UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


(Mark One)
☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	March 31, ~~2021~~2022
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

56-2677689

(State or other jurisdiction of
incorporation or organization)

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

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

(Address of principal executive offices) (Zip Code)

(281) 207-3200

(Registrant’s telephone number, including area code)

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


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

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

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

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

Large accelerated filer

☐

Accelerated filer

☑

Non-Accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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

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

There were ~~10,681,332~~10,569,637 common units representing limited partner interests of CVR Partners, LP (“common units”) outstanding at April ~~30, 2021.~~29, 2022.

Table of Contents

TABLE OF CONTENTS

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

March 31, ~~2021~~2022

PART I. Financial Information

PART II. Other Information

PART I. Financial Information

PART II. Other Information

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

Item 1A.

Risk Factors

Condensed Consolidated Balance Sheets - March 31, 2022 and December 31, 2021 (unaudited)

Item 1A.

Risk Factors

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

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Condensed Consolidated Statements of Operations - Three Months Ended March 31, 2022 and 2021 (unaudited)

Item 5.

Other Information

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

Item 5.

Other Information

Condensed Consolidated Statements of Partners’ Capital - Three Months Ended March 31, 2022 and 2021 (unaudited)

Item 6.

Exhibits

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

Item 6.

Exhibits

Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2022 and 2021 (unaudited)

Signatures

Notes to the Condensed Consolidated Financial Statements (unaudited)

Signatures

Notes to the Condensed Consolidated Financial Statements (unaudited)

Item 2.

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

Item 2.

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

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

Item 4.

Controls and Procedures

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

March 31, ~~2021~~2022 | 2

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Important Information Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements 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;~~units, including reserves and future uses of cash;

•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 or inflation, including fertilizer, natural gas, and other commodity prices and the impact of such changes on our operating results and financial position;

•the cyclical and seasonal nature of our business;

•the impact of weather on our business, including our ability to produce, market, sell, transport or deliver 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, pet coke we purchase from CVR Energy,, Inc. (together with its subsidiaries, but excluding the Partnership and its subsidiaries, “CVR Energy”) and other third-party suppliers;

•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;~~materials and the effects of inflation thereupon;

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

•product pricing, including contracted sales and our ability to realize market prices, in full or at all;

•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~~business and foreign wheat and coarse grain production, including ~~potential~~ impacts thereto as a result of farm planting acreage, domestic and global supply and ~~demand;~~ ~~and/or~~demand, and domestic or international duties tariffs or similar ~~costs~~;

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

•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;

•political disturbances, geopolitical instability and tensions, and associated changes in global trade policies and economic sanctions, including, but not limited to, in connection with Russia’s invasion of Ukraine in February 2022 and any ongoing conflicts in the region;

•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;

•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;

March 31, 2022 | 3

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•control of our general partner by CVR Energy;

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

•the potential inability to successfully implement our business strategies at all or on time and within our anticipated budgets, including significant capital programs or projects and turnarounds at our fertilizer facilities;

•restrictions in our debt agreements;

•asset impairments and impacts thereof;

~~March 31, 2021 |~~ 3

~~Table of Contents~~

•asset useful life;

•realizable inventory value;

•the number of investors willing to hold or acquire our common units;

•our ability to issue securities or obtain financing;

•~~the possibility of~~ 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, credit and ~~credit markets;~~commodities markets and in the global economy, including due to the ongoing Russia-Ukraine conflict;

•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; and

•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, ~~2020~~2021 and our other filings with the Securities and Exchange Commission (the “SEC”).

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

Information About Us

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

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

March 31, ~~2021~~2022 | 4

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CVR PARTNERS, LP AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands) March 31, 2021 December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents $ 52,561 $ 30,559
Accounts receivable 15,491 36,896
Inventories 57,184 42,349
Prepaid expenses and other current assets 7,494 8,410
Total current assets 132,730 118,214
Property, plant, and equipment, net 883,336 897,847
Other long-term assets 15,816 16,819
Total assets $ 1,031,882 $ 1,032,880
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Accounts payable $ 20,603 $ 19,544
Accounts payable to affiliates 1,061 5,217
Deferred revenue 40,383 30,631
Other current liabilities 37,781 20,949
Total current liabilities 99,828 76,341
Long-term liabilities:
Long-term debt, net of current portion 634,946 633,942
Other long-term liabilities 8,780 8,356
Total long-term liabilities 643,726 642,298
Commitments and contingencies (See Note 11)
0 0
Partners’ capital:
Common unitholders, 10,681,332 and 10,705,710 units issued and outstanding at March 31, 2021 and December 31, 2020, respectively 288,327 314,240
General partner interest 1 1
Total partners’ capital 288,328 314,241
Total liabilities and partners’ capital $ 1,031,882 $ 1,032,880


(in thousands)	March 31, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	137,347	$	112,516
Accounts receivable	43,577		88,351
Inventories	65,192		52,270
Prepaid expenses and other current assets	7,623		9,108
Total current assets	253,739		262,245
Property, plant, and equipment, net	835,713		850,462


Other long-term assets	13,249		14,351
Total assets	$	1,102,701	$	1,127,058

LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Accounts payable	$	49,241	$	41,504
Accounts payable to affiliates	6,081		8,895
Deferred revenue	80,877		87,060
Other current liabilities	37,007		24,401
Total current liabilities	173,206		161,860
Long-term liabilities:
Long-term debt, net of current portion	546,439		610,642
Other long-term liabilities	15,565		12,358
Total long-term liabilities	562,004		623,000
Commitments and contingencies (See Note 11)	0		0
Partners’ capital:
Common unitholders, 10,569,637 and 10,681,332 units issued and outstanding at March 31, 2022 and December 31, 2021, respectively	367,490		342,197
General partner interest	1		1
Total partners’ capital	367,491		342,198
Total liabilities and partners’ capital	$	1,102,701	$	1,127,058

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

March 31, ~~2021~~2022 | 5

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CVR PARTNERS, LP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

Three Months Ended
March 31,
(in thousands, except per unit data) 2021 2020
Net sales $ 60,921 $ 75,080
Operating costs and expenses:
Cost of materials and other 17,766 23,991
Direct operating expenses (exclusive of depreciation and amortization) 37,075 35,123
Depreciation and amortization 14,123 15,597
Cost of sales 68,964 74,711
Selling, general and administrative expenses 5,891 5,354
Loss (gain) on asset disposal 72 (13)
Operating loss (14,006) (4,972)
Other (expense) income:
Interest expense, net (15,916) (15,783)
Other income, net 4,557 27
Loss before income tax expense (25,365) (20,728)
Income tax expense 19 7
Net loss $ (25,384) $ (20,735)
Basic and diluted loss per unit $ (2.37) $ (1.83)
Weighted-average common units outstanding:
Basic and Diluted 10,695 11,328


	Three Months Ended March 31,
(in thousands, except per unit data)	2022		2021
Net sales	$	222,873	$	60,921
Operating costs and expenses:
Cost of materials and other	30,246		17,766
Direct operating expenses (exclusive of depreciation and amortization)	60,318		37,075
Depreciation and amortization	19,465		14,123
Cost of sales	110,029		68,964
Selling, general and administrative expenses	8,744		5,891
Loss on asset disposal	173		72

Operating income (loss)	103,927		(14,006)
Other (expense) income:
Interest expense, net	(10,036)		(15,916)

Other income, net	28		4,557
Income (loss) before income tax expense	93,919		(25,365)
Income tax expense	258		19
Net income (loss)	$	93,661	$	(25,384)

Basic and diluted earnings (loss) per unit	$	8.78	$	(2.37)
Distributions declared per common unit	$	5.24	$	—

Weighted-average common units outstanding:
Basic and Diluted	10,665		10,695

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

March 31, ~~2021~~2022 | 6

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CVR PARTNERS, LP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(unaudited)

Common Units General
Partner
Interest Total Partners’ Capital
(in thousands, except unit data) Issued Amount
Balance at December 31, 2020 10,705,710 $ 314,240 $ 1 $ 314,241
Unit repurchases (24,378) (529) — (529)
Net loss — (25,384) — (25,384)
Balance at March 31, 2021 10,681,332 $ 288,327 $ 1 $ 288,328


	Common Units			General Partner Interest		Total Partners’ Capital
(in thousands, except unit data)	Issued	Amount
Balance at December 31, 2021	10,681,332	$	342,197	$	1	$	342,198
Cash distributions to common unitholders - Affiliates	—	(20,394)		—		(20,394)
Cash distributions to common unitholders - Non-affiliates	—	(35,576)		—		(35,576)

Repurchase of common units	(111,695)	(12,398)		—		(12,398)
Net income	—	93,661		—		93,661
Balance at March 31, 2022	10,569,637	$	367,490	$	1	$	367,491

Common Units General
Partner
Interest Total Partners’ Capital
(in thousands, except unit data) Issued Amount
Balance at December 31, 2019 11,328,297 $ 419,543 $ 1 $ 419,544
Land exchange with affiliate — (116) — (116)
Net loss — (20,735) — (20,735)
Balance at March 31, 2020 11,328,297 $ 398,692 $ 1 $ 398,693


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


Repurchase of common units	(24,378)	(529)		—		(529)

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

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

March 31, ~~2021~~2022 | 7

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CVR PARTNERS, LP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

Three Months Ended March 31,
(in thousands) 2021 2020
Cash flows from operating activities:
Net loss $ (25,384) $ (20,735)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 14,123 15,597
Share-based compensation 3,592 (477)
Other adjustments 1,259 1,262
Change in assets and liabilities:
Current assets and liabilities 33,782 32,645
Non-current assets and liabilities (1,821) (585)
Net cash provided by operating activities 25,551 27,707
Cash flows from investing activities:
Capital expenditures (2,994) (6,710)
Proceeds from sale of assets 0 48
Net cash used in investing activities (2,994) (6,662)
Cash flows from financing activities:
Repurchase of common units (529) 0
Other financing activities (26) (25)
Net cash used in financing activities (555) (25)
Net increase in cash and cash equivalents 22,002 21,020
Cash and cash equivalents, beginning of period 30,559 36,994
Cash and cash equivalents, end of period $ 52,561 $ 58,014


