CVR Partners(UAN) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights This section provides an overview of CVR Partners' strong Q2 2025 financial and operational performance, along with its cash distribution declaration Second Quarter 2025 Financial Highlights CVR Partners reported substantial year-over-year growth in Q2 2025 net income, EPS, EBITDA, and net sales Q2 2025 Key Financial Highlights (YoY) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Net Income | $39 million | $26 million | +50% | | EPS | $3.67/unit | $2.48/unit | +47.98% | | EBITDA | $67 million | $54 million | +24.07% | | Net Sales | $169 million | $133 million | +27.07% | Operational Performance & Strategic Focus CVR Partners achieved solid Q2 2025 operational performance, benefiting from tight nitrogen fertilizer markets and strong pricing - Combined ammonia production rate was 91% for Q2 2025, indicating solid operational performance[3] - Nitrogen fertilizer supply and demand balances remain tight, contributing to strong pricing through the planting season[3] Q2 2025 Production Volumes (YoY) | Product | Q2 2025 (thousand tons) | Q2 2024 (thousand tons) | YoY Change | | :------ | :---------------------- | :---------------------- | :--------- | | Ammonia (combined) | 197 | 221 | -10.9% | | Ammonia (net for sale) | 54 | 69 | -21.6% | | UAN | 321 | 337 | -4.8% | Q2 2025 Average Realized Gate Prices (YoY) | Product | Q2 2025 ($/ton) | Q2 2024 ($/ton) | YoY Change | | :------ | :-------------- | :-------------- | :--------- | | Ammonia | $593 | $520 | +14% | | UAN | $317 | $268 | +18% | - Strategic focus remains on safe, reliable operations and generating free cash flow amidst favorable market conditions[4] Cash Distribution Declaration CVR Partners declared a Q2 2025 cash distribution of $3.89 per common unit, with variable distributions based on operational and market factors - A cash distribution of $3.89 per common unit was declared for Q2 2025[4][6][9] - Distributions are variable and depend on operating performance, product prices, maintenance capital expenditures, and cash reserves[7] Company Information This section provides an overview of CVR Partners, its business, investor communication practices, and forward-looking statement disclaimers About CVR Partners, LP CVR Partners, a Delaware limited partnership, produces and distributes nitrogen fertilizers like UAN and ammonia from its two manufacturing facilities - CVR Partners is a Delaware limited partnership focused on producing, marketing, and distributing nitrogen fertilizer products[13] - Primary products are urea ammonium nitrate (UAN) and ammonia, used by farmers to improve crop yield and quality[13] - Operates two nitrogen fertilizer manufacturing facilities: Coffeyville, Kansas (1,300 ton/day ammonia, 3,100 ton/day UAN, 89 million scf/day gasifier) and East Dubuque, Illinois (1,075 ton/day ammonia, 950 ton/day UAN)[13] Investor Communications CVR Partners disseminates material information through SEC filings, press releases, webcasts, and its Investor Relations website - Material information is announced via SEC filings, press releases, public conference calls, webcasts, and the Investor Relations page of the company's website[14] - Information posted on the website could be deemed material, and investors are encouraged to review it[14] Forward-Looking Statements This release contains forward-looking statements subject to various risks and uncertainties, with no obligation for public updates unless legally required - Statements about future results, performance, prospects, opportunities, plans, actions, and events are considered forward-looking statements[12] - These statements involve known and unknown risks and uncertainties, many beyond the company's control, including economic effects of pandemics, planting season impacts, operating hazards, regulatory compliance costs, and geopolitical instability[12] - Investors are cautioned not to place undue reliance on forward-looking statements, and the company disclaims any obligation to update them publicly, except as legally required[12] Financial Performance This section details CVR Partners' financial results, including statements of operations, balance sheet, cash flow, and capital expenditures for the reported periods Statement of Operations CVR Partners reported substantial year-over-year increases in net sales, operating income, net income, and EPS for Q2 and 6M 2025 Statement of Operations Data (Q2 and 6M Ended June 30) | Metric (in thousands, except