer, vendor, and supplier relationships to determine whether and to what extent, if any, the impacts of the COVID-19 pandemic or recent price volatility will impair or excuse the performance of the Partnership or its subsidiaries or their customers, vendors, or suppliers under existing agreements. As of March 31, ~~2020 |~~ 15

~~Table~~2021, the Partnership had not experienced a material financial impact from any actual or threatened impairment of ~~Contents~~or excuse in its or others’ performance under such agreements.

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

(12) Supplemental Cash Flow Information

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


		Three Months Ended March 31,							Three Months Ended March 31,
(in thousands)	(in thousands)	2020		2019		(in thousands)	2021		2020
Supplemental disclosures:	Supplemental disclosures:					Supplemental disclosures:
Cash received for income taxes, net of payments		$	(1)	$	—
Cash paid for interest	Cash paid for interest	49		53		Cash paid for interest	$	45	$	49
Cash paid, net of refunds (received, net of payments) for income taxes						Cash paid, net of refunds (received, net of payments) for income taxes	0		(1)
Cash paid for amounts included in the measurement of lease liabilities:	Cash paid for amounts included in the measurement of lease liabilities:					Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	Operating cash flows from operating leases	1,118		966		Operating cash flows from operating leases	918		1,118
Operating cash flows from finance leases	Operating cash flows from finance leases	2		9		Operating cash flows from finance leases	1		2
Financing cash flows from finance leases	Financing cash flows from finance leases	25		135		Financing cash flows from finance leases	26		25

Non-cash investing activities:	Non-cash investing activities:					Non-cash investing activities:

Change in capital expenditures included in accounts payable	Change in capital expenditures included in accounts payable	(1,117)		(668)		Change in capital expenditures included in accounts payable	131		(1,117)

March 31, 2021 | 15

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(13) Related Party Transactions

Effective January 1, 2020, the Partnership entered into a new Coffeyville Master Service Agreement (the “Coffeyville MSA”) between Coffeyville Resources Nitrogen Fertilizer LLC (“CRNF”) and Coffeyville Resources Refining & Marketing, LLC, an indirect, wholly-owned subsidiary of CVR Energy (“CRRM”) and a new Corporate Master Service Agreement (the “Corporate MSA”) between CRLLC and certain of its affiliates, including CVR GP and the Partnership and its subsidiaries. For a description of these agreements, see Note 9 (“Related Party Transactions”) in Part II, Item 8 of the 2019 Form 10-K.

Activity associated with the Partnership’s related party arrangements for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 is summarized below.

Related Party Activity


		Three Months Ended March 31,					Three Months Ended March 31,
(in thousands)	(in thousands)	2020		2019		(in thousands)	2021		2020
Sales to related parties (1)	Sales to related parties (1)	$	540	$	2	Sales to related parties (1)	$	219	$	540
Purchases from related parties (2)	Purchases from related parties (2)	5,938		8,985		Purchases from related parties (2)	6,693		5,938

		March 31, 2020		December 31, 2019
Prepaid expenses (3)		60		249
Due to related parties (4)		949		7,826


	March 31, 2021	December 31, 2020

Due to related parties (3)	902	1,446

(1)Sales to related parties, included in Net sales, consist primarily of sales of feedstocks and services to ~~CRRM~~Coffeyville Resources Refining & Marketing, LLC (“CRRM”) under the Master Service Agreement with Coffeyville ~~MSA.~~Resources Nitrogen Fertilizers, LLC (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 (from) to related parties, included in Accounts payable to affiliates, Other current liabilities, and Other long-term liabilities, consist primarily of amounts to be received or payable for feedstocks and other supplies and services provided by CRRM and ~~CRLLC~~CVR Services under the Coffeyville MSA and Corporate MSA.

~~Property Exchange~~

On October 22, 2019, the audit committee of CVR Energy and the Conflicts Committee of the board of directors of CVR GP 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

~~March 31, 2020 |~~ 16

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~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

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 805-50 guidance on transferring assets between entities under common control. This transaction resulted in a net reduction to the Partnership’s partners’ capital of approximately $0.1 million.

Distributions to CVR Partners’ Unitholders

Distributions, if any, including the payment, amount, and timing thereof, are subject to change at the discretion of the ~~Board of Directors of CVR Partners’ general partner.~~Board. There were 0 distributions declared or paid by the Partnership during the three months ended March 31, ~~2020~~2021 related to the fourth quarter of ~~2019,~~2020, and 0 distributions were paid during 2020. NaN distributions were declared for the first quarter of ~~2020.~~

~~The following table presents distributions paid by the Partnership to CVR Partners’ unitholders, including amounts paid to CVR Energy, during 2019.~~

Distributions Paid (in thousands)
Related Period Date Paid Distribution Per
Common Unit Public Unitholders CVR Energy Total
2018 - 4th Quarter March 11, 2019 $ 0.12 $ 8,924 $ 4,670 $ 13,594
2019 - 1st Quarter May 13, 2019 0.07 5,205 2,724 7,929
2019 - 2nd Quarter August 12, 2019 0.14 10,411 5,449 15,860
2019 - 3rd Quarter November 11, 2019 0.07 5,205 2,724 7,930
Total distributions $ 0.40 $ 29,745 $ 15,567 $ 45,313

2021.

March 31, ~~2020~~2021 | 1716

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

The following discussion and analysis of our financial condition, results of operations, and cash flows should be read in conjunction with the unaudited condensed consolidated financial statements and related notes and with the statistical information and financial data appearing in this Report, as well as our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 filed with the Securities and Exchange Commission (“SEC”) on February ~~20, 2020~~23, 2021 (the ~~“2019~~“2020 Form 10-K”). Results of operations for the three months ended March 31, ~~2020~~2021 and cash flows for the three months ended March 31, ~~2020~~2021 are not necessarily indicative of results to be attained for any other period. See “Important Information Regarding Forward-Looking ~~Statements”.~~Statements.”

Reflected in this discussion and analysis is how management views the Partnership’s current financial condition and results of operations along with key external variables and management actions that may impact the Partnership. Understanding significant external variables, such as market conditions, weather, and seasonal trends, among others, and management actions taken to manage the Partnership, address external variables, among others, which will increase users’ understanding of the Partnership, its financial condition and results of operations. This discussion may contain forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this Report.

Partnership Overview

CVR Partners, LP (“CVR Partners” or the “Partnership”) is a Delaware limited partnership formed in 2011 by CVR Energy, Inc. (“CVR Energy”) to own, operate, and grow ~~our~~its nitrogen fertilizer business. ~~We produce~~The Partnership produces and ~~distribute~~distributes nitrogen fertilizer products, which are used by farmers to improve the yield and quality of their crops. The Partnership produces these products at two manufacturing facilities, which are located in Coffeyville, Kansas (the “Coffeyville Facility”) and East Dubuque, ~~Illinois.~~Illinois (the “East Dubuque Facility”). Our principal products are ammonia and urea ammonium nitrate (“UAN”). All of our products are sold on a wholesale basis. 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. Additionally, as the context may require, references to CVR Energy may refer to CVR Energy and its consolidated subsidiaries which include its petroleum refining, marketing, and logistics operations.

