What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-04-30 compared with 2025-10-30 · 170 added, 267 removed, 298 unchanged (59% of the section changed)

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We expect our future results of operations and financial condition to benefit from the following key initiatives:

• Investing to improve Environmental, Health & Safety and Reliability at our Facilities while Supplying our Customers with Products of the Highest Quality.

• Invest to improve Environmental, Health & Safety at our Facilities.

We prioritize high safety standards that not only enable us to protect what matters, which is the well-being of our employees, but also translates into improved plant performance.

We remain focused on our safety programs to move closer to attaining zero injuries.

We have been investing and plan to continue to invest additional capital at all three of our facilities during 2025 to build upon the progress we have had in implementing enhanced safety programs during the last several years.

▪ We have multiple initiatives underway focused on continuing to improve the reliability of our plants as we advance towards our ammonia on-stream operating rate target and increase our production volumes of ammonia and other downstream products.

Progress towards these targets would enable us to produce greater volumes of product for sale while lowering our unit cost of production thereby increasing our overall profitability.

Additionally, our product quality program continues to focus on providing products to our customers that meet our quality standards.

We continue to invest additional capital across our facilities to build upon the progress we have made in implementing enhanced safety programs during the last several years.

• Improve the Reliability at our Facilities while Supplying our Customers with Products of the Highest Quality.

Improving the reliability of our facilities while supplying customers with high-quality products remains a key operational focus.

We have several initiatives underway aimed at increasing production volumes of ammonia and downstream products through improved operational execution and asset reliability.

Progress in these areas is expected to support higher available production and improved unit cost performance over time, while we continue to maintain a strong focus on product quality and customer requirements.

▪ Turnaround Excellence:

We will continue to focus on the safe and effective execution of scheduled Turnarounds, with an emphasis on schedule adherence, cost control, and minimizing operational risk.

We will continue to apply our standardized Turnaround management practices across all sites, including our revised Turnaround standardization, to support consistent execution and long-term asset reliability.

▪ Mechanical Integrity:

We will continue to enhance mechanical integrity through ongoing refinement of our inspection programs, with the objective of reducing fixed equipment failures and unplanned downtime.

▪ Asset Care Strategies:

We will continue to advance our machinery and asset care strategies, with a focus on reducing unplanned downtime, optimizing the scope and duration of planned outages, and improving the effectiveness of startup operations.

▪ Culture of Excellence :

We will continue to strengthen operational discipline and accountability across the organization, supporting improved productivity and overall operational reliability.

• Advance Productivity Improvement.

We are accelerating productivity improvements through a comprehensive focus on fixed and variable cost optimization, procurement-driven savings, automation, and process changes with multiple initiatives underway to identify, assess, and pursue cost-reduction opportunities.

• Continued Optimization and Increase the Breadth of Distribution of our Product Mix.

We have initiatives underway to increase the distribution of our products within our industrial end markets, among other product mix optimization strategies.

We have initiatives underway to increase the distribution of our products within our industrial and agricultural end markets, among other product mix optimization strategies.

We believe that these initiatives and strategies, combined with continued expansion of our customer relationships, the robust market analysis capabilities we have developed, and the establishment of in-market tank storage and distribution terminals, will make us more effective in identifying and capitalizing on the most profitable distribution opportunities for our products, while making our financial results more stable and predictable.

Additionally, we have completed and are advancing several capital improvement projects with the intention of increasing our sales volumes of higher value downstream products resulting in improvements in our overall profit margins.

• Development of Low Carbon Ammonia and Other Products.

The reduction of greenhouse gas emissions, particularly related to carbon dioxide, has been and we expect will increasingly become a global environmental priority.

Ammonia has continued to emerge as one of the more viable alternatives to serve as a hydrogen-based energy source for a variety of applications due to its higher energy density and ease of storage relative to hydrogen gas.

Low carbon ammonia can be used as a coal and natural gas substitute in power generation, a zero-carbon fuel in the maritime sector, and as a carbon free fertilizer.

If low carbon ammonia were to be adopted for these and other energy needs globally, some studies have indicated that future demand could increase from current levels of global annual production of ammonia.

Low carbon ammonia is produced using natural gas and conventional processes but includes an additional stage where the carbon dioxide emissions are captured and permanently stored in deep underground rock formations.

We believe that the resulting low carbon emission product can be sold at a premium to conventional ammonia, to customers seeking to reduce their carbon footprint, particularly in the power generation, marine, industrial, mining and agricultural end markets.

Additionally, we believe that producers of low carbon ammonia will be eligible for government incentives aimed at promoting carbon capture and sequestration (“CCS”).

We believe we are well-positioned to capitalize on this opportunity given our potential to retrofit our existing plants, which we believe can reduce our time to market for low carbon ammonia and also reduce the upfront capital expenditures necessary to enable us to produce this product.

We are currently pursuing projects that could enable us to become a producer and marketer of low carbon ammonia and other derivative products.

These projects include a low carbon ammonia project at our El Dorado Facility in collaboration with Lapis Carbon Solutions (“Lapis”) that we expect to be operational by the end of 2026.

In January 2025, we achieved pre-certification status under the Fertilizer Institute’s Verified Ammonia Carbon Intensity program.

This is a voluntary certification of the carbon footprint of ammonia production at a specific facility, from well to production gate.

Our El Dorado ammonia plant is one of four North American plants to have received such a status.

• Evaluate and Pursue Organic Capacity Expansion.

We have been evaluating opportunities across all our facilities to increase production capacity through the implementation of several potential debottlenecking projects, particularly at our El Dorado Facility.

Initial feasibility studies have pointed to potentially attractive returns for some of these projects.

However, given the current high-cost environment and limited resources, coupled with our outlook for moderating selling prices, during 2024 we elected to put the El Dorado expansion projects on hold.

We will continue evaluating these projects over the course of 2025 to determine our prospects of moving forward with one or more of them in the future.

• Evaluate Acquisitions of Strategic Assets or Companies.

From time to time, we evaluate opportunities to acquire strategic assets or companies where we believe those acquisitions will enhance our value and provide attractive returns to our stockholders.

Additionally,

we have completed and are advancing several capital improvement projects with the intention of increasing our sales volumes of higher value downstream products resulting in improvements in our overall profit margins.

• Grow Our Platform.

We continue to evaluate opportunities across all our facilities to increase production capacity through the implementation of several potential debottlenecking and other margin enhancement projects.

Additionally, from time to time, we evaluate opportunities to acquire strategic assets or companies where we believe those acquisitions will enhance our value and provide attractive returns to our stockholders.

