Table of Contents


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 endedJune 30, 20202021
OR
☐
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
cvi-20210630_g1.gif
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 classTrading Symbol(s)Name of each exchange on which registered
Common units representing limited partner interestsUANThe 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 111,244,97110,681,332 common units representing limited partner interests of CVR Partners, LP (“common units”) outstanding at July 31, 2020.30, 2021.


Table of Contents
 TABLE OF CONTENTS
CVR PARTNERS, LP - Quarterly Report on Form 10-Q
June 30, 20202021


PART I. Financial InformationPART I. Financial InformationPART II. Other InformationPART I. Financial InformationPART II. Other Information
Financial Statements
5
Item 1.
34
Financial Statements
5
33
5
34
5
33
6
35
6
33
Condensed Consolidated Statements of Partners’ Capital - Three and Six Months Ended June 30, 2020 and 2019 (unaudited)
7
35
Condensed Consolidated Statements of Partners’ Capital - Three and Six Months Ended June 30, 2021 and 2020 (unaudited)
7
34
Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2020 and 2019 (unaudited)
8
35
Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2021 and 2020 (unaudited)
8
35
9
37
9
cvi-20210630_g1.gif
19
cvi-20200630_g1.gif
18
cvi-20210630_g1.gif
33
cvi-20210630_g1.gif
Controls and Procedures
33
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.

June 30, 20202021 | 2
Table of Contents
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”and any variants thereof (collectively, “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 selldeliver fertilizer products profitably or at all;all and on commodity supply and/or pricing;
•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, petroleum coke (“pet cokecoke”) we purchase from CVR Energy, Inc. (together with its subsidiaries, but excluding the Partnership and its subsidiaries, “CVR Energy”) and other third-party 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 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;
•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 demand; and/or domestic or international duties, tariffs, or similar costs;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 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;
June 30, 20202021 | 3
Table of Contents
•asset impairments and impacts thereof;
•risks associated with noncompliance with continued listing standards of the New York Stock Exchange (“NYSE”) including potential suspension or delisting and the impacts thereof on our common unit price, valuation, access to capital, liquidity, asset useful life;
•realizable inventory value;
•the number of investors willing to hold or acquire our common units, and units;
•our ability to issue securities or obtain financing;
•changes in tax and other law, regulations and policies;
•ability to qualify for and receive the benefit of 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 Report2020 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.

June 30, 20202021 | 4
Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

CVR PARTNERS, LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)June 30, 2020December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents$32,557  $36,994  
Accounts receivable15,062  34,264  
Inventories46,668  48,296  
Prepaid expenses and other current assets5,307  5,406  
Total current assets99,594  124,960  
Property, plant, and equipment, net924,586  951,959  
Goodwill—  40,969  
Other long-term assets18,896  20,067  
Total assets$1,043,076  $1,137,955  
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Accounts payable$20,968  $21,069  
Accounts payable to affiliates3,044  2,578  
Deferred revenue2,666  27,841  
Other current liabilities18,833  24,043  
Total current liabilities45,511  75,531  
Long-term liabilities:
Long-term debt632,007  632,406  
Other long-term liabilities9,432  10,474  
Total long-term liabilities641,439  642,880  
Commitments and contingencies (See Note 12)
Partners’ capital:
Common unitholders, 112,392,755 and 113,282,973 units issued and outstanding at June 30, 2020 and December 31, 2019, respectively356,125  419,543  
General partner interest1  1  
Total partners’ capital356,126  419,544  
Total liabilities and partners’ capital$1,043,076  $1,137,955  
(in thousands)June 30, 2021December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents$42,819 $30,559 
Accounts receivable34,862 36,896 
Inventories50,129 42,349 
Prepaid expenses and other current assets6,674 8,410 
Total current assets134,484 118,214 
Property, plant, and equipment, net868,410 897,847 
Other long-term assets16,266 16,819 
Total assets$1,019,160 $1,032,880 
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Accounts payable$27,196 $19,544 
Accounts payable to affiliates2,935 5,217 
Deferred revenue15,196 30,631 
Other current liabilities24,390 20,949 
Total current liabilities69,717 76,341 
Long-term liabilities:
Long-term debt, net of current portion640,421 633,942 
Other long-term liabilities13,674 8,356 
Total long-term liabilities654,095 642,298 
Commitments and contingencies (See Note 11)
00
Partners’ capital:
Common unitholders, 10,681,332 and 10,705,710 units issued and outstanding at June 30, 2021 and December 31, 2020, respectively295,347 314,240 
General partner interest1 1 
Total partners’ capital295,348 314,241 
Total liabilities and partners’ capital$1,019,160 $1,032,880 

The accompanying notes are an integral part of these condensed consolidated financial statements.
June 30, 20202021 | 5
Table of Contents
CVR PARTNERS, LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands, except unit data)2020201920202019
Net sales$105,091  $137,660  $180,172  $229,533  
Operating costs and expenses:
Cost of materials and other21,948  26,000  45,939  49,730  
Direct operating expenses (exclusive of depreciation and amortization)40,008  45,630  75,131  80,450  
Depreciation and amortization23,371  25,030  38,968  41,614  
Cost of sales85,327  96,660  160,038  171,794  
Selling, general and administrative expenses4,451  6,465  9,806  13,311  
Loss (gain) on asset disposals94  (9) 81  445  
Goodwill impairment40,969  —  40,969  —  
Operating (loss) income(25,750) 34,544  (30,722) 43,983  
Other (expense) income:
Interest expense, net(15,890) (15,599) (31,673) (31,249) 
Other income, net38  35  65  55  
(Loss) income before income taxes(41,602) 18,980  (62,330) 12,789  
Income tax expense (benefit)10  12  17  (100) 
Net (loss) income$(41,612) $18,968  $(62,347) $12,889  
Basic and diluted (loss) earnings per common unit$(0.37) $0.17  $(0.55) $0.11  
Distributions declared and paid per common unit$—  $0.07  $—  $0.19  
Weighted-average common units outstanding:
Basic and Diluted113,170  113,283  113,226  113,283  
Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands, except per unit data)2021202020212020
Net sales$138,025 $105,091 $198,945 $180,172 
Operating costs and expenses:
Cost of materials and other26,094 21,948 43,860 45,939 
Direct operating expenses (exclusive of depreciation and amortization)53,291 40,008 90,366 75,131 
Depreciation and amortization21,119 23,371 35,242 38,968 
Cost of sales100,504 85,327 169,468 160,038 
Selling, general and administrative expenses6,802 4,451 12,692 9,806 
Loss on asset disposal405 94 477 81 
Goodwill impairment0 40,969 0 40,969 
Operating income (loss)30,314 (25,750)16,308 (30,722)
Other (expense) income:
Interest expense, net(23,334)(15,890)(39,251)(31,673)
Other income, net40 38 4,598 65 
Income (loss) before income tax expense7,020 (41,602)(18,345)(62,330)
Income tax expense0 10 19 17 
Net income (loss)$7,020 $(41,612)$(18,364)$(62,347)
Basic and diluted earnings (loss) per unit$0.66 $(3.68)$(1.72)$(5.51)
Weighted-average common units outstanding:
Basic and Diluted10,681 11,317 10,688 11,323 

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

June 30, 20202021 | 6
Table of Contents
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)IssuedAmount
Balance at December 31, 202010,705,710 $314,240 $1 $314,241 
Unit repurchases(24,378)(529)— (529)
Net loss— (25,384)— (25,384)
Balance at March 31, 202110,681,332 $288,327 $1 $288,328 
Net income— 7,020 — 7,020 
Balance at June 30, 202110,681,332 $295,347 $1 $295,348 
Common Units General
Partner
Interest		Total Partners’ Capital
(in thousands, except unit data)IssuedAmount
Balance at December 31, 2019113,282,973  $419,543  $1  $419,544  
Land exchange with affiliate—  (116) —  (116) 
Net loss—  (20,735) —  (20,735) 
Balance at March 31, 2020113,282,973  $398,692  $1  $398,693  
Repurchase of common units(890,218) (955) —  (955) 
Net loss—  (41,612) —  (41,612) 
Balance at June 30, 2020112,392,755  $356,125  $1  $356,126  

Common Units General
Partner
Interest		Total Partners’ Capital
(in thousands, except unit data)IssuedAmount
Balance at December 31, 2018113,282,973  $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, 2019113,282,973  $480,152  $1  $480,153  
Cash distributions to common unitholders - Affiliates—  (2,724) —  (2,724) 
Cash distributions to common unitholders - Non-affiliates—  (5,205) —  (5,205) 
Net income—  18,968  —  18,968  
Balance at June 30, 2019113,282,973  $491,191  $1  $491,192  
Common Units General
Partner
Interest		Total Partners’ Capital
(in thousands, except unit data)IssuedAmount
Balance at December 31, 201911,328,297 $419,543 $1 $419,544 
Land exchange with affiliate— (116)— (116)
Net loss— (20,735)— (20,735)
Balance at March 31, 202011,328,297 $398,692 $1 $398,693 
Repurchase of common units(89,022)(955)— (955)
Net loss— (41,612)— (41,612)
Balance at June 30, 202011,239,275 $356,125 $1 $356,126 

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


June 30, 20202021 | 7
Table of Contents
CVR PARTNERS, LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Six Months Ended June 30,
(in thousands)20202019
Cash flows from operating activities:
Net (loss) income$(62,347) $12,889  
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization38,968  41,614  
Goodwill impairment40,969  —  
Share-based compensation(169) 2,218  
Other adjustments2,380  2,108  
Change in assets and liabilities:
Current assets and liabilities(13,026) (24,822) 
Non-current assets and liabilities3  674  
Net cash provided by operating activities6,778  34,681  
Cash flows from investing activities:
Capital expenditures(10,204) (5,757) 
Proceeds from sale of assets47  89  
Net cash used in investing activities(10,157) (5,668) 
Cash flows from financing activities:
Repurchase of common units(1,008) —  
Cash distributions to common unitholders - Affiliates—  (7,394) 
Cash distributions to common unitholders - Non-affiliates—  (14,129) 
Other financing activities(50) —  
Net cash used in financing activities(1,058) (21,523) 
Net (decrease) increase in cash and cash equivalents(4,437) 7,490  
Cash and cash equivalents, beginning of period36,994  61,776  
Cash and cash equivalents, end of period$32,557  $69,266  
Six Months Ended June 30,
(in thousands)20212020
Cash flows from operating activities:
Net loss$(18,364)$(62,347)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization35,242 38,968 
Goodwill impairment0 40,969 
Share-based compensation9,971 (169)
Loss on extinguishment of debt7,763 0 
Other adjustments2,808 2,380 
Change in assets and liabilities:
Current assets and liabilities(15,852)(13,026)
Non-current assets and liabilities1,411 3 
Net cash provided by operating activities22,979 6,778 
Cash flows from investing activities:
Capital expenditures(5,386)(10,204)
Proceeds from sale of assets42 47 
Net cash used in investing activities(5,344)(10,157)
Cash flows from financing activities:
Repurchase of common units(529)(1,008)
Proceeds from issuance of senior secured notes550,000 0 
Principal payments on senior secured notes(552,240)0 
Payment of deferred financing costs(2,554)0 
Other financing activities(52)(50)
Net cash used in financing activities(5,375)(1,058)
Net increase (decrease) in cash and cash equivalents12,260 (4,437)
Cash and cash equivalents, beginning of period30,559 36,994 
Cash and cash equivalents, end of period$42,819 $32,557 