	Three Months Ended March 31,
(in thousands)	2022		2021
Cash flows from operating activities:
Net income (loss)	$	93,661	$	(25,384)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	19,465		14,123

Share-based compensation	12,074		3,592
Loss on extinguishment of debt	628		—
Other adjustments	613		1,259
Change in assets and liabilities:
Current assets and liabilities	39,991		33,782
Non-current assets and liabilities	495		(1,821)
Net cash provided by operating activities	166,927		25,551
Cash flows from investing activities:
Capital expenditures	(7,899)		(2,994)

Net cash used in investing activities	(7,899)		(2,994)
Cash flows from financing activities:
Repurchase of common units	(12,398)		(529)

Principal payments on senior secured notes	(65,000)		—

Cash distributions to common unitholders - Affiliates	(20,394)		—
Cash distributions to common unitholders - Non-affiliates	(35,576)		—
Payment of deferred financing costs	(829)		—
Other financing activities	—		(26)
Net cash used in financing activities	(134,197)		(555)
Net increase in cash and cash equivalents	24,831		22,002
Cash and cash equivalents, beginning of period	112,516		30,559
Cash and cash equivalents, end of period	$	137,347	$	52,561

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

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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~~one located in Coffeyville, Kansas operated by our wholly owned subsidiary, Coffeyville Resources Nitrogen Fertilizers, LLC (“CRNF”) (the “Coffeyville Facility”) and one located in East Dubuque, Illinois operated by our wholly owned subsidiary, East Dubuque Nitrogen Fertilizers, LLC (“EDNF”) (the “East Dubuque Facility”). Both facilities manufacture ammonia and are able to further upgrade such ammonia to other nitrogen fertilizer products, principally urea ammonium nitrate (“UAN”). Nitrogen fertilizer is used by farmers to improve the yield and quality of their crops, primarily corn and wheat. The Partnership’s products are sold on a wholesale basis in the United States of America. As used in these financial statements, references to CVR Partners, the Partnership, “we”, “us”, and “our” may refer to consolidated subsidiaries of CVR Partners or one or both of the facilities, as the context may require.

Interest Holders

As of March 31, ~~2021,~~2022, public common unitholders held approximately ~~64%~~63% of the Partnership’s outstanding limited partner interests; CVR Services, LLC (“CVR Services”), a ~~wholly-owned~~wholly owned subsidiary of CVR Energy, held approximately ~~36%~~37% 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 March 31, ~~2021,~~2022, 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”)., which was increased on February 22, 2021. The Unit Repurchase Program, ~~enables~~as increased, authorized the Partnership to repurchase up to ~~$10~~$20 million of the Partnership’s common units. ~~On February 22, 2021, the Board authorized an additional $10 million for the Unit Repurchase Program.~~ During the three months ended March 31, 2022 and 2021, the Partnership repurchased 111,695 and 24,378 common units, respectively, 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 $12.4 million and $0.5 million, ~~inclusive~~respectively, exclusive of transaction costs, or an average price of ~~$21.70~~$110.98 and $21.69 per common ~~unit.~~unit, respectively. As of March 31, ~~2021,~~2022, the Partnership, considering all repurchases made since inception of the Unit Repurchase Program, had ~~$12.4 million~~a 0minal amount in authority remaining under the Unit Repurchase Program. This Unit Repurchase Program does not obligate the Partnership to ~~acquire~~repurchase any common units and may be cancelled or terminated by the Board at any time.

Management and Operations

The Partnership, including CVR GP, is managed by a combination of the Board, the general partner’s executive officers, CVR Services (as sole member of the general partner), and certain officers of CVR Energy, pursuant to the Partnership Agreement, as well as a number of agreements ~~between~~among the Partnership, CVR GP, CVR Energy, and certain of their respective subsidiaries, including a services agreement. See Part II, Item 8 of CVR Partners’ Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 (the ~~“2020~~“2021 Form 10-K”) for further discussion. Common unitholders have limited voting rights on matters affecting the Partnership and have no right to elect the general partner’s directors or officers, whether on an annual or continuing basis 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 (“SEC”). These condensed consolidated financial statements should be read in conjunction with the December 31, ~~2020~~2021 audited consolidated financial statements and notes thereto included in the ~~2020~~2021 Form 10-K.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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

~~March 31, 2021 |~~ 9

~~Table of Contents~~Certain reclassifications have been made within the condensed consolidated financial statements for prior periods to conform with current presentation.

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Results of operations and cash flows for the interim periods presented are not necessarily indicative of the results that will be realized for the year ending December 31, ~~2021~~2022 or any other interim or annual period.

(3) Recent Accounting Pronouncements

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

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“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. Effective January 1, 2021, we adopted this ASU with no material impact on the Partnership’s consolidated financial position or results of operations.

~~Recent Accounting Pronouncements - Adoption of Codification Improvements Standard~~

In October 2020, the FASB issued ASU 2020-10, Codification Improvements. The ASU amends various sections of the codification in the Boards ongoing efforts to simplify and improve guidance. Effective January 1, 2021, we adopted this 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~~Financial Accounting Standards Board (“FASB”) issued ~~ASU~~Accounting Standard Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848). This ASU was issued because, by the end of ~~2021,~~2022, banks will no longer be required to report information that is used to determine London Interbank Offered Rate (“LIBOR”), which is used globally by all types of entities. As a result, LIBOR could be discontinued, as well as other interest rates used globally. ASU 2020-04 provides companies with optional expedients for contract modifications under Topics 310, 470, 842, and 815-15, excluded components of certain hedging relationships, fair value hedges, and cash flow hedges, as well as certain exceptions, which are intended to help ease the potential accounting burden associated with transitioning away from these reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which 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~~of adopting this new accounting standard, ~~will~~but does not currently expect it to have a material impact on its consolidated financial statements and related disclosures.

(4) Inventories

Inventories consisted of the following:


(in thousands)	(in thousands)	March 31, 2021		December 31, 2020		(in thousands)	March 31, 2022		December 31, 2021
Finished goods	Finished goods	$	24,490	$	9,815	Finished goods	$	21,124	$	17,141
Raw materials	Raw materials	100		152		Raw materials	1,734		833
Parts, supplies and other	Parts, supplies and other	32,594		32,382		Parts, supplies and other	42,334		34,296
Total inventories	Total inventories	$	57,184	$	42,349	Total inventories	$	65,192	$	52,270

March 31, ~~2021~~2022 | 10

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(5) Property, Plant and Equipment

Property, plant and equipment consisted of the following:


(in thousands)	(in thousands)	March 31, 2021		December 31, 2020		(in thousands)	March 31, 2022		December 31, 2021
Machinery and equipment	Machinery and equipment	$	1,392,503	$	1,388,735	Machinery and equipment	$	1,412,633	$	1,410,203
Buildings and improvements	Buildings and improvements	17,598		17,598		Buildings and improvements	17,598		17,598
Automotive equipment	Automotive equipment	16,608		16,608		Automotive equipment	16,429		16,433
Land and improvements	Land and improvements	14,132		14,132		Land and improvements	14,604		14,199

Construction in progress	Construction in progress	10,746		12,098		Construction in progress	16,803		14,167
Other	Other	2,027		1,721		Other	2,220		2,221
		1,453,614		1,450,892			1,480,287		1,474,821
Less: Accumulated depreciation and amortization	Less: Accumulated depreciation and amortization	570,278		553,045		Less: Accumulated depreciation and amortization	(644,574)		(624,359)
Total property, plant and equipment, net	Total property, plant and equipment, net	$	883,336	$	897,847	Total property, plant and equipment, net	$	835,713	$	850,462

As of March 31, ~~2021,~~2022, the Partnership had not identified the existence of an impairment indicator for our long-lived asset groups as outlined under ~~ASC~~Accounting Standards Codification (“ASC”) Topic 360, Property, Plant, and Equipment.

(6) Leases

Lease Overview

We lease railcars and certain facilities to support the Partnership’s operations. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 20 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Certain of our lease agreements include rental payments which are adjusted periodically for factors such as inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Additionally, we do not have any material lessor or sub-leasing arrangements.

Balance Sheet Summary as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021

The following tables summarize the ~~ROU~~right-of-use (“ROU”) asset and lease liability balances for the Partnership’s operating and finance leases at March 31, ~~2021~~2022 and December 31, ~~2020~~2021:


		March 31, 2021				December 31, 2020					March 31, 2022				December 31, 2021
(in thousands)	(in thousands)	Operating Leases		Finance Leases		Operating Leases		Finance Leases		(in thousands)	Operating Leases		Finance Leases		Operating Leases		Finance Leases
ROU asset, net	ROU asset, net									ROU asset, net

Railcars	Railcars	$	6,558	$	0	$	7,327	$	0	Railcars	$	3,767	$	—	$	4,570	$	—
Real estate and other	Real estate and other	2,944		95		3,040		101		Real estate and other	2,659		8		2,755		34
Lease liability	Lease liability									Lease liability

Railcars	Railcars	$	6,931	$	0	$	7,696	$	0	Railcars	$	3,767	$	—	$	4,570	$	—
Real estate and other	Real estate and other	817		70		867		105		Real estate and other	614		—		665		—

March 31, ~~2021~~2022 | 11

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Lease Expense Summary for the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021

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 months ended March 31, ~~2021~~2022 and ~~2020,~~2021, we recognized lease expense comprised of the following components:


		Three Months Ended March 31,				Three Months Ended March 31,
(in thousands)	(in thousands)	2021		2020			(in thousands)	2022		2021
Operating lease expense	Operating lease expense	$	916	$	1,111		Operating lease expense	$	1,059	$	916
Finance lease expense:	Finance lease expense:						Finance lease expense:
Amortization of ROU asset	Amortization of ROU asset	$	22	$	27		Amortization of ROU asset	$	26	$	22
Interest expense on lease liability	Interest expense on lease liability	1		2			Interest expense on lease liability	—		1
Short-term lease expense	Short-term lease expense	$	160	$	77		Short-term lease expense	$	766	$	160

Lease Terms and Discount Rates

The following outlines the remaining lease terms and discount rates used in the measurement of the Partnership’s ROU assets and liabilities at March 31, ~~2021~~2022 and December 31, ~~2020:~~2021:

March 31, 2021

December 31, 2020

March 31, 2022

December 31, 2021

Operating Leases

Finance Leases

Operating Leases

Finance Leases

Operating Leases

Finance Leases

Operating Leases

Finance Leases

Weighted-average remaining lease term

2.7 years

1.1 years

2.9 years

1.3 years

Weighted-average remaining lease term

2.0 years

0.0 years

2.1 years

0.0 years

Weighted-average discount rate

5.1

3.9

5.1

4.0

Weighted-average discount rate

5.1

—

5.1

—

Maturities of Lease Liabilities

The following summarizes the remaining minimum operating lease payments through maturity of the Partnership’s ROU assets and liabilities at March 31, ~~2021:~~2022. There were no finance lease payments remaining at March 31, 2022.


