CVR Partners LP

10/30/2025 | Press release | Distributed by Public on 10/30/2025 14:44

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

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 unaudited condensed consolidated financial statements and related notes and with the statistical information and financial data included elsewhere in this Report, as well as our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the U.S. Securities and Exchange Commission ("SEC") on February 19, 2025 (the "2024 Form 10-K"). Results of operations for the three and nine months ended September 30, 2025 and cash flows for the nine months ended September 30, 2025 are not necessarily indicative of results to be attained for any other period. See "Important Information Regarding Forward-Looking Statements."
Reflected in this discussion and analysis is how management views the Partnership's current financial condition and results of operations along with key external variables and management actions that may impact the Partnership. This discussion may contain forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this Report.
Partnership Overview
CVR Partners, LP ("CVR Partners" or the "Partnership") is a Delaware limited partnership formed in 2011 by CVR Energy, Inc. (together with its subsidiaries, but excluding the Partnership and its subsidiaries, "CVR Energy") to own, operate, and grow its nitrogen fertilizer business. The Partnership produces and distributes nitrogen fertilizer products, which are used by farmers to improve the yield and quality of their crops, primarily corn and wheat. The Partnership produces these products at two manufacturing facilities, one located in Coffeyville, Kansas operated by our wholly owned subsidiary, Coffeyville Resources Nitrogen Fertilizers, LLC ("CRNF") (the "Coffeyville Facility") and one located in East Dubuque, Illinois operated by our wholly owned subsidiary, East Dubuque Nitrogen Fertilizers, LLC ("EDNF") (the "East Dubuque Facility", and together with the Coffeyville Facility, the "Facilities"). Our principal products are ammonia and urea ammonium nitrate ("UAN"). All of our products are sold on a wholesale basis. References to CVR Partners, the Partnership, "we", "us", and "our" may refer to consolidated subsidiaries of CVR Partners or one or both of the Facilities, as the context may require. Additionally, as the context may require, references to CVR Energy may refer to CVR Energy and its consolidated subsidiaries which include its petroleum and renewables refining, marketing, and logistics operations.
Strategy and Goals
The Partnership has adopted Mission and Core Values, which articulate the Partnership's expectations for how it and its employees do business each and every day.
Mission and Core Values
Our Mission is to be a top tier North American nitrogen-based fertilizer company as measured by safe and reliable operations, superior performance and profitable growth. The foundation of how we operate is built on five core Values:
•Safety- We always put safety first. The protection of our employees, contractors and communities is paramount. We have an unwavering commitment to safety above all else. If it's not safe, then we don't do it.
•Environment - We care for our environment. Complying with all regulations and minimizing any environmental impact from our operations is essential. We understand our obligation to the environment and that it's our duty to protect it.
•Integrity- We require high business ethics. We comply with the law and practice sound corporate governance. We only conduct business one way-the right way with integrity.
•Corporate Citizenship- We are proud members of the communities where we operate. We are good neighbors and know that it's a privilege we can't take for granted. We seek to make a positive economic and social impact through our financial donations and the contributions of time, knowledge and talent of our employees to the places where we live and work.
•Continuous Improvement - We believe in both individual and team success. We foster accountability under a performance-driven culture that supports creative thinking, teamwork, diversity and personal development so that
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employees can realize their maximum potential. We use defined work practices for consistency, efficiency and to create value across the organization.
Our core Values are driven by our people, inform the way we do business each and every day and enhance our ability to accomplish our mission and related strategic objectives.
Strategic Objectives
We have outlined the following strategic objectives to drive the accomplishment of our mission:
•Environmental, Health & Safety ("EH&S")- We aim to achieve continuous improvement in all EH&S areas through ensuring our people's commitment to environmental, health and safety comes first, the refinement of existing policies, continuous training, and enhanced monitoring procedures.
•Reliability - Our goal is to achieve industry-leading utilization rates at both of our Facilities through safe and reliable operations. We are focusing on improvements in day-to-day 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.
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.
The price at which nitrogen fertilizer products are ultimately sold depends on numerous factors, including the global supply and demand for nitrogen fertilizer products which, in turn, depends on world grain demand and production levels, changes in world population, the cost and availability of fertilizer transportation infrastructure, weather conditions, the availability of imports, the availability and price of feedstocks to produce nitrogen fertilizer, and the extent of government intervention in agriculture markets, among other factors.
