Item 7. 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 our consolidated financial statements and related notes and with the statistical information and financial data included elsewhere in this Report, as well as Part I, Item 1, “Business” and Part I, Item 1A, “Risk Factors” of this Report. 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.
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This discussion and analysis covers the years ended December 31, 2025 and 2024 and discusses year-to-year comparisons between such periods. The discussions of the year ended December 31, 2023 and year-to-year comparisons between the years ended December 31, 2024 and 2023 are not included in this Annual Report on Form 10-K but can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed on February 19, 2025, and such discussions are incorporated by reference into this Report.
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. 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 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, primarily corn and wheat. The Partnership produces these products at two manufacturing facilities, 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”, and together with the Coffeyville Facility, the “Facilities”). 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 and renewables refining, marketing, and logistics operations.
Strategy and Goals
The Partnership has adopted Mission and Core 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 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 employees can realize their maximum potential. We use defined work practices for consistency, efficiency and to create value across the organization.
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Our core 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 Facilities through safe and reliable operations. We are focusing on improvements in day-to-day facility operations, identifying alternative sources for facility inputs to reduce lost time due to third-party operational constraints, and optimizing our commercial and marketing functions to maintain facility 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.
Potential Strategic Transactions
As previously disclosed, Icahn Enterprises L.P. and its affiliates (“IEP”) and CVR Energy are considering potential strategic transactions available to CVR Energy subsidiaries and affiliates, which may include the acquisition of additional entities, assets or businesses, including the acquisition of material amounts of refining assets through negotiated mergers and/or stock or asset purchase agreements by the Company or our subsidiaries, and/or strategic options involving CVR Partners. There is no assurance that any of the aforementioned or previously disclosed or other transactions will develop or materialize, or if they do, as to their timing. As of December 31, 2025, IEP owns approximately 70% of CVR Energy’s total outstanding common stock and approximately 2.6% of the total outstanding common units of CVR Partners. As of December 31, 2025, CVR Energy, through its subsidiaries, held approximately 36.8% of CVR Partners’ outstanding common units and 100% of CVR Partners’ general partner interests.
Partnership Initiatives
Over the past two years, the Partnership has reserved funds for a series of debottlenecking and reliability projects that are intended to enhance operational reliability and ultimately facilitate potential increases in production capacity:
•In 2025, the Partnership progressed several projects focused on improving water and electrical reliability, expanding diesel exhaust fluid production, and increasing loadout capabilities, among other initiatives.
•During the planned turnaround at the Coffeyville Facility (the “2025 Coffeyville Turnaround”), which was completed as scheduled in early November 2025, the Partnership completed the installation of a nitrous oxide abatement unit. As a result, all four of our nitric acid plants are now equipped with nitrous oxide abatement units.
Based on engineering studies completed earlier in 2025, the Coffeyville Facility has the potential, subject to certain facility modifications, to utilize natural gas as an alternative feedstock to pet coke in the production of nitrogen fertilizer. The Partnership is also evaluating the ability to import larger than historical quantities of hydrogen directly from CVR Energy’s adjacent refinery and to increase the nameplate ammonia production of the Coffeyville Facility. The initial stages of this combined project have been approved by the board of directors of our General Partner (the “Board”), subject to completion of detailed engineering and final cost estimates. If completed, these initiatives would make the Coffeyville Facility the only nitrogen fertilizer facility in the United States with dual feedstock flexibility, providing management with the ability to choose the optimal mix of natural gas and third-party pet coke depending on prevailing prices.
In December 2025, we published our 2024 Environmental, Social & Governance Report (“2024 ESG Report”), which continues to benchmark performance against specific Sustainability Accounting Standards Board metrics and is available at CVR Partner’s website at www.CVRPartners.com. The 2024 ESG Report does not constitute a part of, and is not incorporated
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by reference into, this Annual Report on Form 10-K or any other report we file with (or furnish to) the Securities and Exchange Commission (the “SEC”), whether made before or after the date of this Annual Report on Form 10-K.
Industry Factors
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 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 world grain demand and production levels, changes in world population, the cost and availability of fertilizer transportation infrastructure, weather conditions, the availability of imports, the availability and price of feedstocks to produce nitrogen fertilizer, and the extent of government intervention in agriculture markets, among other factors.
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 markets, resulting in price and product margin volatility.
General Business Environment
On September 25, 2025, the United States Department of Agriculture (“USDA”) and the Department of Justice (“DOJ”) antitrust division signed a memorandum of understanding to conduct an investigation into anti-competitive practices among suppliers of agricultural inputs, including fertilizers, seeds, and crop protection products. In addition, actual and potential tariffs imposed by the U.S. on imports of nitrogen fertilizers have been among the factors that have caused the price of fertilizers to rise in the U.S. However, retaliatory trade actions by other countries, particularly in corn and soybean, have been a factor in lowering grain prices and negatively impacting farmer economics.
The Partnership expects to benefit from the permanent extension of certain of the 2017 Tax Cuts and Jobs Act provisions signed into law on July 4, 2025 with the One Big Beautiful Bill Act. The Partnership expects no material impact to its income tax balances and will continue to monitor developments and evaluate any potential future impacts.
Geopolitical Matters
•Changes, and proposed changes, to the U.S. global trade policy, along with renewed trade tensions and related international retaliatory measures, have continued to influence global markets and impact short- and long-term economics in the U.S. and around the globe, including concerns over inflation, recession, and slowing growth.
•The ongoing Russia-Ukraine war, continued conflicts and tensions in the Middle East, and the related implications for the global fertilizer and agriculture industries, together with tentative and ongoing peace negotiations in the affected regions, could lead to further disruptions in the production and trade of fertilizer, grains, and feedstock through various means, such as trade restrictions, sanctions or transportation bottlenecks. The ultimate impacts of these conflicts and/or economic policy, or further escalation, expansion, or resolution thereof, may affect our business, operations, cash flows, and access to capital in unforeseen ways.
Regulatory Environment
•Our business faces an uncertain regulatory landscape around climate-related reporting requirements due to various changes at the federal, state, and international levels which may materially impact our business, operations, compliance costs, results of operations and overall market stability.
•Certain governmental regulations and incentives associated with the automobile transportation and agricultural industries, including the ones related to corn-based ethanol and vegetable oil-based biodiesel, renewable diesel, and sustainable aviation fuel production or consumption, can impact, and have directly impacted, our business. In response to the United States Environmental Protection Agency (“EPA”) granting full or partial small refinery exemptions to 140 refineries in August 2025, a low reallocation requirement by the EPA of the exempted gallons from 2023 to present to other refiners could depress demand for corn and soybeans used in fuels blending. However, we believe the
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government will seek ways to mitigate the potential impact of these reallocations on farmers, which will support continued planting activities in the future.
•Provisions of the Section 45Z Clean Fuel Production Credit exclude imports of renewable fuels and imported feedstocks used to produce renewable fuels in the United States, which we expect to support demand for domestic corn and soybean oil feedstocks.
•Corn used in ethanol production consumed approximately 36% of the annual United States corn crop used by the market. Further, potential year-round, nationwide E15 (gasoline blended with 15% ethanol) expansion is expected to support fertilizer demand and pricing by driving increased, long-term demand for corn.
Results of Operations
The following should be read in conjunction with the information outlined in the previous sections of this Part II, Item 7 and the financial statements and related notes thereto in Part II, Item 8 of this Report.
Utilization is an important measure used by management to assess operational output at each of the Partnership’s Facilities and is calculated as actual tons of ammonia produced divided by capacity. Utilization is presented solely on ammonia production, rather than on 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 production primarily focused on ammonia upgrade capabilities, we believe this measure provides a meaningful view of how we operate. The chart presented below summarizes our ammonia utilization rates on a consolidated basis for the years ended December 31, 2025, 2024, and 2023.
Year Ended December 31,
Ammonia utilization rate 88 % 96 % 100 %
On a consolidated basis, for the year ended December 31, 2025 as compared to December 31, 2024, utilization decreased 8% primarily due to the 2025 Coffeyville Turnaround and subsequent downtime of several weeks due to startup issues at the third-party air separation plant, as well as control systems upgrades at the East Dubuque Facility in the second and third quarters of 2025 and other minor unplanned outages at the Facilities in the current period (the “2025 Outages”), partially offset by the 14-day planned outage at the Coffeyville Facility during the first quarter of 2024 and other minor unplanned outages at the Facilities (the “2024 Outages”) in the prior period.
Sales Volume 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 which 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.
Year Ended December 31,
Consolidated sales (thousands of tons)
Consolidated product pricing at gate (dollars per ton)
For the year ended December 31, 2025, total product sales volume variance was unfavorable driven by reduced production volumes resulting from the 2025 Coffeyville Turnaround and the 2025 Outages. Total product sales variance was favorable, driven by sales price increases of 22% for ammonia and 27% for UAN during the year. Ammonia and UAN sales price were favorable primarily due to improved market conditions, primarily driven by tight inventory levels. These inventory constraints resulted from increased demand arising from higher planting acreage of corn in 2025 and increased soybean yields, as well as domestic and international production outages that reduced global supply of nitrogen fertilizers. Higher natural gas prices also raised input costs, contributing to an overall increase in market prices.