We also consider assets and companies that can provide us with geographic expansion, extend an existing product line, add one or more new product lines, leverage our existing ammonia production capabilities, or complement our existing business lines, among other accretive opportunities.

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Freeport intends to use the low carbon ANS purchased from us for its United States copper mining operations.

In April 2022, we entered into an agreement with Lapis to develop a project to capture and sequester CO 2 at our El Dorado Facility.

In April 2022, we entered into an agreement with Lapis Carbon Solutions (“Lapis”) to develop a project to capture and sequester CO 2 at our El Dorado Facility.

Lapis, backed by Cresta Fund Management, a Dallas-based middle-market infrastructure investment firm, will invest the majority of the capital required for project development.

The project is expected to be completed and operational by the end of 2026, subject to the approval of a Class VI permit, at which time CO 2 injections are expected to begin.

The project is expected to be completed and operational late in the fourth quarter of 2026 or the first quarter of 2027, subject to the approval of a Class VI permit, at which time CO 2 injections are expected to begin.

Once operational, the project at the El Dorado site will initially capture and sequester approximately 400,000 to 500,000 metric tons of CO 2 per year in underground saline aquifers.

The sequestered CO 2 generated from the facility’s ammonia production is expected to qualify for federal tax credits under Internal Revenue Code Section 45Q, which are $85 per metric ton of CO 2 captured and sequestered.

Lapis, as the majority owner of the CCS equipment, will earn the 45Q tax credits and will pay us a fee for each ton of CO 2 captured and sequestered by the end of 2026.

Lapis, as the majority owner of the carbon capture and sequestration equipment, will earn the 45Q tax credits and will pay us a fee for each ton of CO 2 captured and sequestered.

Once in operation, the sequestered CO 2 is expected to reduce our overall scope 1 GHG emissions by approximately 25% from current levels.

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In June 2025, Lapis completed the drilling of a stratigraphic injection well at the El Dorado site and has been gathering data to support the EPA in its continuing technical review of our Class VI application.

Lapis resubmitted the pre-construction Class VI permit application to the EPA in December 2025.

Once the project receives EPA approval, we intend to use this well for CO 2 injections.

Market Outlook

Demand for our industrial products remains consistent despite global economic concerns.

Nitric acid demand has been robust, reflecting strong domestic production driven by proposed anti-dumping duties on imported methylene diphenyl diisocyanate (MDI) (for which nitric acid is a raw material in its production process), import tariffs and the resilience of the U.S.

Demand for AN for use in mining applications is robust across all commodities, particularly metals, with copper and gold in limited supply globally.

Gold and copper prices are at or near historical highs with strong outlooks for future demand to underpin current production levels and potential new projects that increase production volumes.

Demand for AN is also benefiting from quarrying/aggregate production for infrastructure upgrade and expansion.

These factors should continue to support AN demand through the remainder of 2025 and into 2026.

Economic uncertainty continues to be heightened by the potential impacts of tariffs on global trade flows, consumer prices and production input costs.

However, we believe that we have a meaningful degree of downside protection in our industrial business given our diverse customer base which is almost entirely located in the United States, the nature of our contracts and our ability to shift our production mix to products where demand and pricing are strongest.

Ammonia prices currently reflect constrained global inventories resulting from reduced supply from the Middle East, higher cost of production in Europe and delays to the start-up of new production capacity.

Supply constraints are expected to continue through the end of 2025, however, this could change and pricing may be impacted by the start-up of new production capacity in both the U.S.

and internationally, with at least one new world scale plant expected to come online before the end of 2025.

Pricing for ammonia derivative fertilizer products has been strong.

UAN prices have strengthened above year-ago levels, reflecting steady exports, lower imports and strong demand, resulting in tight U.S.

supply fundamentals and below average distribution channel inventory levels throughout the U.S.

which are expected to remain into 2026.

UAN prices have also been positively impacted by robust global demand for urea.

Corn market dynamics appear supportive of strong fertilizer demand.

The United States Department of Agriculture’s (“USDA”) recent revision of domestic spring planting season estimates to approximately 98 million planted acres of corn, up 9% from 2024, is not expected to hinder demand for the fall program, which remains subject to seasonal weather outcomes.

Demand for our industrial products remains consistent, including demand for AN for use in mining applications, which is robust across all commodities, particularly with copper and gold miners as they maximize production to take advantage of strong supply and demand fundamentals.

Supply of AN is constrained in North America due, in part, to producer outages.

These factors should continue to support AN demand well into 2026.

Demand for nitric acid is robust domestically, where it is supported by tariffs and countervailing duties on imports of methylene diphenyl diisocyanate (MDI) for five years, which was recently finalized on April 8, 2026.

While economic uncertainty remains a risk due to tariffs, the U.S.-Iran conflict, higher oil prices, and concerns about inflation, we believe that we have a meaningful degree of downside protection in our industrial business.

A significant portion of our volumes are already contracted, our customer base is diverse and almost entirely located in the U.S., and we have the ability to optimize our product mix.

In addition, we expect European marginal cost of production to be higher throughout the remainder of 2026, driven by elevated natural gas costs and a tight global market for nitrogen products, particularly as demand for fertilizers in India remains strong and export capacity from China and other sources continues to be limited.

Ammonia prices currently reflect significantly reduced ammonia supplies due to ammonia carrying vessels being unable to transit through the Strait of Hormuz, higher costs of production in Europe, ongoing curtailment of ammonia production in Trinidad and new production outages in Australia, increased import demand in India and potential export controls in China, gas supply disruptions in North Africa reducing ammonia production and the slow ramp up in new U.S.

production capacity which are constraining global supply availability.

Pricing for ammonia derivative fertilizer products remains strong.

Urea Ammonium Nitrate (“UAN”) prices recently improved, reflecting increased demand during the application season and constrained supply and a strengthening in urea prices.

Like ammonia,

urea prices have strengthened due to vessels being unable to transit through the Strait of Hormuz, leading to a tightening of urea supply and customers switching from urea to UAN, thereby driving up UAN demand.

Channel inventories remain on the tighter end of the range and are expected to remain so until late in the second quarter of 2026.

The outlook for U.S.

corn calls for a small increase in stocks to use as a result of strong 2025 plantings and harvest expectations.

We expect to see a reduction in planted acres in 2026 closer to recent averages of 91 million to 93 million acres underpinning nitrogen fertilizer demand levels in line with recent years.

corn calls for demand to keep stocks-to-use only modestly above historical levels.

We are currently expecting approximately 95 million planted acres of corn for the 2027 season, underpinning nitrogen fertilizer demand levels in line with recent years.

Key Industry Factors

Supply and Demand

Industrial Products

Our industrial products sales volumes are dependent upon general economic conditions, primarily in the housing, automotive, mining and paper industries.