Nitrogen fertilizer prices are also affected by local factors, including local market conditions and the operating levels of competing facilities. An expansion or upgrade of competitors' facilities, new facility development, political and economic developments, and other factors are likely to continue to play an important role in nitrogen fertilizer industry economics. These factors can impact, among other things, the level of inventories in the markets, resulting in price and product margin volatility. Moreover, the industry typically experiences seasonal fluctuations in demand for nitrogen fertilizer products.
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. As a result, the future operating results and current and long-term financial conditions of the Partnership 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.
On September 25, 2025, the United States Department of Agriculture ("USDA") and the Department of Justice ("DOJ") antitrust division signed a memorandum of understanding to conduct an investigation into anti-competitive practices among suppliers of agricultural inputs, including fertilizers, seeds, and crop protection products. In addition, actual and potential tariffs imposed by the U.S. on imports of nitrogen fertilizers have been among the factors that have caused the price of fertilizers to
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rise in the U.S. However, retaliatory trade actions by other countries, particularly in corn and soybean, have been a factor in lowering grain prices and negatively impacting farmer economics.
On July 4, 2025, the One Big Beautiful Bill Act (the "OBBB") was signed into law, making significant amendments to federal tax law, including permanently extending several provisions of the 2017 Tax Cuts and Jobs Act ("TCJA"). The Partnership expects to benefit from the permanent extension of certain TCJA provisions and expects no material impact to its income tax balances. However, the Partnership will continue to monitor developments and evaluate any potential future impacts related to the OBBB.
Geopolitical Matters- Changes, and proposed changes, to the U.S. global trade policy, along with renewed trade tensions and related international retaliatory measures, have continued to drive volatility in global markets and create uncertainty around short- and long-term economic impacts in the U.S. and around the globe, including concerns over inflation, recession, and slowing growth. In addition, the ongoing Russia-Ukraine war and continued conflicts and tensions in the Middle East present significant geopolitical risks to global markets, with direct implications for the global fertilizer, agriculture, and other industries. These factors, together with tentative and ongoing peace negotiations in the affected regions, could lead to further disruptions in the production and trade of fertilizer, grains, and feedstock through various means, such as trade restrictions, sanctions or transportation bottlenecks. The ultimate impacts of these conflicts and/or economic policy changes, or further escalation, expansion, or resolution thereof, and any associated market disruptions are difficult to predict and may affect our business, operations, cash flows, and access to capital in unforeseen ways.
Regulatory Environment- Certain governmental regulations and incentives associated with the automobile transportation and agricultural industries, including those related to corn-based ethanol and vegetable oil-based biodiesel, renewable diesel, and sustainable aviation fuel production and consumption, can impact, and have directly impacted, our business. In June 2023, the United States Environmental Protection Agency ("EPA") announced the renewable volume obligations for 2023, 2024, and 2025, limiting the conventional biofuel volume to 15 billion gallons. In June 2025, the EPA proposed to maintain the conventional biofuel volume at 15 billion gallons for 2026 and 2027. In August 2025, the EPA addressed a backlog of 175 small refinery exemption petitions covering compliance years 2016 to 2024, granting full or partial exemptions to 140 refineries. The EPA is considering reallocating the exempted gallons from 2023 to present to other refiners, which, if implemented, would be included in the final conventional biofuel volume for 2026 and 2027. While a low reallocation requirement could depress demand for corn and soybeans used in fuels blending, we believe that the government will seek ways to mitigate the potential impact on farmers and support continued planting activities in the future. In addition, provisions of the Section 45Z Clean Fuel Production Credit excludes imports of renewable fuels and imported feedstocks used to produce renewable fuels in the United States, which we expect to support demand for domestic corn and soybean oil feedstocks. In 2024, corn used in ethanol production consumed approximately 37% of the annual production of the U.S. corn crop.
