What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-02-22 compared with 2022-02-23 · 251 added, 280 removed, 534 unchanged (50% of the section changed)

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$ 86,339 $ 112,516

Accounts receivable

Accounts receivable, net

90,448 88,351

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Current liabilities:

Current portion of long-term debt

Accounts payable

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Long-term liabilities:

Long-term debt, net of current portion

Long-term debt, net

546,800 610,642

Other long-term liabilities

15,734 12,358

Total long-term liabilities

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32,192 26,615 18,174

Loss on asset disposals

948 582 3,397

Loss on asset disposal 263 948 582

Goodwill impairment — — 40,969

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Income (loss) before income tax expense 286,961 78,212 ( 98,151 )

Income tax expense (benefit) 57 30 ( 18 )

Income tax expense 160 57 30

Net income (loss) $ 286,801 $ 78,155 $ ( 98,181 )

Basic and diluted earnings (loss) per common unit $ 27.07 $ 7.31 $ ( 8.77 )

Distributions declared per common unit

Weighted-average common units outstanding:

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Balance at December 31, 2019 11,328,297 $ 419,543 $ 1 $ 419,544

Cash distributions to common unitholders – Affiliates

— ( 15,568 ) — ( 15,568 )

Cash distributions to common unitholders – Non-affiliates

— ( 29,745 ) — ( 29,745 )

Net loss — ( 98,181 ) — ( 98,181 )

Balance at December 31, 2019 11,328,297 419,543 1 419,544

Net loss — ( 98,181 ) — ( 98,181 )

Repurchase of common units

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Fractional unit impact of reverse unit split 590 — — —

Other — ( 46 ) — ( 46 )

— ( 46 ) — ( 46 )

Balance at December 31, 2020 10,705,710 314,240 1 314,241

Net income — 78,155 — 78,155

Repurchase of common units

( 24,378 ) ( 529 ) — ( 529 )

Cash distributions to common unitholders – Affiliates

2 unchanged sentences

— ( 31,571 ) — ( 31,571 )

Balance at December 31, 2021 10,681,332 342,197 1 342,198

Net income — 286,801 — 286,801

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( 111,695 ) ( 12,398 ) — ( 12,398 )

Cash distributions to common unitholders – Affiliates

— ( 75,193 ) — ( 75,193 )

Cash distributions to common unitholders – Non-affiliates

— ( 129,597 ) — ( 129,597 )

Balance at December 31, 2022 10,569,637 $ 411,810 $ 1 $ 411,811

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Goodwill impairment — — 40,969

Loss on asset disposals 948 582 3,397

Loss on asset disposal 263 948 582

Loss on debt extinguishment 628 8,462 —

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Net cash used in financing activities ( 283,018 ) ( 86,426 ) ( 7,625 )

Net increase (decrease) in cash and cash equivalents and restricted cash 81,957 ( 6,435 ) ( 24,782 )

Net (decrease) increase in cash and cash equivalents ( 26,177 ) 81,957 ( 6,435 )

Cash and cash equivalents, beginning of period 112,516 30,559 36,994

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(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 at two manufacturing facilities, which are located in Coffeyville, Kansas (the “Coffeyville Facility”) and East Dubuque, Illinois (the “East Dubuque Facility”).

Both facilities manufacture ammonia and are able to further upgrade to other nitrogen fertilizer products, principally urea ammonium nitrate (“UAN”).

The Partnership produces nitrogen fertilizer products at two manufacturing facilities, one located in Coffeyville, Kansas operated by our wholly owned subsidiary, Coffeyville Resources Nitrogen Fertilizers, LLC (“CRNF”) (the “Coffeyville Facility”) and one located in East Dubuque, Illinois operated by our wholly owned subsidiary, East Dubuque Nitrogen Fertilizers, LLC (“EDNF”) (the “East Dubuque Facility”).

Both 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.

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.

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As of December 31, 2022, public common unitholders held approximately 63 % of the Partnership’s outstanding limited partner interests;

CVR Services, LLC (“CVR Services”), a wholly-owned subsidiary of CVR Energy, held approximately 36 % of the Partnership’s outstanding limited partner interests;

CVR Services, LLC (“CVR Services”), a wholly-owned subsidiary of CVR Energy, held the remaining approximately 37 % of the Partnership’s outstanding limited partner interests;

and CVR GP, LLC (“CVR GP” or the “general partner”), a wholly owned subsidiary of CVR Energy, held 100 % of the Partnership’s general partner interest.

As of December 31, 2022, Icahn Enterprises L.P.

(“IEP”) and its affiliates owned approximately 71 % of the common stock of CVR Energy.

and its affiliates owned approximately 71 % of the common stock of CVR Energy.

Unit Repurchase Program

On May 6, 2020, the board of directors of the Partnership’s general partner (the “Board”), on behalf of the Partnership, authorized a unit repurchase program (the “Unit Repurchase Program”).

The Unit Repurchase Program enables the Partnership to repurchase up to $ 10 million of the Partnership’s common units.

On February 22, 2021, the Board authorized an additional $ 10 million for the Unit Repurchase Program.

During the year ended December 31, 2021, the Partnership repurchased 24,378 common units on the open market in accordance with a repurchase agreement under Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended, at a cost of $ 0.5 million, inclusive of transaction costs, or an average price of $ 21.70 per common unit.

During the year ended December 31, 2020, as adjusted to reflect the impact of the 1-for-10 reverse unit split of the Partnership’s common units that was effective as of November 23, 2020, the Partnership repurchased 623,177 common units, respectively, at a cost of $ 7.1 million, inclusive of transaction costs, or an average price of $ 11.35 per common unit.

As of December 31, 2021, the Partnership had $ 12.4 million in authority remaining under the Unit Repurchase Program.

This Unit Repurchase Program does not obligate the Partnership to acquire any common units and may be cancelled or terminated by the Board at any time.

The Unit Repurchase Program, as increased, authorized the Partnership to repurchase up to $ 20 million of the Partnership’s common units.

During the years ended December 31, 2022 and 2021, the Partnership repurchased 111,695 and 24,378 common units, respectively, on the open market in accordance with a repurchase agreement under Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended, at a cost of $ 12.4 million and $ 0.5 million, respectively, exclusive of transaction costs, or an average price of $ 110.98 and $ 21.69 per common unit, respectively.

During the year ended December 31, 2020, as adjusted to reflect the impact of the 1-for-10 reverse unit split of the Partnership’s common units that was effective as of November 23, 2020, the Partnership repurchased 623,177 common units at a cost of $ 7.1 million, inclusive of transaction costs, or an average price of $ 11.34 per common unit.

As of December 31, 2022, the Partnership had a nominal authorized amount remaining under the Unit Repurchase Program.

This Unit Repurchase Program does not obligate the Partnership to purchase any common units and may be cancelled or terminated by the Board at any time.

Management and Operations

The Partnership, including CVR GP, is led by the Board and its committees and managed by the general partner’s executive officers, CVR Services (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 between the Partnership, CVR GP, CVR Energy, and certain of their respective subsidiaries, including a service agreement.

The Partnership, including CVR GP, is managed by a combination of the Board, the general partner’s executive officers, CVR Services (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, CVR GP, CVR Energy, and certain of their respective subsidiaries, including a service agreement.

See Note 9 (“Related Party Transactions”) 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 consolidated financial statements or require disclosure in the notes to the consolidated financial statements through the date of issuance of these consolidated financial statements.

Where applicable, the notes to these consolidated financial statements have been updated to discuss all significant subsequent events which have occurred.

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CVR Partners, LP and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(2) Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements, prepared in accordance with U.S.

generally accepted accounting principles (“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.

The accompanying 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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Commission (“SEC”), include the accounts of CVR Partners and its wholly-owned subsidiaries.

All intercompany accounts and transactions have been eliminated.

Reclassifications

Certain reclassifications have been made within the consolidated financial statements for prior periods to conform with current presentation.

Certain immaterial reclassifications have been made within the consolidated financial statements for prior periods to conform with current presentation.

Use of Estimates

The consolidated financial statements are prepared in conformity with GAAP, which requires management to make 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.

The 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.

Estimates are reviewed on an ongoing basis, based on currently available information.

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Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and on deposit, investments in highly liquid money market accounts, and debt instruments with original maturities of three months or less.

Cash and cash equivalents include cash on hand and on deposit and investments in highly liquid money market accounts with original maturities of three months or less.

Accounts Receivable, net

Accounts receivable, net primarily consist of customer accounts receivable recorded at the invoiced amounts and generally do not bear interest.

Also included within Accounts Receivable are unbilled fixed price contracts which is discussed further within Note 6 (“Revenue”).

Allowances for doubtful accounts are generally recorded when it becomes probable the receivable will not be collected and is booked to bad debt expense.

The largest concentration of credit for any one customer was approximately 22 % and 20 % of the net accounts receivable balance at December 31, 2021 and 2020, respectively.