Demand for our industrial products is robust across all commodities, particularly with copper and gold miners as they maximize production to take advantage of strong supply and demand fundamentals.

Our LDAN and AN solutions are primarily used to produce AN fuel oil and specialty emulsions for use in explosives in the quarry and the construction industries, for metals mining and to a lesser extent, for coal.

AN demand for explosives for quarrying/aggregate production for infrastructure upgrade and expansion remains steady.

Demand for nitric acid is robust domestically, supported in part by anticipated antidumping duties on imports of methylene diphenyl diisocyanate (MDI) from China, a downstream product of nitric acid.

On April 8, 2026, the U.S.

Department of Commerce issued a final affirmative antidumping determination on Chinese MDI, where duties were established for a period of five years.

The International Trade Commission’s final injury determination remains pending.

The price at which our agricultural products are ultimately sold depends on numerous factors, including the supply and demand for nitrogen fertilizers which, in turn, depends upon world grain demand and production levels, the cost and availability of transportation and storage, weather conditions, competitive pricing and the availability of imports.

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Individual farmers make planting decisions based largely on prospective profitability of a harvest, while the specific varieties and amounts of fertilizer they apply depend on factors such as their financial resources, soil conditions, weather patterns and the types of crops planted.

Additionally, changes in corn prices, as well as soybean, cotton and wheat prices, can affect the number of acres of corn planted in a given year and the number of acres planted will drive the level of nitrogen fertilizer consumption, likely affecting prices.

According to the World Agricultural Supply and Demand Estimates Report dated September 12, 2025 (the “September Report”), farmers planted approximately 98.7 million acres of corn in the 2025 planting season, up 8.9% compared to the 2024 planting season.

According to the September Report, the USDA estimates the U.S.

According to the World Agricultural Supply and Demand Estimates Report dated April 9, 2026 (the “April Report”), farmers planted approximately 98.8 million acres of corn in the 2025 planting season, up 8.7% compared to the 2024 planting season.

According to the April Report, the U.S.

Department of Agriculture (“USDA”) estimates the U.S.

ending stocks for the 2025 Harvest will be approximately 54.0 million metric tons, a 37.1% increase from the 2024 Harvest.

The USDA's expected yield per acre for the 2025 Harvest is 186.5 bushels, up approximately 4.0% from a year ago.

The following September 2025 estimates are associated with the corn market:

The following April 2026 estimates are associated with the corn market:

(2025 Harvest)

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(2023 Harvest)

September Report (1)

April Report (1)

Area Planted (Million acres)

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World Ending Stocks (Million metric tons)

Information obtained from the September Report for the 2026/2025 (“2026 Crop”), 2024/2025 ("2025 Crop") and 2023/2024 (“2024 Crop”) corn marketing years.

Information obtained from the April Report for the 2025/2026 (“2026 Crop”), 2024/2025 (“2025 Crop”) and 2023/2024 (“2024 Crop”) corn marketing years.

The marketing year is the twelve-month period during which a crop normally is marketed.

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The current USDA corn outlook for the U.S.

calls for greater supplies, larger exports, and a slight reduction in ending stocks.

Corn beginning stocks are higher based on a lower use forecast for the 2024 Harvest, with reductions in imports and corn used for ethanol partially offset by an increase in exports.

is unchanged relative to the last month report.

ending stocks remain at 54.0 million metric tons, up 14.3% from the 2024 harvest.

Both acres planted and yields are up from the 2024 Harvest, 8.7% and 4.0%, respectively.

Corn production for the 2025 Harvest is forecast at 17.0 billion bushels.

If realized, harvested area would be the highest since 1933 and planted area of 98.8 million acres the highest since 1936.

Industrial Products

Our industrial products sales volumes are dependent upon general economic conditions, primarily in the housing, automotive and paper industries.

Demand for our industrial products is stable despite persistent global economic challenges.

Nitric acid demand has been robust, reflecting strong domestic production.

Our sales prices generally vary with the market price of ammonia or natural gas, as applicable, in our pricing arrangements with customers.

Our LDAN and AN solution, which are primarily used as AN fuel oil and specialty emulsions for usage in the quarry and the construction industries, are used for metals mining and to a lesser extent, for coal.

Demand for AN for use in mining applications has been bolstered by positive exposure to copper, gold and iron ore, as well as continued attractive market fundamentals for aggregate production relating to infrastructure construction.

Economic uncertainty has recently been heightened by the potential impacts of tariffs on global trade flows, consumer prices and production input costs.

Natural Gas Prices

Natural gas is the primary feedstock used to produce nitrogen fertilizers at our manufacturing facilities.

Natural gas is the primary resource for conversion and manufacturing production of our nitrogen products.

In recent years, U.S.

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As a result, our competitive position and that of other North American nitrogen fertilizer producers has been positively affected.

We historically have purchased natural gas either on the spot market, through forward purchase contracts, or a combination of both and we have used forward purchase contracts to lock in pricing for a portion of our natural gas requirements.

Historically, we have purchased natural gas either on the spot market, through forward purchase contracts, or a combination of both and have used forward purchase contracts to lock in pricing for a portion of our natural gas requirements.

These forward purchase contracts are generally either fixed-price or index-price, short-term in nature and for a fixed supply quantity.

We are able to purchase natural gas at competitive prices due to our connections to large distribution systems and their proximity to interstate pipeline systems.

The following table shows the volume of natural gas purchased and the average cost per MMBtu:

Three Months Ended September 30,

Natural gas costs increased during the February settlement period primarily due to elevated market prices driven by Winter Storm Fern, which caused significant weather-related supply constraints and heightened regional demand, resulting in a higher average cost of natural gas for the period.

Since that time, natural gas prices have moderated as market conditions normalized and weather-related constraints eased.

The following table shows the volume of natural gas utilized to produce the goods we sold and the associated average cost per MMBtu:

Three Months Ended March 31,

Natural gas volumes (MMBtu in millions)

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Consistent, reliable and safe operations at our chemical plants are critical to our financial performance and results of operations.

The financial effects of planned downtime at our plants, including a planned major maintenance activity (each such activity, a “Turnaround”) is mitigated through a diligent planning process that considers the availability of resources to perform the needed maintenance and other factors.

Unplanned downtime of our plants typically results in lost contribution margin from lost sales of our products, lost fixed cost absorption from lower production of our products and increased costs related to repairs and maintenance.

All Turnarounds result in lost contribution margin from lost sales of our products, lost fixed cost absorption from lower production of our products and increased costs related to repairs and maintenance, which repair and maintenance costs are expensed as incurred.

