CVR PARTNERS LP

Previous wording

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 appearing in this Report, as well as our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the U.S. Securities and Exchange Commission (“SEC”) on February 21, 2024 (the “2023 Form 10-K”). Results of operations for the three and six months ended June 30, 2024 and cash flows for the six months ended June 30, 2024 are not necessarily indicative of results to be attained for any other period. See “Important Information Regarding Forward-Looking Statements.”

Current wording

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 appearing in this Report, as well as our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the U.S. Securities and Exchange Commission (“SEC”) on February 21, 2024 (the “2023 Form 10-K”). Results of operations for the three and nine months ended September 30, 2024 and cash flows for the nine months ended September 30, 2024 are not necessarily indicative of results to be attained for any other period. See “Important Information Regarding Forward-Looking Statements.”

Previous wording

The Partnership believes the general business environment in which it operates will continue to remain volatile, driven by uncertainty around the availability and prices of its feedstocks, demand for and prices of its products, inflation, and existing and potential future global supply disruptions. As a result, future operating results and current and long-term financial conditions could be negatively impacted if economic conditions decline and remain volatile. The Partnership is not able at this time to predict the extent to which these events may have a material, or any, effect on its financial or operational results in future periods.

Current wording

The Partnership believes the general business environment in which it operates will continue to remain volatile, driven by uncertainty around the availability and prices of its feedstocks, demand for and prices of its products, inflation, and existing and potential future global supply disruptions. As a result, future operating results and current and long-term financial conditions could be negatively impacted if economic conditions remain volatile and/or decline. The Partnership is not able at this time to predict the extent to which these conditions may have a material, or any, effect on its financial or operational results in future periods.

Previous wording

Regulatory Environment - Certain governmental regulations and incentives associated with the automobile transportation and agricultural industries, including the ones related to corn-based ethanol and sustainable aviation fuel production or consumption, can, and have, directly impact our business. In June 2023, the United States Environmental Protection Agency (“EPA”) announced the renewable volume obligations for 2023, 2024, and 2025 which maintained the conventional biofuel blending level at 15 billion gallons. These actions lead us to believe that the demand on food, in particular corn, for fuel will remain strong for the foreseeable future and support farmer economics that incentivize the use of nitrogen-based fertilizers.

Current wording

Regulatory Environment - Certain governmental regulations and incentives associated with the automobile transportation and agricultural industries, including the ones related to corn-based ethanol and sustainable aviation fuel production or consumption, can impact, and have directly impacted, our business. In June 2023, the United States Environmental Protection Agency (“EPA”) announced the renewable volume obligations for 2023, 2024, and 2025 which maintained the conventional biofuel blending level at 15 billion gallons. These actions lead us to believe that the demand on food, in particular corn, for fuel will remain strong for the foreseeable future and support farmer economics that incentivize the use of nitrogen-based fertilizers.

Previous wording

There have been several proposed and enacted climate-related rules, in various stages of approval, that, if finalized, would demand considerable efforts to comply with new compliance requirements and could impact our disclosure controls and procedures as well as require additional disclosures in our regulatory filings.

Current wording

There have been several proposed and enacted climate-related rules and compliance requirements, in various stages of approval, that, if finalized, could demand considerable efforts to comply with and could impact our disclosure controls and procedures as well as require additional disclosures in our regulatory filings. In addition, the current political environment and upcoming presidential election in the United States create uncertainty regarding existing and future laws, regulations, policies, or rulings, including the reinterpretation or amplification thereof by regulators, which may impact our business, operations, compliance costs, results and market stability.

Previous wording

Geopolitical Matters - The conflict in the Middle East, which began in October 2023 and may continue to escalate, and the ongoing Russia-Ukraine war, could significantly impact global fertilizer and agriculture markets. These conflicts pose significant geopolitical risks to global markets, raise concerns of major implications, such as the enforcement of sanctions, and could disrupt the production and trade of fertilizer, grains, and feedstock through several means, such as trade restrictions. The ultimate outcome of these conflicts, or further escalation or expansion thereof, and any associated market disruptions are difficult to predict and may affect our business, operations, and cash flows in unforeseen ways.

