CVR PARTNERS, LP 10-K

Item 8. Financial Statements and Supplementary Data CVR PARTNERS, LP AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248 ) 52 Consolidated Balance Sheets as of December 31, 2024 and 2023 54 Consolidated Statements of Operations for the Years Ended December 31, 2024, 2023 and 2022 55 Consolidated Statements of Partners’ Capital for the Years Ended December 31, 2024, 2023 and 2022 56 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022 57 Notes to the Consolidated Financial Statements 58 December 31, 2024 | 51 Table of Contents Report of Independent Registered Public Accounting Firm The Board of Directors of CVR GP, LLC The Unitholders of CVR Partners, LP The General Partner of CVR Partners, LP: Opinion on the financial statements We have audited the accompanying consolidated balance sheets of CVR Partners, LP (a Delaware limited partnership) and subsidiaries (the “Partnership”) as of December 31, 2024 and 2023, the related consolidated statements of operations, partners’ capital, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Partnership’s internal control over financial reporting as of December 31, 2024, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 19, 2025, expressed an unqualified opinion. Basis for opinion These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on the Partnership’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical audit matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and ( 2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ GRANT THORNTON LLP We have served as the Partnership’s auditor since 2013. Tulsa, Oklahoma February 19, 2025 December 31, 2024 | 52 Table of Contents Report of Independent Registered Public Accounting Firm The Board of Directors of CVR GP, LLC The Unitholders of CVR Partners, LP The General Partner of CVR Partners, LP: Opinion on internal control over financial reporting We have audited the internal control over financial reporting of CVR Partners, LP (a Delaware limited partnership) and subsidiaries (the “Partnership”) as of December 31, 2024, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Partnership as of and for the year ended December 31, 2024, and our report dated February 19, 2025 expressed an unqualified opinion on those financial statements. Basis for opinion The Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Partnership’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and limitations of internal control over financial reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ GRANT THORNTON LLP Tulsa, Oklahoma February 19, 2025 December 31, 2024 | 53 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, (in thousands) 2024 2023 ASSETS Current assets: Cash and cash equivalents $ 90,857 $ 45,279 Accounts receivable, net 65,216 41,893 Inventories 75,579 69,165 Prepaid expenses 1,257 8,392 Other current assets 632 1,140 Total current assets 233,541 165,869 Property, plant and equipment, net 735,591 761,023 Other long-term assets 49,592 48,440 Total assets $ 1,018,724 $ 975,332 LIABILITIES AND PARTNERS’ CAPITAL Current liabilities: Accounts payable $ 30,365 $ 33,486 Accounts payable to affiliates 6,213 5,319 Deferred revenue 50,788 15,796 Other current liabilities 23,983 20,872 Total current liabilities 111,349 75,473 Long-term liabilities: Long-term debt and finance lease obligations, net of current portion 567,974 547,308 Long-term deferred revenue 26,966 33,311 Other long-term liabilities 19,365 16,360 Total long-term liabilities 614,305 596,979 Commitments and contingencies (See Note 11 and Note 2, respectively) Partners’ capital: Common unitholders, 10,569,637 and 10,569,637 units issued and outstanding as of December 31, 2024 and 2023, respectively 293,069 302,879 General partner interest 1 1 Total partners’ capital 293,070 302,880 Total liabilities and partners’ capital $ 1,018,724 $ 975,332 The accompanying notes are an integral part of these consolidated financial statements. December 31, 2024 | 54 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended December 31, (in thousands, except per unit data) 2024 2023 2022 Net sales $ 525,324 $ 681,477 $ 835,584 Operating costs and expenses: Cost of materials and other 104,141 134,377 130,913 Direct operating expenses (exclusive of depreciation and amortization) 214,222 234,916 270,167 Depreciation and amortization 88,096 79,720 82,137 Cost of sales 406,459 449,013 483,217 Selling, general and administrative expenses 28,414 29,523 32,192 Loss on asset disposal 100 1,533 263 Operating income 90,351 201,408 319,912 Other (expense) income: Interest expense, net ( 29,827 ) ( 28,653 ) ( 34,065 ) Other income (expense), net 453 ( 33 ) 1,114 Income before income tax expense 60,977 172,722 286,961 Income tax expense 77 289 160 Net income $ 60,900 $ 172,433 $ 286,801 Basic and diluted earnings per common unit $ 5.76 $ 16.31 $ 27.07 Weighted-average common units outstanding: Basic and diluted 10,570 10,570 