Strategy and Goals

Mission and Core Values

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

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

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

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

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

•Continuous Improvement - We believe in both individual and team success. We foster accountability under a performance-driven culture that supports creative thinking, teamwork, diversity and personal development so that

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employees can realize their maximum potential. We use defined work practices for consistency, efficiency and to create value across the organization.

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

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Strategic Objectives

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

Environmental Health & Safety (“EH&S”) - We aim to achieve continuous improvement in all ~~environmental, health and safety~~EH&S areas through ensuring our people’s commitment to environmental, health and safety comes first, the refinement of existing policies, continuous training, and enhanced monitoring procedures.

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

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

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

Achievements

During the first ~~quarter~~three months of ~~2020,~~2021, we successfully executed a number of achievements in support of our strategic objectives shown below through the date of this ~~filing:~~filing despite the challenges experienced by the industry as a result of the COVID-19 pandemic:

Safety

Reliability

Market Capture

Financial Discipline

Achieved record truck shipments and total shipments from the Coffeyville Facility in March 2021

Opportunistically sold natural gas into high priced market, offsetting storm-related lost profit opportunities

Operated ~~all facilities and corporate offices safely and reliably and maintained financial discipline amid COVID-19 pandemic.~~the East Dubuque Ammonia plant at high utilization rates, excluding downtime related to Winter Storm Uri

~~Maintained high asset reliability and utilization~~Recovered quickly from storm-related downtime at both facilities ~~during the first quarter of 2020.~~

Achieved ~~8% improvement~~45% reduction in ~~total recordable incident rate for the first quarter 2020~~process safety incidents and 33% reduction in environmental events compared to the first quarter ~~2019.~~of 2020

Industry Factors and Market ~~Conditions~~Indicators

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

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

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

General Business Environment

~~In March~~Throughout 2020, the ~~World Health Organization categorized COVID-19 as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. The~~ COVID-19 pandemic and actions taken by governments and others in response thereto is negatively ~~impacting~~impacted the worldwide economy, financial markets, and the agricultural industry. The COVID-19 pandemic ~~has~~also resulted in significant business and operational disruptions, including business closures in the

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restaurant and food supply industries, ~~amongst~~among others, liquidity strains, destruction of non-essential demand, as well as supply chain challenges, travel restrictions, stay-at-home orders, and limitations on the availability of the workforce, including farmers in the agricultural industry. As a result, the ~~global~~U.S. demand for liquid transportation fuels, including ethanol (the production of which is a significant driver of demand for ~~fertilizer)~~corn), ~~has~~ declined, causing many refineries and plants to reduce production or ~~idle,~~idle. Over recent quarters, government restrictions have eased, vaccines have become available, and demand for transportation fuels has increased. However, demand levels remain below pre-pandemic levels as evidenced by a decline in the first quarter 2021 average ethanol production ~~per day~~ of ~~45% from 2019. The potential~~12% compared to the first quarter of 2020. Additionally, given market conditions for ~~a decline in production~~transportation fuels over the past year, the processing of sweet crude oil, including at ~~refineries, including from~~the crude oil refinery owned and operated by Coffeyville Resources Refining & Marketing, LLC (“CRRM”), an indirect, wholly-owned subsidiary of CVR Energy ~~(“CRRM”~~(the “Coffeyville Refinery”), ~~could~~has increased compared to the period pre-COVID-19 resulting in lower sour crude oil being processed as refineries have adjusted to market dynamics. As a result, ~~in increased costs incurred by the Partnership in future periods to source feedstocks, such as~~ pet coke production has declined, including at the Coffeyville Refinery, which has and ~~natural gas,~~may continue to cause increased production costs at ~~spot prices.~~our Coffeyville Facility. Concerns over the long-term negative effects of the COVID-19 pandemic on economic and business prospects across the world have contributed to increased market and grain price volatility ~~uncertainty in food supply demands,~~ and have diminished expectations for the global ~~economy and may precipitate a prolonged economic slowdown and recession. As a result, the Partnership may witness some decline in demand for its products in 2020.~~economy.

The Partnership believes the general business environment in which it operates will continue to remain volatile ~~through at least the first half of 2020, and likely through the remainder of the year,~~during 2021, driven by uncertainty around the availability and prices of its feedstocks and the demand for its products. As a result, ~~the Partnership anticipates its~~ future operating results and current and long-term financial condition ~~may~~could be negatively ~~impacted.~~impacted if economic conditions decline, remain volatile, and do not return to pre-pandemic levels. Due to the ~~rapidly evolving situation, the~~ uncertainty of the global recovery, including its duration, timing, and ~~the timing of recovery,~~strength, the Partnership is not able at this time to predict the extent to which these events may have a material, or any, effect on its financial or operational results ~~including any potential impairment of goodwill associated with our Coffeyville reporting unit.~~in future periods.

With the adverse economic impacts discussed above and the uncertainty surrounding the COVID-19 pandemic, there is a heightened risk that amounts recognized, including goodwill, may not be recoverable. We have $41.0 million in goodwill at March 31, 2020 associated with our Coffeyville reporting unit for which the estimated fair value has been in excess of carrying value based on our 2018 and 2019 assessments. While our assessment in 2020 has not identified the existence of an impairment indicator, we continue to monitor the current environment, including the duration and breadth of the impacts that the pandemic will have on demand for our fertilizer products, to assess whether qualitative factors indicate a quantitative assessment is required. If a quantitative assessment is performed, the extent to which the recoverability of our goodwill could be impaired is unknown. Such impairment could have a significant adverse impact on our results of operations; however, an impairment would have no impact on our financial condition or liquidity.

~~2020~~ Market ~~Conditions~~Indicators

While there is risk of shorter-term volatility given the inherent nature of the commodity cycle, ~~and the impacts of the global COVID-19 pandemic,~~ the Partnership believes the long-term fundamentals for the U.S. nitrogen fertilizer industry remain intact. The Partnership views the anticipated combination of (i) increasing global population, (ii) decreasing arable land per capita, (iii) continued evolution to more protein-based diets in developing countries, (iv) sustained use of corn as feedstock for the domestic production of ethanol, and (v) positioning at the lower end of the global cost curve should ~~continue to~~ provide a solid foundation for nitrogen fertilizer producers in the U.S. over the longer term.