Current wording

Geopolitical Matters - The conflict in the Middle East, which began in October 2023 and has continued to escalate, and the ongoing Russia-Ukraine war can significantly impact global fertilizer and agriculture markets. These conflicts pose significant geopolitical risks to global markets, raise concerns of major implications, such as the enforcement of sanctions, and could disrupt the production and trade of fertilizer, grains, and feedstock through several means, such as trade restrictions. The ultimate outcome of these conflicts, or further escalation or expansion thereof, and any associated market disruptions are difficult to predict and may affect our business, operations, and cash flows in unforeseen ways.

Previous wording

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 as shown by the chart presented below as of June 30, 2024.

Current wording

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 as shown by the chart presented below.

Previous wording

The United States Department of Agriculture (“USDA”) estimates that in spring 2024 farmers will plant 91.5 million corn acres, representing a decrease of 3.3% compared to 94.6 million corn acres in 2023. Planted soybean acres are estimated to be 86.1 million, representing an increase of 3.0% compared to 83.6 million soybean acres in 2023. The combined estimated corn and soybean planted acres of 177.6 million represents a decrease of 0.4% compared to the acreage planted in 2023. Due to lower input costs in 2024 for corn planting and the relative grain prices of corn versus soybeans, economics favored planting corn compared to soybeans in 2024. Inventory levels of corn and soybeans are expected to be supportive of grain prices for the remainder of 2024.

Current wording

The United States Department of Agriculture (“USDA”) estimates that in spring 2024 farmers planted 90.7 million corn acres, representing a decrease of 4.1% compared to 94.6 million corn acres in 2023. Planted soybean acres are estimated to be 87.1 million, representing an increase of 4.2% compared to 83.6 million soybean acres in 2023. The combined estimated corn and soybean planted acres of 177.8 million represents a nominal decrease compared to the acreage planted in 2023. Due to lower input costs in 2024 for corn planting and the relative grain prices of corn versus soybeans, economics favored planting corn compared to soybeans in 2024. Inventory levels of corn and soybeans are expected to be supportive of grain prices for the remainder of 2024.

Previous wording

Ethanol is blended with gasoline to meet requirements under the Renewable Fuel Standard of the Clean Air Act and for its octane value. Since 2010, ethanol production has historically consumed 38% of the U.S. corn crop used by the market, so demand for corn generally rises and falls with ethanol demand, as shown by the charts below, through June 30, 2024.

Current wording

Ethanol is blended with gasoline to meet requirements under the Renewable Fuel Standard of the Clean Air Act and for its octane value. Since 2010, ethanol production has historically consumed 38% of the U.S. corn crop used by the market, so demand for corn generally rises and falls with ethanol demand, as shown by the chart below.

Previous wording

Weather continues to be a critical variable for crop production. Even with high planted acres and trendline yields per acre in the U.S., global inventory levels for corn and soybeans remain at or below historical levels and prices have remained elevated. Demand for nitrogen fertilizer, as well as other crop inputs, is expected to be strong for the spring 2024 planting season, primarily due to elevated grain prices and favorable weather conditions for planting.

Current wording

Weather continues to be a critical variable for crop production. Even with high planted acres and above trendline yields per acre for corn in the United States, global inventory levels for corn and soybeans remain near historical 10-year averages and prices have remained elevated. Demand for nitrogen fertilizer, as well as other crop inputs, was strong for the spring 2024 planting season, primarily due to elevated grain prices and favorable weather conditions for planting.

Previous wording

Fertilizer input costs have been volatile since the fall of 2021. Natural gas prices were elevated in the fall of 2022 due to shortages in Europe and demand being driven by building natural gas storage for winter. Winter 2022/2023 weather was warmer than average in Europe and, when combined with natural gas conservation measures, caused demand and prices for natural gas in Europe to fall significantly in the first quarter of 2023 and remain below the 2021/2022 price levels. The decline in natural gas prices, and the resulting capacity curtailments, among other factors, has led to a significant reduction in the price for nitrogen fertilizer from peak prices. While we expect that natural gas prices might remain below the elevated levels experienced in 2022 in the near term, we believe that the structural shortage of natural gas in Europe will continue to be a source of volatility for the rest of 2024 through 2026. Although pet coke prices have been elevated since 2021 due to higher natural gas prices compared to historical levels, as natural gas prices fell in 2023, third-party pet coke prices have declined into 2024.