Bad debt expense was $ 0.2 million, $ 0.1 million and $ 0.1 million for the years ended December 31, 2021, 2020, and 2019, respectively.

Inventories consist of fertilizer products which are valued at the lower of FIFO cost, or net realizable value.

Inventories also include raw materials (primarily gauze, natural gas, and pet coke) and parts and supplies that are valued at the lower of moving-average cost, which approximates FIFO, or net realizable value.

Accounts receivable, net primarily consists of customer accounts receivable recorded at the invoiced amounts and generally do not bear interest.

Also included within Accounts receivable, net are uncollected fixed price contracts which are discussed further within Note 6 (“Revenue”).

Allowances for doubtful accounts are based on historical loss experience, expected credit losses from current economic conditions, and management’s expectations of future economic conditions.

The allowance is recorded when the receivable is deemed uncollectible and is booked to bad debt expense.

The largest concentration of credit for any one customer was approximately 45 % and 22 % of the Accounts receivable, net balance at December 31, 2022 and 2021, respectively.

There was no bad debt expense for the year ended December 31, 2022.

For the years ended December 31, 2021, and 2020, bad debt expenses were $ 0.2 million and $ 0.1 million, respectively.

Inventories consist of fertilizer products and raw materials (primarily natural gas and pet coke), which are valued at the lower of GAAP First-In, First-Out (“FIFO”) cost or net realizable value.

Inventories also include parts and supplies that are valued at the weighted moving-average cost, which approximates FIFO.

The cost of inventories includes inbound freight costs.

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CVR PARTNERS, LP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Property, Plant and Equipment, net

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1,492,210 1,474,821

Accumulated depreciation ( 624,359 ) ( 553,045 )

Accumulated depreciation and amortization ( 681,216 ) ( 624,359 )

Total property, plant and equipment, net $ 810,994 $ 850,462

Leasehold improvements and assets held under finance leases are depreciated or amortized on the straight-line method over the shorter of the contractual lease term or the estimated useful life of the asset.

Expenditures for routine maintenance and repair costs are expensed when incurred.

Such expenses are reported in Direct operating expenses (exclusive of depreciation and amortization) in the Partnership’s Consolidated Statements of Operations.

As of December 31, 2021, the Partnership had not identified the existence of an impairment indicator for our long-lived asset groups as outlined under Accounting Standards Codification (“ASC”) Topic 360, Property, Plant, and Equipment .

Leasehold improvements and assets held under finance leases are depreciated or amortized utilizing the straight-line method over the shorter of the contractual lease term or the estimated useful life of the asset.

Expenditures for routine maintenance and repair costs are expensed when incurred and are reported in Direct operating expenses (exclusive of depreciation and amortization) in the Partnership’s Consolidated Statements of Operations.

For the years ended December 31, 2022, 2021, and 2020, depreciation and amortization expenses were $ 81.3 million, $ 72.4 million, and $ 75.0 million, respectively.

During the planning and execution of the turnarounds at the Coffeyville and East Dubuque Facilities in 2022 and 2021, the Partnership updated the estimated useful lives of certain assets, which resulted in additional depreciation expense of $ 12.7 million and $ 4.5 million during the years ended December 31, 2022 and 2021, respectively.

During the year ended December 31, 2022, the Partnership had not identified the existence of an impairment indicator for our long-lived asset groups as outlined under the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 360, Property, Plant, and Equipment .

At inception, the Partnership determines whether an arrangement is a lease and the appropriate lease classification.

Operating leases are included as operating lease right-of-use (“ROU”) assets within Other long-term assets and lease liabilities within Other current liabilities and Other long-term liabilities on our Consolidated Balance Sheets.

Finance leases are included as ROU finance leases within Property, plant, and equipment, net, and finance lease liabilities within Other current liabilities and Long-term debt, net of current portion on our Consolidated Balance Sheets.

When applicable, finance leases are included as ROU finance leases within Property, plant, and equipment, net, and finance lease liabilities within Other current liabilities and Long-term debt, net of current portion on our Consolidated Balance Sheets.

Leases with an initial expected term of 12 months or less are considered short-term and are not recorded on our Consolidated Balance Sheets.

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ROU assets represent the Partnership’s right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease.

ROU assets and liabilities are recognized at the commencement date based on the present value of minimum lease payments over the lease term using an incremental borrowing rate with a maturity similar to the lease term, as our leases do not generally provide an implicit rate.

The lease term is modified to reflect options to extend or terminate the lease when it is reasonably certain we will exercise such option.

The depreciable life of assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably

ROU assets and liabilities are recognized at the lease commencement

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CVR PARTNERS, LP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

certain of exercise, in which case the depreciation policy in the “Property, Plant and Equipment, net” section above is applicable.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

date based on the present value of minimum lease payments over the lease term using an incremental borrowing rate with a maturity similar to the lease term, as our leases do not generally provide an implicit rate.

The lease term is modified to reflect options to extend or terminate the lease when it is reasonably certain we will exercise such option.

The depreciable life of assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise, in which case the depreciation policy in the “Property, Plant and Equipment, net” section above is applicable.

The periodic lease payments are treated as payments of the lease obligation and interest is recorded as interest expense.

A lease modification is assessed to conclude whether it is a separate new contract or a modified contract.

If it is a modified contract, the Partnership reconsiders the lease classification and remeasures the lease.

Deferred Financing Costs

Lender and other third-party costs associated with debt issuances are deferred and amortized to interest expense and other financing costs using the effective-interest method over the term of the debt.

Deferred financing costs related to line-of-credit arrangements are amortized using the straight-line method through the maturity date of the facility.

The deferred financing costs are included net within Long-term debt, net and in Other long-term liabilities for the line-of-credit arrangements where no debt balance exists.

Impairment of Long-Lived Assets and Goodwill

Long-lived assets (excluding goodwill, intangible assets with indefinite lives, and deferred tax assets) are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future net cash flows expected to be generated by the asset.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future net cash flows expected to be generated by the asset.

If the carrying amount of an asset exceeds its estimated undiscounted future net cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds their fair value.

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The Partnership uses November 1 of each year as its annual valuation date for its goodwill impairment test.

One of the Partnership’s reporting units, the Coffeyville Facility, had a goodwill balance of $ 41.0 million at December 31, 2019.

During the second quarter of 2020, following completion of the spring planting season, the market pricing for ammonia and UAN, which are the facility’s two primary products, experienced significant pricing declines driven by updated market expectations around supply and demand fundamentals which were expected to continue into the second half of 2020.

Additionally, significant uncertainty remained as to the nature and extent of impacts to be seen on the overall demand for corn and soybean given reduced ethanol production and broader economic conditions which may negatively impacted demand.

Therefore, in connection with the preparation of the financial statements for the three months ended June 30, 2020, given the pricing declines experienced in the second quarter of 2020, further muting of the Partnership’s near-term economic recovery assumptions, and market price performance of the Partnership’s common units, the Partnership concluded an impairment indicator was present and a triggering event under ASC Topic 350, Intangibles-Goodwill and Other , had occurred as of June 30, 2020.

Significant assumptions inherent in the valuation methodologies are goodwill include, but are not limited to, prospective financial information, growth rates, discount rates, inflationary factors, and cost of capital.

Based on the interim quantitative analysis, it was determined that the estimated fair value of the Coffeyville Facility reporting unit did not exceed its carrying value.

As a result, the Partnership recorded a full non-cash impairment charge of $ 41.0 million during the year ended December 31, 2020.

As there was no goodwill remaining as of December 31, 2021 and 2020, no annual impairment review was performed.

The Partnership performed the annual impairment review of goodwill for 2019 associated with the Coffeyville Facility reporting unit and concluded there were no impairments.

For the period ended December 31, 2019, no events or circumstances were identified which would trigger the performance of a quantitative analysis after reviewing all qualitative factors impacting the reporting unit including improved market conditions, financial results, and financial forecasts from those used in the fair value analysis for December 31, 2018, which resulted in the fair value of the Coffeyville Facility reporting unit exceeding its carrying value by approximately 36 %.

One of our reporting units, the Coffeyville Facility, had a goodwill balance of $ 41.0 million at December 31, 2019, which was fully impaired during the second quarter of 2020 when it was determined the estimated fair value of the Coffeyville Facility reporting unit did not exceed its carrying value.

As there was no goodwill balance as of December 31, 2022 and 2021, no annual impairment review was performed.

Asset Retirement Obligations

The Partnership records an asset retirement obligation (“ARO”) at fair value for the estimated cost to retire a tangible long-lived asset at the time the liability is incurred, which is generally when the asset is purchased, constructed, or leased.

The liability is recorded when there is a legal or contractual obligation to incur costs to retire the asset and only when a reasonable estimate of the fair value can be made.

Loss Contingencies

In the ordinary course of business, CVR Partners 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.

Accrued amounts are reflected in Other current liabilities or Other long-term liabilities depending on when the Company expects to expend such amounts.

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 will be incurred and the loss can be reasonably estimated.

