|
|
|
|
|
(Mark One)
|
|
þ
|
QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the quarterly period ended June 30, 2018
|
|
|
|
OR
|
|
|
|
¨
|
TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the transition period from
to
.
|
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
(Address of principal executive offices)
|
77479
(Zip Code)
|
|
|
|
Page No.
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
(unaudited)
|
|
|
||||
|
(in thousands, except unit data)
|
||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
28,252
|
|
|
$
|
49,173
|
|
Accounts receivable, net of allowance for doubtful accounts of $55 and $28 at June 30, 2018 and December 31, 2017, respectively
|
27,574
|
|
|
9,855
|
|
||
Inventories
|
49,502
|
|
|
54,097
|
|
||
Prepaid expenses and other current assets
|
4,985
|
|
|
5,793
|
|
||
Total current assets
|
110,313
|
|
|
118,918
|
|
||
Property, plant, and equipment, net of accumulated depreciation
|
1,043,837
|
|
|
1,069,526
|
|
||
Goodwill
|
40,969
|
|
|
40,969
|
|
||
Other long-term assets
|
4,457
|
|
|
4,863
|
|
||
Total assets
|
$
|
1,199,576
|
|
|
$
|
1,234,276
|
|
LIABILITIES AND PARTNERS’ CAPITAL
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable, including $2,410 and $2,223 due to affiliates at June 30, 2018 and December 31, 2017, respectively
|
$
|
25,272
|
|
|
$
|
23,518
|
|
Accrued expenses and other current liabilities, including $3,511 and $4,742 with affiliates at June 30, 2018 and December 31, 2017, respectively
|
30,152
|
|
|
32,577
|
|
||
Total current liabilities
|
55,424
|
|
|
56,095
|
|
||
Long-term liabilities:
|
|
|
|
||||
Long-term debt, net of current portion
|
627,410
|
|
|
625,904
|
|
||
Other long-term liabilities
|
2,399
|
|
|
2,424
|
|
||
Total long-term liabilities
|
629,809
|
|
|
628,328
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Partners’ capital
|
514,343
|
|
|
549,853
|
|
||
Total liabilities and partners’ capital
|
$
|
1,199,576
|
|
|
$
|
1,234,276
|
|
|
Three Months Ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(unaudited)
|
||||||||||||||
|
(in thousands, except per unit data)
|
||||||||||||||
Net sales
|
$
|
93,197
|
|
|
$
|
97,896
|
|
|
$
|
173,056
|
|
|
$
|
183,217
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of materials and other
|
19,139
|
|
|
22,141
|
|
|
41,608
|
|
|
43,878
|
|
||||
Direct operating expenses (exclusive of depreciation and amortization)
|
47,465
|
|
|
37,796
|
|
|
86,134
|
|
|
73,693
|
|
||||
Depreciation and amortization
|
20,405
|
|
|
19,982
|
|
|
36,831
|
|
|
35,394
|
|
||||
Cost of sales
|
87,009
|
|
|
79,919
|
|
|
164,573
|
|
|
152,965
|
|
||||
Selling, general and administrative expenses
|
6,900
|
|
|
5,754
|
|
|
12,562
|
|
|
12,668
|
|
||||
Loss on asset disposals
|
78
|
|
|
25
|
|
|
132
|
|
|
38
|
|
||||
Total operating costs and expenses
|
93,987
|
|
|
85,698
|
|
|
177,267
|
|
|
165,671
|
|
||||
Operating income (loss)
|
(790
|
)
|
|
12,198
|
|
|
(4,211
|
)
|
|
17,546
|
|
||||
Interest expense, net
|
(15,677
|
)
|
|
(15,683
|
)
|
|
(31,388
|
)
|
|
(31,387
|
)
|
||||
Other income, net
|
27
|
|
|
16
|
|
|
71
|
|
|
59
|
|
||||
Loss before income tax
|
(16,440
|
)
|
|
(3,469
|
)
|
|
(35,528
|
)
|
|
(13,782
|
)
|
||||
Income tax expense (benefit)
|
19
|
|
|
(24
|
)
|
|
(18
|
)
|
|
(1
|
)
|
||||
Net loss
|
$
|
(16,459
|
)
|
|
$
|
(3,445
|
)
|
|
$
|
(35,510
|
)
|
|
$
|
(13,781
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per common unit — basic and diluted
|
$
|
(0.15
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.31
|
)
|
|
$
|
(0.12
|
)
|
Weighted-average common units outstanding — basic and diluted
|
113,283
|
|
|
113,283
|
|
|
113,283
|
|
|
113,283
|
|
|
Six months ended
June 30, |
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
|
(unaudited)
|
||||||
|
(in thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(35,510
|
)
|
|
$
|
(13,781
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
36,831
|
|
|
35,394
|
|
||
Share-based compensation
|
1,500
|
|
|
1,112
|
|
||
Other non-cash items
|
1,751
|
|
|
1,539
|
|
||
Change in assets and liabilities:
|
|
|
|
||||
Current assets and liabilities
|
(17,421
|
)
|
|
(17,416
|
)
|
||
Non-current assets and liabilities
|
379
|
|
|
89
|
|
||
Net cash (used in) provided by operating activities
|
(12,470
|
)
|
|
6,937
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(8,623
|
)
|
|
(8,616
|
)
|
||
Proceeds from sale of assets
|
172
|
|
|
—
|
|
||
Net cash used in investing activities
|
(8,451
|
)
|
|
(8,616
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Cash distributions to common unitholders – Affiliates
|
—
|
|
|
(778
|
)
|
||
Cash distributions to common unitholders – Non-affiliates
|
—
|
|
|
(1,488
|
)
|
||
Net cash used in financing activities
|
—
|
|
|
(2,266
|
)
|
||
Net decrease in cash and cash equivalents
|
(20,921
|
)
|
|
(3,945
|
)
|
||
Cash and cash equivalents, beginning of period
|
49,173
|
|
|
55,595
|
|
||
Cash and cash equivalents, end of period
|
$
|
28,252
|
|
|
$
|
51,650
|
|
|
June 30, 2018
|
||||||||||
|
As Reported
|
|
Balances without adoption of ASC 606
|
|
Effect of Change
|
||||||
|
|
|
|
|
|
||||||
|
(in thousands)
|
||||||||||
Assets
|
|
|
|
|
|
||||||
Accounts receivable
|
$
|
27,574
|
|
|
$
|
17,817
|
|
|
$
|
9,757
|
|
Liabilities
|
|
|
|
|
|
||||||
Deferred revenue
|
$
|
11,194
|
|
|
$
|
1,437
|
|
|
$
|
9,757
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Raw materials and precious metals
|
$
|
6,374
|
|
|
$
|
6,333
|
|
Finished goods
|
11,100
|
|
|
13,594
|
|
||
Parts and supplies
|
32,028
|
|
|
34,170
|
|
||
Total inventories
|
$
|
49,502
|
|
|
$
|
54,097
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Land and improvements
|
$
|
13,092
|
|
|
$
|
13,092
|
|
Buildings and improvements
|
17,123
|
|
|
16,990
|
|
||
Machinery and equipment
|
1,356,662
|
|
|
1,352,573
|
|
||
Other
|
32,047
|
|
|
28,101
|
|
||
|
1,418,924
|
|
|
1,410,756
|
|
||
Less: Accumulated depreciation
|
375,087
|
|
|
341,230
|
|
||
Total property, plant and equipment, net
|
$
|
1,043,837
|
|
|
$
|
1,069,526
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Deferred revenue
|
$
|
11,194
|
|
|
$
|
12,895
|
|
Personnel accruals
|
6,487
|
|
|
6,719
|
|
||
Affiliates (a)
|
3,511
|
|
|
4,742
|
|
||
Accrued interest
|
2,683
|
|
|
2,683
|
|
||
Other accrued expenses and liabilities
|
6,277
|
|
|
5,538
|
|
||
Total accrued expenses and other current liabilities
|
$
|
30,152
|
|
|
$
|
32,577
|
|
|
(a)
|
Personnel accruals and other accrued expenses and liabilities include amounts owed by the Partnership to CVR Energy under the shared services agreement. Refer to
Note 12 ("Related Party Transactions")
for additional discussion.
