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What changed in CVR PARTNERS, LP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CVR PARTNERS, LP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+332 added−323 removedSource: 10-K (2025-02-19) vs 10-K (2024-02-21)

Top changes in CVR PARTNERS, LP's 2024 10-K

332 paragraphs added · 323 removed · 264 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

60 edited+14 added−20 removed37 unchanged
Biggest changeDecember 31, 2023 | 9 Table of Contents Customers Retailers and distributors are the main customers for UAN, and, more broadly, the industrial and agricultural sectors are the primary recipients of our ammonia products. Given the nature of our business, and consistent with industry practice, we sell our products on a wholesale basis under a contract or by purchase order.
Biggest changeGiven the nature of our business, and consistent with industry practice, we sell our products on a wholesale basis under a contract or by purchase order. Contracts with customers generally contain fixed pricing and have terms of less than one year.
Our operations require numerous permits, licenses, and authorizations. Failure to comply with these permits or environmental laws, rules, and regulations could result in fines, penalties, or other sanctions or liabilities or a revocation of our permits, licenses, or authorizations.
Our operations require numerous permits, licenses, and authorizations. Failure to comply with these permits, licenses, and authorizations or environmental laws, rules, and regulations could result in fines, penalties, or other sanctions or liabilities or a revocation of our permits, licenses, or authorizations.
Seasonality Because we primarily sell agricultural commodity products, our business is exposed to seasonal fluctuations in demand for nitrogen fertilizer products in the agricultural industry. In addition, the demand for fertilizers is affected by the aggregate crop planting decisions and fertilizer application rate decisions of individual farmers who make planting decisions based largely on the prospective profitability of a harvest.
Because we primarily sell agricultural commodity products, our business is exposed to seasonal fluctuations in demand for nitrogen fertilizer products in the agricultural industry. In addition, the demand for fertilizers is affected by the aggregate crop planting decisions and fertilizer application rate decisions of individual farmers who make planting decisions based largely on the prospective profitability of a harvest.
Farming activities intensify in the United States during the spring and fall fertilizer application periods, and geographic proximity to these activities is also a significant competitive advantage for domestic producers. We manage our manufacturing and distribution operations to best serve our customers during these critical periods.
Farming activities intensify in the United States during the spring and fall fertilizer application periods, and geographic proximity to these activities is also a significant competitive advantage for domestic producers. We seek to manage our manufacturing and distribution operations to best serve our customers during these critical periods.
December 31, 2023 | 7 Table of Contents Facilities Coffeyville Facility - We own and operate a nitrogen fertilizer production facility in Coffeyville, Kansas that includes a gasifier complex having a capacity of 89 million standard cubic feet per day of hydrogen, a 1,300 ton per day capacity ammonia unit and a 3,100 ton per day capacity UAN unit.
December 31, 2024 | 7 Table of Contents Facilities Coffeyville Facility - We own and operate a nitrogen fertilizer production facility in Coffeyville, Kansas that includes a gasifier complex having a capacity of 89 million standard cubic feet per day of hydrogen, a 1,300 ton per day capacity ammonia unit and a 3,100 ton per day capacity UAN unit.
Senior employees may also receive long-term incentive awards that currently vest ratably over a three-year period, subject to the terms and conditions of the applicable award agreement, aligning employee compensation with the interests of our shareholders and promoting employee retention.
Senior employees may also receive long-term incentive awards that currently vest ratably over a three-year period, subject to the terms and conditions of the applicable award agreement, aligning employee compensation with the interests of our unitholders and promoting employee retention.
Talent Management We believe our competitive compensation and benefit plans allow us to attract and retain talented employees. Our recruiting strategy focuses on ensuring our hiring practices are free from bias for or against any individual or group of candidates.
Talent Management We believe our competitive compensation and benefit plans allow us to attract and retain talented employees. Our recruiting strategy focuses on hiring practices that are free from bias for or against any individual or group of candidates.
In support of the personal development of our employees and our goal of employing and retaining effective and dynamic leaders, we provide in-person supervisor training to managers at all levels, which focuses on a combination of business and leadership strategies, including coaching and performance management, goal setting, critical thinking, effective communication and listening, development and succession planning, delegation techniques, and legal aspects of leadership, among other topics.
In support of the personal development of our employees and our goal of employing and retaining effective and dynamic leaders, we provide in-person supervisor training to managers at all levels led by our executives, which focuses on a combination of business and leadership strategies, including coaching and performance management, goal setting, critical thinking, effective communication and listening, development and succession planning, delegation techniques, and legal aspects of leadership, among other topics.
We believe these efforts reinforce our safety culture; promote a safe workplace, accountability, and stronger community relations; help guard against complacency; and ultimately, enhance our safety performance and help us manage risk and reduce impact to personal health and safety and the environment.
We believe these efforts reinforce our safety culture; promote a safe workplace, accountability, and stronger community relations; help safeguard against complacency; and ultimately, enhance our safety performance and help us manage risk and reduce impact to personal health and safety and the environment.
We believe that certain carbon oxide capture and sequestration activities conducted at or in connection with the Coffeyville Facility qualify under the Internal Revenue Service (“IRS”) safe harbor described in Revenue Procedure 2020-12 for certain tax credits available to joint ventures under Section 45Q of the Internal Revenue Code of 1986, as amended (“Section 45Q Credits”).
Certain carbon oxide capture and sequestration activities conducted at or in connection with the Coffeyville Facility qualify under the Internal Revenue Service (“IRS”) safe harbor described in Revenue Procedure 2020-12 for certain tax credits available to joint ventures under Section 45Q of the Internal Revenue Code of 1986, as amended (“Section 45Q Credits”).
The Coffeyville Facility has entered into an agreement with the Kansas Department of Health and Environment (“KDHE”) to address certain historical releases of UAN located on our property and comingled with legacy groundwater contamination from the adjacent Coffeyville refinery operated by a subsidiary of CVR Energy (the “Coffeyville Refinery”).
CRNF entered into an agreement with the Kansas Department of Health and Environment (“KDHE”) to address certain historical releases of UAN located on our property and comingled with legacy groundwater contamination from the adjacent Coffeyville refinery operated by a subsidiary of CVR Energy (the “Coffeyville Refinery”).
The East Dubuque Facility has the flexibility to vary its product mix, thereby enabling it to upgrade a portion of its ammonia production into varying amounts of UAN, nitric acid, and liquid and granulated urea, depending on market demand, pricing, and storage availability.
The East Dubuque Facility has the flexibility to vary its product mix, thereby enabling it to upgrade a portion of its ammonia production into varying amounts of UAN and nitric acid, depending on market demand, pricing, and storage availability.
East Dubuque Facility - Our East Dubuque Facility is generally able to purchase natural gas at competitive prices due to its connection to the Northern Natural Gas interstate pipeline system, which is within one mile of the facility, and a third-party owned and operated pipeline.
We are generally able to purchase natural gas at competitive prices due to the connection of our East Dubuque Facility to the Northern Natural Gas interstate pipeline system, which is within one mile of the facility, and a third-party owned and operated pipeline.
Information on our website is not a part of, and is not incorporated into, this Report or any other report we may file with or furnish to the SEC, whether before or after the date of this Report and irrespective of any general incorporation language therein. December 31, 2023 | 15 Table of Contents
Information on our website is not a part of, and is not incorporated into, this Report or any other report we may file with or furnish to the SEC, whether before or after the date of this Report and irrespective of any general incorporation language therein. December 31, 2024 | 14 Table of Contents
The Partnership also sequesters carbon dioxide that is not utilized for urea production at its Coffeyville Facility by capturing and purifying the CO 2 as part of its manufacturing process and then transfers it to CapturePoint LLC, an unaffiliated third-party (“CapturePoint”), which then compresses and ships the CO 2 for sequestration through Enhanced Oil Recovery December 31, 2023 | 11 Table of Contents (“EOR”) under an EPA-approved monitoring, reporting, and verification plan.
The Partnership also sequesters carbon dioxide that is not utilized for urea production at its Coffeyville Facility by capturing and purifying the CO 2 as part of its manufacturing process and then transfers it to CapturePoint LLC, an unaffiliated third-party (“CapturePoint”), which then compresses and ships the CO 2 for sequestration through Enhanced Oil Recovery (“EOR”) under an EPA-approved monitoring, reporting, and verification plan.
The site pollution legal liability policy and the pollution coverage provided in the casualty insurance policies are subject to retentions and deductibles and contain discovery requirements, reporting requirements, exclusions, definitions, conditions, and limitations that could apply to a particular pollution claim, and there can be no assurance such claim will be adequately insured for all potential damages.
The site pollution legal liability policy and the Casualty Policies are subject to retentions and deductibles and contain discovery requirements, reporting requirements, waiting periods, exclusions, definitions, conditions, and limitations that could apply to a particular pollution claim, and there can be no assurance such claim will be adequately insured for all potential damages.
We encourage all employees to live our core Value of corporate citizenship by making a positive impact in our communities by taking advantage of our volunteerism policy pursuant to which eligible employees are provided paid time off from work to volunteer at 501(c)(3) non-profit entities.
We encourage all employees to live our core Value of corporate citizenship by December 31, 2024 | 13 Table of Contents making a positive impact in our communities by taking advantage of our volunteerism policy pursuant to which eligible employees are provided paid time off from work to volunteer at 501(c)(3) non-profit entities.
Global fertilizer use, consisting of nitrogen, phosphate, and potash, is projected to increase by 2% through 2024 to meet global food demand according to a study funded by the Food and Agricultural Organization of the United Nations.
Global fertilizer use, consisting of nitrogen, phosphate, and potash, is projected to increase by 1% through 2025 to meet global food demand according to a study funded by the Food and Agricultural Organization of the United Nations.
Demand Global demand for fertilizers is driven primarily by grain demand and prices, which, in turn, are driven by population growth, farmland per capita, dietary changes in the developing world, and increased consumption of bio-fuels. According to the IFA, from 1976 to 2021, global fertilizer demand grew 2% annually.
Demand Global demand for fertilizers is driven primarily by grain demand and prices, which, in turn, are driven by population growth, farmland per capita, dietary changes in the developing world, and increased consumption of bio-fuels. According to the IFA, from 1981 to 2024, global fertilizer demand grew 6% annually.
These greenhouse gas footprint reduction efforts support our core Values of Environment and Continuous Improvement and our goal of continuing to produce nitrogen fertilizers that produce crops that help to feed the world’s growing population in the most environmentally responsible way possible.
These greenhouse gas footprint reduction efforts support our core Values of Environment and Continuous Improvement and our goal of continuing to December 31, 2024 | 10 Table of Contents produce nitrogen fertilizers that produce crops that help to feed the world’s growing population in the most environmentally responsible way possible.
The Coffeyville Facility has contracts in place to receive water during certain water shortage conditions, but these conditions and contracts could change over time depending on the scarcity of water. In January 2021, the U. S. Environmental Protection Agency (the “EPA”) announced it is undertaking a plan to review and update effluent standards for many industries.
The Coffeyville Facility has contracts in place to receive water during certain water shortage conditions, but these conditions and contracts could change over time depending on the scarcity of water. In January 2021, the EPA announced it is undertaking a plan to review and update effluent standards for many industries.
As an example, China’s wheat and coarse grains production is estimated to have increased 42% between 2011 and 2023, but still failed to keep pace with increases in demand, prompting China to grow its wheat and coarse grain imports by more than 1,167% over the same period, according to the United States Department of Agriculture (“USDA”).
As an example, China’s wheat and coarse grains production is estimated to have increased 48% between 2011 and 2024, but still failed to keep pace with increases in demand, prompting China to grow its wheat and coarse grain imports by 1,090% over the same period, according to the United States Department of Agriculture (“USDA”).
Based on Fertecon Limited’s (“Fertecon”) 2023 estimates, the United States is the world’s third largest consumer and importer of nitrogen fertilizer. Fertecon is an agency which provides market information and analysis on fertilizers and fertilizer raw materials for fertilizer and related industries, as well as international agencies.
Based on Fertecon Limited’s (“Fertecon”) 2024 estimates, the United States is the world’s third largest consumer and importer of nitrogen fertilizer. Fertecon is an agency which provides market information and December 31, 2024 | 8 Table of Contents analysis on fertilizers and fertilizer raw materials for fertilizer and related industries, as well as international agencies.
Health, Safety, and Security Matters We are subject to a number of federal and state laws and regulations related to safety, including the Occupational Safety and Health Act, which created the Occupational Safety and Health Administration (“OSHA”) and comparable state statutes, the purposes of which are to protect the health and safety of workers.
Health, Safety, and Security Matters We are subject to a number of federal and state laws and regulations related to safety, including the Occupational Safety and Health Act, which created the Occupational Safety and Health Administration (“OSHA”) and comparable state statutes, the December 31, 2024 | 12 Table of Contents purposes of which are to protect the health and safety of workers.
This insurance generally provides coverage due to named perils for claims involving pollutants where the discharge is sudden and accidental and first commences at a specific day and time during the policy period.
The Casualty Policies generally provide coverage due to named perils for claims involving pollutants where the discharge is sudden and accidental and first commences at a specific day and time during the policy period.
Combining our nitrous oxide abatement and CO 2 sequestration activities should reduce our CO 2 e footprint by an average of over 1 million metric tons per year. In addition, our Coffeyville Facility is uniquely qualified to produce hydrogen and ammonia that could be certified ‘blue’ to a market that is increasingly demanding reduced carbon footprints.
By combining our nitrous oxide abatement and CO 2 sequestration activities, we reduced our CO 2 e footprint by over 1.3 million metric tons in 2023. In addition, our Coffeyville Facility is uniquely qualified to produce hydrogen and ammonia that could be certified ‘blue’ to a market that is increasingly demanding reduced carbon footprints.
EPA is prioritizing those sectors that are ranked high in point source categories for total nitrogen discharges, including fertilizer manufacturers. The EPA’s review eventually could result in different regulations governing the Partnership.
In that announcement, the EPA prioritized those sectors that are ranked high in point source categories for total nitrogen discharges, including fertilizer manufacturers. The EPA is continuing its review, which eventually could result in different regulations governing the Partnership.
The Partnership produces nitrogen fertilizer 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”).
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”).
December 31, 2023 | 8 Table of Contents The United States is the world’s largest exporter of coarse grains, accounting for 25% of world exports and 27% of world production for the fiscal year ended December 31, 2023, according to the USDA. A substantial amount of nitrogen is consumed in production of these crops to increase yield.
The United States is the world’s largest exporter of coarse grains, accounting for 30% of world exports and 26% of world production for the fiscal year ended December 31, 2024, according to the USDA. A substantial amount of nitrogen is consumed in production of these crops to increase yield.
Subject to location and other considerations, our major domestic competitors in the nitrogen fertilizer business generally includes CF Industries Holdings, Inc., which sells significantly more nitrogen fertilizers in the United States than other industry participants; Nutrien Ltd.; Koch Fertilizer Company, LLC; OCI N.V.; and LSB Industries, Inc.
December 31, 2024 | 9 Table of Contents Subject to location and other considerations, our major domestic competitors in the nitrogen fertilizer business generally includes CF Industries Holdings, Inc., which sells significantly more nitrogen fertilizers in the United States than other industry participants; Nutrien Ltd.; Koch Fertilizer Company, LLC; and LSB Industries, Inc.
December 31, 2023 | 10 Table of Contents The Federal Clean Air Act (“CAA”) The CAA and its implementing regulations, as well as state laws and regulations governing air emissions, affect us both directly and indirectly.
The Federal Clean Air Act (“CAA”) The CAA and its implementing regulations, as well as state laws and regulations governing air emissions, affect us both directly and indirectly.
Fertecon estimates indicate that the United States represented 11% of total global nitrogen fertilizer consumption for 2023, with China and India as the top consumers representing 23% and 18% of total global nitrogen fertilizer consumption, respectively. North American nitrogen fertilizer producers predominantly use natural gas as their primary feedstock.
Fertecon estimates indicate that China, India, and the United States are the top consumers representing 27%, 17%, and 10% of total global nitrogen fertilizer consumption for 2024, respectively. North American nitrogen fertilizer producers predominantly use natural gas as their primary feedstock.