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Production Volumes - Gross tons of ammonia represent the total ammonia produced, including ammonia produced that was upgraded into other fertilizer products. Net tons available for sale represents the ammonia available for sale that was not upgraded into other fertilizer products. The table below presents these metrics for the years ended December 31, 2025, 2024, and 2023:
Year Ended December 31,
Feedstock - Our Coffeyville Facilityutilizes 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 the Facilities for the years ended December 31, 2025, 2024, and 2023:
Year Ended December 31,
Petroleum coke used in production (thousands of tons) 459 517 518
Petroleum coke used in production (dollars per ton) $ 49.11 $ 59.69 $ 78.14
Natural gas used in production (thousands of MMBtus) (1) 8,234 8,667 8,462
Natural gas used in production (dollars per MMBtu) (1) $ 3.74 $ 2.56 $ 3.42
(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).
Market Indicators
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 United States over the longer term.
Corn and soybeans are two major crops planted by farmers in North America. Corn crops result in the depletion of the amount of nitrogen within the soil in which it is grown, which in turn, results in the need for 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.
The relationship between the total acres planted for both corn and soybeans has a direct impact on the overall demand for nitrogen products, as the market and demand for nitrogen increases with increased corn acres and decreases with increased soybean acres. Additionally, an estimated 15.5 billion pounds of soybean oil is expected to be used in producing cleaner renewable fuels in marketing year 2025/2026.
Weather continues to be a critical variable for crop production. Demand for nitrogen fertilizer, as well as other crop inputs, was strong for the spring 2025 planting season, primarily due to elevated grain prices and favorable weather conditions for planting. Even with high planted acres and above trendline yields per acre for corn in the United States, global inventory levels for corn remain above historical 10-year averages, prices remained moderated through 2025. While soybean production declined slightly due to fewer planted acres in 2025, yields were above historical levels, and pricing has remained steady as global inventory levels have increased.
The United States Department of Agriculture (“USDA”) estimates that in spring 2025 farmers planted 8.7% more corn acres and 6.9% less soybean acres compared to 2024. The combined corn and soybean planted acres of 180.0 million in 2025 was slightly higher than the acreage planted in 2024. Due to lower input costs in 2025 for corn planting and the relative grain prices of corn versus soybeans, economics favored planting corn compared to soybeans in 2025. Inventory levels of corn and soybeans are expected to be supportive of grain prices into the spring of 2026.
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Ethanol is blended with gasoline to meet requirements under the Renewable Fuel Standard of the Clean Air Act and for its octane value. Since 2020, corn used in ethanol production has historically consumed 36% of the annual production of the U.S. corn crop used by the market, so demand for corn generally rises and falls with ethanol demand. The EPA’s recently proposed renewable volume requirements for 2026 and 2027 include increased volume requirements for biomass-based diesel and advanced biofuel, which are expected to be supportive of grain demand and prices.
The charts below show the corn-soybean rotational planting cycle and average fuel ethanol production volumes in the U.S. for the years ended December 31, 2025, 2024, and 2023:
Corn and Soybean Planted Acres (1) U.S. Plant Production of Fuel Ethanol (2)
(1)Information used within this chart was obtained from the USDA, National Agricultural Statistics Services as of December 31, 2025.
(2)Information used within this chart was obtained from the U.S. Energy Information Administration (“EIA”) through December 31, 2025.
We believe the structural shortage of natural gas in Europe will continue to be a source of volatility through at least 2026. Pet coke prices are expected to continue to fall into 2026 due to the decline in oil prices seen since 2024.
The charts below show relevant market indicators by month through December 31, 2025:
Ammonia and UAN Market Pricing (1)
(1)Information used within this chart was obtained from various third-party sources including Green Markets (a Bloomberg Company), Pace Petroleum Coke Quarterly, and the EIA, amongst others.
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Natural Gas Market Pricing (1) Pet Coke Market Pricing (1)
(1)Information used within this chart was obtained from various third-party sources including Green Markets (a Bloomberg Company), Pace Petroleum Coke Quarterly, and the EIA, amongst others.
Financial Highlights
Year Ended December 31,
Less:
(1)Exclusive of depreciation and amortization expense.
(2)See “Non-GAAP Reconciliations” section below for reconciliations of the non-GAAP measures shown above.
Overview - For the year ended December 31, 2025, the Partnership’s operating income and net income increased $38.3 million and $37.8 million, respectively, compared to the year ended December 31, 2024 primarily due to increased product sales and lower pet coke feedstock costs, partially offset by unfavorable sales volumes driven by the 2025 Coffeyville Turnaround and the 2025 Outages, higher natural gas and ammonia feedstock costs, increased expenses associated with the 2025 Coffeyville Turnaround, higher personnel costs, and unfavorable utility costs due to higher natural gas and electricity prices.
Net Sales - The $80.7 million increase for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily due to favorable UAN and ammonia pricing which increased revenues by $104.8 million partially offset by reduced sales volumes which decreased revenues by $29.3 million.
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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 year ended December 31, 2025 as compared to December 31, 2024:
(in thousands) Price Variance Volume Variance
Ammonia and UAN sales price variances were favorable primarily due to aforementioned improved pricing and inventory conditions within the Sales Volume and Pricing per Ton discussion above.
Cost of Materials and Other - The $2.6 million increase for the year ended December 31, 2025 as compared to December 31, 2024 was primarily due to higher natural gas feedstock costs as a result of higher natural gas prices combined with increased ammonia feedstock costs, partially offset by lower pet coke feedstock costs primarily as a result of the 2025 Coffeyville Turnaround and the subsequent downtime due to three weeks of startup issues at the third-party air separation plant at the Coffeyville Facility during the fourth quarter of 2025.
Direct Operating Expenses (exclusive of depreciation and amortization) - The $39.8 million increase for the year ended December 31, 2025 as compared to December 31, 2024 was primarily due to increased expenses associated with the 2025 Coffeyville Turnaround and, to a lesser extent, was also due to higher personnel costs, increased utility costs, and unfavorable inventory impacts in the current period.
Depreciation and Amortization Expense - The $6.2 million decrease for the year ended December 31, 2025 as compared to December 31, 2024 was primarily due to certain assets being fully depreciated during 2024 as a result of depreciation being accelerated, including granular plant production assets related to planned asset retirements, partially offset by additions to property, plant, and equipment and fluctuations in depreciation capitalized to inventory in the current period.
Selling, General, and Administrative Expenses - The $5.2 million increase for the year ended December 31, 2025 as compared to December 31, 2024 was due primarily to higher share-based compensation due to a larger increase in market prices for CVR Partners’ common units compared to the prior period.
Non-GAAP Measures
Our management uses certain non-GAAP measures, and reconciliations to those measures, to evaluate current and past performance and prospects for the future to supplement our financial information presented in accordance with 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 measures defined below.
The following are non-GAAP measures we present for the years ended December 31, 2025, 2024, and 2023:
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 noncash 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.
Available Cash for Distribution - EBITDA for the quarter excluding noncash 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, turnarounds, 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 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
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financing methods, and our ability to incur and service debt and fund capital and turnaround 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 GAAP financial measures. Refer to the “Non-GAAP Reconciliations” included herein for reconciliation of these amounts. Due to rounding, numbers presented within this section may not add or equal to numbers or totals presented elsewhere within this document.
Factors Affecting Comparability of Our Financial Results
Major Scheduled Turnaround Activities
Our results of operations for the periods presented may not be comparable with prior periods or to our results of operations in the future due to expenses incurred as part of planned turnarounds. We incurred turnaround expenses of $16.7 million, $0.5 million, and $1.8 million during the years ended December 31, 2025, 2024, and 2023, respectively. The next scheduled turnaround is currently set to commence in August 2026 at the East Dubuque Facility.
Non-GAAP Reconciliations
Reconciliation of Net Income to EBITDA, Adjusted EBITDA and Available Cash for Distribution
Year Ended December 31,
Income tax (benefit) expense (23) 77 289
Adjustments (Reserves)/Releases:
(1)Amount consists of reserves established by management and approved by the Board for potential future cash needs related to nitrogen fertilizer seasonality, feedstock price volatility, and any known operating events.
(2)Amount consists of maintenance capital expenditures, including additional reserves for future profit and growth projects, net of any releases of previously reserved funds, of $30.7 million, $29.1 million, and $28.4 million for the years ended December 31, 2025, 2024, and 2023, respectively.
(3)Amount consists of reserves for periodic, planned turnarounds, net of expenditures incurred in the period.
(4)Amount consists of distributions received by the Partnership adjusted for the amortization of deferred revenue related to the joint venture created to monetize certain tax credits under Section 45Q of the Internal Revenue Code of 1986 (“45Q Transaction”).
(5)Amount represents the cumulative available cash for distribution based on full year results. However, available cash for distribution is calculated quarterly, with distributions (if any) being paid in the following period. The Partnership declared and paid cash distributions of $1.75, $2.26, $3.89, and $4.02 per common unit related to the fourth quarter of 2024, and the first, second, and third quarters of 2025, respectively, and declared a cash distribution of $0.37 per common unit related to the fourth quarter of 2025, to be paid in March 2026.
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Liquidity and Capital Resources
Our primary source of liquidity is cash generated from operations, which may include customer cash advances under prepay contracts. As further discussed below, our primary uses of cash are for working capital, capital and turnaround expenditures, servicing debt obligations, and paying distributions to our unitholders.