|
Debt Balance, Net of Current Maturities and Unamortized Discount and Issuance Costs
|
|
|
|
||||
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
(in thousands)
|
||||||
9.250% senior secured notes, due 2023
|
$
|
645,000
|
|
|
$
|
645,000
|
|
6.500% notes, due 2021
|
2,240
|
|
|
2,240
|
|
||
Total long-term debt, before debt issuance costs and discount (a)
|
647,240
|
|
|
647,240
|
|
||
Less:
|
|
|
|
||||
Unamortized discount and debt issuance costs
|
19,830
|
|
|
21,336
|
|
||
Total long-term debt, net of current portion
|
$
|
627,410
|
|
|
$
|
625,904
|
|
|
(a)
|
The estimated fair value of total long-term debt outstanding was approximately
$666.6 million
as of June 30, 2018.
|
Credit Facilities Outstanding
|
|
|
|
|
|
|
|
|
|
||||||||
|
Total Capacity
|
|
Amount Borrowed as of June 30, 2018
|
|
Outstanding Letters of Credit
|
|
Available Capacity as of June 30, 2018
|
|
Maturity Date
|
||||||||
|
(in thousands)
|
||||||||||||||||
Asset based credit facility (b)
|
$
|
50,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
49,622
|
|
|
September 30, 2021
|
|
(b)
|
Loans under the asset based credit facility initially bear interest at an annual rate equal to (i)
2.00%
plus LIBOR or (ii)
1.00%
plus a base rate, subject to a
0.50%
step-down based on the previous quarter’s excess availability.
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Supplemental disclosures:
|
|
|
|
||||
Cash paid for interest
|
$
|
29,999
|
|
|
$
|
29,951
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
Construction in process additions included in accounts payable
|
3,713
|
|
|
1,375
|
|
||
Change in accounts payable related to construction in process additions
|
2,824
|
|
|
(2,496
|
)
|
|
Three Months Ended
June 30, 2018 |
|
Six Months Ended
June 30, 2018 |
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Ammonia
|
$
|
28,373
|
|
|
$
|
39,970
|
|
UAN
|
51,394
|
|
|
104,157
|
|
||
Urea products
|
4,936
|
|
|
9,847
|
|
||
Fertilizer sales, exclusive of freight
|
84,703
|
|
|
153,974
|
|
||
Freight revenue
|
6,364
|
|
|
15,103
|
|
||
Other revenue
|
2,130
|
|
|
3,979
|
|
||
Total net sales
|
$
|
93,197
|
|
|
$
|
173,056
|
|
|
Six Months Ended
June 30, 2018 |
||
|
|
||
|
(in thousands)
|
||
Balance at January 1, 2018
|
$
|
34,270
|
|
Add:
|
|
||
New prepay contracts entered into during the period
|
13,829
|
|
|
Less:
|
|
||
Revenue recognized that was included in the contract liability balance at the beginning of the period
|
(31,903
|
)
|
|
Revenue recognized related to contracts entered into during the period
|
(4,781
|
)
|
|
Other changes
|
(221
|
)
|
|
Balance at June 30, 2018
|
$
|
11,194
|
|
Share-Based Compensation Expense
|
|||||||||||||||
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
||||||||||||||
CVR Partners LTIP - Phantom Units
|
$
|
548
|
|
|
$
|
85
|
|
|
$
|
954
|
|
|
$
|
415
|
|
Other Awards (a)
|
672
|
|
|
345
|
|
|
546
|
|
|
697
|
|
||||
Total Share-Based Compensation Expense
|
$
|
1,220
|
|
|
$
|
430
|
|
|
$
|
1,500
|
|
|
$
|
1,112
|
|
|
(a)
|
Other awards include compensation expense for certain employees of CVR Energy who perform services for the Partnership under the services agreement with CVR Energy and participate in equity compensation plans of CVR Partners' affiliates.
|
Expenses from related parties
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
Related Party
|
(in thousands)
|
||||||||||||||
Cost of materials and other
|
|
|
|
|
|
|
|
|
||||||||
Coke Supply Agreement
|
CRRM (a)
|
$
|
716
|
|
|
$
|
507
|
|
|
$
|
1,075
|
|
|
$
|
981
|
|
Hydrogen Purchase and Sale Agreement
|
CRRM
|
774
|
|
|
892
|
|
|
2,084
|
|
|
2,109
|
|
||||
Railcar Lease Agreements
|
ARI (b)
|
361
|
|
|
223
|
|
|
722
|
|
|
447
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Direct operating expenses (exclusive of depreciation and amortization)
|
|
|
|
|
|
|
|
|
||||||||
Services Agreement
|
CVR Energy
|
$
|
769
|
|
|
$
|
782
|
|
|
$
|
1,384
|
|
|
$
|
1,391
|
|
Limited Partnership Agreement
|
CVR GP
|
174
|
|
|
128
|
|
|
330
|
|
|
302
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
|
|
|
|
|
|
|
|
||||||||
Services Agreement
|
CVR Energy
|
$
|
3,895
|
|
|
$
|
3,006
|
|
|
$
|
6,758
|
|
|
$
|
6,158
|
|
Limited Partnership Agreement
|
CVR GP
|
787
|
|
|
590
|
|
|
1,294
|
|
|
1,324
|
|
|
(a)
|
Coffeyville Resources Refining & Marketing, LLC, a subsidiary of CVR Refining
|
(b)
|
ARI Leasing, LLC, a company controlled by IEP
|
Amounts due to related parties
|
|
|
|
|
||||
|
|
|
|
|
||||
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
Related Party
|
(in thousands)
|
||||||
Accounts payable
|
|
|
|
|
||||
Feedstock and Shared Services Agreement
|
CRRM
|
$
|
763
|
|
|
$
|
1,020
|
|
Hydrogen Purchase and Sale Agreement
|
CRRM
|
218
|
|
|
324
|
|
||
Services Agreement
|
CVR Energy
|
1,259
|
|
|
771
|
|
||
|
|
|
|
|
||||
Accrued expenses and other current liabilities