10,593 The accompanying notes are an integral part of these consolidated financial statements. December 31, 2024 | 55 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL (in thousands, except unit data) Common Units General Partner Interest Total Partners ’ Capital Issued Amount Balance at December 31, 2021 10,681,332 $ 342,197 $ 1 $ 342,198 Net income — 286,801 — 286,801 Repurchase of common units ( 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 Net income — 172,433 — 172,433 Cash distributions to common unitholders – Affiliates — ( 103,605 ) — ( 103,605 ) Cash distributions to common unitholders – Non-affiliates — ( 177,759 ) — ( 177,759 ) Balance at December 31, 2023 10,569,637 302,879 1 302,880 Net income — 60,900 — 60,900 Cash distributions to common unitholders – Affiliates — ( 26,037 ) — ( 26,037 ) Cash distributions to common unitholders – Non-affiliates — ( 44,673 ) — ( 44,673 ) Balance at December 31, 2024 10,569,637 $ 293,069 $ 1 $ 293,070 The accompanying notes are an integral part of these consolidated financial statements. December 31, 2024 | 56 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, (in thousands) 2024 2023 2022 Cash flows from operating activities: Net income $ 60,900 $ 172,433 $ 286,801 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 88,096 79,720 82,137 Amortization of deferred financing costs and original issue discount 696 754 821 Loss on asset disposal 100 1,533 263 Loss on debt extinguishment — — 628 Share-based compensation 4,898 8,235 25,264 Other adjustments 76 222 ( 107 ) Changes in assets and liabilities: Accounts receivable ( 23,323 ) 27,501 ( 21,139 ) Inventories ( 5,677 ) 6,704 ( 24,807 ) Prepaid expenses and other current assets 7,643 1,911 ( 2,278 ) Accounts payable ( 5,599 ) ( 23,831 ) ( 6,577 ) Deferred revenue 28,647 ( 23,491 ) ( 20,502 ) Other current liabilities 2,227 ( 8,412 ) ( 14,939 ) Other long-term assets and liabilities ( 8,143 ) 247 ( 4,101 ) Net cash provided by operating activities 150,541 243,526 301,464 Cash flows from investing activities: Capital expenditures ( 37,074 ) ( 24,196 ) ( 44,668 ) Proceeds from the sale of assets 4 — 45 Return of equity method investment 5,178 21,474 — Net cash used in investing activities ( 31,892 ) ( 2,722 ) ( 44,623 ) Cash flows from financing activities: Principal payments on senior secured notes — — ( 65,000 ) Payment of deferred financing costs — ( 500 ) ( 829 ) Repurchase of common units — — ( 12,398 ) Cash distributions to common unitholders – Affiliates ( 26,037 ) ( 103,605 ) ( 75,193 ) Cash distribution to common unitholders – Non-affiliates ( 44,673 ) ( 177,759 ) ( 129,597 ) Other financing activities ( 2,361 ) — ( 1 ) Net cash used in financing activities ( 73,071 ) ( 281,864 ) ( 283,018 ) Net increase (decrease) in cash and cash equivalents 45,578 ( 41,060 ) ( 26,177 ) Cash and cash equivalents, beginning of period 45,279 86,339 112,516 Cash and cash equivalents, end of period $ 90,857 $ 45,279 $ 86,339 The accompanying notes are an integral part of these consolidated financial statements. December 31, 2024 | 57 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) Organization and Nature of Business CVR Partners, LP (“CVR Partners” or the “Partnership”) is a Delaware limited partnership formed by CVR Energy, Inc. (together with its subsidiaries, but excluding the Partnership and its subsidiaries, “CVR Energy”) to own, operate and grow its nitrogen fertilizer business. The Partnership produces nitrogen fertilizer products 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”, and together with the Coffeyville Facility, the “Facilities”). The Facilities manufacture ammonia and are able to further upgrade such ammonia to other nitrogen fertilizer products, principally urea ammonium nitrate (“UAN”). Nitrogen fertilizer is used by farmers to improve the yield and quality of their crops, primarily corn and wheat. The Partnership’s products are sold on a wholesale basis in the United States of America. As used in these financial statements, references to CVR Partners, the Partnership, “we”, “us”, and “our” may refer to consolidated subsidiaries of CVR Partners or one or both of the facilities, as the context may require. Interest Holders As of December 31, 2024, public common unitholders held approximately 61 % of the Partnership’s outstanding limited partner interests; CVR Energy, through its subsidiaries, held approximately 37 % of the Partnership’s outstanding limited partner interests and 100 % of the Partnership’s general partner interest, while Icahn Enterprises L.P. and its other affiliates (“IEP”) held the remaining approximately 2 % of the Partnership’s outstanding limited partner interests. As of December 31, 2024, IEP owned approximately 66 % of the common stock of CVR Energy. On January 8, 2025, IEP acquired an additional 1 % ownership, or 878,212 additional shares of CVR Energy’s common stock at a price of $ 18.25 per share. Unit Repurchase Program