With its Q4 results , CVR Partners, LP ( UAN ) highlighted the risk of owning a variable distribution partnership consisting of only two manufacturing sites. The partnership reported a loss of ($0.97) per unit andI retired early after 22 years in the energy industry with roles in engineering, planning, and financial analysis. I have managed my own portfolio since 1998 and have met my goal to match the S+P 500 return over the long term with lower volatility and higher income. I mostly write on positions I al ...

Group 1 - CVR Partners, LP (UAN) reported a loss of ($0.97) per unit in its Q4 results, highlighting the risks associated with owning a variable distribution partnership with only two manufacturing sites [1] - The company emphasizes the potential volatility and income risks tied to its limited operational footprint [1] Group 2 - The article reflects the author's long-term investment strategy, focusing on matching S&P 500 returns with lower volatility and higher income [1] - The author has been managing their own portfolio since 1998, indicating a preference for long-term holdings unless compelling reasons to sell arise [1]

Mark A. Pytosh: Thank you, Richard. Good morning, everyone, and thank you for joining us for today's call. Before we get into the results, I would like to introduce our new Chief Operating Officer, Mike Wright. Mike also serves as COO of CVR Energy, a position he has held since January 2022. Mike has nearly 35 years of experience in the refining and petrochemicals industries in a variety of operations and commercial roles, and we are excited to have him leading our fertilizer operations teams. Turning to th ...

