CVR Partners LP
11/03/2026 | Press release | Distributed by Public on 11/03/2026 07:22
Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition, results of operations, and cash flows should be read in conjunction with our unaudited condensed consolidated financial statements and related notes and with the statistical information and financial data included elsewhere in this Report, as well as our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the U.S. Securities and Exchange Commission ("SEC") on February 18, 2026 (the "2025 Form 10-K"). Results of operations and cash flows for the three and nine months ended September 30, 2026 are not necessarily indicative of results of operations and cash flows to be attained for any other period. See "Important Information Regarding Forward-Looking Statements".
Reflected in this discussion and analysis is how management views the Partnership's current financial condition and results of operations along with key external variables and management actions that may impact the Partnership. This discussion may contain forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this Report.
Partnership Overview
CVR Partners, LP ("CVR Partners" or the "Partnership") is a Delaware limited partnership formed in 2011 by CVR Energy, Inc. (together with its subsidiaries, but excluding the Partnership and its subsidiaries, "CVR Energy") to own, operate, and grow its nitrogen fertilizer business. The Partnership produces and distributes nitrogen fertilizer products, which are used by farmers to improve the yield and quality of their crops, primarily corn and wheat. The Partnership produces these products at two manufacturing facilities, one located in Coffeyville, Kansas operated by its wholly owned subsidiary, Coffeyville Resources Nitrogen Fertilizers, LLC ("CRNF") (the "Coffeyville Facility") and one located in East Dubuque, Illinois operated by its wholly owned subsidiary, East Dubuque Nitrogen Fertilizers, LLC ("EDNF") (the "East Dubuque Facility", and together with the Coffeyville Facility, the "Facilities"). Our principal products are ammonia and urea ammonium nitrate ("UAN"). All of our products are sold on a wholesale basis. References to CVR Partners, the Partnership, "we", "us", and "our" may refer to consolidated subsidiaries of CVR Partners or one or both of the Facilities, as the context may require. Additionally, as the context may require, references to CVR Energy may refer to CVR Energy and its consolidated subsidiaries which include its petroleum refining, marketing, and logistics operations.
Strategy and Initiatives
Potential Strategic Transactions
As previously disclosed, Icahn Enterprises L.P. and its affiliates ("IEP") and CVR Energy are considering potential strategic transactions available to CVR Energy and its subsidiaries and affiliates, which may include the acquisition of additional entities, assets or businesses through negotiated mergers and/or stock or asset purchase agreements, and/or strategic options involving CVR Partners. There is no assurance that any of the aforementioned, previously disclosed, or other transactions will develop or materialize, or if they do, as to their timing. As of September 30, 2026, IEP owns approximately 71% of CVR Energy's total outstanding common stock and approximately 3% of the total outstanding common units of CVR Partners. As of September 30, 2026, CVR Energy, through its subsidiaries, held approximately 37% of CVR Partners' outstanding common units and 100% of CVR Partners' general partner interests.
Partnership Initiatives
Over the past three years, the Partnership has reserved funds for a series of debottlenecking and reliability projects that are intended to enhance operational reliability and ultimately facilitate potential increases in production capacity, or provide feedstock availability at the Facilities:
•In 2025 and into 2026, the Partnership progressed several projects focused on improving water and electrical reliability, expanding diesel exhaust fluid production, and increasing loadout capabilities, among other initiatives.
•The East Dubuque Facility's planned turnaround was completed in mid-October 2026 (the "2026 Turnaround"), consisting of upgrades to its water systems and completion of the brownfield ammonia expansion project, which is expected to increase production capacity by approximately 5%. EDNF's ability to sustainably operate at the increased capacity level is expected to be tested during the fourth quarter of 2026.
September 30, 2026 | 16
•Based on engineering studies completed in 2025, the Coffeyville Facility has the potential to utilize natural gas as an alternative feedstock in conjunction with pet coke in the production of nitrogen fertilizer. We are in the final phases of completing detailed engineering, cost estimates, and has submitted a permit application to the state environmental agency. With approval by the board of directors of our General Partner (the "Board"), we expect to proceed with construction in 2028. If completed, these initiatives would make the Coffeyville Facility the only nitrogen fertilizer facility in the United States with dual feedstock flexibility, providing management with the ability to choose the optimal mix of natural gas and third-party pet coke depending on prevailing prices.
•In June 2026, the Coffeyville Facility received its Verified Ammonia Carbon Intensity certification from an independent third-party auditor under The Fertilizer Institute framework, which will enable the Coffeyville Facility to market ammonia it produces as "blue."
Industry Factors
Within the nitrogen fertilizer business, earnings and cash flows from operations are primarily affected by the relationship between nitrogen fertilizer product prices, utilization, and operating costs and expenses, including pet coke and natural gas feedstock costs.