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

June 30, 20202021 | 8
Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

(1) Organization and Nature of Business

CVR Partners, LP (“CVR Partners” or the “Partnership”) is a Delaware limited partnership formed by CVR Energy, Inc. (together with its subsidiaries, but excluding the Partnership and its subsidiaries, “CVR Energy”) to own, operate and grow its nitrogen fertilizer business. The Partnership produces nitrogen fertilizer products at 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 salesproducts 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 (the “NYSE”) under the symbol “UAN.” On April 20, 2020, the average closing price of the Partnership’s common units over a 30 consecutive trading-day period fell below $1.00 per common unit, resulting in noncompliance with the continued listing 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. As of June 30, 2020, the average closing price of the Partnership’s common units over a consecutive 30 trading-day period has remained below $1.00 per common unit. The Partnership currently intends to monitor the closing price of its common units and consider available options if its common units do not trade at a level likely to result in the Partnership regaining compliance with Section 802.01C by January 1, 2021. These options could include, but are not limited to, additional repurchases of common units, reverse unit splits, or other actions.Interest Holders

As of June 30, 2020,2021, public security holderscommon unitholders held approximately 65%64% of the Partnership’s outstanding limited partner interests; CVR Services, LLC (“CVR Services”) (formerly Coffeyville Resources, LLC), a wholly-owned subsidiary of CVR Energy, held approximately 35%36% of the Partnership’s outstanding limited partner interests; and CVR GP, LLC (“CVR GP” or the “general partner”), a wholly owned subsidiary of CVR Energy, held 100% of the Partnership’s general partner interest. As of June 30, 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. RepurchasesOn February 22, 2021, the Board authorized an additional $10 million for the Unit Repurchase Program. During the three months ended June 30, 2021, the Partnership did 0t repurchase any common units. During the six months ended June 30, 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. During the three and six months ended June 30, 2020, as adjusted to reflect the impact of the 1-for-10 reverse unit split of the Partnership’s common units that was effective as of November 23, 2020, the Partnership repurchased 89,022 common units at a cost of $1.0 million, inclusive of transaction costs, or an average price of $10.72 per common unit. As of June 30, 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 directorsthe Board at any time. On May 20, 2020, the Partnership entered into a common unit repurchase agreement (the “Repurchase Agreement”), pursuant to Rules 10b5-1 and 10b-18 of the Exchange Act, to facilitate the repurchase of its common units and which the Partnership may terminate at any time by providing written notice. During the three and six months ended June 30, 2020, the Partnership repurchased 890,218 common units on the open market at a cost of $1.0 million, inclusive of transaction costs, or an average price of $1.07 per common unit. At June 30, 2020, the Partnership had $9.0 million in authority remaining under the Unit Repurchase Program.

Management and Operations

The Partnership, including CVR GP, is partymanaged 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 withbetween the Partnership, CVR GP, CVR Energy, and itscertain 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 general partner, are set forth in the Partnership’s limited partnership agreement, as amended, 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, 20192020 (the “2019“2020 Form 10-K”) for further discussion. Common unitholders have limited voting rights
June 30, 2020 | 9
Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
on matters affecting the Partnership and have no right to elect the general partner’s directors or officers, whether on an annual or continuing basis or otherwise.

(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, 20192020 audited consolidated financial statements and notes thereto included in the 20192020 Form 10-K.

June 30, 2021 | 9
Table of Contents

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 and six months ended June 30, 2019. Catalyst inventory with a value of $5.6 million as of December 31, 2019 was reclassified in the first quarter of 2020 to Other long-term assets to conform to current presentation.

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, 20202021 or any other interim or annual period.

(3) Recent Accounting Pronouncements

Recent Accounting Pronouncements - Adoption of Credit LossesIncome Taxes Standard

In June 2016,December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326). The ASU replaces the incurred loss model with a current expected credit loss model for more timely recognition of expected impairment losses for most financial assets and certain other instruments that are not measured at fair value through net income. Effective January 1, 2020, we adopted this ASU with no material impact on the Partnership’s consolidated financial position or results of operations.

Recent Accounting Pronouncements - Adoption of Fair Value Measurement Standard

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820). The ASU eliminates such disclosures as the amount of, and reasons for, transfers between Level 1 and Level 2 of the fair value hierarchy. Certain disclosures are required to be applied on a retrospective basis and others on a prospective basis. Effective January 1, 2020, we adopted this ASU with no material impact on the Partnership’s disclosures.

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

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740). The ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and modifies other areas of the topic to clarify the application of GAAP. Certain amendments within the standard are required to be applied on a retrospective basis and others on a prospective basis. This standard is effective for the Partnership beginningEffective January 1, 2021, we adopted this ASU with early adoption permitted. The Partnership is evaluating the effect of adopting this new accounting guidance on its consolidated financial statements, but does not currently expect adoption will have ano material impact on the Partnership’s consolidated financial position or results of operations.

Recent Accounting Pronouncements - Adoption of Codification Improvements Standard

In October 2020, the FASB issued ASU 2020-10, Codification Improvements. The Partnership does not intendASU amends various sections of the codification in the FASB’s ongoing efforts to early adoptsimplify and improve guidance. Effective January 1, 2021, we adopted this ASU.ASU with no material impact on the Partnership’s 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
June 30, 2020 | 10
Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
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)June 30, 2020December 31, 2019
Finished goods$17,362  $17,612  
Raw materials177  243  
Parts, supplies and other29,129  30,441  
Total inventories$46,668  $48,296  

(5) Property, Plant and Equipment

Property, plant and equipment consisted of the following:
(in thousands)June 30, 2020December 31, 2019
Machinery and equipment$1,386,140  $1,378,651  
Buildings and improvements17,534  17,221  
Automotive equipment16,637  16,691  
Land and improvements14,058  14,075  
Construction in progress7,047  5,198  
Other1,791  1,752  
1,443,207  1,433,588  
Less: Accumulated depreciation518,621  481,629  
Total property, plant and equipment, net$924,586  $951,959  

As of June 30, 2020, the Partnership had not identified the existence of an impairment indicator for our long-lived asset groups as outlined under ASC 360.

(6) Goodwill

One of the Partnership’s reporting units, the Coffeyville Facility, had a goodwill balance of $41.0 million at December 31, 2019. During the second quarter of 2020, following completion of the spring planting season, the market pricing for ammonia and UAN, the Partnership’s 2 primary products, experienced significant pricing declines driven by updated market expectations around supply and demand fundamentals which are currently expected to continue into the second half of 2020. Additionally, significant uncertainty remains as to the nature and extent of impacts to be seen on the overall demand for corn and soybean given reduced ethanol production and broader economic conditions which may negatively impact demand. Therefore, in connection with the preparation of the financial statements for the three months ended June 30, 2020, given the pricing declines experienced in the second quarter of 2020, further muting of our near-term economic recovery assumptions, and market price performance of the Partnership’s common units, the Partnership concluded an impairment indicator was present and a triggering event under ASC 350 had occurred as of June 30, 2020, requiring an interim quantitative impairment assessment to be performed. Significant assumptions inherent in the valuation methodologies for goodwill include, but are not limited to, prospective financial information, growth rates, discount rates, inflationary factors, and cost of capital. Based on the interim quantitative analysis, it was determined that the estimated fair value of the Coffeyville Facility reporting unit did not exceed its carrying value. As a result, the Partnership recorded a non-cash impairment charge of $41.0 million during the three months ended June 30, 2020.

(in thousands)June 30, 2021December 31, 2020
Finished goods$17,220 $9,815 
Raw materials445 152 
Parts, supplies and other32,464 32,382 
Total inventories$50,129 $42,349 
June 30, 20202021 | 1110
Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(7)(5) Property, Plant and Equipment

Property, plant and equipment consisted of the following:
(in thousands)June 30, 2021December 31, 2020
Machinery and equipment$1,392,354 $1,388,735 
Buildings and improvements17,598 17,598 
Automotive equipment16,555 16,608 
Land and improvements14,132 14,132 
Construction in progress12,968 12,098 
Other2,213 1,721 
1,455,820 1,450,892 
Less: Accumulated depreciation and amortization587,410 553,045 
Total property, plant and equipment, net$868,410 $897,847 

As of June 30, 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 June 30, 20202021 and December 31, 20192020

The following tables summarize the ROUright-of-use (“ROU”) asset and lease liability balances for the Partnership’s operating and finance leases at June 30, 20202021 and December 31, 20192020:
(in thousands)June 30, 2020December 31, 2019
Operating Leases:
ROU asset, net
Railcars$8,994  $10,826  
Real estate and other2,769  2,581  
Lease liability
Railcars$9,327  $11,088  
Real estate and other504  288  
Finance Leases:
ROU asset, net
Real estate and other$151  $201  
Lease liability
Real estate and other$155  $205  

Lease Expense Summary for the Three and Six Months Ended June 30, 2020 and 2019

We recognize lease expense on a straight-line basis over the lease term. For the three and six months ended June 30, 2020 and 2019, we recognized lease expense comprised of the following components:
Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands)2020201920202019
Operating lease expense$1,033  $1,023  $2,144  $2,046  
Finance lease expense:
Amortization of ROU asset$23  $167  $50  $272  
Interest expense on lease liability2  9  4  15  

Short-term lease expense, recognized within Direct operating expenses (exclusive of depreciation and amortization), was $0.1 million and $0.2 million for the three and six months ended June 30, 2020, respectively, and $0.1 million and $0.1 million for the three and six months ended June 30, 2019, respectively.
June 30, 2021December 31, 2020
(in thousands)Operating LeasesFinance LeasesOperating LeasesFinance Leases
ROU asset, net
Railcars$6,145 $0 $7,327 $0 
Real estate and other2,944 85 3,040 101 
Lease liability
Railcars$6,145 $0 $7,696 $0 
Real estate and other767 44 867 105 