Financial Data and Key Metrics Changes - For Q4 2025, the company reported net sales of $131 million, a net loss of $10 million, and EBITDA of $20 million [4] - For the full year 2025, net sales were $606 million, with an EBITDA of $211 million and a net income of $99 million, or $9.33 per common unit [8] - The fourth quarter EBITDA decreased primarily due to lower production and sales volumes and higher direct operating costs associated with a planned turnaround [8] Business Line Data and Key Metrics Changes - Total ammonia production for Q4 was 140,000 gross tons, with 62,000 net tons available for sale, and UAN production was 169,000 tons [9] - UAN sales volumes were lower due to the planned turnaround and startup issues, but prices for UAN increased approximately 55% and ammonia prices increased approximately 32% compared to Q4 2024 [9] Market Data and Key Metrics Changes - The company noted strong pricing for nitrogen fertilizers throughout the quarter, with expectations for continued strong demand due to anticipated planting levels [6][14] - The USDA estimates a record crop year for 2025, with corn yields of nearly 187 bushels per acre on nearly 99 million acres planted [13] Company Strategy and Development Direction - The company is focused on improving reliability and production rates through debottlenecking projects and is planning for ammonia expansion at the Coffeyville facility [16] - The board has elected to reserve capital for future projects, which are expected to be funded from reserves accumulated over the past several years [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the spring planting season, citing strong demand for nitrogen fertilizers and tight global inventory levels [14] - Geopolitical tensions and natural gas supply issues in Europe are seen as risks that could impact fertilizer supplies [15] Other Important Information - Direct operating expenses for Q4 were $81 million, including turnaround expenses of approximately $14 million [10] - The company ended the quarter with total liquidity of $117 million, consisting of $69 million in cash and $48 million available under the ABL facility [11] Q&A Session Summary Question: What are you seeing in terms of UAN imports? - Management noted that UAN imports from Trinidad are lower due to a Nutrien plant being down, keeping the market tight for UAN [23] Question: Does the decrease in deferred revenue indicate less product pre-sold this year? - Management clarified that it was a timing issue, with more activity expected in January and February rather than December [25] Question: Will ammonia and UAN pricing increase sequentially heading into Q1 2026? - Management confirmed that pricing is expected to see an uptick from Q4 to Q1, based on the current book of business [26] Question: Is the air separator issue at Coffeyville resolved? - Management expressed confidence that the issues have been addressed and is in discussions with the service provider about future operations [27] Question: How does the acreage decrease for corn affect demand? - Management remains optimistic about demand due to the need for nitrogen replenishment in the soil, despite a slight decrease in acreage [29][30]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported net sales of $131 million, a net loss of $10 million, and EBITDA of $20 million [4][8] - For the full year 2025, net sales were $606 million, with an EBITDA of $211 million and a net income of $99 million, or $9.33 per common unit [8] - The fourth quarter EBITDA decreased compared to Q4 2024 primarily due to lower production and sales volumes and higher direct operating costs [8] Business Line Data and Key Metrics Changes - Total ammonia production for Q4 was 140,000 gross tons, with 62,000 net tons available for sale, and UAN production was 169,000 tons [9] - UAN sales volumes were lower due to planned turnaround and startup issues, but prices for UAN increased by approximately 55% and ammonia prices by approximately 32% compared to the prior year [9] Market Data and Key Metrics Changes - The company noted strong pricing for nitrogen fertilizers throughout the quarter, with expectations for continued strong demand due to a projected record crop year [6][13] - The USDA estimates corn yields of nearly 187 bushels per acre on 99 million acres planted, with soybean yields estimated at 53 bushels per acre on over 81 million acres [13] Company Strategy and Development Direction - The company is focused on improving reliability and production rates through debottlenecking projects and plans to expand DEF production and load-out capacity [17] - A feedstock diversification and ammonia expansion project at the Coffeyville facility is underway, allowing for optimal use of natural gas and third-party petcoke [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the spring planting season, citing strong demand for nitrogen fertilizers despite potential acreage reductions for corn [13][32] - Geopolitical tensions and natural gas supply issues in Europe are seen as risks that could impact nitrogen fertilizer supplies [15][16] Other Important Information - Direct operating expenses for Q4 2025 were $81 million, including turnaround expenses of approximately $14 million [10] - The company ended the quarter with total liquidity of $117 million, consisting of $69 million in cash and $48 million available under the ABL facility [11] Q&A Session Summary Question: What are you seeing in terms of UAN imports? - Management noted a decrease in imports from Trinidad due to a plant being down, keeping the UAN market tight [24] Question: Is current deferred revenue down due to less product pre-sold? - Management clarified it was a timing issue, with more activity expected in January and February [26] Question: Will ammonia and UAN pricing increase sequentially heading into Q1 2026? - Management confirmed that prices are expected to increase slightly from Q4 to Q1 [27] Question: Is the air separator issue at Coffeyville resolved? - Management expressed confidence that issues have been addressed and is in discussions with the service provider for future operations [28][29] Question: How does the acreage reduction for corn affect demand? - Management indicated that despite acreage reductions, strong demand is expected due to nitrogen depletion in the soil from previous planting seasons [31][32]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported net sales of $131 million, a net loss of $10 million, and EBITDA of $20 million [4][8] - For the full year 2025, net sales were $606 million, with an operating income of $129 million and net income of $99 million, translating to $9.33 per common unit [8] - EBITDA for the full year was $211 million, with a distribution of $10.54 per common unit [5][8] Business Line Data and Key Metrics Changes - Total ammonia production for Q4 was 140,000 gross tons, with 62,000 net tons available for sale, and UAN production was 169,000 tons [9] - UAN sales volumes were lower due to planned turnaround and startup issues, but prices increased by approximately 55% compared to Q4 2024, while ammonia prices rose by approximately 32% [9] Market Data and Key Metrics Changes - The company noted strong pricing for nitrogen fertilizers throughout Q4, despite lower production and sales volumes [5][9] - The USDA estimates a record crop year for 2025, with corn yields of nearly 187 bushels per acre on approximately 99 million acres planted [13] - U.S. inventory carryout levels for corn are expected to be above the 10-year average, while soybean levels are below [13] Company Strategy and Development Direction - The company is focused on improving reliability and production rates through debottlenecking projects at both plants, aiming for utilization rates above 95% [16][17] - Plans include expanding DEF production and load-out capacity, and a feedstock diversification project at the Coffeyville facility [17] - The board has reserved capital for future projects, expecting to spend over the next two years [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the spring planting season, anticipating strong demand for nitrogen fertilizers due to depleted soil nitrogen levels [13][30] - Geopolitical tensions and natural gas supply issues in Europe are seen as risks that could impact nitrogen fertilizer supplies [14][15] - The company expects ammonia utilization rates to be between 95% and 100% in Q1 2026, with direct operating expenses projected at $57 million to $62 million [11][12] Other Important Information - Direct operating expenses for Q4 2025 were $81 million, including $14 million in turnaround expenses [10] - The company ended the quarter with total liquidity of $117 million, consisting of $69 million in cash and $48 million available under the ABL facility [11] Q&A Session Summary Question: What are you seeing in terms of UAN imports? - Management noted a decrease in imports from Trinidad due to a plant being down, keeping the UAN market tight [22] Question: Is current deferred revenue down due to less product pre-sold? - Management clarified it was a timing issue, with more activity expected in January and February [25] Question: Will ammonia and UAN pricing increase sequentially heading into Q1 2026? - Management confirmed an uptick in prices based on the current book of business [26] Question: Is the air separator issue at Coffeyville resolved? - Management expressed confidence that issues have been addressed and is in discussions with the service provider for future operations [27][28] Question: How does acreage down for corn affect demand? - Management remains optimistic about demand due to nitrogen depletion in soil and supply constraints [29][30]

SUGAR LAND, Texas--(BUSINESS WIRE)--CVR Partners, LP (NYSE: UAN), a manufacturer of ammonia and urea ammonium nitrate ("UAN†) solution fertilizer products, announced that its Annual Report on Form 10-K for the fiscal year ended December 31, 2025, was filed today with the Securities and Exchange Commission and can be viewed on its website at www.CVRPartners.com by selecting the "SEC Filings†link. Upon written request, unitholders may receive, free of charge, a printed copy of the Annual Report. ...