Weather significantly impacted the demand for ammonia and UAN in 2019 due to a lack of extended dry conditions required for ammonia application and excessive moisture in the fall season. As a result, there was limited ability to apply ammonia after the fall harvest season and before the winter freeze. The decreased application resulted in a shift of deliveries from the fourth quarter of 2019 to the beginning of the second quarter in 2020. This has created a surplus of inventory in the market that was further exacerbated by continued imports of foreign UAN tons into the U.S. market. As a result of these factors, the Partnership has seen a softening of prices related to these products. This softening is not expected to be sustained.

Corn and soybean are two major crops planted by farmers in North America. Corn crops result in the depletion of the amount of nitrogen and ammonia within the soil in which it is grown, which in turn, results in the need for these nutrients to be replenished after each growing cycle. Unlike corn, ~~soybean is~~soybeans are able to obtain ~~its~~their own nitrogen through a process known as “N ~~fixation”.~~fixation.” As such, upon ~~the~~ harvesting of ~~soybean,~~soybeans, the soil retains a certain amount of nitrogen which results in lower demand for nitrogen fertilizer for the following corn planting cycle. Due to these factors, nitrogen fertilizer consumers generally operate a balanced corn-soybean rotational planting cycle as evident through the chart presented below for ~~2020~~2021 and ~~2019.~~2020.

The relationship between the total acres planted for both corn and soybean has a direct impact on the overall demand for nitrogen products. As the number of corn acres increases, the market and demand for nitrogen also increases. Correspondingly, as the number of soybean acres increases, the market and demand for nitrogen decreases.

Additionally, an estimated 8 billion pounds of soybean oil is expected to be used in producing cleaner biodiesel in 2020 and 2021. Multiple refiners have announced biodiesel expansion projects for 2021 and beyond, which will only increase the demand and capacity for soybeans. Due to the uncertainty of how these factors will truly affect the soybean market, it is not yet known how the nitrogen business will be impacted.

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~~There has been a decline in the ethanol market due to decreased demand for transportation fuels as a result of the COVID-19 pandemic.~~

Ethanol is blended with gasoline to meet renewable fuel standard requirements and for its octane value. Ethanol production has historically consumed approximately 35% of the U.S. corn crop, so demand for corn generally rises and falls with ethanol demand. ~~While there is uncertainty surrounding when gasoline demand will return to normal levels, the drop~~There has been a decline in ethanol demand ~~has~~in 2020 due to decreased demand for transportation fuels as a result of the COVID-19 pandemic. However, the lower ethanol demand did not ~~yet significantly impacted~~alter the spring 2021 or 2020 planting decisions by farmers as evidenced ~~through~~in the ~~chart~~charts below.

While weather conditions in 2020 exhibited normal patterns, weather continues to be a critical variable for crop production. The normal weather in the spring and the fall of 2020 allowed for an efficient spring application period and fall harvest. However, the unusual derecho storm in the Midwest in August 2020 damaged a significant number of corn acres, reducing harvested corn yields and, coupled with higher demand for corn starting in the second half of 2020, led to much lower corn inventory levels and significantly higher corn prices. Soybeans have also experienced high demand levels starting in the second half of 2020 and inventory levels are much lower, resulting in much higher soybean prices. The higher corn and soybean prices have increased expectations for planted corn and soybean acres for the spring of 2021 and led to higher demand for nitrogen fertilizer, as well as other crop inputs.

The preliminary ~~2020~~2021 United States Department of Agriculture (“USDA”) ~~U.S. farmer planting intentions report~~reports on corn and soybean acres planted indicated farmers’ intentions to plant ~~97.0~~91.1 million acres of corn, representing an increase of ~~8.1%~~0.2% in corn acres planted as compared to ~~89.7~~91.0 million corn acres in ~~2019.~~2020. Planted soybean acres are estimated to be ~~83.5~~87.6 million acres, representing a ~~9.7%~~5.4% increase in soybean acres planted as compared to ~~76.1~~83.1 million soybean acres in ~~2019. Despite these anticipated increases~~2020. The combined corn and soybean planted acres of 178.7 million is the highest in ~~corn acres planted in 2020, if the current gasoline demand~~history, and ~~ethanol blending continues~~based on expected yields and crop prices, farm economics are expected to be ~~weak, there is an expectation that corn planted acres could be lower than estimated while remaining above 2019 levels and corn inventories could be elevated after the harvest~~very attractive in fall 2020 leading to lower planted corn acres in future years. Despite the above potential risks for 2021 or later, the Partnership and industry expect solid demand for crop inputs for the 2020 spring season.2021.

~~Although the~~Due to strong crop prices, an expected strong spring planting season, and ~~current shipments~~lower fertilizer supply due to nitrogen fertilizer production outages during Winter Storm Uri, fertilizer prices have ~~continued as expected, we will continue~~risen significantly since January 1, 2021. In 2020, UAN prices were impacted by the imposition of import duties on UAN product by the European Union (the “EU”), which resulted in shifts in UAN trade flows for product that had previously been shipped to ~~monitor~~ the ~~COVID-19 pandemic and business environment and its potential impacts~~EU. The impact on pricing of the ~~Partnership.~~changes in trade flows was significant in 2020 but has lessened in the first quarter of 2021. While natural gas prices were at historical lows across the world in 2020, they have recovered significantly since the summer of 2020, reducing the incentive to maximize production at nitrogen fertilizer production facilities.

~~The tables below show relevant market indicators by month through March 31, 2020:~~

~~(1)~~Information used within this chart was obtained from the USDA, National Agricultural Statistics Services. Grown acres for 2020 are preliminary USDA estimated amounts and will be updated for actual amounts during the second quarter.

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The tables below show relevant market indicators by month through March 31, 2021:

(1)Information used within this chart was obtained from the U.S. Energy Information Administration (“EIA”).

(2)Information used within this chart was obtained from the USDA, National Agricultural Statistics Services. Grown acres for 2021 are preliminary USDA estimated amounts and will be updated for actual amounts as the information becomes available, which is expected to be during the third quarter of 2021.

(3)Information used within these charts was obtained from various third-party sources, including Green Markets (a Bloomberg Company), Pace Petroleum Coke Quarterly, and the ~~U.S. Energy Information Administration (“EIA”),~~EIA, amongst others.

Results of Operations

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

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

The presentation of our utilization is on a two-year rolling average which takes into account the impact of our planned and unplanned outages on any specific period. We believe the two-year rolling average is a more useful presentation of the long-term utilization performance of our facilities.

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

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On a consolidated basis, utilization increased 1%3% to ~~93%~~96% for the two years ended March 31, ~~2020~~2021 compared to the two years ended March 31, ~~2019.~~2020. The first quarter of 2019 ammonia storage capacity was constrained at the East Dubuque Facility impacting comparability ~~to 2020.~~for 2020 and 2021.