The pipelines are connected to a third-party distribution system at the Chicago Citygate receipt point and at the Hampshire interconnect from which natural gas is transported to our East Dubuque Facility.
The pipelines are connected to a third-party distribution system at the Chicago Citygate receipt point and at the Hampshire interconnect from which natural gas is transported to our East Dubuque Facility. Marketing and Distribution We primarily market UAN products to agricultural customers and ammonia products to agricultural and industrial customers.
Domestic customers generally demonstrate sophisticated buying tendencies that include a focus on cost and service. We also encounter competition from producers of fertilizer products manufactured in foreign countries, including the threat of increased production capacity. In certain cases, foreign producers of fertilizer that export to the United States may be subsidized by their respective governments.
Domestic customers generally demonstrate sophisticated buying tendencies that include a focus on cost and service. We also encounter competition from producers of fertilizer products manufactured in foreign countries, including the threat of increased production capacity.
We implement and maintain comprehensive security programs designed to comply with regulatory requirements and protect our assets and employees. We periodically assess risk and conduct audits of our programs and seek to continually improve our health, safety, and security management systems.
In addition, the East Dubuque Facility is regulated under the Maritime Transportation Security Act. We implement and maintain comprehensive security programs designed to comply with regulatory requirements and protect our assets and employees. We periodically assess risk and conduct audits of our programs and seek to continually improve our health, safety, and security management systems.
Both facilities manufacture ammonia and are able to further upgrade such ammonia to other nitrogen fertilizer products, principally urea ammonium nitrate (“UAN”). Nitrogen fertilizer is used by farmers to improve the yield and quality of their crops, primarily corn and wheat. The Partnership’s products are sold on a wholesale basis in the United States of America.
The Facilities manufacture ammonia and are able to further upgrade such ammonia to other nitrogen fertilizer products, principally urea ammonium nitrate (“UAN”). The Partnership’s products are sold on a wholesale basis in the United States of America.
The regulation of air emissions under the CAA requires that we obtain various construction and operating permits and incur capital expenditures for the installation of certain air pollution control devices at our operations.
If new controls or changes to operations are needed, the costs could be material. The regulation of air emissions under the CAA requires that we obtain various construction and operating permits and incur capital expenditures for the installation of certain air pollution control devices at our operations.
The efforts of our employees in support of this Mission are guided each and every day by these core Values as we strive to achieve excellence for all of our key stakeholders – employees, communities and stockholders. See “Management’s Discussion and Analysis” in Part II, Item 7 of this Report for further discussion on our Mission and core Values.
The efforts of our employees in support of this Mission are guided each and every day by these core Values as we strive to achieve excellence for all of our key stakeholders – employees, communities and unitholders.
Our recruiting efforts that include focus on veteran and diverse college populations, support our diverse and inclusive environment, as do the activities of our Diversity & Inclusion Committee. We provide diversity and inclusion training that includes focus on unconscious bias where employees learn to recognize and address the effects thereof by encouraging diversity of experience and opinion.
Our recruiting efforts that include focus on veteran and diverse college populations, support our diverse and inclusive environment, as do the activities of our Diversity & Inclusion Committee. We provide diversity and inclusion training that covers, among other topics, unconscious bias and encouraging diversity of experience and opinion.
If delivered by truck, products are most commonly sold on a shipping point basis, and freight is normally arranged by the customer. We also utilize a fleet of railcars for use in product delivery. If delivered by railcar, products are most commonly sold on a destination point basis, and we typically arrange the freight.
If delivered by truck, our fertilizer products are most commonly sold on a shipping point basis, and freight is normally arranged by the customer. If delivered by railcar, our fertilizer products are most commonly sold on a destination point basis, and we typically arrange the freight.
Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and the Emergency Planning and Community Right-to-Know Act (“EPCRA”) The release of hazardous substances or extremely hazardous substances into the environment is subject to release reporting requirements under federal and state environmental laws. Our Facilities also periodically experience releases of hazardous and extremely hazardous substances from their equipment.
December 31, 2024 | 11 Table of Contents Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and the Emergency Planning and Community Right-to-Know Act (“EPCRA”) The release of hazardous substances or extremely hazardous substances into the environment is subject to release reporting requirements under federal and state environmental laws.
From time to time, the EPA has conducted inspections and issued information requests to us with respect to our compliance with reporting requirements under the CERCLA and the EPCRA.
Our Facilities also periodically experience releases of hazardous and extremely hazardous substances from their equipment. From time to time, the EPA has conducted inspections and issued information requests to us with respect to our compliance with reporting requirements under the CERCLA and the EPCRA.
The Coffeyville Facility is the only nitrogen fertilizer plant in North America that utilizes a pet coke gasification process to produce nitrogen fertilizer. The Coffeyville Facility’s largest raw material cost used in the production of ammonia is pet coke, which is purchased from CVR Energy and third parties.
The Coffeyville Facility is the only nitrogen fertilizer facility in North America that utilizes pet coke, which is purchased from CVR Energy and third parties, in a gasification process to produce hydrogen for use in manufacturing nitrogen fertilizer.
Recent Greenhouse Gas Footprint Reduction Efforts In October 2020, the Partnership announced that it generated its first carbon offset credits from voluntary nitrous oxide abatement at its Coffeyville Facility. The Partnership has similar nitrous oxide abatement efforts at its East Dubuque Facility.
Greenhouse Gas Footprint Reduction Efforts The Partnership has generated carbon offset credits from voluntary nitrous oxide (“N 2 O”) abatement at its Coffeyville Facility since October 2020, with similar N 2 O abatement efforts at its East Dubuque Facility since June 2011.
In addition, our Corporate Governance Guidelines, Codes of Ethics and Business December 31, 2023 | 14 Table of Contents Conduct, and the charters of the Audit Committee, the Compensation Committee, and the Environmental, Health and Safety Committee of the Board of Directors of our general partner are available on our website.
In addition, our Corporate Governance Guidelines, Codes of Ethics and Business Conduct, and the charters of the Audit Committee, the Compensation Committee, and the Environmental, Health and Safety Committee of the Board of Directors of our general partner are available on our website. These guidelines, policies, and charters are also available in print without charge to any unitholder requesting them.
We periodically audit our programs and seek to continually improve our management systems. Our Facilities were subject to the Chemical Facility Anti-Terrorism Standards (“CFATS”), a regulatory program designed to ensure facilities have security measures in place to reduce the risk that certain hazardous chemicals are weaponized by terrorists.
Our Facilities were subject to the Chemical Facility Anti-Terrorism Standards (“CFATS”), a regulatory program designed to ensure facilities have security measures in place to reduce the risk that certain hazardous chemicals are weaponized by terrorists. Despite the expiration of the CFATS in June 2023, our Facilities continue to adhere to its requirements.
Contracts with customers generally contain fixed pricing and have terms of less than one year. Our top two customers represented 25% and 30% of net sales for the years ended December 31, 2023 and 2022, respectively, and our top customer represented 13% of net sales for the year ended December 31, 2021.
Our top customer represented 14% of net sales for the year ended December 31, 2024, and our top two customers represented 25% and 30% of net sales for the years ended December 31, 2023 and 2022, respectively.
December 31, 2023 | 13 Table of Contents Safety & Health We are committed to providing a safe and healthy workplace and striving to protect our employees, contractors and communities.
Of these, 85 employees are covered by a collective bargaining agreement. Safety & Health We are committed to providing a safe and healthy workplace and striving to protect our employees, contractors and communities.
December 31, 2023 | 12 Table of Contents Environmental Insurance We are covered by CVR Energy’s site pollution legal liability insurance policies, which include business interruption coverage, subject to applicable retentions and exclusions. The policies insure any location owned, leased, rented, or operated by the Partnership, including our Facilities.
Environmental Insurance We are covered by CVR Energy’s site pollution legal liability insurance policies, which insure any location owned, leased, rented, or operated by the Partnership, including our Facilities. The policies insure certain pollution conditions at, or migrating from, a covered location, certain waste transportation and disposal activities, and business interruption.
The CAA affects the Partnership by extensively regulating the air emissions of sulfur dioxide (“SO 2 ”), volatile organic compounds, nitrogen oxides, and other substances.
The CAA affects the Partnership by extensively regulating the air emissions of sulfur dioxide (“SO 2 ”), volatile organic compounds, nitrogen oxides, and other substances. Some or all of the regulations promulgated pursuant to the CAA, or any future promulgations of regulations, may require the installation of controls at or changes to our Facilities to maintain compliance.
Unlike ammonia and urea, UAN can be applied throughout the growing season and can be applied in tandem with pesticides and herbicides, providing farmers with flexibility and cost savings. As a result of these factors, UAN typically commands a premium price to urea and ammonia, on a nitrogen equivalent basis.
The three primary forms of nitrogen fertilizer used in the United States are ammonia, urea, and UAN. Unlike ammonia and urea, UAN can be applied throughout the growing season and can be applied in tandem with pesticides and herbicides, providing farmers with flexibility and cost savings.
Raw Material Supply Coffeyville Facility - During the past five years, approximately 41% of the Coffeyville Facility’s pet coke requirements, on average, were supplied by CVR Energy’s adjacent Coffeyville, Kansas refinery pursuant to a supply agreement between one of our subsidiaries and a subsidiary of CVR Energy (the “Coffeyville MSA”).
A substantial part of our pet coke requirements are supplied by CVR Energy’s adjacent Coffeyville, Kansas refinery pursuant to a supply agreement between one of our subsidiaries and a subsidiary of CVR Energy (the “Coffeyville MSA”). In 2024, 2023, and 2022, our supply of pet coke from the Coffeyville refinery was approximately 46%, 43%, and 47%, respectively.
Agriculture Nutrients are depleted in soil over time and, therefore, must be replenished through fertilizer application. Nitrogen is the most quickly depleted nutrient and must be replenished every year, whereas phosphate and potassium can be retained in soil for up to three years.
Nitrogen is the most quickly depleted nutrient and must be replenished every year, whereas phosphate and potassium can be retained in soil for up to three years. Plants require nitrogen in the largest amounts, and it accounts for approximately 58% of primary fertilizer consumption on a nutrient ton basis, per the International Fertilizer Association (“IFA”).
The Reserve employs high-quality standards and an independent third-party verification process to issue its carbon credits, known as Climate Reserve Tonnes.
CVR Partners’ N 2 O abatement projects are registered with the Climate Action Reserve (the “Reserve”), a carbon offset registry for the North American market. The Reserve employs standards and an independent third-party verification process to issue its carbon credits, known as Climate Reserve Tonnes.
The policies insure certain pollution conditions at, or migrating from, a covered location, certain waste transportation and disposal activities, and business interruption. In addition to the site pollution legal liability insurance policies, we maintain umbrella and excess casualty insurance policies which include sudden and accidental pollution coverage policies maintained by CVR Energy, subject to applicable retentions and exclusions.
In addition to the site pollution legal liability insurance policies, CVR Energy maintains and we are covered by certain general liability, umbrella and excess casualty insurance policies (collectively, the “Casualty Policies”) which generally include sudden and accidental pollution coverage.
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. Organizational Structure and Related Ownership The following chart illustrates the organizational structure of the Partnership as of December 31, 2023.
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.
From 2018 to 2022, the N 2 O abatement systems at the East Dubuque Facility’s two nitric acid plants have abated, on average, the annual release of approximately 256,000 metric tons of CO 2 e. CVR Partners’ N 2 O abatement projects are registered with the Climate Action Reserve (the “Reserve”), a carbon offset registry for the North American market.
From 2020 to 2023, the N 2 O abatement systems at the East Dubuque Facility’s two nitric acid plants and the Coffeyville Facility’s nitric acid plant have abated, on average, the annual release of approximately 277,000 and 340,000 metric tons of carbon dioxide-equivalent (“CO 2 e”), respectively.
Marketing and Distribution We primarily market UAN products to agricultural customers and ammonia products to agricultural and industrial customers. UAN and ammonia, including freight, accounted for approximately 69% and 24%, respectively, of total net sales for the year ended December 31, 2023. UAN and ammonia are primarily distributed by truck or railcar.
UAN and ammonia, including freight, accounted for approximately 66% and 25%, respectively, of total net sales for the year ended December 31, 2024.
The nitrogen fertilizer products leave our Coffeyville Facility either in railcars for destinations located principally on the Union Pacific or Burlington Northern Santa Fe railroads or in trucks for direct shipment to customers. Our East Dubuque Facility primarily sells product to customers located within 200 miles of the facility.
The Partnership distributes its nitrogen fertilizer products via railcars, primarily using the Union Pacific or Burlington Northern Santa Fe railroads, trucks for direct shipment to customers, and barges, as it has direct access to a barge dock on the Mississippi River.
Workforce Profile As of December 31, 2023, CVR Partners and its subsidiaries had 310 employees, all of which are located in the United States. Of these, 95 employees are covered by a collective bargaining agreement.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this Report for further discussion on our Mission and core Values. Workforce Profile As of December 31, 2024, CVR Partners and its subsidiaries had 316 employees, all of which are located in the United States.
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For the years ended December 31, 2023, 2022, and 2021, the Partnership purchased approximately $40.5 million, $22.5 million, and $23.0 million, respectively, of pet coke, which equaled an average cost per ton of $78.14, $52.88, and $44.69, respectively.
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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.
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For the years ended December 31, 2023, 2022, and 2021, we upgraded approximately 92%, 94%, and 87%, respectively, of our ammonia production into UAN, a product that generated greater profit per ton than ammonia. When the economics are favorable, we expect to continue upgrading substantially all of our ammonia production into UAN.
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Organizational Structure and Related Ownership The following chart illustrates the organizational structure of the Partnership as of December 31, 2024.
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The East Dubuque Facility’s largest raw material cost used in the production of ammonia is natural gas, which is purchased from third parties.
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The East Dubuque Facility utilizes natural gas, which is purchased from third parties, to produce hydrogen for use in manufacturing nitrogen fertilizer. Agriculture Commodities and Seasonality Nutrients are depleted in soil over time and, therefore, must be replenished through fertilizer application.
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For the years ended December 31, 2023, 2022, and 2021, the East Dubuque Facility incurred approximately $29.0 million, $46.0 million, and $31.8 million for feedstock natural gas used in production, respectively, which equaled an average cost of $3.42, $6.66, and $3.95 per MMBtu, respectively. Commodities The nitrogen products we produce are globally traded commodities and are subject to price competition.
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As a result of these factors, UAN typically commands a premium price to urea and ammonia, on a nitrogen equivalent basis. The nitrogen fertilizer products we produce are globally traded commodities and are subject to price competition.
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Plants require nitrogen in the largest amounts, and it accounts for approximately 56% of primary fertilizer consumption on a nutrient ton basis, per the International Fertilizer Association (“IFA”). The three primary forms of nitrogen fertilizer used in the United States are ammonia, urea, and UAN.
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Raw Material Supply A key ingredient used in the manufacturing process of our nitrogen fertilizer products is hydrogen, which is sourced from pet coke gasification or natural gas. The Partnership benefits from logistical advantages for both feedstocks, ensuring a stable and secure supply chain.
Removed
In 2023, 2022, and 2021, our supply of pet coke from the Coffeyville refinery was approximately 43%, 47%, and 43%, respectively. Historically, our Coffeyville Facility has obtained the remainder of its pet coke requirements through third-party contracts typically priced at a discount to the spot market.
Added
Historically, we have obtained the remainder of our pet coke requirements through third-party contracts with delivery provided by truck, railcar, or barge.
Removed
We have contracts with several vendors to supply third-party pet coke, which could be delivered by truck, railcar, or barge. Additionally, our Coffeyville Facility relies on a third-party air separation plant at its location that provides contract volumes of oxygen, nitrogen, and compressed dry air to the Coffeyville Facility gasifiers.
Added
In addition, given the East Dubuque Facility’s advantaged location in the heart of the agriculture country, the Partnership ships substantially all of its products within 200 miles of the facility. Customers Retailers and distributors are the main customers for UAN and, more broadly, the industrial and agricultural sectors are the primary recipients of our ammonia products.
Removed
Should the oxygen volume fall below a specified level, the on-site vendor is contractually obligated to provide excess oxygen through its own mechanism or through third-party purchases. The reliability of the air separation plant can have a significant impact on our Coffeyville Facility’s operations.