Considering current market conditions and geopolitical matters, we believe that cash from operations, together with existing cash and cash equivalents, available borrowings, and reserves is sufficient to meet anticipated operating cash requirements for at least the next 12 months. However, future capital expenditures and other cash needs may exceed current expectations due to factors such as rising material and labor costs, inflationary pressures, and interest rate volatility.
In addition, supply chain disruptions, geopolitical instability, commodity price fluctuations, and changes in regulatory policies may negatively impact our operations. Our ability to generate adequate cash flow and access additional financing depends on our future performance, which is subject to various factors—economic, political, financial, and competitive—many of which may be beyond our control. Shifts in U.S. trade policy, global demand dynamics, and tightening credit markets could also affect our financial position.
Subject to business needs, contractual limitations, and market conditions, we may pursue financing strategies such as issuing equity or debt securities, incurring additional borrowings, or refinance existing debt through various means, including open market repurchases, tender offers or privately negotiated transactions. There can be no assurance that any such actions will be undertaken or, if pursued, completed on favorable terms.
The Partnership and its subsidiaries were in compliance with all covenants under their respective debt instrumentsas of December 31, 2025 and through the date of filing, as applicable.
Cash and Other Liquidity
As of December 31, 2025, we had cash and cash equivalents of $69.2 million and, combined with $47.9 million available under our ABL Credit Facility, we had total liquidity of $117.1 million. As of December 31, 2024, we had $90.9 million in cash and cash equivalents and, combined with $38.9 million available under our ABL Credit Facility, we had total liquidity of $129.8 million.
Long-term debt consisted of the following:
December 31,
Unamortized debt issuance costs (1,577) (2,152)
As of December 31, 2025, the Partnership had outstanding its 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 and capital expenditures, and for other general corporate purposes. Refer to Part II, Item 8, Note 8 (“Long-Term Debt”) of this Report for further information.
Capital Spending
We divide capital spending needs into two categories: maintenance and growth. Maintenance capital spending includes non-discretionary maintenance projects necessary to maintain safe and reliable operations, including those required to comply with environmental, health, and safety regulations. Growth capital projects generally support the expansion of existing capacity, improvements in reliability, and reductions in direct operating expenses. We undertake growth capital projects selectively, based on strategic priorities and expected returns, and may adjust the timing or scope of such investments in response to market conditions or operational needs.
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Our total capital expenditures for the years ended December 31, 2025 and 2024, along with our estimated expenditures for 2026 are as follows:
Year Ended December 31, Estimated
Our estimated capital expenditures are subject to change based on changes in project cost, scope, and timing. For example, fluctuations in labor and equipment costs—particularly those related to compliance with government regulations or initiatives aimed at sustaining or enhancing facility profitability. Additionally, we may choose to accelerate or defer certain capital expenditures in response to operational priorities or market conditions from time to time.
Capital spending decisions for CVR Partners are determined by the Board. We continue to actively monitor market conditions and will adjust our capital and turnaround plans as necessary to align with evolving business needs and external factors.
We incurred turnaround expenses of $16.7 million, $0.5 million, and $1.8 million during the years ended December 31, 2025, 2024, and 2023, respectively. The Coffeyville Facility’s scheduled turnaround commenced in early October 2025 and was completed during November 2025. The next scheduled turnaround is set to commence in August 2026 at the East Dubuque Facility at an estimated cost of $30.0 million. Turnaround costs are expensed as incurred within Direct operating expenses (exclusive of depreciation and amortization) and are expected to be funded through cash reserves accumulated preceding the turnaround.
Cash Requirements
The following table summarizes our known contractual obligations and other commercial commitments as of December 31, 2025 that are expected to be paid within the next year and thereafter:
Payments Due by Period
(in thousands) Short-Term Long-Term Total
(1)Debt obligations consist of the 6.125% Senior Secured Notes due 2028 (“2028 Notes”).
(2)Consists of interest payments for our 2028 Notes and commitment fees on the unutilized commitments of our ABL Credit Facility.
(3)Operating lease liabilities and finance lease obligations are described in Part II, Item 8, Note 6 (“Leases”) of this Report.
(4)Consists primarily of purchase obligations for pet coke, oxygen, nitrogen, and other feedstocks, as well as water and utilities usage.
(5)Includes purchase obligations related to the transportation of feedstocks.
Distributions to Unitholders
The current policy of the Board is to distribute all Available Cash for Distribution, as determined in its sole discretion, on a quarterly basis. Following the end of each quarter, the Board evaluates and determines Available Cash for Distribution, which is generally calculated as EBITDA for the quarter, adjusted to exclude noncash income or expense items, if and to the extent the Board deems such adjustments necessary or appropriate. From this adjusted EBITDA, the Board deducts (i) reserves for maintenance capital expenditures, turnarounds, debt service and other contractual obligations, and (ii) reserves for future operating or capital needs, in each case, as deemed necessary or appropriate in its sole discretion. Available Cash for
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Distribution may also be increased by the release of previously established reserves or other excess cash, subject to the Board’s discretion.
Distributions, if any—including the amount, timing, and the Board’s distribution policy—are subject to change at the discretion of the Board. This includes the definition of Available Cash for Distribution and any related reserves, which may be adjusted based on the Board’s judgment and prevailing business concerns. The following table presents distributions paid by the Partnership to CVR Partners’ unitholders, including amounts paid to CVR Energy and IEP, during 2025, 2024, and 2023 (amounts presented in the tables below may not add to totals presented due to rounding):
Year Ended December 31,
(1)Amount represents the cumulative distributions, calculated quarterly, paid in the respective period.
For the fourth quarter of 2025, upon approval by the Board on February 18, 2026, the Partnership declared a distribution of $0.37 per common unit, or $3.9 million, which is payable March 9, 2026 to unitholders of record as of March 2, 2026. Of this amount, CVR Energy and IEP will receive approximately $1.4 million and $0.1 million, respectively, with the remaining amount payable to public unitholders.
Cash Flows
The following table sets forth our cash flows for the periods indicated below:
Year Ended December 31,
Net cash provided by (used in):
Cash Flows from Operating Activities
The change in net cash flows from operating activities for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily due to an increase in net income of $37.8 million offset by a decrease in working capital of $38.3 million. The change in working capital was primarily due to unfavorable changes in deferred revenue, partially offset by favorable changes in accounts receivable resulting from unfavorable shifts in customer purchasing patterns due to market volatility and current economic conditions.
Cash Flows from Investing Activities
The change in net cash flows from investing activities for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily due to a an increase in capital expenditures of $13.7 million during 2025 resulting from an increase in various capital projects in the current period compared to 2024, partially offset by an increase in distributions received from CVR Partners’ equity method investment of $1.5 million in 2025 associated with the 45Q Transaction.
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Cash Flows from Financing Activities
The change in net cash flows from financing activities for the year ended December 31, 2025 compared to the year ended December 31, 2024 was mainly due to an increase in cash distributions paid of $55.3 million in 2025 compared to 2024, partially offset by a decrease in payments related to finance lease obligation of $1.2 million in 2025.
Recent Accounting Pronouncements
Refer to Part II, Item 8, Note 2 (“Summary of Significant Accounting Policies”) of this Report for a discussion of recent accounting pronouncements applicable to the Partnership.
Critical Accounting Estimates
We prepare our consolidated financial statements in accordance with GAAP requiring management to make judgments, assumptions, and estimates based on the best available information at the time. Accounting estimates are considered to be critical if (1) the nature of the estimates and assumptions is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change; and (2) the impact of the estimates and assumptions on financial condition or operating performance is material. Actual results could differ from the estimates and assumptions used.
Impairment of Long-lived Assets
Long-lived assets used in operations are assessed for impairment whenever changes in facts and circumstances indicate a possible significant deterioration in future expected cash flows. If the sum of the undiscounted expected future cash flows of an asset group is less than the carrying value, including applicable liabilities, the carrying value may be written down to its estimated fair value. Individual assets are grouped for impairment purposes based on a judgmental assessment of the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other assets. In addition, when preparing the expected future cash flows or estimating the fair value of impaired assets, we make several estimates that include subjective assumptions related to future sales volumes, commodity prices, operating costs, discount rates, and capital expenditures, among others.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Commodity Price Risk
We are exposed to significant market risk due to potential changes in prices for fertilizer products, pet coke, and natural gas. Pet coke and natural gas are the primary raw materials used in the production of various nitrogen-based products manufactured at our Coffeyville Facility and East Dubuque Facility, respectively. We have commitments to purchase pet coke and natural gas for use in our Facilities through short-term, fixed price, and index price purchase contracts.
In the normal course of business, we produce nitrogen-based fertilizer products throughout the year to supply the needs of our customers during the high-delivery-volume spring and fall seasons. The value of fertilizer product inventory is subject to market risk due to fluctuations in the relevant commodity prices. Prices of nitrogen fertilizer products can be volatile, and we believe they are affected by changes in grain prices, demand, natural gas prices, and other factors. A $1.00 per MMBtu change in the price of natural gas would change the cost to produce a ton of ammonia and UAN by approximately $14.29 and $5.86, respectively. A $1.00 per ton change in the price of pet coke would change the cost to produce a ton of ammonia and UAN by approximately $0.66 and $0.27, respectively. In the opinion of our management, there are no financial instruments that correlate with our firm pet coke commitments and forecasted commodity sales transactions that could be used to effectively reduce commodity price risk.