Sales and Pricing per Ton - Two of our key operating metrics are total sales for ammonia and UAN, along with the product pricing per ton realized at the gate. Total sales for ammonia and UAN were unfavorable, driven by lower production due to downtime associated with the Messer air separation plant and production and shipping constraints due to Winter Storm Uri. Ammonia sales prices were favorable compared to difficult market conditions in the first quarter of 2020. UAN sales prices were slightly unfavorable due to forward sales of product completed in November/December 2020 prior to the increase in UAN market prices. Product pricing at the gate represents net sales less freight revenue divided by product sales volume in tons and is shown in order to provide a pricing measure ~~that is~~ comparable across the fertilizer industry.

Operating Highlights for the Three Months Ended March 31, ~~2020 |~~ 2021 versus March 31, 2020)

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Production Volumes - Gross tons produced for ammonia represent the total ammonia produced, including ammonia produced, that was upgraded into other fertilizer products. Net tons available for sale represent the ammonia available for sale

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that was not upgraded into other fertilizer products. The table below presents these metrics for the three months ended March 31, ~~2020~~2021 and ~~2019:~~2020:


		Three Months Ended March 31,			Three Months Ended March 31,
(in thousands of tons)	(in thousands of tons)	2020	2019	(in thousands of tons)	2021	2020
Ammonia (gross produced)	Ammonia (gross produced)	201	179	Ammonia (gross produced)	188	201
Ammonia (net available for sale)	Ammonia (net available for sale)	78	41	Ammonia (net available for sale)	70	78
UAN	UAN	317	335	UAN	272	317

Feedstock - Our Coffeyville Facility utilizes a pet coke gasification process to produce nitrogen fertilizer. Our East Dubuque Facility uses natural gas in its production of ammonia. The table below presents these feedstocks for both facilities for the three months ended March 31, ~~2020~~2021 and ~~2019:~~2020:


		Three Months Ended March 31,					Three Months Ended March 31,
		2020		2019			2021		2020
Petroleum coke used in production (thousand tons)	Petroleum coke used in production (thousand tons)	125		132		Petroleum coke used in production (thousand tons)	128		125
Petroleum coke (dollars per ton)	Petroleum coke (dollars per ton)	$	44.68	$	37.70	Petroleum coke (dollars per ton)	$	42.91	$	44.68
Natural gas used in production (thousands of MMBtu) (1)	Natural gas used in production (thousands of MMBtu) (1)	2,141		1,440		Natural gas used in production (thousands of MMBtu) (1)	1,882		2,141
Natural gas used in production (dollars per MMBtu) (1)	Natural gas used in production (dollars per MMBtu) (1)	$	2.42	$	3.83	Natural gas used in production (dollars per MMBtu) (1)	$	3.10	$	2.42
Natural gas in cost of materials and other (thousands of MMBtu) (1)	Natural gas in cost of materials and other (thousands of MMBtu) (1)	1,418		1,008		Natural gas in cost of materials and other (thousands of MMBtu) (1)	940		1,418
Natural gas in cost of materials and other (dollars per MMBtu) (1)	Natural gas in cost of materials and other (dollars per MMBtu) (1)	$	2.80	$	3.87	Natural gas in cost of materials and other (dollars per MMBtu) (1)	$	2.94	$	2.80

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

Financial Highlights for the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020

Overview - For the three months ended March 31, ~~2020,~~2021, the ~~Partnership's~~Partnership’s operating loss and net loss were ~~$5.0~~$14.0 million and ~~$20.7~~$25.4 million, a ~~$14.4~~$9.0 million ~~decrease~~increase in operating loss and ~~$14.6~~$4.7 million ~~decrease,~~increase in net loss, respectively, compared to the three months ended March 31, ~~2019~~2020. These increases were driven primarily by ~~decreased ammonia and UAN pricing. Sales pricing has weakened~~fewer sales as a result of ~~competitive domestic markets, seasonally high inventories,~~lower production due to downtime associated with the Messer air separation plant and ~~increased imports of UAN.~~production and shipping impacts from Winter Storm Uri.

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(1)See “Non-GAAP Reconciliations” section below for reconciliations of the non-GAAP measures shown ~~below.~~above.

Net ~~Sales.~~Sales ~~Net sales decreased by $16.8 million to $75.1 million for~~- For the three months ended March 31, ~~2020~~2021, net sales decreased by $14.2 million to $60.9 million compared to the three months ended March 31, ~~2019.~~2020. This decrease was primarily due to ~~unfavorable pricing conditions~~decreased sales volumes which contributed ~~$21.6~~$13.2 million in lower revenues ~~partially offset by increased~~and unfavorable sales ~~volumes contributing $5.3~~pricing contributed $0.5 million in lower revenues as compared to the three months ended March 31, ~~2019.~~2020.

The following table demonstrates the impact of changes in sales volumes and pricing for the primary components of net sales, excluding urea products, freight, and other revenue, for the three months ended March 31, ~~2020~~2021 as compared to the three months ended March 31, ~~2019:~~2020:


(in thousands)	(in thousands)	Price Variance		Volume Variance		(in thousands)	Price Variance		Volume Variance
UAN	UAN	$	(16,016)	$	(1,030)	UAN	$	(1,673)	$	(7,419)
Ammonia	Ammonia	$	(5,550)	$	6,344	Ammonia	1,145		(5,769)

The ~~decrease~~increase in ~~UAN and~~ ammonia sales pricing for the three months ended March 31, ~~2020~~2021 as compared to the three months ended March 31, ~~2019~~2020 was primarily attributable to ~~competitive pricing pressures seen throughout~~favorable market conditions in the ~~domestic and international markets. For UAN, imported volumes increased as~~first quarter of 2021 compared to ~~2019 because~~difficult market conditions in the first quarter of ~~the imposition of duties by the European Union on~~2020. UAN ~~imports from Russia, Trinidad, and the U.S. For ammonia, customers held a significant amount of inventory~~sales prices were slightly unfavorable due to ~~the delay~~forward sales of product completed in application from the fourth quarter 2019 to the beginning of the second quarter 2020. This delay in application was primarily due to excessive moisture in the 2019 fall season which delayed normal application from occurring after the fall harvestNovember and ~~before the spring planting season. As ammonia application is slated to be applied~~December 2020 prior to the ~~spring planting season, requires extended dry conditions for success, and a majority of customers buy on a cyclical basis, there was an~~ increase in UAN market prices. The decrease in UAN and ammonia sales volumes for the ~~volumes of ammonia purchased during~~three months ended March 31, 2021 compared to the three months ended March 31, 2020 ~~as compared~~was primarily attributable to lower production due to downtime associated with the ~~three months~~Messer air separation plant and production and shipping impacts from Winter Storm Uri.

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~~ended March 31, 2019. These increases in application and purchases were not seen in the UAN market, as it can be applied more ratably throughout the growing season.~~

(1)Exclusive of depreciation and amortization expense.