Added
In certain cases, foreign producers of fertilizer that export to the United States may be subsidized by their respective governments which could put us at a competitive disadvantage.
Removed
As of December 31, 2023, we had commitments to purchase approximately 0.7 million MMBtus of natural gas supply for planned use in our East Dubuque Facility in January of 2024, at a weighted average rate per MMBtu of approximately $3.03, exclusive of transportation costs.
Added
On January 20, 2025, under the new Trump Administration the White House issued Executive Order (“EO”) 14154 titled “Unleashing American Energy” that seeks to establish American energy dominance through, among other actions, purported revocation of certain Presidential and regulatory actions, abolishment of certain offices such as the American Climate Corps and the Interagency Working Group on the Social Cost of Greenhouse Gases and other actions including, for example, directives to revise permitting processes, promote domestic mining and energy production and eliminate the "electric vehicle mandate" by ensuring a level regulatory playing field for gasoline-powered automobiles and eliminating subsidies or other incentives for purchasing electric vehicles (“EVs”).
Removed
In most instances, customers take delivery of nitrogen products at our East Dubuque Facility and arrange to transport them to their final destinations by truck.
Added
Also on January 20, 2025, the White House issued EO 14162, “Putting America First in International Environmental Agreements”, directing the United States’ withdrawal from the Paris Agreement under the United Nations Framework Convention on Climate Change.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeBecause we build inventory during low demand periods, the accumulation of inventory to be available for seasonal sales creates significant seasonal working capital and storage capacity requirements. The degree of seasonality can change significantly from year-to-year due to conditions in the agricultural industry and other factors.
Biggest changeOur quarterly results may vary significantly from one year to the next due to weather-related shifts in planting schedules and purchase patterns or economic downturns in areas where our customers are located. Because we build inventory during low demand periods, the accumulation of inventory to be available for seasonal sales creates significant seasonal working capital and storage capacity requirements.
Risks Related to Our Business Our business is, and nitrogen fertilizer and feedstock prices are, cyclical and highly volatile, which could have a material adverse effect on our results of operations, financial condition and cash flows. Demand for nitrogen fertilizer products is dependent on fluctuating demand for crop nutrients by the global agricultural industry.
Risks Related to Our Business Our operations are, and nitrogen fertilizer and feedstock prices are, cyclical and highly volatile, which could have a material adverse effect on our results of operations, financial condition and cash flows. Demand for nitrogen fertilizer products is dependent on fluctuating demand for crop nutrients by the global agricultural industry.
Our debt facilities and instruments contain, and any instruments governing future indebtedness would likely contain, a number of covenants that impose significant operating and financial restrictions on us and our subsidiaries and may limit our ability to engage in acts that may be in our long-term best interest, including restrictions on the ability, among other things, to: incur, assume, or guarantee additional indebtedness or issue redeemable or preferred stock; pay dividends or distributions in respect of equity securities or make other restricted payments; prepay, redeem, or repurchase certain debt; enter into agreements that restrict distributions from restricted subsidiaries; make certain payments on debt that is subordinated or secured on a junior basis; make certain investments; sell or otherwise dispose of assets, including capital stock of subsidiaries; create liens on certain assets; consolidate, merge, sell, or otherwise dispose of all or substantially all assets; enter into certain transactions with affiliates; and designate subsidiaries as unrestricted subsidiaries.
Our debt facilities and instruments contain, and any instruments governing future indebtedness would likely contain, a number of covenants that impose significant operating and financial restrictions on us and our subsidiaries and may limit our ability to engage in acts that may be in our long-term best interest, including restrictions on the ability, among other things, to: incur, assume or guarantee additional indebtedness or issue redeemable or preferred stock; pay distributions in respect of equity securities or make other restricted payments; prepay, redeem or repurchase certain debt; enter into agreements that restrict distributions from restricted subsidiaries; make certain payments on debt that is subordinated or secured on a junior basis; make certain investments; sell or otherwise dispose of assets, including capital stock of subsidiaries; create liens on certain assets; consolidate, merge, sell or otherwise dispose of all or substantially all assets; enter into certain transactions with affiliates; and designate subsidiaries as unrestricted subsidiaries.
If we are unable to conclude that an activity would not affect our treatment as a partnership for U.S. federal income tax purposes and are unable or unwilling to obtain an IRS ruling, we may choose to acquire such business or develop such expansion project in a corporate subsidiary, which would subject the income related to such activity to entity-level taxation, which would reduce the amount of cash available for distribution to our common unitholders and could likely cause a substantial reduction in the value of our common units.
If we are unable to conclude that an activity would not affect our treatment as a partnership for U.S. federal income tax purposes and are unable or unwilling to obtain an IRS ruling, we may choose to acquire such business or develop such expansion project in a corporate subsidiary, which would subject the income related to such activity to entity-level taxation, which would reduce the amount of cash available for distribution to our common unitholders and could cause a substantial reduction in the value of our common units.
Operations at our plant could be curtailed, limited or completely shut down for an extended period of time as the result of one or more unforeseen events and circumstances, which may not be within our control, including: major unplanned maintenance requirements; catastrophic events caused by mechanical breakdown, electrical injury, pressure vessel rupture, explosion, contamination, fire, or natural disasters, including floods, windstorms, and other similar events; labor supply shortages or labor difficulties that result in a work stoppage or slowdown; cessation or suspension of a plant or specific operations dictated by environmental authorities; acts of terrorism, cyberattacks or other deliberate malicious acts; and an event or incident involving a large clean-up, decontamination, or the imposition of laws and ordinances regulating the cost and schedule of demolition or reconstruction, which can cause significant delays in restoring property to its pre-event condition.
Operations at our facility could be curtailed, limited or completely shut down for an extended period of time as the result of one or more unforeseen events and circumstances, which may not be within our control, including: major unplanned maintenance requirements; catastrophic events caused by mechanical breakdown, electrical injury, pressure vessel rupture, explosion, contamination, fire or natural disasters, including floods, windstorms and other similar events; labor supply shortages or labor difficulties that result in a work stoppage or slowdown; cessation or suspension of a facility or specific operations dictated by environmental authorities; acts of terrorism, cyberattacks or other deliberate malicious acts; and an event or incident involving a large clean-up, decontamination or the imposition of laws and ordinances regulating the cost and schedule of demolition or reconstruction, which can cause significant delays in restoring property to its pre-event condition.
Recent calls for governmental action related to fertilizer pricing conditions, including related to an investigation of market manipulation and proposals to limit price increases or place a maximum price ceiling or cap on fertilizer product pricing, would add complexity to the already dynamic global market for nitrogen fertilizer, and if such initiatives were adopted, our product sales, business and results of operations may be negatively impacted.
Calls for governmental action related to fertilizer pricing conditions, including related to an investigation of market manipulation and proposals to limit price increases or place a maximum price ceiling or cap on fertilizer product pricing, would add complexity to the already dynamic global market for nitrogen fertilizer, and if such initiatives were adopted, our product sales, business and results of operations may be negatively impacted.
The international market for nitrogen fertilizers is influenced by such factors as the relative value of the U.S. dollar and its impact upon the cost of importing nitrogen fertilizers, foreign agricultural policies, the existence of, or changes in, import or foreign currency exchange barriers in certain foreign markets, changes in the hard currency demands of certain countries and other regulatory policies of foreign governments, as well as the laws and policies of the U.S. affecting foreign trade and investment.
In addition, the international market for nitrogen fertilizers is influenced by such factors as the relative value of the U.S. dollar and its impact upon the cost of importing nitrogen fertilizers, foreign agricultural policies, the existence of, or changes in, import or foreign currency exchange barriers in certain foreign markets, changes in the hard currency demands of certain countries and other regulatory policies of foreign governments, as well as the laws and policies of the U.S. affecting foreign trade and investment.
If such an event were to occur, it is possible that we will not have sufficient funds at the time of the change of control to make the required repurchase of notes or repay amounts outstanding under our ABL Credit Facility, if any. An increase in interest rates will cause our debt service obligations to increase.
If such an event were to occur, it is possible that we will not have sufficient funds at the time of the change of control to make the required repurchase of notes or repay amounts outstanding under our ABL Credit Facility, if any. An increase in interest rates may cause our debt service obligations to increase.
We rely on third-party providers of transportation services and equipment, which subjects us to risks and uncertainties beyond our control and that may have a material adverse effect on our results of operations, financial condition and ability to make distributions. Our business also relies on third-party railroad, trucking, and barge companies to ship finished products to customers.
We rely on third-party providers of transportation services, which subjects us to risks and uncertainties beyond our control and that may have a material adverse effect on our results of operations, financial condition and ability to make distributions. Our business also relies on third-party railroad, trucking and barge companies to ship finished products to customers.
The regions in which our facilities are located and in which our customers operate are susceptible to severe storms, including hurricanes, thunderstorms, tornadoes, floods, extended periods of rain, ice storms and snow, some of which we or our customers have experienced in recent years. Such inclement weather conditions or other unforeseen developments could damage our facilities or logistics assets.
The regions in which our Facilities are located and in which our customers operate are susceptible to severe storms, including hurricanes, thunderstorms, tornadoes, floods, extended periods of rain, ice storms, snow, and wildfires, some of which we or our customers have experienced in recent years. Such inclement weather conditions or other unforeseen developments could damage our Facilities or logistics assets.
There is no assurance that the Coffeyville refinery will comply with its Permit conditions in the future, which may trigger enforcement of the cleanup provisions of our agreement with KDHE. We may be unable to obtain or renew permits or approvals necessary for our operations, which could inhibit our ability to do business.
There is no assurance that the Coffeyville refinery will comply with its RCRA Permit conditions in the future, which may trigger enforcement of the cleanup provisions of our agreement with KDHE. We may be unable to obtain or renew permits or approvals necessary for our operations, which could inhibit our ability to do business.
Our operations are subject to extensive federal, state and local environmental laws and regulations relating to the protection of the environment, including those governing the emission or discharge of pollutants into the environment, product use and specifications and the generation, treatment, storage, transportation, disposal and remediation of solid and hazardous wastes.
Our operations are subject to extensive federal, state and local environmental laws, rules and regulations relating to the protection of the environment, including those governing the emission or discharge of pollutants into the environment, product use and specifications and the generation, treatment, storage, transportation, disposal and remediation of solid and hazardous wastes.
In addition, a default under existing debt facilities and instruments could trigger a cross default under other agreements and could trigger a cross default under the agreements governing future indebtedness. Our operating segments’ results may not be sufficient to service existing indebtedness or to fund other expenditures, and we may not be able to obtain financing to meet these requirements.
In addition, a default under existing debt facilities and instruments could trigger a cross default under other agreements and could trigger a cross default under the agreements governing future indebtedness. Our operating results may not be sufficient to service existing indebtedness or to fund other expenditures, and we may not be able to obtain financing to meet these requirements.
Icahn indirectly controls approximately 66% of the voting power of CVR Energy’s common stock and, by virtue of such ownership, is able to control the Partnership through CVR Energy’s ownership of our general partner and its sole member, including: the election and appointment of directors; business strategy and policies; mergers or other business combinations; acquisition or disposition of assets; future issuances of common stock, common units, or other securities; incurrence of debt or obtaining other sources of financing; and the payment of distributions on our common units.
Icahn indirectly controlled approximately 66% of the voting power of CVR Energy’s common stock and, by virtue of such ownership, is able to control the Partnership through CVR Energy’s ownership of our general partner and its sole member, including: the election and appointment of directors; business strategy and policies; mergers or other business combinations; acquisition or disposition of assets; future issuances of common units or other securities; incurrence of debt or obtaining other sources of financing; and the payment of distributions on our common units.
The potential conflicts of interest include, among others, the following: (i) neither our partnership agreement nor any other agreement requires the owners of our general partner, including CVR Energy, to pursue a business strategy that favors us and the affiliates of our general partner, including CVR Energy, have fiduciary duties to make decisions in their own best interests and in the best interest of holders of CVR Energy’s common stock, which may be contrary to our interests (ii) our general partner is allowed to take into account the interests of parties other than us or our common unitholders, such as its owners or CVR Energy, in resolving conflicts of interest, which has the effect of limiting its fiduciary duty to our common unitholders; December 31, 2023 | 26 Table of Contents (iii) our general partner has limited its liability and reduced its fiduciary duties under our partnership agreement and has also restricted the remedies available to our common unitholders for actions that, without the limitations, might constitute breaches of fiduciary duty; (iv) the Board determines the amount and timing of asset purchases and sales, capital expenditures, borrowings, repayment of indebtedness, and issuances of additional partnership interests, each of which can affect the amount of cash that is available for distribution to our common unitholders; (v) our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with any of these entities on our behalf and there is no limitation on the amounts that can be paid; (vi) our general partner controls the enforcement of obligations owed to us by it and its affiliates, and decides whether to retain separate counsel or others to perform services for us; (vii) our general partner determines which costs incurred by it and its affiliates are reimbursable by us; and (viii) certain of the executive officers of our general partner also serve as executive officers of CVR Energy, including our executive chairman, who will face conflicts of interest when making decisions which may benefit either us or CVR Energy.
The potential conflicts of interest include, among others, the following: (i) neither our partnership agreement nor any other agreement requires the owners of our general partner, including CVR Energy, to pursue a business strategy that favors us and the affiliates of our general partner, including CVR Energy, have fiduciary duties to make decisions in their own best interests and in the best interest of holders of CVR Energy’s common stock, which may be contrary to our interests (ii) our general partner is allowed to take into account the interests of parties other than us or our common unitholders, such as its owners or CVR Energy, in resolving conflicts of interest, which has the effect of limiting its fiduciary duty to our common unitholders; (iii) our general partner has limited its liability and reduced its fiduciary duties under our partnership agreement and has also restricted the remedies available to our common unitholders for actions that, without the limitations, might constitute breaches of fiduciary duty; (iv) the Board determines the amount and timing of asset purchases and sales, capital expenditures, borrowings, repayment of indebtedness, and issuances of additional partnership interests, each of which can affect the amount of cash that is available for distribution to our common unitholders; (v) our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with any of these entities on our behalf and there is no limitation on the amounts that can be paid; (vi) our general partner controls the enforcement of obligations owed to us by it and its affiliates, and decides whether to retain separate counsel or others to perform services for us; (vii) our general partner determines which costs incurred by it and its affiliates are reimbursable by us; and (viii) certain of the executive officers of our general partner also serve as executive officers of CVR Energy, including our executive chairman, who will face conflicts of interest when making decisions which may benefit either us or CVR Energy.
For example: our partnership agreement (i) permits our general partner to make a number of decisions in its individual capacity, as opposed to its capacity as general partner, which entitles our general partner to consider only the interests and factors that it desires and means that it has no duty or obligation to give any consideration to any interest of, or factors affecting, any limited partner; (ii) provides that our general partner will not have any liability to unitholders for decisions made in its capacity as general partner so long as it acted in good faith, meaning it believed the decision was in our best interest; (iii) provides that our general partner and the officers and directors of its general partner will not be liable for monetary damages to common unitholders, including us, for any acts or omissions unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that the general partner or its officers or directors acted in bad faith or engaged in fraud or willful misconduct, or in the case of a criminal matter, acted with knowledge that the conduct was criminal; (iv) generally provides that affiliated transactions and resolutions of conflicts of interest not approved by the conflicts committee of the board of directors of its general partner and not involving a vote of unitholders must be on terms no less favorable to us than those generally being provided to or available from unrelated third parties or be “fair and reasonable” to us, as determined by its general partner in good faith, and that, in determining whether a transaction or resolution is “fair and reasonable”, the general partner may consider the totality of the relationships between the parties involved, including other transactions that may be particularly advantageous or beneficial to affiliated parties, including us; and (v) provides that in resolving conflicts of interest, it will be presumed that in making its decision, the general partner or its conflicts committee acted in good faith, and in any proceeding brought by or on behalf of any holder of common units, the person bringing or prosecuting such proceeding will have the burden of overcoming such presumption.