The next ammonia plant Turnaround is currently planned for our El Dorado Facility in the first half of 2026.

We completed Turnarounds at both our Pryor Facility and Cherokee Facility in the latter half of 2024.

Following those Turnarounds, the next Pryor Facility Turnaround is currently planned for 2027, with the Cherokee Facility Turnaround currently planned for 2028.

Planned downtime, including a planned major maintenance activity (each such activity, a “Turnaround”), and unplanned downtime can adversely affect results of operations through reduced sales volumes, lower fixed cost absorption, and increased repair and maintenance costs, which are expensed as incurred.

We performed major Turnaround activities at our Pryor Facility during the third quarter of 2024 and at our Cherokee Facility during the fourth quarter of 2024.

Minor planned outages were executed at our El Dorado Facility in July 2024 to replace the ammonia primary reformer catalyst.

We did not perform any major planned ammonia Turnaround events during 2025 at the El Dorado Facility, although a minor Turnaround was completed on our nitric acid plants at our El Dorado Facility during 2025.

Based on our current maintenance schedule, Turnaround activities in 2026 are expected to include an ammonia plant Turnaround at our El Dorado Facility during the second quarter and a full-site Turnaround at our Pryor Facility during the third quarter.

Additionally, a minor Turnaround on the urea plant at our Cherokee Facility is planned for the third quarter of 2026.

Ammonia Production

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The ammonia production rates of our plants affect the total cost per ton of each product produced and the overall sales of our products.

For 2025, we are targeting total ammonia production of approximately 820,000 tons to 850,000 tons.

For 2026, we are targeting total ammonia production of approximately 780,000 tons to 810,000 tons, which reflects planned Turnaround work at our El Dorado and Pryor Facilities during 2026.

Forward Sales Contracts

In certain instances, we may use forward sales of our fertilizer products to optimize our asset utilization, planning process and production scheduling.

These sales are made by offering customers the opportunity to purchase product on a forward basis at prices and delivery dates that are agreed upon, with delivery dates typically occurring within 12 months.

These sales are made by offering customers the opportunity to purchase product on a forward basis at prices and delivery dates that are agreed upon, with dates typically occurring within 12 months.

We use this program to varying degrees during the year depending on market conditions and our view of changing price environments.

Fixing the selling prices of our products months in advance of their ultimate delivery to customers typically causes our reported selling prices and margins to differ from spot market prices and margins available at the time of shipment.

Consolidated Results of the Third Quarter of 2025

Our consolidated net sales for the third quarter of 2025 were $155.4 million compared to $109.2 million for the same period in 2024.

Our consolidated operating income for the third quarter of 2025 was $15.6 million compared to an operating loss of $24.4 million for the same period in 2024.

Consolidated Results of the First Quarter of 2026

Our consolidated net sales for the first quarter of 2026 were $169.5 million compared to $143.4 million for the same period in 2025.

Our consolidated operating income for the first quarter of 2026 was $23.2 million compared to $4.5 million for the same period in 2025.

The items impacting our operating results are discussed in more detail below and under “Results of Operations.”

Items Affecting Comparability of Results of the Third Quarter

Items Affecting Comparability of Results of the First Quarter

Stock Based Compensation

During the first quarter of 2026, we modified certain equity awards held by our Chief Executive Officer to allow for accelerated vesting in the event of a qualifying retirement.

As a result, we accelerated recognition of the remaining compensation cost associated with those grants in the amount of $3.1 million during the quarter.

See our discussion in “Equity Awards” in Note 1.

Shift in Production Mix

Earlier this year, we commenced the process of transitioning our production of fertilizer grade ammonium nitrate (“HDAN”), an agricultural/fertilizer product, to ANS, a product used in industrial and mining applications.

This transition was completed and the Company ceased production of HDAN during the third quarter of 2025.

This transition from HDAN to ANS is consistent with our strategy to shift a portion of our sales mix from agricultural sales made at spot market pricing, which can be volatile, towards sales covered under multi-year contracts where we pass through the cost of natural gas feedstock.

In 2025, we transitioned our production from fertilizer grade ammonium nitrate (“HDAN”), an agricultural product, to ANS, a product used in industrial and mining applications.

The transition was completed during the third quarter of 2025, at which time we ceased production of HDAN.

This shift in production mix is consistent with our strategy to transition a portion of our sales from agricultural sales made at spot market pricing, which can be volatile, to sales under multi-year contracts that provide the pass-through of natural gas feedstock costs.

Selling Prices

For the third quarter of 2025, average selling prices for UAN and ammonia increased while the average selling price for AN and nitric acid decreased compared to the third quarter of 2024.

Turnaround Activities (2024 only)

We performed major Turnaround activities at our Pryor Facility in the third quarter of 2024.

Additionally, we planned and executed a minor planned outage at our El Dorado Facility during July 2024 to change the catalyst in the ammonia plant to maximize production rates.

When such activities are performed, overall results are negatively impacted.

This impact includes lost contribution margin from lost sales, lost fixed cost absorption from lower production, and increased costs associated with repairs and maintenance.

In addition, Turnaround-related costs may be incurred in periods earlier than the actual outage of the plant for activities such as planning and procurement of materials.

Plant, Property and Equipment Impairments

For the three months ended September 30, 2025 and 2024, we recorded asset write-downs primarily related to assets no longer in use in the amount of $0.4 million and $5.6 million, respectively.

These write-downs are included in “Other (income) expense, net” on our condensed consolidated statements of operations.

For the first quarter of 2026, average selling prices for all of our major products increased compared to the first quarter of 2025.

Results of Operations

The following is a discussion and analysis of our condensed consolidated results of operations for the three months ended September 30, 2025 and 2024.

The following is a discussion and analysis of our condensed consolidated results of operations for the three months ended March 31, 2026 and 2025.

Net sales to unaffiliated customers are reported in the condensed consolidated financial statements and gross profit represents net sales less cost of sales.

Net sales are reported on a gross basis with the cost of freight being recorded in cost of sales.

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

The following table sets forth certain financial information for the three months ended September 30, 2025 and 2024, the increase or decrease between those periods, and the percentage increase or decrease between those periods with respect to each line item:

Three Months Ended September 30,

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

The following table sets forth certain financial information for the three months ended March 31, 2026 and 2025, the increase or decrease between those periods, and the percentage increase or decrease between those periods with respect to each line item:

Three Months Ended March 31,

(Dollars In Thousands)

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Total net sales

Gross profit (loss):

Adjusted gross profit (1)

Depreciation and amortization (1)

Turnaround expense

Total gross profit (loss)

Selling, general and administrative expense

Other (income) expense, net

Operating income (loss)

Interest expense, net

Non-operating other income, net

Provision (benefit) for income taxes

Net income (loss)

Other information:

Gross profit (loss) percentage (3)

Adjusted gross profit percentage (3)

Property, plant and equipment expenditures

_____________________________

N/M-Not meaningful.