Cost of ~~materials~~Materials and ~~other.~~ Other -~~Cost of materials and other for~~ For the three months ended March 31, ~~2020~~2021, cost of materials and other was ~~$24.0~~$17.8 million ~~compared to $23.7~~from $24.0 million for the three months ended March 31, ~~2019 with increased production costs given higher volumes and higher pet coke pricing that were offset by~~2020. The $6.2 million decrease was largely tied to reduced sales in 2021 compared to the 2020 period. Additionally, lower natural gas and other production costs of $2.3 million as compared to the first quarter of 2020 at ~~our~~the East Dubuque Facility were realized from the shutdown of operations during Winter Storm Uri. These decreases are partially offset by increases to third-party coke, refinery coke, and hydrogen feedstock purchases of $0.6 million in the first quarter of 2021 as compared to the first quarter of 2020 at the Coffeyville Facility.

Direct ~~operating expenses~~Operating Expenses (exclusive of depreciation and amortization). - ~~Direct~~For the three months ended March 31, 2021, direct operating expenses (exclusive of depreciation and amortization) ~~for the three months ended March 31, 2020~~were ~~$35.1~~$37.1 million compared to ~~$34.8~~$35.1 million for the three months ended March 31, ~~2019.~~2020. The $2.0 million increase was primarily due to higher personnel ~~costs.~~costs of $3.9 million for labor and stock-based compensation expenses as a result of higher market prices for CVR Energy’s shares and CVR Partners’ units in the first quarter of 2021, coupled with higher utility costs of $2.2 million related to higher electricity rates and usage at the Coffeyville Facility and higher overall natural gas prices during the three months ended March 31, 2021. These costs were partially offset by lower operating costs at the East Dubuque Facility from the shutdown of operations during Winter Storm Uri of $3.0 million.

Depreciation and Amortization Expense - ~~Depreciation and amortization expense decreased $1.0 million for~~For the three months ended March 31, ~~2020~~2021, depreciation and amortization expense decreased $1.5 million compared to the three months ended March 31, ~~2019,~~2020 primarily as a result of ~~higher depreciation on~~ certain assets ~~in January 2019 through September 2019 that are no longer~~ being ~~utilized following~~fully depreciated or retired during the ~~2019 turnaround at the East Dubuque Facility.~~three months ended March 31, 2021.

Selling, General, and Administrative Expenses, and Other - ~~Selling,~~For the three months ended March 31, 2021, selling, general and administrative expenses and other ~~decreased $2.0~~increased $0.7 million ~~for the three months ended March 31, 2020~~ compared to the three months ended March 31, ~~2019. The decrease was primarily related to a decrease in share-based compensation and corporate allocated costs.~~

2020. This

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increase was primarily related to higher personnel costs due to an increase in stock-based compensation expenses resulting from market increases in CVR Energy’s share price and CVR Partners’ unit price coupled with an increase in asset write-offs. This increase was partially offset by a reduction in bad debt reserves and non-personnel expenses for outside services and public relations costs.

Other Income, Net - For the three months ended March 31, 2021, other income, net was $4.6 million compared to less than $0.1 million for the three months ended March 31, 2020 due to sales of natural gas volumes at the East Dubuque Facility in February 2021.

Non-GAAP Measures

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

Effective January 1, 2020, the Partnership no longer presents the non-GAAP performance measure of Adjusted EBITDA, as management no longer relies on this financial measure when evaluating the Partnership’s performance and does not believe it enhances the users understanding of its financial statements in a useful manner.

The following are non-GAAP measures ~~that continue to be presented~~we present for the period ended March 31, ~~2020:~~2021:

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

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

Available Cash for Distribution - EBITDA ~~reduced~~ for ~~cash reserves established~~the quarter excluding non-cash income or expense items (if any), for which adjustment is deemed necessary or appropriate by the board of directors of our general partner ~~for~~(the “Board”) in its sole discretion, less (i) ~~debt service, (ii)~~reserves for maintenance capital expenditures, debt service and ~~to the extent applicable, (iii)~~other contractual obligations, and (ii) reserves for future operating or capital needs (if any), in each case, that the ~~board of directors of our general partner~~Board deems necessary or appropriate ~~if any,~~ in its sole discretion. Available cash for distribution may be increased by the release of previously established cash reserves, if any, and other excess cash, at the discretion of the ~~board of directors of our general partner.~~Board.

We present these measures because we believe they may help investors, analysts, lenders, and ratings agencies analyze our results of operations and liquidity in conjunction with our U.S. GAAP results, including, but not limited to, our operating performance as compared to other publicly traded companies in the fertilizer industry, without regard to historical cost basis or financing methods, and our ability to incur and service debt and fund capital expenditures. Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect net earnings and operating income. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures. Refer to the “Non-GAAP Reconciliations” included herein for reconciliation of these amounts. Due to rounding, numbers presented within this section may not add or equal to numbers or totals presented elsewhere within this document.

Non-GAAP Reconciliations

Reconciliation of Net Loss to EBITDA

Three Months Ended
March 31,
(in thousands) 2020 2019
Net loss $ (20,735) $ (6,079)
Add:
Interest expense, net 15,783 15,650
Income tax expense (benefit) 7 (112)
Depreciation and amortization 15,597 16,584
EBITDA $ 10,652 $ 26,043


	Three Months Ended March 31,
(in thousands)		2021		2020
Net loss		$	(25,384)	$	(20,735)
Add:
Interest expense, net		15,916		15,783
Income tax expense		19		7
Depreciation and amortization		14,123		15,597
EBITDA		$	4,674	$	10,652

March 31, ~~2020~~2021 | 26

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Reconciliation of Net Cash Provided By Operating Activities to EBITDA

Three Months Ended
March 31,
(in thousands) 2020 2019
Net cash provided by operating activities $ 27,707 $ 51,924
Add:
Interest expense, net 15,783 15,650
Income tax expense (benefit) 7 (112)
Change in assets and liabilities (32,060) (39,099)
Other non-cash adjustments (785) (2,320)
EBITDA $ 10,652 $ 26,043


	Three Months Ended March 31,
(in thousands)		2021		2020
Net cash provided by operating activities		$	25,551	$	27,707
Non-cash items:

Other		(4,851)		(785)
Adjustments:
Interest expense, net		15,916		15,783
Income tax expense		19		7
Change in assets and liabilities		(31,961)		(32,060)
EBITDA		$	4,674	$	10,652

Reconciliation of EBITDA to Available Cash for Distribution

Three Months Ended
March 31,
(in thousands) 2020 2019
EBITDA $ 10,652 $ 26,043
Current reserves for amounts related to:
Debt service (14,999) (14,827)
Maintenance capital expenditures (4,139) (3,367)
Other:
Release of previously established cash reserves 2,567 —
Available Cash for distribution (1) (2) $ (5,919) $ 7,849
Common units outstanding 113,283 113,283


	Three Months Ended March 31,
(in thousands)		2021		2020
EBITDA		$	4,674	$	10,652


Current reserves for amounts related to:
Debt service		(14,996)		(14,999)
Maintenance capital expenditures		(2,459)		(4,139)
Common units repurchased		(529)		—




Other (reserves) releases:
Future turnaround		(1,500)		—




Previously established cash reserves		5,331		2,567
Available Cash for distribution (1) (2)		$	(9,479)	$	(5,919)



Common units outstanding		10,681		11,328

(1)Amount represents the cumulative available cash based on year-to-date results. However, available cash for distribution is calculated quarterly, with distributions (if any) being paid in the period following declaration.