Current wording

Fertilizer input costs have been volatile since the fall of 2021. Natural gas prices were elevated in the fall of 2022 due to shortages in Europe and demand being driven by building natural gas storage for winter. Winter 2022/2023 weather was warmer than average in Europe and, when combined with natural gas conservation measures, caused demand and prices for natural gas in Europe to fall significantly in the first quarter of 2023 and remain below the 2021/2022 price levels. The decline in natural gas prices, and the resulting capacity curtailments, among other factors, has led to a significant reduction in the price for nitrogen fertilizer from peak prices. While we expect that natural gas prices might remain below the elevated levels experienced in 2022 in the near term, we believe that the structural shortage of natural gas in Europe will continue to be a source of volatility for the rest of 2024 through 2026. Although pet coke prices had been elevated since 2021 due to higher natural gas prices compared to historical levels, as natural gas prices fell in 2023, third-party pet coke prices have declined into 2024 and are expected to decline further in 2025.

Previous wording

The Partnership has been conducting engineering studies on the potential to utilize natural gas as an optional feedstock to pet coke at its Coffeyville Facility. Based on these studies, the Coffeyville Facility could utilize either natural gas or pet coke to produce nitrogen fertilizer by making certain modifications to the plant. If this project is approved by the board of directors of our general partner (the “Board”) and successfully implemented, it could allow the Partnership to choose the optimal feedstock mix for production and would make the Coffeyville Facility the only nitrogen fertilizer plant in the U.S. with that feedstock flexibility.

Current wording

The Partnership continues to conduct engineering studies on the potential to utilize natural gas as an optional feedstock to pet coke at its Coffeyville Facility. Based on these studies, we believe the Coffeyville Facility could utilize either natural gas or pet coke to produce nitrogen fertilizer by making certain modifications to the plant. If this project is approved by the board of directors of our general partner (the “Board”) and successfully implemented, it could allow the Partnership to choose the optimal feedstock mix for production and would make the Coffeyville Facility the only nitrogen fertilizer plant in the United States with that feedstock flexibility.

Previous wording

The chart presented below summarizes our ammonia utilization rates on a consolidated basis for the three and six months ended June 30, 2024 and 2023. Utilization is an important measure used by management to assess operational output at each of the Partnership’s facilities. Utilization is calculated as actual tons of ammonia produced divided by capacity.

Current wording

The chart presented below summarizes our ammonia utilization rates on a consolidated basis for the three and nine months ended September 30, 2024 and 2023. Utilization is an important measure used by management to assess operational output at each of the Partnership’s facilities. Utilization is calculated as actual tons of ammonia produced divided by capacity.

Previous wording

On a consolidated basis for the three months ended June 30, 2024, utilization increased to 102% compared to 100% for the three months ended June 30, 2023 due to the facilities operating largely as planned with reduced downtime compared to the prior period. For the six months ended June 30, 2024, utilization decreased to 96% compared to 103% for the six months ended June 30, 2023 primarily due to the 14-day planned outage at the Coffeyville Facility during the first quarter of 2024.

Current wording

On a consolidated basis for the three months ended September 30, 2024, utilization decreased to 97% compared to 99% for the three months ended September 30, 2023 due to minor unplanned outages at both facilities in the current period. For the nine months ended September 30, 2024, utilization decreased to 96% compared to 101% for the nine months ended September 30, 2023 primarily due to the 14-day planned outage at the Coffeyville Facility during the first quarter of 2024 and other minor unplanned outages at both facilities in the current period.

Previous wording

Operating Highlights for the Six Months Ended June 30, 2024 versus June 30, 2023

Current wording

Operating Highlights for the Nine Months Ended September 30, 2024 versus September 30, 2023

Previous wording

For the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023, total product sales volumes were unfavorable due to shifting more product sales into the first quarter of 2024 as weather was favorable for an early application during the second quarter of 2024 and reduced production volumes due to the 14-day planned outage at the Coffeyville Facility during the first quarter of 2024. For the three and six months ended June 30, 2024, total product sales prices were unfavorable driven by sales price decreases of 26% and 32%, respectively, for ammonia and 15% and 31%, respectively, for UAN. Ammonia and UAN sales prices were unfavorable primarily due to lower natural gas prices reducing input costs and driving an overall decrease in the market prices during the current period.