June 30, 20202021 | 1211
Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Lease Expense Summary for the Three and Six Months Ended June 30, 2021 and 2020

We recognize lease expense on a straight-line basis over the lease term and short-term lease expense within Direct operating expenses (exclusive of depreciation and amortization). For the three and six months ended June 30, 2021 and 2020, we recognized lease expense comprised of the following components:
Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands)2021202020212020
Operating lease expense$1,004 $1,033 $1,920 $2,144 
Finance lease expense:
Amortization of ROU asset$22 $23 $44 $50 
Interest expense on lease liability0 2 1 4 
Short-term lease expense$139 $126 $299 $203 

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 June 30, 20202021 and December 31, 2019:2020:
June 30, 2020December 31, 2019
Weighted-average remaining lease term (years)
Operating Leases3.13.4
Finance Leases1.82.3
Weighted-average discount rate
Operating Leases5.1 %5.1 %
Finance Leases3.9 %3.9 %
June 30, 2021December 31, 2020
Operating LeasesFinance LeasesOperating LeasesFinance Leases
Weighted-average remaining lease term2.5 years0.8 years2.9 years1.3 years
Weighted-average discount rate5.1 %4.0 %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 June 30, 2020:2021:
(in thousands)Operating LeasesFinancing Leases
Remainder of 2020$1,938  $53  
20213,567  107  
20223,131  —  
20231,262  —  
2024579  —  
Thereafter193  —  
Total lease payments10,670  160  
Less: imputed interest(839) (5) 
Total lease liability$9,831  $155  

On July 31, 2020, the Partnership and Messer LLC (“Messer”) entered into an On-Site Product Supply Agreement (the “Agreement”). Under the Agreement, among other obligations, Messer is obligated to supply and make certain capital improvements during the term of the Agreement, and the Partnership is obligated to take as available and pay for, oxygen, nitrogen, and compressed dry air from Messer’s facility. This arrangement for the Partnership’s purchase of oxygen, nitrogen, and dry air from Messer does not meet the definition of a lease under ASC 842, as the Partnership does not expect to receive substantially all of the output of Messer’s on-site production from its air separation unit over the life of the Agreement. The Agreement also obligates Messer to install a new oxygen storage vessel and related equipment to be used solely by the Coffeyville Facility. The arrangement for the use of the oxygen storage vessel and related equipment meets the definition of a lease under ASC 842, as the Partnership will receive all output associated with the vessel. Based on terms outlined in the Agreement, the Partnership expects the lease of the oxygen storage vessel to be classified as a financing lease with an amount between $20 and $25 million being capitalized upon lease commencement when the oxygen storage vessel is placed in service.
(in thousands)Operating LeasesFinance Leases
Remainder of 2021$1,828 $44 
20223,220 0 
20231,359 0 
2024676 0 
2025261 0 
Thereafter0 0 
Total lease payments7,344 44 
Less: imputed interest(432)0 
Total lease liability$6,912 $44 

June 30, 20202021 | 1312
Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(8)(7) Other Current Liabilities

Other current liabilities consisted of the following:
(in thousands)June 30, 2020December 31, 2019
Personnel accruals$4,398  $8,187  
Sales incentives3,737  1,614  
Operating lease liabilities3,292  3,523  
Accrued interest2,517  2,518  
Current portion of long-term debt2,240  —  
Share-based compensation303  5,011  
Prepaid revenue contracts223  277  
Other accrued expenses and liabilities2,123  2,913  
Total other current liabilities$18,833  $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. The Partnership had a receivable of $0.6 million at June 30, 2020 with these entities, which is included within Accounts receivable. See Note 14 (“Related Party Transactions”) for additional discussion.
(in thousands)June 30, 2021December 31, 2020
Personnel accruals$6,169 $7,475 
Share-based compensation5,447 442 
Sales incentives4,296 2,215 
Operating lease liabilities3,343 3,309 
Accrued taxes other than income taxes1,848 1,769 
Accrued interest1,115 2,506 
Prepaid revenue contracts198 197 
Current portion of long-term debt and finance lease obligations53 2,240 
Other accrued expenses and liabilities1,921 796 
Total other current liabilities$24,390 $20,949 

(9)(8) Long-Term Debt

Long-term debt consists of the following:
(in thousands)June 30, 2020December 31, 2019
9.25% Senior Secured Notes, due June 2023 (1)$645,000  $645,000  
6.50% Notes, due April 2021, net of current portion (2)—  2,240  
Unamortized discount and debt issuance costs(12,993) (14,834) 
Total long-term debt, net of current portion$632,007  $632,406  
Current portion of long-term debt (3)2,240  —  
Total long-term debt, including current portion$634,247  $632,406  

(in thousands)June 30, 2021December 31, 2020
9.25% Senior Secured Notes, due June 2023 (1)(5)$95,000 $645,000 
6.125% Senior Secured Notes, due June 2028 (1)550,000 — 
Unamortized discount and debt issuance costs (2)(4,579)(11,058)
Total long-term debt and finance lease obligations, net of current portion640,421 633,942 
Current portion of long-term debt and finance lease obligations (3)(4)53 2,240 
Total long-term debt and finance lease obligations, including current portion$640,474 $636,182 
(1)The estimated fair value of long-term debt outstandingthe 9.25% Senior Secured Notes due June 2023 (the “2023 Notes”) was approximately $632.1$95.2 million and $673.8$645.7 million as of June 30, 20202021 and December 31, 2019,2020, respectively. The estimated fair value of the 6.125% Senior Secured Notes due June 2028 was approximately $563.8 million as of June 30, 2021. These estimates of fair value are a Level 2 measurement as they were determined by quotations obtained from a broker-dealer who makes a market in these and similar securities.
(2)For the three and six months ended June 30, 2021, amortization of the discount on debt and amortization of deferred financing costs reported as Interest expense, net totaled approximately $1.0 million and $2.0 million, respectively, and for the three and six months ended June 30, 2020, Interest expense, net totaled approximately $0.9 million and $1.8 million, respectively.
(3)The $2.2 million outstanding balance of the 6.50% Notes, due April 2021, mature within 12 months, and, therefore, the outstanding balancewas paid in full on April 15, 2021.
(4)Current portion of $2.2finance lease obligations recognized was approximately $0.1 million has been classified as short-term as of June 30, 2020.
(3)Amounts2021. Amount is reported in Other current liabilities.
(5)The call price of the 2023 Notes decreased to par on June 15, 2021. On June 23, 2021, the Partnership redeemed $550 million of the 2023 Notes at par, plus accrued and unpaid interest. The remaining balance of $95 million is outstanding as of June 30, 2021.

Credit FacilityAgreements
(in thousands)Total CapacityAmount Borrowed as of June 30, 2020Outstanding Letters of CreditAvailable Capacity as of June 30, 2020Maturity Date
Asset Based (AB) Credit Facility (4)$45,550  $—  $—  $45,550  September 30, 2021

(in thousands)Total Available Borrowing CapacityAmount Borrowed as of June 30, 2021Outstanding Letters of CreditAvailable Capacity as of June 30, 2021Maturity Date
ABL Credit Agreement (1)(2)$32,044 $0 $0 $32,044 September 30, 2022
(4)(1)At the option of the borrowers,Beginning January 1, 2021, loans under the ABPartnership’s ABL Credit Facility initiallyAgreement (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, subjectif 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 base rate, otherwise.
(2)Amortization expense was $0.1 million and $0.2 million for the three and six months ended June 30, 2021, respectively, and $0.1 million and $0.1 million for the three and six months ended June 30, 2020, respectively.

June 30, 2021 | 13
Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
2028 Notes - On June 23, 2021, CVR Partners and its subsidiary, CVR Nitrogen Finance Corporation (“Finance Co.” and, together with CVR Partners, the “Issuers”), completed a private offering of $550 million aggregate principal amount of 6.125% Senior Secured Notes due 2028 (the “2028 Notes”). Interest on the 2028 Notes is payable semi-annually in arrears on June 15 and December 15 each year, commencing on December 15, 2021. The 2028 Notes mature on June 15, 2028, unless earlier redeemed or repurchased by the Issuers. The 2028 Notes are jointly and severally guaranteed on a senior secured basis by all the existing domestic subsidiaries of CVR Partners, excluding Finance Co.

In relation to the issuance of the 2028 Notes, the Partnership received $546.7 million of net cash proceeds, net of underwriting fees and other third-party fees and expenses associated with the offering. The debt issuance costs of the 2028 Notes totaled approximately $3.3 million and are being amortized over the term of the 2028 Notes as interest expense using the effective-interest amortization method.

We may, at our option, at any time and from time to time prior to June 15, 2024, on any one or more occasions, redeem all or part of the 2028 Notes at a price equal to 100% of the principal amount plus a “make whole” premium, plus accrued and unpaid interest. On or after June 15, 2024, we may, on any one or more occasions, redeem all or part of the 2028 Notes at the redemption prices set forth below, expressed as a percentage of the principal amount of the respective notes, plus accrued and unpaid interest to the applicable redemption date.
12-month period beginning June 15,Percentage
2024103.063%
2025101.531%
2026 and thereafter100.000%

The indenture governing the 2028 Notes contains covenants that are substantially the same as the 2023 Notes. However, the 2028 Notes contain a permitted investment activity carveout that allows for the transfer of certain carbon capture assets to a 0.50% step-down basedjoint venture for the purpose of monetizing potential tax credits.

2023 Notes - On June 23, 2021, the Partnership redeemed $550 million aggregate principal amount of the outstanding 2023 Notes at par and settled accrued interest of approximately $1.1 million through the date of redemption. As a result of this transaction, the Partnership recognized in Interest expense, net a $7.8 million loss on extinguishment of debt in the previous quarter’s excess availability.second quarter of 2021, which includes the write-off of unamortized deferred financing costs and original issue discount of $2.9 million and $4.9 million, respectively.

Covenant Compliance

The Partnership and its subsidiaries were in compliance with all covenants under their respective debt instruments as of June 30, 2020.2021.