per unit data) | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :---------------------------------------- | :------ | :------ | :------ | :------ | | Net sales | $168,559 | $132,901 | $311,425 | $260,565 | | Operating income | $46,318 | $33,564 | $80,908 | $53,623 | | Net income | $38,768 | $26,219 | $65,856 | $38,798 | | Basic and diluted earnings per common unit | $3.67 | $2.48 | $6.23 | $3.67 | | EBITDA | $67,209 | $53,769 | $120,065 | $93,279 | | Available Cash for Distribution | $41,102 | $20,113 | $65,027 | $40,425 | Components of Net Sales Fertilizer product sales were the primary driver of net sales, showing strong growth in Q2 and 6M 2025 year-over-year Components of Net Sales (Q2 and 6M Ended June 30) | Component (in thousands) | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :----------------------- | :------ | :------ | :------ | :------ | | Fertilizer product sales | $153,852 | $119,400 | $282,465 | $237,215 | | Other | $14,707 | $13,501 | $28,960 | $23,350 | | Total net sales | $168,559 | $132,901 | $311,425 | $260,565 | Selected Balance Sheet Data CVR Partners' balance sheet as of June 30, 2025, shows increased cash and working capital, with reduced total liabilities and higher partners' capital Selected Balance Sheet Data (as of June 30, 2025 vs. Dec 31, 2024) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $114,400 | $90,857 | | Working capital | $171,924 | $122,192 | | Total assets | $997,996 | $1,018,724 | | Total debt and finance lease obligation | $569,968 | $568,851 | | Total liabilities | $681,455 | $725,654 | | Total partners' capital | $316,541 | $293,070 | Selected Cash Flow Data Operating cash flow significantly increased in Q2 and 6M 2025, while investing and financing activities resulted in net cash outflows Selected Cash Flow Data (Q2 and 6M Ended June 30) | Activity (in thousands) | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :---------------------- | :------ | :------ | :------ | :------ | | Operating activities | $24,102 | $8,608 | $79,493 | $51,025 | | Investing activities | $(4,883) | $(5,413) | $(10,690) | $(10,730) | | Financing activities | $(26,594) | $(20,293) | $(45,260) | $(38,050) | | Net (decrease) increase in cash | $(7,375) | $(17,098) | $23,543 | $2,245 | Capital Expenditures Total capital expenditures, particularly growth-related, significantly increased in Q2 and 6M 2025 compared to the prior year Capital Expenditures (Q2 and 6M Ended June 30) | Type (in thousands) | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :------------------ | :------ | :------ | :------ | :------ | | Maintenance | $6,560 | $4,831 | $10,253 | $9,103 | | Growth | $4,187 | $64 | $6,426 | $403 | | Total | $10,747 | $4,895 | $16,679 | $9,506 | Operational Data & Market Trends This section presents key operational metrics, sales and production volumes, feedstock costs, and relevant market indicators for CVR Partners Key Operating Data Consolidated ammonia utilization rate decreased to 91% in Q2 2025, while the six-month rate remained stable at 96% Ammonia Utilization Rate (Q2 and 6M Ended June 30) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :----- | :------ | :------ | :------ | :------ | | Ammonia utilization rate | 91% | 102% | 96% | 96% | Sales and Production Data Q2 and 6M 2025 saw increased sales volumes and higher gate prices for ammonia and UAN, despite decreased ammonia production Consolidated Sales Volumes (Q2 and 6M Ended June 30) | Product (thousand tons) | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :---------------------- | :------ | :------ | :------ | :------ | | Ammonia | 57 | 43 | 117 | 113 | | UAN | 345 | 330 | 681 | 614 | Consolidated Product Pricing at Gate (Q2 and 6M Ended June 30) | Product (dollars per ton) | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :------------------------ | :------ | :------ | :------ | :------ | | Ammonia | $593 | $520 | $573 | $525 | | UAN | $317 | $268 | $287 | $268 | Consolidated Production Volume (Q2 and 6M Ended June 30) | Product (thousand tons) | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :---------------------- | :------ | :------ | :------ | :------ | | Ammonia (gross produced) | 197 | 221 | 413 | 414 | | Ammonia (net available for sale) | 54 | 69 | 117 | 130 | | UAN | 321 | 337 | 668 | 643 | Feedstock Usage and Cost (Q2 and 6M Ended June 30) | Feedstock Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :---------------- | :------ | :------ | :------ | :------ | | Petroleum coke used (thousand tons) | 130 | 133 | 261 | 261 | | Petroleum coke cost ($/ton) | $56.68 | $62.96 | $49.54 | $69.21 | | Natural gas used (thousand MMBtus) | 1,897 | 2,213 | 4,057 | 4,361 | | Natural gas cost ($/MMBtu) | $3.29 | $1.93 | $4.00 | $2.51 | Key Market Indicators Market prices for ammonia, UAN, and NYMEX natural gas increased in Q2 and 6M 2025, indicating favorable nitrogen fertilizer market conditions Key Market Indicators (Q2 and 6M Ended June 30) | Market Indicator (dollars per ton/MMBtu) | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------------------- | :------ | :------ | :------ | :------ | | Ammonia — Southern plains | $576 | $523 | $569 | $545 | | Ammonia — Corn belt | $630 | $565 | $624 | $581 | | UAN — Corn belt | $403 | $288 | $364 | $290 | | Natural gas NYMEX | $3.51 | $2.32 | $3.69 | $2.21 | Outlook & Non-GAAP Measures This section provides CVR Partners' Q3 2025 outlook and defines and reconciles its non-GAAP financial measures Q3 2025 Outlook CVR Partners projects Q3 2025 ammonia utilization between 93-98%, direct operating expenses of $60-65 million, and total capital expenditures of $20-25 million Q3 2025 Outlook | Metric | Low | High | | :-------------------------- | :-- | :--- | | Ammonia utilization rate | 93% | 98% | | Direct operating expenses (in millions) | $60 | $65 | | Total capital expenditures (in millions) | $20 | $25 | Non-GAAP Measures Definitions CVR Partners defines non-GAAP measures like EBITDA, Adjusted EBITDA, and Available Cash for Distribution to assess performance and liquidity - EBITDA is defined as Net income (loss) before interest expense, net, income tax expense (benefit), and depreciation and amortization expense[17] - Adjusted EBITDA is EBITDA adjusted for significant noncash items or items not attributable to ongoing operations[17] - Available Cash for Distribution is EBITDA excluding noncash items, less reserves for maintenance capital expenditures, debt service, other contractual obligations, and future operating or capital needs, as deemed necessary by the Board[18] Non-GAAP Reconciliations This section reconciles net income to EBITDA, Adjusted EBITDA, and Available Cash for Distribution, detailing adjustments for non-GAAP metric derivation Reconciliation of Net Income to EBITDA, Adjusted EBITDA, and Available Cash for Distribution (Q2 and 6M Ended June 30) | Metric (in thousands) | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------- | :------ | :------ | :------ | :------ | | Net income | $38,768 | $26,219 | $65,856 | $38,798 | | Interest expense, net | 7,580 | 7,510 | 15,307 | 15,175 | | Income tax benefit | — | — | — | (25) | | Depreciation and amortization | 20,861 | 20,040 | 38,902 | 39,331 | | EBITDA and Adjusted EBITDA | 67,209 | 53,769 | 120,065 | 93,279 | | Accrued interest expense (excluding capitalized interest) | (9,064) | (8,485) | (18,023) | (16,970) | | Future operating needs | — | — | (8,000) | — | | Capital expenditures | (14,015) | (21,106) | (25,608) | (29,653) | | Turnaround expenditures, net | (2,308) | (3,235) | (5,130) | (6,593) | | Equity method investment | (720) | (830) | 1,723 | 362 | | Available cash for distribution | $41,102 | $20,113 | $65,027 | $40,425 | Other Information This section includes details on the Q2 2025 earnings call, a qualified notice for distributions, and company contact information Second Quarter 2025 Earnings Conference Call CVR Partners will host its Q2 2025 earnings conference call on July 31, 2025, with webcast and replay options available - The Q2 2025 Earnings Conference Call is scheduled for Thursday, July 31, at 11 a.m. Eastern[8] - The call will be webcast live on the Investor Relations section of CVR Partners' website (www.CVRPartners.com) and accessible via dial-in (877) 407-8029[10] - A webcast archive and call replay will be available for 14 days[10] Qualified Notice This notice confirms 100% of CVR Partners' foreign investor distributions are U.S. effectively connected income, subject to federal tax withholding - 100% of CVR Partners' distributions to foreign investors are attributable to income effectively connected with a United States trade or business[11] - Distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate[11] Contact Information Contact details for Investor Relations and Media Relations are provided for inquiries regarding CVR Partners - Investor Relations contact: Richard Roberts, (281) 207-3205, InvestorRelations@CVRPartners.com[15] - Media Relations contact: Brandee Stephens, (281) 207-3516, MediaRelations@CVRPartners.com[15]