Current wording

For the three and nine months ended September 30, 2024, total product sales volumes were unfavorable compared to the three and nine months ended September 30, 2023, due to reduced production volumes resulting from the 14-day planned outage at the Coffeyville Facility during the first quarter of 2024 and minor unplanned outages at both facilities in the current period. For the three months ended September 30, 2024, ammonia and UAN sales prices were favorable compared to the three months ended September 30, 2023, primarily due to lower producer and customer inventories ahead of the fall season in the current period. For the nine months ended September 30, 2024, ammonia and UAN sales prices were unfavorable compared to the nine months ended September 30, 2023, primarily due to lower natural gas prices reducing input costs and driving an overall decrease in market prices during the current period.

Previous wording

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. The table below presents these metrics for the three and six months ended June 30, 2024 and 2023:

Current wording

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. The table below presents these metrics for the three and nine months ended September 30, 2024 and 2023:

Previous wording

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. The table below presents these feedstocks for both facilities for the three and six months ended June 30, 2024 and 2023:

Current wording

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. The table below presents these feedstocks for both facilities for the three and nine months ended September 30, 2024 and 2023:

Previous wording

For the three months ended June 30, 2024, the Partnership’s operating income and net income were $33.6 million and $26.2 million, respectively, compared to operating income and net income of $66.7 million and $59.9 million, respectively, for the three months ended June 30, 2023. For the six months ended June 30, 2024, the Partnership’s operating income and net income were $53.6 million and $38.8 million, respectively, compared to operating income and net income of $176.1 million and $161.7 million, respectively, for the six months ended June 30, 2023. These decreases were driven primarily by lower product sales prices attributable to natural gas prices reducing input costs and driving an overall decrease in the market prices.

Current wording

For the three months ended September 30, 2024, the Partnership’s operating income and net income were $11.0 million and $3.8 million, respectively, compared to operating income and net income of $8.1 million and $0.7 million, respectively, for the three months ended September 30, 2023. These increases were driven primarily by a decrease in utility costs due to lower natural gas and electricity prices, combined with favorable personnel costs related to share-based compensation due to a falling unit price in the current period. For the nine months ended September 30, 2024, the Partnership’s operating income and net income were $64.6 million and $42.6 million, respectively, compared to operating income and net income of $184.2 million and $162.5 million, respectively, for the nine months ended September 30, 2023. These decreases were driven primarily by lower product sales prices attributable to natural gas prices reducing input costs and driving an overall decrease in market prices, partially offset by favorable utility costs due to lower natural gas and electricity prices.

Previous wording

Net Sales - For the three months ended June 30, 2024, net sales was $132.9 million compared to $183.0 million for the three months ended June 30, 2023. The decrease was primarily due to unfavorable UAN and ammonia sales prices resulting in reduced revenues of $23.7 million and unfavorable ammonia sales volume contributing $25.6 million in lower revenue compared to the three months ended June 30, 2023.

Current wording

Net Sales - For the three months ended September 30, 2024, net sales was $125.2 million compared to $130.6 million for the three months ended September 30, 2023. The decrease was primarily due to unfavorable UAN sales volumes contributing $11.4 million in lower revenue, partially offset by favorable UAN and ammonia sales prices.

Previous wording

The $187 and $48 per ton decreases in ammonia and UAN sales pricing, respectively, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 were primarily attributable to natural gas prices reducing input costs and driving an overall decrease in the market prices. The decrease in ammonia sales volume for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was due to shifting more product into the first quarter as weather was favorable for an early application.

Current wording

The increases in ammonia and UAN sales pricing, respectively, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 were primarily attributable to lower producer and customer inventory levels in 2024 ahead of the fall season. The decrease in UAN sales volume for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was primarily due to minor unplanned outages in the current period, limiting product available for sale.

Previous wording

For the six months ended June 30, 2024, net sales was $260.6 million compared to $409.3 million for the six months ended June 30, 2023. This decrease was primarily due to unfavorable UAN and ammonia pricing conditions and sales volumes which contributed $102.5 million and $35.5 million, respectively, in lower revenues compared to the six months ended June 30, 2023.

Current wording

For the nine months ended September 30, 2024, net sales was $385.8 million compared to $539.9 million for the nine months ended September 30, 2023. This decrease was primarily due to unfavorable UAN and ammonia pricing conditions and sales volumes which contributed $98.8 million and $46.7 million, respectively, in lower revenues.