(9) Revenue

The following table presents the Partnership’s revenue, disaggregated by major product:
Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands)2021202020212020
Ammonia$32,097 $36,765 $41,630 $50,911 
UAN87,585 55,294 125,647 102,308 
Urea products6,820 3,535 11,578 7,068 
Net sales, exclusive of freight and other126,502 95,594 178,855 160,287 
Freight revenue8,870 6,954 14,985 14,677 
Other revenue2,653 2,543 5,105 5,208 
Net sales$138,025 $105,091 $198,945 $180,172 

June 30, 20202021 | 14
Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(10) Revenue

The following table presents the Partnership’s revenue, disaggregated by major product:
Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands)2020201920202019
Ammonia$36,765  $49,954  $50,911  $63,306  
UAN55,294  73,542  102,308  137,606  
Urea products3,535  5,006  7,068  9,677  
Net sales, exclusive of freight and other95,594  128,502  160,287  210,589  
Freight revenue6,954  7,139  14,677  15,157  
Other revenue2,543  2,019  5,208  3,787  
Net sales$105,091  $137,660  $180,172  $229,533  

The Partnership sells its products, on a wholesale basis, under a contract or by purchase order. The Partnership’s contracts with customers generally contain fixed pricing and most have terms of less than one year. The Partnership recognizes revenue at the point in time at which the customer obtains control of the product, which is generally upon delivery and acceptance by the customer. The customer acceptance point is stated in the contract and may be at one of the Partnership’s manufacturing facilities, at one of the Partnership’s off-site loading facilities or at the customer’s designated facility. Freight revenue recognized by the Partnership represents the pass-through finished goods delivery costs incurred prior to customer acceptance and is reimbursed by customers. An offsetting expense for freight is included in Cost of materials and other. Qualifying taxes collected from customers and remitted to governmental authorities are not included in reported revenues.

Depending on the product sold and the type of contract, payments from customers are generally either due prior to delivery or within 15 to 30 days of product delivery.

The Partnership generally provides no warranty other than the implicit promise that goods delivered are free of liens and encumbrances and meet the agreed upon specifications. Product returns are rare, and as such, the Partnership does not record a specific warranty reserve or consider activities related to such warranty, if any, to be a separate performance obligation.

The Partnership has an immaterial amount of variable consideration for contracts with an original duration of less than a year. A small portion of the Partnership’s revenue includes contracts extending beyond one year, some of which contain variable pricing in which the majority of the variability is attributed to the market-based pricing. The Partnership’s contracts do not contain a significant financing component.

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

Transaction Price Allocated to Remaining Performance Obligations

As of June 30, 2020,2021, the Partnership had approximately $7.5$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 $1.4$3.5 million of these performance obligations as revenue by the end of 2020,2021, an additional $3.5$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
June 30, 2020 | 15
Table of Contents

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 six months ended June 30, 20202021 is presented below:
(in thousands)
Balance at December 31, 20192020$27,84130,631 
Add:
New prepay contracts entered into during the period (1)18,02529,740 
Less:
Revenue recognized that was included in the contract liability balance at the beginning of the period26,949 (29,724)
Revenue recognized related to contracts entered into during the period15,943 (15,311)
Other changes308 (140)
Balance at June 30, 20202021$2,666 15,196 

(1) Includes $16.6$16.2 million where payment associated with prepaid contracts was collected as of June 30, 2020.2021.

(11)(10) Share-Based Compensation

A summary of compensation expense for the three and six months ended June 30, 20202021 and 20192020 is presented below:
Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands)2020201920202019
Phantom Units$59  $755  $(198) $1,545  
Other Awards (1)
248  355  29  673  
Total share-based compensation expense$307  $1,110  $(169) $2,218  

Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands)2021202020212020
Phantom Units$5,388 $59 $8,533 $(198)
Other Awards (1)
991 248 1,438 29 
Total share-based compensation expense$6,379 $307 $9,971 $(169)
(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.

(12)(11) Commitments and Contingencies

There have been no material changes in the Partnership’s commitments and contingencies disclosed in the 20192020 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.

June 30, 2021 | 15
Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The Partnership is continuingcontinues to evaluatemonitor 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 recentongoing 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 June 30, 2020,2021, the Partnership had not experienced a material financial impact from any actual or threatened impairment of or excuse in its or others’ performance under such agreements.

June 30, 2020 | 16
Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(13)(12) Supplemental Cash Flow Information

Cash flows related to income taxes, interest, leases, and capital expenditures included in accounts payable are as follows:
Six Months Ended
June 30,		Six Months Ended
June 30,
(in thousands)(in thousands)20202019(in thousands)20212020
Supplemental disclosures:Supplemental disclosures:Supplemental disclosures:
Cash paid for interestCash paid for interest$30,009  $30,016  Cash paid for interest$32,872 $30,009 
Cash paid for income taxes, net of refundsCash paid for income taxes, net of refunds31 0 
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 leasesOperating cash flows from operating leases2,082  2,046  Operating cash flows from operating leases1,832 2,082 
Operating cash flows from finance leasesOperating cash flows from finance leases4  15  Operating cash flows from finance leases1 4 
Financing cash flows from finance leasesFinancing cash flows from finance leases50  272  Financing cash flows from finance leases52 50 
Non-cash investing activities:Non-cash investing activities:Non-cash investing activities:
Change in capital expenditures included in accounts payableChange in capital expenditures included in accounts payable(2,104) (952) Change in capital expenditures included in accounts payable1,470 (2,104)

(14)(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 CVR Services 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 and six months ended June 30, 20202021 and 20192020 is summarized below.

Related Party Activity
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2020201920202019
Sales to related parties (1)$342  $—  $882  $2  
Purchases from related parties (2)5,326  7,914  11,264  16,900  
Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands)2021202020212020
Sales to related parties (1)$82 $342 $301 $882 
Purchases from related parties (2)9,819 6,302 17,823 13,510 


June 30, 2020December 31, 2019
Prepaid expenses (3)$30  $249  
Due to related parties (4)388  7,826  

June 30, 2021December 31, 2020
Due to related parties (3)1,653 694 
(1)Sales to related parties, included in Net sales, consist primarily of sales of feedstocks and services to CRRMCoffeyville 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 feedstocksMSA and services provided by CRRMCVR Services under the Coffeyville MSA.Corporate Master Service Agreement (the “Corporate MSA”).
(4)(3)Due to related parties, included in Accounts payable to affiliates, Other current liabilities, and Other long-term liabilities, consistconsists primarily of amounts to be received or payable for feedstocks and other supplies and services provided by CRRM and 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 CRRM with an equal number of parcels owned by CRNF, all located in Coffeyville, Kansas (the “Property Exchange”). On February 19, 2020, CRRM and CRNF executed the Property Exchange agreement. This Property Exchange will enable each such subsidiary to create a more usable,
June 30, 20202021 | 1716
Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
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. There were 0 distributions declared or paid by the Partnership during the three and six months ended June 30, 20202021 related to the fourthfirst quarter of 2019 or first2021 and fourth quarter of 2020, and 0 distributions were declared foror paid during 2020.

For the second quarter of 2020.

The following table presents distributions paid2021, the Partnership, upon approval by the PartnershipBoard on August 2, 2021, declared a distribution of $1.72 per common unit, or $18.4 million, which is payable August 23, 2021 to CVR Partners’ unitholders including amounts paid toof record as of August 13, 2021. Of this amount, CVR Energy during 2019.
Distributions Paid (in thousands)
Related PeriodDate PaidDistribution Per
Common Unit		Public UnitholdersCVR EnergyTotal
2018 - 4th QuarterMarch 11, 2019$0.12  $8,924  $4,670  $13,594  
2019 - 1st QuarterMay 13, 20190.07  5,205  2,724  7,929  
2019 - 2nd QuarterAugust 12, 20190.14  10,411  5,449  15,860  
2019 - 3rd QuarterNovember 11, 20190.07  5,205  2,724  7,930  
Total distributions$0.40  $29,745  $15,567  $45,313  

will receive approximately $6.7 million, with the remaining amount payable to public unitholders.

June 30, 20202021 | 1817
Table of Contents
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, 20192020 filed with the Securities and Exchange Commission (“SEC”) on February 20, 202023, 2021 (the “2019“2020 Form 10-K”). Results of operations for the three and six months ended June 30, 20202021 and cash flows for the six months ended June 30, 20202021 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 ourits nitrogen fertilizer business. We produceThe Partnership produces and distributedistributes 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

The Partnership has adopted Mission and Values, which articulate the Partnership’s expectations for how it and its employees do business each and every day.

Mission and Core Values

Our missionMission 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.

June 30, 2021 | 18
Table of Contents
•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 employees can realize their maximum potential. We use defined work practices for consistency, efficiency and to create value across the organization.

Our core Valuesvalues 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.


June 30, 2020 | 19
Table of Contents
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 safetyEH&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 as efficient as possible by maintaining low operating costs and disciplined deployment of capital.

Achievements

During the first halfsix 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:
SafetyReliabilityMarket CaptureFinancial Discipline
Operated all facilities and corporate offices safely and reliably and maintained financial discipline amid COVID-19 pandemic.üüü
Maintained high asset reliability and utilization at both facilities during the second quarter of 2020.üüü
Achieved record shipments of ammonia from the East Dubuque Facility in April 2020.üü
Achieved 8% improvement in total recordable incident rate through the second quarter 2020 compared to 2019.ü
Repurchased $1.0 million of CVR Partners common units during the second quarter 2020.
Achieved record truck shipments and total shipments from the Coffeyville Facility in March 2021üüü
Operated both facilities at high utilization rates, excluding downtime related to Winter Storm Uriüü
Reduced CVR Partners’ debt service costs by over 300 basis points through refinancing a substantial portion of its 2023 Senior Notes resulting in a $17 million savings in cash interestü
Environmental events and project safety management tier 1 incidents declined 67% and 65%, respectively, compared to the first half of 2020ü
Declared cash distribution of $1.72 per common unit for the second quarter of 2021ü

Industry Factors and Market ConditionsIndicators
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 petroleumpet 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, local market
June 30, 2021 | 19
Table of Contents
conditions, operating levels of competing facilities, weather conditions, the availability of imports, impacts of foreign imports and foreign subsidies thereof, and the extent of government intervention in agriculture markets.
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.
June 30, 2020 |
20
Table of Contents
General Business Environment

In MarchThroughout 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 has and continues to negatively impactimpacted the worldwide economy, financial markets, and the agricultural industry. The COVID-19 pandemic also resulted in significant business and operational disruptions, including business closures in the restaurant and food supply industries, amongstamong others, liquidity strains, destruction of non-essential demand, destruction, 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 globalU.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, evidenced by a declineidle. Over recent quarters, government restrictions have eased, vaccines have become available, and demand for transportation fuels has increased. Demand for ethanol for fuels blending has largely recovered to pre-COVID-19 levels, although an increase in outbreaks of any variant of COVID-19 could reverse this recovery. Additionally, given market conditions for transportation fuels over the second quarter 2020 average ethanol productionpast year, the processing of 30% from 2019. As of July 2020, ethanol production has recovered 27% from the second quarter 2020 average. The potential for a decline in production atsweet crude oil, refineries, including fromat the crude oil refinery owned and operated by Coffeyville Resources Refining & Marketing, LLC (“CRRM”), an indirect, wholly-owned subsidiary of CVR Energy could(the “Coffeyville Refinery”), 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 spot prices.the Coffeyville Refinery, which has and may continue to cause increased production costs at 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 or beyond.economy.