Accrued amounts, if any, are reflected in Other current liabilities or Other long-term liabilities depending on when the Partnership expects to expend such amounts.

As of December 31, 2022 and 2021, there are no matters or contingencies that require recognition or disclosure.

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CVR PARTNERS, LP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Environmental, Health & Safety (“EHS”) Matters

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Environmental, Health & Safety (“EH&S”) Matters

The Partnership is subject to various stringent federal, state, and local environmental, health, and safety rules and regulations.

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Environmental expenditures for capital assets are capitalized at the time of the expenditure when such costs provide future economic benefits.

Accrued amounts are reflected in Other current liabilities or Other long-term liabilities depending on when the Company expects to expend such amounts.

Accrued amounts, if any, are reflected in Other current liabilities or Other long-term liabilities depending on when the Partnership expects to expend such amounts.

As of December 31, 2022 and 2021, no liabilities have been recognized for environmental remediation matters, as no matters have been identified that are considered to be probable or estimable.

Revenue Recognition

The Partnership recognizes revenue based on consideration specified in contracts or agreements with customers when performance obligations are satisfied by transferring control over products or services to a customer.

The adoption of ASC Topic 606, Revenue from Contracts with Customers , resulted in the recognition of deferred revenue and related receivables, on a gross basis, associated with contracts that guarantee a price and supply of nitrogen fertilizer products in quantities expected to be delivered in the normal course of business.

Other accounting policies relevant to revenue include:

• Revenue transactions that pass control at customers’ designated facilities;

• Non-monetary product exchanges which are entered into in the normal course of business are included on a net cost basis in operating expenses on the Consolidated Statements of Operations;

• Pass-through finished goods delivery costs reimbursed by customers are reported in net sales, while an offsetting expense is included in cost of materials and other.

Other considerations - Excise and other taxes collected from customers and remitted to governmental authorities are excluded from reported revenues.

The Partnership’s revenue is generated from contracts with customers and is recognized at a point in time when performance obligations are satisfied by transferring control of the products or services to a customer.

The transfer of control occurs upon delivery of the product, as the customer accepts the product, has title and significant risks and rewards of ownership of the product, physical possession of the product has been transferred, and we have the right to payment.

The transaction prices of the Partnership’s contracts are either fixed or based on market indices, and any uncertainty related to the variable consideration when determining the transaction price is resolved on the pricing date or the date when the product is delivered.

The payment terms depend on the product and type of contract, but generally require customers to pay within 30 days or less, and do not contain significant financing components.

Any pass-through finished goods delivery costs reimbursed by customers are reported in Net sales, while an offsetting expense is included in Cost of materials and other.

Non-monetary product exchanges which are entered into in the normal course of business are included on a net cost basis in Cost of materials and other on our Consolidated Statements of Operations.

Qualifying excise and other taxes collected from customers and remitted to governmental authorities are recorded as a reduction of the transaction price.

Certain sales contracts require customer prepayment prior to product delivery to guarantee a price and supply of nitrogen fertilizer.

Deferred revenue is recorded at the point in time in which a prepaid contract is legally enforceable and the associated right to consideration is unconditional prior to transferring product to the customer.

An associated receivable is recorded for uncollected prepaid contract amounts.

Cost Classifications

Cost of materials and other consist primarily of freight and distribution expenses, feedstock expenses, purchased ammonia, and purchased hydrogen.

Cost of materials and other consists primarily of freight and distribution expenses, feedstock expenses, purchased ammonia, and purchased hydrogen.

Direct operating expenses (exclusive of depreciation and amortization) consist primarily of energy and other utility costs, direct costs of labor, property taxes, plant-related maintenance services, including turnaround, and environmental and safety compliance costs, as well as catalyst and chemical costs.

Each of these financial statement line items are also impacted by changes in inventory balances.

Each of these financial statement line items are also impacted by changes in inventory balances, as they include inventory production costs.

Direct operating expenses also include allocated share-based compensation from CVR Energy and its subsidiaries, as discussed in Note 7 (“Share-Based Compensation”).

Selling, general and administrative expenses consist primarily of legal expenses, treasury, accounting, marketing, human resources, information technology, and maintaining the corporate and administrative offices in Texas and Kansas.

Turnaround Expenses

Turnarounds represent major maintenance activities that require the shutdown of significant parts of a plant to perform necessary inspections, cleanings, repairs, and replacements of assets.

Costs incurred for routine repairs and maintenance or unplanned outages at our facilities are expensed as incurred.

Planned turnaround activities vary in frequency dependent on refinery units, but generally occur every two to three years .

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Partnership follows the direct-expense method of accounting for turnaround activities.

Costs associated with these turnaround activities are included in Direct operating expenses (exclusive of depreciation and amortization) in the Consolidated Statements of Operations.

During the years ended December 31, 2022, 2021, and 2020, the Partnership incurred turnaround expenses of $ 33.4 million, $ 2.9 million, and $ 0.7 million, respectively.

Share-Based Compensation

The Partnership accounts for share-based compensation in accordance with ASC Topic 718, Compensation — Stock Compensation (“ASC 718”).

The Partnership accounts for share-based compensation in accordance with FASB ASC Topic 718, Compensation — Stock Compensation .

Currently, all of the Partnership’s share-based compensation awards are liability-classified and are measured at fair value at the end of each reporting period based on the applicable closing unit price.

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See Note 7 (“Share-Based Compensation”) for further discussion.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

CVR Partners accounts for income taxes utilizing the asset and liability approach.

Under this method, deferred tax assets and liabilities are recognized for the anticipated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.

The Partnership accounts for income taxes utilizing the asset and liability approach.

Under this method, deferred tax assets and liabilities are recognized for the anticipated future tax consequences attributable to differences between the amounts recorded in the accounting books and their respective tax basis.

Deferred amounts are measured using enacted tax rates expected to apply to taxable income in the year those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

In assessing the realizability of the deferred income tax assets, including net operating loss and state tax credit carryforwards, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

Further, the Partnership recognizes interest expense (income) and penalties on income tax deficiencies (refunds) in Income tax expense.

Allocation of Costs

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See Note 9 (“Related Party Transactions”) for a detailed discussion of the billing procedures and the basis for calculating the charges for specific products and services.

Recent Accounting Pronouncements - Adoption of Income Taxes Standard

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2019-12, Income Taxes (Topic 740).

The ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and modifies other areas of the topic to clarify the application of GAAP.

Certain amendments within the standard are required to be applied on a retrospective basis and others on a prospective basis.

Effective January 1, 2021, we adopted this ASU with no material impact on the Partnership’s consolidated financial position or results of operations.

Recent Accounting Pronouncements - Adoption of Codification Improvements Standard

In October 2020, the FASB issued ASU 2020-10, Codification Improvements.

The ASU amends various sections of the codification in the FASB’s ongoing efforts to simplify and improve guidance.

Effective January 1, 2021, we adopted this ASU with no material impact on the Partnership’s consolidated financial position or results of operations.

Recent Accounting Pronouncements - New Accounting Standards Issued But Not Yet Implemented

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848).

This ASU was issued because, by the end of 2022, banks will no longer be required to report information that is used to determine London Interbank Offered Rate (“LIBOR”), which is used globally by all types of entities.

As a result, LIBOR could be discontinued, as well as other interest rates used globally.

ASU 2020-04 provides companies with optional expedients for contract modifications under Topics 310, 470, 842, and 815-15, excluded components of certain hedging relationships, fair value hedges, and cash flow hedges, as well as certain exceptions, which are intended to help ease the potential accounting burden associated with transitioning away from these reference rates.

In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which clarifies certain optional expedients and exceptions for contract modifications and hedge accounting.

Companies can apply the ASU immediately.

However, the guidance will only be available for a limited time (generally through December 31, 2022).

The Partnership is currently evaluating the impact of adopting this new accounting standard, but does not expect it to have a material impact on its consolidated financial statements and related disclosures.

Lease Overview

We lease railcars and certain facilities and equipment to support the Partnership’s operations.

Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 20 years or more.

The exercise of lease renewal options is at our sole discretion.

Certain leases also include options to purchase the leased property.

The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase

Recent Accounting Pronouncements - Accounting Standards Issued But Not Yet Implemented

In March 2020, FASB issued Accounting Standard Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.

This guidance applies to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates.

The guidance is effective beginning on March 12, 2020 through the sunset date of Topic 848, which is currently expected to occur on December 31, 2024.

The Partnership has not utilized any of the optional expedients or exceptions available under this guidance and will continue to assess whether this guidance is applicable throughout the effective period.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

option reasonably certain of exercise.

Certain of our lease agreements include rental payments which are adjusted periodically for factors such as inflation.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Lease Overview

We lease railcars and certain facilities to support the Partnership’s operations.

Most of our leases include one or more renewal options to extend the lease term, which can be exercised at our sole discretion.

Certain leases also include options to purchase the leased property.