The price at which nitrogen fertilizer products are ultimately sold depends on numerous factors, including the global supply and demand for nitrogen fertilizer products which, in turn, depends on world grain demand and production levels, changes in world population, the cost and availability of fertilizer transportation infrastructure, weather conditions, the availability of imports, the availability and price of feedstocks to produce nitrogen fertilizer, and the extent of government intervention in agriculture markets, among other factors.
Nitrogen fertilizer prices are also affected by local factors, including local market conditions and the operating levels of competing facilities. An expansion or upgrade of competitors' facilities, new facility development, political and economic developments, and other factors are likely to continue to play an important role in nitrogen fertilizer industry economics. These factors can impact, among other things, the level of inventories in the markets, resulting in price and product margin volatility.
General Business Environment
Geopolitical Matters
•The conflicts and tensions in the Middle East have resulted in significant disruptions to fertilizer production facilities in the region, as well as to global energy and fertilizer supply chains. These conflicts have disrupted key trade routes, tightened global supply of certain commodities, and increased energy costs. Hostilities and restrictions on shipping through the Strait of Hormuz continued during the third quarter, and transit volumes remained significantly below pre-war levels. These disruptions have contributed to elevated and volatile fertilizer prices, and we believe they could continue to do so. The duration, geographic scope, and ultimate severity of these disruptions and any further impacts on the global and fertilizer markets remain highly uncertain, and we cannot predict whether or when any stabilization in market conditions will occur or be sustained.
•The ongoing Russia-Ukraine war and related geopolitical developments have disrupted, and could further disrupt, the production and trade of fertilizer, grains, and feedstock through various means, such as trade restrictions, sanctions or transportation bottlenecks. The ultimate impacts of these conflicts, including any escalation, de-escalation, or resolution, may materially affect our business, operations, cash flows, and access to capital.
•Actual and potential tariffs imposed by the U.S. on imports of nitrogen fertilizers have also contributed to higher fertilizer prices in the U.S. Changes, and proposed changes, to the U.S. global trade policy, together with related judicial, regulatory and administrative developments, as well as renewed trade tensions and related international retaliatory measures, have continued to influence global markets and impact short- and long-term economic conditions in the U.S. and around the globe, including concerns over inflation, recession, and slowing growth. The Partnership continues to monitor these developments and may experience variability in margins depending on the duration and severity of these market disruptions.
•Damage to liquid natural gas ("LNG") production facilities and constrained LNG trade flows through the Middle East have contributed to higher natural gas prices in Europe, impacting competitiveness of European fertilizer facilities. Meanwhile, the abundance of natural gas supply available in the U.S. continues to keep domestic prices subdued, providing a sustained cost advantage for U.S. fertilizer facilities.
September 30, 2026 | 17
Regulatory Environment
•The fertilizer industry continues to face additional scrutiny from legislators, regulators, agriculture groups and others following fertilizer and fertilizer input price increases related to the impacts of the conflicts and tensions in the Middle East, which only exacerbated price increases caused by the ongoing Russia-Ukraine war, and related geopolitical developments. Such scrutiny has increased in 2026 and may result in additional government inquiries, investigations, legislative actions or regulatory initiatives affecting participants in the fertilizer industry.
•Our business faces existing, potential and future climate-related regulations and legal proceedings, as well as an uncertain regulatory landscape around climate-related reporting requirements, at the federal, state, and international levels which may materially impact our business, operations, compliance costs, results of operations and overall market stability.
•Certain governmental regulations and incentives associated with the automobile transportation, agricultural and renewables industries, including the ones related to corn-based ethanol and vegetable oil-based biodiesel, renewable diesel, and sustainable aviation fuel production or consumption, have impacted, and are expected to continue to impact, our business. For example:
◦Ethanol is blended with gasoline to meet requirements under the Renewable Fuel Standard ("RFS") and for its octane value. Since 2020, corn used in ethanol production has historically consumed an average of approximately 36% of annual domestic corn production. Accordingly, corn and/or ethanol demand can be impacted by the actions of the United States Environmental Protection Agency ("EPA") under the RFS, including its establishment of annual blending obligations and related actions. In 2026, the EPA finalized the RFS blending obligations for 2026 and 2027 that reflect the highest renewable fuel volume in the program's history, including for biomass-based diesel and advanced biofuel, which is expected to support ethanol and grain demand.
◦The EPA has issued a nationwide emergency waiver of the Reid Vapor Pressure specification during the summer of 2026, increasing flexibility in gasoline blending during the summer driving season. In May 2026, H.R. 1346 aimed at permanently allowing year-round, nationwide E15 (gasoline blended with 15% ethanol), among other actions, was passed by the U.S. House of Representatives and remains pending in the U.S. Senate, together with other related legislation. If enacted, year-round, nationwide E15 could support fertilizer demand.