The Partnership believes the general business environment in which it operates will continue to remain volatile through the remainder of the year,during 2021 and into 2022, 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 maycould 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.

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 and other long-lived assets, may not be recoverable. As of December 31, 2019, the Partnership had a goodwill balance of $41.0 million associated with our Coffeyville Facility reporting unit for which the estimated fair value had beenresults in excess of carrying value based on our 2018 and 2019 assessments. As a result of lower expectations for market conditions in the fertilizer industry, the market price performance of the Partnership’s common units, a qualitative analysis, and additional risks associated with the business, the Partnership concluded a triggering event had occurred that required an interim quantitative impairment assessment of goodwill for this reporting unit as of June 30, 2020. The results of the impairment test indicated that the carrying amount of the Coffeyville Facility reporting unit exceeded the estimated fair value of the reporting unit, and a full impairment of the asset was required. Significant assumptions inherent in the valuation methodologies for goodwill include, but are not limited to, prospective financial information, growth rates, discount rates, inflationary factors, and cost of capital. To evaluate the sensitivity of the fair value calculations for the reporting unit, the Partnership applied a hypothetical 1% favorable change in the weighted average cost of capital, and separately, increased the revenue projections by 10%, holding gross margins steady. The results of these sensitivity analyses confirmed the need to record a non-cash impairment charge of $41.0 million during the three months ended June 30, 2020.

While our assessment in 2020 has not identified the existence of an impairment indicator for our long-lived asset groups, 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 test is performed, the extent to which the recoverability of our long-lived assets 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.future periods.

Market ConditionsIndicators

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 provide a solid foundation for nitrogen fertilizer producers in the U.S. over the longer term.

June 30, 2020 | 21
Table of Contents
Weather significantly impacted the timing of the planting season for corn and soybeans in 2019. Due to excessive wet conditions, crops were planted later than normal in the spring which led to a late harvest of these crops in the fall of 2019. As a result, the ammonia application season in the fall of 2019 was shortened. This created a surplus of ammonia inventory in the market during the winter of 2019 leading into 2020. UAN continues to be impacted by the imposition of import duties on UAN product by the European Union (the “EU”). This has resulted in shifts in UAN trade flows for product that had previously been shipped to the EU. In 2020, natural gas prices across the world declined significantly as compared to 2019. Natural gas is the primary feedstock for production of nitrogen fertilizers. As a result of these factors, the Partnership has seen a softening of prices related to these products.

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, soybeans are able to obtain their own nitrogen through a process known as “N fixation”.fixation.” As such, upon the harvesting of 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 20202021 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,products, as the market and demand for nitrogen also increases. Correspondingly, as the numberincreases with increased corn acres and decreases with increased soybean acres. 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
June 30, 2021 | 20
Table of Contents
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.

The preliminary 2021 United States Department of Agriculture (“USDA”) reports on corn and soybean acres increases,planted indicated farmers’ intentions to plant 92.7 million acres of corn, representing an increase of 1.9% in corn acres planted as compared to 91.0 million corn acres in 2020. Planted soybean acres are estimated to be 87.6 million acres, representing a 5.4% increase in soybean acres planted as compared to 83.1 million soybean acres in 2020. The combined corn and soybean planted acres of 180.2 million is the markethighest in history, and demand for nitrogen decreases.based on expected yields and crop prices, farm economics are expected to be very attractive in 2021.

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. There has beenwas a decline in the ethanol marketdemand in 2020 due to decreased demand for transportation fuels as a result of the COVID-19 pandemic. While there is uncertainty surrounding if and when gasoline demand will return to normal levels,However, the drop inlower ethanol demand hasdid not significantly impactedalter the spring 2021 or 2020 planting decisions by farmers as evidenced throughin the chartcharts below.
cvi-20200630_g2.jpg
The preliminary 2020 United States Department of Agriculture (“USDA”) reports on corn and soybean acres planted indicated farmers’ intentions to plant 92.0 million acres of corn, representing an increase of 2.6% in corn acres planted as compared to 89.7 million corn acres in 2019. Planted soybean acres are estimated to be 83.8 million acres, representing a 10.2% increase in soybean acres planted as compared to 76.1 million soybean acres in 2019. Despite these anticipated increases in corn acres planted in 2020, if the current gasoline demand and ethanol blending continues 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 in fall 2020 leading to lower planted corn acres in future years. Despite the above potential risks for 2021 or later, the Partnership currently expects solid demand for crop inputs for the remainder of the year.



June 30, 2020 | 22
Table of Contents
The tables below show relevant market indicators by month through June 30, 2020:
cvi-20200630_g3.jpgcvi-20200630_g4.jpgcvi-20210630_g2.jpgcvi-20210630_g3.jpg
(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. Planted acres for 20202021 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.quarter of 2021.
(2)
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 grain prices have increased expected planted corn and soybean acres for the spring of 2021 and led to higher demand for nitrogen fertilizer, as well as other crop inputs.

Fertilizer prices have risen significantly since January 1, 2021 due to strong grain prices, the strong spring 2021 planting season, and lower fertilizer supply due to nitrogen fertilizer production outages during Winter Storm Uri. 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 the EU. The impact on pricing of the changes in trade flows was significant in 2020 but has been insignificant in the first half 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.

On June 30, 2021, CF Industries Nitrogen, L.L.C., Terra Nitrogen, Limited Partnership, and Terra International (Oklahoma) LLC filed petitions with the U.S. Department of Commerce and the U.S. International Trade Commission (the “ITC”) requesting the initiation of antidumping and countervailing duty investigations on imports of urea ammonium nitrate solutions (“UAN”) from Russia and Trinidad and Tobago (“Trinidad”). In August 2021, the U.S. Department of Commerce is
June 30, 2021 | 21
Table of Contents
expected to decide whether to pursue an investigation to determine the extent of dumping and unfair subsidies associated with imports from Russia and Trinidad, and the ITC will initiate a concurrent investigation to determine whether such imports materially injure the U.S. industry. We believe it is too early to determine if the investigations will proceed and, if so, how it might affect CVR Partners and the nitrogen fertilizer industry in the U.S. in general.

The tables below show relevant market indicators by month through June 30, 2021:
cvi-20210630_g4.jpgcvi-20210630_g5.jpg
(1)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 for the three and at each of our facilities.six months ended June 30, 2021 and 2020. 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.
June 30, 20202021 | 2322
Table of Contents
cvi-20200630_g5.jpgcvi-20200630_g6.jpgcvi-20210630_g6.jpgcvi-20210630_g7.jpg
On a consolidated basis utilization increased 2% to 94% for the two yearsthree and six months ended June 30, 2021 and 2020, utilization decreased slightly to 98% and 93%, respectively. The decreases during the three and six months ended June 30, 2021 were primarily due to downtime associated with the Messer air separation plant experienced in both January and June of 2021, compared to the two years ended June 30, 2019. The first quartersame periods of 2019 ammonia storage capacity was constrained at the East Dubuque Facility impacting comparability to 2020.

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 product sales were favorable, driven by a strong Spring 2021 planting season. Ammonia and UAN sales prices were favorable primarily due to higher crop pricing coupled with lower fertilizer supply caused by nitrogen fertilizer production outages during Winter Storm Uri. Product pricing at the gate represents net sales less freight revenue divided by product sales volume in tons and is shown in order to provide a pricing measure that is comparable across the fertilizer industry.

Operating Highlights (three months endedfor the Three Months Ended June 30, 20202021 versus June 30, 2019)2020

cvi-20200630_g7.jpgcvi-20200630_g8.jpg

cvi-20210630_g8.jpgcvi-20210630_g9.jpg
June 30, 20202021 | 2423
Table of Contents
Operating Highlights (six months endedfor the Six Months Ended June 30, 20202021 versus June 30, 2019)2020

cvi-20200630_g9.jpgcvi-20200630_g10.jpgcvi-20210630_g10.jpgcvi-20210630_g11.jpg

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 that was not upgraded into other fertilizer products. The table below presents these metrics for the three and six months ended June 30, 20202021 and 2019:2020:
Three Months Ended
June 30,		 Six Months Ended
June 30,		 Three Months Ended
June 30,		 Six Months Ended
June 30,
(in thousands of tons)(in thousands of tons)2020 2019 2020 2019(in thousands of tons)2021 2020 2021 2020
Ammonia (gross produced)Ammonia (gross produced)216  211  417  390  Ammonia (gross produced)217 216 404 417 
Ammonia (net available for sale)Ammonia (net available for sale)79  71  157  112  Ammonia (net available for sale)70 79 140 157 
UANUAN321  316  638  651  UAN334 321 606 638 

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 and six months ended June 30, 20202021 and 2019:2020:
 Three Months Ended
June 30,		 Six Months Ended
June 30,
2020 2019 2020 2019
Petroleum coke used in production (thousand tons)138  134  263  266  
Petroleum coke (dollars per ton)$31.13  $34.60  $37.59  $36.14  
Natural gas used in production (thousands of MMBtu) (1)2,131  2,070  4,272  3,510  
Natural gas used in production (dollars per MMBtu) (1)$1.94  $2.61  $2.18  $3.11  
Natural gas in cost of materials and other (thousands of MMBtu) (1)3,216  3,185  4,633  4,193  
Natural gas in cost of materials and other (dollars per MMBtu) (1)$2.17  $3.32  $2.36  $3.45  

 Three Months Ended
June 30,		 Six Months Ended
June 30,
2021 2020 2021 2020
Petroleum coke used in production (thousand tons)134 138 262 263 
Petroleum coke (dollars per ton)$36.69 $31.13 $39.73 $37.59 
Natural gas used in production (thousands of MMBtu) (1)2,154 2,131 4,036 4,272 
Natural gas used in production (dollars per MMBtu) (1)$3.04 $1.94 $3.07 $2.18 
Natural gas in cost of materials and other (thousands of MMBtu) (1)2,711 3,216 3,650 4,633 
Natural gas in cost of materials and other (dollars per MMBtu) (1)$3.06 $2.17 $3.03 $2.36 
(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 and Six Months Ended June 30, 20202021 and 20192020