On May 6, 2020, the board of directors of our general partner (the “Board”), on behalf of the Partnership, authorized a unit repurchase program, which was increased on February 22, 2021 (the “Unit Repurchase Program”). The Unit Repurchase Program authorized the Partnership to repurchase up to $ 20 million of the Partnership’s common units. On February 20, 2024, the Board, on behalf of the Partnership, terminated the nominal authority remaining under the Unit Repurchase Program. From authorization through March 2022, CVR Partners repurchased, on a split-adjusted basis, 759,250 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 $ 20.0 million, exclusive of transaction costs, or an average price of $ 26.33 per common unit. Prior to the termination of the Unit Repurchase Program in 2024 and for the year ended December 31, 2023, CVR Partners did not repurchase any common units. Management and Operations The Partnership, including its general partner, is managed by a combination of the Board, the general partner’s executive officers, UAN Services, LLC (as sole member of the general partner), and certain officers of CVR Energy and its subsidiaries, pursuant to the Partnership Agreement, as well as a number of agreements among the Partnership, the General Partner, CVR Energy, and certain of their respective subsidiaries, including a service agreement. See Note 13 (“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. December 31, 2024 | 58 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (2) Summary of Significant Accounting Policies Principles of Consolidation 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 Commission (“SEC”), include the accounts of CVR Partners and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated. Reclassifications 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 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. Changes in facts and circumstances may result in revised estimates, and actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, demand deposits, and investments in highly liquid money market accounts with original maturities of three months or less. We maintain cash and cash equivalent balances with a single financial institution, which may at times be in excess of federally insured levels. Accounts Receivable, net Accounts receivable, net primarily consists of customer accounts receivable recorded at the invoiced amounts and generally do not bear interest. 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 25 % and 40 % of the Accounts receivable, net balance at December 31, 2024 and 2023, respectively. There was no bad debt expense for the years ended December 31, 2024, 2023, and 2022. Inventories Inventories consist of fertilizer products and raw materials (primarily pet coke), which are valued at the lower of GAAP First-In, First-Out (“FIFO”) cost or net realizable value. We compare the estimated realizable value of inventories to their cost by product. Depending on inventory levels, the per-ton realizable value of our fertilizer products is estimated using pricing on in-transit orders, pricing for open, fixed-price orders that have not shipped, and, if volumes remain unaccounted for, current management pricing estimates for fertilizer products. Management’s estimate for current pricing reflects up-to-date pricing in the market as of the end of each reporting period. Reductions to selling prices for unreimbursed freight costs are included to arrive at net realizable value, as applicable. There were no inventory adjustments recognized during the years ended December 31, 2024, 2023, and 2022. 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. Property, Plant and Equipment, net Additions to property, plant and equipment, including capitalized interest and certain costs allocable to construction and property purchases, are recorded at cost. Expenditures for improvements that increase economic benefit or returns and/or extend useful life are capitalized, while expenditures for routine maintenance and repair costs are expensed when incurred December 31, 2024 | 59 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS and are reported in Direct operating expenses (exclusive of depreciation and amortization) in the Partnership’s Consolidated Statements of Operations. Depreciation is computed using the straight-line method over the estimated useful lives of the various classes of depreciable assets. The lives used in computing depreciation for significant asset classes are as follows: Asset Range of Useful Lives, in Years Land improvements 10 to 30 Buildings and improvements 3 to 30 Automotive equipment 5 to 30 Machinery and equipment 1 to 30 Right-of-use (“ROU”) finance leases 25 Other 3 to 10 Leasehold improvements and assets held under finance leases are depreciated or amortized utilizing the straight-line method over the shorter of the related contractual lease term or the estimated useful life of the asset. Equity