(in thousands)	(in thousands)	Operating Leases		Finance Leases		(in thousands)	Operating Leases
Remainder of 2021		$	2,754	$	71
2022		3,236		0
Remainder of 2022						Remainder of 2022	$	2,307
2023	2023	1,367		0		2023	1,359
2024	2024	684		0		2024	676
2025	2025	263		0		2025	260
2026						2026	—
Thereafter	Thereafter	0		0		Thereafter	—
Total lease payments	Total lease payments	8,304		71		Total lease payments	4,602
Less: imputed interest	Less: imputed interest	(556)		(1)		Less: imputed interest	(221)
Total lease liability	Total lease liability	$	7,748	$	70	Total lease liability	$	4,381

On February 21, 2022, CRNF entered into the First Amendment to the On-Site Product Supply Agreement with Messer LLC (“Messer”), which amended the July 31, 2020 On-Site Product Supply Agreement (as amended, the “Messer Agreement”). Under the Messer Agreement, among other obligations, Messer is obligated to supply and make certain capital improvements during the term of the Messer Agreement, and CRNF is obligated to take as available and pay for, oxygen, nitrogen, and compressed dry air from Messer’s facility. This arrangement for CRNF’s purchase of oxygen, nitrogen, and dry air from Messer does not meet the definition of a lease under FASB ASC Topic 842, Leases (“Topic 842”), as CRNF does not expect to receive substantially all of the output of Messer’s on-site production from its air separation unit over the life of the Messer Agreement. The Messer Agreement also obligates Messer to install a new oxygen storage vessel, related equipment and infrastructure (“Oxygen Storage Vessel” or “Vessel”) to be used solely by the Coffeyville Facility. The arrangement for the use of the Oxygen Storage Vessel meets the definition of a lease under Topic 842, as CRNF will receive all output associated with the Vessel. Based on terms outlined in the Messer Agreement, the Partnership expects the lease of the Oxygen Storage Vessel

March 31, ~~2021~~2022 | 12

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

to be classified as a financing lease with an amount of approximately $25 million being capitalized upon lease commencement when the Vessel is placed in service.

(7) Other Current Liabilities

Other current liabilities consisted of the following:


(in thousands)	(in thousands)	March 31, 2021		December 31, 2020		(in thousands)	March 31, 2022		December 31, 2021
Share-based compensation						Share-based compensation	$	12,123	$	5,888
Accrued interest	Accrued interest	$	17,470	$	2,506	Accrued interest	9,826		1,654
Personnel accruals	Personnel accruals	5,287		7,475		Personnel accruals	5,252		7,920
Sales incentives						Sales incentives	2,643		1,555
Operating lease liabilities	Operating lease liabilities	3,356		3,309		Operating lease liabilities	2,578		3,052
Sales incentives		2,954		2,215
Share-based compensation		2,313		442
Current portion of long-term debt and finance lease obligations		2,310		2,240
Accrued taxes other than income taxes						Accrued taxes other than income taxes	1,642		1,744
Prepaid revenue contracts	Prepaid revenue contracts	138		197		Prepaid revenue contracts	140		954
Other accrued expenses and liabilities	Other accrued expenses and liabilities	3,953		2,565		Other accrued expenses and liabilities	2,803		1,634
Total other current liabilities	Total other current liabilities	$	37,781	$	20,949	Total other current liabilities	$	37,007	$	24,401

(8) Long-Term Debt

Long-term debt consists of the following:

(in thousands) March 31, 2021 December 31, 2020
9.25% Senior Secured Notes, due June 2023 (1) $ 645,000 $ 645,000
Unamortized discount and debt issuance costs (2) (10,054) (11,058)
Total long-term debt and finance lease obligations, net of current portion 634,946 633,942
Current portion of long-term debt and finance lease obligations (3)(4) 2,310 2,240
Total long-term debt and finance lease obligations, including current portion $ 637,256 $ 636,182


(in thousands)	March 31, 2022		December 31, 2021
9.25% Senior Secured Notes, due June 2023 (1)	$	—	$	65,000
6.125% Senior Secured Notes, due June 2028 (1)	550,000		550,000

Unamortized discount and debt issuance costs (2)	(3,561)		(4,358)
Total long-term debt	$	546,439	$	610,642

(1)The $65 million outstanding balance of the 9.25% Senior Secured Notes, due June 2023 (the “2023 Notes”) was paid in full on February 22, 2022 at par, plus accrued and unpaid interest. The estimated fair value of ~~long-term debt outstanding~~the 2023 Notes was approximately ~~$650.6~~$65.1 million as of December 31, 2021. The estimated fair value of the 6.125% Senior Secured Notes, due June 2028 (the “2028 Notes”) was approximately $549.8 million and ~~$645.7~~$580.3 million as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. ~~This estimate~~These estimates of fair value isare a Level 2 measurement as ~~it was~~they were determined by quotations obtained from a broker-dealer who makes a market in these and similar securities. ~~The call price of the 2023 Notes decreases to par on June 15, 2021.~~

(2)For the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, amortization of the discount on debt and amortization of deferred financing costs reported as Interest expense, net totaled approximately $0.2 million and $1.0 million, ~~and $0.9 million,~~ respectively.

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

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

Credit Agreements

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



(in thousands)	Total Available Borrowing Capacity		Amount Borrowed as of March 31, 2022		Outstanding Letters of Credit		Available Capacity as of March 31, 2022		Maturity Date
ABL Credit Facility (1) (2)	$	35,000	$	—	$	—	$	35,000	September 30, 2024

(1)Beginning ~~January 1,~~September 30, 2021, loans under the Partnership’s ABL Credit ~~Agreement (the “ABL Credit Agreement”)~~Facility bear interest at an annual rate equal to, at the option of the borrowers, (i) (a) ~~2.00%~~1.615% plus ~~LIBOR, to~~ the ~~extent available,~~daily simple Secured Overnight Financing Rate (“SOFR”) or (b) ~~1.00%~~0.615% plus a base rate, if our quarterly excess availability is greater than ~~50% and~~or equal to 75%, (ii) (a) ~~2.50%~~1.865% plus ~~LIBOR, to the extent available,~~SOFR or (b) ~~1.50%~~0.865% plus a base rate, if our quarterly excess availability is greater than or equal to 50% but less than 75%, or (iii) (a) 2.115% plus SOFR or (b) 1.115% plus a base rate, otherwise.

(2)Amortization expense was $0.1 million and $0.1 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

9.25%Senior Secured Notes due June 2023

On February 22, 2022, the Partnership redeemed all of the outstanding 2023 Notes at par and settled accrued and unpaid interest of approximately $1.1 million through the date of redemption. As a result of this transaction, the Partnership recognized a loss on extinguishment of debt of $0.6 million, which includes the write-off of unamortized deferred financing costs and discount of $0.2 million and $0.4 million, respectively.

March 31, 2022 | 13

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Covenant Compliance

The Partnership and its subsidiaries were in compliance with all covenants under their respective debt instruments as of March 31, ~~2021.~~2022.

~~March 31, 2021 |~~ 13

~~Table of Contents~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

(9) Revenue

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


		Three Months Ended March 31,			Three Months Ended March 31,
(in thousands)	(in thousands)		2021			2020		(in thousands)	2022		2021
Ammonia	Ammonia		$	9,534		$	14,147	Ammonia	$	42,011	$	9,534
UAN	UAN		38,062			47,014		UAN	159,607		38,062
Urea products	Urea products		4,758			3,533		Urea products	9,223		4,758
Net sales, exclusive of freight and other	Net sales, exclusive of freight and other		52,354			64,694		Net sales, exclusive of freight and other	210,841		52,354
Freight revenue	Freight revenue		6,114			7,722		Freight revenue	9,214		6,114
Other revenue	Other revenue		2,453			2,664		Other revenue	2,818		2,453
Net sales	Net sales		$	60,921		$	75,080	Net sales	$	222,873	$	60,921

Transaction Price Allocated to Remaining Performance Obligations

As of March 31, ~~2021,~~2022, the Partnership had approximately ~~$6.1~~$10.0 million of remaining performance obligations for contracts with an original expected duration of more than one year. The Partnership expects to recognize approximately ~~$3.5~~$5.8 million of these performance obligations as revenue by the end of ~~2021,~~2022, an additional ~~$2.3~~$4.0 million in ~~2022,~~2023, and the remaining balance thereafter.

Contract Balances

The Partnership’s deferred revenue is a contract liability that primarily relates to nitrogen fertilizer sales contracts requiring customer prepayment prior to product delivery to guarantee a price and supply of nitrogen fertilizer. Deferred revenue is recorded at the point in time in which a prepaid contract is legally enforceable and the associated right to consideration is unconditional prior to transferring product to the customer. An associated receivable is recorded for uncollected prepaid contract amounts. Contracts requiring prepayment are generally short-term in nature and, as discussed above, revenue is recognized at the point in time in which the customer obtains control of the product.

A summary of the deferred revenue activity for the three months ended March 31, ~~2021~~2022 is presented below:


(in thousands)
Balance at December 31, ~~2020~~2021	$	~~30,631~~87,060
Add:
New prepay contracts entered into during the period (1)	~~20,094~~15,246
Less:
Revenue recognized that was included in the contract liability balance at the beginning of the period	~~(7,505)~~(16,968)
Revenue recognized related to contracts entered into during the period	~~(2,800)~~(4,277)
Other changes	~~(37)~~(184)
Balance at March 31, ~~2021~~2022	$	~~40,383~~80,877

(1) Includes ~~$18.6~~$14.2 million where payment associated with prepaid contracts was collected as of March 31, ~~2021.~~2022.