Overview - For the three months ended June 30, 2020,2021, the Partnership’s operating lossincome and net lossincome were $25.8$30.3 million and $41.6$7.0 million, a $60.3respectively, representing improvements of $56.1 million and $60.6$48.6 million, decrease in operating and net income, respectively, compared to the three months ended June 30, 2019.2020. Beyond the goodwill impairment of $41.0 million negatively impacting the 2020 period, these increases were driven by the significantly higher pricing environment for ammonia and UAN products in 2021. For the six months ended June 30, 2020,2021, the Partnership’s operating lossincome and net loss were $30.7$16.3 million and $62.3 million, a $74.7 million and $75.2 million decrease in operating and net income, respectively, compared to$18.4
June 30, 20202021 | 2524
Table of Contents
million, respectively, representing a $47.0 million increase in operating income and a $43.9 million decrease in net loss, respectively, compared to the six months ended June 30, 2019. The declines in income during both periods were driven primarily by a2020. Beyond the goodwill impairment of $41.0 million resulting fromnegatively impacting the expectation of continued weakening of sales pricing due to lower corn prices, a softening natural gas market, and increased imports of UAN, as was seen during the second quarter of 2020 as well as unfavorableperiod, these improvements were driven primarily by higher ammonia and UAN sales prices in 2021 due to higher crop pricing seencoupled with lower fertilizer supply caused by nitrogen fertilizer production outages during the second quarter of 2020.Winter Storm Uri in 2021.
cvi-20200630_g11.jpgcvi-20200630_g12.jpgcvi-20210630_g12.jpgcvi-20210630_g13.jpg
cvi-20200630_g13.jpgcvi-20200630_g14.jpgcvi-20210630_g14.jpgcvi-20210630_g15.jpg
(1)See “Non-GAAP Reconciliations” section below for reconciliations of the non-GAAP measures shown below.above.

Net Sales - For the three months ended June 30, 2020,2021, net sales decreasedincreased by $32.6$32.9 million to $105.1$138.0 million compared to the three months ended June 30, 2019.2020. This decreaseincrease was primarily due to unfavorablefavorable pricing conditions which contributed $31.5$32.5 million in higher revenues, partially offset by decreased sales volumes contributing $4.8 million in lower revenues, partially offset by increased sales volumes contributing $0.1 million, as compared to the three months ended June 30, 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 June 30, 20202021 as compared to the three months ended June 30, 2019:2020:
(in thousands)(in thousands)Price
Variance		Volume
Variance		(in thousands)Price
 Variance		Volume
 Variance
UANUAN$(17,781) $(467) UAN$26,851 $5,440 
AmmoniaAmmonia(13,725) 535  Ammonia5,606 (10,275)

The decreaseincrease in UAN and ammonia sales pricing for the three months ended June 30, 20202021 as compared to the three months ended June 30, 20192020 was primarily attributable to competitive pricing pressures seen throughout the domestic and international markets. For UAN, a softening natural gasfavorable market which is the typical feedstock for nitrogen plants, shifting trade flows in UAN due to the imposition of import duties on UANconditions in the EU,second quarter of 2021 compared to difficult market conditions in the second quarter of 2020. Ammonia and lower cornUAN sales prices due to decreased demand for corn forin the current period were favorable primarily
June 30, 20202021 | 2625
Table of Contents
ethanol blending contributeddue to higher crop pricing coupled with lower UAN prices. Forfertilizer supply initially caused by nitrogen fertilizer production outages during Winter Storm Uri. The decrease in ammonia lower natural gas and corn prices and reduced demandsales volumes for industrial usesthe three months ended June 30, 2021 compared to the three months ended June 30, 2020 was primarily attributable to a higher conversion of ammonia contributed to lowerUAN. The increase in UAN sales volumes for the three months ended June 30, 2021 compared to the three months ended June 30, 2020 was primarily driven by higher fertilizer demand due to increasing crop prices.

For the six months ended June 30, 2020,2021, net sales decreasedincreased by $49.3$18.7 million to $180.2$198.9 million compared to the six months ended June 30, 2019.2020. This decreaseincrease was primarily due to unfavorablefavorable sales pricing conditionscontributing $32.3 million in higher revenue, offset by decreased sales volumes which contributed $54.2$18.3 million in lower revenues, partially offset by increased sales volumes contributing $6.5 million, as compared to the six months ended June 30, 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 six months ended June 30, 20202021 as compared to the six months ended June 30, 2019:2020:
(in thousands)(in thousands)Price
Variance		Volume
Variance		(in thousands)Price
 Variance		Volume
 Variance
UANUAN$(33,805) $(1,489) UAN$25,239 $(1,900)
AmmoniaAmmonia(20,406) 8,012  Ammonia7,072 (16,353)

The decreaseincrease in UAN and ammonia sales pricing for the six months ended June 30, 20202021 as compared to the six months ended June 30, 20192020 was primarily attributable to the competitive pricing pressures discussed above. For UAN, the softening natural gas markets, shifting trade flows, and lower corn prices seen duringfavorable market conditions in the second quarter of 2021 compared to difficult market conditions in the second quarter of 2020. Ammonia and UAN sales prices in the current period were favorable primarily due to higher crop pricing coupled with continuing lower fertilizer supply initially caused by nitrogen fertilizer production outages during Winter Storm Uri. The decrease in ammonia and UAN sales volumes for the six months ended June 30, 2021 compared to the six months ended June 30, 2020 contributedwas primarily attributable to lower prices. For ammonia, lower natural gasproduction due to downtime associated with the Messer air separation plant and corn pricesproduction and reduced demand for industrial uses of ammonia contributed to lower prices.shipping impacts from Winter Storm Uri.
cvi-20200630_g15.jpgcvi-20200630_g16.jpgcvi-20210630_g16.jpgcvi-20210630_g17.jpg
(1)Exclusive of depreciation and amortization expense.

Cost of materialsMaterials and otherOther -For the three months ended June 30, 2020, cost of materials and other was $21.9 million compared to $26.0 million for the three months ended June 30, 2019 as a result of lower natural gas costs and a lesser draw of ammonia at our East Dubuque Facility.

For the six months ended June 30, 2020, cost of materials and other was $45.9 million compared to $49.7 million for the six months ended June 30, 2019 as a result of a decrease in freight and distribution costs at our Coffeyville Facility and lower natural gas prices and a lesser draw of ammonia than the prior period at our East Dubuque Facility, partially offset by increased pet coke costs at our Coffeyville Facility.

Direct operating expenses (exclusive of depreciation and amortization) - For the three and six months ended June 30, 2020, direct operating expenses (exclusive2021, cost of depreciationmaterials and amortization) were $40.0other was $26.1 million and $75.1$43.9 million, respectively, as compared to $45.6$21.9 million and $80.5$45.9 million for the three and six months ended June 30, 2019,2020, respectively. The decreases for both periodsFor the three months ended June 30, 2021, increased costs were primarily due to increased feedstock costs for coke, natural gas, and hydrogen of $3.7 million, offset by lower utilitythird-party ammonia purchases of $0.4 million compared to the three months ended June 30, 2020. For the six months ended June 30, 2021, costs declined as a result of lower purchases of third-party ammonia and a decreasedistribution costs of inventory draws in ammonia primarily at our East Dubuque Facility.$3.3 million and $2.5 million, respectively, as compared to the six months ended June 30, 2020. These decreases were partially offset by increases to refinery coke, natural gas, and hydrogen feedstock purchases of $4.4 million, as compared to the six months ended June 30, 2020.


June 30, 20202021 | 2726
Table of Contents
cvi-20200630_g17.jpgcvi-20200630_g18.jpg
DepreciationDirect Operating Expenses (exclusive of depreciation and Amortization Expense amortization) --Direct operating expenses (exclusive of depreciation and amortization) for the three and six months ended June 30, 2021were $53.3 million and $90.4 million, respectively, as compared to $40.0 million and $75.1 million for the three and six months ended June 30, 2020, respectively. For the three and six months ended June 30, 2020, depreciation2021, the increases were primarily due to higher personnel costs for labor and amortization expense decreasedstock based compensation expenses as a result of higher market prices for CVR Partners’ units of $5.9 million and $9.8 million, respectively, higher utilities costs and electrical provider costs at the Coffeyville Facility related to effects from Winter Storm Uri of $6.6 million and $7.8 million, respectively, and higher natural gas prices and increased electrical pricing and usage of $1.6 million and $2.6 million, compared torespectively. These costs were partially offset by lower turnaround expenses and lower chemicals, catalysts, and other operating costs in the current period.
cvi-20210630_g18.jpgcvi-20210630_g19.jpg
Depreciation and Amortization Expense - Depreciation and amortization expense for the three and six months ended June 30, 2019,2021 were $21.1 million and $35.2 million, respectively, as acompared to $23.4 million and $39.0 million for the three and six months ended June 30, 2020, respectively. The decreases were primarily the result of higher depreciation oninventory changes and certain assets in January 2019 through September 2019 that are no longer being utilized following the 2019 turnaround at the East Dubuque Facility.fully depreciated or retired.

Selling, General, and Administrative Expenses, and Other - ForSelling, general and administrative expenses and other for the three and six months ended June 30, 2020, selling, general and administrative expenses and other decreased $2.02021 were $7.2 million and $3.9$13.2 million, respectively, compared to $4.5 million and $9.9 million, respectively, for the three and six months ended June 30, 2019. These decreases were2020. The increase was primarily related to a decrease inhigher personnel costs in 2021 due to an increase in stock-based compensation expenses resulting from market increases in CVR Partners’ unit price.

Other Income, Net - Other income, net for the three and corporate allocated costs.six months ended June 30, 2021 was nominal and $4.6 million, respectively, compared to less than $0.1 million for both the three and six months ended June 30, 2020. The increase was 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,Beginning with the Partnership no longer presents the non-GAAP performance measuresecond quarter of 2021, management began reporting Adjusted EBITDA, as management no longer relies ondefined below. We believe the presentation of this financialnon-GAAP measure when evaluatingis meaningful to compare our operating results between periods and peer companies. All prior periods presented have been conformed to the Partnership’s performance and does not believe it enhances the users understanding of its financial statements in a useful manner.

definition below. The following are non-GAAP measures that continue to be presentedwe present for the period ended June 30, 2020:2021:

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

June 30, 2021 | 27
Table of Contents
Adjusted EBITDA - EBITDA adjusted for certain significant non-cash items and items that management believes are not attributable to or indicative of our on-going operations or that may obscure our underlying results and trends.