There have been several proposed and enacted climate-related rules and compliance requirements at federal, state, and international levels. While the Biden Administration advanced stricter EPA motor vehicle emissions standards and the SEC's proposed climate risk disclosure rule, changes following the 2024 U.S. presidential election have shifted regulatory priorities. Under the new Administration, a combination of executive orders, regulatory rollbacks and new legislation have curtailed, delayed or restructured some of these initiatives. Climate-related reporting requirements at the state level also remain under discussion, further contributing to a more uncertain regulatory landscape, which may materially impact our business, operations, compliance costs, results of operations and overall market stability.
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. The Partnership views the anticipated combination of (i) increasing global population, (ii) decreasing arable land per capita, (iii) continued evolution to more protein-based diets in developing countries, (iv) sustained use of corn and soybeans as feedstock for the domestic production of ethanol and other renewable fuels, and (v) positioning at the lower end of the global cost curve should provide a solid foundation for nitrogen fertilizer producers in the United States over the longer term.
Corn and soybeans are two major crops planted by farmers in North America. Corn crops result in the depletion of the amount of nitrogen within the soil in which it is grown, which in turn, results in the need for this nutrient to be replenished after each growing cycle. Unlike corn, soybeans are able to obtain most of their own nitrogen through a process known as "N fixation". As such, upon harvesting of soybeans, the soil retains a certain amount of nitrogen which results in lower demand for
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nitrogen fertilizer for the following corn planting cycle. Due to these factors, farmers generally operate a balanced corn-soybean rotational planting cycle as shown by the chart presented below.
The relationship between the total acres planted for both corn and soybeans has a direct impact on the overall demand for nitrogen products, as the market and demand for nitrogen increases with increased corn acres and decreases with increased soybean acres. Additionally, an estimated 16 billion pounds of soybean oil is expected to be used in producing cleaner renewable fuels in marketing year 2025/2026.
The USDA estimates that in spring 2025 farmers planted 98.7 million corn acres, representing an increase of 8.6% compared to 90.9 million corn acres in 2024. Planted soybean acres are estimated to be 81.1 million, representing a decrease of 7.0% compared to 87.3 million soybean acres in 2024. The combined estimated corn and soybean planted acres of 179.9 million represents a slight increase compared to the acreage planted in 2024. Due to lower input costs in 2025 for corn planting and the relative grain prices of corn versus soybeans, economics favored planting corn compared to soybeans in 2025. Inventory levels of corn and soybeans are expected to be higher in 2026 but supportive of grain prices through the fall 2025 harvest.
Ethanol is blended with gasoline to meet requirements under the Renewable Fuel Standard of the Clean Air Act and for its octane value. Since 2010, corn used in ethanol production has historically consumed approximately 38% of the annual production of the U.S. corn crop, so demand for corn generally rises and falls with ethanol demand. The EPA's recently proposed renewable volume requirements for 2026 and 2027 include increased volume requirements for biomass-based diesel and advanced biofuel, which are expected to be supportive of grain demand and prices. The chart below shows the production volumes of fuel ethanol in the U.S.
U.S. 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 September 30, 2025.
(2)Information used within this chart was obtained from the USDA, National Agricultural Statistics Services as of September 30, 2025.
Weather continues to be a critical variable for crop production. Despite high planted acres and above trendline yields per acre for corn in the United States, global inventory levels for corn and soybeans remain near their historical 10-year averages and prices have remained moderated through summer 2025. Demand for nitrogen fertilizer, as well as other crop inputs, was strong for the spring 2025 planting season, primarily due to elevated grain prices and favorable weather conditions for planting.
While we expect natural gas prices might remain below the elevated levels experienced in 2022 in the near term, we believe the structural shortage of natural gas in Europe will continue to be a source of volatility through at least 2026. Pet coke prices had been elevated since 2021 due to higher oil prices compared to historical levels, but as oil prices have declined, third-party pet coke prices declined in 2024, have fallen further in 2025, and are expected to continue to fall into 2026.
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Partnership Initiatives
Based on recently completed engineering studies, the Coffeyville Facility could utilize natural gas as an optional feedstock to pet coke for the production of nitrogen fertilizer, subject to certain facility modifications. In addition, the Partnership could import larger than historical quantities of hydrogen directly from CVR Energy's adjacent refinery, and increase the nameplate ammonia production of the Coffeyville Facility. The initial stages of the combined project have been approved by the board of directors of our general partner (the "Board"), subject to engineering and final cost estimates. We have begun detailed engineering and ordering long lead-time equipment. This project will make the Coffeyville Facility the only nitrogen fertilizer facility in the United States with dual feedstock flexibility.
