CVR Partners L.P.

Company Overview

Business Model: CVR Partners, LP is a Delaware limited partnership that produces and distributes nitrogen fertilizer products, primarily ammonia and urea ammonium nitrate (UAN), which are utilized by farmers to enhance crop yield and quality, particularly for corn and wheat. The Partnership operates two manufacturing facilities: the Coffeyville Facility in Kansas and the East Dubuque Facility in Illinois. The Coffeyville Facility uniquely employs a pet coke gasification process to produce hydrogen for nitrogen fertilizer manufacturing, while the East Dubuque Facility uses natural gas. All products are sold on a wholesale basis within the United States. For the year ended December 31, 2025, UAN and ammonia, including freight, constituted approximately 67% and 24%, respectively, of total net sales.

Market Position: CVR Partners operates the only nitrogen fertilizer facility in North America that utilizes petroleum coke in a gasification process to produce hydrogen. The United States is the world’s largest exporter of coarse grains, accounting for 35% of world exports and 28% of world production for the fiscal year ended December 31, 2025. The U.S. is also the world’s third-largest consumer and importer of nitrogen fertilizer, representing 10% of total global nitrogen fertilizer consumption in 2025, according to Fertecon. North America benefits from being a low-cost region for nitrogen fertilizer production due to significant increases in U.S. oil and natural gas reserves over the last five years. The Partnership benefits from geographic proximity to agricultural regions, with the East Dubuque Facility shipping substantially all of its products within 100 miles. The Partnership anticipates long-term benefits from increasing global population, decreasing arable land per capita, evolving protein-based diets in developing countries, and sustained use of corn and soybeans for domestic ethanol and renewable fuels, which position it favorably on the global cost curve.

Recent Strategic Developments: In 2025, CVR Partners advanced several projects aimed at improving water and electrical reliability, expanding diesel exhaust fluid production, and increasing loadout capabilities. In December 2025, the Coffeyville Facility commenced operation of its second nitrous oxide (N2O) abatement system on its remaining nitric acid plant, ensuring all four of the Partnership's nitric acid plants are now equipped with N2O abatement units. The Partnership is evaluating initiatives at the Coffeyville Facility to enable natural gas as an alternative feedstock to pet coke and to increase nameplate ammonia production, which, if completed, would establish it as the only nitrogen fertilizer facility in the United States with dual feedstock flexibility. These efforts, combined with carbon oxide sequestration activities, reduced the Partnership's CO2e footprint by over 1.3 million metric tons in 2024. The Coffeyville Facility is also uniquely positioned to produce 'blue' hydrogen and ammonia. In January 2023, CVR Partners entered into agreements with CapturePoint LLC and other unaffiliated third-party investors to monetize Section 45Q tax credits from carbon oxide capture and sequestration activities, expected to continue until March 31, 2030.

Geographic Footprint: CVR Partners operates two primary manufacturing facilities: one in Coffeyville, Kansas, and another in East Dubuque, Illinois. Its products are sold on a wholesale basis throughout the United States, with agricultural sales concentrated in the Great Plains and Midwest states. The East Dubuque Facility's strategic location allows it to ship substantially all of its products within 100 miles. The Partnership maintains executive and marketing offices in Sugar Land, Texas, and Kansas City, Kansas, respectively. As of December 31, 2025, all 320 of CVR Partners' employees are located in the United States.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: 27.0%
• Operating Margin: 21.2%
• Net Margin: 16.3%

Investment in Growth:

• Capital Expenditures: $56,923 thousand
• Strategic Investments: In 2025, the Partnership progressed projects to improve water and electrical reliability, expand diesel exhaust fluid production, and increase loadout capabilities. Initial stages for dual feedstock flexibility and increased ammonia production at the Coffeyville Facility have been approved, pending detailed engineering and final cost estimates.