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 for the quarter excluding non-cash income or expense items (if any), for which adjustment is deemed necessary or appropriate by the board of directors (the “Board”) of our general partner (the “Board”) in its sole discretion, less (i) reserves for maintenance capital expenditures, debt service and other contractual obligations, and (ii) reserves for future operating or capital needs (if any), in each case, that the Board deems necessary or appropriate 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.

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
June 30, 2020 | 28
Table of Contents
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.

Factors Affecting Comparability of Our Financial Results

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

Goodwill Impairment

As of December 31, 2019, the Partnership had a goodwill balance of $41.0 million associated with our Coffeyville Facility reporting unit for which the estimated fair value had been in excess of carrying value based on our 2018 and 2019 assessments. As a result of lower expectations for market conditions in the fertilizer industry during 2020, the market performance of the Partnership’s common units, a qualitative analysis, and additional risks associated with the business, the Partnership concluded a triggering event had occurred that requiredperformed an interim quantitative impairment assessment of goodwill for thisthe Coffeyville Facility reporting unit as of June 30, 2020. Significant assumptions inherent in the valuation methodologies for goodwill include, but are not limited to, prospective financial information, growth rates, discount rates, inflationary factors, and cost of capital. The results of the impairment test indicated that the carrying amount of the Coffeyville Facilitythis reporting unit exceeded the estimated fair value, of the reporting unit, and a full, non-cash impairment charge of the asset$41 million was required. No such charge was recognized during 2019.Refer to Part II, Item 8 of our 2020 Form 10-K for further discussion.

Non-GAAP Reconciliations

Reconciliation of Net Income (Loss) Income to EBITDA

Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands)2020201920202019
Net (loss) income$(41,612) $18,968  $(62,347) $12,889  
Add:
Interest expense, net15,890  15,599  31,673  31,249  
Income tax expense (benefit)10  12  17  (100) 
Depreciation and amortization23,371  25,030  38,968  41,614  
EBITDA$(2,341) $59,609  $8,311  $85,652  

Reconciliation of Net Cash Provided By Operating Activities to and Adjusted EBITDA

Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands)2020201920202019
Net cash provided by operating activities$(20,929) $(17,243) $6,778  $34,681  
Non-cash items:
Goodwill impairment(40,969) —  (40,969) —  
Other(1,426) (2,005) (2,211) (4,326) 
Add:
Interest expense, net15,890  15,599  31,673  31,249  
Income tax expense (benefit)10  12  17  (100) 
Change in assets and liabilities45,083  63,246  13,023  24,148  
EBITDA$(2,341) $59,609  $8,311  $85,652  
Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands)2021202020212020
Net income (loss)$7,020 $(41,612)$(18,364)$(62,347)
Interest expense, net23,334 15,890 39,251 31,673 
Income tax expense— 10 19 17 
Depreciation and amortization21,119 23,371 35,242 38,968 
EBITDA51,473 (2,341)56,148 8,311 
Adjustments:
Goodwill impairment— 40,969 — 40,969 
Adjusted EBITDA$51,473 $38,628 $56,148 $49,280 

June 30, 20202021 | 2928
Table of Contents



Reconciliation of Net Cash Provided By Operating Activities to EBITDA and Adjusted EBITDA
Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands)2021202020212020
Net cash provided by operating activities$(2,572)$(20,929)$22,979 $6,778 
Non-cash items:
Loss on extinguishment of debt(7,763)— (7,763)— 
Goodwill impairment— (40,969)— (40,969)
Other(7,928)(1,426)(12,779)(2,211)
Adjustments:
Interest expense, net23,334 15,890 39,251 31,673 
Income tax expense— 10 19 17 
Change in assets and liabilities46,402 45,083 14,441 13,023 
EBITDA51,473 (2,341)56,148 8,311 
Goodwill impairment— 40,969 — 40,969 
Adjusted EBITDA$51,473 $38,628 $56,148 $49,280 

Reconciliation of EBITDA to Available Cash for Distribution

Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands)2020201920202019
EBITDA$(2,341) $59,609  $8,311  $85,652  
Non-cash items:
Goodwill impairment40,969  —  40,969  —  
Current reserves for amounts related to:
Debt service(14,999) (14,865) (29,998) (29,692) 
Maintenance capital expenditures(2,220) (1,447) (6,358) (4,814) 
Common units repurchased(1,008) —  (1,008) —  
Other (reserves) releases:
Reserve for future turnaround(1,500) (7,000) (1,500) (7,000) 
Reserve for repayment of current portion of long-term debt(2,240) —  (2,240) —  
Reserve for recapture of prior negative available cash(5,917) —  (5,917) —  
Cash reserves for future operating needs(10,744) (5,000) (10,744) (5,000) 
Reserve for maintenance capital expenditures—  (16,000) —  (16,000) 
Release of previously established cash reserves—  —  2,567  —  
Available Cash for distribution (1) (2)$—  $15,297  $(5,918) $23,146  
Common units outstanding112,393  113,283  112,393  113,283  

Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands)2021202020212020
EBITDA$51,473 $(2,341)$56,148 $8,311 
Non-cash items:
Goodwill impairment— 40,969 — 40,969 
Current (reserves) adjustments for amounts related to:
Debt service(14,725)(14,999)(29,721)(29,998)
Financing fees(3,244)— (3,244)— 
Maintenance capital expenditures(2,855)(2,220)(4,939)(6,358)
Utility pass-through4,145 — 4,145 — 
Common units repurchased— (1,008)(529)(1,008)
Other (reserves) releases:
Reserve for recapture of prior negative available cash(14,980)(5,917)(14,980)(5,917)
Future turnaround(1,403)(1,500)(2,880)(1,500)
Previously established cash reserves— — 5,308 2,567 
Reserve for repayment of current portion of long-term debt— (2,240)— (2,240)
Cash reserves for future operating needs— (10,744)— (10,744)
Available Cash for distribution (1) (2)$18,411 $— $9,308 $(5,918)
Common units outstanding10,681 11,239 10,681 11,239 
(1)Amount represents the cumulative available cash based on quarter-to-date and 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 the fourth quarter of 2019 andrelated to the first quarter of 2020.2021, and declared a cash distribution of $1.72 per common unit related to the second quarter of 2021.
June 30, 2021 | 29
Table of Contents



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 we have observed adverse impacts to our business and financial performance, of which the nature and 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 theWhile we believe demand for our fertilizer products is stable, there is still uncertainty on the horizon as COVID-19 vaccines are distributed and countries and states continue to monitor their efforts against the virus, and variants thereof, and weigh further lock-down measures. In executing financial discipline, we have taken proactive actions to addresssuccessfully implemented and are maintaining the impacts we may experience in our results of operations, liquidity, and financial condition, including the following:following measures:

•The defermentTaking advantage of the Coffeyville Facility turnaround from the fall of 2020downtime to the summer of 2021,perform maintenance activities which enabled by certain maintenance we proactively performed during the quarter, andus to defer the East Dubuque Facility turnaround from 2021 to 2022; and
•A reduction inReducing the amount of expected maintenance capital expenditures for the remainder of 2020 to only include those projects which are criticala priority to support continuing safe and reliable operations, or which we consider are requiredcritical 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 AB Credit Facility, 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
June 30, 2020 | 30
Table of Contents



and other cash requirements could be higher than we currently expect as a result of various factors.factors including, but not limited to, rising material and labor costs. 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 changesOn June 23, 2021, the Partnership completed a private offering of $550 million aggregate principal amount of 6.125% Senior Unsecured Notes due 2028 (the “2028 Notes”), which mature on June 15, 2028. The issuance of the 2028 Notes, along with the associated partial redemption of the Partnership’s 9.25% Senior Notes due 2023 (the “2023 Notes”) of $550 million, collectively represent a significant and favorable change in the Partnership’s cash flow and liquidity fromposition, with an annual savings of approximately $17 million in future interest expense, as compared to our 20192020 Form 10-K. The Partnership and its subsidiaries were in compliance with all covenants under their respective debt instruments as of June 30, 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 June 30, 2020,2021, we had cash and cash equivalents of $32.6$42.8 million, including $1.3$1.8 million fromof customer advances. Combined with $45.6$32.0 million available under our ABABL Credit Facility less $25.0 million in cash included in our borrowing base,Agreement, we had total liquidity of $53.1$74.8 million. As of December 31, 2020, we had $30.6 million asin cash and cash equivalents, including $7.6 million of customer advances.
June 30, 2020.2021 | 30
June 30, 2020December 31, 2019
(in thousands)
9.25% Senior Notes due June 2023$645,000  $645,000  
6.50% Senior Notes due April 2021, net of current portion (1)—  2,240  
Unamortized discount and debt issuance costs(12,993) (14,834) 
Total long-term debt$632,007  $632,406  
Current portion of long-term debt (2)2,240  —  
Total long-term debt, including current portion$634,247  $632,406  
Table of Contents



June 30, 2021December 31, 2020
(in thousands)
9.25% Senior Secured Notes, due June 2023 (1)$95,000 $645,000 
6.125% Senior Secured Notes, due June 2028 (1)550,000 — 
Unamortized discount and debt issuance costs(4,579)(11,058)
Total long-term debt$640,421 $633,942 
Current portion of long-term debt (2)— 2,240 
Total long-term debt, including current portion$640,421 $636,182 
(1)The call price of the 2023 Notes decreased to par on June 15, 2021. On June 23, 2021, the Partnership redeemed 6.50%$550 million of the 2023 Notes at par, plus accrued and unpaid interest. The remaining balance of $95 million is outstanding as of June 30, 2021.
(2)The $2.2 million outstanding balance of the 6.50% Notes, due April 2021, mature within 12 months, and, therefore, the outstanding balance of $2 million has been classified as short-term as of June 30, 2020.
(2)Amounts reportedwas paid in Other current liabilities.full on April 15, 2021.

On June 23, 2021, the Partnership completed the private offering the 2028 Notes. The net proceeds from the 2028 Notes, plus cash on hand, were used to redeem a portion of the 2023 Notes. The Partnership has the remaining portion of the 2023 Senior Notes, the 6.50% Senior2028 Notes, due 2021, and an AB Credit Facility, the proceeds of which may be used to fund working capital, capital expenditures, and for other general corporate purposes. Refer to Note 58 (“Long-Term Debt”) in Part II, Item 8for further discussion of the 2019 Form 10-K for further discussion.issuance of the 2028 Notes and the partial redemption of the 2023 Notes.

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.