Additionally, certain of our lease agreements include rental payments, which are adjusted periodically for factors such as inflation.

Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Additionally, we do not have any material lessor or sub-leasing arrangements.

Furthermore, we do not have any material lessor or sub-leasing arrangements.

Balance Sheet Summary at December 31, 2022 and 2021

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Lease Terms and Discount Rates

The following outlines the remaining lease terms and discount rates used in the measurement of the Partnership’s ROU assets and liabilities:

The following outlines the remaining lease terms and discount rates used in the measurement of the Partnership’s ROU assets and lease liabilities at December 31, 2022 and 2021:

December 31, 2022 December 31, 2021

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CVR PARTNERS, LP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Maturities of Lease Liabilities

The following summarizes the remaining minimum operating lease payments through maturity of the Partnership’s ROU assets and liabilities at December 31, 2021.

The following summarizes the remaining minimum operating lease payments through maturity of the Partnership’s liabilities at December 31, 2022.

There were no finance lease payments remaining at December 31, 2022.

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Total lease liability $ 10,905

On July 31, 2020, the Partnership and Messer LLC (“Messer”) entered into an On-Site Product Supply Agreement (the “Messer Agreement”).

On February 21, 2022, the Partnership entered into the First Amendment to the On-Site Product Supply Agreement (the “Messer Amendment”, and collectively, the “Amended Messer Agreement”) with Messer.

Under the Amended Messer Agreement, among other obligations, Messer is obligated to supply and make certain capital improvements during the term of the Amended Messer Agreement, and the Partnership is obligated to take as available and pay for, oxygen, nitrogen, and compressed dry air from Messer’s facility.

This arrangement for the Partnership’s purchase of oxygen, nitrogen, and dry air from Messer does not meet the definition of a lease under FASB Accounting Standards Codification (“ASC”) Topic 842, Leases (“Topic 842”), as the Partnership does not expect to receive substantially all of the output of Messer’s on-site production from its air separation unit over the life of the Amended Messer Agreement.

The Amended Messer Agreement also obligates Messer to install a new oxygen storage vessel, related equipment and infrastructure (“Oxygen Storage Vessel” or “Vessel”) to be used solely by the Coffeyville Facility.

The arrangement for the use of the Oxygen Storage Vessel meets the definition of a lease under Topic 842, as the Partnership will receive all output associated with the Vessel.

Based on terms outlined in the Amended Messer Agreement, the Partnership expects the lease of the Oxygen Storage Vessel to be classified as a financing lease with an amount of approximately $ 25 million being capitalized upon lease commencement when the Vessel is placed in service.

On February 21, 2022, CRNF entered into the First Amendment to the On-Site Product Supply Agreement with Messer LLC (“Messer”), which amended the July 31, 2020 On-Site Product Supply Agreement (as amended, the “Messer Agreement”).

Under the Messer Agreement, among other obligations, Messer is obligated to supply and make certain capital improvements during the term of the Messer Agreement, and CRNF is obligated to take as available and pay for oxygen from Messer’s facility.

This arrangement for CRNF’s purchase of oxygen from Messer does not meet the definition of a lease under FASB ASC Topic 842, Leases (“Topic 842”), as CRNF does not expect to receive substantially all of the output, which includes oxygen, nitrogen and compressed air, of Messer’s on-site production from its air separation unit over the life of the Messer Agreement.

The Messer Agreement also obligates Messer to install a new oxygen storage vessel, related equipment and infrastructure (“Oxygen Storage Vessel” or “Vessel”) to be used solely by the Coffeyville Facility.

The arrangement for the use of the Oxygen Storage Vessel meets the definition of a lease under Topic 842, as CRNF will receive all output associated with the Vessel.

Based on terms outlined in the Messer Agreement, the Partnership expects the lease of the Oxygen Storage Vessel to be classified as a financing lease with an amount of approximately $ 25 million being capitalized upon lease commencement when the Vessel is placed in service, which is currently expected within the next 12 months.

(4) Other Current Liabilities

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(in thousands) 2022 2021

Personnel accruals $ 7,920 $ 7,475

Share-based compensation $ 9,231 $ 5,888

Personnel accruals 7,539 7,920

Operating lease liabilities 2,931 3,052

Accrued insurance 2,283 718

Accrued taxes other than income taxes 1,789 1,744

Accrued interest 1,654 2,506

Sales incentives 1,772 1,555

Prepaid revenue contracts 954 197

Accrued interest 1,404 1,654

Other accrued expenses and liabilities 768 1,870

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CVR PARTNERS, LP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(5) Long-Term Debt

Long-term debt consists of the following:

Long-term debt, net consists of the following:

(in thousands) 2022 2021

9.25 % Senior Secured Notes, due June 2023 (1)

6.125 % Senior Secured Notes, due June 2028 (1)

550,000 550,000

6.125 % Senior Notes, due June 2028 (1)

Unamortized discount and debt issuance costs ( 3,200 ) ( 4,358 )

( 4,358 ) ( 11,058 )

Total long-term debt

$ 546,800 $ 610,642

Current portion of long-term debt and finance lease obligations (4)

Total long-term debt, including current portion $ 610,642 $ 636,182

(1) The estimated fair value of the 9.25 % Senior Secured Notes due June 2023 (the “2023 Notes”) was approximately $ 65.1 million and $ 645.7 million as of December 31, 2021 and December 31, 2020, respectively.

The estimated fair value of the 6.125 % Senior Secured Notes due June 2028 was approximately $ 580.3 million as of December 31, 2021.

This estimate of fair value is a Level 2 measurement as it was determined by quotations obtained from a broker-dealer who makes a market in these and similar securities.

(2) The call price of the 2023 Notes decreased to par on June 15, 2021.

On June 23, 2021, September 23, 2021, and December 22, 2021, the Partnership redeemed $ 550 million, $ 15 million, and $ 15 million, respectively, of the 2023 Notes, at par, plus accrued and unpaid interest on the redeemed portion.

The remaining balance of $ 65 million was outstanding as of December 31, 2021.

The $ 65 million outstanding balance of the 2023 Notes was paid in full on February 22, 2022 at par, plus accrued and unpaid interest.

(3) For the years ended December 31, 2021, 2020, and 2019, amortization of the discount on debt and amortization of deferred financing costs reported as Interest expense, net totaled approximately $ 2.5 million, $ 3.8 million, and $ 3.4 million, respectively.

(4) The $ 2.2 million outstanding balance of the 6.5 % Notes, due April 2021, was paid in full on April 15, 2021.

(1) The $ 65 million outstanding balance of the 2023 Notes, defined below, was paid in full on February 22, 2022 at par, plus accrued and unpaid interest.

The estimated fair value of the 2028 Notes, defined below, was approximately $ 493.3 million and $ 580.3 million as of December 31, 2022 and 2021, respectively.

These estimates of fair value are a Level 2 measurement, as defined by ASC Topic 820 - Fair Value Measurements and Disclosure, as they were determined by quotations obtained from a broker-dealer who makes a market in these and similar securities.

Credit Agreements

(in thousands) Total Capacity Amount borrowed as of December 31, 2021 Outstanding Letters of Credit Available capacity as of December 31, 2021 Maturity Date

ABL Credit Agreement (1) (2) (3)

(in thousands) Total Available Borrowing Capacity Amount Borrowed as of December 31, 2022 Outstanding Letters of Credit Available Capacity as of December 31, 2022 Maturity Date

ABL Credit Facility

$ 35,000 $ — $ — $ 35,000 September 30, 2024

(1) On September 30, 2021, the Partnership entered into a senior secured asset based credit agreement with an aggregate principal amount of up to $ 35.0 million with a maturity date of September 30, 2024 (the “ABL Credit Facility”) and terminated its $ 35.0 million ABL Credit Agreement , dated as of September 30, 2016, as amended (the “2016 ABL Credit Agreement”).

(2) Beginning September 30, 2021, loans under the Partnership’s ABL Credit Facility bear interest at an annual rate equal to, at the option of the borrowers, (i) (a) 1.615 % plus the daily simple Secured Overnight Financing Rate (“SOFR”) or (b) 0.615 % plus a base rate, if our quarterly excess availability is greater than or equal to 75%, (ii) (a) 1.865 % plus SOFR or (b) 0.865 % plus a base rate, if our quarterly excess availability is greater than or equal to 50% but less than 75%, or (iii) (a) 2.115 % plus SOFR or (b) 1.115 % plus a base rate, otherwise.

(3) For the years ended December 31, 2021, 2020, and 2019, amortization expense for deferred financing costs were approximately $ 0.3 million, $ 0.2 million, and $ 0.2 million, respectively.

9.25 % Senior Secured Notes due June 2023

On June 23, 2021, CVR Partners and its subsidiary, CVR Nitrogen Finance Corporation (“Finance Co.” and, together with CVR Partners, the “Issuers”), completed a private offering of $ 550 million aggregate principal amount of 6.125 % Senior Secured Notes due June 2028 (the “2028 Notes”).