For example: our partnership agreement (i) permits our general partner to make a number of decisions in its individual capacity, as opposed to its capacity as general partner, which entitles our general partner to consider only the interests and factors that it desires and means that it has no duty or obligation to give any consideration to any interest of, or factors affecting, any limited partner; (ii) provides that our general partner will not have any liability to unitholders for decisions made in its capacity as general partner so long as it acted in good faith, meaning it believed the decision was in our best interest; (iii) provides that our general partner and the officers and directors of its general partner will not be liable for monetary damages to common unitholders, including us, for any acts or omissions unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that the general partner or its officers or directors acted in bad faith or engaged in fraud or willful misconduct, or in the case of a criminal matter, acted with knowledge that the conduct was criminal; (iv) generally provides that affiliated transactions and resolutions of conflicts of interest not approved by the conflicts committee of the board of directors of its general partner and not involving a vote of unitholders must be on terms no less favorable to us than those generally being provided to or available from unrelated third parties or be “fair and reasonable” to us, as determined by its general partner in good faith, and that, in determining whether a transaction or resolution is “fair and reasonable”, the general partner may consider the totality of the relationships between the parties involved, December 31, 2024 | 26 Table of Contents including other transactions that may be particularly advantageous or beneficial to affiliated parties, including us; and (v) provides that in resolving conflicts of interest, it will be presumed that in making its decision, the general partner or its conflicts committee acted in good faith, and in any proceeding brought by or on behalf of any holder of common units, the person bringing or prosecuting such proceeding will have the burden of overcoming such presumption.
Compliance with and changes in environmental laws and regulations, including those related to climate change, could result in increased operating costs and capital expenditures and adversely affect our performance.
Compliance with and changes in environmental laws, rules and regulations, including those related to climate change, could result in increased operating costs and capital expenditures and adversely affect our performance.
Our business holds numerous environmental and other governmental permits and approvals authorizing operations at our facilities and future expansion of our operations is predicated upon the ability to secure approvals therefore.
Our business holds numerous environmental and other governmental permits and approvals authorizing operations at our Facilities and future expansion of our operations is predicated upon the ability to secure necessary approvals therefore.
If such weather conditions prevail near our facilities or logistics assets, they could interrupt or undermine our ability to produce and transport products or to manage our business.
If such weather conditions or unforeseen conditions prevail near our Facilities or logistics assets, they could interrupt or undermine our ability to produce and transport products or to manage our business.
However, should CVR Energy’s Coffeyville refinery fail to perform in accordance with the existing agreement or to the extent pet coke from CVR Energy’s Coffeyville refinery is insufficient, we would need to purchase pet coke from third parties on the open market, which could negatively impact our results of operations to the extent third-party pet coke is unavailable or available only at higher prices.
Should CVR Energy’s Coffeyville refinery fail to perform in accordance with the existing agreement or to the extent pet coke from CVR Energy’s Coffeyville refinery is insufficient, we would need to purchase more pet coke from third parties on the open market, which could negatively impact our results of operations to the extent third-party pet coke is unavailable or available only at higher prices.
Acts of sabotage or terrorist attacks (including cyberattacks), threats of war, armed conflict, or war, as well as events occurring in response to or in connection with such events may harm our business or have an adverse impact on our future results of operations and financial condition.
Acts of sabotage or terrorist attacks (including cyberattacks), threats of war, armed conflict or war or trade wars, as well as events occurring in response to or in connection with such events may harm our business or have an adverse impact on our future results of operations and financial condition.
Our level of indebtedness December 31, 2023 | 23 Table of Contents could have important consequences, such as: (i) limiting our ability to obtain additional financing to fund our working capital needs, capital expenditures, debt service requirements, acquisitions, or other purposes; (ii) requiring us to utilize a significant portion of our cash flows to service our indebtedness, thereby reducing available cash and our ability to make distributions on our common units; (iii) limiting our ability to use operating cash flow in other areas of the business because we must dedicate a substantial portion of additional funds to service debt; (iv) limiting our ability to compete with other companies who are not as highly leveraged, as we may be less capable of responding to adverse economic and industry conditions; (v) limiting our ability to make certain payments on debt that is subordinated or secured on a junior basis; (vi) restricting the way in which we conduct business because of financial and operating covenants, including regarding borrowing additional funds, disposing of assets, and the ability of subsidiaries to pay dividends or make other distributions; (vii) limiting our ability to enter into certain transactions with our affiliates; (viii) limiting our ability to designate our subsidiaries as unrestricted subsidiaries; (ix) exposing us to potential events of default (if not cured or waived) under financial and operating covenants contained in our or our respective subsidiaries’ debt instruments; and (x) limiting our ability to react to changing market conditions.
Our level of indebtedness could have important consequences, such as: (i) limiting our ability to obtain additional financing to fund our working capital needs, capital expenditures, debt service requirements, acquisitions or other purposes; (ii) requiring us to utilize a significant portion of our cash flows to service our indebtedness, thereby reducing available cash and our ability to make distributions on our common units; (iii) limiting our ability to use operating cash flow in other areas of the business because we must dedicate a substantial portion of additional funds to service debt; (iv) limiting our ability to compete with other companies who are not as highly leveraged, as we may be less capable of responding to adverse economic and industry conditions; (v) limiting our ability to make certain payments on debt that is subordinated or secured on a junior basis; (vi) restricting the way in which we conduct business because of financial and operating covenants, including regarding borrowing additional funds, disposing of assets and the ability of subsidiaries to pay distributions; (vii) limiting our ability to enter into certain transactions with our affiliates; (viii) limiting our ability to designate our subsidiaries as unrestricted subsidiaries; (ix) exposing us to potential events of default (if not cured or waived) under financial and operating covenants contained in our or our respective subsidiaries’ debt instruments; and (x) limiting our ability to react to changing market conditions.
We have two agreements for pipeline transportation of natural gas with expiration dates in 2025. We typically purchase natural gas from third parties on a spot basis and, from time to time, may enter into fixed-price forward purchase contracts.
We typically obtain natural gas from third parties on a spot basis and, from time to time, may enter into fixed-price forward purchase contracts. We have two agreements for pipeline transportation of natural gas with expiration dates in April 2025.
Our compliance with emerging privacy/security laws, as well as any associated inquiries or investigations or any other government actions related to these laws, may increase our operating costs. An increase in inflation could have adverse effects on our results of operations.
Our compliance with emerging privacy/security laws, as well as any associated inquiries or investigations or any other government actions related to these laws, may increase our operating costs. Inflation could have adverse effects on our results of operations.
If any of our plants, logistics assets, or key suppliers sustain a catastrophic loss and operations are shutdown or significantly impaired, it would have a material adverse impact on our operations, financial condition and cash flows.
If any of our facilities, logistics assets, or key suppliers sustain a catastrophic loss and operations are shutdown or significantly impaired, it would have a material adverse impact on our operations, financial condition and cash flows.
A portion of our workforce is unionized, and we are subject to the risk of labor disputes, slowdowns or strikes, which may disrupt our business and increase our costs. As of December 31, 2023, approximately 31% of our employees were represented by labor unions under collective bargaining agreements.
A portion of our workforce is unionized, and we are subject to the risk of labor disputes, slowdowns or strikes, which may disrupt our business and increase our costs. As of December 31, 2024, approximately 27% of our employees were represented by labor unions under collective bargaining agreements.
Inflation in the United States increased beginning in the second half of 2021 and continued into the beginning of 2023, due to a substantial increase in money supply, a stimulative fiscal policy, a significant rebound in consumer demand as COVID-19 restrictions were relaxed, the Russia-Ukraine war and worldwide supply chain disruptions resulting from the economic contraction caused by COVID-19 and lockdowns followed by a rapid recovery.
Inflation in the U.S. increased beginning in the second half of 2021 and continued into the beginning of 2023, due to a substantial increase in money supply, a stimulative fiscal policy, a significant rebound in consumer demand as COVID-19 restrictions were relaxed, the Russia-Ukraine war and worldwide supply chain disruptions resulting from the economic contraction caused by COVID-19 and lockdowns followed by a rapid recovery.
While we do not collect significant amounts of personal information from consumers, we do have personal information from our employees, job applicants and some third parties, such as contractors and distributors.
While we do not collect significant amounts of personal information from customers, we do have personal information from our employees, job applicants and some third parties, such as contractors and distributors.
Acts of terror or sabotage, threats of war, armed conflict, or war may have an adverse impact on our business, our future results of operations and our overall financial performance.
Acts of terror or sabotage, threats of war, armed conflict or war or trade wars may have an adverse impact on our business, our future results of operations and our overall financial performance.
Our facilities face significant risks due to physical damage hazards, environmental liability risk exposure, and unplanned or emergency partial or total plant shutdowns which could cause property damage and a material decline in production which are not fully insured.
Our Facilities face significant risks due to physical damage hazards, environmental liability risk exposure, and unplanned or emergency partial or total facility shutdowns, which could cause property damage or injuries and a material decline in production which are not fully insured.
Any disruption of these systems or security breach or event resulting in the misappropriation, loss or other unauthorized disclosure of confidential information, whether by us directly or our third-party service providers, could damage our reputation, expose us to the risks of litigation and liability, disrupt our business, or otherwise affect our results of operations.
Despite our mitigation efforts, any disruption of these systems or a security breach or event resulting in the misappropriation, loss or other unauthorized disclosure of confidential information, whether by us directly or our third-party service providers, could damage our reputation, expose us to the risks of litigation and liability, disrupt our business or otherwise affect our results of operations.
If events such as storms, including hurricanes, thunderstorms, tornadoes, floods, extended periods of rain, ice storms and snow become more frequent, they could have an adverse effect on our operations, as well as the operations of our suppliers and customers.
If events such as severe storms, hurricanes, thunderstorms, tornadoes, floods, extended periods of rain, ice storms, snow, and wildfires become more frequent, they could have an adverse effect on our operations, as well as the operations of our suppliers and customers.
Although we implement controls on third-party connectivity to our systems, we have limited control in ensuring their systems consistently enforce strong cybersecurity controls.
Although we implement controls on third-party connectivity to our systems, we have limited control in ensuring their systems consistently enforce strong cybersecurity contro ls.
Public health crises such as the COVID-19 pandemic have had, and may continue to have, adverse impacts on our business, financial condition, results of operations and liquidity. The economic effects from public health crises such as the COVID-19 pandemic on our business were and may again be significant.
Public health crises have had, and may continue to have, adverse impacts on our business, financial condition, results of operations and liquidity. The economic effects from public health crises, such as a pandemic, on our business were and may again be significant.
We generally (i) prorate our items of income, gain, loss, and deduction between transferors and transferees of our common units; and (ii) allocate certain deductions for depreciation of capital additions, gain or loss realized on a sale or other disposition of our assets, and, in the discretion of the general partner, any other extraordinary item of income, gain, loss, or deduction, each month based upon the ownership of our units on the first day of each month (the “Allocation Date”), instead of on the basis of the date a particular common unit is transferred.
We generally (i) prorate our items of income, gain, loss, and deduction between transferors and transferees of our common units; and (ii) allocate certain deductions for depreciation of capital additions, gain or loss realized on a sale or other disposition of our assets, and, in the discretion of the general partner, any other extraordinary item of income, gain, loss, or deduction, each month based upon the ownership of our units on the first day of each month (the “Allocation Date”), instead of on the basis of December 31, 2024 | 30 Table of Contents the date a particular common unit is transferred.
In resolving these conflicts, our general partner may favor its own interests, the interests of CVR Services, its sole member, or the interests of CVR Energy and holders of CVR Energy’s common stock, including its majority stockholder, an affiliate of Icahn Enterprises L.P., over our interests and those of our common unitholders.
In resolving these conflicts, our general partner may favor its own interests, the interests of its sole member, UAN Services, LLC (“UAN Services”), or the interests of CVR Energy and holders of CVR Energy’s common stock, including its majority stockholder, an affiliate of Icahn Enterprises L.P., over our interests and those of our common unitholders.
The ultimate outcome of these and other factors may result in many adverse consequences including, but not limited to, disruption or delays to supply chains for critical equipment or feedstock, inflation, increased interest rates, and increased administrative, compliance, and operational costs.
The ultimate outcome of these and other factors have in the past resulted and may again result in many adverse consequences including, but not limited to, disruption or delays to supply chains for critical equipment or feedstock, inflation, increased interest rates, and increased administrative, compliance, and operational costs.
In the event of contamination, under environmental law, we may be held responsible even if we are not at fault, and we complied with the laws and regulations in effect at the time of the accident.
In the event of contamination, under environmental law, we may be held responsible even if we are not at fault and were in compliance with the laws and regulations in effect at the time of the accident.
International Trade Commission ultimately voted against imposing import tariffs on UAN from Russia and Trinidad and Tobago and, accordingly, the U.S. Department of Commerce will not issue countervailing duty orders and anti-dumping duty orders on UAN imports from the same countries.
International Trade Commission ultimately voted against imposing import tariffs on UAN from Russia and Trinidad and Tobago and, accordingly, the U.S. Department of Commerce did not issue countervailing duty orders and anti-dumping duty orders on UAN imports from those countries.
Our ability to satisfy debt obligations will depend upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory, and other factors, many of which are beyond our control; future ability to borrow under our ABL Credit Facility, the availability of which depends on, among other things, complying with the covenants in the facility; and our future ability to obtain other financing.
December 31, 2024 | 24 Table of Contents Our ability to satisfy debt obligations will depend upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, many of which are beyond our control; future ability to borrow under our ABL Credit Facility, the availability of which depends on, among other things, complying with the covenants in the facility; and our future ability to obtain other financing.
Our December 31, 2023 | 27 Table of Contents partnership agreement restricts common unitholders’ voting rights by providing that any units held by a person that owns 20% or more of any class of units then outstanding, other than our general partner, its affiliates, their transferees, and persons who acquired such units with the prior approval of the Board, may not vote on any matter.
Our partnership agreement restricts common unitholders’ voting rights by providing that any units held by a person that owns 20% or more of any class of units then outstanding, other than our general partner, its affiliates, their transferees, and persons who acquired such units with the prior approval of the Board, may not vote on any matter.
In light of the recent strong pricing environment, farmers may shift preference to other types of fertilizer products or shift crop rotation to minimize purchases of nitrogen fertilizer, both of which would negatively affect our sales volumes and revenue.
In a strong pricing environment, farmers may shift preference to other types of fertilizer products or shift crop rotation to minimize purchases of nitrogen fertilizer, both of which would negatively affect our sales volumes and revenue.
Any failure, whether real or perceived, by us to comply with applicable data protection laws could result in proceedings or actions against us by governmental entities or others, subject us to significant fines, penalties, judgments, and negative publicity, require us to December 31, 2023 | 18 Table of Contents change our business practices, increase the costs and complexity of compliance, and adversely affect our business.
Any failure, whether real or perceived, by us to comply with applicable data protection laws could result in proceedings or actions against us by governmental entities or others, subject us to significant fines, penalties, judgments and negative publicity, require us to change our business practices, increase the costs and complexity of compliance and adversely affect our business.
December 31, 2023 | 28 Table of Contents If, as a result of any such audit adjustment, we are required to make payments of taxes, penalties, and interest, our cash available for distribution to our common unitholders might be substantially reduced and our current and former unitholders may be required to indemnify us for any taxes (including any applicable penalties and interest) resulting from such audit adjustments that were paid on such unitholders behalf.
If, as a result of any such audit adjustment, we are required to make payments of taxes, penalties, and interest, our cash available for distribution to our common unitholders might be substantially reduced and our current and former unitholders may be required to indemnify us for any taxes (including any applicable penalties and interest) resulting from such audit adjustments that were paid on such unitholders behalf.
Any damage or injury to persons, equipment, or property or other disruption of our ability to produce or distribute products could result in a significant decrease in operating revenues and significant additional costs to replace or repair and insure our assets, which could have a material adverse effect on our results of operations, financial condition and ability to make cash distributions.
Any damage or injury to persons, equipment or property or other disruption of our ability to produce or distribute products could result in a December 31, 2024 | 20 Table of Contents significant decrease in operating revenues and significant additional costs to replace or repair and insure our assets, which could have a material adverse effect on our results of operations, financial condition and ability to make cash distributions.
Violations of applicable environmental laws and regulations, or of the conditions of permits issued thereunder, can result in substantial penalties, injunctive orders compelling installation of additional controls, civil and criminal sanctions, operating restrictions, injunctive relief, permit revocations and/or facility shutdowns, which may have a material adverse effect on our ability to operate our facilities and accordingly our financial performance.