|
|
|
|
|
||||
Limited Partnership Agreement
|
CVR GP
|
$
|
1,565
|
|
|
$
|
1,521
|
|
Service Agreement
|
CVR Energy
|
1,943
|
|
|
3,221
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in millions)
|
||||||||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
93.2
|
|
|
$
|
97.9
|
|
|
$
|
173.1
|
|
|
$
|
183.2
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of materials and other
|
19.1
|
|
|
22.1
|
|
|
41.6
|
|
|
43.9
|
|
||||
Direct operating expenses (exclusive of depreciation and amortization)
|
47.4
|
|
|
37.8
|
|
|
86.1
|
|
|
73.7
|
|
||||
Depreciation and amortization
|
20.4
|
|
|
20.0
|
|
|
36.8
|
|
|
35.4
|
|
||||
Cost of sales
|
86.9
|
|
|
79.9
|
|
|
164.5
|
|
|
153.0
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
6.9
|
|
|
5.8
|
|
|
12.6
|
|
|
12.7
|
|
||||
Loss on asset disposals
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
||||
Operating income (loss)
|
(0.7
|
)
|
|
12.2
|
|
|
(4.1
|
)
|
|
17.5
|
|
||||
Interest expense, net
|
(15.7
|
)
|
|
(15.7
|
)
|
|
(31.4
|
)
|
|
(31.4
|
)
|
||||
Other income, net
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Net loss
|
$
|
(16.4
|
)
|
|
$
|
(3.5
|
)
|
|
$
|
(35.5
|
)
|
|
$
|
(13.8
|
)
|
|
|
|
|
|
|
|
|
||||||||
EBITDA (1)
|
$
|
19.7
|
|
|
$
|
32.2
|
|
|
$
|
32.7
|
|
|
$
|
53.0
|
|
Adjusted EBITDA (1)
|
$
|
26.0
|
|
|
$
|
32.3
|
|
|
$
|
39.0
|
|
|
$
|
53.1
|
|
Available cash for distribution (1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(4.2
|
)
|
|
$
|
1.8
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation to net sales:
|
|
|
|
|
|
|
|
||||||||
Fertilizer sales, exclusive of freight
|
$
|
84.7
|
|
|
$
|
87.6
|
|
|
$
|
154.0
|
|
|
$
|
163.6
|
|
Freight in revenue
|
6.4
|
|
|
8.2
|
|
|
15.1
|
|
|
15.3
|
|
||||
Other
|
2.1
|
|
|
2.1
|
|
|
4.0
|
|
|
4.3
|
|
||||
Total net sales
|
$
|
93.2
|
|
|
$
|
97.9
|
|
|
$
|
173.1
|
|
|
$
|
183.2
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Key Operating Statistics:
|
|
|
|
|
|
|
|
||||||||
Consolidated sales (thousand tons):
|
|
|
|
|
|
|
|
||||||||
Ammonia
|
81.6
|
|
|
74.6
|
|
|
117.6
|
|
|
136.5
|
|
||||
UAN
|
269.6
|
|
|
330.9
|
|
|
615.0
|
|
|
652.5
|
|
||||
Consolidated product pricing at gate (dollars per ton) (1):
|
|
|
|
|
|
|
|
||||||||
Ammonia
|
$
|
348
|
|
|
$
|
333
|
|
|
$
|
340
|
|
|
$
|
322
|
|
UAN
|
$
|
191
|
|
|
$
|
174
|
|
|
$
|
169
|
|
|
$
|
167
|
|
Consolidated production volume (thousand tons):
|
|
|
|
|
|
|
|
||||||||
Ammonia (gross produced) (2)
|
173.7
|
|
|
215.3
|
|
|
372.8
|
|
|
434.5
|
|
||||
Ammonia (net available for sale) (2)
|
65.5
|
|
|
77.5
|
|
|
124.4
|
|
|
157.5
|
|
||||
UAN
|
240.9
|
|
|
313.8
|
|
|
580.2
|
|
|
655.7
|
|
||||
Feedstock:
|
|
|
|
|
|
|
|
||||||||
Petroleum coke used in production (thousand tons)
|
89.8
|
|
|
124.0
|
|
|
208.0
|
|
|
256.6
|
|
||||
Petroleum coke used in production (dollars per ton)
|
$
|
25
|
|
|
$
|
21
|
|
|
$
|
21
|
|
|
$
|
17
|
|
Natural gas used in production (thousands of MMBtu) (3)(4)
|
1,964.1
|
|
|
2,134.0
|
|
|
3,814.4
|
|
|
4,225.3
|
|
||||
Natural gas used in production (dollars per MMBtu) (3)(4)
|
$
|
2.78
|
|
|
$
|
3.18
|
|
|
$
|
3.00
|
|
|
$
|
3.29
|
|
Natural gas in cost of materials and other (thousands of MMBtu) (3)
|
2,571.4
|
|
|
2,487.4
|
|
|
3,829.1
|
|
|
3,963.4
|
|
||||
Natural gas in cost of materials and other (dollars per MMBtu) (3)
|
$
|
2.84
|
|
|
$
|
3.24
|
|
|
$
|
3.05
|
|
|
$
|
3.37
|
|
Coffeyville Facility on-stream factors (4):
|
|
|
|
|
|
|
|
||||||||
Gasification
|
72.8
|
%
|
|
98.8
|
%
|
|
86.3
|
%
|
|
98.8
|
%
|
||||
Ammonia
|
70.2
|
%
|
|
98.2
|
%
|
|
84.9
|
%
|
|
98.3
|
%
|
||||
UAN
|
67.0
|
%
|
|
87.3
|
%
|
|
83.0
|
%
|
|
92.0
|
%
|
||||
East Dubuque Facility on-stream factors (4):
|
|
|
|
|
|
|
|
||||||||
Ammonia
|
93.3
|
%
|
|
100.0
|
%
|
|
90.0
|
%
|
|
99.8
|
%
|
||||
UAN
|
93.6
|
%
|
|
99.4
|
%
|
|
90.3
|
%
|
|
98.8
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Market Indicators:
|
|
|
|
|
|
|
|
||||||||
Ammonia - Southern plains (dollars per ton)
|
$
|
343
|
|
|
$
|
316
|
|
|
$
|
362
|
|
|
$
|
352
|
|
Ammonia - Corn belt (dollars per ton)
|
$
|
396
|
|
|
$
|
365
|
|
|
$
|
412
|
|
|
$
|
395
|
|
UAN - Corn belt (dollars per ton)
|
$
|
211
|
|
|
$
|
196
|
|
|
$
|
211
|
|
|
$
|
205
|
|
Natural gas - NYMEX (dollars per MMBtu)
|
$
|
2.83
|
|
|
$
|
3.14
|
|
|
$
|
2.84
|
|
|
$
|
3.10
|
|
(1)
|
Product pricing at gate (also referred to as "netback") represents net sales less freight revenue divided by product sales volume in tons and is shown in order to provide a pricing measure that is comparable across the fertilizer industry.
|
(2)
|
Gross tons produced for ammonia represent total ammonia produced, including ammonia produced that was upgraded into other fertilizer products. Net tons available for sale represent ammonia available for sale that was not upgraded into other fertilizer products.