Interest Rate Risk
We may be exposed to risk based on changes in interest rates related to our ABL Credit Facility, which bears interest at the daily simple Secured Overnight Financing Rate (“SOFR”) plus a premium. As of December 31, 2025, there was no outstanding borrowings under the ABL Credit Facility or other variable rate borrowings. Further, fixed-rate debt, such as our 2028 Notes, exposes us to changes in the fair value of our debt due to changes in market interest rates, but not our earnings or cash flows.
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Based on the 2028 Notes, a hypothetical 50-basis point fluctuation in market interest rates at December 31, 2025 would have resulted in a change of $25.6 million in fair value disclosure. Fixed-rate debt also exposes us to the risk that we may need to refinance maturing debt with new debt at higher rates, or that we may be obligated to pay rates higher than the current market.
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Item 8. Financial Statements and Supplementary Data
CVR PARTNERS, LP AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248) 50
Consolidated Balance Sheets as of December 31, 2025 and 2024 52
Notes to the Consolidated Financial Statements 56
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Report of Independent Registered Public Accounting Firm
The Board of Directors of CVR GP, LLC
The Unitholders of CVR Partners, LP
The General Partner of CVR Partners, LP:
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of CVR Partners, LP (a Delaware limited partnership) and subsidiaries (the “Partnership”) as of December 31, 2025 and 2024, the related consolidated statements of operations, partners’ capital, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Partnership’s internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 18, 2026, expressed an unqualified opinion.
Basis for opinion
These consolidated financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on the Partnership’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical audit matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/ GRANT THORNTON LLP
We have served as the Partnership’s auditor since 2013.
Tulsa, Oklahoma
February 18, 2026
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Report of Independent Registered Public Accounting Firm
The Board of Directors of CVR GP, LLC
The Unitholders of CVR Partners, LP
The General Partner of CVR Partners, LP:
Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of CVR Partners, LP (a Delaware limited partnership) and subsidiaries (the “Partnership”) as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Partnership as of and for the year ended December 31, 2025, and our report dated February 18, 2026 expressed an unqualified opinion on those financial statements.
Basis for opinion
The Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Partnership’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ GRANT THORNTON LLP
Tulsa, Oklahoma
February 18, 2026
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CONSOLIDATED BALANCE SHEETS
December 31,
ASSETS
Current assets:
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Accounts payable to affiliates 3,784 6,213
Long-term liabilities:
Commitments and contingencies (See Note 11)
Partners’ capital:
General partner interest 1 1
The accompanying notes are an integral part of these consolidated financial statements.
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CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December 31,
Operating costs and expenses:
Other (expense) income:
Income tax (benefit) expense (23) 77 289
Basic and diluted earnings per common unit $ 9.33 $ 5.76 $ 16.31
Weighted-average common units outstanding:
The accompanying notes are an integral part of these consolidated financial statements.
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CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL
Issued Amount
Cash distributions to common unitholders – Affiliates — (103,605) — (103,605)
Cash distributions to common unitholders – Affiliates — (26,037) — (26,037)
Cash distributions to common unitholders – Non-affiliates — (44,673) — (44,673)
Cash distributions to common unitholders – Affiliates — (49,467) — (49,467)
Cash distributions to common unitholders – Non-affiliates — (76,524) — (76,524)
The accompanying notes are an integral part of these consolidated financial statements.
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CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
Cash flows from operating activities:
Amortization of deferred financing costs and original issue discount 730 696 754
Changes in working capital:
Prepaid expenses and other current assets (673) 1,714 1,411
Cash flows from investing activities:
Proceeds from the sale of assets 54 4 —
Cash flows from financing activities:
Net (decrease) increase in cash and cash equivalents (21,614) 45,578 (41,060)
The accompanying notes are an integral part of these consolidated financial statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Organization and Nature of Business
CVR Partners, LP (“CVR Partners” or the “Partnership”) is a Delaware limited partnership formed in 2011 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 and distributes nitrogen fertilizer products, which are used by farmers to improve the yield and quality of their crops, primarily corn and wheat. The Partnership produces these products at two manufacturing facilities, 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”, and together with the Coffeyville Facility, the “Facilities”). Our principal products are ammonia and urea ammonium nitrate (“UAN”). All of our products are sold on a wholesale basis. 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. Additionally, as the context may require, references to CVR Energy may refer to CVR Energy and its consolidated subsidiaries which include its petroleum and renewables refining, marketing, and logistics operations.
Interest Holders
CVR Partners’ common units are listed on the New York Stock Exchange (“NYSE”) under the symbol “UAN”. As of December 31, 2025, public common unitholders held approximately 60.6% of the Partnership’s outstanding limited partner interests; CVR Energy, through its subsidiaries, held approximately 36.8% of the Partnership’s outstanding limited partner interests and 100% of the Partnership’s general partner, CVR GP, LLC, (“General Partner”) interest, while Icahn Enterprises L.P. and its other affiliates (“IEP”) held approximately 2.6% of the outstanding limited partner interests. As of December 31, 2025, IEP owned approximately 70% of the common stock of CVR Energy, and as a result, IEP beneficially owns approximately 40% of the Partnership’s outstanding limited partner interests.
Management and Operations
The Partnership, including its General Partner, is managed by a combination of the board of directors of our General Partner (the “Board”), the General Partner’s executive officers, UAN Services, LLC (as sole member of the General Partner), and certain officers of CVR Energy and its subsidiaries, pursuant to the partnership agreement, as well as a number of agreements among the Partnership, the General Partner, CVR Energy, and certain of their respective subsidiaries, including a service agreement. See Note 13 (“Related Party Transactions”) 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.
Subsequent Events
The Partnership evaluated subsequent events, if any, that would require an adjustment to the Partnership’s consolidated financial statements or require disclosure in the notes thereto through the date of issuance. Where applicable, the notes to these consolidated financial statements have been updated to reflect all significant subsequent events which have occurred.
(2) Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements, 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”), include the accounts of CVR Partners and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated.
Use of Estimates
The consolidated financial statements are prepared in conformity with GAAP, which requires management to make certain estimates and assumptions that affect the reported amounts and disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are reviewed on an
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
ongoing basis, based on currently available information. Changes in facts and circumstances may result in revised estimates, and actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, demand deposits, and investments in highly liquid money market accounts with original maturities of three months or less. We maintain cash and cash equivalent balances at multiple financial institutions, which may at times be in excess of federally insured levels.
Accounts Receivable, net
Accounts receivable, net primarily consists of customer accounts receivable recorded at the invoiced amounts and generally do not bear interest. Allowances for doubtful accounts are based on historical loss experience, expected credit losses from current economic conditions, and management’s expectations of future economic conditions. The allowance is recorded when the receivable is deemed uncollectible and is booked to bad debt expense. The largest concentration of credit for any one customer was approximately 29% and 25% of the Accounts receivable, net balance at December 31, 2025 and 2024, respectively. There was no balance in the allowance for doubtful accounts as of December 31, 2025 and December 31, 2024.
Inventories
Inventories consist of fertilizer products and raw materials (primarily pet coke), which are valued at the lower of GAAP First-In, First-Out (“FIFO”) cost or net realizable value. We compare the estimated realizable value of inventories to their cost by product. Depending on inventory levels, the estimated per-ton net realizable value of fertilizer products is determined using observable selling prices based on, in order of priority, in-transit, open, and fixed-price orders that have not shipped. For any inventory volumes not supported by such orders, management estimates the net realizable value using market-based prices obtained from third-party sources that are closest to the date the inventory is expected to be sold. Estimated selling prices are reduced, as applicable, by unreimbursed freight costs and other predictable selling costs to arrive at net realizable value. There were no inventory adjustments recognized during the years ended December 31, 2025, 2024, and 2023.
Inventories also include parts and supplies that are valued at the weighted moving-average cost, which approximates FIFO. The cost of inventories includes inbound freight costs.
Property, Plant and Equipment, net
Additions to property, plant and equipment, including certain costs allocable to construction and property purchases, are recorded at cost. Interest costs are capitalized in accordance with ASC 835-20. The interest capitalization rate is calculated for each individual segment by dividing the interest expense on senior secured notes by the senior notes balance of the previous year. The capitalization rate is applied to the carrying amount of expenditures to determine the amount of interest to be capitalized each month. Expenditures for improvements that increase economic benefit or returns and/or extend useful life are capitalized, while expenditures for routine maintenance and repair costs are expensed when incurred and are reported in Direct operating expenses (exclusive of depreciation and amortization) in the Partnership’s Consolidated Statements of Operations. Depreciation is computed using the straight-line method over the estimated useful lives of the various classes of depreciable assets. The lives used in computing depreciation for significant asset classes are as follows:
Asset Range of UsefulLives, in Years
Land improvements 10 to 30
Buildings and improvements 3 to 30
Automotive equipment 5 to 30
Machinery and equipment 1 to 30
Right-of-use (“ROU”) finance leases 25
Leasehold improvements and assets held under finance leases are depreciated or amortized utilizing the straight-line method over the shorter of the related contractual lease term or the estimated useful life of the asset.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Equity Method Investments
The Partnership accounts for investments in which it has a noncontrolling interest, yet has significant influence over the entity, using the equity method of accounting, whereby the Partnership records its pro-rata share of earnings, contributions to, and distributions from, as adjustments to the investment balance in Other long-term assets on our Consolidated Balance Sheets. The pro-rata share of earnings is also recorded in Other income (expense), net on our Consolidated Statements of Operations.