Over the past two years, the Partnership has reserved funds for a series of debottlenecking projects that are intended to improve reliability and ultimately facilitate potential additions to production rates at the Facilities. During 2025, the Partnership has been executing projects focused on water and electrical reliability at the Facilities, along with expansions of diesel exhaust fluid production and loadout capabilities, among other projects. In addition, during the planned turnaround at the Coffeyville Facility, which is currently underway, the Partnership is nearing completion on the installation of a nitrous oxide abatement unit. After installation, the Partnership will have nitrous oxide abatement units on all four of its nitric acid plants. The funds needed in 2025 for these projects have come and are expected to come from the reserves taken over the past two years.
The charts below show relevant market indicators by month through September 30, 2025:
Ammonia and UAN Market Pricing (1)
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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.
Results of Operations
The following should be read in conjunction with the information outlined in the previous sections of this Part I, Item 2 and the financial statements and related notes thereto in Part I, Item 1 of this Report.
The chart presented below summarizes our ammonia utilization rate on a consolidated basis for the three and nine months ended September 30, 2025 and 2024. 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.
Utilization is presented solely on ammonia production, rather than on each nitrogen product, as it provides a comparative baseline against industry peers and eliminates the disparity of facility configurations for upgrade of ammonia into other nitrogen products. With production primarily focused on ammonia upgrade capabilities, we believe this measure provides a meaningful view of how we operate.
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On a consolidated basis for the three months ended September 30, 2025, utilization decreased to 95% compared to 97% for the three months ended September 30, 2024 due primarily to planned downtime associated with control systems upgrades at the East Dubuque Facility and other minor unplanned outages at the Facilities during the third quarter of 2025 (the "Q3 2025 Outages"). For the nine months ended September 30, 2025, utilization was 96%, consistent with utilization for the nine months ended September 30, 2024. Utilization for the 2025 period was impacted primarily by the Q3 2025 Outages and outages related to the control systems upgrades at the East Dubuque Facility and other minor unplanned outages at the Facilities during the second quarter of 2025 (together with the Q3 2025 Outages, the "2025 Outages"), while the 2024 period was impacted by the 14-day planned outage at the Coffeyville Facility during the first quarter of 2024 and other minor unplanned outages at the Facilities (the "2024 Outages").
Sales and Pricing per Ton- Two of our key operating metrics are total sales volumes for ammonia and UAN, along with the product pricing per ton realized at the gate. 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.
Q3 Ammonia Sales Volumes and Pricing
Q3 UAN Sales Volumes and Pricing
YTD Ammonia Sales Volumes and Pricing YTD UAN Sales Volumes and Pricing
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
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upgraded into other fertilizer products. The table below presents these metrics for the three and nine months ended September 30, 2025 and 2024:
Three Months Ended
September 30, 		Nine Months Ended
September 30,
(in thousands of tons) 2025 2024 2025 2024
Ammonia(gross produced)
208 212 621 626
Ammonia (net available for sale)
59 61 181 191
UAN 337 321 1,005 964
Feedstock - Our Coffeyville Facility utilizes a pet coke gasification process to produce nitrogen fertilizer. Our East Dubuque Facility uses natural gas in its production of ammonia. The table below presents these feedstocks for the Facilities for the three and nine months ended September 30, 2025 and 2024:
Three Months Ended
September 30, 		Nine Months Ended
September 30,
2025 2024 2025 2024
Petroleum coke used in production (thousands of tons)
134 133 394 395
Petroleum coke used in production (dollars per ton)
$ 44.58 $ 44.69 $ 47.86 $ 60.93
Natural gas used in production (thousands of MMBtus) (1)
2,114 2,082 6,171 6,443
Natural gas used in production (dollars per MMBtu) (1)
$ 3.18 $ 2.19 $ 3.72 $ 2.40
(1)The feedstock natural gas shown above does not include natural gas used for fuel. The cost of fuel natural gas is included in Direct operating expenses (exclusive of depreciation and amortization).