Violations of applicable environmental laws, rules and regulations, or of the conditions of permits issued thereunder, can result in substantial penalties, injunctive orders compelling installation of additional controls, civil and criminal sanctions, December 31, 2024 | 16 Table of Contents operating restrictions, injunctive relief, permit revocations and/or facility shutdowns, which may have a material adverse effect on our ability to operate our Facilities and accordingly our financial performance.
Failing to meet the qualifying income requirement or a change in current law (which could be retroactive) could cause us to be treated as a corporation for U.S. federal income tax purposes or otherwise subject us to taxation at the corporate tax rate and distributions to our common unitholders would generally be taxed again as corporate distributions, and no income, gains, losses, or deductions would flow through to our common unitholders.
Failing to meet the qualifying income December 31, 2024 | 28 Table of Contents requirement or a change in current law (which could be retroactive) could cause us to be treated as a corporation for U.S. federal income tax purposes or otherwise subject us to taxation at the corporate tax rate and distributions to our common unitholders would generally be taxed again as corporate distributions, and no income, gains, losses, or deductions would flow through to our common unitholders.
Risks Related to Our Limited Partnership Structure We may not have sufficient “available cash” to pay any quarterly distribution on common units, or the board of directors of the Partnership’s general partner (the “Board”) may elect to take reserves or distribute less than all of our available cash.
Risks Related to Our Limited Partnership Structure We may not have sufficient “available cash” to pay any quarterly distribution on common units, or the Board may elect to take reserves or distribute less than all of our available cash.
Any disruption in the supply of natural gas to our East Dubuque Facility could restrict our ability to continue to make products at the facility and have a material adverse effect on our results of operations and financial condition.
Any disruption in the supply of natural gas could restrict our ability to continue to make products and have a material adverse effect on our results of operations and financial condition.
If we are unable to maintain sales of our products December 31, 2023 | 17 Table of Contents at a price that reflects such increased costs or have to increase the prices of our products because of such increased costs, there could be a material adverse effect on our business, financial condition, results of operations and cash flows.
If we are unable to maintain sales of our products at a price that reflects such increased costs or have to increase the prices of our products because of such increased costs, there could be a material adverse effect on our business, financial condition, results of operations and cash flows.
Moreover, the insurance that may be available to us may be December 31, 2023 | 21 Table of Contents significantly more expensive than our existing insurance coverage. Instability in the financial markets as a result of war, terrorism, sabotage or cyberattack could also affect our ability to raise capital, including our ability to repay or refinance debt.
Moreover, the insurance that may be available to us may be significantly more expensive than our existing insurance coverage. Instability in the financial markets as a result of war, terrorism, sabotage or cyberattack could also affect our ability to raise capital, including our ability to repay or refinance debt.
Current and prospective Non-U.S. common unitholders should consult their tax advisors regarding the impact of these rules on an investment in our common units. December 31, 2023 | 29 Table of Contents Tax-exempt entities face unique tax issues from owning our common units that may result in adverse tax consequences.
Current and prospective Non-U.S. common unitholders should consult their tax advisors regarding the impact of these rules on an investment in our common units. Tax-exempt entities face unique tax issues from owning our common units that may result in adverse tax consequences.
Moreover, cyberattacks are expected to accelerate on a global basis in both frequency and magnitude as threat actors are becoming increasingly sophisticated in using techniques and tools (including artificial intelligence) that circumvent controls, evade detection and even remove forensic evidence of the infiltration.
Moreover, cyberattacks have accelerated on a global basis in both frequency and magnitude as threat actors are becoming increasingly sophisticated in using techniques and tools (including artificial intelligence (“AI”)) that circumvent controls, evade detection and even remove forensic evidence of the infiltration.
Due to the dangerous and potentially hazardous nature of the cargo we carry, in particular ammonia, a railcar accident may result in fires, explosions, and releases of material which could lead to sudden, December 31, 2023 | 20 Table of Contents severe damage or injury to property, the environment, and human health.
Due to the dangerous and potentially hazardous nature of the cargo we carry, in particular ammonia, a railcar accident may result in fires, explosions and releases of material which could lead to sudden, severe damage or injury to property, the environment and human health.
End user demand for our products may also be adversely impacted by climate change legislation and other changes to or new interpretations of environmental laws, due to increased costs or application restrictions. Decreased demand for our products may have a material adverse effect on our results of operations, financial condition and cash flows.
End user demand for our products may also be adversely impacted by changes to or new interpretations of environmental laws, rules and regulations, including those related to climate change, due to increased costs or application restrictions. Decreased demand for our products may have a material adverse effect on our results of operations, financial condition and cash flows.
December 31, 2023 | 22 Table of Contents We are subject to the requirements of OSHA and comparable state statutes that regulate the protection of the health and safety of workers, the proper design, operation, and maintenance of our equipment, and require us to provide information about hazardous materials used in our operations.
We are subject to the requirements of OSHA and comparable state statutes that regulate the protection of the health and safety of workers, the proper design, operation and maintenance of our equipment and require us to provide information about hazardous materials used in our operations.
Further, our ABL Credit Facility bears interest at variable rates and other debt we incur could likewise be variable-rate debt. If market interest rates increase, variable-rate debt will create higher debt service requirements, which could adversely December 31, 2023 | 24 Table of Contents affect our ability to fund our liquidity needs, capital investments, and distributions to our unitholders.
Further, our ABL Credit Facility bears interest at variable rates and other debt we incur could likewise be variable-rate debt. If market interest rates increase, variable-rate debt will create higher debt service requirements, which could adversely affect our ability to fund our liquidity needs, capital investments and distributions to our unitholders.
If licensed technology were no longer available or able to be licensed economically or at all, our business may be adversely affected. We have licensed a combination of patent, trade secret, and other intellectual property rights of third parties for use in our plant operations.
December 31, 2024 | 19 Table of Contents If licensed technology were no longer available or able to be licensed economically or at all, our business may be adversely affected. We have licensed a combination of patent, trade secret and other intellectual property rights of third parties for use in our operations.
Additionally, the compensation of such executive officers is set by CVR Energy, and we have no control over the amount paid to such officers. CVR Energy has the power to elect all of the members of the Board. Our general partner has control over all decisions related to our operations.
Additionally, the compensation of our executive officers, other than for our Chief Executive Officer, Mr. Pytosh, is set by CVR Energy, and we have no control over the amount paid to such officers. CVR Energy has the power to elect all of the members of the Board. Our general partner has control over all decisions related to our operations.
The new equity owner of our general partner would then be in a position to replace the board of directors and the officers of our general partner with its own choices and to influence their decisions.
The new equity owner of our general partner December 31, 2024 | 27 Table of Contents would then be in a position to replace the board of directors and the officers of our general partner with its own choices and to influence their decisions.
The dynamic pricing environment for nitrogen fertilizer products, as well as any changes to government policy regarding fertilizer pricing in response thereto, could negatively affect our results of operations.
December 31, 2024 | 15 Table of Contents The dynamic pricing environment for nitrogen fertilizer products, as well as any changes to government policy regarding fertilizer pricing in response thereto, could negatively affect our results of operations.
A shortage of trained workers due to retirements or otherwise could have an adverse impact on productivity and costs and our ability to expand production in the event there is an increase in the demand for our products and services, which could adversely affect our operations.
Furthermore, our operations require skilled and experienced laborers with proficiency in multiple tasks. A shortage of trained workers due to retirements or otherwise could have an adverse impact on productivity and costs and our ability to expand production in the event there is an increase in the demand for our products and services, which could adversely affect our operations.
December 31, 2023 | 30 Table of Contents General Risks Related to the Partnership The acquisition and expansion strategy of our business involves significant risks that could have a material adverse effect on our results of operations, financial condition and cash flows.
December 31, 2024 | 18 Table of Contents The acquisition and expansion strategy of our business involves significant risks that could have a material adverse effect on our results of operations, financial condition and cash flows.
The extent to which the pandemic and its ongoing effects may adversely impact our future business, financial, and operating results, and for what duration and magnitude, depends on factors that are continuing to evolve, are difficult to predict and, in many instances, are beyond our control.
The extent to which the effects of an ongoing pandemic or other public health crisis may adversely impact our future business, financial, and operating results, and for what duration and magnitude, depends on factors that continuously evolve, are difficult to predict and, in many instances, are beyond our control.
On an as needed basis, but no less than quarterly, we brief the Audit Committee of the board of directors of the Partnership’s general partner “(Board”) on information security matters.
On an as needed basis, but no less than quarterly, we brief the Audit Committee of the Board on information security matters.
Increases in remote work opportunities have also amplified the competition for employees and contractors. An inability to recruit, train, and retain adequate personnel, or the loss or departure of personnel with key skills or deep institutional knowledge for whom we are unable to find adequate replacements, may negatively impact our business.
An inability to recruit, train and retain adequate personnel, or the loss or departure of personnel with key skills or deep institutional knowledge for whom we are unable to find adequate replacements, may negatively impact our business.
Failure to comply with these requirements may result in significant fines or compliance costs, which could have a material adverse effect on our results of operations, financial condition and cash flows. Our business may suffer due to the departure of any of our key senior executives or other key employees.
Failure to comply with these requirements may result in significant fines or compliance costs, which could have a material adverse effect on our results of operations, financial condition and cash flows.
December 31, 2023 | 19 Table of Contents In addition, we may identify in the future additional third-party intellectual property that we believe is necessary to our operations.
In addition, we may identify in the future additional third-party intellectual property that we believe is necessary to our operations.
The existence of a controlling stockholder may have the effect of making it difficult for, or may discourage or delay, a third-party from seeking to acquire a majority of our common units, which may adversely affect the market price of such common units. Further, Mr.
The existence of a controlling stockholder may have the effect of making it difficult for, or may discourage or delay, a third-party from seeking to acquire a majority of our common units, which may adversely affect the market price of such common units. As of December 31, 2024, Icahn Enterprises L.P. and its affiliates, including Mr.
Our East Dubuque Facility operations also depend in large part on the performance of third-party suppliers, including for the purchase of electricity, which we purchase under a utility service agreement that terminates on June 1, 2025 and will continue thereafter unless either party provides 30 days advance written notice of termination.
Operations depend in large part on the performance of third-party suppliers, such as the adjacent third-party air separation plant under a contract through 2039 and a third-party electric service provider under a contract through June 2029 at our Coffeyville Facility and purchase of electricity at our East Dubuque Facility, which we purchase under a utility service agreement that terminates in June 2025 and will continue thereafter unless either party provides 30 days advance written notice of termination.
The loss of several of these significant customers, or a significant reduction in purchase volume by several of them, could have a material adverse effect on our results of operations, financial condition and cash flows.
Given the nature of our business, and consistent with industry practice, we do not have long-term minimum purchase contracts with our customers. The loss of several of these significant customers, or a significant reduction in purchase volume by several of them, could have a material adverse effect on our results of operations, financial condition and cash flows.
In addition, new environmental laws and regulations, new interpretations of existing laws and regulations, or increased governmental enforcement of laws and regulations could require us to make additional unforeseen expenditures.
In addition, new environmental laws, rules and regulations, new interpretations of existing laws and regulations, including as a result of the change in the U.S. presidential administration, or increased governmental enforcement of laws, rules and regulations could require us to make additional unforeseen expenditures.
Non-U.S. common unitholders are generally taxed and subject to income tax filing requirements by the United States on income effectively connected with a U.S. trade or business (“effectively connected income”). Income allocated to our common unitholders and any gain from the sale of our common units will generally be considered to be “effectively connected” with a U.S. trade or business.
Income allocated to our common unitholders and any gain from the sale of our common units will generally be considered to be “effectively connected” with a U.S. trade or business.
Furthermore, a shortage of skilled labor may make it difficult for us to maintain labor productivity. Our future performance depends to a significant degree upon our management team and key technical personnel. The loss or unavailability to us of any member of our management team or a key technical employee could significantly harm us.
Our business may suffer due to the departure of any of our key senior executives or other key employees, and a shortage of skilled labor may make it difficult for us to maintain labor productivity. Our future performance depends to a significant degree upon our management team and key technical personnel.
An increase in inflation rates could negatively affect our profitability and cash flows, due to higher wages, higher operating costs, higher financing costs and/or higher supplier prices. We may be unable to pass along such higher costs to our customers.
According to the Consumer Price Index, annual inflation was at 2.9% and 3.4% as of December 2024 and 2023, respectively. An increase in inflation rates could negatively affect our profitability and cash flows, due to higher wages, higher operating costs, higher financing costs and/or higher supplier prices. We may be unable to pass along such higher costs to our customers.
The issuance by us of additional common units or other equity interests of equal or senior rank would reduce the proportionate ownership interest of common unitholders immediately prior to the issuance.
Under our partnership agreement, we are authorized to issue an unlimited number of additional interests without a vote of the common unitholders. The issuance by us of additional common units or other equity interests of equal or senior rank would reduce the proportionate ownership interest of common unitholders immediately prior to the issuance.
In addition, future public health crises could also result in significant economic disruption and other effects that adversely impact our business, financial condition, results of operations and liquidity in future periods in ways similar to the COVID-19 pandemic and its effects.
In addition, pandemics or other public health crises have resulted in and could result in significant economic disruption and other effects that adversely impact our business, financial condition, results of operations and liquidity.
We depend on internal, related-party, and third-party information technology systems to manage and support our operations, and we collect, process, and retain sensitive and confidential customer information in the normal course of business.
December 31, 2024 | 17 Table of Contents We are subject to cybersecurity risks and may experience cyber incidents resulting in disruption or harm to our business. We depend on internal, related-party, and third-party information technology systems to manage and support our operations, and we collect, process and retain sensitive and confidential customer information in the normal course of business.
Developments in crop technology could also reduce the use of chemical fertilizers and adversely affect the demand for nitrogen fertilizer. Unfavorable state and federal governmental policies could negatively affect nitrogen fertilizer prices and therefore have a material adverse effect on our results of operations, financial condition and cash flows.
Unfavorable state and federal governmental policies, such as policies that restrict application, could negatively affect nitrogen fertilizer prices and, therefore, have a material adverse effect on our results of operations, financial condition and cash flows.
The application of these and other policy conditions could materially impact insurance recoveries and potentially cause us to assume losses which could impair earnings. There is potential for a common occurrence to impact both our Coffeyville Facility and CVR Energy’s Coffeyville refinery in which case the insurance limits and applicable sub-limits would apply to all damages combined.
There is potential for a common December 31, 2024 | 22 Table of Contents occurrence to impact both our Coffeyville Facility and CVR Energy’s Coffeyville refinery in which case the insurance limits and applicable sub-limits would apply to all damages combined.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeBoard Oversight of Cybersecurity Matters The board of directors of the Partnership’s general partner (the “Board”) considers oversight of CVR Partners’ risks and risk management activities, including those related to cybersecurity risk, to be a responsibility of the entire Board.
Biggest changeBoard Oversight of Cybersecurity Matters The Board considers oversight of CVR Partners’ risks and risk management activities, including those related to cybersecurity risk, to be a responsibility of the entire Board. The Board also delegates certain risk oversight responsibilities to certain of its committees, and oversight of the Partnership’s cybersecurity risk is delegated by the Board to its Audit Committee.
Management utilizes certain tools and controls to detect, monitor, prevent, mitigate, and remediate cybersecurity threats to our systems, networks, applications, and data. Management also conducts annual cybersecurity training and periodic phishing tests, which provide contemporaneous feedback and instruction to our employees and strengthen the Partnership’s defenses against cyber threats.
Management utilizes certain tools and controls to detect, monitor, prevent, mitigate, and remediate cybersecurity threats to our systems, networks, applications, and data. Management also conducts annual cybersecurity training and periodic phishing tests, which provide contemporaneous feedback and instruction to our employees and seek to strengthen the Partnership’s defenses against cyber threats.
These audits have provided the Partnership with assessments of the effectiveness and efficiency of our information technology and cyber threat management processes with the goal of safeguarding Partnership assets and information.
These audits have provided the Partnership and its Board with assessments of the effectiveness and efficiency of our information technology and cyber threat management processes with the goal of safeguarding Partnership assets and information.
Material Impact on Partnership During 2023 , the Partnership did not experience any cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect the Partnership , including its business strategy, results of operations, or financial condition.
Material Impact on Partnership During 2024, 2023, and 2022 , the Partnership did not experience any cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect the Partnership , including its business strategy, results of operations, or financial condition.
Several members of the ERM Committee have functional responsibility for the Partnership’s information technology and cybersecurity risk monitoring activities and provide expertise to the ERM Committee in those areas. Likewise, the Partnership’s internal audit function periodically performs audit engagements focused on information technology processes and cybersecurity risks.
Several members of the ERM Committee have functional responsibility for the Partnership’s information technology and cybersecurity risk monitoring activities and provide expertise to the ERM Committee in those areas. December 31, 2024 | 31 Table of Contents Similarly, the Partnership’s internal audit function periodically performs audit engagements focused on information technology processes and cybersecurity risks.
The Audit Committee receives regular reports, typically on a quarterly basis, from management regarding information technology, cybersecurity risk, and efforts to prevent and mitigate such risks. The Chairperson of the Audit Committee subsequently reports on the Partnership’s cybersecurity risk, monitoring, and mitigation activities to the full Board, which equips the Board and its committees to fulfill their risk oversight role.
The Audit Committee receives regular reports, typically on a quarterly basis, from management regarding information technology, cybersecurity risk, AI use and governance, and efforts to prevent and mitigate such risks. The Audit Committee subsequently reports on these activities to the full Board, which equips the Board and its committees to fulfill their risk oversight role.
Management of Cybersecurity Matters At the management level, the Partnership’s cybersecurity risk management activities are integrated into the day-to-day activities of the Partnership’s information technology function led by our Chief Information Officer, who operates under the supervision of our Chief Financial Officer.
Management of Cybersecurity Matters At the management level, the Partnership’s cybersecurity risk management activities are led by our Chief Executive Officer and his executive team and is integrated into the day-to-day activities of the Partnership’s information technology function and Chief Information Officer, who operates under the supervision of our Chief Financial Officer, and reports regularly to the Audit Committee on cybersecurity risks, typically on a quarterly basis.
Removed
The Board also delegates certain risk oversight responsibilities to certain of its committees, and oversight of the Partnership’s cybersecurity December 31, 2023 | 31 Table of Contents risk is delegated by the Board to its Audit Committee.
Added
Refer to Part I, Item 1A, “Risk Factors— We are subject to cybersecurity risks and may experience cyber incidents resulting in disruption or harm to our businesses ” of this Report for further discussion of our processes for managing cybersecurity risks.
Added
Management also monitors AI usage and has implemented a framework that tracks use and is governed by CVR Energy’s Artificial Intelligence Policy and includes a review and approval process for adopting use of AI tools. Such governance activities are designed to mitigate the risks presented by AI.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Refer to Part I, Item 1, “Facilities” of this Report for more information on our core business properties. CVR Energy also leases property for our executive and marketing offices in Sugar Land, Texas and Kansas City, Kansas, respectively. December 31, 2023 | 32 Table of Contents
Biggest changeItem 2. Properties Refer to Part I, Item 1, “Facilities” of this Report for more information on our core business properties. CVR Energy also leases property for our executive and marketing offices in Sugar Land, Texas and Kansas City, Kansas, respectively.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeNot applicable. December 31, 2023 | 33 Table of Contents PART II
Biggest changeNot applicable. December 31, 2024 | 32 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThrough December 31, 2023, the Partnership, considering all repurchases made since inception of the Unit Repurchase Program, repurchased 759,250 common units, as adjusted to reflect the impact of the 1-for-10 reverse unit split of the Partnership’s common units that was effective as of November 23, 2020, on the open market in accordance with a repurchase agreement under Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended.
Biggest changeFrom authorization through March 2022, CVR Partners repurchased, on a split-adjusted basis, 759,250 common units on the open market in accordance with a repurchase agreement under Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended, at a cost of $20.0 million, exclusive of transaction costs, or an average price of $26.33 per December 31, 2024 | 33 Table of Contents common unit.
The graph assumes that the value of the investment in common units and each index was $100 on December 31, 2018 and that all distributions were reinvested. Investment is weighted on the basis of market capitalization. The unit price performance shown on the graph is not necessarily indicative of future price performance.
The graph assumes that the value of the investment in common units and each index was $100 on December 31, 2019 and that all distributions were reinvested. Investment is weighted on the basis of market capitalization. The unit price performance shown on the graph is not necessarily indicative of future price performance.
Market For Registrant’s Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities Performance Graph The performance graph below compares the cumulative total return of the Partnership’s common units to (a) the cumulative total return of the S&P 500 Composite Index and (b) a composite peer group (“Peer Group”) consisting of CF Industries Holdings, Inc., LSB Industries, Inc., Nutrien Ltd., The Andersons, Inc., Green Plains Partners LP, and Flotek Industries Inc.
Market For Registrant’s Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities Performance Graph The performance graph below compares the cumulative total return of the Partnership’s common units to (a) the cumulative total return of the S&P 500 Composite Index and (b) a composite peer group (“Peer Group”) consisting of CF Industries Holdings, Inc., LSB Industries, Inc., Nutrien Ltd., The Andersons, Inc., AdvanSix Inc., and Flotek Industries Inc.
The Partnership has 30 holders of record of the outstanding units as of December 31, 2023. Purchases of Equity Securities by the Issuer On May 6, 2020, the board of directors of the Partnership’s general partner (the “Board”), on behalf of the Partnership, authorized a unit repurchase program (the “Unit Repurchase Program”), which was increased on February 22, 2021.
Purchases of Equity Securities by the Issuer On May 6, 2020, the board of directors of the Partnership’s General Partner (the “Board”), on behalf of the Partnership, authorized a unit repurchase program, which was increased on February 22, 2021 (the “Unit Repurchase Program”).
The Unit Repurchase Program, as increased, authorized the Partnership to repurchase up to $20 million of the Partnership’s common units.
The Unit Repurchase Program, as increased, authorized the Partnership to repurchase up to $20 million of the Partnership’s common units. On February 20, 2024, the Board, on behalf of the Partnership, terminated the nominal authority remaining under the Unit Repurchase Program.
Removed
As of December 31, 2023, the Partnership had a nominal authorized amount remaining under the Unit Repurchase Program. The Unit Repurchase Program does not obligate the Partnership to acquire any common units and may be cancelled, modified, or terminated by the Board at December 31, 2023 | 34 Table of Contents any time.
Added
The Partnership has 30 holders of record of the outstanding units as of December 31, 2024, with CVR Energy subsidiaries holding approximately 37% and Icahn Enterprises L.P. and its affiliates (“IEP”) holding approximately 2% of the Partnership’s outstanding limited partner interests.
Removed
On February 20, 2024, the Board, on behalf of the Partnership, terminated the nominal authority remaining under the Unit Repurchase Program. Item 6. [Reserved]
Added
CVR Partners did not repurchase any additional common units after March 2022 through the termination date mentioned above. Item 6. [Reserved]

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. [Reserved] 35 Item 16. Form 10-K Summary 114 Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations 35 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 51 Item 8. Financial Statements and Supplementary Data 52
Biggest changeItem 6. [Reserved] 34 Item 16. Form 10-K Summary 114 Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations 34 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 49 Item 8. Financial Statements and Supplementary Data 51

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following tables present quarterly distributions paid by the Partnership to CVR Partners’ unitholders, including amounts paid to CVR Energy, during 2023 and 2022 (amounts presented in the table below may not add to totals presented due to rounding): Quarterly Distributions Paid (in thousands) Related Period Date Paid Quarterly Distributions Per Common Unit Public Unitholders CVR Energy Total 2022 - 4th Quarter March 13, 2023 $ 10.5 $ 70,115 $ 40,866 $ 110,981 2023 - 1st Quarter May 22, 2023 10.43 69,647 40,594 110,241 2023 - 2nd Quarter August 21, 2023 4.14 27,646 16,113 43,759 2023 - 3rd Quarter November 20, 2023 1.55 10,350 6,033 16,383 Total 2023 quarterly distributions $ 26.62 $ 177,759 $ 103,605 $ 281,364 December 31, 2023 | 48 Table of Contents Quarterly Distributions Paid (in thousands) Related Period Date Paid Quarterly Distributions Per Common Unit Public Unitholders CVR Energy Total 2021 - 4th Quarter March 14, 2022 $ 5.24 $ 35,576 $ 20,394 $ 55,970 2022 - 1st Quarter May 23, 2022 2.26 15,091 8,796 23,887 2022 - 2nd Quarter August 22, 2022 10.05 67,109 39,115 106,225 2022 - 3rd Quarter November 21, 2022 1.77 11,819 6,889 18,708 Total 2022 quarterly distributions $ 19.32 $ 129,597 $ 75,193 $ 204,790 Quarterly Distributions Paid (in thousands) Related Period Date Paid Quarterly Distributions Per Common Unit Public Unitholders CVR Energy Total 2021 - 2nd Quarter August 23, 2021 $ 1.72 $ 11,678 $ 6,694 $ 18,372 2021 - 3rd Quarter November 22, 2021 2.93 19,893 11,404 31,297 Total 2021 quarterly distributions $ 4.65 $ 31,571 $ 18,098 $ 49,669 There were no quarterly distributions declared or paid by the Partnership related to the first quarter of 2021 and the fourth quarter of 2020.
Biggest changeThe following table presents quarterly distributions paid by the Partnership to CVR Partners’ unitholders, including amounts paid to CVR Energy, during 2024, 2023, and 2022 (amounts presented in the table below may not add to totals presented due to rounding): Quarterly Distributions Paid (in thousands) Related Period Date Paid Quarterly Distributions Per Common Unit Public Unitholders CVR Energy Total 2023 - 4th Quarter March 11, 2024 $ 1.68 $ 11,218 $ 6,539 $ 17,757 2024 - 1st Quarter May 20, 2024 1.92 12,821 7,472 20,293 2024 - 2nd Quarter August 19, 2024 1.90 12,688 7,395 20,082 2024 - 3rd Quarter November 18, 2024 1.19 7,946 4,632 12,578 Total 2024 quarterly distributions $ 6.69 $ 44,673 $ 26,037 $ 70,710 2022 - 4th Quarter March 13, 2023 $ 10.50 $ 70,115 $ 40,866 $ 110,981 2023 - 1st Quarter May 22, 2023 10.43 69,647 40,594 110,241 2023 - 2nd Quarter August 21, 2023 4.14 27,646 16,113 43,759 2023 - 3rd Quarter November 20, 2023 1.55 10,350 6,033 16,383 Total 2023 quarterly distributions $ 26.62 $ 177,759 $ 103,605 $ 281,364 December 31, 2024 | 47 Table of Contents Quarterly Distributions Paid (in thousands) Related Period Date Paid Quarterly Distributions Per Common Unit Public Unitholders CVR Energy Total 2021 - 4th Quarter March 14, 2022 $ 5.24 $ 35,576 $ 20,394 $ 55,970 2022 - 1st Quarter May 23, 2022 2.26 15,091 8,796 23,887 2022 - 2nd Quarter August 22, 2022 10.05 67,109 39,115 106,225 2022 - 3rd Quarter November 21, 2022 1.77 11,819 6,889 18,708 Total 2022 quarterly distributions $ 19.32 $ 129,597 $ 75,193 $ 204,790 For the fourth quarter of 2024, the Partnership, upon approval by the Board on February 18, 2025, declared a distribution of $1.75 per common unit, or $18.5 million, which is payable March 10, 2025 to unitholders of record as of March 3, 2025.
Product pricing at the gate represents net sales less freight revenue divided by product sales volume in tons and is shown in order to provide a pricing measure comparable across the fertilizer industry.
Product pricing at gate represents net sales less freight revenue divided by product sales volume in tons and is shown in order to provide a pricing measure comparable across the fertilizer industry.
Liquidity and Capital Resources Our principal source of liquidity has historically been and continues to be cash from operations, which can include cash advances from customers resulting from prepay contracts. Our principal uses of cash are for working capital, capital expenditures, funding our debt service obligations, and paying distributions to our unitholders, as further discussed below.
Liquidity and Capital Resources Our principal source of liquidity has historically been and continues to be cash from operations, which can include cash advances from customers resulting from prepay contracts. As further discussed below, our principal uses of cash are for working capital, capital expenditures, funding our debt service obligations, and paying distributions to our unitholders.
As a result, future operating results and current and long-term financial conditions could be negatively impacted if economic conditions decline and remain volatile. The Partnership is not able at this time to predict the extent to which these events may have a material, or any, effect on its financial or operational results in future periods.
As a result, future operating results and current and long-term financial conditions could be negatively impacted if economic conditions remain volatile and/or decline. The Partnership is not able at this time to predict the extent to which these conditions may have a material, or any, effect on its financial or operational results in future periods.
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 Values, which articulate the Partnership’s expectations for how it and its employees do business each and every day.
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.
We are focusing on improvements in day-to-day plant operations, identifying alternative sources for plant inputs to reduce lost time due to third-party operational constraints, and optimizing our commercial and marketing functions to maintain plant operations at their highest level. • Market Capture - We continuously evaluate opportunities to improve the facilities’ realized pricing at the gate and reduce variable costs incurred in production to maximize our capture of market opportunities. • Financial Discipline - We strive to be as efficient as possible by maintaining low operating costs and disciplined deployment of capital.
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.
The chart presented below summarizes our ammonia utilization rates on a consolidated basis for the years ended December 31, 2023, 2022, and 2021. Utilization is an important measure used by management to assess operational output at each of the Partnership’s facilities. Utilization is calculated as actual tons of ammonia produced divided by capacity.
The chart presented below summarizes our ammonia utilization rates on a consolidated basis for the years ended December 31, 2024, 2023, and 2022. Utilization is an important measure used by management to assess operational output at each of the Partnership’s facilities. Utilization is calculated as actual tons of ammonia produced divided by capacity.
The charts below show relevant market indicators by month through December 31, 2023: 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.
The charts below show relevant market indicators by month through December 31, 2024: 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.
Actual results could differ from the estimates and assumptions used. Inventory Valuation The cost of our fertilizer product inventories is determined under the first-in, first-out (“FIFO”) method and our FIFO inventories are carried at the lower of cost or net realizable value. We compare the estimated realizable value of inventories to their cost by product at each of our facilities.
Actual results could differ from the estimates and assumptions used. Inventory Valuation The cost of our fertilizer product inventories is determined under the first-in, first-out (“FIFO”) method and our FIFO inventories are carried at the lower of cost or net realizable value. We compare the estimated realizable value of inventories to their cost by product.
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. This discussion and analysis covers the years ended December 31, 2023 and 2022 and discusses year-to-year comparisons between such periods.
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. This discussion and analysis covers the years ended December 31, 2024 and 2023 and discusses year-to-year comparisons between such periods.
The 2022 ESG Report does not constitute a part of, and is not incorporated 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.
The 2023 ESG Report does not constitute a part of, and is not incorporated 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.
Plant Production of Fuel Ethanol (1) Corn and Soybean Planted Acres (2) (1) Information used within this chart was obtained from the U.S. Energy Information Administration (“EIA”) through December 31, 2023. (2) Information used within this chart was obtained from the USDA, National Agricultural Statistics Services as of December 31, 2023.
Plant Production of Fuel Ethanol (1) Corn and Soybean Planted Acres (2) (1) Information used within this chart was obtained from the U.S. Energy Information Administration (“EIA”) through December 31, 2024. (2) Information used within this chart was obtained from the USDA, National Agricultural Statistics Services as of December 31, 2024.
Winter 2022/2023 weather was warmer than average in Europe and when combined with natural gas conservation measures caused demand and prices for natural gas in Europe to fall significantly in the first quarter of 2023 and remain below the 2021/2022 price levels.
Winter 2023/2024 weather was warmer than average in Europe and when combined with natural gas conservation measures caused demand and prices for natural gas in Europe to fall significantly in the first quarter of 2024 and remain below the 2021/2022 price levels throughout 2024.
Regulatory Environment - Certain governmental regulations and incentives associated with the automobile transportation and agricultural industries, including the ones related to corn-based ethanol and sustainable aviation fuel production or consumption can directly impact our business.
Regulatory Environment - Certain governmental regulations and incentives associated with the automobile transportation and agricultural industries, including the ones related to corn-based ethanol and sustainable aviation fuel production or consumption, can impact, and have directly impacted, our business.
Since 2010, ethanol production has historically consumed 37% of the U.S. corn crop used by the market, so demand for corn generally rises and falls with ethanol demand, as shown by the charts below, through December 31, 2023. U.S.
Since 2010, ethanol production has historically consumed 37% of the U.S. corn crop used by the market, so demand for corn generally rises and falls with ethanol demand, as shown by the charts below, through December 31, 2024. U.S.
The following are non-GAAP measures we present for the years ended December 31, 2023, 2022, and 2021: EBITDA - Net income (loss) before (i) interest expense, net, (ii) income tax expense (benefit) and (iii) depreciation and amortization expense.
The following are non-GAAP measures we present for the years ended December 31, 2024, 2023, and 2022: EBITDA - Net income (loss) before (i) interest expense, net, (ii) income tax expense (benefit) and (iii) depreciation and amortization expense.
(2) Interest payments related to debt obligations consist of interest payments for our long-term debt outstanding as of December 31, 2023 and commitment fees on the unutilized commitments of the ABL Credit Facility. (3) Operating lease liabilities are described in Part II, Item 8, Note 6 (“Leases”) of this Report.
(2) Interest payments related to debt obligations consist of interest payments for our long-term debt outstanding as of December 31, 2024 and commitment fees on the unutilized commitments of the ABL Credit Facility. (3) Operating lease liabilities and finance lease obligations are described in Part II, Item 8, Note 6 (“Leases”) of this Report.
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 is written down to its estimated fair value.
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.
(4) Consists primarily of purchase obligations for pet coke and other feedstocks, as well as water and utilities usage. (5) Includes purchase obligations related to the transportation of feedstocks.
(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.
General Business Environment The Partnership believes the general business environment in which it operates will continue to remain volatile, driven by uncertainty around the availability and prices of its feedstocks, demand for its products, inflation, and global supply disruptions.
General Business Environment The Partnership believes the general business environment in which it operates will continue to remain volatile, driven by uncertainty around the availability and prices of its feedstocks, demand for and prices of its products, inflation, and existing and potential future global supply disruptions.
Lower inventory levels of corn and soybeans are expected to be supportive of grain prices into the spring of 2024. Ethanol is blended with gasoline to meet renewable fuel standard requirements and for its octane value.
Inventory levels of corn and soybeans are expected to be supportive of grain prices into the spring of 2025. Ethanol is blended with gasoline to meet renewable fuel standard requirements and for its octane value.
We have an unwavering commitment to safety above all else. If it’s not safe, then we don’t do it. December 31, 2023 | 35 Table of Contents • Environment - We care for our environment. Complying with all regulations and minimizing any environmental impact from our operations is essential.
We have an unwavering commitment to safety above all else. If it’s not safe, then we don’t do it. December 31, 2024 | 34 Table of Contents • Environment - We care for our environment. Complying with all regulations and minimizing any environmental impact from our operations is essential.
December 31, 2023 | 39 Table of Contents Natural Gas Market Pricing (1) Pet Coke Market Pricing (1) (1) Information used within these charts was obtained from various third-party sources including Green Markets (a Bloomberg Company), Pace Petroleum Coke Quarterly, and the EIA, amongst others.
December 31, 2024 | 38 Table of Contents Natural Gas Market Pricing (1) Pet Coke Market Pricing (1) (1) Information used within these charts was obtained from various third-party sources including Green Markets (a Bloomberg Company), Pace Petroleum Coke Quarterly, and the EIA, amongst others.
Demand for nitrogen fertilizer, as well as other crop inputs, was strong for the spring 2023 planting season and fall 2023 ammonia application, primarily due to elevated grain prices and favorable weather conditions for planting and fertilizer application. Fertilizer input costs have been volatile since the fall of 2021.
Demand for nitrogen fertilizer, as well as other crop inputs, was strong for the spring 2024 planting season, primarily due to elevated grain prices and favorable weather conditions for planting. Fertilizer input costs have been volatile since the fall of 2021.
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”).
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”).
Distributions to Unitholders The current policy of the Board is to distribute all Available Cash for Distribution, as determined by the Board in its sole discretion, the Partnership generated on a quarterly basis. Available Cash for Distribution for each quarter will be determined by the Board following the end of such quarter.
Distributions to Unitholders The current policy of the Board is to distribute all Available Cash for Distribution, as determined by the Board in its sole discretion, the Partnership generates on a quarterly basis. The Board will determine Available Cash for Distribution for each quarter following the end of such quarter.
Additionally, an estimated 12.8 billion pounds of soybean oil is expected to be used in producing cleaner renewable fuels in marketing year 2023/2024. Multiple refiners have announced renewable diesel expansion projects for 2024 and beyond, which should only increase the demand for soybeans and potentially for corn and canola.
Additionally, an estimated 14 billion pounds of soybean oil is expected to be used in producing cleaner renewable fuels in marketing year 2024/2025. Multiple refiners have announced renewable diesel expansion projects for 2025 and beyond, which should only increase the demand for soybeans and potentially for corn and canola.
The discussions of the year ended December 31, 2021 and year-to-year comparisons between the years ended December 31, 2022 and 2021 that are not included in this Annual Report on Form 10-K 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, 2022 filed on February 22, 2023, and such discussions are incorporated by reference into this Report.
The discussions of the year ended December 31, 2022 and year-to-year comparisons between the years ended December 31, 2023 and 2022 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, 2023 filed on February 21, 2024, and such discussions are incorporated by reference into this Report.
December 31, 2023 | 41 Table of Contents 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.
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 December 31, 2024 | 40 Table of Contents upgraded into other fertilizer products.
The table below presents these metrics for the years ended December 31, 2023, 2022, and 2021: Year Ended December 31, (in thousands of tons) 2023 2022 2021 Ammonia (gross produced) 864 703 807 Ammonia (net available for sale) 270 213 275 UAN 1,369 1,140 1,208 Feedstock - Our Coffeyville Facility utilizes a pet coke gasification process to produce nitrogen fertilizer.
The table below presents these metrics for the years ended December 31, 2024, 2023, and 2022: Year Ended December 31, (in thousands of tons) 2024 2023 2022 Ammonia (gross produced) 836 864 703 Ammonia (net available for sale) 270 270 213 UAN 1,273 1,369 1,140 Feedstock - Our Coffeyville Facility utilizes a pet coke gasification process to produce nitrogen fertilizer.
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.
December 31, 2024 | 35 Table of Contents 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.
For example, we may experience changes in labor or equipment costs necessary to comply with government regulations or to complete projects that sustain or improve the profitability of the nitrogen fertilizer facilities. We may also accelerate or defer some capital expenditures from time to time. Capital spending for CVR Partners is determined by the Board.
For example, we may experience changes in labor or equipment costs necessary to comply with government regulations or to complete projects that sustain or improve the profitability of the Facilities. We may also accelerate or defer some capital expenditures from time to time. The Board determines capital spending for CVR Partners.
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.
Unlike corn, soybeans are able to obtain most of their own nitrogen through a process known as “N December 31, 2024 | 36 Table of Contents 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.
When considering the market conditions and actions described above, we currently believe that our cash from operations and existing cash and cash equivalents, along with borrowings and reserves, as necessary, will be sufficient to satisfy anticipated cash requirements associated with our existing operations for at least the next 12 months.
When considering the market conditions and current geopolitical matters, we currently believe that our cash from operations and existing cash and cash equivalents, along with borrowings and reserves, as necessary, will be sufficient to satisfy anticipated cash requirements associated with our existing operations for at least the next 12 months.
Direct Operating Expenses (exclusive of depreciation and amortization) - For the year ended December 31, 2023, direct operating expenses (exclusive of depreciation and amortization) were $234.9 million compared to $270.2 million for the year ended December 31, 2022.
Direct Operating Expenses (exclusive of depreciation and amortization) - For the year ended December 31, 2024, direct operating expenses (exclusive of depreciation and amortization) were $214.2 million compared to $234.9 million for the year ended December 31, 2023.
Of this amount, CVR Energy will receive approximately $6.5 million, with the remaining amount payable to public unitholders. Capital Structure On May 6, 2020, the Board, on behalf of the Partnership, authorized a unit repurchase program (the “Unit Repurchase Program”), which was increased on February 22, 2021.
Of this amount, CVR Energy and IEP will receive approximately $6.8 million and $0.3 million, respectively, with the remaining amount payable to public unitholders. Capital Structure On May 6, 2020, the Board, on behalf of the Partnership, authorized a unit repurchase program, which was increased on February 22, 2021 (the “Unit Repurchase Program”).
December 31, 2023 | 37 Table of Contents Market Indicators While there is risk of shorter-term volatility given the inherent nature of the commodity cycle and governmental and geopolitical risks, the Partnership believes the long-term fundamentals for the U.S. nitrogen fertilizer industry remain intact.
Market Indicators While there is risk of shorter-term volatility given the inherent nature of the commodity cycle and governmental and geopolitical risks, the Partnership believes the long-term fundamentals for the U.S. nitrogen fertilizer industry remain intact.
December 31, 2023 | 36 Table of Contents Industry Factors and Market Indicators Within the nitrogen fertilizer business, earnings and cash flows from operations are primarily affected by the relationship between nitrogen fertilizer product prices, utilization, and operating costs and expenses, including pet coke and natural gas feedstock costs.
Industry Factors and Market Indicators Within the nitrogen fertilizer business, earnings and cash flows from operations are primarily affected by the relationship between nitrogen fertilizer product prices, utilization, and operating costs and expenses, including pet coke and natural gas feedstock costs.
Due to these factors, nitrogen fertilizer consumers generally operate a balanced corn-soybean rotational planting cycle as shown by the chart presented below for 2023, 2022, and 2021.
Due to these factors, nitrogen fertilizer consumers generally operate a balanced corn-soybean rotational planting cycle as shown by the chart presented below.
Long-term debt consists of the following: December 31, (in thousands) 2023 2022 6.125% Senior Secured Notes, due June 2028 550,000 550,000 Unamortized debt issuance costs (2,692) (3,200) Total long-term debt $ 547,308 $ 546,800 As of December 31, 2023, the Partnership had the 6.125% Senior Secured Notes, due June 2028 (the “2028 Notes”) and the ABL Credit Facility, the proceeds of which may be used to fund working capital and capital expenditures, and for other general corporate purposes.
Long-term debt consisted of the following: December 31, (in thousands) 2024 2023 6.125% Senior Secured Notes, due June 2028 $ 550,000 $ 550,000 Unamortized debt issuance costs (2,152) (2,692) Total long-term debt $ 547,848 $ 547,308 As of December 31, 2024, 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.
If this project is approved by the board of directors of our general partner (the “Board”) and successfully implemented, it could allow the Partnership to choose the lowest cost feedstock for production and would make the Coffeyville Facility the only nitrogen fertilizer plant in the U.S. with that feedstock flexibility.
If this project is approved by the board of directors of our general partner (the “Board”) and successfully implemented, it could allow the Partnership to choose the optimal feedstock mix for production and would make the Coffeyville Facility the only nitrogen fertilizer facility in the United States with that feedstock flexibility.
We will continue to monitor market conditions and make adjustments, if needed, to our current capital spending or turnaround plans. December 31, 2023 | 47 Table of Contents We incurred turnaround expenses of $1.8 million, $33.4 million, and $2.9 million during the years ended December 31, 2023, 2022, and 2021, respectively.
We will continue to monitor market conditions and make adjustments, if needed, to our current capital spending or turnaround plans. We incurred turnaround expenses of $0.5 million, $1.8 million, and $33.4 million during the years ended December 31, 2024, 2023, and 2022, respectively.
The table below presents these feedstocks for both facilities for the years ended December 31, 2023, 2022, and 2021: Year Ended December 31, 2023 2022 2021 Petroleum coke used in production (thousands of tons) 518 425 514 Petroleum coke used in production (dollars per ton) $ 78.14 $ 52.88 $ 44.69 Natural gas used in production (thousands of MMBtus) (1) 8,462 6,905 8,049 Natural gas used in production (dollars per MMBtu) (1) $ 3.42 $ 6.66 $ 3.95 Natural gas in cost of materials and other (thousands of MMBtus) (1) 8,671 6,701 7,848 Natural gas in cost of materials and other (dollars per MMBtu) (1) $ 3.84 $ 6.37 $ 3.83 (1) The feedstock natural gas shown above does not include natural gas used for fuel.
The table below presents these feedstocks for the Facilities for the years ended December 31, 2024, 2023, and 2022: Year Ended December 31, 2024 2023 2022 Petroleum coke used in production (thousands of tons) 517 518 425 Petroleum coke used in production (dollars per ton) $ 59.69 $ 78.14 $ 52.88 Natural gas used in production (thousands of MMBtus) (1) 8,667 8,462 6,905 Natural gas used in production (dollars per MMBtu) (1) $ 2.56 $ 3.42 $ 6.66 Natural gas in cost of materials and other (thousands of MMBtus) (1) 7,755 8,671 6,701 Natural gas in cost of materials and other (dollars per MMBtu) (1) $ 2.50 $ 3.84 $ 6.37 (1) The feedstock natural gas shown above does not include natural gas used for fuel.
Combined with $39.0 million available under our ABL Credit Facility, we had total liquidity of $84.3 million as of December 31, 2023. As of December 31, 2022, we had $86.3 million in cash and cash equivalents, including $13.7 million of customer advances.
As of December 31, 2023, we had $45.3 million in cash and cash equivalents and, combined with $39.0 million available under our ABL Credit Facility, we had total liquidity of $84.3 million.
We incurred turnaround expenses of $1.8 million, $33.4 million, and $2.9 million during the years ended December 31, 2023, 2022, and 2021, respectively. The next planned turnarounds are currently scheduled to take place in 2025 at the Coffeyville Facility and in 2026 at the East Dubuque Facility.
We incurred turnaround expenses of $0.5 million, $1.8 million, and $33.4 million during the years ended December 31, 2024, 2023, and 2022, respectively. The next planned turnarounds are currently scheduled to commence in the fourth quarter of 2025 at the Coffeyville Facility and in 2026 at the East Dubuque Facility.
Depending on the needs of our business, contractual limitations, and market conditions, we may from time to time seek to issue equity securities, incur additional debt, issue debt securities, or redeem, repurchase, refinance, or retire our outstanding debt through privately negotiated transactions, open market repurchases, redemptions, exchanges, tender offers or otherwise, but we are under no obligation to do so.
Depending on the needs of our business, contractual limitations, and market conditions, we may from time to time seek to issue equity securities, incur additional debt, issue debt securities, or redeem, repurchase, refinance, or retire our outstanding December 31, 2024 | 45 Table of Contents debt through privately negotiated transactions, open market repurchases, redemptions, exchanges, tender offers or otherwise.
Depending on inventory levels, the per-ton realizable value of our fertilizer products is estimated using pricing on in-transit orders, pricing for open, fixed-price orders that have not shipped, and, if volumes remain unaccounted for, current management pricing estimates for fertilizer products.
Depending on inventory levels, the per-ton realizable value of our fertilizer products is estimated using pricing on in-transit orders, pricing for open, fixed-price orders that have not shipped, and, if volumes remain unaccounted for, current management pricing estimates for fertilizer products. Management’s estimate for current pricing reflects up-to-date pricing in the market as of the end of each reporting period.
The next planned turnarounds are currently scheduled to take place in 2025 at the Coffeyville Facility and in 2026 at the East Dubuque Facility.
The next planned turnarounds are currently scheduled to commence in the fourth quarter of 2025 at the Coffeyville Facility and in 2026 at the East Dubuque Facility.
The United States Department of Agriculture (“USDA”) data shows that in spring 2023 farmers planted 94.6 million corn acres, representing an increase of 6.8% as compared to 88.6 million corn acres in 2022. Planted soybean acres for spring 2023 are 83.6 million, representing a decrease of 4.5% as compared to 87.5 million soybean acres in 2022.