On a quarterly basis, or when a triggering event has been identified, the Partnership assesses its equity method investments for other-than-temporary impairment. If it is determined that an other-than-temporary impairment has occurred, the Partnership records an impairment charge in Other income (expense), net on the Consolidated Statements of Operations sufficient to reduce the investment’s carrying value to its fair value, resulting in a new cost basis on the Consolidated Balance Sheets.
Leases
At inception, the Partnership determines whether an arrangement is a lease and, if so, the appropriate lease classification. Operating leases are included as operating lease ROU assets within Other long-term assets and lease liabilities within Other current liabilities and Other long-term liabilities on our Consolidated Balance Sheets. Finance leases are included as ROU finance leases within Property, plant and equipment, net, and finance lease liabilities within Other current liabilities and Long-term debt and finance lease obligations, net of current portion on our Consolidated Balance Sheets. Leases with an initial expected term of 12 months or less are considered short-term and are not recorded on our Consolidated Balance Sheets. The Partnership recognizes operating lease expense on a straight-line basis over the lease term within Direct operating expenses (exclusive of depreciation and amortization) and Cost of materials and other and finance lease expense using the effective-interest method over the lease term within Depreciation and amortization and Interest expense, net.
ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term using an incremental borrowing rate with a maturity similar to the lease term. The lease term is modified to reflect options to extend or terminate the lease when it is reasonably certain we will exercise such option. The depreciable life of assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise, in which case the depreciation policy in the “Property, Plant and Equipment, net” section above is applicable. The periodic lease payments are treated as payments of the lease obligation. A lease modification is assessed to conclude whether it is a separate new contract or a modified contract. If it is a modified contract, the Partnership reconsiders the lease classification and remeasures the lease.
Deferred Financing Costs
Lender and other third-party costs associated with debt issuances are deferred and amortized to Interest expense, net using the effective-interest method over the term of the debt and, depending on maturity, are included within Current portion of long-term debt and finance lease obligations and Long-term debt and finance lease obligations, net of current portion. Deferred financing costs related to line-of-credit arrangements are amortized using the straight-line method through the maturity date of the facility and, depending on maturity, are included within Other current assets and Other long-term assets.
Impairment of Long-Lived Assets
Long-lived assets (excluding intangible assets with indefinite lives and deferred tax assets) are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future net cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future net cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds their fair value. Assets to be disposed of are reported at the lower of their carrying value or fair value less cost to sell.
Asset Retirement Obligations
The Partnership records an asset retirement obligation (“ARO”) at fair value for the estimated cost to retire a tangible long-lived asset at the time the liability is incurred, which is generally when the asset is purchased, constructed, or leased. The
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
liability is recorded when there is a legal or contractual obligation to incur costs to retire the asset and only when a reasonable estimate of the fair value can be made.
Manufacturing and other processing assets can be used for extended or indeterminate periods of time with proper maintenance and upgrades, which the Partnership intends, and has a historical practice of, to support functionality of these assets as technological advances are made available. As a result, since the dates to retire these assets cannot be reasonably estimated, the Partnership believes these assets have indeterminate lives for purposes of estimating AROs. A liability is recognized when sufficient information exists to estimate a date or range of potential settlement dates needed to employ a present value technique to estimate fair value.
Loss Contingencies
In the ordinary course of business, CVR Partners 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 will be incurred and the loss can be reasonably estimated. Accrued amounts, if any, are reflected in Other current liabilities or Other long-term liabilities on our Consolidated Balance Sheets depending on when the Partnership expects to expend such amounts and are adjusted as additional information becomes available or upon a change in circumstance, as applicable.
Insurance recoveries and recoveries related to loss contingencies are recognized as receivables in Other current assets only when an enforceable contract is in place covering the loss event and realization of the claim underlying the recovery is probable. The probable recovery asset is not netted against potential liabilities.
Environmental, Health & Safety (“EH&S”) Matters
The Partnership is subject to various stringent federal, state, and local environmental, health, and safety rules and regulations. Liabilities related to future remediation costs of past environmental contamination of properties are recognized when the related costs are considered probable and can be reasonably estimated. Estimates of these costs are based upon currently available facts, internal and third-party assessments of contamination, available remediation technology, site-specific costs, and currently enacted laws and regulations. In reporting environmental liabilities, no offset is made for potential recoveries. Loss contingency accruals, including those for environmental remediation, are subject to periodic management review and revision as further information develops or circumstances change and such accruals can take into account the legal liability of other parties. Environmental expenditures for capital assets are capitalized at the time of the expenditure when such costs provide future economic benefits. Accrued amounts, if any, are reflected in Other current liabilities or Other long-term liabilities on our Consolidated Balance Sheets depending on when the Partnership expects to expend such amounts. As of December 31, 2025 and 2024, no liabilities have been recognized for environmental remediation matters, as no matters have been identified that are considered to be probable and estimable.
Revenue Recognition
The Partnership’s revenue is generated from contracts with customers and is recognized at a point in time when performance obligations are satisfied by transferring control of the products or services to a customer. The transfer of control occurs upon delivery of the product, as the customer accepts the product, has title and significant risks and rewards of ownership of the product, physical possession of the product has been transferred, and we have the right to payment.
The transaction prices of the Partnership’s contracts are either fixed or based on market indices, and any uncertainty related to the variable consideration when determining the transaction price is resolved on the pricing date or the date when the product is delivered. The payment terms depend on the product and type of contract, but generally require customers to pay within 30 days or less, and do not contain significant financing components.
Any pass-through finished goods delivery costs reimbursed by customers are reported in Net sales, while an offsetting expense is included in Cost of materials and other. Non-monetary product exchanges which are entered into in the normal course of business are included on a net cost basis in Cost of materials and other on our Consolidated Statements of Operations. Qualifying excise and other taxes collected from customers and remitted to governmental authorities are recorded as a reduction of the transaction price.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Certain sales contracts require 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.
Cost Classifications
Cost of materials and other consists primarily of feedstock expenses, purchased ammonia, purchased hydrogen, and freight and distribution expenses. Direct operating expenses (exclusive of depreciation and amortization) consist primarily of energy and other utility costs, direct costs of labor, property taxes, facility-related maintenance services, including turnaround expenses, and environmental and safety compliance costs, as well as catalyst and chemical costs. Each of these financial statement line items are also impacted by changes in inventory balances, as they include inventory production costs. Direct operating expenses also include allocated share-based compensation from CVR Energy and its subsidiaries. Selling, general and administrative expenses consist primarily of legal expenses, treasury, accounting, marketing, human resources, information technology, and maintaining the corporate and administrative offices in Texas and Kansas.
Fair Value of Financial Instruments
In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“Topic 820”), the Partnership utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets, liabilities, or a group of assets or liabilities, such as a business.
Topic 820 utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
•Level 1 — Quoted prices in active markets for identical assets or liabilities
•Level 2 — Other significant observable inputs (including quoted prices in active markets for similar assets or liabilities)
•Level 3 — Significant unobservable inputs (including the Partnership’s own assumptions in determining the fair value)
Financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, and operating and finance lease obligations which are carried at cost and approximate their estimated fair value. The Partnership may enter into forward contracts with fixed or indexed delivery prices to purchase portions of its natural gas requirements. These natural gas contracts are not treated as derivatives as they qualify for the normal purchase and normal sale exclusions. Accordingly, the fair value of these contracts are not recorded at the end of each reporting period.
Turnaround Expenses
Turnarounds represent major maintenance activities that require the shutdown of significant parts of a facility to perform necessary inspections, cleanings, repairs, and replacements of assets. Costs incurred for routine repairs and maintenance or unplanned outages at our Facilities are expensed as incurred. Planned turnaround activities vary in frequency, dependent on our Facilities, but generally occur every three years.
The Partnership follows the direct-expense method of accounting for turnaround activities, with associated costs included in Direct operating expenses (exclusive of depreciation and amortization) on our Consolidated Statements of Operations. During the years ended December 31, 2025, 2024, and 2023, the Partnership incurred turnaround expenses of $16.7 million, $0.5 million, and $1.8 million, respectively.
Share-Based Compensation
The Partnership accounts for share-based compensation in accordance with FASB ASC Topic 718, Compensation — Stock Compensation. Currently, all of the Partnership’s share-based compensation awards are liability-classified and are measured at fair value at the end of each reporting period based on the applicable closing unit price. Compensation expense will fluctuate based on changes in the applicable unit price value and expense reversals resulting from employee terminations prior to award
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vesting. The Partnership recognizes forfeitures as they occur. Any previously recognized compensation expense is reversed in the period of forfeiture, and the corresponding liability is extinguished.
Income Taxes
The Partnership is not a taxable entity for federal income tax purposes or states that follow the federal income tax treatment of partnerships. Instead, for purposes of these income taxes, each partner of the Partnership is required to take into account its share of items of income, gain, loss and deduction in computing its federal and state income tax liabilities, regardless of whether cash distributions are made to such partner by the Partnership. We are subject to income taxes in certain states that do not follow the federal tax treatment of partnerships. These taxes are accounted for utilizing the asset and liability approach. Under this method, deferred tax assets and liabilities are recognized for the anticipated future tax consequences attributable to differences between the amounts recorded in the accounting books and their respective tax basis. Deferred amounts are measured using enacted tax rates expected to apply to taxable income in the year those temporary differences are expected to be recovered or settled.