Method Investments The Partnership accounts for investments in which it has a noncontrolling interest, yet has significant influence over the entity, using the equity method of accounting, whereby the Partnership records its pro-rata share of earnings, contributions to, and distributions from, as adjustments to the investment balance in Other long-term assets on our Consolidated Balance Sheets. The pro-rata share of earnings is also recorded in Other income (expense), net on our Consolidated Statements of Operations. Leases At inception, the Partnership determines whether an arrangement is a lease and, if so, the appropriate lease classification. Operating leases are included as operating lease ROU assets within Other long-term assets and lease liabilities within Other current liabilities and Other long-term liabilities 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 and finance lease obligations, 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. The Partnership recognizes operating lease expense on a straight-line basis over the lease term within Direct operating expenses (exclusive of depreciation and amortization) and Cost of materials and other and finance lease expense on a straight-line basis over the lease term within Depreciation and amortization and Interest expense, net. ROU assets and lease liabilities are recognized at the lease 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. 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, net using the effective-interest method over the term of the debt and, depending on maturity, are included within Current portion of long-term debt and finance lease obligations and Long-term debt and finance lease obligations, net of current portion. Deferred financing costs related to line-of-credit arrangements are amortized using the straight-line method through the maturity date of the facility and, depending on maturity, are included within Other current assets and Other long-term liabilities. December 31, 2024 | 60 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Impairment of Long-Lived Assets Long-lived assets (excluding 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 or asset group 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 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. Assets to be disposed of are reported at the lower of their carrying value or fair value less cost to sell. 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. Certain of the Partnership’s assets can be used for extended or indeterminate periods of time with proper maintenance and upgrades, which the Partnership intends, and has a historical practice of, to maintain and upgrade as technological advances are made available. As a result, the Partnership believes these assets have indeterminate lives for purposes of estimating AROs. A liability is recognized when sufficient information exists to estimate a date or range of potential settlement dates needed to employ a present value technique to estimate fair value. 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 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 on our Consolidated Balance Sheets depending on when the Partnership expects to expend such amounts and are adjusted as additional information becomes available upon a change in circumstance, as applicable. As of December 31, 2024 and 2023, there are no matters or contingencies that require recognition or disclosure. Environmental, Health & Safety (“EH&S”) Matters The Partnership is subject to various stringent federal, state, and local environmental, health, and safety rules and regulations. Liabilities related to future remediation costs of past environmental contamination of properties are recognized when the related costs are considered probable and can be reasonably estimated. Estimates of these costs are based upon currently available facts, internal and third-party assessments of contamination, available remediation technology, site-specific costs, and currently enacted laws and regulations. In reporting environmental liabilities, no offset is made for potential recoveries. Loss contingency accruals, including those for environmental remediation, are subject to periodic management review and revision as further information develops or circumstances change and such accruals can take into account the legal liability of other parties. Environmental expenditures for capital assets are capitalized at the time of the expenditure when such costs provide future economic benefits. Accrued amounts, if any, are reflected in Other current liabilities or Other long-term liabilities on our Consolidated Balance Sheets depending on when the Partnership expects to expend such amounts. As of December 31, 2024 and 2023, no liabilities have been recognized for environmental remediation matters, as no matters have been identified that are considered to be probable and estimable. Revenue Recognition 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. December 31, 2024 | 61 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 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, facility-related maintenance services, including turnaround expenses, 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, as they include inventory production costs. Direct operating expenses also include allocated share-based compensation from CVR Energy and its subsidiaries. 