Market Risks and Commodity Prices - The company reported significant exposure to market risks due to potential changes in prices for fertilizer products, pet coke, and natural gas, which are critical raw materials for production [286]. - The company anticipates potential impacts from changes in market conditions, including fluctuations in fertilizer and natural gas prices, which could affect profitability [23]. - A $1.00 per MMBtu change in natural gas prices affects the production cost of ammonia and UAN by approximately $14.29 and $5.86 per ton, respectively [287]. - A $1.00 per ton change in pet coke prices impacts the production cost of ammonia and UAN by approximately $0.66 and $0.27 per ton, respectively [287]. Operational Risks - The company faces risks related to the volatile, cyclical, and seasonal nature of its business, which could impact cash distributions and financial performance [23]. - The company is dependent on a few third-party suppliers for feedstocks and transportation services, which poses risks to operational stability [23]. - The company acknowledges the potential for significant operational hazards and interruptions, including unscheduled maintenance or downtime, which could affect production levels [33]. - The company may face challenges in obtaining or renewing necessary permits and approvals for operations, impacting business continuity [33]. Competition and Market Position - The company is subject to intense competition in the nitrogen fertilizer market, which may affect pricing and market share [33]. - The company is reliant on the natural gas market, and volatility in natural gas prices could impact its competitive position [33]. Environmental and Regulatory Risks - The company is exposed to risks from environmental regulations and compliance, which could adversely affect operations and financial results [33]. Financial Risks - As of December 31, 2025, there were no outstanding borrowings under the ABL Credit Facility or other variable rate borrowings, indicating a low exposure to interest rate risk [288]. - A hypothetical 50-basis point fluctuation in market interest rates would have resulted in a $25.6 million change in the fair value of the company's fixed-rate debt as of December 31, 2025 [289]. - Fixed-rate debt exposes the company to refinancing risks, potentially requiring new debt at higher rates upon maturity [289]. Raw Material Cost Management - The company has commitments to purchase pet coke and natural gas through short-term, fixed price, and index price purchase contracts, indicating a strategy to manage raw material costs [286]. - The company produces nitrogen-based fertilizer products year-round to meet customer demand during high-delivery-volume seasons, with inventory value subject to market risk from commodity price fluctuations [287].

Financial Projections - Preliminary estimated net income for Q4 2025 is projected to be between $(14) million and $(7) million, while full-year 2025 net income is expected to range from $95 million to $102 million[2]. - Estimated EBITDA for Q4 2025 is expected to be between $15 million and $25 million, with full-year 2025 EBITDA projected to be between $206 million and $216 million[2]. - Cash and cash equivalents are estimated to be between $65 million and $75 million for both Q4 and full-year 2025[2]. - Total long-term debt and finance lease obligations are projected to be between $550 million and $600 million for both Q4 and full-year 2025[2]. Operational Performance - Ammonia utilization rate for Q4 2025 is estimated to be between 60% and 65%, while the full-year 2025 rate is expected to be between 87% and 89%[2]. - Strong demand for nitrogen fertilizers was noted in Q4 2025, with robust pricing amid tight inventories[2]. - The planned turnaround at the Coffeyville facility was completed as scheduled, although startup was delayed by several weeks due to third-party unit downtime[2]. Risk and Uncertainty - The company emphasizes that these preliminary estimates are subject to final adjustments and may differ from actual results[3]. - Forward-looking statements indicate potential risks and uncertainties that may affect future performance[10]. Business Focus - CVR Partners focuses on the production, marketing, and distribution of nitrogen fertilizer products, primarily urea ammonium nitrate (UAN) and ammonia[11].

Industry Outlook - The fertilizer business is expected to thrive as global efforts to secure food supply chains intensify, particularly in the US where executive orders are aimed at boosting domestic production [1] - US corn production is anticipated to increase, reflecting a positive trend in the agricultural sector [1] Analyst Background - The analyst has over a decade of experience in financial markets, primarily in hedge funds, with a focus on sectors such as technology (SaaS and cloud) and recently energy and minerals [1] - The analyst emphasizes rigorous research standards and personal investment criteria, indicating a high level of diligence in investment decisions [1]