|
(3)
|
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).
|
(4)
|
On-stream factor is the total number of hours operated divided by the total number of hours in the reporting period and is included as a measure of operating efficiency.
|
|
Price
Variance
|
|
Volume
Variance
|
||||
|
|
|
|
||||
|
(in millions)
|
||||||
UAN
|
$
|
3.9
|
|
|
$
|
(12.1
|
)
|
Ammonia
|
$
|
1.1
|
|
|
$
|
2.4
|
|
|
Price
Variance
|
|
Volume
Variance
|
||||
|
|
|
|
||||
|
(in millions)
|
||||||
UAN
|
$
|
1.8
|
|
|
$
|
(7.0
|
)
|
Ammonia
|
$
|
2.4
|
|
|
$
|
(6.3
|
)
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in millions)
|
||||||||||||||
Net loss
|
$
|
(16.4
|
)
|
|
$
|
(3.5
|
)
|
|
$
|
(35.5
|
)
|
|
$
|
(13.8
|
)
|
Add:
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
15.7
|
|
|
15.7
|
|
|
31.4
|
|
|
31.4
|
|
||||
Depreciation and amortization
|
20.4
|
|
|
20.0
|
|
|
36.8
|
|
|
35.4
|
|
||||
EBITDA
|
$
|
19.7
|
|
|
$
|
32.2
|
|
|
$
|
32.7
|
|
|
$
|
53.0
|
|
Add:
|
|
|
|
|
|
|
|
||||||||
Major scheduled turnaround expenses
|
6.3
|
|
|
0.1
|
|
|
6.3
|
|
|
0.1
|
|
||||
Adjusted EBITDA
|
$
|
26.0
|
|
|
$
|
32.3
|
|
|
$
|
39.0
|
|
|
$
|
53.1
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in millions, except units and per unit data)
|
||||||||||||||
Adjusted EBITDA
|
$
|
26.0
|
|
|
$
|
32.3
|
|
|
$
|
39.0
|
|
|
$
|
53.1
|
|
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Net cash interest expense (excluding capitalized interest) and debt service
|
(14.9
|
)
|
|
(14.9
|
)
|
|
(29.8
|
)
|
|
(29.9
|
)
|
||||
Maintenance capital expenditures
|
(4.1
|
)
|
|
(4.4
|
)
|
|
(6.4
|
)
|
|
(8.4
|
)
|
||||
Major scheduled turnaround expenses
|
(6.3
|
)
|
|
(0.1
|
)
|
|
(6.3
|
)
|
|
(0.1
|
)
|
||||
Cash reserves for future operating needs
|
(0.7
|
)
|
|
(12.9
|
)
|
|
(0.7
|
)
|
|
(12.9
|
)
|
||||
Available cash for distribution
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(4.2
|
)
|
|
$
|
1.8
|
|
Distribution declared, per common unit
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.02
|
|
Common units outstanding (in thousands)
|
113,283
|
|
|
113,283
|
|
|
113,283
|
|
|
113,283
|
|
|
Six Months Ended
June 30, |
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
|
(in millions)
|
||||||
Net cash flow provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
(12.5
|
)
|
|
$
|
7.0
|
|
Investing activities
|
(8.4
|
)
|
|
(8.6
|
)
|
||
Financing activities
|
—
|
|
|
(2.3
|
)
|
||
Net decrease in cash and cash equivalents
|
$
|
(20.9
|
)
|
|
$
|
(3.9
|
)
|
•
|
statements, other than statements of historical fact, that address activities, events or developments that we expect, believe or anticipate will or may occur in the future;
|
•
|
statements relating to future financial or operational performance, future distributions, future capital sources and capital expenditures; and
|
•
|
any other statements preceded by, followed by or that include the words "anticipates," "believes," "expects," "plans," "intends," "estimates," "projects," "could," "should," "may" or similar expressions.
|
•
|
our ability to make cash distributions on the common units;
|
•
|
the volatile nature of our business and the variable nature of our distributions;
|
•
|
the ability of our general partner to modify or revoke our distribution policy at any time;
|
•
|
the cyclical nature of our business;
|
•
|
the seasonal nature of our business;
|
•
|
the dependence of our operations on a few third-party suppliers, including providers of transportation services and equipment;
|
•
|
our reliance on pet coke that we purchase from CVR Refining;
|
•
|
our reliance on the natural gas, electricity, oxygen, nitrogen and compressed dry air that we purchase from third parties;
|
•
|
the supply and price levels of essential raw materials;
|
•
|
the risk of a material decline in production at our nitrogen fertilizer plants;
|
•
|
accidents or other unscheduled shutdowns or distributions 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 or renew permits to operating our business.;
|
•
|
competition in the nitrogen fertilizer businesses;
|
•
|
capital expenditures and potential liabilities arising from environmental laws and regulations;
|
•
|
existing and proposed laws, rulings and regulations, including those relating to climate change, alternative energy or fuel sources, and the end-use and application of fertilizers;
|
•
|
new regulations concerning the transportation of hazardous chemicals, risks of terrorism, the security of chemical manufacturing facilities and other matters beyond our control;
|
•
|
the risk of security breaches;
|
•
|
our lack of asset diversification;
|
•
|
our dependence on significant customers and the creditworthiness and performance by counterparties;
|
•
|
the potential loss of our transportation cost advantage over our competitors;
|
•
|
our partial dependence on customer and distributor transportation of purchased goods;
|
•
|
our potential inability to successfully implement our business strategies, including the completion of significant capital programs;
|
•
|
our reliance on CVR Energy’s senior management team and conflicts of interest they face operating each of CVR Partners, CVR Refining and CVR Energy;
|
•
|
the risk of labor disputes and adverse employee relations;
|
•
|
risks relating to our relationships with CVR Energy and CVR Refining;
|
•
|
control of our general partner by CVR Energy;
|
•
|
our ability to continue to license the technology used in our operations;
|
•
|
restrictions in our debt agreements;
|
•
|
changes in our treatment as a partnership for U.S. federal income or state tax purposes;
|
•
|
rulings, judgments or settlements in litigation, tax or other legal or regulatory matters;
|
•
|
instability and volatility in the capital and credit markets; and
|
•
|
competition with CVR Energy and its affiliates.
|
|
*
|
Filed herewith.
|
**
|
Previously filed.
|
†
|
Furnished herewith.
|
|
|
CVR Partners, LP
|
|
|
|
|
|
|
|
By:
|
CVR GP, LLC, its general partner
|
|
|
|
|
July 26, 2018
|
|
By:
|
/s/ TRACY D. JACKSON
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
July 26, 2018
|
|
By:
|
/s/ MATTHEW W. BLEY
|
|
|
|
Chief Accounting Officer and Corporate Controller
|
|
|
|
(Principal Accounting Officer)
|
|
|
|
|
Retention, Severance, and Release Agreement
|
1
|
1.
|
Payment of Salary through the Completion Date and Separation of Employment.