March 31, ~~2021~~2022 | 14

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(10) Share-Based Compensation

A summary of compensation expense for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 is presented below:

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


	Three Months Ended March 31,
(in thousands)	2022		2021
Phantom Units	$	9,912	$	3,145
Other Awards (1)	2,162		447
Total share-based compensation expense	$	12,074	$	3,592

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

(11) Commitments and Contingencies

There have been no material changes in the Partnership’s commitments and contingencies disclosed in the ~~2020~~2021 Form 10-K. In the ordinary course of business, the Partnership may become party to lawsuits, administrative proceedings, and governmental investigations, including environmental, regulatory, and other matters. The outcome of these matters cannot always be predicted accurately, but the Partnership accrues liabilities for these matters if the Partnership has determined that it is probable a loss has been incurred and the loss can be reasonably estimated. While it is not possible to predict the outcome of such proceedings, if one or more of them were decided against us, the Partnership believes there would be no material impact on its consolidated financial statements.

The Partnership continues to monitor its contractual arrangements and customer, vendor, and supplier relationships to determine whether and to what extent, if any, the impacts of the COVID-19 pandemic, the Russia-Ukraine conflict, or ~~recent~~ongoing price volatility will impair or excuse the performance of the Partnership or its subsidiaries or their customers, vendors, or suppliers under existing agreements. As of March 31, ~~2021,~~2022, 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.

(12) Supplemental Cash Flow Information

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


		Three Months Ended March 31,					Three Months Ended March 31,
(in thousands)	(in thousands)	2021		2020		(in thousands)	2022		2021
Supplemental disclosures:	Supplemental disclosures:					Supplemental disclosures:
Cash paid for interest	Cash paid for interest	$	45	$	49	Cash paid for interest	$	1,164	$	45
Cash paid, net of refunds (received, net of payments) for income taxes		0		(1)

Cash paid for amounts included in the measurement of lease liabilities:	Cash paid for amounts included in the measurement of lease liabilities:					Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	Operating cash flows from operating leases	918		1,118		Operating cash flows from operating leases	$	898	$	918
Operating cash flows from finance leases	Operating cash flows from finance leases	1		2		Operating cash flows from finance leases	—		1
Financing cash flows from finance leases	Financing cash flows from finance leases	26		25		Financing cash flows from finance leases	—		26
Non-cash investing activities:
Non-cash investing and financing activities:						Non-cash investing and financing activities:
Change in capital expenditures included in accounts payable	Change in capital expenditures included in accounts payable	131		(1,117)		Change in capital expenditures included in accounts payable	$	(2,250)	$	131

March 31, ~~2021~~2022 | 15

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(13) Related Party Transactions

Activity associated with the Partnership’s related party arrangements for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 is summarized below.

Related Party Activity


		Three Months Ended March 31,			Three Months Ended March 31,
(in thousands)	(in thousands)		2021			2020		(in thousands)	2022		2021
Sales to related parties (1)	Sales to related parties (1)		$	219		$	540	Sales to related parties (1)	$	48	$	219
Purchases from related parties (2)	Purchases from related parties (2)		6,693			5,938		Purchases from related parties (2)	14,534		6,693

March 31, 2021 December 31, 2020
Due to related parties (3) 902 1,446


	March 31, 2022		December 31, 2021

Due to related parties (3)	$	4,933	$	3,580

(1)Sales to related parties, included in Net sales, consist primarily of sales of feedstocks and services to Coffeyville Resources Refining & Marketing, LLC (“CRRM”) under the Master Service Agreement with ~~Coffeyville Resources Nitrogen Fertilizers, LLC~~CRNF (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)Due ~~(from)~~ to related parties, included in Accounts payable to affiliates, ~~Other current liabilities, and Other long-term liabilities, consist~~consists 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 the Corporate ~~MSA.~~Master Service Agreement effective January 1, 2020, by and among CVR Services and certain of its affiliates, including the Partnership and our subsidiaries, as amended by that certain Amendment to Corporate Master Service Agreement dated April 12, 2022 (as amended, the “Corporate MSA”).

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. The following table presents distributions paid by the Partnership to CVR Partners’ unitholders, including amounts paid to CVR Energy, during 2022 and 2021.


				Distributions Paid (in thousands)
Related Period	Date Paid	Distribution Per Common Unit		Public Unitholders		CVR Energy		Total
2021 - 4th Quarter	March 14, 2022	$	5.24	$	35,576	$	20,394	$	55,970



				Distributions Paid (in thousands)
Related Period	Date Paid	Distribution Per Common Unit		Public Unitholders		CVR Energy		Total


2021 - 2nd Quarter	August 23, 2021	$	1.72	$	11,678	$	6,694	$	18,372
2021 - 3rd Quarter	November 23, 2021	2.93		19,893		11,404		31,297
Total distributions		$	4.65	$	31,571	$	18,098	$	49,669

There were 0no distributions declared or paid by the Partnership ~~during the three months ended March 31, 2021~~ related to ~~the fourth quarter of 2020, and 0 distributions were paid during 2020. NaN distributions were declared for~~ the first quarter of ~~2021.~~

2021 and fourth quarter of 2020.

For the first quarter of 2022, the Partnership, upon approval by the Board on May 2, 2022, declared a distribution of $2.26 per common unit, or $23.9 million, which is payable May 23, 2022 to unitholders of record as of May 13, 2022. Of this amount, CVR Energy will receive approximately $8.8 million, with the remaining amount payable to public unitholders.

March 31, ~~2021~~2022 | 16

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

The following discussion and analysis of our financial condition, results of operations, and cash flows should be read in conjunction with the unaudited condensed consolidated financial statements and related notes and with the statistical information and financial data appearing in this Report, as well as our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 filed with the Securities and Exchange Commission (“SEC”) on February 23, ~~2021~~2022 (the ~~“2020~~“2021 Form 10-K”). Results of operations for the three months ended March 31, ~~2021~~2022 and cash flows for the three months ended March 31, ~~2021~~2022 are not necessarily indicative of results to be attained for any other period. See “Important Information Regarding Forward-Looking 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 its nitrogen fertilizer business. The Partnership produces and distributes nitrogen fertilizer products, which are used by farmers to improve the yield and quality of their crops. The Partnership produces these products at two manufacturing facilities, ~~which are~~one located in Coffeyville, Kansas operated by its wholly owned subsidiary, Coffeyville Resources Nitrogen Fertilizers, LLC (“CRNF”) (the “Coffeyville Facility”) and one located in East Dubuque, Illinois operated by its wholly owned subsidiary, East Dubuque Nitrogen Fertilizers, LLC (“EDNF”) (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 Mission is to be a top tier North American nitrogen-based fertilizer company as measured by safe and reliable operations, superior performance and profitable growth. The foundation of how we operate is built on five core Values:

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

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

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

•Corporate Citizenship - We are proud members of the communities where we operate. We are good neighbors and know that it’s a privilege we can’t take for granted. We seek to make a positive economic and social impact through

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our financial donations and the contributions of time, knowledge and talent of our employees to the places where we live and work.

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

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

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

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 EH&S areas through ensuring our people’s commitment to environmental, health and safety comes first, the refinement of existing policies, continuous training, and enhanced monitoring procedures.

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

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

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

Achievements

During the first three months of ~~2021,~~2022, we successfully executed a number of achievements in support of our strategic objectives shown below through the date of this ~~filing despite the challenges experienced by the industry as a result of the COVID-19 pandemic:~~filing:

Safety

Reliability

Market Capture

Financial Discipline

Achieved ~~record truck shipments~~reductions in environmental events, process safety management tier 1 incidents and total ~~shipments from~~recordable incident rate of 50%, 100% and 100%, respectively, compared to the first three months of 2021

Operated both facilities safely

Achieved record UAN production volumes at the Coffeyville Facility in March ~~2021~~

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

~~Operated the East Dubuque Ammonia plant at high utilization rates, excluding downtime related to Winter Storm Uri~~2022

~~Recovered quickly from storm-related downtime at both facilities~~

Declared a distribution of $2.26 per common unit related to the first three months of 2022 to be paid in May 2022

~~Achieved 45%~~Completed targeted $95 million debt reduction plan with the repayment of the remaining $65 million balance of the 9.25% Senior Secured Notes, due 2023 (the “2023 Notes”) in ~~process safety incidents and 33% reduction in environmental events compared to~~ the first quarter of ~~2020~~2022 for a total reduction in annual cash interest expense of approximately $9 million

Repurchased over 111,000 common units for $12.4 million

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Industry Factors and Market Indicators

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

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

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

General Business Environment

COVID-19 - Throughout 2020 and into 2021, the COVID-19 pandemic ~~and actions taken by governments and others in response thereto negatively impacted~~disrupted the worldwide economy, financial markets, and the ~~agricultural industry. The COVID-19 pandemic also resulted in significant business~~energy and ~~operational disruptions, including business closures in~~fertilizer industries. Actions taken by the ~~restaurant~~U.S. government to provide stimulus to individuals and ~~food supply industries, among others, liquidity strains, destruction of non-essential demand, as well as supply chain challenges, travel restrictions, stay-at-home orders, and limitations on~~businesses have helped mitigate the ~~availability~~impacts of the ~~workforce, including farmers~~downturn caused by COVID-19, and we continue to see businesses resuming operations and the lifting of governmental restrictions. However, despite worldwide advances in containment of the ~~agricultural industry. As~~virus and economic market recovery in 2021 and 2022, COVID-19 remains a ~~result,~~dynamic and continuously evolving situation with unknown short and long-term economic challenges that could reverse any recent improvements. Further, the ~~U.S. demand for liquid transportation fuels, including ethanol (the production~~spread of variants of COVID-19 could cause restrictions to be reinstated, and the extent to which the pandemic may impact our business, financial condition, liquidity, or results of operations cannot be determined at this time.