On June 10, 2016, CVR Partners and its subsidiary, CVR Nitrogen Finance Corporation (“Finance Co.” and, together with CVR Partners, the “2023 Notes Issuers”), certain subsidiary guarantors named therein and Wilmington Trust, National Association, as trustee and as collateral trustee, completed a private offering of $ 645 million aggregate principal amount of 9.25 % Senior Secured Notes due 2023 (the “2023 Notes”).

The 2023 Notes would have matured on June 15, 2023, but the 2023 Notes Issuers redeemed the remaining outstanding balance at par plus accrued and unpaid interest to the applicable redemption date on February 22, 2022.

Interest on the 2023 Notes was paid semi-annually in arrears on June 15 and December 15 of each year and were guaranteed on a senior secured basis by all of the Partnership’s existing subsidiaries.

The 2023 Notes contained customary covenants for a financing of this type that, among other things, restricted CVR Partners’ ability and the ability of certain of its subsidiaries to have:

(i) sold assets;

(ii) paid distributions on, redeemed or repurchased the Partnership’s units or redeemed or repurchased its subordinated debt;

(iii) made investments;

(iv) incurred or guaranteed additional indebtedness or issued preferred units;

(v) created or incurred certain liens;

(vi) entered into agreements that restrict distributions or other payments from the Partnerships’ restricted subsidiaries to the Partnership;

(vii) consolidated, merged or transferred all or substantially all of the Partnerships’ assets;

(viii) engaged in transactions with affiliates;

and (ix) created unrestricted subsidiaries.

In addition, the indenture contained customary events of default, the occurrence of which would have resulted in or permitted the trustee or the holders of at least 25 % of the 2023 Notes to have caused the acceleration of the 2023 Notes, in addition to pursuing other available remedies.

During 2021, the Partnership redeemed $ 580 million in aggregate principal amounts of the outstanding 2023 Notes at par.

On February 22, 2022, the Partnership redeemed all of the remaining outstanding 2023 Notes at par and settled accrued and unpaid interest of approximately $ 1.1 million through the date of redemption.

As a result of this transaction, the Partnership recognized a loss on extinguishment of debt of $ 0.6 million in the first quarter of 2022, which includes the write-off of unamortized deferred financing costs and discount of $ 0.2 million and $ 0.4 million, respectively.

6.125 % Senior Secured Notes due June 2028

On June 23, 2021, CVR Partners and Finance Co.

(the “Issuers”), completed a private offering of $ 550 million aggregate principal amount of 6.125 % Senior Secured Notes due June 2028 (the “2028 Notes”).

Interest on the 2028 Notes is payable semi-annually in arrears on June 15 and December 15 each year, commencing on December 15, 2021.

The 2028 Notes mature on June 15, 2028, unless earlier redeemed or repurchased by the Issuers.

The 2028 Notes are jointly and severally guaranteed on a senior secured basis by all the existing domestic subsidiaries of CVR Partners, excluding Finance Co.

In relation to the issuance of the 2028 Notes, the Partnership received $ 546.7 million of net cash proceeds, net of underwriting fees and other third-party fees and expenses associated with the offering.

The debt issuance costs of the 2028 Notes totaled approximately $ 3.9 million and are being amortized over the term of the 2028 Notes as interest expense using the effective-interest amortization method.

The 2028 Notes mature

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

on June 15, 2028, unless earlier redeemed or repurchased by the Issuers.

The 2028 Notes are jointly and severally guaranteed on a senior secured basis by all the existing domestic subsidiaries of CVR Partners, excluding Finance Co.

We may, at our option, at any time and from time to time prior to June 15, 2024, on any one or more occasions, redeem all or part of the 2028 Notes at a price equal to 100 % of the principal amount plus a “make whole” premium, plus accrued and unpaid interest.

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However, the 2028 Notes contain a permitted investment activity carveout that allows for the transfer of certain carbon capture assets to a joint venture for the purpose of monetizing potential tax credits.

9.25 % Senior Secured Notes due June 2023

On June 10, 2016, CVR Partners and Finance Co.

(together the “2023 Notes Issuers”), certain subsidiary guarantors named therein and Wilmington Trust, National Association, as trustee and as collateral trustee, completed a private offering of $ 645 million aggregate principal amount of 9.25 % Senior Secured Notes due 2023 (the “2023 Notes”).

The 2023 Notes mature on June 15, 2023, unless earlier redeemed or repurchased by the issuers.

Interest on the 2023 Notes is payable semi-annually in arrears on June 15 and December 15 of each year.

The 2023 Notes are guaranteed on a senior secured basis by all of the Partnership’s existing subsidiaries.

On or after June 15, 2021, the 2023 Notes Issuers may redeem all or part of the 2023 Notes at a price equal to 100 % of the principal amount plus accrued and unpaid interest to the applicable redemption date.

The 2023 Notes contain customary covenants for a financing of this type that, among other things, restrict CVR Partners’ ability and the ability of certain of its subsidiaries to:

(i) sell assets;

(ii) pay distributions on, redeem or repurchase the Partnership’s units or redeem or repurchase its subordinated debt;

(iii) make investments;

(iv) incur or guarantee additional indebtedness or issue preferred units;

(v) create or incur certain liens;

(vi) enter into agreements that restrict distributions or other payments from the Partnerships’ restricted subsidiaries to the Partnership;

(vii) consolidate, merge or transfer all or substantially all of the Partnerships’ assets;

(viii) engage in transactions with affiliates;

and (ix) create unrestricted subsidiaries.

In addition, the indenture contains customary events of default, the occurrence of which would result in or permit the trustee or the holders of at least 25 % of the 2023 Notes to cause the acceleration of the 2023 Notes, in addition to the pursuit of other available remedies.

On June 23, 2021, the Partnership redeemed $ 550 million aggregate principal amount of the outstanding 2023 Notes at par and settled accrued interest of approximately $ 1.1 million through the date of redemption.

As a result of this transaction, the Partnership recognized in Interest expense, net a $ 7.8 million loss on extinguishment of debt in the second quarter of 2021, which includes the write-off of unamortized deferred financing costs and original issue discount of $ 2.9 million and $ 4.9 million, respectively.

On September 23, 2021 and December 22, 2021, the Partnership redeemed $ 15 million and $ 15 million, respectively, in aggregate principal amount of the outstanding 2023 Notes at par and settled accrued interest of approximately $ 0.4 million and less than $ 0.1 million, respectively, through the date of each redemption.

As a result of these redemptions and for the year ended December 31, 2021, the Partnership recognized in Interest expense, net a $ 0.3 million loss on extinguishment of debt, which includes the write-off of unamortized deferred financing costs and discount of $ 0.1 million and $ 0.2 million, respectively.

On February 22, 2022, the Partnership redeemed all of the outstanding 2023 Notes at par and settled accrued interest of approximately $ 1.1 million through the date of redemption.

As a result of this transaction, the Partnerships will recognize a loss on extinguishment of debt of $ 0.6 million in the first quarter of 2022, which includes the write-off of unamortized deferred financing costs and discount of $ 0.2 million and $ 0.4 million, respectively.

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ABL Credit Agreement

On September 30, 2021, CVR Partners, LP and its subsidiaries, CVR Nitrogen, LP, East Dubuque Nitrogen Fertilizers, LLC, Coffeyville Resources Nitrogen Fertilizers, LLC, CVR Nitrogen Holdings, LLC, Finance Co.

On September 30, 2021, CVR Partners, LP and its subsidiaries, CVR Nitrogen, LP, EDNF, CRNF, CVR Nitrogen Holdings, LLC, Finance Co.

and CVR Nitrogen GP, LLC, entered into the ABL Credit Facility with Wells Fargo Bank National Association, a national banking association (“Wells Fargo”), as administrative agent, collateral agent, and lender.

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The ABL Credit Facility is scheduled to mature on September 30, 2024.

Loans under the ABL Credit Facility initially bear interest at an annual rate equal to, at the option of the borrowers, (i) 1.615 % plus SOFR or (ii) 0.615 % plus a base rate.

Based on the previous quarter’s excess availability, such annual rate could increase to, at the option of the borrowers, (i) 2.115 % plus SOFR or (ii) 1.115 % plus a base rate.

Beginning September 30, 2021, loans under the Partnership’s ABL Credit Facility bear interest at an annual rate equal to, at the option of the borrowers, (i) (a) 1.615 % plus the daily simple Secured Overnight Financing Rate (“SOFR”) or (b) 0.615 % plus a base rate, if our quarterly excess availability is greater than or equal to 75%, (ii) (a) 1.865 % plus SOFR or (b) 0.865 % plus a base rate, if our quarterly excess availability is greater than or equal to 50% but less than 75%, or (iii) (a) 2.115 % plus SOFR or (b) 1.115 % plus a base rate, otherwise.

The borrowers must also pay a commitment fee on the unutilized commitments and also pay customary letter of credit fees.