Our total capital expenditures for the six months ended June 30, 2020,2021, along with our estimated expenditures for 20202021 are as follows:
Six Months Ended June 30,Estimated full yearSix Months Ended June 30,Estimated full year
(in thousands)(in thousands)20202020(in thousands)20212021
Maintenance capitalMaintenance capital$6,358  $14,000 - 16,000Maintenance capital$4,939 $20,000 - 22,000
Growth capitalGrowth capital1,742  5,000 - 7,000Growth capital1,917 7,000 - 9,000
Total capital expendituresTotal capital expenditures$8,100  $19,000 - 23,000Total capital expenditures$6,856 $27,000 - 31,000

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 during the first quarter of 2020, we moved 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
June 30, 2020 | 31
Table of Contents



labor or equipment costs necessary to comply with government regulations or to complete projects that sustain or improve the profitability of the nitrogen fertilizer facilities. We may also accelerate or defer some capital expenditures from time to time. Capital spending for CVR Partners is determined by the Board.
The next planned turnaround is at the Coffeyville Facility which is expected to occur in the fall of 2021, with an estimated cost of $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 is to distribute all Available Cash the Partnership generated on a quarterly basis. Available Cash for each quarter will be determined by the Board following the end of such quarter. Available Cash for each quarter is calculated as EBITDA reduced for cash neededthe 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, 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 deems necessary or appropriate if any, in its sole discretion. Available Cashcash 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.
June 30, 2021 | 31
Table of Contents




Distributions, if any, including the payment, amount, and timing thereof, are subject to change at the discretion of the Board. There have beenwere no distributions declared or paid by the Partnership relatingduring the six months ended June 30, 2021 related to the fourth quarter of 2019 or the first quarter of 2021 and fourth quarter of 2020, and there have also been no distributions were declared foror paid during 2020.

For the second quarter of 2020, as2021, the Partnership, upon approval by the Board determined there was no available cash for each such quarter.

The following table presents distributions paid by the Partnershipon August 2, 2021, declared a distribution of $1.72 per common unit, or $18.4 million, which is payable August 23, 2021 to CVR Partners’ common unitholders including amounts paid toof record as of August 13, 2021. Of this amount, CVR Energy during 2019.
Distributions Paid (in thousands)
Related PeriodDate PaidDistribution Per
Common Unit		Public UnitholdersCVR EnergyTotal
2018 - 4th QuarterMarch 11, 2019$0.12  $8,924  $4,670  $13,594  
2019 - 1st QuarterMay 13, 20190.07  5,205  2,724  7,929  
2019 - 2nd QuarterAugust 12, 20190.14  10,411  5,449  15,860  
2019 - 3rd QuarterNovember 11, 20190.07  5,205  2,724  7,930  
Total distributions$0.40  $29,745  $15,567  $45,313  
will receive approximately $6.7 million, with the remaining amount payable to public unitholders.
Capital Structure

On May 6, 2020, the Board,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. RepurchasesOn February 22, 2021, the Board authorized an additional $10 million for the Unit Repurchase Program. During the three months ended June 30, 2021, the Partnership did not repurchase any common units. During the six months ended June 30, 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. During the three and six months ended June 30, 2020, as adjusted to reflect the impact of the 1-for-10 reverse unit split of the Partnership’s common units that was effective as of November 23, 2020, the Partnership repurchased 89,022 common units at a cost of $1.0 million, inclusive of transaction costs, or an average price of $10.72 per common unit. As of June 30, 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 directorsthe Board at any time. On May 20, 2020, the Partnership entered into a common unit repurchase agreement, pursuant to Rules 10b5-1 and 10b-18 of the Exchange Act, to facilitate the repurchase of its common units and which the Partnership may terminate at any time by providing written notice. During the three and six months ended June 30, 2020, the Partnership repurchased 890,218 common units on the open market at a cost of $1.0 million, inclusive of transaction costs, or an average price of $1.07 per common unit. At June 30, 2020, the Partnership had $9.0 million in authority remaining under the Unit Repurchase Program.

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 New York Stock Exchange (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 SEC 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. As of June 30, 2020, the average closing price of the Partnership’s common units over a consecutive 30 trading-day period has remained below $1.00 per common unit. Although the Partnership intends to
June 30, 2020 | 32
Table of Contents



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.

Cash Flows

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


Six Months Ended June 30,

Six Months Ended June 30,
(in thousands)(in thousands)20202019Change(in thousands)20212020Change
Net cash flow provided by (used in):Net cash flow provided by (used in):Net cash flow provided by (used in):
Operating activitiesOperating activities$6,778  $34,681  $(27,903) Operating activities$22,979 $6,778 $16,201 
Investing activitiesInvesting activities(10,157) (5,668) (4,489) Investing activities(5,344)(10,157)4,813 
Financing activitiesFinancing activities(1,058) (21,523) 20,465  Financing activities(5,375)(1,058)(4,317)
Net increase (decrease) in cash and cash equivalentsNet increase (decrease) in cash and cash equivalents$(4,437) $7,490  $(11,927) Net increase (decrease) in cash and cash equivalents$12,260 $(4,437)$16,697 

Cash Flows Provided by Operating Activities

The change in net cash flows from operating activities for the six months ended June 30, 20202021 as compared to the six months ended June 30, 20192020 is primarily due to a decline$47.8 million increase in net income, excluding non-cash items,EBITDA and a $7.8 million loss on extinguishment of $39.0 million, and unfavorable changesdebt associated with the partial redemption of the 2023 Notes in non-current assets and liabilities of $0.7 million,June 2021. This activity is partially offset by favorable changesa non-cash impairment of goodwill of $41.0 million recognized in working capital of $11.8 million.2020.

Cash Flows Used in Investing Activities

The change in net cash used in investing activities for the six months ended June 30, 20202021 compared to the six months ended June 30, 2019,2020, was primarily due to increaseddecreased capital expenditures during 2021 of $4.8 million resulting from measures taken in 2020 to defer capital projects in light of $4.4 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 six months ended June 30, 20202021 compared to the six months ended June 30, 20192020 was primarily due to the resultpartial redemption of cash distributions paidthe 2023 Notes of $21.5$550.0 million, the redemption of the
June 30, 2021 | 32
Table of Contents



remaining 2021 Notes of $2.2 million, and the payment of $2.6 million in deferred financing costs during the second quarter of 2021 related to the offering of the 2028 Notes. These decreases were partially offset by the Partnership’s June 2021 offering of $550.0 million of the 2028 Notes, coupled with a reduction of $0.5 million in repurchases of the Partnership’s common units in 2021 compared to 2020.

Critical Accounting Estimates

Our critical accounting estimates are disclosed in the “Critical Accounting Estimates” section of our 2020 Form 10-K. No modifications have been made during the three and six months ended June 30, 2019, which were not paid during the six months ended June 30, 2020, partially offset by repurchasing common units for $1.0 million during 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 and six months ended June 30, 20202021 as compared to the risks discussed in Part II, Item 7A of our 20192020 Form 10-K.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of June 30, 2020,2021, we have evaluated, under the direction of our Executive Chairman, Chief Executive Officer Chief Financial Officer and Chief AccountingFinancial 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 AccountingFinancial 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
June 30, 2020 | 33
Table of Contents



Chairman, Chief Executive Officer Chief Financial Officer, and Chief AccountingFinancial Officer as appropriate, to allow timely decisions regarding required disclosure.

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 June 30, 20202021 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 1211 (“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 withThere have been no material changes from the risk factors previously discusseddisclosed in Part I, Item 1Athe “Risk Factors” section of our 20192020 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, liquidity, 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. Further, if general economic conditions continue to remain uncertain for an extended period of time, our liquidity and ability to repay our outstanding debt may be harmed. 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.

June 30, 2020 | 34
Table of Contents



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

Issuer Purchases of Equity Securities

Repurchases of the Partnership’s equity securities during the three months ended June 30, 2020 were as follows:
PeriodTotal Number of Units PurchasedAverage Price paid per UnitTotal Number of Units Purchased as Part of Publicly Announced Plans or ProgramsApproximate Dollar Value of Units that May Yet Be Purchased Under the Plans or Programs (1)
May 1 to May 31, 2020—  $—  —  $10,000,000  
June 1 to June 30, 2020890,218  1.07  890,218  9,045,479  
Total890,218  890,218  

(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. Repurchases may be made through open market transactions, block trades, privately negotiated transactions, or otherwise in accordance with applicable securities laws. Through June 30, 2020, the Partnership has repurchased $1.0 million of its common units under this authorization and $9.0 million of authority may yet be used to purchase common units.10-K.

Item 5. Other Information

On July 31, 2020, Coffeyville Resources Nitrogen Fertilizers, LLC (“CRNF”) and Messer LLC (“Messer”) entered into an On-Site Product Supply Agreement (the “Agreement”) which replaced the Amended and Restated On-Site Product Supply Agreement between CRNF and The BOC Group, Inc. (as predecessor in interest to Messer) on substantially similar terms. The Agreement term is fifteen years, and renews for successive 12 month terms unless terminated by either party upon 12 months written notice given on the last day of the initial term or any renewal term, or unless earlier terminated in the event of default. Under the Agreement, among other obligations, Messer is obligated to supply, and CRNF is obligated to take as available and pay for, oxygen, nitrogen, and compressed dry air, subject to certain technical specifications and other customary requirements contained therein. The Agreement also obligates Messer to install an oxygen storage vessel and other equipment and make additional capital investments in Messer’s facility intended to improve the reliability of such facility. This description of the Agreement is qualified in its entirety by reference to the copy thereof filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q, which is incorporated herein by reference.None.

June 30, 2021 | 33
Table of Contents



Item 6. Exhibits
ExhibitExhibit Description
4.1**
4.2**
10.1*+*
10.2**
31.1*
31.2*
31.3*
31.4*
32.1†
101*The following financial information for CVR Partners, LP’s Quarterly Report on Form 10-Q for the quarter ended June 30, 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.
+ Certain portions of this Exhibit have been redacted pursuant to Item 601(b)(10) of Regulation S-K. The Partnership agrees to furnish an unredacted copy of this Exhibit to the SEC on a confidential basis upon request.**    Previously filed.
†Furnished herewith.

June 30, 2020 | 35
Table of Contents



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.
June 30, 20202021 | 3634
Table of Contents



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
August 4, 20203, 2021By:/s/ Tracy D. Jackson
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
August 4, 2020By:/s/ Matthew W. Bley
Chief Accounting Officer and Corporate Controller
(Principal Accounting Officer)

June 30, 20202021 | 3735