The United States Department of Agriculture (“USDA”) estimates that in spring 2024 farmers planted 90.7 million corn acres, representing a decrease of 4.1% as compared to 94.6 million corn acres in 2023. Planted soybean acres for spring 2024 are 87.1 million, representing an increase of 4.2% as compared to 83.6 million soybean acres in 2023.
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 flow 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.
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.
The combined corn and soybean planted acres of 178.2 million in 2023 is an increase of 1.2% compared to the acreage planted in 2022. Due to lower input costs in 2023 for corn planting and the relative grain prices of corn versus soybeans, economics favored planting corn compared to soybeans in 2023.
The combined corn and soybean planted acres of 177.8 million in 2024 is in line with the acreage planted in 2023. Due to lower input costs in 2024 for corn planting and the relative grain prices of corn versus soybeans, economics favored planting corn compared to soybeans in 2024.
Individual assets are grouped for impairment purposes based on a judgmental assessment of the lowest level for December 31, 2023 | 50 Table of Contents which there are identifiable cash flows that are largely independent of the cash flows of other assets (for example, at a fertilizer facility level).
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.
On February 20, 2024, the Board, on behalf of the Partnership, terminated the nominal authority remaining under the Unit Repurchase Program.
The Unit Repurchase Program authorized the Partnership to repurchase up to $20 million of the Partnership’s common units. On February 20, 2024, the Board, on behalf of the Partnership, terminated the nominal authority remaining under the Unit Repurchase Program.
Available Cash for Distribution may be increased by the release of previously established cash reserves, if any, and other excess cash, at the discretion of the Board. Distributions, if any, including the payment, amount, and timing thereof, and the Board’s distribution policy, including the definition of Available Cash for Distribution, are subject to change at the discretion of the Board.
Distributions, if any, including the payment, amount, and timing thereof, and the Board’s distribution policy, including the definition of Available Cash for Distribution and reserves relating thereto, are subject to change at the discretion of the Board.
(5) The Partnership declared and paid cash distributions of $10.50, $10.43, $4.14, and $1.55 per common unit related to the fourth quarter of 2022, and the first, second, and third quarters of 2023, respectively, and declared a cash distribution of $1.68 per common unit related to the fourth quarter of 2023, to be paid in March 2024.
The Partnership declared and paid cash distributions of $1.68, $1.92, $1.90, and $1.19 per common unit related to the fourth quarter of 2023, and the first, second, and third quarters of 2024, respectively, and declared a cash distribution of $1.75 per common unit related to the fourth quarter of 2024, to be paid in March 2025.
Financial Highlights Overview - For the year ended December 31, 2023, the Partnership’s operating income and net income were $201.4 million and $172.4 million, respectively, representing declines of $118.5 million and $114.4 million, respectively, compared to operating income and net income of $319.9 million and $286.8 million, respectively, for the year ended December 31, 2022.
Financial Highlights Overview - For the year ended December 31, 2024, the Partnership’s operating income and net income were $90.4 million and $60.9 million, respectively, compared to operating income and net income of $201.4 million and $172.4 million, respectively, for the year ended December 31, 2023.
(“CVR Energy”) to own, operate, and grow its nitrogen fertilizer business. The Partnership produces and distributes nitrogen fertilizer products, which are used by farmers to improve the yield and quality of their crops.
The Partnership produces and distributes nitrogen fertilizer products, which are used by farmers to improve the yield and quality of their crops, primarily corn and wheat.
While we expect that natural gas prices might remain below the elevated levels experienced in 2022 in the near term, we believe that the structural shortage of natural gas in Europe will continue to be a source of volatility into 2024. Although pet coke prices remain elevated compared to historical levels, third-party pet coke prices have declined into 2024.
While we expect that natural gas prices might remain below the elevated levels experienced in 2022 in the near term, we believe that the structural shortage of natural gas in Europe will continue to be a source of volatility through at least 2026.
December 31, 2023 | 38 Table of Contents Weather continues to be a critical variable for crop production. Even with high planted acres and trendline yields per acre in the U.S., global inventory levels for corn and soybeans remain below historical levels and prices have remained elevated.
Weather continues to be a critical variable for crop production. Even with high planted acres and above trendline yields per acre for corn in the United States, global inventory levels for corn and soybeans remain near historical 10-year averages and prices have remained elevated.
Management’s estimate for current pricing reflects up-to-date pricing in each facility’s market as of the end of each reporting period. Reductions to selling prices for unreimbursed freight costs are included to arrive at net realizable value, as applicable. There were no inventory adjustments recognized during the years ended December 31, 2023, 2022, and 2021.
Reductions to selling prices for unreimbursed freight costs are included to arrive at net realizable value, as applicable. There were no inventory adjustments recognized during the years ended December 31, 2024, 2023, and 2022.
Growth capital projects generally involve an expansion of existing capacity and/or a reduction in direct operating expenses. We undertake growth capital spending based on the expected return on incremental capital employed.
Growth capital projects generally involve an expansion of existing capacity, reliability improvements, and/or reducing direct operating expenses. We undertake growth capital spending based on the expected return on incremental capital employed, which is typically funded by reserves taken in prior years.
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.
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.
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.
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.
Investing Activities The change in net cash used in investing activities for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due to distributions received from CVR Partners’ equity method investment of $21.5 million associated with the 45Q Transaction in 2023 and a decrease in capital expenditures of $20.5 million during 2023 resulting from reduced spending on capital projects compared to 2022.
Cash Flows from Investing Activities The change in net cash used in investing activities for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to a decrease in distributions received from CVR Partners’ equity method investment of $16.3 million in 2024 compared to 2023 and an increase in capital expenditures of $12.9 million during 2024 resulting from an increase in various capital projects in the current period compared to 2023.
Our total capital expenditures for the years ended December 31, 2023 and 2022, along with our estimated expenditures for 2024 are as follows: Year Ended December 31, Estimated (in thousands) 2023 2022 2024 Maintenance capital $ 28,025 $ 40,793 $32,000 - 35,000 Growth capital 1,056 653 12,000 - 13,000 Total capital expenditures $ 29,081 $ 41,446 $44,000 - 48,000 Our estimated capital expenditures are subject to change due to changes in the cost, scope, and completion time for capital projects.
Our total capital expenditures for the years ended December 31, 2024 and 2023, along with our estimated expenditures for 2025 are as follows: Year Ended December 31, Estimated (in thousands) 2024 2023 2025 Maintenance capital $ 30,014 $ 28,025 $35,000 - 45,000 Growth capital 7,049 1,056 20,000 - 25,000 Total capital expenditures $ 37,063 $ 29,081 $55,000 - 70,000 Our estimated capital expenditures are subject to change due to changes in capital projects’ cost, scope, and completion time.
In December 2023, we published a 2022 Environmental, Social & Governance Report (“2022 ESG Report”) which is based on the Sustainability Accounting Standards Board standards and is available at CVR Partner’s website at www.CVRPartners.com.
In January 2025, we published a 2023 Environmental, Social & Governance Report (“2023 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 decrease was primarily related to lower share-based compensation due to a decrease in market prices for CVR Partners’ common units in the current period.
The decrease was primarily December 31, 2024 | 43 Table of Contents related to lower share-based compensation due to a decrease in market prices for CVR Partners’ common units in the current period, partially offset by an increase in other personnel costs.
During the years ended December 31, 2022 and 2021, CVR Partners repurchased 111,695 and 24,378 common units, respectively, on the open market in accordance with a repurchase agreement under Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended, at a cost of $12.4 million and $0.5 million, respectively, exclusive of transaction costs, or an average price of $110.98 and $21.69 per common unit, respectively.
From authorization through March 2022, CVR Partners repurchased, on a split-adjusted basis, 759,250 common units on the open market in accordance with a repurchase agreement under Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended, at a cost of $20.0 million, exclusive of transaction costs, or an average price of $26.33 per common unit.
Refer to Part II, Item 8, Note 8 (“Long-Term Debt”) of this Report for further discussion. The Partnership and its subsidiaries were in compliance with all covenants under their respective debt instruments as of December 31, 2023 and through the date of filing, as applicable.
The Partnership and its subsidiaries were in compliance with all covenants under their respective debt instruments as of December 31, 2024 and through the date of filing, as applicable.
Financing Activities The change in net cash used in financing activities for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due to an increase of $76.6 million in cash distributions paid in 2023 compared to 2022.
December 31, 2024 | 48 Table of Contents Cash Flows from Financing Activities The change in net cash used in financing activities for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to a $210.7 million decrease in cash distributions in 2024 compared to 2023.
For the year ended December 31, 2023, total product sales were unfavorable driven by sales price decreases of 44% for ammonia and 36% for UAN during the year. Ammonia and UAN sales prices were unfavorable primarily due to lower natural gas prices and increased global supplies of nitrogen fertilizers.
For the year ended December 31, 2024, total product sales were unfavorable driven by sales price decreases of 16% for ammonia and 20% for UAN during the year. Ammonia and UAN sales prices were unfavorable primarily due to lower natural gas prices reducing input costs and lower planted acres of corn in the U.S.
Cost of Materials and Other - For the year ended December 31, 2023, cost of materials and other was $134.4 million compared to $130.9 million for the year ended December 31, 2022. The $3.5 million increase was driven primarily by higher third-party pet coke feedstock costs, partially offset by lower natural gas feedstock costs in the current period.
Cost of Materials and Other - For the year ended December 31, 2024, cost of materials and other was $104.1 million compared to $134.4 million for the year ended December 31, 2023. The decrease was driven primarily by lower pet coke and natural gas feedstock costs, as discussed above, combined with favorable inventory impacts in the current period.
The Unit Repurchase Program, as increased, authorized the Partnership to repurchase up to $20 million of the Partnership’s common units. During the year ended December 31, 2023, CVR Partners did not repurchase any common units.
Prior to the termination of the Unit Repurchase Program in 2024 and for the year ended December 31, 2023, CVR Partners did not repurchase any common units.
These conflicts pose significant geopolitical risks to global markets, raise concerns of major implications, such as the enforcement of sanctions, and could disrupt the production and trade of fertilizer, grains, and feedstock through several means, such as trade restrictions.
These concerns, including the enforcement of sanctions, could lead to disruptions in the production and trade of fertilizer, grains, and feedstock through various means, such as trade restrictions.
Cash Requirements The following table summarizes our known contractual obligations and other commercial commitments as of December 31, 2023 that are expected to be paid within the next year and thereafter: Payments Due by Period (in thousands) Short-Term Long-Term Total Debt obligations (1) $ — $ 550,000 $ 550,000 Interest payments related to debt obligations (2) 33,941 118,856 152,797 Operating lease liabilities (3) 3,816 10,151 13,967 Purchase commitments (4) 48,166 81,324 129,490 Transportation agreements (5) 6,665 9,070 15,734 Total cash requirements $ 92,588 $ 769,401 $ 861,989 (1) Debt obligations consist of the 2028 Notes as of December 31, 2023.
December 31, 2024 | 46 Table of Contents Cash Requirements The following table summarizes our known contractual obligations and other commercial commitments as of December 31, 2024 that are expected to be paid within the next year and thereafter: Payments Due by Period (in thousands) Short-Term Long-Term Total Debt obligations (1) $ — $ 550,000 $ 550,000 Interest payments related to debt obligations (2) 33,941 84,915 118,856 Operating lease liabilities (3) 4,996 14,346 19,342 Finance lease obligations (3) 3,145 41,452 44,597 Purchase commitments (4) 36,319 60,273 96,592 Transportation agreements (5) 3,833 5,281 9,114 Total cash requirements $ 82,234 $ 756,267 $ 838,501 (1) Debt obligations consist of the 2028 Notes as of December 31, 2024.
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, 2023 compared to the year ended December 31, 2022: (in thousands) Price Variance Volume Variance UAN $ (246,954) $ 121,886 Ammonia (126,590) 88,071 For the year ended December 31, 2023 compared to the year ended December 31, 2022, ammonia and UAN sales prices were unfavorable primarily due to lower natural gas prices and increased global supplies of nitrogen fertilizers in the current year.
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, 2024 compared to the year ended December 31, 2023: (in thousands) Price Variance Volume Variance UAN $ (77,638) $ (41,805) Ammonia (25,737) (5,315) For the year ended December 31, 2024 compared to the year ended December 31, 2023, ammonia and UAN sales prices were unfavorable primarily due to lower natural gas prices reducing input costs and driving an overall decrease in market prices, paired with lower planted corn acres in the U.S.
Cash Flows The following table sets forth our cash flows for the periods indicated below: Year Ended December 31, (in thousands) 2023 2022 2021 Net cash provided by (used in): Operating activities $ 243,526 $ 301,464 $ 188,725 Investing activities (2,722) (44,623) (20,342) Financing activities (281,864) (283,018) (86,426) Net (decrease) increase in cash and cash equivalents $ (41,060) $ (26,177) $ 81,957 December 31, 2023 | 49 Table of Contents Operating Activities The change in net cash flows from operating activities for the year ended December 31, 2023 as compared to the year ended December 31, 2022 is primarily due to a $114.4 million decrease in net income as a result of lower product prices, partially offset by increased sales volumes and a $17.0 million decrease in noncash share-based compensation as a result of lower market prices for CVR Partners’ units.
Cash Flows The following table sets forth our cash flows for the periods indicated below: Year Ended December 31, (in thousands) 2024 2023 2022 Net cash provided by (used in): Operating activities $ 150,541 $ 243,526 $ 301,464 Investing activities (31,892) (2,722) (44,623) Financing activities (73,071) (281,864) (283,018) Net increase (decrease) in cash and cash equivalents $ 45,578 $ (41,060) $ (26,177) Cash Flows from Operating Activities The change in net cash flows from operating activities for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to a decrease in net income of $111.5 million caused by lower sales prices attributable to natural gas prices reducing input costs and driving an overall decrease in market prices and unfavorable sales volume driven by reduced production volumes resulting from the 2024 Outages in the current period.
These variances were primarily driven by decreased product sales prices, offset by increased production and sales volumes, compared to 2022. Net Sales Operating Income December 31, 2023 | 42 Table of Contents Net Income EBITDA (1) (1) See “Non-GAAP Reconciliations” section below for reconciliations of the non-GAAP measures shown above.
Net Sales Operating Income December 31, 2024 | 41 Table of Contents Net Income EBITDA (1) (1) See “Non-GAAP Reconciliations” section below for reconciliations of the non-GAAP measures shown above. Net Sales - For the year ended December 31, 2024, net sales was $525.3 million compared to $681.5 million for the year ended December 31, 2023.
The decline in natural gas prices has led to a significant reduction in the price for nitrogen fertilizer globally due to lower input costs.
The decline in natural gas prices, and the resulting reversal of capacity curtailments, among other factors, has led to a significant reduction in the price for nitrogen fertilizer from peak prices.
Based on these studies, CVR Partners subsidiaries could utilize either natural gas or pet coke to produce nitrogen fertilizer by making certain modifications to the plant.
Partnership Initiatives The Partnership is nearing completion of engineering studies on the potential to utilize natural gas as an optional feedstock to pet coke at its Coffeyville Facility. Based on these studies, we believe the Coffeyville Facility could utilize either natural gas or pet coke to produce nitrogen fertilizer by making certain modifications to the facility.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe have commitments to purchase natural gas for use in our East Dubuque Facility at the spot market and through short-term, fixed supply, 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.
Biggest changeIn 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.
In the opinion of our management, there are no financial instruments that correlate with our firm commitments and forecasted commodity sales transactions and could be used to effectively reduce commodity price risk. December 31, 2023 | 51 Table of Contents
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.
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. Natural gas is the primary raw material used in the production of various nitrogen-based products manufactured at our East Dubuque Facility.
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.
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.
Prices of nitrogen fertilizer products can be volatile, and we December 31, 2024 | 49 Table of Contents believe they are affected by changes in grain prices, demand, natural gas prices, and other factors.
Added
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.
Added
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.
Added
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.
Added
As of and during the years ended December 31, 2024 and 2023, there were 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.
Added
Based on the 2028 Notes, a hypothetical 50-basis point fluctuation in market interest rates at December 31, 2024 would have resulted in a change of $8.3 million in fair value disclosure.
Added
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. December 31, 2024 | 50 Table of Contents

Other UAN 10-K year-over-year comparisons