Financial Highlights for the Three and Nine Months Ended September 30, 2025 and 2024
For the three months ended September 30, 2025, the Partnership's operating income and net income were $50.6 million and $43.1 million, respectively, compared to operating income and net income of $11.0 million and $3.8 million, respectively, for the three months ended September 30, 2024. For the nine months ended September 30, 2025, the Partnership's operating income and net income were $131.5 million and $108.9 million, respectively, compared to operating income and net income of $64.6 million and $42.6 million, respectively, for the nine months ended September 30, 2024. These increases were primarily due to higher revenues which were driven by increases in UAN and ammonia sales prices during the three and nine months ended September 30, 2025, as well as UAN sales volumes during the nine months ended September 30, 2025, partially offset by higher natural gas prices and lower ammonia sales volumes during the three and nine months ended September 30, 2025.
Net Sales
Operating Income
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Net Income
EBITDA (1)
(1)See "Non-GAAP Reconciliations" section below for reconciliations of the non-GAAP measures shown above.
Net Sales - For the three months ended September 30, 2025, net sales was $163.5 million compared to $125.2 million for the three months ended September 30, 2024. The increase was primarily due to favorable UAN and ammonia sales prices contributing $45.4 million in higher revenue, partially offset by decreased ammonia and UAN sales volumes reducing revenues by $7.4 million.
The following table demonstrates the impact of changes in sales volumes and pricing for the primary components of net sales, excluding urea products, freight, and other revenue, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024:
(in thousands) Price
Variance 		Volume
Variance
UAN $ 39,034 $ (1,809)
Ammonia 6,322 (5,557)
For the three months ended September 30, 2025 compared to the three months ended September 30, 2024, UAN and ammonia sales volumes decreased due to tight inventory levels as a result of higher sales earlier in the year, primarily due to strong demand. In addition, UAN and ammonia sales prices were favorable in 2025 due to improved market conditions, primarily driven by tight inventory levels. These inventory constraints resulted from increased demand arising from higher planting acreage in 2025, as well as domestic and international production outages that reduced global supply of nitrogen fertilizers. Higher natural gas prices also raised input costs, contributing to an overall increase in market prices.
For the nine months ended September 30, 2025, net sales was $475.0 million compared to $385.8 million for the nine months ended September 30, 2024. This increase was primarily due to favorable UAN sales volumes and prices contributing $68.5 million in higher revenues, combined with favorable ammonia sales prices contributing $13.3 million in higher revenues, partially offset by decreased ammonia sales volumes reducing revenues by $4.5 million.
The following table demonstrates the impact of changes in sales volume and pricing for the primary components of net sales, excluding urea products, freight, and other revenue, for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024:
(in thousands) Price
Variance 		Volume
Variance
UAN $ 53,469 $ 15,074
Ammonia 13,295 (4,549)
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The increase in ammonia and UAN sales pricing for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was due to the same conditions described for the three-month period. The increase in UAN sales volumes for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was primarily attributable to higher UAN production volumes in the current period as a result of the 2024 Outages in the prior period, partially offset by the 2025 Outages. The decrease in ammonia sales volumes is primarily due to an increase in the volume of ammonia upgraded to other nitrogen products in the current period leading to less ammonia volumes available for sale.
Cost of Materials and Other
Direct Operating Expenses (1)
(1)Exclusive of depreciation and amortization expense.
Cost of Materials and Other - For the three and nine months ended September 30, 2025, cost of materials and other was $25.4 million and $85.8 million, respectively, compared to $26.3 million and $77.7 million for the three and nine months ended September 30, 2024, respectively. The decrease for the three months ended September 30, 2025 was driven primarily by decreased volumes sold and lower distribution costs, partially offset by increased natural gas prices. The increase for the nine months ended September 30, 2025 was driven primarily by increased natural gas prices, higher volumes of other purchased feedstocks, and increased distribution costs in the current period, partially offset by lower pet coke prices.