Previous wording

The following table demonstrates the impact of changes in sales volume and pricing for the primary components of net sales, excluding urea products, freight, and other revenue, for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023:

Current wording

The following table demonstrates the impact of changes in sales volume and pricing for the primary components of net sales, excluding urea products, freight, and other revenue, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023:

Previous wording

The $245 and $122 per ton decreases in ammonia and UAN sales pricing, respectively, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 were primarily attributable to natural gas prices reducing input costs and driving an overall decrease in the market prices, paired with increased global supplies of nitrogen fertilizer. The decreases in

Current wording

The decreases in ammonia and UAN sales pricing, respectively, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 were primarily attributable to lower natural gas prices reducing input costs and driving an overall decrease in market prices, paired with increased global supply of nitrogen fertilizers driven by the restart of previously shut-in production capacity. The decreases in ammonia and UAN sales volumes for the nine months ended

Previous wording

UAN and ammonia sales volumes for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily attributable to lower UAN and ammonia production volumes as a result of the 14-day planned outage at the Coffeyville Facility during the first quarter of 2024.

Current wording

September 30, 2024 compared to the nine months ended September 30, 2023 were primarily attributable to lower ammonia and UAN production volumes as a result of the 14-day planned outage at the Coffeyville Facility during the first quarter of 2024 combined with minor unplanned outage at both facilities in the current period.

Previous wording

Cost of Materials and Other -For the three and six months ended June 30, 2024, cost of materials and other was $26.1 million and $51.4 million, respectively, compared to $33.4 million and $70.0 million for the three and six months ended June 30, 2023, respectively. These decreases were driven primarily by lower natural gas and refinery pet coke prices in the current period.

Current wording

Cost of Materials and Other -For the three and nine months ended September 30, 2024, cost of materials and other was $26.3 million and $77.7 million, respectively, compared to $31.0 million and $101.0 million for the three and nine months ended September 30, 2023, respectively. These decreases were driven primarily by lower natural gas and refinery pet coke prices in the current periods.

Previous wording

Direct Operating Expenses (exclusive of depreciation and amortization) -For the three and six months ended June 30, 2024, direct operating expenses (exclusive of depreciation and amortization) were $46.9 million and $102.5 million, respectively, compared to $55.8 million and $113.3 million, respectively, for the three and six months ended June 30, 2023. These decreases were primarily a result of decreased utility costs from lower natural gas and electricity prices, partially offset by increased repairs and maintenance costs in the current period.

Current wording

Direct Operating Expenses (exclusive of depreciation and amortization) -For the three and nine months ended September 30, 2024, direct operating expenses (exclusive of depreciation and amortization) were $55.8 million and $158.3 million, respectively, compared to $58.5 million and $171.8 million, respectively, for the three and nine months ended September 30, 2023. These decreases were primarily a result of decreased utility costs from lower natural gas and electricity prices, partially offset by increased repairs and maintenance costs in the current period.

Previous wording

Depreciation and Amortization Expense- For the three and six months ended June 30, 2024, depreciation and amortization expense was $20.0 million and $39.3 million, respectively, compared to $19.8 million and $35.0 million for the three and six months ended June 30, 2023, respectively. While depreciation and amortization expense remained consistent during the three months ended June 30, 2024, the increase during the six months ended June 30, 2024 was primarily due to accelerated depreciation related to planned asset retirements, including granular plant production assets, and due to additions to property, plant, and equipment during the current period, partially offset by fluctuations in depreciation capitalized to inventory and retirement of fully depreciated assets.

Current wording

Depreciation and Amortization Expense- For the three and nine months ended September 30, 2024, depreciation and amortization expense was $24.7 million and $64.1 million, respectively, compared to $24.1 million and $59.1 million for the three and nine months ended September 30, 2023, respectively. These increases were primarily due to accelerated depreciation related to planned asset retirements, including granular plant production assets, and due to additions to property, plant, and equipment during the current period, partially offset by fluctuations in depreciation capitalized to inventory and retirement of fully depreciated assets.

Previous wording

(4)The Partnership declared and paid a $1.68 and $1.92 cash distribution related to the fourth quarter of 2023 and the first quarter of 2024, respectively, and declared a cash distribution of $1.90 per common unit related to the second quarter of 2024 to be paid in August 2024.

Current wording

(6)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 $1.68, $1.92, and $1.90 cash distribution related to the fourth quarter of 2023 and the first and second quarters of 2024, respectively, and declared a cash distribution of $1.19 per common unit related to the third quarter of 2024 to be paid in November 2024.