◦Provisions of the Section 45Z Clean Fuel Production Credit exclude imports of renewable fuels and imported feedstocks used to produce renewable fuels in the United States, which we expect to support demand for domestic corn and soybean oil feedstocks. The U.S. Department of Treasury and Internal Revenue Service issued proposed regulations in February 2026, and final regulations are targeted for release in November 2026.
Results of Operations
The following should be read in conjunction with the information outlined in the previous sections of this Part I, Item 2 and the financial statements and related notes thereto in Part I, Item 1 of this Report.
Utilization is an important measure used by management to assess operational output at each of the Partnership's Facilities and is calculated as actual tons of ammonia produced divided by capacity. Utilization is presented solely on ammonia production, rather than on each nitrogen product, as it provides a comparative baseline against industry peers and eliminates the disparity of facility configurations for upgrade of ammonia into other nitrogen products. With production primarily focused on ammonia upgrade capabilities, we believe this measure provides a meaningful view of how we operate. The table presented below summarizes our ammonia utilization rate on a consolidated basis.
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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| (percent of capacity utilization) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
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Ammonia utilization rate
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80 | % | 95 | % | 94 | % | 96 | % | |||||||||||||||
On a consolidated basis, for the three months ended September 30, 2026 as compared to September 30, 2025, utilization decreased 15% primarily due to the 2026 Turnaround and other minor unplanned outages at the Facilities during the third quarter of 2026. For the nine months ended September 30, 2026 as compared to September 30, 2025, utilization decreased 2% primarily due to the aforementioned 2026 Turnaround, partially offset by the impact of control systems upgrades at the East Dubuque Facility and other minor unplanned outages at the Facilities during 2025.
September 30, 2026 | 18
Sales Volume and Pricing per Ton - Two of our key operating metrics are total sales volumes for ammonia and UAN, along with the product pricing per ton realized at the gate which represents net sales less freight revenue divided by product sales volume in tons and is shown in order to provide a pricing measure comparable across the fertilizer industry.
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
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Consolidated sales volumes (thousands of tons)
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Ammonia
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36 | 48 | 164 | 165 | |||||||||||||||||||
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UAN
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327 | 328 | 971 | 1,009 | |||||||||||||||||||
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Consolidated product pricing at gate (dollars per ton)
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Ammonia
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$ | 637 | $ | 531 | $ | 710 | $ | 561 | |||||||||||||||
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UAN
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309 | 348 | 348 | 307 | |||||||||||||||||||
For the three months ended September 30, 2026, ammonia sales volumes decreased by 25% due to lower ammonia production as a result of the 2026 Turnaround. For the nine months ended September 30, 2026, UAN sales volumes decreased by 4% due to lower consumer demand in the first half of 2026 as a result of the higher prices for UAN relative to other comparable fertilizer products.
For the three months ended September 30, 2026, ammonia sales prices increased by 20% due to strong fall demand and limited supply in the domestic inland ammonia market, combined with changes in market conditions described below, while UAN sales prices decreased by 11% due to lower market prices following the reset of UAN prices with the summer fill program in July 2026. For the nine months ended September 30, 2026, ammonia and UAN sales prices increased by 27% and 13%, respectively. These increases were primarily due to changes in market conditions, driven by a combination of tight inventory levels as a result of the conflicts and tensions in the Middle East along with domestic and international production outages, logistics constraints, and other impacts that reduced global supply of nitrogen fertilizers.
Production Volumes - Gross tons of ammonia represent the total ammonia produced, including ammonia produced that was upgraded into other fertilizer products. Net tons available for sale represents the ammonia available for sale that was not upgraded into other fertilizer products. These metrics are presented in the table below:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
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| (in thousands of tons) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Ammonia-gross produced | 175 | 208 | 609 | 621 | |||||||||||||||||||
| Ammonia-net available for sale | 46 | 59 | 179 | 181 | |||||||||||||||||||
| UAN | 294 | 337 | 971 | 1,005 | |||||||||||||||||||
Feedstock - Our Coffeyville Facility utilizes a pet coke gasification process to produce nitrogen fertilizer. Our East Dubuque Facility uses natural gas in its production of ammonia. These feedstocks for the Facilities are presented in the table below:
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
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Petroleum coke used in production (thousands of tons)
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133 | 134 | 407 | 394 | |||||||||||||||||||
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Petroleum coke used in production (dollars per ton)
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$ | 45.50 | $ | 44.58 | $ | 41.38 | $ | 47.86 | |||||||||||||||
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Natural gas used in production (thousands of MMBtus) (1)
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1,376 | 2,114 | 5,505 | 6,171 | |||||||||||||||||||
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Natural gas used in production (dollars per MMBtu) (1)
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$ | 3.09 | $ | 3.18 | $ | 3.89 | $ | 3.72 | |||||||||||||||
(1)The feedstock natural gas shown above does not include natural gas used for fuel, which is included in Direct operating expenses (exclusive of depreciation and amortization).
September 30, 2026 | 19
Market Indicators
The Partnership views the anticipated combination of (i) increasing global population, (ii) decreasing arable land per capita, (iii) continued evolution to more protein-based diets in developing countries, (iv) sustained use of corn and soybeans as feedstock for the domestic production of ethanol and other renewable fuels, and (v) positioning at the lower end of the global cost curve should provide a solid foundation for nitrogen fertilizer producers in the United States over the longer term.
Corn and soybeans are two major crops planted by farmers in North America. Corn crops result in the depletion of the amount of nitrogen within the soil in which it is grown, which in turn, results in the need for this nutrient to be replenished after each growing cycle. Unlike corn, soybeans are able to obtain most of their own nitrogen through a process known as "N fixation". As such, upon harvesting of soybeans, the soil retains a certain amount of nitrogen which results in lower demand for nitrogen fertilizer for the following corn planting cycle. Due to these factors, nitrogen fertilizer consumers generally operate a balanced corn-soybean rotational planting cycle.
The relationship between the total acres planted for both corn and soybeans has a direct impact on the overall demand for nitrogen products, as the market and demand for nitrogen increases with increased corn acres and decreases with increased soybean acres. Additionally, an estimated 18 billion pounds of soybean oil is expected to be used in producing renewable fuels in marketing year 2026/2027.
Weather continues to be a critical variable for crop production. Even with escalating prices for nitrogen fertilizer, demand was strong for the spring 2026 planting season, primarily due to elevated grain prices and favorable weather conditions for planting. With high planted acres and above-trendline yields per acre for corn in the United States in 2025, global inventory levels for corn remain above historical 10-year averages, but prices have risen in 2026 on expectations of lower carryout inventory levels compared to 2025. While soybean production declined slightly due to fewer planted acres in 2025, yields were above historical levels, and pricing has increased in the United States due in part to increased biofuel blending obligations set by the EPA increasing demand for soybean oil used in the production of biodiesel and renewable diesel.
The United States Department of Agriculture ("USDA") estimates that in spring 2026 farmers planted 2.0% fewer corn acres and 7.0% more soybean acres compared to 2025. The combined estimated corn and soybean planted acres of 183.6 million in 2026 represents a 2.1% increase compared to the acreage planted in 2025. Due to the relative grain prices of corn versus soybeans, economics slightly favor planting corn compared to soybeans in 2026. Inventory levels of corn and soybeans are expected to be higher in 2026 but supportive of grain prices through the fall 2026 harvest.
The charts below show the corn-soybean rotational planting cycle and average fuel ethanol production volumes in the U.S.:
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Corn and Soybean Planted Acres (1)
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U.S. Plant Production of Fuel Ethanol (2)
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(1)Information used within this chart was obtained from the USDA, National Agricultural Statistics Services as of September 30, 2026.
(2)Information used within this chart was obtained from the U.S. Energy Information Administration ("EIA") through September 30, 2026.
September 30, 2026 | 20
Given the current geopolitical events, we believe the structural shortage of natural gas in Europe will continue to be a source of volatility through at least 2027. Pet coke prices have fallen in the nine months ended September 30, 2026 compared to the same period in 2025, although prices increased slightly in the third quarter of 2026 compared to the third quarter of 2025. Pet coke prices are largely contractually set for 2026.
The charts below show relevant market indicators by month through September 30, 2026:
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Ammonia and UAN Market Pricing (1)
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Natural Gas Market Pricing (1)
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Pet Coke Market Pricing (1)
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(1)Information used within these charts was obtained from various third-party sources, including Green Markets (a Bloomberg Company), Pace Petroleum Coke Quarterly, and the EIA, among others.
September 30, 2026 | 21
Financial Highlights
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
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| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net sales | $ | 146,152 | $ | 163,549 | $ | 528,394 | $ | 474,973 | |||||||||||||||
| Less: | |||||||||||||||||||||||
| Cost of materials and other | 24,888 | 25,390 | 82,391 | 85,837 | |||||||||||||||||||
| Direct operating expenses | 89,545 | 57,681 | 211,426 | 172,685 | |||||||||||||||||||
| Depreciation and amortization | 23,253 | 19,958 | 65,437 | 58,859 | |||||||||||||||||||
| Selling, general and administrative expenses | 11,600 | 9,171 | 28,165 | 25,094 | |||||||||||||||||||
| Loss on asset disposals | 508 | 713 | 2,153 | 955 | |||||||||||||||||||
| Operating (loss) income | $ | (3,642) | $ | 50,636 | $ | 138,822 | $ | 131,543 | |||||||||||||||
| Net (loss) income | $ | (10,742) | $ | 43,072 | $ | 116,675 | $ | 108,928 | |||||||||||||||
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EBITDA (1)
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$ | 19,716 | $ | 70,617 | $ | 204,562 | $ | 190,681 | |||||||||||||||
(1)See "Non-GAAP Reconciliations" section below for reconciliations of the non-GAAP measures shown above.
Overview - For the three months ended September 30, 2026, the Partnership incurred an operating loss and net loss compared to operating income and net income for the three months ended September 30, 2025 resulting in a variance of $54.3 million and $53.8 million, respectively. These variances resulted from higher direct operating expenses, primarily associated with the 2026 Turnaround, and lower revenues which were due primarily to the decrease in UAN sales prices and ammonia sales volumes. For the nine months ended September 30, 2026, the Partnership's operating income and net income increased $7.3 million and $7.7 million, respectively, compared to the nine months ended September 30, 2025. These increases resulted from higher revenues which were due primarily to the increases in UAN and ammonia sales prices, partially offset by higher direct operating expenses primarily associated with the 2026 Turnaround and lower UAN sales volumes. See further discussions of these changes in "-Sales Volume and Pricing per Ton" above and "-Direct Operating Expenses (exclusive of depreciation and amortization)" below.
Net Sales - The $17.4 million decrease for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 was primarily due to unfavorable UAN sales prices and lower ammonia sales volumes reducing revenue by $18.7 million, partially offset by favorable ammonia sales prices contributing $3.9 million in higher revenue.
The following table demonstrates the impact of changes in sales volumes and pricing for the primary components of net sales, excluding urea products, freight, and other revenue, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025:
| (in thousands) |
Price Variance |
Volume Variance |
|||||||||
| UAN | $ | (12,651) | $ | (69) | |||||||
| Ammonia | 3,850 | (6,043) | |||||||||
UAN and ammonia sales price variances were unfavorable and favorable, respectively, primarily due to the aforementioned market conditions discussed in "-Sales Volume and Pricing per Ton" above.
The $53.4 million increase for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 was primarily due to favorable UAN and ammonia sales prices contributing $64.7 million in higher revenue, partially offset by lower UAN sales volumes reducing revenue by $11.8 million.
September 30, 2026 | 22
The following table demonstrates the impact of changes in sales volumes and pricing for the primary components of net sales, excluding urea products, freight, and other revenue, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025:
| (in thousands) |
Price Variance |
Volume Variance |
|||||||||
| UAN | $ | 40,315 | $ | (11,756) | |||||||
| Ammonia | 24,383 | (860) | |||||||||
Ammonia and UAN sales price variances were favorable primarily due to the aforementioned improved pricing and inventory conditions discussed in "-Sales Volume and Pricing per Ton" above.
Cost of Materials and Other - The $0.5 million decrease and $3.4 million decrease for the three and nine months ended September 30, 2026, respectively, compared to the three and nine months ended September 30, 2025 were driven primarily by lower natural gas feedstock volumes as a result of the 2026 Turnaround and decreased distribution costs, combined with decreased petroleum coke prices for the nine months ended September 30, 2026. These decreases were partially offset by unfavorable changes in inventory adjustments due to a draw of UAN inventory in the current three-month period compared to a build of inventory in the prior-year period and a smaller build of inventory in the current nine-month period, as well as higher petroleum coke prices for the three months ended September 30, 2026 and increased natural gas feedstock prices for the nine months ended September 30, 2026 compared to the respective prior-year periods.
Direct Operating Expenses (exclusive of depreciation and amortization) - The $31.9 million increase and $38.7 million increase for the three and nine months ended September 30, 2026, respectively, compared to the three and nine months ended September 30, 2025 were primarily a result of the 2026 Turnaround, increased personnel costs, along with higher catalyst and chemical costs. For the three months ended September 30, 2026, these increases were also driven by the aforementioned unfavorable inventory impacts, partially offset by decreased utility costs as a result of lower electricity and natural gas consumption. For the nine months ended September 30, 2026, these increases were also driven primarily by increased repairs and maintenance costs.
Depreciation and Amortization Expense - The $3.3 million increase and $6.6 million increase for the three and nine months ended September 30, 2026, respectively, compared to the three and nine months ended September 30, 2025 were primarily due to new capital projects placed into service during the planned turnaround at the Coffeyville Facility during the fourth quarter of 2025, as well as increased depreciation on assets scheduled for retirement during the 2026 Turnaround.
Selling, General and Administrative Expenses - The $2.4 million increase and $3.1 million increase for the three and nine months ended September 30, 2026, respectively, compared to the three and nine months ended September 30, 2025 were primarily due to increased legal expenses.
Non-GAAP Measures
Our management uses certain non-GAAP measures, and reconciliations to those measures, to evaluate current and past performance and prospects for the future to supplement our financial information presented in accordance with accounting principles generally accepted in the United States ("GAAP"). These non-GAAP measures are important factors in assessing our operating results and profitability and include the measures defined below.
The following are non-GAAP measures we present for the periods ended September 30, 2026 and 2025:
EBITDA - Net income (loss) before (i) interest expense, net, (ii) income tax expense (benefit) and (iii) depreciation and amortization expense.
Adjusted EBITDA - EBITDA adjusted for certain significant noncash items and items that management believes are not attributable to or indicative of our on-going operations or that may obscure our underlying results and trends.
Available Cash for Distribution - EBITDA for the period excluding noncash income or expense items (if any), for which adjustment is deemed necessary or appropriate by the Board in its sole discretion, less (i) reserves for maintenance capital expenditures, turnarounds, debt service and other contractual obligations and (ii) reserves for future operating or capital needs
September 30, 2026 | 23
(if any), in each case, that the Board deems necessary or appropriate in its sole discretion. Available Cash for Distribution may be increased by the release of previously established cash reserves, if any, and other excess cash, at the discretion of the Board.
We present these measures because we believe they may help investors, analysts, lenders, and ratings agencies analyze our results of operations and liquidity in conjunction with our GAAP results, including, but not limited to, our operating performance as compared to other publicly traded companies in the fertilizer industry, without regard to historical cost basis or financing methods, and our ability to incur and service debt and fund capital and turnaround expenditures. Non-GAAP measures have important limitations as analytical tools because they exclude some, but not all, items that affect net earnings and operating income. These measures should not be considered substitutes for their most directly comparable GAAP financial measures. Refer to the "Non-GAAP Reconciliations" included herein for reconciliation of these amounts. Due to rounding, numbers presented within this section may not add or equal to numbers or totals presented elsewhere within this document.
Factors Affecting Comparability of Our Financial Results
Our results of operations for the periods presented may not be comparable with prior periods or to our results of operations in the future due to expenses incurred as part of planned turnarounds. We incurred turnaround expenses of $26.8 million and $1.2 million during the three months ended September 30, 2026 and 2025, respectively, and $28.9 million and $2.5 million during the nine months ended September 30, 2026 and 2025, respectively.
Non-GAAP Reconciliations
Reconciliation of Net (Loss) Income to EBITDA, Adjusted EBITDA and Available Cash for Distribution
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net (loss) income | $ | (10,742) | $ | 43,072 | $ | 116,675 | $ | 108,928 | |||||||||||||||
| Interest expense, net | 7,205 | 7,587 | 22,450 | 22,894 | |||||||||||||||||||
| Depreciation and amortization | 23,253 | 19,958 | 65,437 | 58,859 | |||||||||||||||||||
| EBITDA and Adjusted EBITDA | 19,716 | 70,617 | 204,562 | 190,681 | |||||||||||||||||||
| Adjustments (Reserves)/Releases: | |||||||||||||||||||||||
| Accrued interest expense (excluding capitalized interest) | (9,104) | (9,192) | (27,317) | (27,215) | |||||||||||||||||||
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Future operating needs (1)
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20,000 | 6,000 | - | (2,000) | |||||||||||||||||||
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Capital expenditures and investments (2)
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(33,324) | (15,312) | (71,308) | (40,920) | |||||||||||||||||||
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Turnaround expenditures, net (3)
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22,237 | (8,974) | 18,069 | (14,104) | |||||||||||||||||||
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Equity method investment (4)
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(636) | (699) | 1,349 | 1,024 | |||||||||||||||||||
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Available Cash for Distribution (5)
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$ | 18,889 | $ | 42,440 | $ | 125,355 | $ | 107,466 | |||||||||||||||
| Common units outstanding | 10,570 | 10,570 | 10,570 | 10,570 | |||||||||||||||||||
(1)Amount consists of reserves established by management and approved by the Board for potential future cash needs related to nitrogen fertilizer seasonality and feedstock price volatility.
(2)Amount consists of maintenance capital expenditures, including additional reserves for future profit and growth projects and potential investment opportunities, net of any releases of previously reserved funds, of $10.2 million and $30.7 million for the three and nine months ended September 30, 2026, respectively, and $7.9 million and $23.3 million for the three and nine months ended September 30, 2025, respectively.
(3)Amount consists of reserves for periodic, planned turnarounds, net of expenditures incurred in the period.
(4)Amount consists of distributions received by the Partnership adjusted for the amortization of deferred revenue related to the joint venture created to monetize certain tax credits under Section 45Q of the Internal Revenue Code of 1986 ("45Q Transaction").
(5)Amount represents the cumulative Available Cash for Distribution based on full year results. However, Available Cash for Distribution is calculated quarterly, with distributions (if any) being paid in the following period. The Partnership declared and paid a cash distribution of $0.37, $4.00, and $6.08 per common unit related to the fourth quarter of 2025 and the first and second quarters of 2026, respectively, and declared a cash distribution of $1.79 per common unit related to the third quarter of 2026 to be paid in November 2026.
September 30, 2026 | 24
Liquidity and Capital Resources
Our primary source of liquidity is cash generated from operations, which may include customer cash advances under prepay contracts. As further discussed below, our primary uses of cash are for working capital, capital and turnaround expenditures, servicing debt obligations, and paying distributions to our unitholders.
Considering current market conditions and geopolitical matters, we believe that cash from operations, together with existing cash and cash equivalents, available borrowings, and reserves is sufficient to meet anticipated operating cash requirements for at least the next 12 months. However, future capital expenditures and other cash needs may exceed current expectations due to risk factors such as rising material and labor costs, inflationary pressures, and changes in project scope, timing or execution.
In addition, supply chain disruptions, geopolitical instability, commodity price fluctuations, and changes in regulatory policies may negatively impact our operations. Our ability to generate adequate cash flow and access additional financing depends on our future performance, which is subject to various factors-economic, political, financial, and competitive-many of which may be beyond our control. Shifts in the U.S. trade policy, global demand dynamics, commodity market volatility, and tightening credit market conditions could also affect our financial position.
Subject to business needs, contractual limitations, and market conditions, we may pursue financing strategies such as issuing equity or debt securities, incurring additional borrowings, or refinancing existing debt through various means, including open market repurchases, tender offers or privately negotiated transactions. There can be no assurance that any such actions will be undertaken or, if pursued, completed on favorable terms.
The Partnership and its subsidiaries were in compliance with all covenants under their respective debt instruments as of September 30, 2026 and through date of filing, as applicable.
Cash and Other Liquidity
As of September 30, 2026, we had cash and cash equivalents of $158.2 million, and combined with $45.2 million available under our ABL Credit Facility, we had total liquidity of $203.4 million. As of December 31, 2025, we had $69.2 million in cash and cash equivalents and, combined with $47.9 million available under our ABL Credit Facility, we had total liquidity of $117.1 million.
Long-term debt consisted of the following:
| (in thousands) | September 30, 2026 | December 31, 2025 | |||||||||
|
6.125% Senior Secured Notes, due June 2028
|
$ | 550,000 | $ | 550,000 | |||||||
| Unamortized debt issuance costs | (1,121) | (1,577) | |||||||||
| Total long-term debt | $ | 548,879 | $ | 548,423 | |||||||
As of September 30, 2026, the Partnership had outstanding the 6.125% Senior Secured Notes, due June 2028 and the ABL Credit Facility, the proceeds of which may be used to fund working capital, capital expenditures, and for other general corporate purposes. Refer to Part II, Item 8, Note 8 ("Long-Term Debt") of our 2025 Form 10-K for further information.
Capital Spending
We divide capital spending needs into two categories: maintenance and growth. Maintenance capital spending includes non-discretionary maintenance projects necessary to maintain safe and reliable operations, including those required to comply with environmental, health, and safety regulations. Growth capital projects generally support the expansion of existing capacity, improvements in reliability, and reductions in direct operating expenses. We undertake growth capital projects selectively, based on strategic priorities and expected returns, and may adjust the timing or scope of such investments in response to market conditions or operational needs.
September 30, 2026 | 25
Our total capital expenditures for the nine months ended September 30, 2026, along with our estimated expenditures for 2026 are as follows:
| Nine Months Ended September 30, | Estimated full year | ||||||||||
| (in thousands) | 2026 | 2026 | |||||||||
| Maintenance capital | $ | 40,633 | $55,000 - 63,000 | ||||||||
| Growth capital | 25,256 | 40,000 - 41,000 | |||||||||
| Total capital expenditures | $ | 65,889 | $95,000 - 104,000 | ||||||||
Our estimated capital expenditures are subject to change based on changes in project cost, scope, and timing. For example, fluctuations in labor and equipment costs-particularly those related to compliance with government regulations or initiatives aimed at sustaining or enhancing Facility profitability. Additionally, we may choose to accelerate or defer certain capital expenditures in response to operational priorities or market conditions from time to time.
Capital spending decisions for CVR Partners are determined by the Board. We continue to actively monitor market conditions and will adjust our capital spending and turnaround plans as necessary to align with evolving business needs and external factors.