Your employment with the Company will end effective July 31, 2018 ("the Completion Date"). You agree to use your good faith efforts to diligently assist the Company as needed or as requested, including necessary travel, through the Completion Date in the completion of assigned duties, the transfer of your knowledge and the orderly transition of your responsibilities, and such other duties as may be requested by the Company through such date. We will continue to pay you at your current regular base salary through the Completion Date (unless you depart earlier due to your own volition). Should the Company elect to relieve you of all further work responsibilities prior to the Completion Date, we nevertheless will pay you through the Completion Date at your current, regular base salary, provided these additional requirements are met:
|
a.
|
You will be permitted reasonable time off from work utilizing unused accrued paid time off (PTO) through the Completion Date as needed and requested in advance to explore other employment opportunities so long as they do not conflict with your responsibilities and duties with the Company.
|
b.
|
If you fail to materially perform duties as assigned, engage in material acts of misconduct, and/or materially violate Company policies at any time prior to the Completion Date, the Company reserves the right to revoke and rescind the severance, retention and related payments set for the below.
|
Retention, Severance, and Release Agreement
|
2
|
c.
|
On or immediately after the Completion Date (or such earlier separation date elected by the Company), you agree to execute a Supplemental Release Agreement in the form attached hereto as Attachment A.
|
2.
|
Accrued
Paid Time Off.
The Company will pay you for any unused accrued PTO that you have remaining as of the Completion Date, less appropriate payroll deductions.
|
3.
|
Severance
. If you remain employed with us through the Completion Date (and do not depart earlier due to your own volition), the Company will pay you the gross amount of $87,692.00, less appropriate payroll deductions as severance pay in accordance with the CVR Severance Pay Plans (effective August 1, 2016), representing two weeks' base pay plus one week for each completed year of service, up to 26 weeks total severance payment, payable in a lump sum on the first regularly scheduled payroll cycle of the Company after you execute and return Attachment A—Supplemental Release Agreement if you remain employed with us through the Completion Date.
|
4.
|
Payment in Lieu of 2018 Bonus
. If you remain employed with us through the Completion Date (and do not depart earlier due to your own volition), the Company will pay you the gross amount of $243,833.00, less appropriate payroll deductions, payable in a lump sum on the first regularly scheduled payroll cycle of the Company after you execute and return Attachment A—Supplemental Release Agreement. This amount represents payment in lieu of any potential 2018 bonus under any applicable Company plan, pro-rated for the number of months you were employed by the Company up to the Completion Date.
|
5.
|
Retention Bonus.
If you remain employed with us through the Completion Date (and do not depart earlier due to your own volition), the Company will pay you the gross amount of $58,462.00, less appropriate payroll deductions, which represents two additional weeks of base pay per month until the Completion Date, payable in a lump sum on the first regularly scheduled payroll cycle of the Company after you execute and return Attachment A —Supplemental Release Agreement.
|
6.
|
Long Term Incentive Award.
The Company will pay you for all “Incentive Units” that are scheduled to vest in 2018 under your Incentive Unit Agreements (each an “Award Agreement”). For each Incentive Unit that is scheduled to vest in 2018, you will receive (a) an amount that is equal to the average closing price of the common units (the “Units”) of CVR Refining, LP (the “Partnership”) per Unit for the 10 business days preceding the separation date (should the Company elect to relieve you for all further responsibilities prior to the Completion Date) or Completion Date, whichever is the earlier, plus (b) the amount per Unit, scheduled to vest in 2018, of all distributions declared and paid by the Partnership from the applicable “Grant Date” of the applicable Award Agreement to and including the Completion Date (or such earlier separation date, if applicable), less, in each case, applicable “Withholding Taxes” as defined in each Award Agreement. All other Incentive Units shall be deemed forfeited and you will have no rights with respect with respect thereto.
|
Retention, Severance, and Release Agreement
|
3
|
7.
|
Company Election of Earlier Separation Date.
Should the Company elect to relieve you of all further work responsibilities prior to the Completion Date, under Sections 3, 4, and 5, Company nevertheless will pay you a recalculated amount of each payment based on your separation date less appropriate payroll deductions, payable in a lump sum on the first regularly scheduled payroll cycle of the Company after you execute and return Attachment A—Supplemental Release Agreement.
|
8.
|
Benefits
. The Company will continue to pay its portion of the monthly cost of group health coverage for you (and your existing covered dependents) under the Company sponsored group health plan through the separation date or Completion Date, whichever is the earlier. Thereafter, you (and your existing covered dependents, if any) may elect COBRA continuation coverage pursuant to the federal COBRA law, or seek coverage through the federal Health Insurance Marketplace (Exchange), pursuant to applicable law. All other benefits, including life and disability insurance, made available by the Company shall cease as of the Completion Date, unless you timely arrange for any conversion coverage as may be permitted by the plans.
|
9.
|
Unemployment Benefits.
The Company agrees not to contest (or appeal) any claim for unemployment benefits that you may file with the appropriate state unemployment office after the Completion Date.
|
10.
|
401(k) Plan
. As required by law, you will no longer be eligible to participate as an active employee in the Company's 401(k) Plan (the "401(k) Plan") after the Completion Date (or such earlier separation date, if applicable), however, you may (to the extent permitted by the terms of the 401(k) Plan) continue to retain an account in such plan until you desire to receive a distribution of your 401(k) Plan account balance. In accordance with federal law, you will not be permitted to make any salary deferral contributions from the payment set forth in paragraph 3, 4, 5 and 6 of this Agreement. However, you will remain vested in any benefits you may have under the 401(k) Plan, pursuant to the terms thereof.
|
11.
|
Totality of Payments and Benefits
. The parties agree that the sums set forth in paragraphs 1, 2, 3, 4, 5, and 6 of this Agreement represent all the sums to be paid by the Company to you, or on your behalf, and include any other payments (including any unused or accrued vacation pay, sick pay, PTO, and any other compensation, bonuses, severance or benefits) that you may otherwise had been eligible to receive had you not accepted this Agreement.
|
12.
|
Release.
You release and forever discharge the Company (including CVR Energy, Inc.; Coffeyville Resources, LLC; Coffeyville Resources Refining & Marketing, LLC; Coffeyville Resources Crude Transportation, LLC; Coffeyville Resources Terminal, LLC; Coffeyville Resources Pipeline, LLC; CVR GP, LLC; CVR Partners, LP; Coffeyville Resources Nitrogen Fertilizers, LLC; Wynnewood Energy Company, LLC; Wynnewood Refining Company, LLC; CVR Refining Holdings, LLC; CVR Refining, LLC; CVR Refining, LP; CVR Refining GP, LLC; CVR Nitrogen, LP; CVR Nitrogen GP, LLC; CVR Nitrogen Holdings, LLC and East Dubuque Nitrogen Fertilizers, LLC; and our respective predecessors, successors, assigns, officers, directors, owners, fiduciaries, shareholders, employees, agents,
|
Retention, Severance, and Release Agreement
|
4
|
13.
|
Release
Includes All Claims.