Business Segment Analysis

Nitrogen Fertilizer

Financial Performance:

• Revenue: $606,038 thousand (+15.4% YoY)
• Operating Margin: 21.2%
• Key Growth Drivers: The increase in revenue was primarily driven by favorable UAN and ammonia pricing, which contributed $104.8 million, partially offset by reduced sales volumes that decreased revenues by $29.3 million. Improved market conditions, tight inventory levels, increased demand from higher corn planting acreage and increased soybean yields, and domestic and international production outages contributed to higher sales prices. Lower pet coke feedstock costs also positively impacted profitability, despite higher natural gas and ammonia feedstock costs.

Product Portfolio:

• Major product lines include ammonia and urea ammonium nitrate (UAN).
• UAN and ammonia accounted for approximately 67% and 24%, respectively, of total net sales for the year ended December 31, 2025. Urea products also contributed $37,384 thousand in revenue in 2025.

Market Dynamics:

• Global fertilizer demand is primarily driven by grain demand and prices, influenced by population growth, dietary changes, and increased consumption of biofuels. Global fertilizer use is projected to increase by 5% from 2022 through 2026.
• The U.S. is the world's largest exporter of coarse grains and the third-largest consumer and importer of nitrogen fertilizer.
• In spring 2025, U.S. farmers planted 8.7% more corn acres and 6.9% less soybean acres compared to 2024, with total combined corn and soybean planted acres at 180.0 million.
• Corn used in ethanol production historically consumes 36% of the annual U.S. corn crop, linking corn demand to ethanol demand. Proposed EPA renewable volume requirements for 2026 and 2027 are expected to support grain demand.
• Natural gas price volatility in Europe is expected to continue through at least 2026, while pet coke prices are projected to fall into 2026 due to declining oil prices.

Capital Allocation Strategy

Shareholder Returns:

• Dividend Payments: $125,990 thousand in 2025.
• Future Capital Return Commitments: The Board's current policy is to distribute all Available Cash for Distribution quarterly, subject to its discretion and reserves for maintenance capital expenditures, turnarounds, debt service, and future operating or capital needs. A cash distribution of $0.37 per common unit for the fourth quarter of 2025 was declared on February 18, 2026, payable in March 2026.

Balance Sheet Position:

• Cash and Equivalents: $69,243 thousand as of December 31, 2025.
• Total Debt: $571,423 thousand as of December 31, 2025, comprising $550,000 thousand in 6.125% Senior Secured Notes due June 2028, and $21,423 thousand in finance lease obligations.
• Net Cash Position: -$502,180 thousand.
• Debt Maturity Profile: The 6.125% Senior Secured Notes mature in June 2028, with interest payable semi-annually. The ABL Credit Facility matures on September 26, 2028, with no outstanding borrowings as of December 31, 2025, and $47,931 thousand available capacity. Finance lease obligations have payments due through 2030 and thereafter.

Cash Flow Generation:

• Operating Cash Flow: $149,638 thousand in 2025.

Operational Excellence

Production & Service Model: CVR Partners operates two nitrogen fertilizer manufacturing facilities, the Coffeyville Facility and the East Dubuque Facility, which produce ammonia and upgrade it into UAN. The Coffeyville Facility utilizes a pet coke gasification process, a unique technology in North America, while the East Dubuque Facility uses natural gas. Products are sold on a wholesale basis. The business experiences seasonal fluctuations, with higher net sales typically in the first half of the calendar year (planting season) and lower sales in the second half (fill season).

Supply Chain Architecture: Key Suppliers & Partners:

• Petroleum Coke: Approximately 36% of pet coke requirements in 2025 were supplied by CVR Energy’s adjacent Coffeyville refinery under a long-term agreement. The remainder is sourced through third-party contracts, with 280,000 tons secured through December 2026.
• Natural Gas: Primarily purchased from third parties on a spot basis, with occasional fixed-price forward purchase contracts. Pipeline transportation agreements for natural gas expire in October 2026 and April 2028.
• Oxygen/Nitrogen: A third-party air separation plant at the Coffeyville Facility under a contract through 2039.
• Electricity: A third-party electric service provider at the Coffeyville Facility under a contract through June 2029.

Facility Network:

• Manufacturing:
  • Coffeyville Facility, Kansas: Features a gasifier complex with 89 million standard cubic feet per day of hydrogen capacity, a 1,300 ton per day ammonia unit, and a 3,100 ton per day UAN unit.
  • East Dubuque Facility, Illinois: Includes a 1,075 ton per day ammonia unit and a 950 ton per day UAN unit, with flexibility to vary product mix.
• Distribution: Products are distributed via railcars (primarily Union Pacific or Burlington Northern Santa Fe railroads), trucks for direct customer shipments, and barges, utilizing direct access to a Mississippi River barge dock. The East Dubuque Facility ships substantially all products within 100 miles. A UAN terminal is leased in Phillipsburg, Kansas, from an affiliated CVR Energy subsidiary.

Operational Metrics:

• Ammonia utilization rate: 88% in 2025, down from 96% in 2024. The decrease in 2025 was primarily due to the Coffeyville Turnaround, subsequent startup issues at the third-party air separation plant, control systems upgrades at the East Dubuque Facility, and other minor unplanned outages.
• Ammonia (gross produced): 761 thousand tons in 2025 (836 thousand tons in 2024).
• UAN (produced): 1,174 thousand tons in 2025 (1,273 thousand tons in 2024).
• Petroleum coke used in production: 459 thousand tons in 2025 (517 thousand tons in 2024).
• Natural gas used in production: 8,234 thousand MMBtu in 2025 (8,667 thousand MMBtu in 2024).
• Turnaround expenses: $16.7 million in 2025 ($0.5 million in 2024). The next scheduled turnaround is at the East Dubuque Facility in August 2026, with an estimated cost of $30.0 million.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Utilizes trucks for direct shipment to customers, with freight typically arranged by the customer for shipping point sales.
• Channel Partners: Primary customers for UAN are retailers and distributors. Ammonia products are sold to both agricultural and industrial sectors.
• Products are distributed via railcars (Union Pacific or Burlington Northern Santa Fe railroads), trucks, and barges, leveraging direct access to a Mississippi River barge dock. For railcar deliveries, products are commonly sold on a destination point basis, with freight arranged by the Partnership.

Customer Portfolio: Enterprise Customers:

• The Partnership sells products on a wholesale basis under contracts or purchase orders, typically with fixed pricing and terms of less than one year.
• Customer Concentration: In 2025, two customers accounted for approximately 15% and 13% of net sales, respectively. In 2024, one customer represented approximately 14% of net sales.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The nitrogen fertilizer market is global, characterized by intense price competition driven by raw material and transportation costs, currency fluctuations, trade barriers, and regulatory policies. Global fertilizer demand is projected to increase by 5% from 2022 through 2026, fueled by population growth, dietary shifts, and biofuel consumption. North America is a low-cost region for nitrogen fertilizer production. The market for natural gas is volatile, and fluctuations in its price can impact competitive positioning. The business is geographically concentrated and subject to regional economic downturns and seasonal variations.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• CF Industries Holdings, Inc. (leading U.S. nitrogen fertilizer seller)
• Nutrien Ltd.
• Koch Fertilizer Company, LLC
• LSB Industries, Inc.
• Foreign nitrogen fertilizer producers, some of whom may be government-subsidized.

Competitive Response Strategy: CVR Partners focuses on managing manufacturing and distribution to effectively serve customers during critical application periods. The Partnership continuously evaluates opportunities to enhance realized pricing and reduce variable production costs. Strategic initiatives include developing dual feedstock flexibility at the Coffeyville Facility to optimize feedstock mix based on prevailing prices and ongoing carbon footprint reduction efforts.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics: The business is exposed to the cyclical and highly volatile nature of nitrogen fertilizer and feedstock prices, including natural gas price volatility. Intense competition from domestic and foreign producers, dynamic pricing environments, and potential changes in government fertilizer pricing policies pose risks. Geographic concentration of operations and customers makes the business susceptible to regional economic downturns and seasonal variations. Declines in U.S. agricultural production or limitations on nitrogen fertilizer use could adversely affect sales. Changes in U.S. trade policy, including tariffs and sanctions, and broader instability in global capital, credit, and commodity markets, could negatively impact operations. Technology Disruption: Developments in crop technology could reduce demand for chemical fertilizers. Reliance on licensed third-party technology means termination or infringement claims could adversely affect operations if alternative licenses are unavailable or uneconomical. Customer Concentration: The loss of significant customers or a substantial reduction in their purchase volumes could materially impact financial results, given that two top customers represented 15% and 13% of net sales in 2025.

Operational & Execution Risks

Supply Chain Vulnerabilities: Interruptions or changes in the supply of pet coke and natural gas feedstocks, or failures by key third-party suppliers (e.g., air separation plant, electric service provider), could force operational shutdowns. Reliance on third-party transportation services (railroad, trucking, barge) exposes the Partnership to risks from hazards, work stoppages, and regulatory changes. Facility Network Risks: Operations face significant risks from physical damage hazards, environmental liability exposure, and unplanned facility shutdowns due to mechanical breakdowns, natural disasters, or labor issues, which may not be fully insured. Accidents involving ammonia or other products could lead to severe damage, injury, and significant liabilities. The Partnership could incur substantial costs for environmental contamination cleanup. Inability to obtain or renew necessary permits and approvals could inhibit operations. Acts of terror, sabotage, armed conflict, or trade wars, such as the Russia-Ukraine war and Middle East conflicts, pose geopolitical risks to global markets and the Partnership's business. Labor disputes, such as the East Dubuque Facility strike in late 2023 to early 2024, and skilled labor shortages could disrupt business and increase costs.

Financial & Regulatory Risks

Market & Financial Risks: High indebtedness levels could limit access to additional financing, reduce cash available for distributions, and restrict operational flexibility due to debt covenants. Inability to generate sufficient cash flow to service debt obligations could lead to liquidity problems. Increasing interest rates on variable-rate debt could raise debt service costs. Inflation (2.7% in 2025) could negatively affect profitability due to higher wages, operating costs, and financing costs, which may not be fully passed on to customers. Regulatory & Compliance Risks: Extensive and evolving federal, state, and local environmental laws and regulations (e.g., CAA, CWA, CERCLA, EPCRA, RCRA, PFAS framework) could result in increased operating costs, capital expenditures, fines, or permit revocations. Changes in governmental policies related to agriculture and biofuels could impact demand. Compliance with complex and evolving data protection laws could increase costs and lead to legal actions. Material litigation, including the CRNF Ammonia Release and Kansas Environmental Claims lawsuits, could result in significant liabilities, though the Partnership believes current matters would not materially impact its financial position.

Geopolitical & External Risks

Geopolitical Exposure: Acts of terror, sabotage, threats of war, armed conflict, or trade wars, including the ongoing Russia-Ukraine war and Middle East conflicts, pose significant geopolitical risks that could disrupt global markets, trade, and feedstock supply. Changes in U.S. global trade policy and retaliatory measures could increase costs or hinder market access.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas: CVR Partners focuses on unique and efficient production technologies. The Coffeyville Facility utilizes a pet coke gasification process, a distinct technology in North America for hydrogen production. Both the Coffeyville and East Dubuque Facilities have implemented nitrous oxide (N2O) abatement systems, with the Coffeyville Facility completing its second N2O abatement system in December 2025. The Coffeyville Facility also sequesters carbon dioxide not used for urea production. The Partnership is exploring the potential for the Coffeyville Facility to utilize natural gas as an alternative feedstock to pet coke and to increase ammonia production, aiming for dual feedstock flexibility. These efforts position the Coffeyville Facility to produce 'blue' hydrogen and ammonia.

Intellectual Property Portfolio: The Partnership licenses third-party patent, trade secret, and other intellectual property rights essential to its operations.

Technology Partnerships: In January 2023, CVR Partners entered into strategic agreements with CapturePoint LLC, an unaffiliated third-party, and other investors to monetize Section 45Q tax credits through a joint venture, CVRP JV, related to carbon oxide capture and sequestration activities. This collaboration is expected to continue until March 31, 2030.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: David L. Lamp resigned as Executive Chairman effective December 31, 2025. Mark A. Pytosh, the current President and Chief Executive Officer of CVR Partners, was appointed President and Chief Executive Officer of CVR Energy, Inc. effective January 1, 2026, indicating a dual leadership role. The Partnership invests in talent management through recruitment efforts, including veteran and apprenticeship programs, and provides in-person supervisor training focused on leadership development and succession planning.

Board Composition: As of February 18, 2026, the Board of Directors of CVR GP, LLC consists of six directors. Three directors (Kevan Vick, Brian A. Goebel, and Alexander Nickolatos) are independent, non-employee directors. Robert E. Flint serves as a non-management director employed by Icahn Enterprises L.P. Mark A. Pytosh and David L. Lamp are executive officers of the General Partner. The Board oversees fundamental financial and business strategies, major corporate actions, and risk management. Key committees include the Audit Committee (Chair: Brian A. Goebel), Compensation Committee (Chair: Robert E. Flint), Environmental Health & Safety Committee (Chair: Kevan Vick), and a Special Committee. As a publicly traded partnership, CVR Partners utilizes NYSE exemptions, meaning a majority of its directors are not required to be independent, and it does not maintain a nominating/corporate governance committee.

Human Capital Strategy

Workforce Composition: As of December 31, 2025, CVR Partners and its subsidiaries employed 320 individuals, all located in the United States. Approximately 28% (88 employees) are covered by collective bargaining agreements. The workforce includes a dedicated cybersecurity team with an average of nearly 20 years of experience and relevant certifications.

Talent Management: Acquisition & Retention: The Partnership prioritizes attracting and retaining highly skilled employees through competitive wages and benefits, a market-based, pay-for-performance compensation philosophy, and a performance bonus program tied to safety, operational reliability, and financial measures. Long-term incentive awards, vesting over three years, align employee compensation with unitholder interests and promote retention. Recruitment efforts focus on diverse candidate pools, including veterans and interns from diverse colleges. Diversity & Development: CVR Partners is an equal opportunity employer, committed to a work environment free from harassment and discrimination. It supports diversity of thought and perspective through recruitment efforts and affinity groups. Employee development includes in-person supervisor training led by executives, covering leadership strategies, coaching, performance management, and succession planning, supplemented by quarterly refresher sessions. Culture & Engagement: The Partnership's culture is guided by core Values: Safety, Environment, Integrity, Corporate Citizenship, and Continuous Improvement. Employees receive paid time off, holidays, a 401(k) Company match, life insurance, health savings, dependent care flexible spending accounts, and an employee assistance program. Educational support includes tuition reimbursement and dependent scholarships. A volunteerism policy encourages community engagement.

Environmental & Social Impact

Environmental Commitments: Climate Strategy: CVR Partners has actively pursued greenhouse gas footprint reduction. Since 2020, it has generated carbon offset credits from voluntary nitrous oxide (N2O) abatement at its Coffeyville Facility, with similar efforts at the East Dubuque Facility since June 2011. From 2021 to 2024, N2O abatement systems at both facilities collectively abated an average of approximately 584,000 metric tons of carbon dioxide-equivalent (CO2e) annually. In December 2025, the Coffeyville Facility began operating its second N2O abatement system, equipping all nitric acid plants with this technology. The Partnership also sequesters carbon dioxide at its Coffeyville Facility. These combined efforts reduced the CO2e footprint by over 1.3 million metric tons in 2024. The Coffeyville Facility is uniquely qualified to produce 'blue' hydrogen and ammonia. Social Impact Initiatives: The Partnership emphasizes corporate citizenship, aiming to make a positive economic and social impact in its operating communities through financial donations and employee volunteerism. Its products, nitrogen fertilizers, contribute to feeding the world's growing population.

Business Cyclicality & Seasonality

Demand Patterns: The Partnership's business experiences significant seasonal fluctuations, with higher net sales typically occurring in the first half of the calendar year (planting season) and lower sales in the second half (fill season). Demand for fertilizers is influenced by farmers' crop planting and application decisions, which are based on prospective harvest profitability, liquidity, soil conditions, weather patterns, and crop types. The business is highly sensitive to economic conditions and weather-related shifts in planting schedules. Planning & Forecasting: To meet seasonal demand, the Partnership builds inventory during low-demand periods, which creates significant seasonal working capital and storage capacity requirements. Demand for nitrogen fertilizer was strong in spring 2025 due to elevated grain prices and favorable weather.

Regulatory Environment & Compliance

Regulatory Framework: CVR Partners is subject to extensive and evolving federal, state, and local environmental laws and regulations, including those governing emissions, waste management, wastewater discharge, and product handling (e.g., Clean Air Act, Clean Water Act, CERCLA, EPCRA, RCRA). Compliance requires numerous permits and authorizations. Regulatory actions in 2025 signaled a heightened focus on Per- and Polyfluoroalkyl Substances (PFAS) contamination, potentially leading to increased monitoring and remediation costs. The Partnership is also subject to Occupational Safety and Health Act (OSHA) regulations for worker safety and process safety management, and the East Dubuque Facility is regulated under the Maritime Transportation Security Act. Despite the expiration of the Chemical Facility Anti-Terrorism Standards (CFATS) in June 2023, the Facilities continue to adhere to its requirements. Trade & Export Controls: The business is influenced by U.S. global trade policy, trade tensions, and international retaliatory measures, which can impact feedstock procurement and product marketing. The threat or imposition of trade restrictions or economic sanctions could disrupt fertilizer, grain, and feedstock production and trade. Legal Proceedings: The Partnership is currently involved in material legal proceedings, including several lawsuits filed in Texas state courts regarding an ammonia release at the Coffeyville Facility in October 2025, and a class-action lawsuit filed in January 2026 in Kansas alleging environmental abuse from operations at the Coffeyville Facility and CVR Energy’s Coffeyville refinery. While the Partnership intends to vigorously defend itself, it believes an adverse resolution of these matters would not have a material impact on its liquidity, consolidated financial position, or results of operations.

Tax Strategy & Considerations

Tax Profile: CVR Partners is treated as a partnership for U.S. federal income tax purposes and in states that follow this treatment, meaning income, gains, losses, and deductions flow through to its partners. However, it is subject to income taxes in certain states that do not follow federal partnership tax treatment. The Partnership benefits from Section 45Q tax credits for carbon oxide capture and sequestration activities at its Coffeyville Facility, which are being monetized through a joint venture with CapturePoint LLC until March 31, 2030. The One Big Beautiful Bill Act, signed into law on July 4, 2025, permanently extended certain provisions of the 2017 Tax Cuts and Jobs Act, with an immaterial impact on the Partnership's income tax balances.

Insurance & Risk Transfer

Risk Management Framework: CVR Partners maintains a comprehensive risk management framework, including casualty, environmental, property, and business interruption insurance policies. These policies are subject to limits, sub-limits, retentions, and deductibles. The Partnership's health and safety management system focuses on injury, illness, and incident prevention, risk assessment, and emergency management. Cybersecurity risks are managed through external monitoring, audits, penetration testing, employee training, and an AI usage governance framework. The Board and its Audit Committee provide oversight of cybersecurity risks, supported by the Enterprise Risk Management Committee. Insurance Coverage: The Partnership is covered by CVR Energy’s site pollution legal liability insurance policies, as well as general liability, umbrella, and excess casualty insurance policies, which include sudden and accidental pollution coverage. These policies are subject to various conditions and limitations, and there is no assurance that all potential damages from a claim would be adequately insured. There is also a potential for a common occurrence to impact both the Coffeyville Facility and CVR Energy’s Coffeyville refinery, in which case insurance limits would apply to combined damages.