The 2026 Turnaround commenced in late August 2026 and was completed in mid-October 2026, with a total cost of approximately $37 million. Turnaround costs were expensed as incurred within Direct operating expenses (exclusive of depreciation and amortization), and funded through cash reserves taken during the three years preceding the turnaround.
Cash Requirements
There have been no material changes to the cash requirements disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, outside the ordinary course of business.
Distributions to Unitholders
The current policy of the Board is to distribute all Available Cash for Distribution, as determined in its sole discretion on a quarterly basis. Following the end of each quarter, the Board evaluates and determines Available Cash for Distribution, which is generally calculated as EBITDA for the quarter, adjusted to exclude noncash income or expense items if and to the extent the Board deems such adjustments necessary or appropriate. From this Adjusted EBITDA, the Board deducts (i) reserves for maintenance capital expenditures, turnarounds, debt service and other contractual obligations, and (ii) reserves for future operating or capital needs, in each case, as deemed necessary or appropriate in its sole discretion. Available Cash for Distribution may also be increased by the release of previously established reserves or other excess cash, subject to the Board's discretion.
Distributions, if any-including the amount, timing, and the Board's distribution policy-are subject to change at the discretion of the Board. This includes the definition of Available Cash for Distribution and any related reserves, which may be adjusted based on the Board's judgment and prevailing business concerns.
September 30, 2026 | 26
The following table presents quarterly distributions paid by the Partnership to CVR Partners' unitholders, including amounts paid to CVR Energy and IEP, during 2026 and 2025:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||||
| (in thousands, except per unit data) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Public unitholders | $ | 38,945 | $ | 24,916 | $ | 66,936 | $ | 50,774 | |||||||||||||||
| IEP | 1,655 | 1,059 | 2,845 | 1,979 | |||||||||||||||||||
| CVR Energy | 23,663 | 15,140 | 40,671 | 30,747 | |||||||||||||||||||
| Total distributions paid | $ | 64,263 | $ | 41,115 | $ | 110,452 | $ | 83,500 | |||||||||||||||
|
Distributions per common unit (1)
|
$ | 6.08 | $ | 3.89 | $ | 10.45 | $ | 7.90 | |||||||||||||||
(1)Amount represents the cumulative distributions, calculated quarterly, paid in the respective period.
For the third quarter of 2026, upon approval by the Board on November 3, 2026, the Partnership declared a distribution of $1.79 per common unit, or approximately $18.9 million, which is payable November 23, 2026 to unitholders of record as of November 16, 2026. Of this amount, CVR Energy and IEP will receive approximately $7.0 million and $0.5 million, respectively, with the remaining amount payable to public unitholders.
Cash Flows
The following table sets forth our cash flows for the periods indicated below:
| Nine Months Ended September 30, | |||||||||||||||||
| (in thousands) | 2026 | 2025 | Change | ||||||||||||||
|
Net cash flow provided by (used in):
|
|||||||||||||||||
|
Operating activities
|
$ | 258,390 | $ | 171,237 | $ | 87,153 | |||||||||||
|
Investing activities
|
(58,414) | (21,419) | (36,995) | ||||||||||||||
|
Financing activities
|
(111,028) | (84,492) | (26,536) | ||||||||||||||
| Net increase in cash and cash equivalents | $ | 88,948 | $ | 65,326 | $ | 23,622 | |||||||||||
Cash Flows from Operating Activities
The change in net cash flows from operating activities for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 was primarily due to an increase in working capital of $70.6 million and an increase in net income of $7.7 million. The change in working capital was primarily due to favorable changes in deferred revenue resulting from more prepayments received in the current period due to entering into more new contracts with customers, favorable changes in accounts payable due to various capital projects performed during the 2026 Turnaround, and favorable changes to inventory due to increased tonnage of both UAN and ammonia on hand resulting from low year-end 2025 inventory because of a strong fall ammonia season in 2025, partially offset by unfavorable changes in accounts receivable from fewer outstanding prepaid contracts from customers being collected during 2026 compared to 2025.
Cash Flows from Investing Activities
The change in net cash flows from investing activities for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 was due to an increase in capital expenditures of $37.3 million during 2026 from projects completed during the 2026 Turnaround.
Cash Flows from Financing Activities
The change in net cash flows from financing activities for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 was due to an increase in cash distributions paid of $27.0 million in 2026 compared to 2025.
September 30, 2026 | 27
Critical Accounting Estimates
Our critical accounting estimates are disclosed in the "Critical Accounting Estimates" section of our 2025 Form 10-K. No modifications have been made during the three and nine months ended September 30, 2026 to these estimates.
CVR Partners LP published this content on November 03, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 03, 2026 at 13:22 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]