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. Fair Value of Financial Instruments In accordance with Financial Accounting Standards Board (“ FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“Topic 820”), the Partnership utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets, liabilities, or a group of assets or liabilities, such as a business. Topic 820 utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: • Level 1 — Quoted prices in active markets for identical assets or liabilities • Level 2 — Other significant observable inputs (including quoted prices in active markets for similar assets or liabilities) • Level 3 — Significant unobservable inputs (including the Partnership’s own assumptions in determining the fair value) Financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, and operating and finance lease obligations which are carried at cost and approximate their estimated fair value. The Partnership may enter into forward contracts with fixed or indexed delivery prices to purchase portions of its natural gas requirements. These natural gas contracts are not treated as derivatives as they qualify for the normal purchase and normal sale exclusions. Accordingly, the fair value of these contracts are not recorded at the end of each reporting period. Turnaround Expenses Turnarounds represent major maintenance activities that require the shutdown of significant parts of a facility 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 our Facilities, but generally occur every three years . December 31, 2024 | 62 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES 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) on our Consolidated Statements of Operations. During the years ended December 31, 2024, 2023, and 2022, the Partnership incurred turnaround expenses of $ 0.5 million, $ 1.8 million, and $ 33.4 million, respectively. Share-Based Compensation 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. Compensation expense will fluctuate based on changes in the applicable unit price value and expense reversals resulting from employee terminations prior to award vesting. The Partnership recognizes forfeitures as they occur. Any previously recognized compensation expense is reversed in the period of forfeiture, and the corresponding liability is extinguished. There were no dilutive awards outstanding during the years ended December 31, 2024, 2023, and 2022. Income Taxes The Partnership is not a taxable entity for federal income tax purposes or states that follow the federal income tax treatment of partnerships. Instead, for purposes of these income taxes, each partner of the Partnership is required to take into account its share of items of income, gain, loss and deduction in computing its federal and state income tax liabilities, regardless of whether cash distributions are made to such partner by the Partnership. We are subject to income taxes in certain states that do not follow the federal tax treatment of partnerships. These taxes are accounted for 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. Allocation of Costs CVR Energy and its subsidiaries provide a variety of services to the Partnership, including employee benefits provided through CVR Energy’s benefit plans, administrative services provided by CVR Energy’s employees and management, insurance, and office space leased by CVR Energy. As such, the accompanying consolidated financial statements include costs that have been incurred by CVR Energy on behalf of the Partnership, which are then billed or allocated to the Partnership and are classified on our Consolidated Statements of Operations as either Direct operating expenses (exclusive of depreciation and amortization) or as Selling, general and administrative expenses. Recent Accounting Pronouncements - Adoption of Segment Reporting Standard In November 2023, FASB issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures , which includes requirements for more robust disclosures of significant segment expenses and information used in assessing segment performance on an annual and interim basis. The guidance also requires that a public entity that has a single reportable segment provide all the disclosures required by the guidance and all existing segment disclosures under the FASB Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting . This standard is effective for the Partnership’s annual period beginning January 1, 2024 and interim periods beginning January 1, 2025 and