Russia-Ukraine Conflict - In February 2022, Russia invaded Ukraine, significantly impacting global fertilizer and agriculture markets. The Black Sea is a ~~significant driver of demand~~major export point for ~~corn), declined, causing many refineries~~nitrogen fertilizer and ~~plants~~grains from Russia and Ukraine. Since the invasion began, the Black Sea has been closed to reduce production or idle. Over recent quarters, government restrictions have eased, vaccines have become available, and demand for transportation fuels has increased. However, demand levels remain below pre-pandemic levels as evidenced by a decline in the first quarter 2021 average ethanol production of 12% compared to the first quarter of 2020. ~~Additionally, given market~~exports which prompted tightening global supply conditions for ~~transportation fuels over~~nitrogen fertilizer in advance of spring planting and for wheat and corn availability, as Russia and Ukraine are major wheat exporters and Ukraine is a major corn exporter. Expectations are that the ~~past year,~~planted acres in Ukraine will be much lower in 2022 due to lack of planting inputs, fuel, and workers to complete the ~~processing~~planting of ~~sweet crude oil, including at~~crops. Additionally, many Western countries have formally or informally adopted sanctions on a number of Russian exports and individuals affiliated with Russian government leadership. While fertilizers have not been formally sanctioned, many Western customers are either unwilling to purchase Russian fertilizers or logistics make it too costly to import Russian fertilizers. Additionally, natural gas supplied from Russia to Western Europe has been constrained and prices have remained elevated since September 2021, causing a significant portion of European nitrogen fertilizer production capacity to be curtailed. Overall, these events have caused grain and fertilizer prices to rise, and we currently expect these conditions to persist for the ~~crude oil refinery owned~~remainder of 2022. The ultimate outcome of the Russia-Ukraine conflict and ~~operated by Coffeyville Resources Refining & Marketing, LLC (“CRRM”), an indirect, wholly-owned subsidiary of CVR Energy (the “Coffeyville Refinery”), has increased compared~~any associated market disruptions are difficult to the period pre-COVID-19 resulting in lower sour crude oil being processed as refineries have adjusted to market dynamics. As a result, pet coke production has declined, including at the Coffeyville Refinery, which haspredict and may ~~continue to cause increased production costs at~~affect 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 and have diminished expectations for the global economy.~~in unforeseen ways.

The Partnership believes the general business environment in which it operates will continue to remain volatile ~~during 2021,~~in 2022, driven by uncertainty around the availability and prices of its feedstocks, ~~and the~~ demand for its ~~products.~~products, inflation, and global supply disruptions. As a result, future operating results and current and long-term financial ~~condition~~conditions could be negatively impacted if economic conditions decline and remain ~~volatile, and do not return to pre-pandemic levels.~~volatile. Due to the uncertainty of the global recovery, including its duration, timing, and 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 in future periods.

Market Indicators

While there is risk of shorter-term volatility given the inherent nature of the commodity cycle, 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 and soybeans as feedstock for the domestic production of ethanol and other renewable fuels, 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.

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Corn and ~~soybean~~soybeans 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~~this nutrient to be replenished after each growing cycle. Unlike corn, soybeans are able to obtain most of their own nitrogen through a process known as “N fixation.” As such, upon 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~~by the chart presented below ~~for 2021 and 2020.~~as of March 31, 2022.

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 number of~~increases with increased corn acres and decreases with increased soybean ~~acres increases, the market and demand for nitrogen decreases.~~acres. Additionally, an estimated 811 billion pounds of soybean oil is expected to be used in producing cleaner biodiesel in ~~2020 and 2021.~~marketing year 2021/2022. Multiple refiners have announced ~~biodiesel~~renewable diesel expansion projects for ~~2021~~2022 and beyond, which will only increase the demand for soybeans and ~~capacity~~potentially for ~~soybeans.~~corn and canola.

The preliminary 2022 United States Department of Agriculture (“USDA”) reports on corn and soybean acres planted indicated farmers’ intentions to plant 89.5 million acres of corn, representing a decrease of 4.1% in corn acres planted as compared to 93.4 million corn acres in 2021. Planted soybean acres are estimated to be 91.0 million acres, representing a 4.3% increase in soybean acres planted as compared to 87.2 million soybean acres in 2021. The combined corn and soybean planted acres of 180.5 million is in line with the acreage planted in 2021, which was the highest in history. Due to ~~the uncertainty~~higher input costs for corn planting and increased demand for soybeans, particularly for renewable diesel production, it was more favorable for farmers to plant soybeans compared to corn. The lower planted corn acres in 2022 is expected to be supportive of ~~how these factors will truly affect the soybean market, it is not yet known how the nitrogen business will be impacted.~~

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corn prices for 2022 and 2023.

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 been a decline in ethanol~~ demand, ~~in 2020 due to decreased demand for transportation fuels as a result of the COVID-19 pandemic. However, the lower ethanol demand did not alter the spring 2021 or 2020 planting decisions by farmers~~ as evidenced inby the charts ~~below.~~below, through March 31, 2022

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

The preliminary 2021 United States Department of Agriculture (“USDA”) reports on corn and soybean acres planted indicated farmers’ intentions to plant 91.1 million acres of corn, representing an increase of 0.2% 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 178.7 million is the highest in history, and based on expected yields and crop prices, farm economics are expected to be very attractive in 2021.

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


U.S. Plant Production of Fuel Ethanol (1)						Corn and Soybean Planted Acres (2)

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

(1)Information used within this chart was obtained from the U.S. Energy Information Administration (“EIA”). through March 31, 2022.

(2)Information used within this chart was obtained from the USDA, National Agricultural Statistics ~~Services. Grown~~Services as of March 31, 2022.

Weather continues to be a critical variable for crop production. Even with high planted acres and trendline yields per acre in the U.S., inventory levels for ~~2021~~corn and soybeans remain below historical levels and prices have remained elevated. With tight grain and fertilizer inventory levels driven by the war in Ukraine, prices for grains and fertilizers are ~~preliminary USDA estimated amounts and will be updated for actual amounts as the information becomes available, which is~~ expected to ~~be during~~remain elevated throughout 2022. These conditions are driving strong demand for nitrogen fertilizer, as well as other crop inputs, for the ~~third quarter of 2021.~~spring 2022 planting season.

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 (“USDOC”) and the U.S. International Trade

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Commission (the “ITC”) requesting the initiation of antidumping and countervailing duty investigations on imports of UAN from Russia and Trinidad and Tobago (“Trinidad”). Following investigations by both USDOC and ITC, on November 30, 2021, USDOC determined that UAN imports from Russia are unfairly subsidized at rates ranging from 9.66% to 9.84% and UAN imports from Trinidad are unfairly subsidized at a rate of 1.83%. On January 27, 2022, USDOC found that Russian UAN imports are sold at less than fair value into the U.S. market at rates ranging from 9.15% to 127.19% and that Trinidadian UAN imports at a rate of 63.08%. As a result of these determinations, USDOC will impose cash deposit requirements on imports of UAN from Russia and Trinidad based on the preliminary rates of antidumping duties. We believe that if the antidumping and countervailing duty preliminary determinations are confirmed by USDOC, there will likely be lower amounts of imported UAN from Russia and Trinidad for the next several years.

The charts below show relevant market indicators by month through March 31, 2022:


Ammonia and UAN Market Pricing (1)						Natural Gas and Pet Coke Market Pricing (1)

(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 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 and 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 months ended March 31, 2022 and ~~at each of our facilities.~~2021. Utilization is an important measure used by management to assess operational output at each of the Partnership’s facilities. Utilization is calculated as actual tons of ammonia produced divided by capacity adjusted for planned maintenance and turnarounds.

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

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

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Consolidated Ammonia Utilization

On a consolidated basis, utilization ~~increased 3% to 96%~~remained unchanged at 88% for the ~~two years~~three months ended March 31, ~~2021~~2022, compared to the ~~two years~~three months ended March 31, ~~2020.~~2021. The ~~first quarter~~depressed utilization for 2022 was primarily a result of ~~2019 ammonia storage capacity was constrained~~unplanned downtime associated with the Messer air separation plant (“Messer”) at the Coffeyville Facility and various pieces of equipment at the East Dubuque Facility. The depressed utilization for 2021 was primarily related to downtime associated with Messer at the Coffeyville Facility ~~impacting comparability for 2020~~in January 2021 and Winter Storm Uri in February 2021.

Sales and Pricing per Ton - Two of our key operating metrics are total sales volumes for ammonia and UAN, along with the product pricing per ton realized at the gate. Total product sales volumes were favorable, driven by higher production at the Coffeyville Facility due to reduced downtime from Messer outages in 2022 as compared to 2021. For the three months ended March 31, 2022, total product sales were favorable, driven by higher overall production and sales in 2022, along with product sales price increases of 252% for ammonia and ~~UAN were unfavorable, driven by lower production due to downtime associated with the Messer air separation plant~~212% for UAN. Ammonia and ~~production and shipping constraints due to Winter Storm Uri. Ammonia~~UAN sales prices were favorable ~~compared to difficult market conditions in the first quarter of 2020. UAN sales prices were slightly unfavorable~~primarily due to ~~forward sales of product completed~~higher crop pricing coupled with lower fertilizer supply driven by production outages from Hurricane Ida in ~~November/December 2020 prior to~~August and September 2021, increased industry turnaround activity, and the ~~increase in UAN market prices.~~impacts from the Russia-Ukraine conflict. 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 comparable across the fertilizer industry.

Operating Highlights for the Three Months Ended March 31, ~~2021~~2022 versus March 31, ~~2020)~~2021


Sales (thousand tons)						Product Pricing at Gate ($ per ton)

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

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that was not upgraded into other fertilizer products. The table below presents these metrics for the three months ended March 31, ~~2021~~2022 and ~~2020:~~2021:


		Three Months Ended March 31,		Three Months Ended March 31,
(in thousands of tons)	(in thousands of tons)		2021		2020	(in thousands of tons)	2022	2021
Ammonia (gross produced)	Ammonia (gross produced)		188		201	Ammonia (gross produced)	187	188
Ammonia (net available for sale)	Ammonia (net available for sale)		70		78	Ammonia (net available for sale)	52	70
UAN	UAN		272		317	UAN	317	272

Feedstock - Our Coffeyville Facility utilizes a pet coke gasification process to produce nitrogen fertilizer. Our East Dubuque Facility uses natural gas in its production of ammonia. The table below presents these feedstocks for both facilities for the three months ended March 31, ~~2021~~2022 and ~~2020:~~2021:

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


	Three Months Ended March 31,
	2022		2021
Petroleum coke used in production (thousand tons)	108		128
Petroleum coke (dollars per ton)	$	56.46	$	42.91
Natural gas used in production (thousands of MMBtu) (1)	1,761		1,882
Natural gas used in production (dollars per MMBtu) (1)	$	5.54	$	3.10
Natural gas in cost of materials and other (thousands of MMBtu) (1)	1,528		940
Natural gas in cost of materials and other (dollars per MMBtu) (1)	$	5.62	$	2.94

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

Financial Highlights for the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021

~~Overview -~~For the three months ended March 31, ~~2021,~~2022, the Partnership’s operating ~~loss~~income and net ~~loss~~income were ~~$14.0~~$103.9 million and ~~$25.4~~$93.7 million, ~~a $9.0~~respectively, representing improvements of $117.9 million ~~increase in operating loss~~ and ~~$4.7~~$119.1 million, ~~increase in net loss,~~ respectively, compared to the three months ended March 31, ~~2020.~~2021. These increases were driven ~~primarily~~ by ~~fewer~~higher product sales ~~as a result of lower production due~~prices and sales volumes for UAN and ammonia compared to ~~downtime associated with~~ the ~~Messer air separation plant and production and shipping impacts from Winter Storm Uri.~~three months ended March 31, 2021.


Net Sales						Operating Income (Loss)

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Net Income (Loss)						EBITDA (1)

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

Net Sales -- For the three months ended March 31, ~~2021,~~2022, net sales ~~decreased~~increased by ~~$14.2~~$162.0 million to ~~$60.9~~$222.9 million compared to the three months ended March 31, ~~2020.~~2021. This ~~decrease~~increase was primarily due to ~~decreased~~favorable UAN and ammonia pricing conditions and sales volumes which contributed ~~$13.2~~$138.5 million and $15.6 million, respectively, in ~~lower revenues and unfavorable sales pricing contributed $0.5 million in lower~~higher revenues, as compared to the three months ended March 31, ~~2020.~~2021.

The following table demonstrates the impact of changes in sales volumes and pricing for the primary components of net sales, excluding urea products, freight, and other revenue, for the three months ended March 31, ~~2021~~2022 as compared to the three months ended March 31, ~~2020:~~2021:


(in thousands)	(in thousands)	Price Variance		Volume Variance		(in thousands)	Price Variance		Volume Variance
UAN	UAN	$	(1,673)	$	(7,419)	UAN	$	108,378	$	13,167
Ammonia	Ammonia	1,145		(5,769)		Ammonia	30,073		2,404

The ~~increase~~$755 and $337 per ton increases in ammonia and UAN sales pricing, respectively, for the three months ended March 31, ~~2021~~2022, as compared to the three months ended March 31, ~~2020 was~~2021, were primarily attributable to ~~favorable~~continued improvement in market conditions as supplies of nitrogen fertilizer remained tight following the production outages related to Hurricane Ida in 2021, heightened turnaround activity during the ~~first quarter~~summer of 2021, ~~compared to difficult market conditions~~energy shortages in ~~the first quarter of 2020. UAN sales prices were slightly unfavorable~~Europe and Asia, and further supply concerns due to ~~forward sales of product completed in November and December 2020 prior to~~ the Russia-Ukraine conflict. The increase in UAN ~~market prices. The decrease in UAN and ammonia~~ sales volumes for the three months ended March 31, ~~2021~~2022 compared to the three months ended March 31, ~~2020~~2021 was primarily attributable to ~~lower~~higher production at the Coffeyville Facility due to reduced downtime ~~associated with the~~from Messer ~~air separation plant and production and shipping impacts from Winter Storm Uri.~~outages in 2022.

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Cost of Materials and Other						Direct Operating Expenses (1)

(1)Exclusive of depreciation and amortization expense.

Cost of Materials and Other -For the three months ended March 31, ~~2021,~~2022, cost of materials and other was ~~$17.8~~$30.2 million, ~~from $24.0~~compared to $17.8 million for the three months ended March 31, ~~2020.~~2021. The ~~$6.2~~$12.4 million ~~decrease~~increase was ~~largely tied to reduced sales~~comprised primarily of a $4.1 million increase in ~~2021 compared to the 2020 period. Additionally, lower~~ natural gas pricing and ~~other production costs of $2.3 million as compared to the first quarter of 2020~~usage at the East Dubuque Facility, ~~were realized from the shutdown~~a $2.8 million increase in distribution costs driven by freight, a $1.8 million increase in purchases of ~~operations during Winter Storm Uri. These decreases are partially offset by increases to third-party coke, refinery~~ammonia, a $1.3 million increase in pet coke and hydrogen feedstock ~~purchases of $0.6 million in the first quarter of 2021 as compared to the first quarter of 2020~~costs at the Coffeyville ~~Facility.~~Facility, and a lower build in inventories contributing $2.5 million.

Direct Operating Expenses (exclusive of depreciation and amortization) - For the three months ended March 31, ~~2021,~~2022, direct operating expenses (exclusive of depreciation and amortization)were ~~$37.1~~$60.3 million compared to ~~$35.1~~$37.1 million for the three months ended March 31, ~~2020.~~2021. The ~~$2.0~~$23.2 million increase was primarily due to higher personnel costs ~~of $3.9 million~~ for ~~labor and stock-based~~share-based compensation expenses of $5.7 million as a result of higher market prices for CVR ~~Energy’s shares and CVR~~ Partners’ common units, a lower build in ~~the first quarter of 2021, coupled with higher utility costs of $2.2~~inventories contributing $5.5 million, ~~related to~~ higher electricity ~~rates~~pricing and usage ~~at the Coffeyville Facility and higher overall~~of $2.7 million, rising natural gas prices ~~during the three months ended March 31, 2021. These~~of $4.0 million, increased repairs and maintenance expenses due to outages of $3.1 million, increased insurance costs ~~were partially offset by lower operating costs at the East Dubuque Facility from the shutdown~~ of ~~operations during Winter Storm Uri~~$1.6 million, and incurring turnaround expenses of ~~$3.0~~$0.6 million.


Depreciation and Amortization						Selling, General and Administrative Expenses, and Other

Depreciation and Amortization Expense - For the three months ended March 31, ~~2021,~~2022, depreciation and amortization expense ~~decreased $1.5~~increased $5.4 million compared to the three months ended March 31, ~~2020~~2021. The increase was primarily ~~as a result of certain~~due to inventory changes and an increase in accelerated depreciation related to projects to be completed by 2025 that will retire assets ~~being fully depreciated or retired~~earlier than their original expected useful life, coupled with additions to property, plant, and equipment during the ~~three months ended March 31, 2021.~~

~~Selling, General, and Administrative Expenses, and Other~~ ~~- For the three months ended March 31, 2021, selling, general and administrative expenses and other increased $0.7 million compared to the three months ended March 31, 2020. This~~current year.

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Selling, General, and Administrative Expenses, and Other - For the three months ended March 31, 2022, selling, general and administrative expenses and other increased approximately $2.9 million compared to the three months ended March 31, 2021. The increase was primarily related to ~~higher~~increased personnel costs ~~due to an increase in stock-based compensation expenses resulting from market increases in CVR Energy’s share price~~contributing $2.3 million and ~~CVR Partners’ unit price coupled with an increase in asset write-offs. This increase was partially offset by a reduction in bad debt reserves and non-personnel~~increased outside services expenses for ~~outside~~consulting, audit services, and ~~public relations costs.~~legal contributing $0.5 million.

Other Income, Net - For the three months ended March 31, ~~2021,~~2022, other income, net was ~~$4.6 million~~nominal compared to ~~less than $0.1~~approximately $4.6 million for the three months ended March 31, ~~2020~~2021. The decrease for the three months ended March 31, 2022 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.~~accounting principles generally accepted in the United States (“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.

The following are non-GAAP measures we present for the period ended March 31, ~~2021:~~2022:

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

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 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 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 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~~”“Non-GAAP Reconciliations” included herein for reconciliation of these amounts. Due to rounding, numbers presented within this section may not add or equal to numbers or totals presented elsewhere within this document.

~~Non-GAAP Reconciliations~~Factors Affecting Comparability of Our Financial Results

~~Reconciliation~~Our historical results of ~~Net Loss~~operations for the periods presented may not be comparable with prior periods or to ~~EBITDA~~our results of operations in the future for the reasons discussed below.

Three Months Ended
March 31,
(in thousands) 2021 2020
Net loss $ (25,384) $ (20,735)
Add:
Interest expense, net 15,916 15,783
Income tax expense 19 7
Depreciation and amortization 14,123 15,597
EBITDA $ 4,674 $ 10,652
Coffeyville Facility - The next planned turnaround at the Coffeyville Facility is currently expected to commence in the summer of 2022. For the three months ended March 31, 2022, we incurred turnaround expense of $0.1 million related to planning for this turnaround.

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East Dubuque Facility - The next planned turnaround at the East Dubuque Facility is currently expected to occur in the summer of 2022. For the three months ended March 31, 2022, we incurred turnaround expense of $0.5 million related to planning for this turnaround.

Non-GAAP Reconciliations

Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA


	Three Months Ended March 31,
(in thousands)	2022		2021
Net income (loss)	$	93,661	$	(25,384)

Interest expense, net	10,036		15,916
Income tax expense	258		19
Depreciation and amortization	19,465		14,123
EBITDA and Adjusted EBITDA	$	123,420	$	4,674

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


	Three Months Ended March 31,
(in thousands)	2022		2021
Net cash provided by operating activities	$	166,927	$	25,551
Non-cash items:
Loss on extinguishment of debt	(628)		—

Share-based compensation	(12,074)		(3,592)
Other	(613)		(1,259)
Adjustments:
Interest expense, net	10,036		15,916
Income tax expense	258		19
Change in assets and liabilities	(40,486)		(31,961)
EBITDA and Adjusted EBITDA	$	123,420	$	4,674

Three Months Ended
March 31,
(in thousands) 2021 2020
Net cash provided by operating activities $ 25,551 $ 27,707
Non-cash items:
Other (4,851) (785)
Adjustments:
Interest expense, net 15,916 15,783
Income tax expense 19 7
Change in assets and liabilities (31,961) (32,060)
EBITDA $ 4,674 $ 10,652

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Reconciliation of EBITDA to Available Cash for Distribution

Three Months Ended
March 31,
(in thousands) 2021 2020
EBITDA $ 4,674 $ 10,652
Current reserves for amounts related to:
Debt service (14,996) (14,999)
Maintenance capital expenditures (2,459) (4,139)
Common units repurchased (529) —
Other (reserves) releases:
Future turnaround (1,500) —
Previously established cash reserves 5,331 2,567
Available Cash for distribution (1) (2) $ (9,479) $ (5,919)
Common units outstanding 10,681 11,328


	Three Months Ended March 31,
(in thousands)	2022		2021
EBITDA	$	123,420	$	4,674


Current (reserves) adjustments for amounts related to:
Net cash interest expense (excluding capitalized interest)	(9,334)		—
Debt service	(65,000)		(14,996)
Financing fees	(815)		—
Maintenance capital expenditures	(5,128)		(2,459)
Utility pass-through	(675)		—
Common units repurchased	(12,397)		(529)




Other (reserves) releases:

Future turnaround	(6,875)		(1,500)
Previously established cash reserves	—		5,331


Reserve for maintenance capital expenditures	639		—
Available Cash for distribution (1) (2)	$	23,835	$	(9,479)



Common units outstanding	10,570		10,681

(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 declared and paid noa $5.24 cash ~~distributions~~distribution related to the fourth quarter of ~~2020,~~2021, and nodeclared a cash distribution ~~was declared for~~of $2.26 per common unit related to the first quarter of ~~2021.~~2022 to be paid in May 2022.

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~~Fertilizer market conditions improved steadily throughout 2021 and into 2022 driven by a combination of increased demand for products amid a series of supply disruptions, including the ~~COVID-19 pandemic resulted in a reduction in U.S. economic activity. These effects caused significant volatility~~Russia-Ukraine conflict, that led to tight fertilizer inventories and ~~disruption~~concerns around availability 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.~~product. 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~~In the summer of ~~extreme economic disruption may continue~~2021, numerous U.S. nitrogen fertilizer facilities underwent turnarounds, several of which extended longer than planned due to start-up issues. Additionally, in August 2021, Hurricane Ida caused additional fertilizer facility disruptions in the Gulf Coast, while the energy crunch in Europe and Asia reduced available supplies of nitrogen fertilizers further and caused prices to increase once more. In the first quarter of 2022 following the Russian invasion of Ukraine, fertilizer prices increased further and have anbeen volatile over concerns of a reduction in global supply of fertilizers due to restrictions on supply of Russian fertilizers and Russia’s decision to restrict fertilizer exports through the end of 2022. Despite the volatility in recent commodity pricing, the increase in fertilizer product pricing has had a favorable impact onto our business ~~results of operations,~~ and ~~access to sources~~has not significantly impacted our primary source of liquidity. While 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

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against ~~the virus~~COVID-19, and variants thereof, and weigh ~~further lock-down measures.~~potential impacts of the ongoing Russia-Ukraine conflict. In executing financial discipline, we ~~have~~ successfully implemented ~~and are maintaining~~ the following measures:

•~~Deferring~~Deferred the planned turnarounds at the Coffeyville and East Dubuque ~~Facility turnaround from~~Facilities after taking advantage of downtime in 2021 to ~~2022;~~complete maintenance activities; and

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

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When ~~paired with~~considering the market conditions and actions ~~outlined~~described above, ~~and prudently managing our operating costs and capital expenditures in 2021,~~ we currently believe that our cash from operations and existing cash and cash equivalents, along with borrowings, as necessary, ~~under the ABL Credit Agreement~~ will be sufficient to satisfy anticipated cash requirements associated with our existing operations for at least the next 12 months. However, our future capital expenditures and other cash requirements could be higher than we currently expect as a result of various ~~factors.~~factors including, but not limited to, rising material and labor costs and other inflationary pressures. 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 refinance or retire our outstanding debt through privately negotiated transactions, open market repurchases, redemptions, exchanges, tender offers or otherwise, ~~refinance our existing debt.~~but we are under no obligation to do so. There can be no assurance that we will seek to do any of the foregoing or that we will be able to do any of the foregoing on terms acceptable to us or at all.

~~There have been no material changes~~On February 22, 2022, the Partnership redeemed the remaining $65 million in aggregate principal amount of the 2023 Notes. This transaction represents a significant and favorable change in the Partnership’s cash flow and liquidity ~~from our 2020 Form 10-K.~~position, with an annual savings of approximately $6.0 million in future interest expense. See Note 8 (“Long-Term Debt”) for further discussion. The Partnership and its subsidiaries were in compliance with all covenants under their respective debt instruments as of March 31, ~~2021,~~2022, as applicable.

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

Cash and Other Liquidity

As of March 31, ~~2021,~~2022, we had cash and cash equivalents of ~~$52.6~~$137.3 million, including ~~$39.0~~$79.8 million of customer advances. Combined with ~~$24.6~~$35.0 million available under our ABL Credit ~~Agreement,~~Facility, we had total liquidity of ~~$77.2~~$172.3 million. As of December 31, ~~2020,~~2021, we had ~~$30.6~~$112.5 million in cash and cash equivalents, including ~~$7.6~~$34.2 million of customer advances.

March 31, 2021 December 31, 2020
(in thousands)
9.25% Senior Secured Notes, due June 2023 (1) $ 645,000 $ 645,000
Unamortized discount and debt issuance costs (10,054) (11,058)
Total long-term debt $ 634,946 $ 633,942
Current portion of long-term debt (2) 2,240 2,240
Total long-term debt, including current portion $ 637,186 $ 636,182


	March 31, 2022		December 31, 2021
(in thousands)
9.25% Senior Secured Notes, due June 2023 (1)	$	—	$	65,000
6.125% Senior Secured Notes, due June 2028	550,000		550,000
Unamortized discount and debt issuance costs	(3,561)		(4,358)
Total long-term debt	$	546,439	$	610,642

(1)The ~~call price~~$65 million outstanding balance of the 2023 Notes ~~decreases to~~was paid in full on February 22, 2022 at par, ~~on June 15, 2021.~~

~~(2)~~The 6.50% Notes, due April 2021, mature within 12 months, and, therefore, the outstanding balance of $2.2 million has been classified as short-term debt as of March 31, 2021 and December 31, 2020. Amounts reported in Other current liabilities. On April 15, 2021, the 2021 Notes matured, and the Partnership paid the outstanding balance, plus accrued and unpaid interest.

As of March 31, 2022, the Partnership had the 6.125% Senior Secured Notes, due June 2028 (the “2028 Notes”) and the ABL Credit Facility, the proceeds of which may be used to fund working capital, capital expenditures, and for other general corporate purposes. Refer to Part I, Item 1, Note 8 (“Long-Term Debt”) of this Report and Part II, Item 8, Note 5 (“Long-Term Debt”) of our 2021 Form 10-K for further information.

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.

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Our total capital expenditures for the three months ended March 31, ~~2021,~~2022, along with our estimated expenditures for ~~2021~~2022 are as follows:


		Three Months Ended March 31,		Estimated full year		Three Months Ended March 31,		Estimated full year
(in thousands)	(in thousands)	2021		2021	(in thousands)	2022		2022
Maintenance capital	Maintenance capital	$	2,459	$18,000 - 20,000	Maintenance capital	$	5,128	$36,000 - 39,000
Growth capital	Growth capital	666		4,000 - 6,000	Growth capital	521		2,000 - 3,000
Total capital expenditures	Total capital expenditures	$	3,125	$22,000 - 26,000	Total capital expenditures	$	5,649	$38,000 - 42,000

Our estimated capital expenditures are subject to change due to unanticipated changes in the cost, scope, and completion time for capital projects. For example, we may experience unexpected changes in labor or equipment costs necessary to comply with government regulations or to complete projects that sustain or improve the profitability of the ~~refineries or~~ nitrogen fertilizer 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 currently expected to occur in the ~~fall~~summer of ~~2021,~~2022, with an estimated cost of $8$12 to ~~$10~~$15 million. The turnaround at our East Dubuque Facility is also currently expected to commence in the summer of 2022, with an estimated cost of $14 to $16 million. For the three months ended March 31, 2022, we incurred turnaround expense of $0.1 million and $0.5 million related to planning for the Coffeyville Facility’s and the East Dubuque Facility’s expected turnarounds, respectively. 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 for the quarter excluding non-cash income or expense items (if any), for which adjustment is deemed necessary or appropriate by the Board in its sole discretion, less (i) 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.

Distributions, if any, including the payment, amount, and timing thereof, are subject to change at the discretion of the Board. The following tables present distributions paid by the Partnership to CVR Partners’ unitholders, including amounts paid to CVR Energy, during 2022 and 2021.


				Distributions Paid (in thousands)
Related Period	Date Paid	Distribution Per Common Unit		Public Unitholders		CVR Energy		Total
2021 - 4th Quarter	March 14, 2022	$	5.24	$	35,576	$	20,394	$	55,970



				Distributions Paid (in thousands)
Related Period	Date Paid	Distribution Per Common Unit		Public Unitholders		CVR Energy		Total


2021 - 2nd Quarter	August 23, 2021	$	1.72	$	11,678	$	6,694	$	18,372
2021 - 3rd Quarter	November 23, 2021	2.93		19,893		11,404		31,297
Total distributions		$	4.65	$	31,571	$	18,098	$	49,669

There were no distributions declared or paid by the Partnership ~~during the three months ended March 31, 2021~~ related to ~~the fourth quarter of 2020, and no distributions were paid during 2020. No distributions were declared for~~ the first quarter of ~~2021.~~2021 and fourth quarter of 2020.

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Capital Structure

On May 6, 2020, the Board, on behalf of the Partnership, authorized a unit repurchase program (the “Unit Repurchase Program”)., which was increased on February 22, 2021. The Unit Repurchase Program, ~~enables~~as increased, authorized the Partnership to repurchase up to ~~$10~~$20 million of the Partnership’s common units. ~~On February 22, 2021, the Board authorized an additional $10 million for the Unit Repurchase Program.~~ During the three months ended March 31, 2022 and 2021, the Partnership repurchased 111,695 and 24,378 common units, respectively, 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 $12.4 million and $0.5 million, ~~inclusive~~respectively, exclusive of transaction costs, or an average price of ~~$21.70~~$110.98 and $21.69 per common ~~unit.~~unit, respectively. As of March 31, ~~2021,~~2022, the Partnership, considering all repurchases made since inception of the Unit Repurchase Program, had ~~$12.4 million~~a nominal amount in authority remaining under the Unit Repurchase Program. This Unit Repurchase Program does not obligate the Partnership to ~~acquire~~repurchase any common units and may be cancelled or terminated by the Board at any time.