Allocation of Costs
CVR Energy and its subsidiaries provide a variety of services to the Partnership, including employee benefits provided through CVR Energy’s benefit plans, administrative services provided by CVR Energy’s employees and management, insurance, and office space leased by CVR Energy. As such, the accompanying consolidated financial statements include costs that have been incurred by CVR Energy on behalf of the Partnership, which are then billed or allocated to the Partnership and are classified on our Consolidated Statements of Operations as either Direct operating expenses (exclusive of depreciation and amortization) or as Selling, general and administrative expenses.
New Tax Legislation
On July 4, 2025, the One Big Beautiful Bill Act (“OBBB”) was signed into law, making significant amendments to federal tax law, including permanently extending several provisions of the 2017 Tax Cuts and Jobs Act (“TCJA”). The Partnership benefited from the permanent extension of certain TCJA provisions; however, the impact to its income tax balances was immaterial. The Partnership will continue to monitor developments and evaluate any potential future impacts related to the OBBB.
Recently Adopted Accounting Pronouncement
In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which requires enhanced income tax disclosures that reflect how operations and related tax risks, as well as how tax planning and operational opportunities, affect the tax rate and prospects for future cash flows. Effective with this Report, the Partnership adopted this ASU and determined the impact of this ASU to be immaterial for the periods presented. Therefore, no additional disclosures were deemed necessary.
Recently Issued Accounting Pronouncements But Not Yet Implemented
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), which requires additional disclosures in the footnotes that disaggregate certain expenses presented on the face of the income statement. This standard is effective for the Partnership’s annual reporting period beginning January 1, 2027 and interim reporting periods beginning January 1, 2028. Retrospective application to comparative periods is optional, and early adoption is permitted. The Partnership continues to evaluate the impact of adopting this new accounting guidance but anticipates that the adoption will primarily affect disclosures and it will not have a material impact on the results of operations, financial condition or cash flows.
In September 2025, the FASB issued ASU 2025-06, Intangibles (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40, including the elimination of accounting consideration of software project development stages and enhancement of the guidance around the ‘probable-to-complete’ threshold. This standard is effective for the Partnership’s annual reporting period beginning January 1, 2028 and interim reporting periods beginning within that annual reporting period.
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Retrospective application to comparative periods is optional, and early adoption is permitted. The Partnership is evaluating the potential impacts of adopting this new accounting guidance.
(3) Inventories
Inventories consisted of the following:
December 31,
(4) Property, Plant and Equipment
Property, plant and equipment, net consisted of the following:
December 31,
Less: Accumulated depreciation and amortization (855,824) (808,164)
For the years ended December 31, 2025, 2024, and 2023, depreciation and amortization expenses related to property, plant, and equipment was $80.5 million, $87.1 million, and $78.9 million, respectively, and capitalized interest was $1.6 million, $1.0 million, and $0.5 million, respectively.
(5) Equity Method Investment
As part of a series of agreements entered into with unaffiliated parties in January 2023 with the objective to monetize certain tax credits under Section 45Q of the Internal Revenue Code of 1986 (“45Q Transaction”), the Partnership received a 50% interest in CVR-CapturePoint Parent, LLC (“CVRP JV”) in connection with a modification to a carbon oxide contract (“CO Contract”) with a customer. The Partnership applied the variable interest entity (“VIE”) model under FASB ASC Topic 810, Consolidation, to its variable interest in CVRP JV and determined that CVRP JV is a VIE. While the Partnership concluded it is not the primary beneficiary of CVRP JV, it does have significant influence over CVRP JV’s operating and financial policies and, therefore, applied the equity method of accounting for its investment in CVRP JV.
The Partnership valued the equity interest received using a combination of the market approach and the discounted cash flow methodology with key inputs including the discount rate, contractual and expected future cash flows, and market multiples. The fair value of the consideration received, which was a non-recurring Level 3 measurement as defined by FASB ASC Topic 820, Fair Value Measurements, was estimated to be $46.0 million in January 2023 based on the use of the Partnership’s own assumptions described above.
The Partnership deferred the recognition of the noncash consideration received at inception and has been recognizing the associated revenue proportionally as the performance obligations associated with the CO Contract are satisfied. Refer to Note 9
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(“Revenue”) for further discussion. The Partnership has elected to record its share of the earnings or loss of CVRP JV one quarter in arrears. Distributions received from CVRP JV reduce the Partnership’s equity method investment and are recorded in the period they are received. The investment in CVRP JV is presented within Other long-term assets on our Consolidated Balance Sheets.
(in thousands) CVRP JV
Cash contributions 14
Cash distributions (1) (5,193)
Equity loss (11)
Cash contributions 4
Cash distributions (1) (6,665)
Equity loss (14)
(1)Includes distributions of $3.2 million and $2.2 million to the Partnership for CVRP JV exceeding certain carbon oxide capture and sequestration milestones during 2024 and 2023, respectively.
(6) Leases
Lease Overview
We lease railcars, equipment, real estate, and certain facilities to support the Partnership’s operations. Most of our leases include one or more renewal options to extend the lease term, which can be exercised at our sole discretion. Certain leases also include options to purchase the leased asset. Additionally, 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. Furthermore, we do not have any material lessor or sub-leasing arrangements.
Balance Sheet Summary as of December 31, 2025 and 2024
The following table summarizes the ROU asset and lease liability balances for the Partnership’s operating and finance leases at December 31, 2025 and 2024.
Operating Leases Finance Leases Operating Leases Finance Leases
ROU asset, net
Lease liability
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Lease Expense Summary for the Years Ended December 31, 2025, 2024, and 2023
For the years ended December 31, 2025, 2024, and 2023, we recognized lease expense comprised of the following components:
Year Ended December 31,
Finance lease expense:
Amortization of ROU asset 974 81 —
Interest expense on lease liability 2,396 231 —
Lease Terms and Discount Rates
The following outlines the remaining lease terms and discount rates used in the measurement of the ROU assets and lease liabilities of the Partnership’s operating leases at December 31, 2025 and 2024:
Operating Leases Finance Leases Operating Leases Finance Leases
Weighted-average remaining lease term 3.9 years 13.6 years 4.5 years 14.6 years
Weighted-average discount rate 7.8 % 11.3 % 7.3 % 11.3 %
Maturities of Lease Liabilities
The following summarizes the remaining minimum lease payments through maturity of the Partnership’s lease liabilities at December 31, 2025:
(in thousands) Operating Leases Finance Leases
Year Ending December 31,
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(7) Other Current Liabilities
Other current liabilities consisted of the following:
December 31,
Accrued taxes other than income taxes 1,948 1,332
Current portion of finance lease obligation 778 877
Other accrued expenses and liabilities 2,441 2,832
(8) Long-Term Debt
Long-term debt and finance lease obligations consisted of the following:
December 31,
Finance lease obligation, net of current portion 20,645 20,126
Unamortized debt issuance costs (1,577) (2,152)
Current portion of finance lease obligation 778 877
(1)The estimated fair value of the 2028 Notes, defined below, was approximately $551.4 million and $533.5 million as of December 31, 2025 and 2024, respectively. The fair value estimate is a Level 2 measurement, as defined by FASB ASC Topic 820, Fair Value Measurements, as it was determined by quotations obtained from a broker-dealer who makes a market in these and similar securities.
Credit Agreements
6.125% Senior Secured Notes due June 2028
On June 23, 2021, CVR Partners and CVR Nitrogen Finance Corporation (“Finance Co.” and collectively with CVR Partners, the “Issuers”), completed a private offering of $550 million aggregate principal amount of 6.125% Senior Secured Notes due June 2028 (the “2028 Notes”). Interest on the 2028 Notes is payable semi-annually in arrears on June 15 and December 15 each year, commencing on December 15, 2021. The 2028 Notes mature on June 15, 2028, unless earlier redeemed or repurchased by the Issuers. The 2028 Notes are jointly and severally guaranteed on a senior secured basis by all the existing domestic subsidiaries of CVR Partners, excluding Finance Co.
We may, at our option, at any time and from time to time prior to June 15, 2024, on any one or more occasions, redeem all or part of the 2028 Notes at a price equal to 100% of the principal amount plus a “make whole” premium, plus accrued and unpaid interest. We may, on any one or more occasions, redeem all or part of the 2028 Notes at the redemption prices set forth
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below, expressed as a percentage of the principal amount of the respective notes, plus accrued and unpaid interest to the applicable redemption date.
12-month period beginning June 15, Percentage
The 2028 Notes contain customary covenants for a financing of this type that, among other things, restricts CVR Partners’ ability and the ability of certain of its subsidiaries to: (i) sell assets; (ii) pay distributions on, redeem or repurchase the Partnership’s units or redeem or repurchase its subordinated debt; (iii) make investments; (iv) incur or guarantee additional indebtedness or issue disqualified stock; (v) create or incur certain liens; (vi) enter into agreements that restrict distributions or other payments from CVR Partners’ restricted subsidiaries to CVR Partners; (vii) consolidate, merge or transfer all or substantially all of CVR Partners’ assets; (viii) engage in transactions with affiliates; and (ix) create unrestricted subsidiaries. The 2028 Notes contains a permitted investment activity carveout that allows for the transfer of certain carbon capture assets to a joint venture for the purpose of monetizing potential tax credits. In addition, the indenture contains customary events of default, the occurrence of which would result in or permit the trustee or the holders of at least 25% of the 2028 Notes to cause the acceleration of the 2028 Notes, in addition to the pursuit of other available remedies.