should be applied retrospectively to all comparative periods. Effective with this Report, the Partnership adopted this ASU. Refer to Note 12 (“Business Segments”) for the required segment disclosures. Recent Accounting Pronouncements - Accounting Standards Issued But Not Yet Implemented In December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which requires enhanced income tax disclosures that reflect how operations and related tax risks, as well as how tax planning and operational opportunities, affect the tax rate and prospects for future cash flows. This standard is effective for the Partnership’s annual reporting period beginning January 1, 2025 with early adoption permitted. While the Partnership does not expect adoption will have a material impact on its consolidated financial statements, it currently expects additional disclosures will be included for its annual reporting period beginning January 1, 2025 and interim reporting periods beginning January 1, 2026. The Partnership does not intend to early adopt this ASU. December 31, 2024 | 63 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In November 2024, FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) , which requires disclosure of specific information about costs and expenses within relevant expense captions on the face of the income statement, qualitative descriptions for expense captions not specifically disaggregated quantitatively, and the total amount and definition of selling expenses for interim and annual reporting periods. This standard is effective for the Partnership’s annual reporting period beginning January 1, 2027 and interim reporting periods beginning January 1, 2028 and should be applied retrospectively to all comparative periods. Early adoption is permitted. The Partnership is currently evaluating the effects of adopting this new accounting guidance. (3) Inventories Inventories consisted of the following: December 31, (in thousands) 2024 2023 Finished goods $ 17,066 $ 15,015 Raw materials 2,755 2,472 Parts, supplies and other 55,758 51,678 Total inventories $ 75,579 $ 69,165 (4) Property, Plant and Equipment Property, plant and equipment, net consisted of the following: December 31, (in thousands) 2024 2023 Machinery and equipment $ 1,435,691 $ 1,446,728 ROU finance lease 25,076 — Buildings and improvements 18,188 18,193 Automotive equipment 16,279 16,208 Land and improvements 14,959 14,959 Construction in progress 30,623 19,075 Other 2,939 2,758 1,543,755 1,517,921 Less: Accumulated depreciation and amortization ( 808,164 ) ( 756,898 ) Total property, plant and equipment, net $ 735,591 $ 761,023 For the years ended December 31, 2024, 2023, and 2022, depreciation and amortization expenses related to property, plant, and equipment were $ 87.1 million, $ 78.9 million, and $ 81.3 million, respectively, which includes $ 14.1 million, $ 0.7 million, and $ 12.7 million, respectively, of additional depreciation expense, as a result of the Partnership updating the estimated useful lives of certain assets due to planned asset retirements, including granular urea production area. For the years ended December 31, 2024, 2023, and 2022, capitalized interest was $ 1.0 million, $ 0.5 million, and $ 0.8 million, respectively. During the years ended December 31, 2024, 2023, and 2022, the Partnership had not identified the existence of an impairment indicator for our long-lived asset groups as outlined under the FASB ASC Topic 360, Property, Plant, and Equipment . (5) Equity Method Investment As part of a series of agreements entered into with unaffiliated parties in January 2023 with the objective to monetize certain tax credits under Section 45Q of the Internal Revenue Code of 1986 (“45Q Transaction”), the Partnership received a 50 % interest in CVR-CapturePoint Parent, LLC (“CVRP JV”) in connection with a modification to a carbon oxide contract (“CO Contract”) with a customer. The Partnership applied the variable interest entity (“VIE”) model under FASB ASC Topic December 31, 2024 | 64 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 810, Consolidation, to its variable interest in CVRP JV and determined that CVRP JV is a VIE. While the Partnership concluded it is not the primary beneficiary of CVRP JV, it does have significant influence over CVRP JV’s operating and financial policies and, therefore, applied the equity method of accounting for its investment in CVRP JV. The Partnership valued the equity interest received using a combination of the market approach and the discounted cash flow methodology with key inputs including the discount rate, contractual and expected future cash flows, and market multiples. The fair value of the consideration received, which was a non-recurring Level 3 measurement as defined by FASB ASC Topic 820, Fair Value Measurements , was estimated to be $ 46.0 million in January 2023 based on the use of the Partnership’s own assumptions described above. The Partnership