(1) Represents a non-GAAP measure since the amount excludes unallocated depreciation, amortization and Turnaround expenses.

(2) Represents amount classified as cost of sales.

(3) As a percentage of the total net sales.

The following tables provide key operating metrics for the fertilizer and major industrial products, the increase or decrease between those periods, and the percentage increase or decrease between those periods with respect to each line item:

Three Months Ended September 30,

Product (tons sold)

AN & Nitric Acid

Urea ammonium nitrate (UAN)

Three Months Ended September 30,

Gross Average Selling Prices (price per ton)

AN & Nitric Acid

Urea ammonium nitrate (UAN)

Three Months Ended September 30,

Average Benchmark Prices (price per ton)

Tampa Ammonia Benchmark

Net sales increased compared to the prior year period due to the favorable impact of both higher prices and higher volumes.

Improved plant reliability in the manufacturing of our AN & Nitric Acid product group as well as an absence of Turnarounds in the third quarter of 2025 drove an increase in sales volumes across all our product groups, with UAN having the most significant increase.

Improved pricing, particularly on UAN, also contributed to the increase in net sales in the third quarter of 2025.

As noted in the table above, we recognized a gross profit of $25.5 million for the third quarter of 2025 compared to a gross loss of $7.9 million for the same period in 2024, or a $33.5 million increase.

Overall, our gross profit percentage was 16.4% compared to gross loss percentage of 7.3% for the same period in 2024.

Our adjusted gross profit percentage increased to 29.6% for the third quarter of 2025 from 22.9% for the third quarter of 2024.

Our gross profit for the third quarter of 2025 was higher compared to the same period of 2024 primarily due to increased sales and lower Turnaround expenses partially offset by higher cost of sales, which were driven largely by an increase in natural gas costs.

Selling, General and Administrative

Our SG&A expenses were relatively flat for the third quarter of 2025 compared to the same period of 2024.

Increases in payroll-related expenses were offset by decreases in professional fees, insurance and other miscellaneous expenses

Other (income) expense, net

Other expense, net for the third quarter of 2024 consisted primarily of asset write-downs.

Interest Expense

Interest expense for the third quarter of 2025 was $7.4 million compared to $8.1 million for the same period in 2024.

The decrease was primarily due to a lower outstanding balance on our Senior Secured Notes as a result of repurchases.

Non-operating Other Income, net

Non-operating other income, net for the third quarter of 2025 was $1.4 million compared to $2.7 million for the same period of 2024, primarily related to interest income earned during both periods from our short-term investments.

Our average short-term investments balance including cash equivalents, was lower during the third quarter of 2025 compared to the third quarter of 2024.

Provision (Benefit) for Income Taxes

The provision for income taxes for the third quarter of 2025 was $2.5 million compared to a benefit for income taxes of $4.5 million for the same period of 2024.

The resulting effective tax rate for the third quarter of 2025 was a provision on pre-tax income of 26.3% compared to a benefit on pre-tax loss of 15.0% for the same period of 2024.

For the third quarter of 2025, the effective tax rate was higher than the statutory rate primarily due to nondeductible compensation expense and state taxes.

For the third quarter of 2024, the effective tax rate was lower than the statutory rate primarily due to change in valuation allowance and nondeductible compensation.

See discussion in Note 7.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

The following table contains certain financial information for the nine months ended September 30, 2025 and 2024, the increase or decrease between those periods, and the percentage increase or decrease between those periods with respect to each line item:

Nine Months Ended September 30,

(Dollars In Thousands)

AN & Nitric Acid

Urea ammonium nitrate (UAN)

Total net sales

Gross profit:

Adjusted gross profit (2)

Depreciation and amortization (2)

Turnaround expense

Total gross profit

Selling, general and administrative expense

Other expense, net

Other income, net

Operating income

Interest expense, net

Loss (gain) on extinguishment of debt

Non-operating other income, net

Provision (benefit) for income taxes

Benefit for income taxes

Net income (loss)

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N/M-Not meaningful.

(1) Represents a non-GAAP measure since the amount excludes unallocated depreciation, amortization and Turnaround expenses.

(1) Represents amount classified as cost of sales.

(2) Represents a non-GAAP measure since the amount excludes unallocated depreciation, amortization and Turnaround expenses.

(3) As a percentage of the total net sales.

Nine Months Ended September 30,

Three Months Ended March 31,

Product (tons sold)

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Urea ammonium nitrate (UAN)

Nine Months Ended September 30,

Three Months Ended March 31,

Gross Average Selling Prices (price per ton)

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Urea ammonium nitrate (UAN)

Nine Months Ended September 30,

Three Months Ended March 31,

Average Benchmark Prices (price per ton)

Tampa Ammonia Benchmark

Net sales of our primary products increased during the first nine months of 2025 compared to the prior year period driven by the impact of higher volumes for UAN and our AN & Nitric Acid product group and improved pricing for UAN and ammonia.

Partially offsetting this increase was lower pricing for our AN & Nitric Acid product group and lower ammonia sales volumes.

Additionally, we benefited from a healthy increase in downstream upgraded product production volumes.

As noted in the table above, we recognized a gross profit of $63.1 million for the first nine months of 2025 compared to $41.7 million for the same period in 2024, a $21.4 million increase.

Overall, our gross profit percentage was 14.0% compared to a gross profit percentage of 10.8% for the same period in 2024.

Our adjusted gross profit percentage was 28.6% for the first nine months of 2025 compared to 29.7% for the same period in 2024.

Our gross profit for the first nine months of 2025 was higher compared to the prior year period primarily due to higher net sales and lower Turnaround expenses.

Partially offsetting these increases were higher natural gas costs and higher depreciation due to recent investments in our facilities.

We recorded net sales of $169.5 million during the first quarter of 2026 compared to $143.4 million for the first quarter of 2025, representing an increase of $26.1 million.

The increase was primarily driven by higher sales prices on all our products.

Decreases in ammonia and UAN sales volumes were offset by an increase in AN and Nitric Acid volumes as part of our product mix strategy, which includes upgrading ammonia to maximize higher value downstream products.

We recognized a gross profit of $35.8 million for the first quarter of 2026 compared to $14.4 million for the same period in 2025, or a $21.4 million increase.

Overall, our gross profit percentage for the first quarter of 2026 was 21.1% compared to 10.0% for the same period in 2025.