(2)The Partnership paid no cash distributions ~~for~~related to the fourth quarter of ~~2019.~~2020, and no distribution was declared for the first quarter of 2021.

Liquidity and Capital Resources

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

The effects of the COVID-19 pandemic ~~have~~ resulted in a ~~significant and swift~~ reduction in U.S. economic activity. These effects ~~have~~ caused significant volatility and disruption of the financial markets, and ~~may ultimately~~we have anobserved adverse ~~impact on~~impacts to our business and financial performance, of which the nature and ~~demand for our products.~~extent of such impacts remains uncertain. In early 2021, as the impacts of the COVID-19 pandemic started to recover, Winter Storm Uri caused unprecedented disruptions to natural gas and electricity supply throughout the Midwest and Gulf Coast regions, leading to lower fertilizer supply due to production outages which increased the price of fertilizer. This period of extreme economic disruption including business closures in the restaurant and food supply industries, idling of ethanol facilities, and limitations on the availability of the workforce, including farmers in the agricultural industry, may continue to have an impact on our business, results of operations, and access to sources of liquidity. ~~In view of the uncertainty of the depth and extent of the contraction in the U.S. economy and potential impact on the~~While we believe demand for our fertilizer products ~~we have taken proactive actions~~is stable, there is still uncertainty on the horizon as COVID-19 vaccines are distributed and countries and states continue to ~~address the impacts we may experience in our results of operations, liquidity, and financial condition, including the following:~~

•The deferment of the Coffeyville Facility turnaround from the fall of 2020 to the summer of 2021, enabled by certain maintenance we proactively performed during the quarter, and the East Dubuque Facility turnaround from 2021 to 2022; and

•A reduction in the amount of expected maintenance capital expenditures for the remainder of 2020 to only include those projects which are critical to continuing safe and reliable operations, or are required to support future activities.

monitor their efforts

March 31, ~~2020~~2021 | 27

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against the virus and weigh further lock-down measures. In executing financial discipline, we have successfully implemented and are maintaining the following measures:

•Deferring the East Dubuque Facility turnaround from 2021 to 2022; and

•Reducing the amount of maintenance capital expenditures to only include those projects which are a priority to support continuing safe and reliable operations, or which we consider are critical to support future activities.

When paired with the actions outlined above and prudently managing our operating costs and capital expenditures in 2021, we believe that our cash from operations and existing cash and cash equivalents, along with borrowings, as necessary, under the ABABL Credit ~~Facility,~~Agreement will be sufficient to satisfy anticipated cash requirements associated with our existing operations for at least the next 12 months. However, our future capital expenditures and other cash requirements could be higher than we currently expect as a result of various factors. Additionally, our ability to generate sufficient cash from our operating activities and secure additional financing depends on our future performance, which is subject to general economic, political, financial, competitive, and other factors, some of which may be beyond our control.

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

There have been no material changes in liquidity from our ~~2019~~2020 Form 10-K. The Partnership and its subsidiaries were in compliance with all covenants under their respective debt instruments as of March 31, ~~2020.~~2021, as applicable.

We do not have any “off-balance sheet arrangements” as such term is defined within the rules and regulations of the SEC.

Cash and Other Liquidity

As of March 31, ~~2020,~~2021, we had cash and cash equivalents of ~~$58.0~~$52.6 million, including ~~$36.6~~$39.0 million ~~from~~of customer advances. Combined with ~~$49.6~~$24.6 million available under our ABABL Credit ~~Facility less $25.0 million in cash included in our borrowing base,~~Agreement, we had total liquidity of ~~$82.6~~$77.2 million. As of December 31, 2020, we had $30.6 million in cash and cash equivalents, including $7.6 million of customer advances.


	March 31, 2021		December 31, 2020
(in thousands)
9.25% Senior Secured Notes, due June 2023 (1)	$	645,000	$	645,000

Unamortized discount and debt issuance costs	(10,054)		(11,058)
Total long-term debt	$	634,946	$	633,942
Current portion of long-term debt (2)	2,240		2,240
Total long-term debt, including current portion	$	637,186	$	636,182

(1)The call price of the 2023 Notes decreases to par on June 15, 2021.

(2)The 6.50% Notes, due April 2021, mature within 12 months, and, therefore, the outstanding balance of $2.2 million has been classified as short-term debt as of March 31, ~~2020.~~

March 31, 2020 December 31, 2019
(in thousands)
9.25% Senior Notes due 2023 $ 645,000 $ 645,000
6.50% Senior Notes due 2021 2,240 2,240
Unamortized discount and debt issuance costs (13,925) (14,834)
Total debt $ 633,315 $ 632,406

~~The Partnership has the 2023 Senior Notes, the 6.50% Senior Notes due~~ 2021 and ~~an AB Credit Facility,~~December 31, 2020. Amounts reported in Other current liabilities. On April 15, 2021, the ~~proceeds of which may be used to fund working capital, capital expenditures,~~2021 Notes matured, and ~~for other general corporate purposes. Refer to Note 5 (“Long-Term Debt”) in Part II, Item 8 of~~ the ~~2019 Form 10-K for further discussion.~~Partnership paid the outstanding balance, plus accrued and unpaid interest.

Capital Spending

We divide capital spending needs into two categories: maintenance and growth. Maintenance capital spending includes non-discretionary maintenance projects and projects required to comply with environmental, health, and safety regulations. Growth capital projects generally involve an expansion of existing capacity and/or a reduction in direct operating expenses. We undertake growth capital spending based on the expected return on incremental capital employed.

March 31, 2021 | 28

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Our total capital expenditures for the three months ended March 31, ~~2020,~~2021, along with our estimated expenditures for ~~2020~~2021 are as follows:


		Three Months Ended March 31,		Estimated full year		Three Months Ended March 31,		Estimated full year
(in thousands)	(in thousands)	2020		2020	(in thousands)	2021		2021
Maintenance capital	Maintenance capital	$	4,139	$14,000 - 16,000	Maintenance capital	$	2,459	$18,000 - 20,000
Growth capital	Growth capital	1,454		5,000 - 7,000	Growth capital	666		4,000 - 6,000
Total capital expenditures	Total capital expenditures	$	5,593	$19,000 - 23,000	Total capital expenditures	$	3,125	$22,000 - 26,000

In light of the changing environment and proactive maintenance performed during several outages at the third-party owned and operated air separation unit at Coffeyville, we are moving our turnaround from the previously planned timeframe of the fall of 2020 to the summer of 2021. We will continue to monitor market conditions and make adjustments, if needed, to our current plans. Our estimated capital expenditures are subject to change due to unanticipated changes in the cost, scope, and completion time for capital projects. For example, we may experience unexpected changes in labor or equipment costs necessary to comply with government regulations or to complete projects that sustain or improve the profitability of the refineries or nitrogen fertilizer ~~plants.~~facilities. We may also accelerate or defer some capital expenditures from time to time. Capital spending for CVR Partners is determined by the ~~board~~Board.

