CVR Partners (UAN) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01Our operations, and nitrogen fertilizer and its feedstock prices, are cyclical and highly volatile, which could have a material adverse effect on our results of operations, financial condition and cash flows26% rewritten
2. 02Nitrogen fertilizer products and our business face intense competition
3. 03The dynamic pricing environment for nitrogen fertilizer products, as well as any changes to government policy regarding fertilizer pricing in response thereto, could negatively affect our results of operations
4. 04Our business is geographically concentrated and is therefore subject to regional economic downturns and seasonal variations for us or our customers, which may affect our production levels and inventory and working capital levels
5. 05Our sales volumes depend on significant customers, and the loss of several significant customers may have a material adverse impact on our results of operations, financial condition and cash flows32% rewritten
6. 06Any decline in U.S. agricultural production or limitations on the use of nitrogen fertilizer for agricultural purposes could have a material adverse effect on the sales of nitrogen fertilizer, and on our results of operations, financial condition and cash flows
7. 07Compliance with and changes in environmental laws, rules and regulations, including those related to climate change, could result in increased operating costs and capital expenditures and adversely affect our performance87% rewritten
8. 08Public health crises have had, and may continue to have, adverse impacts on our business, financial condition, results of operations and liquidity
9. 09We are subject to cybersecurity risks and may experience cyber incidents resulting in disruption or harm to our business
10. 10Inflation could have adverse effects on our results of operations58% rewritten
11. 11The acquisition and expansion strategy of our business involves significant risks that could have a material adverse effect on our results of operations, financial condition and cash flows82% rewritten
12. 12obtain requisite regulatory approvals. In addition, any Expansion Projects may entail significant transaction costs and risks associated with entry into new markets and lines of business, including but not limited to, new regulatory obligations and risksNew
13. 13Internally generated cash flows and other sources of liquidity may not be adequate for our capital needs

Risks Related to Our Facility Operations

1. 14Any interruption or change in the supply of feedstocks to our Facilities could have a material adverse effect on our results of operations and financial condition21% rewritten
2. 15If licensed technology were no longer available or able to be licensed economically or at all, our business may be adversely affected76% rewritten
3. 16acceptable, or in the case of infringement, may result in substantial costs, all of which could have a material adverse effect on our results of operations, financial condition and cash flowsNew
4. 17Our operations are dependent on third-party suppliers, which could have a material adverse effect on our results of operations, financial condition and cash flows27% rewritten
5. 18We rely on third-party providers of transportation services, which subjects us to risks and uncertainties beyond our control and that may have a material adverse effect on our results of operations, financial condition and ability to make distributions
6. 19Any liability for accidents involving ammonia or other products we produce or transport that cause severe damage to property or injury to the environment and human health could have a material adverse effect on our results of operations, financial condition and ability to make cash distributions
7. 20We could incur significant costs in cleaning up contamination37% rewritten
8. 21We may be unable to obtain or renew permits or approvals necessary for our operations, which could inhibit our ability to do business
9. 22Acts of terror or sabotage, threats of war, armed conflict or war or trade wars may have an adverse impact on our business, our future results of operations and our overall financial performance
10. 23Adverse weather conditions or other unforeseen developments could damage our Facilities or logistics assets and impair our ability to produce and deliver our nitrogen fertilizer products
11. 24Our Facilities face significant risks due to physical damage hazards, environmental liability risk exposure, and unplanned or emergency partial or total facility shutdowns, which could cause property damage or injuries and a material decline in production which are not fully insured51% rewritten
12. 25Our business may suffer due to the departure of any of our key senior executives or other key employees, and a shortage of skilled labor may make it difficult for us to maintain labor productivity
13. 26A portion of our workforce is unionized, and we are subject to the risk of labor disputes, slowdowns or strikes, which may disrupt our business and increase our costs

Risks Related to Our Capital Structure

1. 27Instability and volatility in the capital, credit and commodity markets in the global economy could negatively impact our business, financial condition, results of operations and cash flows
2. 28Our level of indebtedness may affect our ability to operate our business and may have a material adverse effect on our financial condition and results of operations
3. 29Covenants in our debt agreements could limit our ability to incur additional indebtedness and engage in certain transactions, as well as limit operational flexibility, which could adversely affect our liquidity and ability to pursue our business strategies75% rewritten
4. 30We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our debt obligations that may not be successfulNew
5. 31agreements limiting our exposure to higher interest rates, but any such agreements may not offer complete protection from this riskNew
6. 32An increase in interest rates may cause our debt service obligations to increase23% rewritten

Risks Related to Our Limited Partnership Structure

1. 33We may not have sufficient “available cash” to pay any quarterly distribution on common units, or the Board may elect to take reserves or distribute less than all of our available cash
2. 34Our partnership agreement has limited our General Partner’s liability, replaces default fiduciary duties, and restricts the remedies available to common unitholders for actions that, without these limitations and reductions, might otherwise constitute breaches of fiduciary duty
3. 35Our General Partner, an indirect wholly owned subsidiary of CVR Energy, has fiduciary duties to CVR Energy and its stockholders, and the interests of CVR Energy and its stockholders may differ significantly from, or conflict with, the interests of our public common unitholders
4. 36As a publicly traded partnership we qualify for and rely upon certain exemptions from many of the NYSE’s corporate governance requirements67% rewritten
5. 37Common unitholders may have liability to repay distributions
6. 38If the IRS were to treat us as a corporation for U.S. federal income tax purposes or we become subject to entity-level taxation for state tax purposes, our cash available for distribution to our common unitholders would be substantially reduced, likely causing a substantial reduction in the value of our common units
7. 39Our unitholders are required to pay income taxes on their share of our taxable income even if they do not receive any cash distributions from us
8. 40Common unitholders may be subject to limitation on their ability to deduct interest expense incurred by us
9. 41Tax-exempt entities face unique tax issues from owning our common units that may result in adverse tax consequences
10. 42The IRS may challenge our treatment of each purchaser of our common units as having the same tax benefits without regard to the common units actually purchased, which could adversely affect the value of our common units
11. 43Our proration methods may be challenged by the IRS, which could change the allocation of items of income, gain, loss, and deduction among our common unitholders
12. 44IRS challenge of certain valuation methodologies we have adopted to determine a unitholder’s allocations of income, gain, loss, and deduction, could adversely affect the value of our common units
13. 45Our common unitholders will likely be subject to state and local taxes, as well as income tax return filing requirements, in jurisdictions where they do not live as a result of investing in our common units