Previous wording

As of June 30, 2024, we had cash and cash equivalents of $47.5 million, and combined with $50.0 million available under our ABL Credit Facility, we had total liquidity of $97.5 million as of June 30, 2024. As of December 31, 2023, we had $45.3 million in cash and cash equivalents. Long-term debt consisted of the following:

Current wording

As of September 30, 2024, we had cash and cash equivalents of $110.5 million, and combined with $39.3 million available under our ABL Credit Facility, we had total liquidity of $149.8 million as of September 30, 2024. As of December 31, 2023, we had $45.3 million in cash and cash equivalents. Long-term debt consisted of the following:

Previous wording

As of June 30, 2024, the Partnership had the 6.125% Senior Secured Notes, due June 2028 (the “2028 Notes”) 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 2023 Form 10-K for further information.

Current wording

As of September 30, 2024, the Partnership had 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 2023 Form 10-K for further information.

Previous wording

We divide capital spending needs into two categories: maintenance and growth. Maintenance capital spending includes non-discretionary maintenance projects and projects required to comply with environmental, health, and safety regulations. Growth capital projects generally involve an expansion of existing capacity and/or a reduction in direct operating expenses. We undertake growth capital spending based on the expected return on incremental capital employed.

Current wording

We divide capital spending needs into two categories: maintenance and growth. Maintenance capital spending includes non-discretionary maintenance projects and projects required to comply with environmental, health, and safety regulations. Growth capital projects generally involve an expansion of existing capacity, reliability improvements, and/or a reduction in direct operating expenses. We undertake growth capital spending based on the expected return on incremental capital employed.

Previous wording

Our total capital expenditures for the six months ended June 30, 2024, along with our estimated expenditures for 2024 are as follows:

Current wording

Our total capital expenditures for the nine months ended September 30, 2024, along with our estimated expenditures for 2024 are as follows:

Previous wording

The next planned turnarounds are currently scheduled to take place in 2025 at the Coffeyville Facility and in 2026 at the East Dubuque Facility.

Current wording

The next planned turnarounds are currently scheduled to take place in late 2025 at the Coffeyville Facility and in 2026 at the East Dubuque Facility.

Previous wording

For the second quarter of 2024, the Partnership, upon approval by the Board on July 29, 2024, declared a distribution of $1.90 per common unit, or $20.1 million, which is payable August 19, 2024 to unitholders of record as of August 12, 2024. Of this amount, CVR Energy will receive approximately $7.4 million, with the remaining amount payable to public unitholders.

Current wording

For the third quarter of 2024, the Partnership, upon approval by the Board on October 28, 2024, declared a distribution of $1.19 per common unit, or $12.6 million, which is payable November 18, 2024 to unitholders of record as of November 8, 2024. Of this amount, CVR Energy will receive approximately $4.6 million, with the remaining amount payable to public unitholders.

Previous wording

The change in net cash flows from operating activities for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 is primarily due to decreases of $122.9 million in net income and $18.7 million in working capital during 2024 due to lower product sales prices and sales volumes.

Current wording

The change in net cash flows from operating activities for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was primarily due to a decrease in net income of $119.9 million caused by lower sales due to unfavorable UAN and ammonia pricing conditions and sales volumes in the current period.

Previous wording

The change in net cash flows from investing activities for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was due to a decrease in distributions received from CVR Partners’ equity method investment of $16.4 million associated with the 45Q Transaction in 2024 and an increase in capital expenditures of $6.7 million during 2024 resulting from an increase in various capital projects in the current period compared to 2023.

Current wording

The change in net cash flows from investing activities for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was due to a decrease in distributions received from CVR Partners’ equity method investment of $16.3 million associated with the 45Q Transaction in 2024 and an increase in capital expenditures of $5.0 million during 2024 resulting from an increase in various capital projects in the current period compared to 2023.

Previous wording

The change in net cash flows from financing activities for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was due to a decrease in cash distributions paid of $183.2 million in 2024 compared to 2023.

Current wording

The change in net cash flows from financing activities for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was due to a decrease in cash distributions paid of $206.8 million in 2024 compared to 2023.

Previous wording

Our critical accounting estimates are disclosed in the “Critical Accounting Estimates” section of our 2023 Form 10-K. No modifications have been made during the three and six months ended June 30, 2024 to these estimates.

Current wording

Our critical accounting estimates are disclosed in the “Critical Accounting Estimates” section of our 2023 Form 10-K. No modifications have been made during the three and nine months ended September 30, 2024 to these estimates.