ABL Credit Agreement
On September 26, 2023, CVR Partners and certain of its subsidiaries entered into Amendment No. 1 to the Credit Agreement (the “ABL Amendment”) with Wells FargoBank National Association, a national banking association, as the administrative agent, collateral agent, and lender. The ABL Amendment amended that certain Credit Agreement, dated as of September 30, 2021 (as amended, the “ABL Credit Facility”), by and among the credit parties thereto and Wells Fargo, as administrative agent, collateral agent and a lender, to, among other things, (i) increase the aggregate principal amount available under the credit facility by an additional $15.0 million to a total of $50.0 million in the aggregate, with an incremental facility for another $15.0 million in the aggregate subject to additional lender commitments and certain other conditions, and (ii) extend the maturity date by an additional four years to September 26, 2028. The ABL Credit Facility provides for loans and letters of credit, subject to meeting certain borrowing base conditions, with sub-limits of $3.5 million for swingline loans and $10.0 million for letters of credit. The proceeds of the loans may be used for general corporate purposes of the Partnership and its subsidiaries. The foregoing description of the ABL Amendment does not purport to be complete and is qualified in its entirety by its terms, which is furnished as an exhibit to this Report.
Loans under the Partnership’s ABL Credit Facility bear interest at an annual rate equal to, at the option of the borrowers, (i) (a) 1.615% plus the daily simple Secured Overnight Financing Rate (“SOFR”) or (b) 0.615% plus a base rate, if our quarterly excess availability is greater than or equal to 75%, (ii) (a) 1.865% plus SOFR or (b) 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. The borrowers must also pay a commitment fee on the unutilized commitments and also pay customary letter of credit fees.
The ABL Credit Facility contains customary covenants for a financing of this type and requires the Partnership in certain circumstances to comply with a minimum fixed charge coverage ratio test and contains other restrictive covenants that limit the ability of the Partnership and its subsidiaries ability to, among other things, incur liens, engage in a consolidation, merger, purchase or sale of assets, pay dividends, incur indebtedness, make advances, investments and loans, enter into affiliate transactions, issue certain equity interests, create subsidiaries and unrestricted subsidiaries, and create certain restrictions on the ability to make distributions, loans, and asset transfers among the Partnership or its subsidiaries.
Covenant Compliance
The Partnership and its subsidiaries were in compliance with all covenants under their respective debt instruments as of December 31, 2025.
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(9) Revenue
The following table presents the Partnership’s revenue, disaggregated by major products:
Year Ended December 31,
(1)Consists mainly of freight revenue and includes sales of carbon oxide (“CO”) made in connection with the 45Q Transaction, as well as the noncash consideration received, which is recognized as the performance obligation associated with the CO Contract is satisfied over its term through April 2030. Revenue from the CO Contract is recognized over time based on carbon oxide volumes measured at delivery.
Remaining Performance Obligations
We have spot and term contracts with customers and the transaction prices are either fixed or based on market indices (variable consideration). The Partnership does not disclose remaining performance obligations for contracts that have terms of one year or less and for contracts where the variable consideration was entirely allocated to an unsatisfied performance obligation.
As of December 31, 2025, the Partnership had approximately $3.6 million of remaining performance obligations for contracts with an original expected duration of more than one year. The Partnership expects to recognize $3.3 million of these performance obligations as revenue by the end of 2026 and an additional $0.3 million in 2027.
Contract Balances
During the years ended December 31, 2025 and 2024, the Partnership recognized revenue of $50.5 million and $15.7 million, respectively, that was included in the deferred revenue balances of $77.8 million and $49.1 million as of December 31, 2024 and 2023, respectively. Accounts receivable from contracts with customers was $57.9 million, $63.1 million, and $39.6 million as of December 31, 2025, 2024, and 2023, respectively.
Major Customers
CVR Partners had two customers that comprised 10% or more of net sales at approximately 15% and 13% for the year ended December 31, 2025 and 13% and 12% for the year ended December 31, 2023. CVR Partners had one customer that accounted for 10% or more of net sales at approximately 14% for the year ended December 31, 2024.
(10) Share-Based Compensation
CVR Partners has a Long-Term Incentive Plan (the “CVR Partners LTIP”) that permits the granting of options, unit appreciation rights, distribution equivalent rights; restricted and phantom units, and other unit-based awards to the employees, officers, consultants and directors of CVR Partners and its subsidiaries. The Partnership had 0.5 million units available for future grants under the CVR Partners LTIP at December 31, 2025.
The Partnership has issued long-term phantom unit awards under the CVR Partners LTIP, which represent the right to receive for each phantom unit, upon vesting, at the election of the Compensation Committee of the Board, (i) one CVR Partners common unit together with the per unit value of all distributions declared and paid on CVR Partners common units, from the grant date through the vesting date, or (ii) a cash payment equal to the average fair market value of one CVR Partners common unit calculated in accordance with the award agreement, plus the per unit value of all distributions declared and paid on CVR Partners common units from the grant date through the vesting date, both subject to the terms of the applicable award agreement (“LTIP Awards”).
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The Partnership has also issued long-term, cash phantom unit awards in connection with (but not under) the CVR Partners LTIP (the “Share-Based Cash Awards” and together with the LTIP Awards, “Share-Based Awards”). These Share-Based Cash Awards represent the right to receive for each phantom unit, upon vesting, a cash payment equal to (i) the average fair market value of one CVR Partners common unit, calculated in accordance with the award agreement, plus (ii) the per share value of all distributions declared and paid on CVR Partners common units from the grant date through the vesting date, subject to the terms of the applicable award agreement.
The Share-Based Awards are graded-vesting awards, which vest over three years with one-third of the award vesting each year provided the grantee remains employed by the Partnership and its subsidiaries on the applicable vesting date. Compensation expense is recognized ratably, based on service provided to the Partnership and its subsidiaries, with the amount recognized fluctuating as a result of the Share-Based Awards being remeasured to fair value at the end of each reporting period due to their liability-award classification. As of December 31, 2025, all outstanding Share-Based Awards were liability-classified under ASC 718 and, therefore, do not represent potentially dilutive securities.
A summary of the Share-Based Award activity during the year ended December 31, 2025 is presented below:
(1)Units reflected above are phantom units awarded by the Partnership and do not include any incentive units granted by CVR Energy for which it shares in the expense.
(2)All units granted are LTIP Awards issued under the CVR Partners LTIP. The remainder of the outstanding and unvested units, as well as the vested and forfeited units, were issued as Share-Based Cash Awards in connection with (and not under) the CVR Partners LTIP.
Unrecognized compensation expense associated with the Share-Based Awards at December 31, 2025 was approximately $7.6 million, which is expected to be recognized over a weighted average period of 1.7 years. Compensation expense recorded for the years ended December 31, 2025, 2024, and 2023 related to these awards was $6.8 million, $4.6 million, and $6.4 million, respectively.
As of December 31, 2025 and 2024, the Partnership had a liability of $2.9 million and $1.8 million, respectively, for non-vested Share-Based Awards and associated distribution equivalent rights, and for the years ended December 31, 2025, 2024, and 2023, paid $4.3 million, $3.3 million, and $12.6 million, respectively, to settle Share-Based Awards upon vesting.
Incentive Unit Awards — CVR Energy
CVR Energy grants awards of incentive units and dividend equivalent rights to certain of its officers and employees and those of its subsidiaries, including officers of the Partnership’s subsidiaries, who provide shared services for CVR Energy and its subsidiaries. Costs related to these incentive unit awards are allocated to the Partnership based on time spent on Partnership business. Total compensation expense allocated to the Partnership for the years ended December 31, 2025, 2024, and 2023 related to the incentive units was $4.4 million, $1.4 million and $3.4 million, respectively.
The Partnership had no separate liabilities related to these incentive unit awards as of December 31, 2025 and 2024, as the allocation of compensation expense for incentive unit awards is part of the amount charged to the Partnership under the Corporate Master Service Agreement (“Corporate MSA”). For the years ended December 31, 2025, 2024, and 2023, the Partnership had no reimbursements related to its allocated portion of CVR Energy’s incentive unit awards payments. See Note 13 (“Related Party Transactions”) for further discussion of the Corporate MSA.
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Performance Unit Awards
A performance award agreement effective November 1, 2017, as amended on December 22, 2021 between CVR Energy and our former Executive Chairman (the “PU Award”) represents our former Executive Chairman’s right to receive upon vesting, a cash payment equal to $10.0 million if the average closing price of CVR Energy’s common stock over the 30-day trading period from January 6, 2025 through February 20, 2025 is equal to or greater than $60 per share (subject to any equitable adjustments required to account for splits, dividends, combinations, acquisitions, dispositions, recapitalizations, and the like). The Performance Cycle (as such term is defined in the PU Award) ended on December 31, 2024, and the measurement period thereunder expired on February 20, 2025. The condition under the PU Award was not achieved, and no amounts were paid thereunder. Nocompensation costs related to the PU Award were recognized for the years ended December 31, 2025, 2024, and 2023.