Our adjusted gross profit percentage increased to 35.7% for the first quarter of 2026 from 25.4% for the first quarter of 2025.

Our gross profit for the first quarter of 2026 was higher compared to the same period of 2025 primarily due to higher selling prices and improved product mix partially offset by increased cost of sales stemming from higher natural gas and sulfur costs.

Selling, General and Administrative

Our SG&A expenses were $30.3 million for the first nine months of 2025, a decrease of $1.6 million compared to the same period in 2024.

The net decrease was primarily driven by decreases in professional fees, insurance and other miscellaneous expenses items, partially offset by an increase in payroll-related expenses.

Our SG&A expenses were higher for the first quarter of 2026 compared to the same period of 2025, primarily due to an increase in stock based compensation from the acceleration of expense recognition for certain executive grants (see “Equity Awards” in Note 1) and an increase in short-term incentive compensation, which were partially offset by decreases in insurance and other miscellaneous expenses.

Other income, net

Other income, net for the first quarter of 2026 includes gains from the sale of real estate and tangible property for a former agricultural retail location that had ceased operations, partially offset by asset write-downs.

Other income, net, was higher in 2026 compared to 2025 due to the disposal gain discussed above.

Interest Expense

Interest expense for the first nine months of 2025 was $23.3 million compared to $26.2 million for the same period in 2024.

The decrease primarily related to reduced interest expense as a result of repurchases of Senior Secured Notes made during 2024 and the second quarter of 2025.

(Loss) gain on Extinguishment of Debt

During the first nine months of 2025, we repurchased $32.4 million in principal amount of our Senior Secured Notes for approximately $32.1 million, which was accounted for as an extinguishment of debt.

Including our write-off of the associated remaining portion of unamortized debt issuance costs, we recognized a loss on extinguishment of debt of approximately $0.1 million.

During the first nine months of 2024, we repurchased $96.6 million of our Senior Secured Notes through open market transactions for approximately $92.2 million.

As a result, we recognized a gain on extinguishment of debt, net of issuance costs, of approximately $3.0 million.

Other Expense, net

Other expense, net during the first nine months of 2025 and 2024 consisted primarily of asset write-downs related to assets no longer being used in operations.

The asset write downs were lower in the first nine months of 2025 compared to the first nine months of 2024.

In addition, the write-downs in the first nine months of 2024 were partially offset by short-term rental income from railcar subleases.

Interest expense for the first quarter of 2026 was $7.1 million compared to $8.1 million for the same period in 2025.

The decrease was primarily due to a lower outstanding balance on our Senior Secured Notes as a result of repurchases in the second and fourth quarters of 2025.

Non-operating Other Income, net

Non-operating other income, net for the first nine months of 2025 was $4.6 million compared to $9.1 million for the same period of 2024, primarily related to interest income earned during both periods from our short-term investments.

Our average short-term investments balance including cash equivalents, was lower during 2025 compared to 2024.

Provision (Benefit) for Income Taxes

The provision for income taxes for the first nine months of 2025 was $3.3 million compared to a benefit for income taxes $2.6 million for the same period of 2024.

The resulting effective tax rate for the first nine months of was 28.2% compared to 20.5% for the same period of 2024.

For the first nine months of 2025, the effective tax rate was higher than the statutory rate primarily due to nondeductible compensation expense and state taxes.

For the first nine months of 2024, the effective tax rate was lower than the statutory rate primarily due to change in valuation allowance and nondeductible compensation, partially offset by state tax law changes.

Non-operating other income, net for the first quarter of 2026 was $1.5 million compared to $1.7 million for the same period of 2025, primarily related to interest income earned during both periods from our short-term investments.

Our average short-term investments balance including cash equivalents, was higher during the first quarter of 2026 but interest rates were lower during this period compared to the first quarter of 2025.

Benefit for Income Taxes

The benefit for income taxes for the first quarter of 2026 was $2.1 million compared to a benefit for income taxes of $0.3 million for the same period of 2025.

The resulting effective tax rate for the first quarter of 2026 was a benefit on pre-tax income of 12.1% compared to a benefit on pre-tax loss of 14.7% for the same period of 2025.

For the first quarter of 2026, the effective tax rate was lower than the statutory rate primarily due to the release of state valuation allowances, partially offset by nondeductible compensation expense.

For the first quarter of 2025, the effective tax rate was lower than the statutory rate primarily due to changes in valuation allowance and nondeductible compensation, partially offset by state taxes.

See discussion in Note 7.

LIQUIDITY AND CAPITAL RESOURCES

The following table summarizes our cash flow activities for the nine months ended September 30:

The following table summarizes our cash flow activities for the three months ended March 31:

(In Thousands)

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Net Cash Flow from Operating Activities

Net cash provided by operating activities was $77.6 million for the first nine months of 2025 compared to $82.6 million for the same period of 2024, a change of $5 million.

The decrease was primarily a result of changes in working capital and lower interest income on our short-term investments.

Net cash provided by operating activities was $51.8 million for the first three months of 2026 compared to $6.8 million for the same period of 2025, a change of $45.0 million.

The increase was primarily a result of improved operating income and changes in working capital.

Net Cash Flow from Investing Activities

Net cash used by investing activities was $16.9 million for the first nine months of 2025 compared to $18.4 million for the same period of 2024, a change of $1.4 million.

For the first nine months of 2025, the net cash provided by investing activities primarily related to proceeds from short-term investments of $211.4 million, partially offset by purchases of short-term investments of $171.8 million and expenditures for property, plant and equipment of $56.3 million.

For the first nine months of 2024, the net cash used by investing activities primarily related to purchases of short-term investments of $190.6 million and expenditures for property, plant and equipment of $64.1 million, partially offset by proceeds from short-term investments of $236.5 million.

Net cash used by investing activities was $45.5 million for the first three months of 2026 compared to $5.3 million for the same period of 2025, a change of $40.2 million.

For the first three months of 2026, the net cash used by investing activities primarily related to purchases of short-term investments of $105.7 million and expenditures for property, plant and equipment of $17.0 million partially offset by proceeds from short-term investments and proceeds from sales of property, plant and equipment totaling $77.2 million.

For the first three months of 2025, the net cash used by investing activities primarily related to purchases of short-term investments of $49.0 million and expenditures for property, plant and equipment of $20.9 million, partially offset by proceeds from short-term investments of $64.5 million.

Net Cash Flow from Financing Activities

Net cash used by financing activities was $52.9 million for the first nine months of 2025 compared to $123.0 million for the same period of 2024, a change of $70.1 million.

For the first nine months of 2025, the net cash used by financing activities primarily consisted of repurchases of our Senior Secured Notes of $32.1 million, payments on our Secured Financing due 2025 and short-term financing of $19.3 million and $1.2 million for tax withholding obligations related to the vesting of equity awards.