Direct Operating Expenses (exclusive of depreciation and amortization) - For the three and nine months ended September 30, 2025, direct operating expenses (exclusive of depreciation and amortization) was $57.7 million and $172.7 million, respectively, compared to $55.8 million and $158.3 million for the three and nine months ended September 30, 2024, respectively. The increases for the three and nine months ended September 30, 2025 were primarily a result of increased utility costs from higher natural gas and electricity prices, higher personnel and contract labor costs, and preliminary spend for the Coffeyville Facility's planned 2025 turnaround in the current period. For the nine months ended September 30, 2025, the aforementioned increases were partially offset by decreased repairs and maintenance costs compared to the nine months ended September 30, 2024.
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Depreciation and Amortization Selling, General, and Administrative Expenses
Depreciation and Amortization Expense - For the three and nine months ended September 30, 2025, depreciation and amortization expense was $20.0 million and $58.9 million, respectively, compared to $24.7 million and $64.1 million, respectively, for the three and nine months ended September 30, 2024. These decreases were primarily due to prior year accelerated depreciation, predominantly related to granular plant production assets retired at the end of 2024, partially offset by fluctuations in depreciation expense capitalized into inventory, current year accelerated depreciation related to early asset retirements, mostly related to the ammonia expansion project, and asset additions to property, plant and equipment in the current period.
Selling, General, and Administrative Expenses - For the three and nine months ended September 30, 2025, selling, general and administrative expenses was $9.2 million and $25.1 million, respectively, compared to $7.4 million and $21.1 million, respectively, for the three and nine months ended September 30, 2024. These increases were primarily related to higher share-based compensation accruals due to an increase in market prices for CVR Partners' common units during the three months ended September 30, 2025 compared to a decrease in the three months ended September 30, 2024, and a larger increase during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.
Non-GAAP Measures
Our management uses certain non-GAAP performance measures, and reconciliations to those measures, to evaluate current and past performance and prospects for the future to supplement our financial information presented in accordance with accounting principles generally accepted in the United States ("GAAP"). These non-GAAP financial measures are important factors in assessing our operating results and profitability and include the performance and liquidity measures defined below.
The following are non-GAAP measures we present for the periods ended September 30, 2025 and 2024:
EBITDA- Net income (loss) before (i) interest expense, net, (ii) income tax expense (benefit) and (iii) depreciation and amortization expense.
Adjusted EBITDA - EBITDA adjusted for certain significant noncash items and items that management believes are not attributable to or indicative of our on-going operations or that may obscure our underlying results and trends.
Available Cash for Distribution- EBITDA for the quarter excluding noncash income or expense items (if any), for which adjustment is deemed necessary or appropriate by the Board in its sole discretion, less (i) reserves for maintenance capital expenditures, debt service and other contractual obligations and (ii) reserves for future operating or capital needs (if any), in each case, that the Board deems necessary or appropriate in its sole discretion. Available Cash for Distribution may be increased by the release of previously established cash reserves, if any, and other excess cash, at the discretion of the Board.
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We present these measures because we believe they may help investors, analysts, lenders, and ratings agencies analyze our results of operations and liquidity in conjunction with our GAAP results, including, but not limited to, our operating performance as compared to other publicly traded companies in the fertilizer industry, without regard to historical cost basis or financing methods, and our ability to incur and service debt and fund capital expenditures. Non-GAAP measures have important limitations as analytical tools because they exclude some, but not all, items that affect net earnings and operating income. These measures should not be considered substitutes for their most directly comparable GAAP financial measures. Refer to the "Non-GAAP Reconciliations" included herein for reconciliation of these amounts. Due to rounding, numbers presented within this section may not add or equal to numbers or totals presented elsewhere within this document.
Non-GAAP Reconciliations
Reconciliation of Net Income to EBITDA, Adjusted EBITDA and Available Cash for Distribution
Three Months Ended
September 30, 		Nine Months Ended
September 30,
(in thousands) 2025 2024 2025 2024
Net income $ 43,072 $ 3,807 $ 108,928 $ 42,605
Interest expense, net 7,587 7,241 22,894 22,416
Income tax benefit - - - (25)
Depreciation and amortization 19,958 24,732 58,859 64,063
EBITDA and Adjusted EBITDA 70,617 35,780 190,681 129,059
Adjustments (Reserves)/Releases:
Accrued interest expense (excluding capitalized interest) (9,192) (8,486) (27,215) (25,456)
Future operating needs (1)
6,000 - (2,000) -
Capital expenditures (2)
(15,312) (10,762) (40,920) (40,416)
Turnaround expenditures, net (3)
(8,974) (3,178) (14,104) (9,772)
Equity method investment (4)
(699) (742) 1,024 (380)
Available cash for distribution (5)
$ 42,440 $ 12,612 $ 107,466 $ 53,035
Common units outstanding 10,570 10,570 10,570 10,570
(1)Amount consists of reserves established by management and approved by the Board for potential future cash needs related to nitrogen fertilizer seasonality and feedstock price volatility.