The ABL Credit Facility contains customary covenants for a financing of this type and requires the Partnership in certain circumstances to comply with a minimum fixed charge coverage ratio test and contains other restrictive covenants that limit the ability of the Partnership and its subsidiaries ability to, among other things, incur liens, engage in a consolidation, merger, purchase or sale of assets, pay dividends, incur indebtedness, make advances, investments and loans, enter into affiliate transactions, issue certain equity interests, create subsidiaries and unrestricted subsidiaries, and create certain restrictions on the ability to make distributions, loans, and asset transfers among the Partnership or its subsidiaries.

In connection with the ABL Credit Facility, the Partnership incurred lender and other third-party costs of $ 0.8 million which have been deferred in Prepaid expenses and other current assets and Other long-term assets and are being amortized as interest expense over the term of the ABL Credit Facility using the straight-line amortization method.

Covenant Compliance

The Partnership and its subsidiaries were in compliance with all covenants under their respective debt instruments as of December 31, 2022.

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

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Freight revenue (1)

34,770 31,419 33,329

Other revenue 11,266 10,262 10,134

$ 835,584 $ 532,581 $ 349,953

The Partnership sells its products on a wholesale basis under a contract or by purchase order.

The Partnership’s contracts with customers generally contain fixed pricing and most have terms of less than one year.

The Partnership recognizes revenue at the point in time at which the customer obtains control of the product, which is generally upon delivery and acceptance by the customer.

The customer acceptance point is stated in the contract and may be at one of the Partnership’s manufacturing facilities, at one of the Partnership’s off-site loading facilities, or at the customer’s designated facility.

Freight revenue recognized by the Partnership represents the pass-through finished goods delivery costs incurred prior to customer acceptance

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

and is reimbursed by customers.

(1) Freight revenue recognized by the Partnership represents the pass-through finished goods delivery costs incurred prior to customer acceptance and is reimbursed by customers.

An offsetting expense for freight is included in Cost of materials and other.

Qualifying taxes collected from customers and remitted to governmental authorities are not included in reported revenues.

Depending on the product sold and the type of contract, payments from customers are generally either due prior to delivery or within 15 to 30 days of product delivery.

The Partnership generally provides no warranty other than the implicit promise that goods delivered are free of liens and encumbrances and meet the agreed upon specifications.

Product returns are rare, and as such, the Partnership does not record a specific warranty reserve or consider activities related to such warranty, if any, to be a separate performance obligation.

The Partnership has an immaterial amount of variable consideration for contracts with an original duration of less than a year.

A small portion of the Partnership’s revenue includes contracts extending beyond one year, some of which contain variable pricing in which the majority of the variability is attributed to the market-based pricing.

The Partnership’s contracts do not contain a significant financing component.

The Partnership has an immaterial amount of fee-based revenue, included in other revenue in the table above, that is recognized based on the net amount of the proceeds received.

Transaction Price - Allocation to Remaining Performance Obligations

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 December 31, 2022, the Partnership had approximately $ 4.6 million of remaining performance obligations for contracts with an original expected duration of more than one year.

The Partnership expects to recognize approximately $ 6.0 million of these performance obligations as revenue by the end of 2022, an additional $ 4.0 million in 2023, and the remaining balance thereafter.

The Partnership has elected to not disclose the amount of transaction price allocated to remaining performance obligations for contracts with an original expected duration of less than one year.

The Partnership has elected to not disclose variable consideration allocated to wholly unsatisfied performance obligations that are based on market prices that have not yet been determined.

The Partnership expects to recognize approximately $ 4.4 million of these performance obligations as revenue by the end of 2023 and the remaining balance during 2024.

Contract Balances

The Partnership’s deferred revenue is a contract liability that primarily relates to nitrogen fertilizer sales contracts requiring customer prepayment prior to product delivery to guarantee a price and supply of nitrogen fertilizer.

An associated receivable is recorded for uncollected prepaid contract amounts.

Contracts requiring prepayment are generally short-term in nature and, as discussed above, revenue is recognized at the point in time in which the customer obtains control of the product.

A summary of the deferred revenue activity during the year ended December 31, 2021 is presented below:

A summary of the deferred revenue activity for the year ended December 31, 2022 is presented below:

(in thousands)

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Balance at December 31, 2022 $ 47,516

(1) Includes $ 93.7 million where payment associated with prepaid contracts was collected as of December 31, 2021.

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(1) Includes $ 83.0 million where payments associated with prepaid contracts were collected as of December 31, 2022.

Major Customers

CVR Partners had one customer who comprised 13 % of net sales for the year ended December 31, 2021 and two customers who comprised 26 % and 28 % of net sales for the years ended December 31, 2020 and 2019, respectively.

CVR Partners had two customers who comprised 30 % and 26 % of net sales for the years ended December 31, 2022 and 2020, respectively, and one customer who comprised 13 % of net sales for the year ended December 31, 2021.

(7) Share-Based Compensation

CVR Partners has a Long-Term Incentive Plan (“CVR Partners LTIP”) which permits the granting of options, stock and unit appreciation rights (“SARs”), restricted shares, restricted stock units, phantom units, unit awards, substitute awards, other unit-based awards, cash awards, dividend and distribution equivalent rights, share awards, and performance awards (including performance share units, performance units, and performance-based restricted stock).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

unit-based awards, cash awards, dividend and distribution equivalent rights, share awards, and performance awards (including performance share units, performance units, and performance-based restricted stock).

Individuals who are eligible to receive awards under or in connection with the CVR Partners LTIP include any director, officer, employee, employee candidate, consultant, or advisor of the Partnership, its subsidiaries, or its parent.

CVR Partners’ Phantom Unit Awards and Compensation Expense

Phantom unit awards have been granted to officers, employees, and directors (the “Share-Based Awards”).

As a result, Share-Based Awards that reflect the value and distributions of CVR Partners, as applicable, have been granted and remain outstanding as of December 31, 2021.

Phantom unit awards that have been granted to officers, employees, and directors (the “Share-Based Awards”) reflect the value and distributions of CVR Partners, as applicable.

Each Share-Based Award and the related distribution equivalent right represents the right to receive, upon vesting, a cash payment equal to (i) the average fair market value of one unit, in accordance with the award agreement, plus (ii) the per unit cash value of all distributions declared and paid, as applicable, from the grant date through the vesting date.

The Share-Based Awards are generally graded-vesting awards, which vest over three years with one-third of the award vesting each year the grantee remains employed by the Partnership and its subsidiaries.

Compensation expense is recognized ratably, based on service provided to the Partnership and its subsidiaries, with the amount recognized fluctuating as a result of the Share-Based Awards being re-measured to fair value at the end of each reporting period due to their liability-award classification.

Compensation expense is recognized ratably, based on service provided to the Partnership and its subsidiaries, with the amount recognized fluctuating as a result of the Share-Based Awards being remeasured to fair value at the end of each reporting period due to their liability-award classification.

A summary of phantom unit award activity during the year ended December 31, 2022 is presented below:

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As of December 31, 2022 and 2021, the Partnership had a liability of $ 9.7 million and $ 9.1 million, respectively, for cash settled non-vested phantom unit awards and associated distribution equivalent rights and, for the years ended December 31, 2022, 2021, and 2020, paid cash of $ 17.7 million, $ 11.1 million, and $ 0.5 million, respectively, to settle liability-classified awards upon vesting.

As of December 31, 2021 and 2020, CVR Energy had a liability associated with the CVR Partners LTIP of $ 3.3 million and $ 0.3 million, respectively, for cash settled non-vested phantom unit awards and associated distribution equivalent rights

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

and, for the years ended December 31, 2021, 2020, and 2019, paid cash of $ 4.4 million, $ 0.3 million, and $ 0.9 million, respectively, to settle liability-classified awards upon vesting under the CVR Partners LTIP.

As of December 31, 2022 and 2021, CVR Energy had a liability associated with the CVR Partners LTIP of $ 3.8 million and $ 3.3 million, respectively, for cash settled non-vested phantom unit awards and associated distribution equivalent rights and, for the years ended December 31, 2022, 2021, and 2020, paid cash of $ 7.0 million, $ 4.4 million, and $ 0.3 million, respectively, to settle liability-classified awards upon vesting under the CVR Partners LTIP.

Incentive Unit Awards — CVR Energy

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Total compensation expense allocated to the Partnership for the years ended December 31, 2022, 2021, and 2020 related to the incentive units was $ 5.3 million, $ 2.3 million and $ 0.4 million, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Partnership had no separate liabilities related to these incentive unit awards as of December 31, 2022 and 2021, as the allocation of compensation expense for incentive unit awards is part of the amount charged to the Partnership under the Corporate MSA.

For the years ended December 31, 2021 and 2019, the Partnership had no reimbursements related to its allocated portion of CVR Energy’s incentive unit awards payments, respectively, and for the year ended December 31, 2020, the Partnership made reimbursements to CVR Energy of $ 2.2 million.