For the first nine months of 2024, the net cash used by financing activities primarily consisted of repurchases of our 6.25% Senior Secured Notes of $92.2 million, payments on other long-term debt and short-term financing of $15.9 million and repurchases of $14.2 million of common stock.

Net cash used by financing activities was $5.2 million for the first three months of 2026 compared to $6.8 million for the same period of 2025, a change of $1.6 million.

For the first three months of 2026, the net cash used by financing activities primarily consisted of payments on short-term financing and finance leases of $3.7 million and $1.5 million for tax withholding obligations related to the vesting of equity awards.

For the first three months of 2025, the net cash used by financing activities primarily consisted of payments on other long-term debt and short-term financing of $5.6 million and $1.2 million for tax withholding obligations related to the vesting of equity awards.

Capitalization

The following table summarizes our total cash and cash equivalents, short-term investments, long-term debt and stockholders’ equity as of September 30, 2025 and December 31, 2024:

September 30, 2025

The following table summarizes our total cash and cash equivalents, short-term investments, long-term debt and stockholders’ equity as of March 31, 2026 and December 31, 2025:

March 31, 2026

December 31, 2025

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Senior Secured Notes due 2028 (1)

Secured Financing due 2025 (2)

Finance Leases

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(1) See discussion contained in Note 4.

(2) During the third quarter of 2025, we made the final balloon payment of approximately $5 million on a $30 million 60-month secured financing arrangement with an affiliate of Eldridge Industries, L.L.C.

(“Eldridge”).

(3) Debt issuance costs as of September 30, 2025 and December 31, 2024 of approximately $0.5 million and $0.6 million, respectively, relating to our Revolving Credit Facility are not included in Unamortized debt issuance costs.

(2) Debt issuance costs as of March 31, 2026 and December 31, 2025 of approximately $0.4 million and $0.5 million, respectively, relating to our Revolving Credit Facility are not included in Unamortized debt issuance costs.

These costs are included in our condensed consolidated balance sheets in Intangible and other assets, net.

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The Revolving Credit Facility provides for a sub-facility for the issuance of letters of credit in an aggregate amount not to exceed $10 million, with the outstanding amount of any such letters of credit reducing availability for borrowings.

As of September 30, 2025, our Revolving Credit Facility was undrawn and had approximately $45 million of availability.

As of March 31, 2026, our Revolving Credit Facility was undrawn and had approximately $59 million of availability.

See Note 4 for further discussion of the Revolving Credit Facility.

For the full year of 2025, we expect capital expenditures to be approximately $80 million, with spending focus on sustaining production, as well as growth initiatives.

From time to time, when the Company exceeds the funding threshold in our natural gas purchase commitments, the Company is required to fund cash collateral to our counterparty.

As of September 30, 2025, we had approximately $152.0 million of cash and short-term investments.

From time to time, we may seek to deploy capital through common stock repurchases or the early redemption of outstanding debt.

For the full year of 2026, we expect capital expenditures to be approximately $75 million, of which $55 million is expected to be spent on sustaining production with the remainder spent on growth initiatives.

As of March 31, 2026, we had approximately $181.6 million of cash and short-term investments.

From time to time, we may seek to deploy capital through common stock repurchases or the repurchase of outstanding debt.

Such repurchases may be made in open market purchases, privately negotiated transactions or otherwise and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

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Compliance with Long-Term Debt Covenants

As discussed in Note 4, the Revolving Credit Facility requires, among other things, that we meet a financial covenant.

The Revolving Credit Facility does not include financial covenant requirements unless a defined covenant trigger event has occurred and is continuing.

As of September 30, 2025, no trigger event had occurred.

As discussed in Note 4, the Revolving Credit Facility does not include financial covenant requirements unless a defined covenant trigger event has occurred and is continuing.

As of March 31, 2026, no trigger event had occurred.

Loan Agreements

Senior Secured Notes due 2028 – LSB had $446.1 million aggregate principal amount of Senior Secured Notes outstanding as of September 30, 2025.

Senior Secured Notes due 2028 – We had $438.6 million aggregate principal amount of Senior Secured Notes outstanding as of March 31, 2026.

Interest is to be paid semiannually in arrears on May 15 th and October 15 th .

The Senior Secured Notes mature on October 15, 2028.

Secured Financing due 2025 – During the third quarter of 2025, we made the final balloon payment of approximately $5 million on a 60-month, $30 million secured financing arrangement with an affiliate of Eldridge.

Revolving Credit Facility – At September 30, 2025, our Revolving Credit Facility was undrawn and had approximately $45 million of availability, based on our eligible collateral, less outstanding letters of credit as of that date.

Revolving Credit Facility – At March 31, 2026, our Revolving Credit Facility was undrawn and had approximately $59 million of availability, based on our eligible collateral, less outstanding letters of credit as of that date.

Also see discussion above under “Compliance with Long-Term Debt Covenants.”

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Most of our railcar leases are classified as operating leases.

Capital Expenditures – First Nine Months of 2025

For the first nine months of 2025, capital expenditures relating to property, plant and equipment were $56.3 million.

Capital Expenditures – First Three Months of 2026

For the first three months of 2026, capital expenditures relating to property, plant and equipment were $17.0 million.

Of the expenditures for the first three months of 2026, approximately $14.8 million was spent on projects to sustain our production capacity while approximately $2.2 million was spent on growth initiatives.

The capital expenditures were funded primarily from cash and working capital.

See discussion above under “Capitalization” for our total expected capital expenditures for the remainder of 2026.

Equity and Debt Repurchases

In May 2023, our Board of Directors authorized a $150 million stock repurchase program.

The program is intended as a means to maximize stockholder value by returning capital to stockholders.

Under the repurchase program, we are authorized to purchase shares from time to time through open market or privately negotiated transactions.

Such purchases may be made pursuant to Rule 10b5-1 plans or other means as determined by our management and in accordance with the requirements of the Securities and Exchange Commission (the “SEC”).

The repurchase program does not obligate us to purchase any particular number or type of securities.

During the nine months ended September 30, 2025, we did not repurchase any of our shares of common stock.

The repurchase program may be suspended, terminated or modified at any time for any reason.

During the nine months ended September 30, 2025, we repurchased $32.4 million in principal amount of our Senior Secured Notes for approximately $32.1 million, which was accounted for as an extinguishment of debt.

The debt repurchase was intended as a means to deleverage our balance sheet and reduce future interest costs while maintaining a balanced capital allocation strategy that provides an appropriate level of liquidity to fund our operations and future growth opportunities.