(2)Amount consists of maintenance capital expenditures, including additional reserves for future profit and growth projects, net of any releases of previously reserved funds, of $7.9 million and $23.3 million for the three and nine months ended September 30, 2025, respectively, and $4.3 million and $24.8 million for the three and nine months ended September 30, 2024, respectively.
(3)Amount consists of reserves for periodic, planned turnarounds, net of expenditures incurred in the period.
(4)Amount consists of distributions received by the Partnership adjusted for the amortization of deferred revenue related to the joint venture created to monetize certain tax credits under Section 45Q of the Internal Revenue Code of 1986 ("45Q Transaction").
(5)Amount represents the cumulative available cash for distribution based on full year results. However, available cash for distribution is calculated quarterly, with distributions (if any) being paid in the following period. The Partnership declared and paid a cash distribution of $1.75, $2.26, and $3.89 per common unit related to the fourth quarter of 2024 and the first and second quarters of 2025, respectively, and declared a cash distribution of $4.02 per common unit related to the third quarter of 2025 to be paid in November 2025.
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 and turnaround expenditures, funding our debt service obligations, and paying distributions to our unitholders.
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 current borrowing capacity and reserves, as necessary, will be sufficient to satisfy anticipated cash requirements associated with our existing operations for at least the next 12 months. However, our future capital expenditures and other cash requirements could be higher than we currently expect as a result of various factors including, but not limited to, rising material and labor costs, other inflationary pressures, and interest rate
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fluctuations. Additionally, potential supply chain disruptions, geopolitical and economy instability, volatility in commodity prices, and changes in regulatory policies could adversely affect our operations. Our ability to generate sufficient cash from our operating activities and secure additional financing depends on our future performance, which is subject to operating performance, as well as general economic, political, financial, competitive, and other factors, some of which may be beyond our control. Furthermore, changes in the U.S trade policies, shifts in global demand and tightening credit market conditions could impact our financial stability.
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. There can be no assurance that we will seek to do any of the foregoing or that we will be able to do any of the foregoing on terms acceptable to us or at all.
The Partnership and its subsidiaries were in compliance with all covenants under their respective debt instruments as of September 30, 2025 and through date of filing, as applicable.
Cash and Other Liquidity
As of September 30, 2025, we had cash and cash equivalents of $156.2 million, and combined with $50.0 million available under our ABL Credit Facility, we had total liquidity of $206.2 million. As of December 31, 2024, we had $90.9 million in cash and cash equivalents and, combined with $38.9 million available under our ABL Credit Facility, we had total liquidity of $129.8 million.
Long-term debt consisted of the following:
(in thousands) September 30, 2025 December 31, 2024
6.125% Senior Secured Notes, due June 2028
$ 550,000 $ 550,000
Unamortized debt issuance costs (1,724) (2,152)
Total long-term debt $ 548,276 $ 547,848
As of September 30, 2025, the Partnership had outstanding the 6.125% Senior Secured Notes, due June 2028 and the ABL Credit Facility, the proceeds of which may be used to fund working capital, capital expenditures, and for other general corporate purposes. Refer to Part II, Item 8, Note 8 ("Long-Term Debt") of our 2024 Form 10-K for further information.
Capital Spending
We divide capital spending needs into two categories: maintenance and growth. Maintenance capital spending includes non-discretionary maintenance projects and projects required to comply with environmental, health, and safety regulations. Growth capital projects generally involve an expansion of existing capacity, reliability improvements, and/or a reduction in 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 total capital expenditures for the nine months ended September 30, 2025, along with our estimated expenditures for 2025 are as follows:
Nine Months Ended September 30, Estimated full year
(in thousands) 2025 2025
Maintenance capital $ 17,665 $39,000 - 42,000
Growth capital 11,727 19,000 - 23,000
Total capital expenditures $ 29,392 $58,000 - 65,000
Our estimated capital expenditures are subject to change due to changes in capital projects' cost, scope, and completion time. 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
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expenditures from time to time. The Board determines capital spending for CVR Partners. We will continue to monitor market conditions and make adjustments, if needed, to our current capital spending or turnaround plans.