The next planned turnaround is at the Coffeyville Facility which is expected to occur in the fall of ~~directors~~2021, with an estimated cost of ~~the Partnership’s general partner.~~

~~March 31, 2020 |~~ 28

~~Table of Contents~~

$8 to $10 million. We will continue to monitor market conditions and make adjustments, if needed, to our current capital spending or turnaround plans.

Distributions to Unitholders

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

Distributions, if any, including the payment, amount, and timing thereof, are subject to change at the discretion of the ~~board of directors of CVR Partners’ general partner.~~Board. There were no distributions declared or paid by the Partnership during the three months ended March 31, ~~2020~~2021 related to the fourth quarter of ~~2019,~~2020, and no distributions were paid during 2020. No distributions were declared for the first quarter of ~~2020, as the board of directors determined there was no available cash for the quarter.~~

~~The following table presents distributions paid by the Partnership to CVR Partners’ unitholders, including amounts paid to CVR Energy, during 2019.~~

2021.

Capital Structure

On May 6, 2020, the ~~board of directors~~Board, on behalf of the ~~Partnership’s general partner~~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~~On February 22, 2021, the Board authorized an additional $10 million for the Unit Repurchase Program. During the three months ended March 31, 2021, the Partnership repurchased 24,378 common units on the open market, in accordance with a repurchase agreement under Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), at a cost of $0.5 million, inclusive of transaction costs, or an average price of $21.70 per common unit. As of March 31, 2021, the Partnership had $12.4 million in authority remaining 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.Program. This Unit Repurchase Program does not obligate the Partnership to acquire any common units and may be cancelled or terminated by ~~our general partner’s board of directors~~the Board at any time.

~~Recent Developments~~

As disclosed in our Current Report on Form 8-K filed with the SEC on April 24, 2020, on April 20, 2020, the average closing price of our common units had fallen below $1.00 per unit over a 30 consecutive trading-day period, which is the minimum average unit price for continued listing on the NYSE under Section 802.01C of the NYSE Listing Company Manual. Under the NYSE’s rules, the Partnership has six months following receipt of this notification to regain compliance with the minimum unit price requirement. However, due to the unprecedented market-wide declines as a result of the ongoing spread of COVID-19, the Securities and Exchange Commission approved the NYSE’s request to toll the six month compliance period through and including June 30, 2020. As a result, the Partnership has until January 1, 2021 to regain compliance with this continued listing standard. Although the Partnership intends to pursue measures to cure the unit price non-compliance and return to compliance with the NYSE continued listing requirements in Section 802.01C of the NYSE Listed Company Manual, no assurance can be given that the Partnership will be able to regain compliance with the aforementioned listing requirement. Since the filing of our Form 8-K, our unit price has continued to trade under $1.00.

March 31, ~~2020~~2021 | 29

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Cash Flows

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


		Three Months Ended March 31,											Three Months Ended March 31,
(in thousands)	(in thousands)	2020		2019		Change		(in thousands)	2021		2020		Change
Net cash flow provided by (used in):	Net cash flow provided by (used in):							Net cash flow provided by (used in):
Operating activities	Operating activities	$	27,707	$	51,924	$	(24,217)	Operating activities	$	25,551	$	27,707	$	(2,156)
Investing activities	Investing activities	(6,662)		(3,500)		(3,162)		Investing activities	(2,994)		(6,662)		3,668
Financing activities	Financing activities	(25)		(13,594)		13,569		Financing activities	(555)		(25)		(530)
Net increase in cash and cash equivalents	Net increase in cash and cash equivalents	$	21,020	$	34,830	$	(13,810)	Net increase in cash and cash equivalents	$	22,002	$	21,020	$	982

Cash Flows Provided by Operating Activities

The change in net cash flows from operating activities for the three months ended March 31, ~~2020~~2021 as compared to the three months ended March 31, ~~2019~~2020 is primarily due to a ~~decline~~$6.0 million decrease in ~~net income, excluding~~EBITDA, of which $4.1 million resulted from higher non-cash ~~items, of $17.2 million, unfavorable changes~~share-based compensation in ~~non-current assets and liabilities of $1.4 million, and unfavorable changes in working capital of $5.6 million.~~2021 compared to 2020.

Cash Flows Used in Investing Activities

The change in net cash used in investing activities for the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019,~~2020, was ~~primarily~~ due to ~~increased~~decreased capital expenditures during 2021 of $3.7 million resulting from measures taken in 2020 to defer capital projects in light of ~~$3.2 million.~~the economic downturn, including the reduction of maintenance capital expenditures to only include those projects which are a priority to support continuing safe and reliable operations.

Cash Flows Used in Financing Activities

The change in net cash used in financing activities for the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019 was~~2020 is primarily due to the ~~result~~repurchasing of ~~cash distributions paid as~~CVR Partner’s common units for $0.5 million in 2021 with no similar repurchases in 2020.

Critical Accounting Estimates

Our critical accounting estimates are disclosed in the “Critical Accounting Estimates” section of ~~the three months ended March 31, 2019 of $13.6 million.~~our 2020 Form 10-K. No ~~distributions were paid~~modifications have been made during the three months ended March 31, ~~2020.~~2021 to these estimates.

~~Off-Balance Sheet Arrangements~~

~~We do not have any “off-balance sheet arrangements” as such term is defined within the rules and regulations of the SEC.~~

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our market risks as of and for the three months ended March 31, ~~2020~~2021 as compared to the risks discussed in Part II, Item 7A of our ~~2019~~2020 Form 10-K.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of March 31, ~~2020,~~2021, we have evaluated, under the direction of our Executive Chairman, Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, the effectiveness of our disclosure controls and procedures, as defined in Exchange Act Rule 13a-15(e). Based upon and as of the date of that evaluation, our Executive Chairman, Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Partnership’s management, including our Executive Chairman, Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer as appropriate, to allow timely decisions regarding required disclosure.