Other Benefit Plans
CVR Energy sponsors and administers two defined contribution 401(k) plans, the CVR Energy 401(k) Plan and the CVR Energy 401(k) Plan for Represented Employees (collectively, the “Plans”), in which employees of the General Partner, CVR Partners and its subsidiaries may participate. Participants in the Plans may elect to contribute a designated percentage of their eligible compensation in accordance with the Plans, subject to statutory limits. CVR Partners provides a matching contribution of 100% of the first 6% of eligible compensation contributed by participants. Participants in both Plans are immediately vested in their individual contributions. The Plans provide for a three-year vesting schedule for the Partnership’s matching contributions and contain a provision to count service with predecessor organizations. The Partnership had contributions under the Plans of $2.8 million, $2.5 million, and $2.4 million for the years ended December 31, 2025, 2024, and 2023, respectively.
(11) Commitments and Contingencies
Unconditional Purchase Obligations
The minimum required payments for unconditional purchase obligations, as defined in ASC 440, Commitments, related to ancillary production supplies and transportation are as follows:
(in thousands) UnconditionalPurchase Obligations
Year Ending December 31,
Expenses associated with these obligations are included in Direct operating expenses (exclusive of depreciation and amortization), and, for the years ended December 31, 2025, 2024, and 2023, totaled $4.1 million, $3.9 million, and $3.7 million, respectively.
Litigation
CRNF Ammonia Release - CVR Energy, CVR Partners and certain of their affiliates have been served with several lawsuits filed in state courts in Fort Bend County, Texas and/or received demand letters each alleging damages arising from an ammonia release that occurred at the Coffeyville Facility in October 2025, following which multiple individuals were transported to hospitals for evaluation and treatment. As these matters are in their earliest stages, the Partnership cannot yet determine whether these matters could have a material adverse effect on the Partnership’s financial position, results of operations, or cash flows.
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Kansas Environmental Claims - In January 2026, a lawsuit was filed in the United States District Court for the District of Kansas against CVR Energy, CVR Partners and certain of their affiliates (collectively, the “Kansas Defendants”) by three residents of Coffeyville and a purported class of similarly situated persons seeking compensatory and punitive damages in excess of $5 million for nuisance and other equitable relief arising from alleged environmental abuse from operations at CVR Energy’s Coffeyville refinery and the Coffeyville Facility. On February 3, 2026, the Kansas Defendants were served with the lawsuit. The Kansas Defendants dispute the claims and intend to vigorously defend themselves. As this matter is in its earliest stages, the Partnership cannot yet determine whether this lawsuit could have a material adverse effect on the Partnership’s financial position, results of operations, or cash flows.
(12) Business Segments
CVR Partners has one operating and reportable segment: Nitrogen Fertilizer. The Partnership derives revenue by producing and marketing nitrogen fertilizer products within the United States, which are used by farmers to improve the yield and quality of their crops. The segment determination is based on the management approach, reflecting the internal reporting used by the Chief Operating Decision Maker (“CODM”), the Partnership’s Chief Executive Officer, to evaluate performance and make strategic decisions.
The CODM evaluates the performance of the Nitrogen Fertilizer Segment and decides how to allocate resources based on net income, which is reported in the Consolidated Statements of Operations. The CODM uses net income to assess the income generated by the Nitrogen Fertilizer Segment and to decide whether to recommend that the Board reinvest profits into the Partnership or pay distributions. Net income is also used to analyze performance against the budget and the Partnership’s competitors.
While segment assets are not reported to, or used by, the CODM to allocate resources or to assess performance of the segment, total assets are disclosed in the Consolidated Balance Sheets.
The following table presents the operating results and capital expenditures information for the Nitrogen Fertilizer Segment:
Year Ended December 31,
Less:
Less:
(1)Other costs of materials includes inventory cost adjustments and lease expense.
(2)Other segment items includes (gain) loss on asset disposal, other (income) expense, and income tax expense.
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(13) Related Party Transactions
Limited Partnership Agreement
The Partnership’s General Partner manages the Partnership’s operations and activities as specified in CVR Partners’ limited partnership agreement. The General Partner is managed by its board of directors. The partnership agreement provides that the Partnership will reimburse the General Partner for all direct and indirect expenses it incurs or payments it makes on behalf of the Partnership, including salary, bonus, incentive compensation, and other amounts paid to any person to perform services for the Partnership or for its General Partner in connection with operating the Partnership.
Omnibus Agreement
We are party to an omnibus agreement with CVR Energy and our General Partner, pursuant to which we have agreed that CVR Energy will have a preferential right to acquire any assets or group of assets that do not constitute assets used in a fertilizer restricted business. In determining whether to exercise any preferential right under the omnibus agreement, CVR Energy will be permitted to act in its sole discretion, without any fiduciary obligation to us or the unitholders whatsoever. These obligations will continue so long as CVR Energy owns at least 50% of our General Partner. There was no activity reported under this agreement during the years ended December 31, 2025, 2024, and 2023.
Coffeyville Master Services Agreement (“Coffeyville MSA”)
Under the Coffeyville MSA, CRNF and an indirect, wholly owned subsidiary of CVR Energy (“CVR Energy Subsidiary”) are party to various services, including cross easements, hydrogen purchase and sale, raw water and facilities sharing, pet coke supply, feedstock and shared services, and a lease. The Coffeyville MSA provides for monthly payments for all goods and services supplied under the Coffeyville MSA and is in effect until terminated in writing, in whole or in part, by either party, or until terminated automatically in the event a party falls out of common control with the other party.
Corporate MSA
Under the Corporate MSA, the General Partner and the Partnership and its subsidiaries, as “service recipients” thereunder, obtain certain management and other administrative and professional services from CVR Services, LLC. The Corporate MSA provides for payment by each service recipient, including the General Partner and the Partnership and its subsidiaries, of a monthly fee for goods and services supplied thereunder, subject to an annual true up, as well as pass-through of any direct costs incurred on behalf of a service recipient without markup. Any party may terminate the Corporate MSA upon at least 90 days’ notice.
Environmental Agreement
CRNF and certain of CVR Energy’s subsidiaries are parties to an environmental agreement which provides for certain indemnification and access rights in connection with environmental matters affecting CVR Energy’s Coffeyville refinery and the Coffeyville Facility. To the extent that liability arises from environmental contamination that is caused by the Coffeyville refinery but is also commingled with environmental contamination caused by the Coffeyville Facility, the Coffeyville refinery may elect, in its sole discretion and at its own cost and expense, to perform government mandated environmental activities relating to such liability, subject to certain conditions and provided that it does not waive any rights to indemnification or compensation otherwise provided for in the agreement. No liability under this agreement was recorded as of December 31, 2025 and 2024.
Terminal and Operating Agreement
CRNF is part of a lease and operating agreement with an affiliated CVR Energy subsidiary, under which it leases the premises located at Phillipsburg, Kansas to be utilized as a UAN terminal. The initial term of the agreement will expire in May 2032, provided, however, CRNF may terminate the lease at any time during the initial term by providing 180 days prior written notice. In addition, this agreement will automatically renew for successive five-year terms, provided that CRNF may terminate the agreement during any renewal term with at least 180 days written notice. Under the terms of this agreement, CRNF will pay for UAN placed into and taken out of the terminal, as well as to lease the premises.
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Related Party Activity
Activity associated with the Partnership’s related party arrangements for the years ended December 31, 2025, 2024, and 2023 is summarized below:
Year Ended December 31,
Sales to related parties: (1)
Expenses from related parties: (2)
December 31,
(1)Sales to related parties, included in Net sales in our consolidated financial statements, consist of (a) sales of feedstocks and services under the Coffeyville MSA and (b) CO sales to CVRP JV and its subsidiaries.
(2)Expenses from related parties, included in Cost of materials and other, Direct operating expenses (exclusive of depreciation and amortization), and Selling, general and administrative expenses in our consolidated financial statements, consist primarily of pet coke and hydrogen purchased under the Coffeyville MSA and management and other professional services under the Corporate MSA.
(3)Consists primarily of amounts payable to CVR Energy subsidiaries under the Coffeyville MSA and Corporate MSA, included in Accounts payable to affiliates.
Distributions to CVR Partners’ Unitholders
The Board has a policy for the Partnership to distribute all available cash, as determined in its sole discretion, generated on a quarterly basis. Cash distributions are made to the common unitholders of record on the applicable record date, generally within 60 days after the end of each quarter. Available cash for distribution for each quarter is determined by the Board following the end of such quarter and may be adjusted through reserves based on the Board’s judgment and prevailing business concerns.
Distributions, if any—including the amount, timing, and the Board’s distribution policy—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 and IEP, during 2025, 2024, and 2023 (amounts presented in table below may not add to totals presented due to rounding):
Year Ended December 31,
(1)Amount represents the cumulative distributions, calculated quarterly, paid in the respective period.
For the fourth quarter of 2025, upon approval by the Board on February 18, 2026, the Partnership declared a distribution of $0.37 per common unit, or $3.9 million, which is payable March 9, 2026 to unitholders of record as of March 2, 2026. Of this
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CVR PARTNERS, LP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
amount, CVR Energy and IEP will receive approximately $1.4 million and $0.1 million, respectively, with the remaining amount payable to public unitholders.
(14) Supplemental Cash Flow Information