For the years ended December 31, 2022 and 2021, the Partnership had no reimbursements related to its allocated portion of CVR Energy’s incentive unit awards payments, and for the year ended December 31, 2020, the Partnership made reimbursements to CVR Energy of $ 2.2 million.

See Note 9 (“Related Party Transactions”) for further discussion of the Corporate MSA.

Performance Unit Awards

Pursuant to the employment agreement, as amended, with the Partnership’s Executive Chairman, CVR Energy entered into a performance unit award agreement (the “2017 Performance Unit Award Agreement”) on November 1, 2017 with our Executive Chairman representing the right to receive upon vesting, a cash payment equal to $ 10.0 million if the average closing price of CVR Energy’s common stock over the 30 day trading period from January 4, 2022 to February 15, 2022 is equal to or greater than $ 60 per share.

Effective as of December 22, 2021, CVR Energy and our Executive Chairman entered into an amendment to the 2017 Performance Unit Award Agreement, which extended the end of the performance period thereunder to December 31, 2024, and changed the 30 day trading period on which the average closing price of CVR Energy’s common stock is based to January 6, 2025 through February 20, 2025.

Under the 2017 Performance Unit Award Agreement, for the year ended December 31, 2021, the Partnership recognized a benefit of $ 0.6 million.

No compensation costs were recognized for the years ended December 31, 2020 and 2019.

Pursuant to the amended employment agreement, effective December 22, 2021, with the Partnership’s Executive Chairman, CVR Energy amended the performance award agreement (the “Performance Unit Award Agreement”) to extend the end of the performance period thereunder to December 31, 2024.

The Performance Unit Award Agreement represents the right to receive upon vesting, a cash payment equal to $ 10.0 million if the average closing price of CVR Energy’s common stock over the 30 -day trading period from January 6, 2025 through February 20, 2025 is equal to or greater than $ 60 per share.

Under the Performance Unit Award Agreement, no compensation costs were recognized for the years ended December 31, 2022 and 2020.

For the year ended December 31, 2021, the Partnership recognized a benefit of $ 0.6 million.

Under the Performance Unit Award Agreement, as of December 31, 2022 and 2021, the Partnership had no outstanding liability.

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Other Benefit Plans

CVR Energy sponsors and administers two defined contribution 401(k) plans, the CVR Energy 401(k) Plan and the CVR Energy 401(k) Plan for Represented Employees (the “Plans”), in which employees of the general partner, CVR Partners and its subsidiaries may participate.

CVR Energy sponsors and administers two defined contribution 401(k) plans, the CVR Energy 401(k) Plan and the CVR Energy 401(k) Plan for Represented Employees (collectively, the “Plans”), in which employees of the general partner, CVR Partners and its subsidiaries may participate.

Participants in the Plans may elect to contribute a designated percentage of their eligible compensation in accordance with the Plans, subject to statutory limits.

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The Plans provide for a three-year vesting schedule for the Partnership’s matching contributions and contain a provision to count service with predecessor organizations.

The Partnership did not have contributions under the Plans for the year ended December 31, 2021, as the Partnership’s matching contributions for the Plans were suspended effective January 1, 2021, and had approximately $ 1.9 million, and $ 1.8 million for the years ended December 31, 2020 and 2019, respectively.

The Partnership’s matching contributions for the Plans resumed effective January 1, 2022.

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The Partnership had contributions under the Plans of approximately $ 2.3 million and $ 1.9 million for the years ended December 31, 2022 and 2020, respectively.

The Partnership had no contributions during the year ended December 31, 2021, as the Partnership’s matching contributions for the Plans were suspended effective January 1, 2021 and resumed effective January 1, 2022.

(8) Commitments

Supply Commitments

The Partnership is a party to various supply agreements with both related and third parties which commit the Partnership to purchase minimum volumes of hydrogen, oxygen, nitrogen, pet coke, and natural gas to run its plants’ operations.

The minimum required payments for unconditional purchase obligations, including the natural gas purchases outlined below, are as follows:

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Thereafter 32,703

Supply Commitments - The Partnership is a party to various supply agreements with both related and third parties which commit the Partnership to purchase minimum volumes of hydrogen, oxygen, nitrogen, pet coke, and natural gas to run its plants’ operations.

The Partnership is also party to a natural gas supply agreement with various third-parties.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Partnership is also party to natural gas supply agreements with various third-parties.

Natural gas expense for the years ended December 31, 2022, 2021, and 2020 totaled approximately $ 77.9 million, $ 52.9 million, and $ 32.4 million, respectively, and is included in Cost of materials and other and Direct operating expenses (exclusive of depreciation and amortization).

The Partnership entered into the Coffeyville Master Service Agreement (“Coffeyville MSA”) with Coffeyville Resources Refining & Marketing, LLC, an indirect, wholly-owned subsidiary of CVR Energy (“CRRM”), pursuant to which, it agrees to pay a monthly fee for pet coke purchases.

The Partnership’s Coffeyville Facility obtains a significant amount ( 48 % on average during last five years , 43 % in 2021) of the pet coke it needs from the Coffeyville MSA.

The Partnership entered into the Coffeyville Master Service Agreement (“Coffeyville MSA”) with Coffeyville Resources Refining & Marketing, LLC (“CRRM”), an indirect, wholly-owned subsidiary of CVR Energy, pursuant to which, it agrees to pay a monthly fee for pet coke purchases.

The Partnership’s Coffeyville Facility obtains a significant amount ( 44 % on average during the last five years , 47 % in 2022) of the pet coke it needs from the Coffeyville MSA.

Any remaining pet coke needs are required to be purchased from various third parties.

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Expenses associated with this agreement are included in Direct operating expenses (exclusive of depreciation and amortization), and, for the years ended December 31, 2022, 2021, and 2020, totaled approximately $ 3.8 million, $ 3.9 million, and $ 4.2 million, respectively.

In addition to the related party Coffeyville MSA, the Coffeyville Facility has pet coke supply agreements with multiple third-party refineries to purchase approximately 327,000 tons of pet coke at a fixed price for delivery at different dates through

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 2022.

In addition to the related party Coffeyville MSA, the Coffeyville Facility has pet coke supply agreements with multiple third-party refineries to purchase approximately 233,500 tons of pet coke at a fixed price for delivery at different dates through December 2023.

The Coffeyville Facility has historically purchased third-party pet coke based on spot purchases and supply agreements in place at the time.

The delivered cost of third-party pet coke purchases is included in Cost of materials and other and totaled approximately $ 14.6 million, $ 17.4 million, and $ 17.9 million for the years ended December 31, 2022, 2021, and 2020, respectively.

During 2019, the Partnership, with respect to the East Dubuque Facility, entered into a utility service agreement with a new third-party energy cooperative.

The new utility service agreement does not contain purchase commitments.

The cost of utilities, including natural gas purchases, is included in Direct operating expenses (exclusive of depreciation and amortization).

Prior to entering into the new utility service agreement, the East Dubuque Facility had a utility service agreement with a third-party energy cooperative which included certain charges on a take-or-pay basis and amounts associated with this agreement totaled approximately $ 3.7 million for the year ended December 31, 2019.

(9) Related Party Transactions

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There was no activity reported under this agreement during the years ended 2022, 2021, and 2020.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Coffeyville MSA

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• Raw Water and Facilities Sharing - CRNF and CRRM are each owners of an undivided one-half interest in and to the water rights and agree to (i) allocate raw water resources between CVR Energy’s Coffeyville refinery and our Coffeyville Facility and (ii) provide for the management of the water intake system which draws raw water from the Verdigris River for both our Coffeyville Facility and CVR Energy’s Coffeyville refinery.

• Coke Supply - Our Coffeyville Facility purchases pet coke from CVR Energy’s Coffeyville Refinery which provides that CRRM must deliver, and the Coffeyville Facility must purchase, during each calendar year an annual required

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

amount of pet coke equal to the lesser of (i) 100 percent of the pet coke or (ii) 500,000 tons of pet coke.

• Coke Supply - CRRM must deliver, and our Coffeyville Facility must purchase, during each calendar year an annual required amount of pet coke equal to the lesser of (i) 100 percent of the pet coke or (ii) 500,000 tons of pet coke.

If during a calendar month, more than 41,667 tons of pet coke is produced and available for purchase, then the Coffeyville Facility will have the option to purchase the excess at the purchase price provided for in the agreement.

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• Lease - CRNF leases certain office and laboratory space from CRRM.

In February 2023, CRRM assigned its interests in the Coffeyville MSA to affiliates, which are newly formed, indirect wholly-owned subsidiaries of CVR Energy, following consent to such assignment by CRNF.

