CVR PARTNERS, LP

(1) Organization and Nature of Business

CVR Partners, LP (“CVR Partners” or the “Partnership”) is a Delaware limited partnership formed 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 nitrogen fertilizer products attwo manufacturing facilities, one located in Coffeyville, Kansas operated by our wholly owned subsidiary, Coffeyville Resources Nitrogen Fertilizers, LLC (“CRNF”) (the “Coffeyville Facility”) andone located in East Dubuque, Illinois operated by our wholly owned subsidiary, East Dubuque Nitrogen Fertilizers, LLC (“EDNF”) (the “East Dubuque Facility”, and together with the Coffeyville Facility, the “Facilities”). The Facilities manufacture ammonia and are able to further upgrade such ammonia to other nitrogen fertilizer products, principally urea ammonium nitrate (“UAN”). Nitrogen fertilizer is used by farmers to improve the yield and quality of their crops, primarily corn and wheat. The Partnership’s products are sold on a wholesale basis in the United States of America. As used in these financial statements, 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.

Interest Holders

As of March 31, 2025, public common unitholders held approximately 61% of the Partnership’s outstanding limited partner interests; CVR Energy, through its subsidiaries, held approximately 37% of the Partnership’s outstanding limited partner interests and 100% of the Partnership’s general partner interest, while Icahn Enterprises L.P. and its other affiliates (“IEP”) held the remaining outstanding limited partner interests. As of March 31, 2025, IEP owned approximately 68% of the common stock of CVR Energy. In April 2025, IEP acquired additional shares of the Partnership’s outstanding limited partner interests, increasing its ownership to approximately 3%.

Management and Operations

The Partnership, including its general partner, is managed by a combination of the Board, the general partner’s executive officers, UAN Services, LLC (as sole member of the general partner), and certain officers of CVR Energy and its subsidiaries, pursuant to the Partnership Agreement, as well as a number of agreements among the Partnership, the general partner, CVR Energy, and certain of their respective subsidiaries, including certain services agreements. See Part II, Item 8 of CVR Partners’ Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”) for further discussion. Common unitholders have limited voting rights on matters affecting the Partnership and have no right to elect the general partner’s directors or officers, whether on an annual or continuing basis or otherwise.

Subsequent Events

The Partnership evaluated subsequent events, if any, that would require an adjustment to the Partnership’s condensed consolidated financial statements or require disclosure in the notes to the condensed consolidated financial statements through the date of issuance of these condensed consolidated financial statements. Where applicable, the notes to these condensed consolidated financial statements have been updated to reflect all significant subsequent events which have occurred.

(2) Basis of Presentation

The accompanying condensed consolidated financial statements, prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), include the accounts of CVR Partners and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated. Certain notes and other information have been condensed or omitted from these condensed consolidated financial statements. Therefore, these condensed consolidated financial statements should be read in conjunction with the December 31, 2024 audited consolidated financial statements and notes thereto included in the 2024 Form 10-K.

In the opinion of the Partnership’s management, the accompanying condensed consolidated financial statements reflect all adjustments that are necessary for fair presentation of the financial position and results of operations of the Partnership for the periods presented. Such adjustments are of a normal recurring nature, unless otherwise disclosed.

The condensed consolidated financial statements are prepared in conformity with GAAP, which requires management to make certain estimates and assumptions that affect the reported amounts and disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Results of operations and cash flows for the interim periods presented are not necessarily indicative of the results that will be realized for the year ending December 31, 2025 or any other interim or annual period.

Recent Accounting Pronouncements - Adoption of Segment Reporting Standard

The Partnership adopted Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures, with its 2024 Form 10-K, and included all disclosures required by the guidance and all existing segment disclosures under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting. Effective with this Quarterly Report on Form 10-Q, the Partnership adopted this ASU for its interim reports. Refer to Note 11 (“Business Segments”) for the required segment disclosures.

Recent Accounting Pronouncements - Accounting Standards Issued But Not Yet Implemented

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which requires enhanced income tax disclosures that reflect how operations and related tax risks, as well as how tax planning and operational opportunities, affect the tax rate and prospects for future cash flows. This standard is effective for the Partnership’s annual reporting beginning January 1, 2025 with early adoption permitted. While the Partnership does not believe the adoption will have a material impact on its consolidated financial statements, additional disclosures will be included for our Annual Report on Form 10-K for the year ending December 31, 2025 and interim reporting periods beginning January 1, 2026. The Partnership does not intend to early adopt this ASU.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), which requires additional disclosures in the footnotes that disaggregate certain expenses presented on the face of the income statement. This standard is effective for the Partnership’s annual reporting period beginning January 1, 2027 and interim reporting periods beginning January 1, 2028. Retrospective application to comparative periods is optional, and early adoption is permitted. The Partnership is currently evaluating the effects of adopting this new accounting guidance.

(3) Inventories

Inventories consisted of the following:

(4) Property, Plant, and Equipment

Property, plant, and equipment, net consisted of the following:

For the three months ended March 31, 2025 and 2024, depreciation and amortization expense related to property, plant, and equipment was $17.7 million and $19.1 million, respectively. Depreciation expense for the three months ended March 31, 2024 includes an additional $2.1 million resulting from the Partnership updating the estimated useful lives of certain assets due to planned asset retirements by the end of 2024, including granular urea production assets.

(5) Leases

Balance Sheet Summary as of March 31, 2025 and December 31, 2024

The following table summarizes the right-of-use (“ROU”) asset and lease liability balances for the Partnership’s operating leases at March 31, 2025 and December 31, 2024:

Lease Expense Summary for the Three Months Ended March 31, 2025 and 2024

We recognize operating lease expense within Direct operating expenses (exclusive of depreciation and amortization) and Cost of materials and other, and finance lease expense within Depreciation and amortization, on a straight-line basis over the lease term. For the three months ended March 31, 2025 and 2024, we recognized lease expense comprised of the following components:

(6) Other Current Liabilities

Other current liabilities consisted of the following:

(7) Long-Term Debt and Finance Lease Obligation

Long-term debt and finance lease obligation consisted of the following:

(1)The 6.125% Senior Secured Notes, due June 2028 had an estimated fair value of $531.8 million and $533.5 million as of March 31, 2025 and December 31, 2024, respectively. The fair value estimate is a Level 2 measurement, as defined by FASB ASC Topic 820, Fair Value Measurements, as it was determined by quotations obtained from a broker-dealer who makes a market in these and similar securities.

Credit Agreements

Covenant Compliance

The Partnership and its subsidiaries were in compliance with all covenants under their respective debt instruments as of March 31, 2025.

(8) Revenue

The following table presents the Partnership’s revenue, disaggregated by major products:

(1)Consists mainly of freight revenue and includes sales of carbon oxide (“CO”) made in connection with the joint venture created to monetize certain tax credits under Section 45Q of the Internal Revenue Code of 1986 (“45Q Transaction”) and the noncash consideration received, which is recognized as the performance obligation associated with the carbon oxide contract (“CO Contract”) is satisfied over its term through April 2030. Revenue from the CO Contract is recognized over time based on carbon oxide volumes measured at delivery.

Remaining Performance Obligations

We have spot and term contracts with customers and the transaction prices are either fixed or based on market indices (variable consideration). We do not disclose remaining performance obligations for contracts that have terms of one year or less and for contracts where the variable consideration was entirely allocated to an unsatisfied performance obligation.

As of March 31, 2025, the Partnership had approximately $6.9 million of remaining performance obligations for contracts with an original expected duration of more than one year. The Partnership expects to recognize $3.4 million of these performance obligations as revenue by the end of 2025, an additional $3.2 million in 2026, and the remaining balance in 2027.

Contract Balances

During the three months ended March 31, 2025 and 2024, the Partnership recognized revenue of $23.2 million and $5.2 million, respectively, that was included in the deferred revenue balances as of December 31, 2024 and December 31, 2023, respectively.

(9) Share-Based Compensation

A summary of compensation expense for the three months ended March 31, 2025 and 2024 is presented below:

(1)Other awards include the allocations, pursuant to the Corporate Master Services Agreement effective January 1, 2020, as amended (the “Corporate MSA”) and the Partnership’s Second Amended and Restated Agreement of Limited Partnership, of compensation expense for certain employees of CVR Energy and its subsidiaries who perform services for the Partnership and participate in equity compensation plans of CVR Energy.

(10) Commitments and Contingencies

In the ordinary course of business, the Partnership may become party to lawsuits, administrative proceedings, and governmental investigations, including environmental, regulatory, and other matters. The outcome of these matters cannot always be predicted accurately, but the Partnership accrues liabilities for these matters if the Partnership has determined that it is probable a loss has been incurred and the loss can be reasonably estimated. There have been no material changes in the Partnership’s commitments and contingencies to those disclosed in the 2024 Form 10-K.

45Q Transaction

Under the agreements entered into in connection with the 45Q Transaction, the Partnership’s subsidiary, CRNF, is obligated to meet certain minimum quantities of carbon oxide supply each year during the term of the agreement and is subject to fees of up to $15.0 million per year (reduced pro rata for partial years) to the unaffiliated third-party investors, subject to an overall $45.0 million cap, if these minimum quantities are not delivered. The Partnership issued a guarantee to the unaffiliated third-party investors and certain of their affiliates involved in the 45Q Transaction of the payment and performance obligations of CRNF and CVR-CapturePoint Parent, LLC (“CVRP JV”), which include the aforementioned fees. This guarantee has no impacts on the accounting records of the Partnership unless the parties fail to comply with the terms of the 45Q Transaction contracts.

(11) Business Segments

CVR Partners hasone operating and reportable segment: Nitrogen Fertilizer. The Partnership derives revenue by producing and marketing nitrogen fertilizer products within the United States, which are used by farmers to improve the yield and quality of their crops. The segment determination is based on the management approach, reflecting the internal reporting used by the Chief Operating Decision Maker (“CODM”), the Partnership’s Chief Executive Officer, to evaluate performance and make strategic decisions.

The CODM evaluates the performance of the Nitrogen Fertilizer Segment and decides how to allocate resources based on net income, which is reported in the condensed consolidated statements of operations. The CODM uses net income to assess the income generated by the Nitrogen Fertilizer Segment and to decide whether to reinvest profits into the Partnership or pay distributions. Net income is also used to analyze performance against the budget and the Partnership’s competitors.

While segment assets are not reported to, or used by, the CODM to allocate resources or to assess performance of the segment, total assets are disclosed in the condensed consolidated balance sheets.

The following table presents the operating results and capital expenditures information for the Nitrogen Fertilizer Segment:

(1)Other costs of materials includes inventory cost adjustments and lease expense.

(2)Other segment items includes (gain) loss on asset disposal, other (income) expense, and income tax (benefit) expense.

(12) Supplemental Cash Flow Information

Cash flows related to interest, leases, and capital expenditures included in accounts payable are as follows:

(13) Related Party Transactions

Activity associated with the Partnership’s related party arrangements for the three months ended March 31, 2025 and 2024 is summarized below:

(1)Sales to related parties, included in Net sales in our condensed consolidated statements of operations, consist of (a) sales of feedstocks and services under the Master Service Agreement with CRNF (the “Coffeyville MSA”) and (b) carbon oxide sales to CVRP JV and its subsidiaries.

(2)Expenses from related parties, included in Cost of materials and other, Direct operating expenses (exclusive of depreciation and amortization), and Selling, general and administrative expenses in our condensed consolidated statements of operations, consist primarily of pet coke and hydrogen purchased under the Coffeyville MSA and management and other professional services under the Corporate MSA.

(3)Consists primarily of amounts payable to CVR Energy subsidiaries under the Coffeyville MSA and Corporate MSA.

Distributions to CVR Partners’ Unitholders

Distributions, if any, including the payment, amount, and timing thereof, and the Board’s distribution policy, including the definition of Available Cash for Distribution, are subject to change at the discretion of the Board. The following tables present quarterly distributions paid by the Partnership to CVR Partners’ unitholders, including amounts paid to CVR Energy, during 2025 and 2024 (amounts presented in the table below may not add to totals presented due to rounding):

For the first quarter of 2025, the Partnership, upon approval by the Board on April 28, 2025, declared a distribution of $2.26 per common unit, or approximately $23.9 million, which is payable May 19, 2025 to unitholders of record as of May 12, 2025. Of this amount, CVR Energy and IEP will receive approximately $8.8 million and $0.5 million, respectively, with the remaining amount payable to public unitholders.