March 31, ~~2020~~2021 | 30

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Changes in Internal Control Over Financial Reporting

There have been no material changes in the Partnership’s internal controls over financial reporting required by Rule 13a-15 of the Exchange Act that occurred during the fiscal quarter ended March 31, ~~2020~~2021 that materially affected, or is reasonably likely to materially affect, the Partnership’s internal control over financial reporting. Despite many of our employees working in a remote environment due to the COVID-19 pandemic, we have not experienced any material impact to our internal controls over financial reporting. We are continually monitoring and assessing the COVID-19 pandemic to determine any potential impact on the design and operating effectiveness of our internal controls over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

~~The risk factors below should be read in conjunction with~~There have been no material changes from the risk factors previously ~~discussed~~disclosed in ~~Part I, Item 1A~~the “Risk Factors” section of our ~~2019~~2020 Form 10-K, which risk factors could also be affected by the potential effects of the outbreak of COVID-19 discussed below. Additional risks and uncertainties, including risks and uncertainties not presently known to us, or that we currently deem immaterial, could also have an adverse effect on our business, financial condition, and/or results of operations.

~~The COVID-19 pandemic, and actions taken in response thereto, could materially adversely affect our business, operations, financial condition, and results of operations.~~

The COVID-19 pandemic and actions of governments and others in response thereto is negatively impacting worldwide economic and commercial activity and financial markets. The COVID-19 pandemic has also resulted in significant business and operational disruptions, including closures, supply chain disruptions, travel restrictions, stay-at-home orders, and limitations on the availability and effectiveness of the workforce. The full impact of the COVID-19 pandemic is unknown and is rapidly evolving. The extent to which the COVID-19 pandemic negatively impacts our business and operations, including the availability and pricing of feedstocks, will depend on the severity, location, and duration of the effects and spread of COVID-19, the actions undertaken by national, regional, and local governments and health officials to contain such virus or remedy its effects, and if, how quickly and to what extent economic conditions recover and normal business and operating conditions resume.

~~If we fail to regain or maintain compliance with the continued listing standards of the NYSE, which may result in delisting of our common units from the NYSE.~~

As disclosed in our Form 8-K filed with the SEC on April 24, 2020, on April 20, 2020, the average closing price of the Partnership’s common units fell below $1.00 per unit over a consecutive 30 trading-day period, which is the minimum average unit price for continued listing on the NYSE under Section 802.01C of the NYSE Listing Company Manual. While the Partnership is considering various options it may take in an effort to cure this deficiency and regain compliance, no assurance can be given that the Partnership will be able to regain compliance with the aforementioned listing requirement. If the Partnership fails to regain compliance, our common units will be subject to the NYSE’s suspension and delisting procedures. If the Partnership’s common units ultimately were to be delisted for any reason, such delisting could negatively impact the Partnership, by among other things, reducing the liquidity and market price of our common units, reducing the number of investors willing to hold or acquire our common units, and limiting our ability to issue securities or obtain financing in the future.10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~See Note 1 (“Organization and Nature~~Issuer Purchases of ~~Business”) to Part I, Item 1 of this Report, which is incorporated by reference into this Part II, Item 2, for a discussion~~Equity Securities

Repurchases of the Partnership’s ~~Unit Repurchase Program.~~equity securities during the three months ended March 31, 2021 were as follows:



Period	Total Number of Units Purchased	Average Price paid per Unit		Total Number of Units Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Units that May Yet Be Purchased Under the Plans or Programs (1)
January 1 to January 31, 2021	7,878	$	15.01	7,878	$	2,806,180
February 1 to February 28, 2021	5,500	15.00		5,500	12,723,656
March 1 to March 31, 2021	11,000	29.84		11,000	12,395,428









Total	24,378			24,378

(1)On May 6, 2020, the Board, on behalf of the Partnership, authorized the Partnership to repurchase up to $10 million of the Partnership’s common units. On February 22, 2021, the Board authorized the Partnership to repurchase an additional $10 million of the Partnership’s common units.. Repurchases may be made through open market transactions, block trades, privately negotiated transactions, or otherwise in accordance with applicable securities laws. Through March 31, 2021, the Partnership has repurchased $7.6 million of its common units under these authorizations and $12.4 million of authority may yet be used to purchase common units.

Item 5. Other Information

None.

March 31, ~~2020~~2021 | 31

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Item 6. Exhibits


Exhibit						Exhibit Description



10.1**+						CVR Partners, LP 2021 Performance-Based Bonus Plan, approved February 19, 2021 (incorporated by reference to Exhibit 10.27 of the Form 10-K filed on February 23, 2021).
31.1*						Rule 13a-14(a)/15d-14(a) Certification of Executive Chairman.
31.2*						Rule 13a-14(a)/15d-14(a) Certification of President and Chief Executive Officer.
31.3*						Rule 13a-14(a)/15d-14(a) Certification of Executive Vice President and Chief Financial Officer.
31.4*						Rule 13a-14(a)/15d-14(a) Certification of Chief Accounting Officer and Corporate Controller.
32.1†						Section 1350 Certification of Executive Chairman, President and Chief Executive Officer, Executive Vice President and Chief Financial Officer, and the Chief Accounting Officer and Corporate Controller.
101*						The following financial information for CVR Partners, LP’s Quarterly Report on Form 10-Q for the quarter ended March 31, ~~2020,~~2021, formatted inInline XBRL (“Extensible Business Reporting Language”) includes: (1) Condensed Consolidated Balance Sheets (unaudited), (2) Condensed Consolidated Statements of Operations (unaudited), (3) Condensed Consolidated Statements of Partners’ Capital (unaudited), (4) Condensed Consolidated Statements of Cash Flows (unaudited) and (5) the Notes to Condensed Consolidated Financial Statements (unaudited), tagged in detail.
104*						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*Filed herewith.

** Previously filed.

†Furnished herewith.

+ Denotes management contract or compensatory plan or arrangement.

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

March 31, ~~2020~~2021 | 32

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SIGNATURES

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

CVR Partners, LP

By:

CVR GP, LLC, its general partner

May ~~7, 2020~~4, 2021

By:

/s/ Tracy D. Jackson

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

May ~~7, 2020~~4, 2021

By:

/s/ Matthew W. Bley

Chief Accounting Officer and Corporate Controller

(Principal Accounting Officer)

March 31, ~~2020~~2021 | 33


	March 31, 2020		December 31, 2019
Weighted-average remaining lease term (years)
Operating Leases	3.2		3.4
Finance Leases	2.0		2.3
Weighted-average discount rate
Operating Leases	5.1	%	5.1	%
Finance Leases	4.0	%	3.9	%


				Distributions Paid (in thousands)
Related Period	Date Paid	Distribution Per Common Unit		Public Unitholders		CVR Energy		Total
2018 - 4th Quarter	March 11, 2019	$	0.12	$	8,924	$	4,670	$	13,594
2019 - 1st Quarter	May 13, 2019	0.07		5,205		2,724		7,929
2019 - 2nd Quarter	August 12, 2019	0.14		10,411		5,449		15,860
2019 - 3rd Quarter	November 11, 2019	0.07		5,205		2,724		7,930
Total distributions		$	0.40	$	29,745	$	15,567	$	45,313