deferred the recognition of the noncash consideration received at inception and has been recognizing the associated revenue proportionally as the performance obligations associated with the CO Contract are satisfied. Refer to Note 9 (“Revenue”) for further discussion. The Partnership has elected to record its share of the earnings or loss of CVRP JV one quarter in arrears. Distributions received from CVRP JV reduce the Partnership’s equity method investment and are recorded in the period they are received. The investment in CVRP JV is presented within Other long-term assets on our Consolidated Balance Sheets. (in thousands) CVRP JV Balance at inception $ 46,000 Cash contributions 13 Cash distributions ( 21,485 ) Equity loss ( 10 ) Balance at December 31, 2023 24,518 Cash contributions 14 Cash distributions (1) ( 5,193 ) Equity loss ( 11 ) Balance at December 31, 2024 $ 19,328 (1) Includes a $ 2.2 million distribution to the Partnership for CVRP JV exceeding certain carbon oxide capture and sequestration milestones during 2023 . (6) Leases 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 asset. 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. Furthermore, we do not have any material lessor or sub-leasing arrangements. December 31, 2024 | 65 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Balance Sheet Summary as of December 31, 2024 and 2023 The following table summarizes the ROU asset and lease liability balances for the Partnership’s operating and finance leases at December 31, 2024 and 2023. (in thousands) December 31, 2024 December 31, 2023 Operating Leases Finance Leases Operating Leases Finance Leases ROU asset, net Equipment, real estate and other $ 1,794 $ 24,995 $ 2,007 $ — Railcars 16,357 — 12,032 — Lease liability Equipment, real estate and other $ 231 $ 21,003 $ 268 $ — Railcars 16,168 — 12,032 — Lease Expense Summary for the Years Ended December 31, 2024, 2023, and 2022 For the years ended December 31, 2024, 2023, and 2022, we recognized lease expense comprised of the following components: Year Ended December 31, (in thousands) 2024 2023 2022 Operating lease expense $ 5,542 $ 4,664 $ 4,230 Finance lease expense: Amortization of ROU asset 81 — 34 Interest expense on lease liability 231 — — Short-term lease expense 2,789 3,022 2,839 Lease Terms and Discount Rates The following outlines the remaining lease terms and discount rates used in the measurement of the ROU assets and lease liabilities of the Partnership’s operating leases at December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Operating Leases Finance Leases Operating Leases Finance Leases Weighted-average remaining lease term 4.5 years 14.6 years 4.0 years 0.0 years Weighted-average discount rate 7.3 % 11.3 % 6.5 % — % December 31, 2024 | 66 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Maturities of Lease Liabilities The following summarizes the remaining minimum operating lease payments through maturity of the Partnership’s lease liabilities at December 31, 2024: (in thousands) Operating Leases Finance Leases Year Ending December 31, 2025 $ 4,996 $ 3,145 2026 4,525 3,157 2027 4,241 3,157 2028 2,186 3,157 2029 1,367 3,157 Thereafter 2,027 28,824 Total lease payments 19,342 44,597 Less: imputed interest ( 2,943 ) ( 23,594 ) Total lease liability $ 16,399 $ 21,003 (7) Other Current Liabilities Other current liabilities consisted of the following: December 31, (in thousands) 2024 2023 Personnel accruals $ 9,693 $ 8,404 Operating lease liabilities 4,041 3,176 Accrued interest 2,531 1,404 Share-based compensation 1,339 1,195 Sales incentives 1,338 1,585 Accrued taxes other than income taxes 1,332 1,825 Current portion of finance lease obligations 877 — Other accrued expenses and liabilities 2,832 3,283 Total other current liabilities $ 23,983 $ 20,872 (8) Long-Term Debt Long-term debt and finance lease obligations, net of current portion consisted of the following: December 31, (in thousands) 2024 2023 6.125 % Senior Secured Notes, due June 2028 (1) $ 550,000 $ 550,000 Finance lease obligations, net of current portion 20,126 — Unamortized debt issuance costs ( 2,152 ) ( 2,692 ) Total long-term debt and finance lease obligations, net of current portion 567,974 547,308 Current portion of long-term debt and finance lease obligations 877 — Total long-term debt and finance lease obligations, including current portion $ 568,851 $ 547,308 (1) The estimated fair value of the 2028 Notes, defined below, was approximately $ 533.5 million and $ 513.1 million as of December 31, 2024 and 2023, respectively. The fair value estimate is a Level 2 measurement, as defined by FASB ASC Topic 820, Fair Value Measurements, as it was determined by quotations obtained from a broker-dealer who makes a market in these and similar securities. December 31, 2024 | 67 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Credit Agreements (in thousands) Total Available Borrowing Capacity Amount Borrowed as of December 31, 2024 Outstanding Letters of Credit Available Capacity as of December 31, 2024 Maturity Date ABL Credit Facility $ 38,923 $ — $ — $ 38,923 September 26, 2028 6.125 % Senior Secured Notes due June 2028 On June 23, 2021, CVR Partners and CVR Nitrogen Finance Corporation (“Finance Co.” and collectively 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”). 