The Coffeyville Facility's planned turnaround commenced in early October 2025, with an estimated cost of approximately $17 million, and is expected to last 33 days. The next planned turnaround is currently scheduled to commence in the third quarter of 2026 at the East Dubuque Facility. Turnaround costs are not capitalized, but instead are expensed as incurred within Direct operating expenses (exclusive of depreciation and amortization), and are expected to be funded through cash reserves taken during the three years preceding the turnaround.
Cash Requirements
There have been no material changes to the cash requirements disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, outside the ordinary course of business.
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. Available Cash for Distribution for each quarter is calculated as EBITDA for the quarter excluding noncash income or expense items (if any), for which adjustment is deemed necessary or appropriate by the Board in its sole discretion, less (i) reserves for maintenance capital expenditures, debt service and other contractual obligations, and (ii) reserves for future operating or capital needs (if any), in each case, that the Board deems necessary or appropriate in its sole discretion. Available Cash for Distribution may be increased by releasing 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 and reserves relating thereto, are subject to change at the discretion of the Board. The following tables present quarterly distributions paid by the Partnership to CVR Partners' unitholders, including amounts paid to CVR Energy and IEP, during 2025and 2024 (amounts presented in the table below may not add to totals presented due to rounding):
Quarterly Distributions
Per Common Unit
Quarterly Distributions Paid (in thousands)
Related Period Date Paid Public Unitholders IEP CVR Energy Total
2024 - 4th Quarter
March 10, 2025 $ 1.75 $ 11,381 $ 305 $ 6,811 $ 18,497
2025 - 1st Quarter
May 19, 2025 2.26 14,477 615 8,796 23,888
2025 - 2nd Quarter
August 18, 2025 3.89 24,916 1,059 15,140 41,115
Total 2025quarterly distributions
$ 7.90 $ 50,774 $ 1,979 $ 30,747 $ 83,500
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
For the third quarter of 2025, upon approval by the Board on October 29, 2025, the Partnership declared a distribution of $4.02 per common unit, or approximately $42.5 million, which is payable November 17, 2025 to unitholders of record as of November 10, 2025. Of this amount, CVR Energy and IEP will receive approximately $15.6 million and $1.1 million, respectively, with the remaining amount payable to public unitholders.
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Cash Flows
The following table sets forth our cash flows for the periods indicated below:
Nine Months Ended September 30,
(in thousands) 2025 2024 Change
Net cash flow provided by (used in):
Operating activities
$ 171,237 $ 137,750 $ 33,487
Investing activities
(21,419) (14,357) (7,062)
Financing activities
(84,492) (58,133) (26,359)
Net increase in cash and cash equivalents $ 65,326 $ 65,260 $ 66
Cash Flows from Operating Activities
The change in net cash flows from operating activities for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was primarily due to an increase in net income of $66.3 million offset by a decrease in working capital of $32.8 million. The change in the working capital was primarily due to unfavorable changes in deferred revenue and other current assets, partially offset by favorable changes in accounts receivable and accounts payable.
Cash Flows from Investing Activities
The change in net cash flows from investing activities for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was due to an increase in capital expenditures of $8.5 million during 2025 resulting from an increase in various capital projects in the current period compared to 2024, offset by an increase in distributions received from CVR Partners' equity method investment of $1.4 million in 2025 associated with the 45Q Transaction.
Cash Flows from Financing Activities
The change in net cash flows from financing activities for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was mainly due to an increase in cash distributions paid of $25.4 million in 2025 compared to 2024 and payments related to finance lease obligations of $1.0 million in the current period.
Critical Accounting Estimates
Our critical accounting estimates are disclosed in the "Critical Accounting Estimates" section of our 2024 Form 10-K. No modifications have been made during the three and nine months ended September 30, 2025 to these estimates.
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