Corporate MSA

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• services from CVR Services’ employees in capacities equivalent to the capacities of corporate executive officers, except that those who serve in such capacities under the agreement will serve the Partnership on a shared, part-time basis only, unless the Partnership and CVR Services agree otherwise;

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

• administrative and professional services, including legal, accounting, SOX compliance, financial reporting, human resources, information technology, communications, insurance, tax, credit, finance, corporate compliance, enterprise risk management, consulting, and government and regulatory affairs;

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For services performed in connection with the services agreement, the Partnership recognized personnel costs, excluding amounts related to share based compensation (refer to Note 7 (“Share-Based Compensation”)), of $ 8.3 million, $ 8.1 million, and $ 6.6 million, respectively, for the years ended December 31, 2022, 2021, and 2020.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Related Party Activity

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(2) Purchases from related parties, included in Cost of materials and other, Direct operating expenses (exclusive of depreciation and amortization), and Selling, general and administrative expenses, consist primarily of pet coke and hydrogen purchased from CRRM under the Coffeyville MSA.

(3) Due to related parties, included in Accounts payable to affiliates, consist primarily of amounts payable for feedstocks and other supplies and services provided by CRRM and CVR Services under the Coffeyville MSA and Corporate MSA.

Environmental Agreement

Our Coffeyville Facility is a party to an environmental agreement with CRRM which provides for certain indemnification and access rights in connection with environmental matters affecting CVR Energy’s Coffeyville refinery and our Coffeyville Facility.

To the extent that liability arises from environmental contamination that is caused by CRRM but is also commingled with environmental contamination caused by our Coffeyville Facility, CRRM may elect, in its sole discretion and at its own cost and expense, to perform government mandated environmental activities relating to such liability, subject to certain conditions and provided that CRRM will not waive any rights to indemnification or compensation otherwise provided for in the agreement.

CRNF is a party to an environmental agreement with CRRM which provides for certain indemnification and access rights in connection with environmental matters affecting CVR Energy’s Coffeyville refinery and the Coffeyville Facility.

To the extent that liability arises from environmental contamination that is caused by CRRM but is also commingled with environmental contamination caused by CRNF, CRRM may elect, in its sole discretion and at its own cost and expense, to perform government mandated environmental activities relating to such liability, subject to certain conditions and provided that CRRM will not waive any rights to indemnification or compensation otherwise provided for in the agreement.

No liability under this agreement was recorded as of December 31, 2022 and 2021.

In February 2023, CRRM assigned its interests in the Environmental Agreement to an affiliate, which is a newly formed, indirect wholly-owned subsidiary of CVR Energy, following consent to such assignment by CRNF.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Terminal and Operating Agreement

Our Coffeyville Facility entered into a lease and operating agreement with Coffeyville Resources Terminal, LLC, an indirect wholly owned subsidiary of CVR Energy (“CRT”), under which it leases the premises located at Phillipsburg, Kansas to be utilized as a UAN terminal.

The initial term of the agreement will expire in May 2032, provided, however, we may terminate the lease at any time during the initial term by providing 180 days prior written notice.

In addition, this agreement will automatically renew for successive five-year terms, provided that we may terminate the agreement during any renewal term with at least 180 days written notice.

Under the terms of this agreement, we will pay CRT $ 1.00 per year for rent, $ 4.00 per ton of UAN placed into the terminal, and $ 4.00 per ton of UAN taken out of the terminal.

CRNF entered into a lease and operating agreement with Coffeyville Resources Terminal, LLC, an indirect wholly owned subsidiary of CVR Energy (“CRT”), under which it leases the premises located at Phillipsburg, Kansas to be utilized as a UAN terminal.

The initial term of the agreement will expire in May 2032, provided, however, CRNF may terminate the lease at any time during the initial term by providing 180 days prior written notice.

In addition, this agreement will automatically renew for successive five-year terms, provided that CRNF may terminate the agreement during any renewal term with at least 180 days written notice.

Under the terms of this agreement, CRNF will pay CRT $ 1.00 per year for rent, $ 4.00 per ton of UAN placed into the terminal, and $ 4.00 per ton of UAN taken out of the terminal.

Property Exchange

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This Property Exchange will enable each such subsidiary to create a more usable, contiguous parcel of land near its own operating footprint.

CVR Energy and the Partnership accounted for this transaction in accordance with the ASC Topic 805-50, Business Combinations (“ Topic 805-50”), guidance on transferring assets between entities under common control.

CVR Energy and the Partnership accounted for this transaction in accordance with the FASB ASC Topic 805-50, Business Combinations (“Topic 805-50”), guidance on transferring assets between entities under common control.

This transaction had a net impact to the Partnership’s partners’ capital of less than $ 0.1 million.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Distributions to CVR Partners’ Unitholders

The Board has a policy for the Partnership to distribute all available cash generated on a quarterly basis.

The Board has a policy for the Partnership to distribute all available cash, as determined by the Board in its sole discretion, generated on a quarterly basis.

Cash distributions are made to the common unitholders of record on the applicable record date, generally within 60 days after the end of each quarter.

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Distributions, if any, including the payment, amount, and timing thereof, are subject to change at the discretion of the Board.

The following table presents distributions paid by the Partnership to CVR Partners’ unitholders, including amounts paid to CVR Energy, as of December 31, 2021.

Distributions Paid (in thousands)

Related Period Date Paid Distribution Per

The following tables present quarterly distributions paid by the Partnership to CVR Partners’ unitholders, including amounts paid to CVR Energy, as of December 31, 2022 and 2021 (amounts presented in table below may not add to totals presented due to rounding):

Quarterly Distributions Paid (in thousands)

Related Period Date Paid Quarterly Distributions Per

Common Unit Public Unitholders CVR Energy Total

2021 - 4th Quarter March 14, 2022 $ 5.24 $ 35,576 $ 20,394 $ 55,970

2022 - 1st Quarter May 23, 2022 2.26 15,091 8,796 23,887

2022 - 2nd Quarter August 22, 2022 10.05 67,109 39,115 106,225

2022 - 3rd Quarter November 21, 2022 1.77 11,819 6,889 18,708

Total distributions $ 4.65 $ 31,571 $ 18,098 $ 49,669

There were no distributions declared or paid by the Partnership related to the first quarter of 2021 and fourth quarter of 2020, and no distributions were declared or paid during 2020.

During the year ended December 31, 2019, the Partnership paid distributions totaling $ 4.00 per common unit on a split-adjusted basis, or $ 45.3 million.

Of these distributions, CVR Energy received $ 15.6 million.

Total 2022 quarterly distributions

$ 19.32 $ 129,597 $ 75,193 $ 204,790

Quarterly Distributions Paid (in thousands)

Related Period Date Paid Quarterly Distributions Per

Common Unit Public Unitholders CVR Energy Total

2021 - 2nd Quarter

August 23, 2021 $ 1.72 $ 11,678 $ 6,694 $ 18,372

2021 - 3rd Quarter

November 22, 2021 2.93 19,893 11,404 31,297

Total 2021 quarterly distributions

$ 4.65 $ 31,571 $ 18,098 $ 49,669

There were no quarterly distributions declared or paid by the Partnership related to the first quarter of 2021 or the fourth quarter of 2020.

During the year ended December 31, 2020, there were no quarterly distributions declared or paid by the Partnership.

For the fourth quarter of 2022, the Partnership, upon approval by the Board on February 21, 2023, declared a distribution of $ 10.50 per common unit, or $ 111.0 million, which is payable March 13, 2023 to unitholders of record as of March 6, 2023.

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Of this amount, CVR Energy will receive approximately $ 40.9 million, with the remaining amount payable to public unitholders.

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Change in deferred financing costs included in accounts payable — 675 —

(11) Subsequent Events

We believe that certain carbon oxide capture and sequestration activities conducted at or in connection with the Coffeyville Facility qualify under the Internal Revenue Service (“IRS”) safe harbor described in Revenue Procedure 2020-12 for certain tax credits available to joint ventures under Section 45Q of the Internal Revenue Code of 1986, as amended (“Section 45Q Credits”).

In January 2023, we entered into a series of agreements with CapturePoint LLC, an unaffiliated Texas limited liability company, and certain unaffiliated third-party investors intended to qualify under the Internal Revenue Service safe harbor described in Revenue Procedure 2020-12 for certain joint ventures that are eligible to claim Section 45Q Credits and allow us to monetize Section 45Q Credits we expect to generate from January 6, 2023 until March 31, 2030.

In January 2023, we received an initial upfront payment, net of expenses, of approximately $ 18.1 million and could receive up to an additional $ 60 million in payments through March 31, 2030, if certain carbon oxide capture and sequestration milestones are met, subject to the terms of the applicable agreements.

The foregoing summaries of the agreements do not purport to be complete and are qualified in their entirety by the terms of the relevant agreements, which will be filed with the Partnership’s Quarterly Report on Form 10-Q for the period ended March 31, 2023.

The Partnership evaluated all other subsequent events, if any, that would require an adjustment to the Partnership’s consolidated financial statements or require disclosure in the notes to the consolidated financial statements through the date of issuance of these consolidated financial statements.

Where applicable, the notes to these consolidated financial statements have been updated to discuss all significant subsequent events which have occurred.

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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-K

Item 8. Financial Statements and Supplementary Data