You acknowledge and agree that you are releasing us (and all Released Parties) from all rights and claims that may be asserted under any applicable local, state, federal, statutory or common law relating to discrimination in employment including, without limitation, discrimination relating to race, color, sex, gender, religion, national origin, ancestry, handicap, disability, genetics or genetic information, veterans status, equal pay, marital status, pregnancy, age, retaliation or whistle-blowing and including claims under Title VII of the 1964 Civil Rights Act, the Civil Rights Act of 1991, Fair Labor Standards Act, Equal Pay Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act as amended, 42 U.S.C. sections 1981, 1983 and 1985, Executive Order 11246, the Rehabilitation Act, the Employee Retirement Income Security Act, Worker's Compensation laws, the Consolidated Omnibus Budget Reconciliation Act (COBRA), the Family and Medical Leave Act, the National Labor Relations Act, all applicable Texas, Kansas, Illinois and Oklahoma state laws, libel, slander, defamation, invasion of privacy, outrageous conduct, intentional or negligent infliction of emotional distress, respondeat superior, negligent hiring or retention, and all other laws and ordinances which are meant to protect workers in their employment relationships and under which you may have rights and claims.
|
14.
|
Non-Admission
. This Agreement does not constitute an admission by any party that it has committed any wrongdoing.
|
15.
|
Return of Property.
You agree to promptly supply to the Company on the Completion Date, or such other date requested by the Company, all computer passwords, property, keys, notes, memoranda, writings, lists, files, reports, customer lists, correspondence, tapes, disks, cards, surveys, maps, logs, machines, technical data and any other tangible product or document which has been produced by, received by, or otherwise submitted to you during your employment with the Company, and any copies thereof in your possession (or capable of being reduced to your possession).
|
Retention, Severance, and Release Agreement
|
5
|
16.
|
Unauthorized Disclosure.
You agree and understand that in your position with the Company and its Affiliates, you have been exposed to and have received information relating to the confidential affairs of the Company and its Affiliates, including, without limitation, employee personnel and financial information, technical information, intellectual property, business and marketing plans, strategies, customer information, software, other information concerning the products, promotions, development, financing, expansion plans, business policies and practices of the Company and its Affiliates and other forms of information considered by the Company and its Affiliates to be confidential and in the nature of trade secrets (including, without limitation, ideas, research and development, know-how, formulas, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information and business and marketing plans and proposals) (collectively, the "Confidential Information"); provided, however, that the Confidential Information shall not include information which (i) is or becomes generally available to the public not in violation of this Agreement or any written policy of the Company; or (ii) was in your possession or knowledge on a non-confidential basis prior to such disclosure. You agree that you will not disclose such Confidential Information, either directly or indirectly, to any individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof, without the prior written consent of the Company; and, you shall not use or attempt to use any such information in any manner unless required by law to disclose such information, in which case you shall provide the Company with written notice of such requirement as far in advance of such anticipated disclosure as possible. Your confidentiality covenant has no temporal, geographical or territorial restriction. Nothing in this Agreement prohibits you from reporting any possible violations of federal law or regulation to any government agency or entity, including, but not limited to, the Department of Justice and the Securities and Exchange Commission, or making any other disclosures that are protected under the whistleblower provisions of federal law or regulation. You are not required to notify the Company that you will make or have made such reports or disclosures.
|
17.
|
Non-Disparagement
. You agree not to make any disparaging comment in any format, whether written, electronic, or oral, to any customer, employee, the press, or any other individual or non-government entity regarding the Company (including its directors, officers and employees) that relates to the Company's business or related activities or the relationship between the parties.
|
18.
|
Cooperation.
In exchange for the severance and other payments set forth in this Agreement, you agree to fully cooperate in any transition issues relating to your work that may arise following your separation from the Company. Such cooperation includes, but is not limited to, providing reasonable assistance and explanations to the Company of the status of pending issues and/or projects and providing responses in a reasonably timely manner to other requests for assistance. You further agree to cooperate with the Company in the event it is involved in litigation, a claim, or other administrative proceedings where you may be a witness or are otherwise necessary for the defense of the action. Such cooperation includes, but is not limited to, providing information and documentation as requested, and responding
|
Retention, Severance, and Release Agreement
|
6
|
19.
|
Confidentiality of this Agreement.
You agree to keep the terms and provisions of this Agreement in complete and absolute confidence, and agree not to reveal them without written permission from the Company to any person, or any other entity, other than to your immediate family and to your accountant, tax consultants and attorneys (who shall all also agree to keep such confidences), and taxing or government authorities.
|
20.
|
45-Days to Consider and 7-Day Revocation Period.
You have been given a period of at least 45 days in which to consider this Agreement. You agree that any changes made to this Agreement (whether material or not) must be made in writing, be signed and dated by both parties, and that any such changes do not restart the running of the 45-day period. You have the right to revoke this Agreement by giving written notice to Alicia Skalnik, Vice President Human Resources, CVR Energy, Inc., 2277 Plaza Drive, Suite 500, Sugar Land, Texas 77479, during the 7-day period after you sign them. This Agreement will not become effective or enforceable until the 7-day revocation period has expired.
|
21.
|
Complete
Agreement.
This Agreement constitutes the full, complete and entire agreement between the parties. There are no representations, promises, or agreements, whether express or implied, that are not set forth in this Agreement.
|
22.
|
Governing
Law.
This Agreement shall be governed by and interpreted under the laws of the State of Kansas to the extent not preempted by federal law. If any provision of the Release is deemed to be void or unenforceable, both parties agree that the remaining provisions shall be enforceable.
|
23.
|
Eligibility.
All employees who report up through the Chief Financial Officer of CVR Energy, Inc. and all employees who are located in the Kansas City Office, excluding employees in the Fertilizer Logistics department who report up to James Witthaus, Fertilizer Marketing department who report up to Matthias Green, and the Environmental, Health & Safety department are the decisional unit from which we choose the employees who would be offered consideration for signing a release of all claims and those who would not. All of the eligible employees have been offered the same terms and conditions found in this Agreement, subject to pay variations resulting from years of service, compensation, eligibility for 2018 bonus payments and Completion Date. The job title, department, pay grade, location, and age of all eligible individuals, including who was offered the agreement and those who were not offered an agreement, are set forth in Attachment B. As indicated on Attachment B, certain employees are being offered the ability to relocate or a retention bonus to delay their Completion Date to assist with transition of responsibilities. Attachment B is subject to
|
Retention, Severance, and Release Agreement
|
7
|
24.
|
Read, Understood and Voluntarily Signed.
The law requires that we advise you to consult with an attorney prior to signing this Agreement. You acknowledge that you have read this Agreement and understand it, and that you have signed it voluntarily.
|
John R. Walter
|
Dated
|
CVR Energy, Inc.
|
Dated
|
Retention, Severance, and Release Agreement
|
1
|
1.
|
Payment of Salary through the Completion Date and Separation of Employment.
Your employment with the Company will end effective June 30, 2018 ("the Completion Date"). You agree to use your good faith efforts to diligently assist the Company as needed or as requested, including necessary travel, through the Completion Date in the completion of assigned duties, the transfer of your knowledge and the orderly transition of your responsibilities, and such other duties as may be requested by the Company through such date. We will continue to pay you at your current regular base salary through the Completion Date (unless you depart earlier due to your own volition). Should the Company elect to relieve you of all further work responsibilities prior to the Completion Date, we nevertheless will pay you through the Completion Date at your current, regular base salary, provided these additional requirements are met:
|
a.
|
You will be permitted reasonable time off from work utilizing unused accrued paid time off (PTO) through the Completion Date as needed and requested in advance to explore other employment opportunities so long as they do not conflict with your responsibilities and duties with the Company.
|
b.
|
If you fail to materially perform duties as assigned, engage in material acts of misconduct, and/or materially violate Company policies at any time prior to the Completion Date, the Company reserves the right to revoke and rescind the severance, retention and related payments set for the below.
|
Retention, Severance, and Release Agreement
|
2
|
c.
|
On or immediately after the Completion Date (or such earlier separation date elected by the Company), you agree to execute a Supplemental Release Agreement in the form attached hereto as Attachment A.
|
2.
|
Accrued
Paid Time Off.
The Company will pay you for any unused accrued PTO that you have remaining as of the Completion Date, less appropriate payroll deductions.
|
3.
|
Severance
. If you remain employed with us through the Completion Date (and do not depart earlier due to your own volition), the Company will pay you the gross amount of $139,000.00, less appropriate payroll deductions as severance pay in accordance with the CVR Severance Pay Plans (effective August 1, 2016), representing two weeks' base pay plus one week for each completed year of service, up to 26 weeks total severance payment, payable in a lump sum on the first regularly scheduled payroll cycle of the Company after you execute and return Attachment A—Supplemental Release Agreement if you remain employed with us through the Completion Date.
|
4.
|
Payment in Lieu of 2018 Bonus
. If you remain employed with us through the Completion Date (and do not depart earlier due to your own volition), the Company will pay you the gross amount of $111,200.00, less appropriate payroll deductions, payable in a lump sum on the first regularly scheduled payroll cycle of the Company after you execute and return Attachment A—Supplemental Release Agreement. This amount represents payment in lieu of any potential 2018 bonus under any applicable Company plan, pro-rated for the number of months you were employed by the Company up to the Completion Date.
|
5.
|
Long Term Incentive Award.
The Company will pay you for all “Incentive Units” that are scheduled to vest in 2018 under your Incentive Unit Agreements (each an “Award Agreement”). For each Incentive Unit that is scheduled to vest in 2018, you will receive (a) an amount that is equal to the average closing price of the common units (the “Units”) of CVR Partners, LP (the “Partnership”) per Unit for the 10 business days preceding the separation date (should the Company elect to relieve you for all further responsibilities prior to the Completion Date) or Completion Date, whichever is the earlier, plus (b) the amount per Unit, scheduled to vest in 2018, of all distributions declared and paid by the Partnership from the applicable “Grant Date” of the applicable Award Agreement to and including the Completion Date (or such earlier separation date, if applicable), less, in each case, applicable “Withholding Taxes” as defined in each Award Agreement. All other Incentive Units shall be deemed forfeited and you will have no rights with respect with respect thereto.
|
6.
|
Company Election of Earlier Separation Date.
Should the Company elect to relieve you of all further work responsibilities prior to the Completion Date, under Sections 3 and 4, Company nevertheless will pay you a recalculated amount of each payment based on your separation date less appropriate payroll deductions, payable in a lump sum on the first regularly scheduled payroll cycle of the Company after you execute and return Attachment A—Supplemental Release Agreement.
|
Retention, Severance, and Release Agreement
|
3
|
7.
|
Benefits
. The Company will continue to pay its portion of the monthly cost of group health coverage for you (and your existing covered dependents) under the Company sponsored group health plan through the separation date or Completion Date, whichever is the earlier. Thereafter, you (and your existing covered dependents, if any) may elect COBRA continuation coverage pursuant to the federal COBRA law, or seek coverage through the federal Health Insurance Marketplace (Exchange), pursuant to applicable law. All other benefits, including life and disability insurance, made available by the Company shall cease as of the Completion Date, unless you timely arrange for any conversion coverage as may be permitted by the plans.
|
8.
|
Unemployment Benefits.
The Company agrees not to contest (or appeal) any claim for unemployment benefits that you may file with the appropriate state unemployment office after the Completion Date.
|
9.
|
401(k) Plan
. As required by law, you will no longer be eligible to participate as an active employee in the Company's 401(k) Plan (the "401(k) Plan") after the Completion Date (or such earlier separation date, if applicable), however, you may (to the extent permitted by the terms of the 401(k) Plan) continue to retain an account in such plan until you desire to receive a distribution of your 401(k) Plan account balance. In accordance with federal law, you will not be permitted to make any salary deferral contributions from the payment set forth in paragraph 3, 4, and 5 of this Agreement. However, you will remain vested in any benefits you may have under the 401(k) Plan, pursuant to the terms thereof.
|
10.
|
Totality of Payments and Benefits
. The parties agree that the sums set forth in paragraphs 1, 2, 3, 4, and 5 of this Agreement represent all the sums to be paid by the Company to you, or on your behalf, and include any other payments (including any unused or accrued vacation pay, sick pay, PTO, and any other compensation, bonuses, severance or benefits) that you may otherwise had been eligible to receive had you not accepted this Agreement.
|
11.
|
Release.
You release and forever discharge the Company (including CVR Energy, Inc.; Coffeyville Resources, LLC; Coffeyville Resources Refining & Marketing, LLC; Coffeyville Resources Crude Transportation, LLC; Coffeyville Resources Terminal, LLC; Coffeyville Resources Pipeline, LLC; CVR GP, LLC; CVR Partners, LP; Coffeyville Resources Nitrogen Fertilizers, LLC; Wynnewood Energy Company, LLC; Wynnewood Refining Company, LLC; CVR Refining Holdings, LLC; CVR Refining, LLC; CVR Refining, LP; CVR Refining GP, LLC; CVR Nitrogen, LP; CVR Nitrogen GP, LLC; CVR Nitrogen Holdings, LLC and East Dubuque Nitrogen Fertilizers, LLC; and our respective predecessors, successors, assigns, officers, directors, owners, fiduciaries, shareholders, employees, agents, attorneys, representatives, insurers, direct and indirect subsidiaries, parents, divisions, affiliates and related companies, collectively referred to as "Released Parties" or "Affiliates") from any and all claims, damages, lawsuits, injuries, liabilities and causes of action or demands, known or unknown, that you have or might have in the future, including but not limited to those rights and claims which arise out of your employment with us and the separation of your employment. You agree that the Company and any Released Parties have no further employment obligation to you after the Completion Date (or such earlier
|
Retention, Severance, and Release Agreement
|
4
|
12.
|
Release
Includes All Claims.
You acknowledge and agree that you are releasing us (and all Released Parties) from all rights and claims that may be asserted under any applicable local, state, federal, statutory or common law relating to discrimination in employment including, without limitation, discrimination relating to race, color, sex, gender, religion, national origin, ancestry, handicap, disability, genetics or genetic information, veterans status, equal pay, marital status, pregnancy, age, retaliation or whistle-blowing and including claims under Title VII of the 1964 Civil Rights Act, the Civil Rights Act of 1991, Fair Labor Standards Act, Equal Pay Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act as amended, 42 U.S.C. sections 1981, 1983 and 1985, Executive Order 11246, the Rehabilitation Act, the Employee Retirement Income Security Act, Worker's Compensation laws, the Consolidated Omnibus Budget Reconciliation Act (COBRA), the Family and Medical Leave Act, the National Labor Relations Act, all applicable Texas, Kansas, Illinois and Oklahoma state laws, libel, slander, defamation, invasion of privacy, outrageous conduct, intentional or negligent infliction of emotional distress, respondeat superior, negligent hiring or retention, and all other laws and ordinances which are meant to protect workers in their employment relationships and under which you may have rights and claims.
|
13.
|
Non-Admission
. This Agreement does not constitute an admission by any party that it has committed any wrongdoing.
|
14.
|
Return of Property.
You agree to promptly supply to the Company on the Completion Date, or such other date requested by the Company, all computer passwords, property, keys, notes, memoranda, writings, lists, files, reports, customer lists, correspondence, tapes, disks, cards, surveys, maps, logs, machines, technical data and any other tangible product or document which has been produced by, received by, or otherwise submitted to you during your employment with the Company, and any copies thereof in your possession (or capable of being reduced to your possession).
|
15.
|
Unauthorized Disclosure.
You agree and understand that in your position with the Company and its Affiliates, you have been exposed to and have received information relating to the confidential affairs of the Company and its Affiliates, including, without limitation, employee personnel and financial information, technical information, intellectual property, business and marketing plans, strategies, customer information, software, other information concerning the products, promotions, development, financing, expansion plans, business policies and
|
Retention, Severance, and Release Agreement
|
5
|
16.
|
Non-Disparagement
. You agree not to make any disparaging comment in any format, whether written, electronic, or oral, to any customer, employee, the press, or any other individual or non-government entity regarding the Company (including its directors, officers and employees) that relates to the Company's business or related activities or the relationship between the parties.
|
17.
|
Cooperation.
In exchange for the severance and other payments set forth in this Agreement, you agree to fully cooperate in any transition issues relating to your work that may arise following your separation from the Company. Such cooperation includes, but is not limited to, providing reasonable assistance and explanations to the Company of the status of pending issues and/or projects and providing responses in a reasonably timely manner to other requests for assistance. You further agree to cooperate with the Company in the event it is involved in litigation, a claim, or other administrative proceedings where you may be a witness or are otherwise necessary for the defense of the action. Such cooperation includes, but is not limited to, providing information and documentation as requested, and responding to reasonable requests from and working with the Company and/or its attorneys in the defense of the litigation, claim, or other administrative proceeding.
|
18.
|
Confidentiality of this Agreement.
You agree to keep the terms and provisions of this Agreement in complete and absolute confidence, and agree not to reveal them without written permission from the Company to any person, or any other entity, other than to your
|
Retention, Severance, and Release Agreement
|
6
|
19.
|
45-Days to Consider and 7-Day Revocation Period.
You have been given a period of at least 45 days in which to consider this Agreement. You agree that any changes made to this Agreement (whether material or not) must be made in writing, be signed and dated by both parties, and that any such changes do not restart the running of the 45-day period. You have the right to revoke this Agreement by giving written notice to Alicia Skalnik, Vice President Human Resources, CVR Energy, Inc., 2277 Plaza Drive, Suite 500, Sugar Land, Texas 77479, during the 7-day period after you sign them. This Agreement will not become effective or enforceable until the 7-day revocation period has expired.
|
20.
|
Complete
Agreement.
This Agreement constitutes the full, complete and entire agreement between the parties. There are no representations, promises, or agreements, whether express or implied, that are not set forth in this Agreement.
|
21.
|
Governing
Law.
This Agreement shall be governed by and interpreted under the laws of the State of Kansas to the extent not preempted by federal law. If any provision of the Release is deemed to be void or unenforceable, both parties agree that the remaining provisions shall be enforceable.
|
22.
|
Eligibility.
All employees who report up through the Chief Financial Officer of CVR Energy, Inc. and all employees who are located in the Kansas City Office, excluding employees in the Fertilizer Logistics department who report up to James Witthaus, Fertilizer Marketing department who report up to Matthias Green, and the Environmental, Health & Safety department are the decisional unit from which we choose the employees who would be offered consideration for signing a release of all claims and those who would not. All of the eligible employees have been offered the same terms and conditions found in this Agreement, subject to pay variations resulting from years of service, compensation, eligibility for 2018 bonus payments and Completion Date. The job title, department, pay grade, location, and age of all eligible individuals, including who was offered the agreement and those who were not offered an agreement, are set forth in Attachment B. As indicated on Attachment B, certain employees are being offered the ability to relocate or a retention bonus to delay their Completion Date to assist with transition of responsibilities. Attachment B is subject to change and may be affected by future employment decisions including future reorganization decisions affecting the decisional unit.
|
23.
|
Read, Understood and Voluntarily Signed.
The law requires that we advise you to consult with an attorney prior to signing this Agreement. You acknowledge that you have read this Agreement and understand it, and that you have signed it voluntarily.
|
Retention, Severance, and Release Agreement
|
7
|
William White
|
Dated
|
CVR GP, LLC
|
Dated
|
By:
|
/s/ DAVID L. LAMP
|
|
David L. Lamp
|
|
Executive Chairman
|
|
CVR GP, LLC
|
|
the general partner of CVR Partners, LP
|
|
(Principal Executive Officer)
|
By:
|
/s/ MARK A. PYTOSH
|
|
Mark A. Pytosh
|
|
President and Chief Executive Officer
|
|
CVR GP, LLC
|
|
the general partner of CVR Partners, LP
|
|
(Principal Executive Officer)
|
By:
|
/s/ TRACY D. JACKSON
|
|
Tracy D. Jackson
|
|
Executive Vice President and Chief Financial Officer
|
|
CVR GP, LLC
|
|
the general partner of CVR Partners, LP
|
|
(Principal Financial Officer)
|
By:
|
/s/ MATTHEW W. BLEY
|
|
Matthew W. Bley
|
|
Chief Accounting Officer and Corporate Controller
|
|
CVR GP, LLC
|
|
the general partner of CVR Partners, LP
|
|
(Principal Accounting Officer)
|
By:
|
/s/ DAVID L. LAMP
|
|
David L. Lamp
|
|
Executive Chairman
|
|
CVR GP, LLC
|
|
the general partner of CVR Partners, LP
|
|
(Principal Executive Officer)
|
|
|
By:
|
/s/ MARK A. PYTOSH
|
|
Mark A. Pytosh
|
|
President and Chief Executive Officer
|
|
CVR GP, LLC
|
|
the general partner of CVR Partners, LP
|
|
(Principal Executive Officer)
|
|
|
By:
|
/s/ TRACY D. JACKSON
|
|
Tracy D. Jackson
|
|
Executive Vice President and Chief Financial Officer
|
|
CVR GP, LLC
|
|
the general partner of CVR Partners, LP
|
|
(Principal Financial Officer)
|
|
|
By:
|
/s/ MATTHEW W. BLEY
|
|
Matthew W. Bley
|
|
Chief Accounting Officer and Corporate Controller
|
|
CVR GP, LLC
|
|
the general partner of CVR Partners, LP
|
|
(Principal Accounting Officer)
|