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Cash Flows

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


		Three Months Ended March 31,							Three Months Ended March 31,
(in thousands)	(in thousands)	2021		2020		Change		(in thousands)	2022		2021		Change
Net cash flow provided by (used in):	Net cash flow provided by (used in):							Net cash flow provided by (used in):
Operating activities	Operating activities	$	25,551	$	27,707	$	(2,156)	Operating activities	$	166,927	$	25,551	$	141,376
Investing activities	Investing activities	(2,994)		(6,662)		3,668		Investing activities	(7,899)		(2,994)		(4,905)
Financing activities	Financing activities	(555)		(25)		(530)		Financing activities	(134,197)		(555)		(133,642)
Net increase in cash and cash equivalents	Net increase in cash and cash equivalents	$	22,002	$	21,020	$	982	Net increase in cash and cash equivalents	$	24,831	$	22,002	$	2,829

Cash Flows Provided by Operating Activities

The change in net cash flows from operating activities for the three months ended March 31, ~~2021~~2022 as compared to the three months ended March 31, ~~2020~~2021 is primarily due to a ~~$6.0~~$118.7 million ~~decrease~~increase in EBITDA, ~~of which $4.1~~a $8.5 million ~~resulted from higher~~increase in non-cash share-based compensation as a result of higher market prices for CVR Partners’ units, favorable changes in ~~2021 compared to 2020.~~working capital of $6.2 million, a $2.3 million increase in our change in non-current assets and liabilities associated with the long-term portion of our share-based compensation, and a $0.6 million loss on extinguishment of debt primarily associated with the redemption of the remaining balance of 2023 Notes in February 2022.

Cash Flows Used in Investing Activities

The change in net cash used in investing activities for the three months ended March 31, ~~2021~~2022 compared to the three months ended March 31, ~~2020,~~2021, was due to ~~decreased~~increased capital expenditures during ~~2021~~2022 of ~~$3.7~~$4.9 million resulting from measures taken in 2020 to defer capital projects in light of 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.fixed asset additions.

Cash Flows Used in Financing Activities

The change in net cash used in financing activities for the three months ended March 31, ~~2021~~2022 compared to the three months ended March 31, ~~2020 is~~2021 was primarily due to the ~~repurchasing~~redemption of ~~CVR Partner’s~~the remaining balance of the 2023 Notes of $65.0 million in 2022, cash distributions paid of $56.0 million in 2022 compared to no distributions in 2021, an increase of $11.9 million in repurchases of the Partnership’s common units ~~for $0.5~~in 2022, and the payment of $0.8 million in ~~2021 with no similar repurchases in 2020.~~deferred financing costs during the first quarter of 2022 related to the offering of the 2028 Notes and the ABL Credit Facility.

Critical Accounting Estimates

Our critical accounting estimates are disclosed in the “Critical Accounting Estimates” section of our ~~2020~~2021 Form 10-K. No modifications have been made during the three months ended March 31, ~~2021~~2022 to these estimates.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our market risks as of and for the three months ended March 31, ~~2021~~2022 as compared to the risks discussed in Part II, Item 7A of our ~~2020~~2021 Form 10-K.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

~~As of March 31, 2021, we have~~The Partnership has evaluated, under the direction and with the participation of ~~our~~the Executive Chairman, Chief Executive Officer, ~~Chief Financial Officer~~ and Chief ~~Accounting~~Financial Officer, the effectiveness of our disclosure controls and procedures, as defined in Exchange Act Rule 13a-15(e) and 15d-15(e). Based upon ~~and as of~~this evaluation, the ~~date of that evaluation, our~~Partnership’s Executive Chairman, Chief Executive Officer, and Chief Financial Officer ~~and Chief Accounting Officer~~ concluded that ~~our~~ disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Partnership’s management, including our Executive Chairman, Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer as ~~appropriate, to allow timely decisions regarding required disclosure.~~of March 31, 2022.

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Changes in Internal Control Over Financial Reporting

There have been no material changes in the Partnership’s internal controls over financial reporting required by Rule 13a-15 of the Exchange Act that occurred during the fiscal quarter ended March 31, ~~2021~~2022 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 Part I, Item 1, Note 11 (“Commitments and Contingencies”) ~~to Part I, Item 1~~ of this Report, which is incorporated by reference into this Part II, Item 1, for a description of certain litigation, legal, and administrative proceedings and environmental matters.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in ~~the “Risk Factors” section~~Part I, Item 1A of our ~~2020~~2021 Form ~~10-K.~~10-K, which risk factors could be affected by the potential effects of the Russia-Ukraine conflict. 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.

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 March 31, ~~2021~~2022 were as follows:

Period Total Number of Units Purchased Average Price paid per Unit Total Number of Units Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Units that May Yet Be Purchased Under the Plans or Programs (1)
January 1 to January 31, 2021 7,878 $ 15.01 7,878 $ 2,806,180
February 1 to February 28, 2021 5,500 15.00 5,500 12,723,656
March 1 to March 31, 2021 11,000 29.84 11,000 12,395,428
Total 24,378 24,378



Period	Total Number of Units Purchased	Average Price Paid Per Unit		Total Number of Units Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Units that May Yet Be Purchased Under the Plans or Programs (1)
January 1 to January 31, 2022	—	$	—	—	$	12,407,324
February 1 to February 28, 2022	—	—		—	12,407,324
March 1 to March 31, 2022	111,695	110.98		111,695	11,003









Total	111,695			111,695

(1)On May 6, 2020, the Board, on behalf of the Partnership, authorized the Partnership to repurchase up to $10 million of the Partnership’s common units. On February 22, 2021, the Board authorized the Partnership to repurchase an additional $10 million of the Partnership’s common ~~units..~~units. Repurchases may be made through open market transactions, block trades, privately negotiated transactions, or otherwise in accordance with applicable securities laws. Through March 31, ~~2021,~~2022, the Partnership has repurchased ~~$7.6~~approximately $20.0 million of its common units under these authorizations and ~~$12.4 million~~a nominal amount of authority ~~may yet be used to purchase common units.~~remains.

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Item 5. Other Information

None.

~~March 31, 2021 |~~ 31

~~Table of Contents~~

Item 6. Exhibits


INDEX TO EXHIBITS
Exhibit Number						Exhibit Description

10.1**
						Amendment No. 1 to On-Site Product Supply Agreement among Coffeyville Resources Nitrogen Fertilizers, LLC and Messer LLC dated as of February 21, 2022 (incorporated by reference to Exhibit 10.17.1 to the Partnership ’s Form 10-K filed on February 2 3 , 2022).
10.110.2*+						Form of CVR Partners, LP Long-Term Incentive Plan Employee Phantom Unit Agreement (Executive) (incorporated by reference to Exhibit 10.7.4 to the Partnership ’s Form 10-K filed on February 2 3 , 2022).
10.3**+						Form of CVR Partners, LP Long-Term Incentive Plan Employee Phantom Unit Agreement (incorporated by reference to Exhibit 10.7.5 to the Partnership ’s Form 10-K filed on February 2 3 , 2022).
10.4**+						CVR Energy, Inc. Change in Control and Severance Plan, as amended effective January 1, 2022 (incorporated by reference to Exhibit 10.11.1 to the Partnership ’s Form 10-K filed on February 2 3 , 2022).
10.5*+						CVR Partners, LP ~~2021~~ 2022 Performance-Based Bonus Plan, approved February ~~19, 2021 (incorporated by reference~~21, 2022.
10.6*						Amendment to ~~Exhibit 10.27~~Master Service Agreement , dated as of April 12, 2022, among CVR Services, LLC and the ~~Form 10-K filed on February 23, 2021)~~Partnership and its subsidiaries .
31.1*						Rule 13a-14(a)/15d-14(a) Certification of Executive Chairman.
31.2*						Rule 13a-14(a)/15d-14(a) Certification of President and Chief Executive Officer.
31.3*						Rule 13a-14(a)/15d-14(a) Certification of Executive Vice President, ~~and~~ Chief Financial ~~Officer.~~Officer, Treasurer and Assistant Secretary.
31.4*						Rule 13a-14(a)/15d-14(a) Certification of Vice President, Chief Accounting Officer and Corporate Controller.
32.1†						Section 1350 Certification of Executive Chairman, President and Chief Executive Officer, Executive Vice President, ~~and~~ Chief Financial Officer, Treasurer and ~~the~~Assistant Secretary, and Vice President, Chief Accounting Officer and Corporate Controller.
101*						The following financial information for CVR Partners, LP’s Quarterly Report on Form 10-Q for the quarter ended March 31, ~~2021,~~2022, formatted Inline XBRL (“Extensible Business Reporting Language”) includes: (1) Condensed Consolidated Balance Sheets (unaudited), (2) Condensed Consolidated Statements of Operations (unaudited), (3) Condensed Consolidated Statements of Partners’ Capital (unaudited), (4) Condensed Consolidated Statements of Cash Flows (unaudited) and (5) the Notes to Condensed Consolidated Financial Statements (unaudited), tagged in detail.
104*						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Filed herewith.

** Previously filed.

† Furnished herewith.

+ Denotes management contract or compensatory plan or arrangement.

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

March 31, ~~2021~~2022 | 3233

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







May ~~4, 2021~~3, 2022	By:	/s/ ~~Tracy D. Jackson~~Dane J. Neumann
		Executive Vice President, ~~and~~ Chief Financial Officer, Treasurer and Assistant Secretary
		(Principal Financial Officer)


May ~~4, 2021~~3, 2022	By:	/s/ ~~Matthew W. Bley~~Jeffrey D. Conaway
		Vice President, Chief Accounting Officer and Corporate Controller
		(Principal Accounting Officer)

March 31, ~~2021~~2022 | 3334



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