Expenses Associated with Environmental Regulatory Compliance

We are subject to specific federal and state environmental compliance laws, regulations and guidelines.

As a result, our expenses were $3.2 million for the first nine months ended September 30, 2025 in connection with environmental projects.

As a result, our expenses were $1.5 million for the first three months ended March 31, 2026 in connection with environmental projects.

For the remainder of 2026, we expect to incur expenses ranging from $4.0 million to $4.4 million in connection with additional environmental projects.

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These insurance bonds primarily represent guarantees of future performance of our subsidiaries.

As of September 30, 2025, we have agreed to indemnify the sureties for payments, up to $10.2 million, made by them in respect of such bonds.

As of March 31, 2026, we have agreed to indemnify the sureties for payments, up to $10.2 million, made by them in respect of such bonds.

New Accounting Pronouncements

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Significant judgment is applied in evaluating the need for and the magnitude of appropriate valuation allowances against deferred tax assets.

It is also reasonably possible that the estimates and assumptions utilized as of September 30, 2025, could change in the near term.

It is also reasonably possible that the estimates and assumptions utilized as of March 31, 2026, could change in the near term.

Actual results could differ materially from these estimates and judgments, as additional information becomes known.

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Adjusted gross profit is a metric that provides investors with greater transparency to the information used by management in its financial and operational decision-making.

We believe this metric is useful to investors because it facilitates comparisons of our core

business operations across periods on a consistent basis.

We believe this metric is useful to investors because it facilitates comparisons of our core business operations across periods on a consistent basis.

Management believes that the non-GAAP measure presented in this Form 10-Q, when viewed in combination with our results prepared in accordance with United States generally accepted accounting principles (“U.S.

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The following table reconciles gross profit to adjusted gross profit.

Three Months Ended September 30,

Nine Months Ended September 30,

(In Thousands)

Three Months Ended March 31,

(In Thousands)

Reconciliation of Gross Profit (Loss) to Adjusted Gross Profit:

Gross profit (loss)

Reconciliation of Gross Profit to Adjusted Gross Profit:

Depreciation and amortization

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As a result, we could be exposed to embedded losses should our product costs exceed the firm sales prices at the end of a reporting period.

At September 30, 2025, we had no embedded losses associated with sales commitments with firm sales prices.

At March 31, 2026, we had no embedded losses associated with sales commitments with firm sales prices.

Commodity Price Risk

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Generally, these contracts are considered normal purchases because they provide for the purchase of natural gas that will be delivered in quantities expected to be used over a reasonable period of time in the normal course of business, and as such, are exempt from derivative accounting requirements.

At September 30, 2025, we had no outstanding natural gas contracts which are subject to derivative accounting requirements.

At March 31, 2026, we had no outstanding natural gas contracts which are subject to derivative accounting requirements.

Interest Rate Risk

We may be exposed to variable interest rate risk with respect to our Revolving Credit Facility when there are outstanding borrowings.

As of September 30, 2025, we had no outstanding borrowings on this credit facility and no other variable rate borrowings.

We currently do not hedge our interest rate risk associated with our variable interest loan.

As of March 31, 2026, we had no outstanding borrowings on this credit facility and no other variable rate borrowings and, as a result, we currently do not hedge our interest rate risk associated with any variable interest rate loan.

Control s and Procedures

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These include controls and procedures designed to ensure that this information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company's disclosure controls and procedures as of September 30, 2025.

Based on this evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures were effective as of September 30, 2025, at the reasonable assurance level.

There were no changes to our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company's disclosure controls and procedures as of March 31, 2026.

There were no changes to our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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All Forward-Looking Statements speak only as of the date on which they are made.

Forward-Looking Statements contained herein include, but are not limited to:

Forward-Looking Statements contained herein, and the associated risks, uncertainties, assumptions and other important factors include, but are not limited to, the following:

• our ability to invest in projects that will generate the best returns for our stockholders;

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• the outlook of our chemical products and related markets;

• our ability to successfully leverage our existing business platform and portfolio of assets to produce low carbon products and execute our advanced low carbon ammonia initiatives, including our strategy to become a leader in the energy transition in the chemical industry;

• our ability to successfully leverage our existing business platform and portfolio of assets to produce low carbon products and execute our strategy to become a leader in the energy transition in the chemical industry;

• the amount, timing and effect on the nitrogen market from current nitrogen expansion projects;

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• our ability to broaden the distribution of our products, including our ability to leverage our nitric acid production capacity at our El Dorado Facility;

• our ongoing initiatives to increase the distribution of our products within our industrial end markets;

• the execution and success of our advanced low carbon ammonia initiatives;

• our expectations regarding future ammonia pricing;

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• changes in domestic fertilizer production;

• the increasing output, capacity and production volumes of our existing production facilities;

• the increasing output and capacity of our existing production facilities;

• production volumes at our production facilities;

• our ability to moderate risk inherent in agricultural markets;

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• our belief as to whether we have sufficient sources for materials and components;

• our belief regarding our estimates and contingencies with respect claims and legal actions in the ordinary course of our business and their effect on our business, financial condition, results of operations or cash flows;

• annual natural gas requirements;

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• expenses in connection with environmental projects;

• the effect of litigation, legal actions and other contingencies on our business, financial condition, results of operations or cash flows, including the potential financial penalties associated with the NOV from ADEQ regarding wastewater discharges from our El Dorado Facility;

• our ability to comply with debt servicing and covenants, including our beliefs as to whether we can meet all required covenant tests for the next twelve months;

• the effect of litigation and other contingencies;

• the increase in interest expense;

• our ability to comply with debt servicing and covenants;

• our ability to meet debt maturities or redemption obligations when due;

• the impact of our repurchase program on our stock price and cash reserves;

• our belief as to whether we can meet all required covenant tests for the next twelve months.

While we believe the expectations reflected in such Forward-Looking Statements are reasonable, we can give no assurance such expectations will prove to have been correct.

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• increased competitive pressures;

• adverse effects of increases in prices of raw materials;

• changes in federal, state and local laws and regulations, or in the interpretation of such laws and regulations;

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• adverse results in our contingencies including pending litigation;

• unplanned downtime at one or more of our facilities;

• changes in production rates at any of our facilities;

• unplanned downtime at one or more of our chemical facilities;

• changes in production rates at any of our chemical plants;

• an inability to obtain necessary raw materials and purchased components;

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• other factors described in Item 1A.

Risk Factors in our Form 10-K for the year ended December 31, 2024.

Risk Factors in our 2025 Form 10-K.

Given these uncertainties, all parties are cautioned not to place undue reliance on such Forward-Looking Statements.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis