[CVR Partners Second Quarter 2024 Results](index=1&type=section&id=CVR%20Partners%20Reports%20Second%20Quarter%202024%20Results) [Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) The company reported lower Q2 2024 net income and EBITDA due to decreased fertilizer prices but maintained solid operational performance Key Financial Metrics | Financial Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net Sales | $133 million | $183 million | | Net Income | $26 million | $60 million | | EBITDA | $54 million | $87 million | | Earnings per Unit | $2.48 | $5.66 | - Announced a second quarter 2024 cash distribution of **$1.90 per common unit**, payable on August 19, 2024, to unitholders of record as of August 12, 2024[17](index=17&type=chunk)[34](index=34&type=chunk) - CEO Mark Pytosh noted solid operating results driven by safe, reliable operations and a combined ammonia production rate of **102%**, despite weather interruptions[16](index=16&type=chunk) Average Realized Product Prices | Product | Q2 2024 Realized Price (per ton) | Q2 2023 Realized Price (per ton) | % Change | | :--- | :--- | :--- | :--- | | UAN | $268 | $316 | -15% | | Ammonia | $520 | $707 | -26% | - Production remained consistent year-over-year, with **221,000 tons of ammonia** produced in Q2 2024 compared to 219,000 tons in Q2 2023[18](index=18&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) Financial statements reflect a year-over-year decline in revenue and profitability, with stable total assets and reduced cash flow from operations Consolidated Statements of Operations | (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :--- | :--- | :--- | | **Net Sales** | **$132,901** | **$183,005** | | Operating Income | $33,564 | $66,726 | | **Net Income** | **$26,219** | **$59,857** | | Basic and Diluted EPS | $2.48 | $5.66 | Consolidated Balance Sheets | (in thousands) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $47,524 | $45,279 | | Total assets | $959,447 | $975,332 | | Total debt | $547,574 | $547,308 | | Total partners' capital | $303,628 | $302,880 | Consolidated Statements of Cash Flows | (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash from Operating activities | $8,608 | $60,844 | | Net cash from Investing activities | ($5,413) | ($3,268) | | Net cash from Financing activities | ($20,293) | ($110,240) | | **Net (decrease) in cash** | **($17,098)** | **($52,664)** | [Operational Data & Key Metrics](index=6&type=section&id=Operational%20Data%20%26%20Key%20Metrics) Operational performance remained strong with a high ammonia utilization rate and stable production, though ammonia sales volumes decreased Ammonia Utilization Rate | Operating Metric | Q2 2024 | Q2 2023 | Six Months 2024 | Six Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Ammonia Utilization | 102% | 100% | 96% | 103% | Production and Sales Volumes | Production/Sales (thousand tons) | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Ammonia Sales Volume | 43 | 79 | | UAN Sales Volume | 330 | 329 | | Ammonia Production (gross) | 221 | 219 | | UAN Production | 337 | 339 | Average Feedstock Costs | Feedstock Cost | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Petroleum coke ($ per ton) | $62.96 | $73.91 | | Natural gas ($ per MMBtu) | $1.93 | $2.35 | Capital Expenditures | Capital Expenditures (in thousands) | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Maintenance | $4,831 | $5,691 | | Growth | $64 | $598 | | **Total** | **$4,895** | **$6,289** | [Q3 2024 Outlook](index=8&type=section&id=Q3%202024%20Outlook) The company anticipates strong nitrogen fertilizer demand and higher prices in Q3 2024, with ammonia utilization projected between 95% and 100% - The company has seen continued strong demand for nitrogen fertilizer for the remainder of 2024 at **prices higher than in 2023**[32](index=32&type=chunk) Q3 2024 Guidance | Q3 2024 Outlook | Low | High | | :--- | :--- | :--- | | Ammonia utilization rates | 95 % | 100 % | | Direct operating expenses (in millions) | $53 | $58 | | Capital expenditures (in millions) | $10 | $15 | [Non-GAAP Measures & Reconciliations](index=4&type=section&id=Non-GAAP%20Measures) The company utilizes non-GAAP measures like EBITDA to assess performance, providing reconciliations from GAAP net income - The company uses non-GAAP measures to help investors and analysts evaluate operating performance compared to peers in the fertilizer industry[3](index=3&type=chunk)[42](index=42&type=chunk) Reconciliation of Net Income to EBITDA and Available Cash | Reconciliation (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :--- | :--- | :--- | | **Net income** | **$26,219** | **$59,857** | | Interest expense, net | $7,510 | $6,919 | | Depreciation and amortization | $20,040 | $19,755 | | **EBITDA** | **$53,769** | **$86,533** | | **Available Cash for Distribution** | **$20,113** | **$43,778** | [Corporate & Investor Information](index=2&type=section&id=Corporate%20%26%20Investor%20Information) This section details the company's business focus, investor communications, forward-looking statements, and tax notices for foreign investors - CVR Partners is a Delaware limited partnership focused on the production, marketing and distribution of nitrogen fertilizer products, primarily **urea ammonium nitrate (UAN) and ammonia**[23](index=23&type=chunk) - The company will host its second quarter 2024 Earnings Conference Call on **Tuesday, July 30, at 11 a.m. Eastern**[36](index=36&type=chunk)[20](index=20&type=chunk) - This release serves as a qualified notice that **100% of CVR Partners' distributions to foreign investors** are attributable to income effectively connected with a U.S. trade or business[21](index=21&type=chunk) - The news release contains **forward-looking statements** concerning estimates and projections about future results, performance, and events[22](index=22&type=chunk)

Company Overview - CVR Partners, LP is a Delaware limited partnership headquartered in Sugar Land, Texas, focused on the production, marketing, and distribution of nitrogen fertilizer products [5] - The company primarily produces urea ammonium nitrate (UAN) and ammonia, which are used by farmers to enhance crop yield and quality [5] Manufacturing Facilities - CVR Partners operates a nitrogen fertilizer manufacturing facility in Coffeyville, Kansas, which includes a 1,300 ton-per-day ammonia unit, a 3,100 ton-per-day UAN unit, and a dual-train gasifier complex with a capacity of 89 million standard cubic feet per day of hydrogen [5] - The company also has a facility in East Dubuque, Illinois, featuring a 1,075 ton-per-day ammonia unit and a 950 ton-per-day UAN unit [5] Tax Information - CVR Partners announced that the 2023 Schedule K-3s, which contain items of international tax relevance, are now available online for unitholders [1] - The company does not plan to mail Schedule K-3s to investors; instead, unitholders can request an electronic copy via email [3] - A limited number of investors, particularly foreign unitholders and those computing a foreign tax credit, may require the detailed information on the Schedule K-3 for their tax reporting needs [4]

[PART I. Financial Information](index=5&type=section&id=PART%20I.%20Financial%20Information) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Q1 2024 unaudited financial statements show significant declines in net sales and income, with stable assets and reduced operating cash flow [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2024, total assets were $972.2 million, with minor shifts in cash, liabilities, and partners' capital Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $64,622 | $45,279 | | Total current assets | $182,469 | $165,869 | | Total assets | $972,215 | $975,332 | | **Liabilities & Partners' Capital** | | | | Total current liabilities | $79,528 | $75,473 | | Long-term debt, net | $547,440 | $547,308 | | Total liabilities | $674,513 | $672,452 | | Total partners' capital | $297,702 | $302,880 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2024 saw a sharp decline in performance, with net sales falling to $127.7 million and net income dropping significantly Consolidated Statements of Operations Highlights (in thousands, except per unit data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net sales | $127,665 | $226,261 | | Operating income | $20,059 | $109,352 | | Net income | $12,579 | $101,870 | | Basic and diluted EPS | $1.19 | $9.64 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations significantly decreased to $42.4 million in Q1 2024, with shifts in investing and reduced financing cash outflow Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $42,417 | $130,443 | | Net cash (used in) provided by investing activities | $(5,317) | $15,562 | | Net cash used in financing activities | $(17,757) | $(110,981) | | Net increase in cash and cash equivalents | $19,343 | $35,024 | [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes detail business operations, accounting policies, revenue disaggregation, debt, and Q1 2024 cash distributions Revenue by Major Product (in thousands) | Product | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Ammonia | $36,901 | $37,499 | | UAN | $75,771 | $164,341 | | Urea products | $5,142 | $8,170 | | **Total Revenue** | **$127,665** | **$226,261** | - The Partnership has **$550 million** in 6.125% Senior Secured Notes due June 2028. As of March 31, 2024, the company was in compliance with all debt covenants[49](index=49&type=chunk)[51](index=51&type=chunk) - A cash distribution of **$1.92 per common unit** for the first quarter of 2024 was declared on April 29, 2024, payable in May 2024. This totals approximately **$20.3 million**[62](index=62&type=chunk) - The Unit Repurchase Program, which had nominal authority remaining, was terminated by the Board on February 20, 2024. No units were repurchased in Q1 2024 or Q1 2023[30](index=30&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q1 2024's financial decline to lower sales prices and UAN volumes, while maintaining a positive long-term outlook [Industry Factors and Market Indicators](index=18&type=section&id=Industry%20Factors%20and%20Market%20Indicators) Nitrogen fertilizer markets are influenced by grain demand, feedstock costs, and geopolitical risks, with USDA projecting shifts in crop acres - The USDA estimates farmers will plant **90.0 million corn acres** in spring 2024 (down **4.9% YoY**) and **86.5 million soybean acres** (up **3.5% YoY**)[81](index=81&type=chunk) - Lower natural gas prices have led to a significant reduction in nitrogen fertilizer prices from their peaks. Pet coke prices have also declined into 2024[86](index=86&type=chunk) - Geopolitical risks from the conflicts in the Middle East and Ukraine could disrupt the production and trade of fertilizer, grains, and feedstock[77](index=77&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Q1 2024 operating income significantly declined to $20.1 million due to lower product pricing and reduced UAN sales volumes Product Pricing at Gate ($ per ton) | Product | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Ammonia | $519 | $879 | -41% | | UAN | $261 | $451 | -42% | Sales Volumes (thousands of tons) | Product | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Ammonia | 69 | 41 | | UAN | 256 | 332 | Feedstock Costs | Feedstock | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Petroleum coke ($ per ton) | $75.71 | $77.24 | | Natural gas ($ per MMBtu) | $3.10 | $5.76 | - Consolidated ammonia utilization decreased to **90%** in Q1 2024 from **105%** in Q1 2023, primarily due to a 14-day planned downtime at the Coffeyville Facility[93](index=93&type=chunk) [Non-GAAP Reconciliations](index=30&type=section&id=Non-GAAP%20Reconciliations) Non-GAAP measures show Q1 2024 EBITDA sharply decreased to $39.5 million, with Available Cash for Distribution at $20.3 million Reconciliation of Net Income to EBITDA (in thousands) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net income | $12,579 | $101,870 | | Interest expense, net | $7,665 | $7,173 | | Income tax (benefit) expense | $(25) | $44 | | Depreciation and amortization | $19,291 | $15,211 | | **EBITDA** | **$39,510** | **$124,298** | | **Available cash for distribution** | **$20,345** | **$110,293** | [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2024, total liquidity was **$107.6 million**, with stable long-term debt and projected 2024 capital expenditures of **$46-49 million** - Total liquidity as of March 31, 2024, was **$107.6 million**, including **$64.6 million** in cash and **$43.0 million** in ABL Credit Facility availability[125](index=125&type=chunk) 2024 Capital Expenditure Outlook (in thousands) | Category | Estimated Full Year 2024 | | :--- | :--- | | Maintenance capital | $33,000 - $35,000 | | Growth capital | $13,000 - $14,000 | | **Total capital expenditures** | **$46,000 - $49,000** | - The next planned major turnarounds are scheduled for 2025 at the Coffeyville Facility and 2026 at the East Dubuque Facility[128](index=128&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risks were reported for Q1 2024 compared to the 2023 Annual Report on Form 10-K - There have been no material changes to market risks as of March 31, 2024, compared to those disclosed in the 2023 Form 10-K[139](index=139&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal controls - The Partnership's management concluded that disclosure controls and procedures were effective as of March 31, 2024[140](index=140&type=chunk) - No material changes occurred in the Partnership's internal control over financial reporting during the first quarter of 2024[141](index=141&type=chunk) [PART II. Other Information](index=35&type=section&id=PART%20II.%20Other%20Information) [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) Information on legal proceedings is incorporated by reference from Note 11 of the financial statements, with no new material disclosures - For information on legal proceedings, the report refers to Note 11 ("Commitments and Contingencies") in Part I, Item 1[143](index=143&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) No material changes from previously disclosed risk factors were reported in Q1 2024 compared to the 2023 Form 10-K - There have been no material changes from the risk factors previously disclosed in the 2023 Form 10-K[144](index=144&type=chunk) [Item 5. Other Information](index=35&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the first quarter of 2024 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended March 31, 2024[145](index=145&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including the 2024 Performance-Based Bonus Plan, officer certifications, and XBRL data - Exhibits filed include the CVR Partners, LP and Subsidiaries 2024 Performance-Based Bonus Plan, certifications by principal officers (Rule 13a-14(a)/15d-14(a) and Section 1350), and Inline XBRL financial data[146](index=146&type=chunk)

Financial Data and Key Metrics Changes - For Q1 2024, the company reported net sales of $128 million, net income of $13 million, and EBITDA of $40 million, with a distribution of $1.92 per common unit declared [7][11][13] - Compared to Q1 2023, EBITDA declined primarily due to lower market prices for ammonia and UAN [11] Business Line Data and Key Metrics Changes - Ammonia plant utilization was 90%, affected by a 14-day planned outage at the Coffeyville facility [9] - Combined ammonia production was 193,000 gross tons, with 60,000 net tons available for sale, while UAN production reached 305,000 tons [9] - UAN sales volumes decreased due to lower production, with approximately 284,000 tons sold at an average price of $267 per ton, and 70,000 tons of ammonia sold at an average price of $528 per ton [9][10] Market Data and Key Metrics Changes - Ammonia prices fell by 41% and UAN prices by 42% compared to Q1 2023, although nitrogen fertilizer pricing remained steady compared to Q4 2023 [10] - Grain market conditions are volatile, with the USDA forecasting a 5% decrease in corn planting acres for 2024, while soybean acres are expected to increase by 3% [17][18] Company Strategy and Development Direction - The company is focusing on improving reliability and redundancy at its production facilities, with plans to begin capital spending on these projects in the second half of 2024 [22] - The potential to utilize natural gas as an alternative feedstock at the Coffeyville facility is being explored, which could enhance operational flexibility [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about strong nitrogen fertilizer demand for the spring 2024 planting season, driven by favorable weather conditions [16] - Geopolitical risks are acknowledged as a wildcard for the nitrogen fertilizer industry, particularly concerning energy and fertilizer markets [19][20] Other Important Information - The company ended the quarter with total liquidity of $108 million, including $65 million in cash [13] - The union strike at the East Dubuque facility ended in late February, allowing operations to resume [22] Q&A Session Summary Question: Changes in customer purchasing dynamics - Management noted that purchases have become more ratable, with lower prepay orders but higher cash purchasing in season [27][30] Question: Alternative feedstock potential at Coffeyville - Management confirmed no technical hurdles exist for utilizing natural gas, with minimal capital investment required for infrastructure [31][32] Question: Breakdown of current reserves for investing activities - Reserves are being set aside for future projects, with a focus on reliability and redundancy rather than adding new units [35][36] Question: Fluctuation in freight revenue - Freight revenue decreased due to lower UAN shipping volumes, but is expected to grow in the second quarter as production increases [38] Question: Outlook for Southern Plains demand - Management anticipates continued strength in demand due to recent storms bringing moisture, which is beneficial for planting [39]

Financial Performance - CVR Partners reported net income of $13 million, or $1.19 per common unit, on net sales of $128 million for Q1 2024, a significant decrease from net income of $102 million, or $9.64 per common unit, on net sales of $226 million in Q1 2023[2]. - EBITDA for Q1 2024 was $40 million, down from $124 million in Q1 2023, reflecting a decline in operating performance[2][23]. - Net income for Q1 2024 was $12.58 million, a significant drop from $101.87 million in Q1 2023[38]. - EBITDA and Adjusted EBITDA decreased to $39.51 million in Q1 2024 from $124.30 million in Q1 2023[38]. - The company generated $42.4 million in net cash flow from operating activities in Q1 2024, down from $130.4 million in Q1 2023[27]. - Available cash for distribution decreased to $20.35 million in Q1 2024 from $110.29 million in Q1 2023[38]. Production and Sales - The company produced a total of 193,000 tons of ammonia in Q1 2024, compared to 224,000 tons in Q1 2023, primarily due to a 14-day planned outage at the Coffeyville facility[6]. - Consolidated sales volumes for ammonia increased to 70,000 tons in Q1 2024 from 42,000 tons in Q1 2023, while UAN sales volumes decreased to 284,000 tons from 359,000 tons[30]. - Gross ammonia production volume decreased to 193,000 tons in Q1 2024 from 224,000 tons in Q1 2023, with net ammonia available for sale slightly down to 60,000 tons from 62,000 tons[30]. Pricing and Market Conditions - Average realized gate prices for UAN decreased by 42% to $267 per ton, while ammonia prices fell by 41% to $528 per ton compared to the previous year[7]. - Ammonia pricing at gate fell to $528 per ton in Q1 2024 from $888 per ton in Q1 2023, and UAN pricing decreased to $267 per ton from $457 per ton[30]. Capital Expenditures and Financial Position - Total capital expenditures for Q1 2024 were $4.6 million, an increase from $3.5 million in Q1 2023, with maintenance expenditures at $4.3 million[28]. - Working capital increased to $102.9 million as of March 31, 2024, compared to $90.4 million at the end of 2023[26]. - Total assets decreased slightly to $972.2 million from $975.3 million at the end of 2023[26]. Future Outlook - The company continues to focus on generating free cash flow despite the challenges faced in the current quarter[5]. - The company expects ammonia utilization rates for Q2 2024 to range between 95% and 100%[34]. - Direct operating expenses for Q2 2024 are projected to be between $50 million and $55 million[34]. - Capital expenditures for Q2 2024 are estimated to be between $15 million and $20 million[34]. Distributions - CVR Partners declared a cash distribution of $1.92 per common unit for Q1 2024, to be paid on May 20, 2024[5][8]. Utilization Rates - Consolidated ammonia utilization rate decreased to 90% in Q1 2024 from 105% in Q1 2023[29].

Market Risk and Commodity Prices - The company reported a significant exposure to market risk due to potential changes in prices for fertilizer products, pet coke, and natural gas, with natural gas being the primary raw material for production [287]. - The company has commitments to purchase natural gas at spot market prices and through various contracts, indicating a strategic approach to manage raw material costs [287]. - Fertilizer product inventory value is subject to market risk from fluctuations in commodity prices, which can be volatile and influenced by grain prices and demand [288]. - The company emphasizes that there are no financial instruments currently in place to effectively reduce commodity price risk associated with firm commitments and forecasted sales [288]. - The company faces risks related to the cyclical and highly volatile nature of the nitrogen fertilizer market, which could impact financial performance [32]. - The company is exposed to significant competition in the nitrogen fertilizer market, which could affect pricing and market share [32]. Financial Performance - Net sales for the year ended December 31, 2023, were $681.477 million, a decrease of 18.4% compared to $835.584 million in 2022 [308]. - Operating income for 2023 was $201.408 million, down 37% from $319.912 million in 2022 [308]. - Net income for 2023 was $172.433 million, a decline of 39.9% compared to $286.801 million in 2022 [308]. - Total assets as of December 31, 2023, were $975.332 million, down from $1,100.402 million in 2022, representing a decrease of 11.4% [305]. - Total current assets decreased to $165.869 million in 2023 from $265.704 million in 2022, a decline of 37.5% [305]. - Total partners' capital decreased to $302.880 million in 2023 from $411.811 million in 2022, a reduction of 26.4% [305]. - Basic and diluted earnings per common unit for 2023 were $16.31, down from $27.07 in 2022, a decrease of 39.9% [308]. - Cash and cash equivalents decreased to $45.279 million in 2023 from $86.339 million in 2022, a decline of 47.7% [305]. - Net income for the year ended December 31, 2023, was $172,433,000, a decrease of 40% compared to $286,801,000 in 2022 [314]. - Net cash provided by operating activities decreased to $243,526,000 in 2023 from $301,464,000 in 2022, reflecting a decline of 19% [314]. - Capital expenditures for 2023 were $24,196,000, significantly lower than $44,668,000 in 2022, indicating a reduction of 46% [314]. Cash Distributions and Related Party Transactions - Cash distributions to common unitholders – Affiliates increased to $103,605,000 in 2023 from $75,193,000 in 2022, representing a rise of 38% [314]. - Cash distributions to common unitholders – Non-affiliates also rose to $177,759,000 in 2023 from $129,597,000 in 2022, an increase of 37% [314]. - The total quarterly distributions paid in 2023 amounted to $281,364,000, with $177,759,000 paid to public unitholders and $103,605,000 to CVR Energy [430]. - The Partnership declared a distribution of $1.68 per common unit for the fourth quarter of 2023, totaling approximately $17.8 million, payable on March 11, 2024 [433]. - For the year ended December 31, 2023, sales to related parties from CVR Energy subsidiary amounted to $4,000, while expenses from related parties totaled $21,336,000 [426]. - The Partnership's related party activity includes sales of feedstocks and services under the Coffeyville MSA, with total sales to related parties reaching $3,617,000 in 2023 [426]. Operational Risks and Stability - The company is reliant on third-party suppliers for essential raw materials, which poses a risk to operational stability [32]. - The company’s operations are geographically concentrated, making it vulnerable to regional economic downturns and seasonal variations [32]. - The company’s ability to generate distributable cash is contingent on market conditions and operational performance, which are subject to various risks [23]. - The company’s financial results may be adversely impacted by changes in environmental laws and regulations, as well as compliance costs [32]. Asset Management and Liabilities - Long-term debt remained relatively stable at $547.308 million in 2023 compared to $546.800 million in 2022 [305]. - The Partnership's cash and cash equivalents at the end of the period were $45,279,000, down from $86,339,000 at the end of 2022, a decrease of 48% [314]. - Total deferred revenue at December 31, 2023 was $49.1 million, with a current portion of $15.8 million and long-term deferred revenue of $33.3 million [400]. - The minimum required payments for unconditional purchase obligations total $57.4 million, with $3.7 million due in 2024 [416]. Joint Ventures and New Initiatives - The Partnership entered into a joint venture for carbon capture and sequestration activities, expected to generate Section 45Q Credits from January 6, 2023, until March 31, 2030 [321]. - The Partnership received a $2.2 million distribution from CVRP JV due to exceeding carbon oxide capture and sequestration milestones in 2023, to be recognized in Q1 2024 [371]. Accounting and Reporting - The Partnership maintained effective internal control over financial reporting as of December 31, 2023, according to the audit opinion [298]. - The Partnership is evaluating the impact of new accounting standards effective in 2024 and 2025 but does not expect a material impact on consolidated financial statements [358][359]. - The Partnership's revenue recognition is based on contracts with customers, with performance obligations satisfied upon delivery of products [344].

Financial Data and Key Metrics Changes - For Q4 2023, the company reported net sales of $142 million, net income of $10 million, and EBITDA of $38 million, with a distribution of $1.68 per common unit declared [6][10][14] - Full year 2023 results included net sales of $681 million, net income of $172 million, and EBITDA of $281 million, with distributions totaling $17.80 per common unit [12][14][28] Business Line Data and Key Metrics Changes - In Q4 2023, UAN production was 306,000 tons, and ammonia production was 205,000 gross tons, with sales volumes of approximately 320,000 tons of UAN and 98,000 tons of ammonia [13] - The average price for UAN was $241 per ton, and for ammonia, it was $461 per ton, reflecting a decline of approximately 47% and 52% respectively compared to the prior year [8][13] Market Data and Key Metrics Changes - Grain market conditions have softened, with USDA estimating a 4% decrease in corn planting to 91 million acres and a 5% increase in soybean planting to 88 million acres for 2024 [18] - Current grain prices are lower, with May corn at $4.30 per bushel and soybeans at nearly $11.90 per bushel, supporting attractive farmer economics for nitrogen fertilizer demand [19] Company Strategy and Development Direction - The company is considering a dual feed system at the Coffeyville facility to utilize both natural gas and pet coke, aiming for a decision in 2024 [24][33] - The focus remains on improving reliability and redundancy at production facilities, with capital reserved for targeted capacity increases [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong nitrogen fertilizer demand for the spring 2024 planting season, despite recent softening in grain market conditions [11][20] - Geopolitical risks and natural gas price fluctuations in Europe are noted as potential volatility factors for the nitrogen fertilizer industry [21][22] Other Important Information - The company achieved a 94% ammonia utilization rate for Q4 2023, with ongoing operations at the East Dubuque facility despite a union strike [25][27] - Capital spending for Q4 2023 was $11 million, with full year spending at $29 million, and estimates for 2024 maintenance capital spending between $32 million and $35 million [15] Q&A Session Summary Question: Timing and costs for dual fuel project at Coffeyville - Management aims to make a decision in 2024, with capital costs expected to be manageable and potentially funded from existing reserves [31][32] Question: Inventory levels in the channel - Inventory levels are lower than historical averages, with customers adopting a more ratable buying pattern due to high capital costs [38][40] Question: Ammonia utilization at Coffeyville - A catalyst change is being performed, which is expected to temporarily lower utilization rates but will return to full production thereafter [41]

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) CVR Partners experienced a significant decline in 2023 financial results due to lower fertilizer prices, yet maintained strong operational reliability and strengthened its capital structure [Fourth Quarter & Full-Year 2023 Financial Performance](index=1&type=section&id=Fourth%20Quarter%20%26%20Full-Year%202023%20Financial%20Performance) CVR Partners reported a significant year-over-year decline in financial performance for both the fourth quarter and full-year 2023. Net income, net sales, and EBITDA all decreased substantially compared to 2022, primarily driven by lower average realized prices for its fertilizer products Q4 2023 vs Q4 2022 Financial Results (in millions) | Metric | Q4 2023 | Q4 2022 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $142 | $212 | -33.0% | | Net Income | $10 | $95 | -89.5% | | Earnings per Unit | $0.94 | $9.02 | -89.6% | | EBITDA | $38 | $122 | -68.7% | Full-Year 2023 vs Full-Year 2022 Financial Results (in millions) | Metric | Full-Year 2023 | Full-Year 2022 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $681 | $836 | -18.6% | | Net Income | $172 | $287 | -40.1% | | Earnings per Unit | $16.31 | $27.07 | -39.7% | | EBITDA | $281 | $403 | -30.3% | [Operational Performance & Market Commentary](index=1&type=section&id=Operational%20Performance%20%26%20Market%20Commentary) Despite weaker pricing, the company achieved excellent operational reliability with a 100% combined ammonia utilization rate for the full year. Management observed strong fall ammonia demand and anticipates continued strength into the spring planting season, supported by favorable farmer economics - Achieved a combined ammonia production utilization rate of **100%** for the full-year 2023, indicating safe and reliable operations[4](index=4&type=chunk)[8](index=8&type=chunk) - The CEO noted that fall application ammonia demand was one of the strongest in recent years and expects strong nitrogen fertilizer demand for the upcoming spring planting season[4](index=4&type=chunk)[5](index=5&type=chunk) Year-over-Year Average Realized Gate Price Changes | Product | Q4 2023 vs Q4 2022 | FY 2023 vs FY 2022 | | :--- | :--- | :--- | | UAN | -47% | -36% | | Ammonia | -52% | -44% | [Distributions and Capital Structure](index=2&type=section&id=Distributions%20and%20Capital%20Structure) The Partnership declared a fourth-quarter 2023 cash distribution of $1.68 per common unit, bringing the cumulative total for 2023 to $17.80 per unit. Additionally, the company strengthened its liquidity by amending its ABL Credit Facility, increasing its capacity to $50 million and extending the maturity to 2028 - Declared a Q4 2023 cash distribution of **$1.68 per common unit**, payable on March 11, 2024. The cumulative cash distributions declared for 2023 totaled **$17.80 per common unit**[8](index=8&type=chunk)[10](index=10&type=chunk) - Amended the ABL Credit Facility to increase the aggregate principal amount by **$15.0 million** to a total of **$50.0 million** and extended the maturity date by four years to **September 26, 2028**[9](index=9&type=chunk) [Detailed Financial Statements](index=5&type=section&id=Detailed%20Financial%20Statements) The company's detailed financial statements for 2023 reflect a decline in net sales and income, alongside reduced capital expenditures and a strengthened liquidity position [Consolidated Statement of Operations](index=5&type=section&id=Consolidated%20Statement%20of%20Operations) For the full year 2023, net sales decreased to $681.5 million from $835.6 million in 2022. Despite lower cost of sales, operating income fell to $201.4 million from $319.9 million. Consequently, net income for 2023 was $172.4 million, or $16.31 per unit, compared to $286.8 million, or $27.07 per unit, in the prior year Full-Year Statement of Operations (in thousands) | Line Item | 2023 | 2022 | | :--- | :--- | :--- | | Net sales | $681,477 | $835,584 | | Cost of sales | $449,013 | $483,217 | | Operating income | $201,408 | $319,912 | | Net income | $172,433 | $286,801 | | Basic and diluted EPS | $16.31 | $27.07 | - Fertilizer sales constituted the vast majority of net sales, totaling **$621.2 million** for the full year 2023, down from **$789.5 million** in 2022[29](index=29&type=chunk) [Selected Balance Sheet & Cash Flow Data](index=6&type=section&id=Selected%20Balance%20Sheet%20%26%20Cash%20Flow%20Data) As of December 31, 2023, the company's balance sheet showed total assets of $975.3 million and total debt of $547.3 million. Cash and cash equivalents stood at $45.3 million, a decrease from $86.3 million at year-end 2022. For the full year 2023, net cash provided by operating activities was $243.5 million, while financing activities used $281.9 million, primarily for distributions Selected Balance Sheet Data (in thousands) | Account | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $45,279 | $86,339 | | Total assets | $975,332 | $1,100,402 | | Total debt | $547,308 | $546,800 | | Total partners' capital | $302,880 | $411,811 | Full-Year Selected Cash Flow Data (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Operating activities | $243,526 | $301,464 | | Investing activities | $(2,722) | $(44,623) | | Financing activities | $(281,864) | $(283,018) | [Capital Expenditures](index=6&type=section&id=Capital%20Expenditures) Total capital expenditures for the full year 2023 were $29.1 million, a significant decrease from $41.4 million in 2022. The reduction was driven by lower maintenance spending, which fell to $28.0 million in 2023 from $40.8 million in 2022. The next planned turnarounds are scheduled for 2025 and 2026 Full-Year Capital Expenditures (in thousands) | Type | 2023 | 2022 | | :--- | :--- | :--- | | Maintenance | $28,025 | $40,793 | | Growth | $1,056 | $653 | | **Total** | **$29,081** | **$41,446** | - The next planned major turnarounds are scheduled for **2025** at the Coffeyville Facility and **2026** at the East Dubuque Facility[25](index=25&type=chunk) [Operational Metrics and Market Indicators](index=6&type=section&id=Operational%20Metrics%20and%20Market%20Indicators) Operational metrics for 2023 show increased production volumes and improved utilization rates, despite a significant decline in average realized product prices and natural gas costs [Production and Sales Data](index=7&type=section&id=Production%20and%20Sales%20Data) For the full year 2023, gross ammonia production increased to 864,000 tons from 703,000 tons in 2022, and UAN production rose to 1,369,000 tons from 1,140,000 tons. Despite higher volumes, average realized prices fell sharply: ammonia dropped to $573/ton from $1,024/ton, and UAN fell to $309/ton from $486/ton. Natural gas feedstock costs also decreased significantly year-over-year Full-Year Production Volume (thousands of tons) | Product | 2023 | 2022 | | :--- | :--- | :--- | | Ammonia (gross produced) | 864 | 703 | | UAN | 1,369 | 1,140 | Full-Year Product Pricing and Feedstock Cost | Indicator | 2023 | 2022 | | :--- | :--- | :--- | | Ammonia Price ($/ton) | $573 | $1,024 | | UAN Price ($/ton) | $309 | $486 | | Natural Gas Cost ($/MMBtu) | $3.42 | $6.66 | [Key Operating & Market Indicators](index=6&type=section&id=Key%20Operating%20%26%20Market%20Indicators) Operational efficiency improved markedly in 2023, with the consolidated ammonia utilization rate reaching 100% for the full year, up from 81% in 2022. This reflects enhanced plant reliability. Market prices for key products saw a significant downturn, with Corn Belt UAN prices averaging $308/ton in 2023 compared to $580/ton in 2022, and NYMEX natural gas prices falling to an average of $2.67/MMBtu from $6.54/MMBtu Consolidated Ammonia Utilization Rate | Period | 2023 | 2022 | | :--- | :--- | :--- | | Q4 | 94% | 96% | | Full Year | 100% | 81% | Full-Year Key Market Indicators | Indicator | 2023 | 2022 | | :--- | :--- | :--- | | UAN — Corn belt ($/ton) | $308 | $580 | | Natural gas NYMEX ($/MMBtu) | $2.67 | $6.54 | [Forward-Looking Information & Other Disclosures](index=2&type=section&id=Forward-Looking%20Information%20%26%20Other%20Disclosures) The company provides Q1 2024 guidance, details its use of non-GAAP financial measures, and addresses shareholder information regarding distributions and tax packages [Q1 2024 Outlook](index=8&type=section&id=Q1%202024%20Outlook) For the first quarter of 2024, CVR Partners anticipates a consolidated ammonia utilization rate between 86% and 91%. Direct operating expenses are projected to be in the range of $52 million to $57 million, while total capital expenditures are expected to be between $9 million and $13 million Q1 2024 Guidance | Metric | Low | High | | :--- | :--- | :--- | | Consolidated Ammonia Utilization | 86% | 91% | | Direct Operating Expenses | $52 million | $57 million | | Total Capital Expenditures | $9 million | $13 million | [Non-GAAP Financial Measures & Reconciliations](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) The company utilizes non-GAAP metrics such as EBITDA and Available Cash for Distribution to assess performance. For the full year 2023, EBITDA was $281.1 million and Available Cash for Distribution was $188.2 million. These figures represent a decline from 2022 levels of $403.2 million and $259.7 million, respectively. The report provides a detailed reconciliation from GAAP Net Income to these non-GAAP measures - Management uses non-GAAP measures including **EBITDA**, **Adjusted EBITDA**, and **Available Cash for Distribution** to supplement GAAP financial information for performance evaluation[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) Reconciliation of Net Income to EBITDA (Full Year, in thousands) | Line Item | 2023 | 2022 | | :--- | :--- | :--- | | Net income | $172,433 | $286,801 | | Interest expense, net | $28,653 | $34,065 | | Income tax expense | $289 | $160 | | Depreciation and amortization | $79,720 | $82,137 | | **EBITDA** | **$281,095** | **$403,163** | [Shareholder Information](index=2&type=section&id=Shareholder%20Information) The company announced its Q4 and full-year 2023 earnings call for February 21, 2024. A qualified notice was issued, stating that 100% of distributions to foreign investors are subject to U.S. federal income tax withholding. Additionally, the release of 2023 K-1 tax packages may be delayed pending the outcome of proposed H.R. 7024 tax legislation - The company hosted its Q4 and full-year 2023 earnings conference call on **February 21, 2024**[12](index=12&type=chunk) - A qualified notice was provided to nominees and brokers, indicating that distributions to foreign investors are subject to federal income tax withholding at the **highest effective rate**[14](index=14&type=chunk) - The availability of 2023 K-1 tax packages is contingent on the U.S. Congress's actions regarding the proposed **H.R. 7024 legislation**, which could retroactively lower the Partnership's 2023 taxable income[15](index=15&type=chunk)

Financial Data and Key Metrics Changes - For Q3 2023, the company reported net sales of $131 million, net income of $1 million, and EBITDA of $32 million, with a distribution of $1.55 per common unit declared [32][34][36] - Compared to Q3 2022, EBITDA increased primarily due to higher production and sales volumes, and lower operating expenses, despite ammonia prices falling 56% and UAN prices falling 48% [33][34] Business Line Data and Key Metrics Changes - UAN production for Q3 2023 was 358,000 tons, with sales of approximately 387,000 tons at an average price of $223 per ton, and 62,000 tons of ammonia sold at an average price of $365 per ton [5][34] - Direct operating expenses for Q3 2023 were $58 million, a decrease of approximately $38 million compared to Q3 2022, driven by lower turnaround and maintenance expenses [7] Market Data and Key Metrics Changes - The nitrogen fertilizer market saw a price reset in July, with prices firming due to strong demand and reduced supply from outages [13][20] - Current USDA estimates indicate 95 million acres of corn were planted in spring 2023, a 7% increase from 2022, supporting favorable conditions for nitrogen fertilizer demand [40] Company Strategy and Development Direction - The company is focusing on reliability and performance, with plans for decarbonization efforts including the installation of a nitrous oxide abatement unit expected to be completed by 2025 [22][24] - The company is exploring CO2 sequestration opportunities and evaluating brownfield development projects for potential capacity increases [23][44] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about nitrogen fertilizer demand for 2024, citing steady grain prices and favorable farmer economics [41][39] - Geopolitical risks and natural gas price fluctuations in Europe are noted as potential challenges for the nitrogen fertilizer industry [21] Other Important Information - The company amended its ABL credit facility to increase maximum availability from $35 million to $50 million, extending maturity to 2028 [35] - Total liquidity at the end of the quarter was $137 million, including $89 million in cash [35] Q&A Session Summary Question: Impact of the strike at East Dubuque on utilization - Management indicated that the strike would not disrupt operations or utilization, as they are fully manned and expect to run continuously [49] Question: Customer purchasing patterns - Management noted that customers are purchasing more ratably and not carrying inventory for long periods, which aligns with their production schedule [50][51] Question: Fourth quarter production and sales - Management refrained from providing specific sales figures but indicated a significant increase in ammonia and UAN sales since July [52] Question: Maintenance CapEx reserves - The buildup in reserves is due to ongoing reliability and expansion projects, with future reserves depending on project outcomes [53][60] Question: Russian imports of UAN - Management stated that the flow of Russian UAN has normalized since mid-2022, with no significant changes impacting the market [61]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number: 001-35120 CVR PARTNERS, LP (Exact name of registrant as specified in its charter) (State or other jurisdict ...