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. 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. On or after June 15, 2024, we may, on any one or more occasions, redeem all or part of the 2028 Notes at the redemption prices set forth below, expressed as a percentage of the principal amount of the respective notes, plus accrued and unpaid interest to the applicable redemption date. 12-month period beginning June 15, Percentage 2024 103.063 % 2025 101.531 % 2026 and thereafter 100.000 % The 2028 Notes contain customary covenants for a financing of this type that, among other things, restricts 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 disqualified stock; (v) create or incur certain liens; (vi) enter into agreements that restrict distributions or other payments from CVR Partners’ restricted subsidiaries to CVR Partners; (vii) consolidate, merge or transfer all or substantially all of CVR Partners’ assets; (viii) engage in transactions with affiliates; and (ix) create unrestricted subsidiaries. The 2028 Notes contains 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. 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 2028 Notes to cause the acceleration of the 2028 Notes, in addition to the pursuit of other available remedies. ABL Credit Agreement On September 26, 2023, CVR Partners and certain of its subsidiaries entered into Amendment No. 1 to the Credit Agreement (the “ABL Amendment”) with Wells Fargo Bank National Association, a national banking association, as the administrative agent, collateral agent, and lender. The ABL Amendment amended that certain Credit Agreement, dated as of September 30, 2021 (as amended, the “ABL Credit Facility”), by and among the credit parties thereto and Wells Fargo, as administrative agent, collateral agent and a lender, to, among other things, (i) increase the aggregate principal amount available under the credit facility by an additional $ 15.0 million to a total of $ 50.0 million in the aggregate, with an incremental facility for another $ 15.0 million in the aggregate subject to additional lender commitments and certain other conditions, and (ii) extend the maturity date by an additional four years to September 26, 2028. The ABL Credit Facility provides for loans and letters of credit, subject to meeting certain borrowing base conditions, with sub-limits of $ 3.5 million for swingline loans and $ 10.0 million for letters of credit. The proceeds of the loans may be used for general corporate purposes of the Partnership and its subsidiaries. The foregoing description of the ABL Amendment does not purport to be complete and is qualified in its entirety by its terms, which is furnished as an exhibit to this Report. 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 December 31, 2024 | 68 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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. Covenant Compliance The Partnership and its subsidiaries were in compliance with all covenants under their respective debt instruments as of December 31, 2024. (9) Revenue The following table presents the Partnership’s revenue, disaggregated by major products: Year Ended December 31, (in thousands) 2024 2023 2022 Ammonia $ 129,952 $ 161,004 $ 199,523 UAN 312,008 431,451 556,519 Urea products 30,449 28,730 33,506 Other revenue (1) 52,915 60,292 46,036 Total revenue $ 525,324 $ 681,477 $ 835,584 (1) Includes sales made in connection with the 45Q Transaction and the noncash consideration received, which is recognized as the performance obligation associated with the CO Contract is satisfied over its term through April 2030. Revenue from the CO Contract is recognized over time based on carbon oxide volumes measured at delivery. Remaining Performance Obligations We have spot and term contracts with customers and the transaction prices are either fixed or based on market indices (variable consideration). We do not disclose remaining performance obligations for contracts that have terms of one year or less and for contracts where the variable consideration was entirely allocated to an unsatisfied performance obligation. As of December 31, 2024, the Partnership had approximately $ 7.7 million of remaining performance obligations for contracts with an original expected duration of more than one year. The Partnership expects to recognize $ 4.2 million of these performance obligations as revenue by the end of 2025, an additional $ 3.2 million in 2026, and the remaining balance thereafter. Contract Balances During the years ended December 31, 2024 and 2023, the Partnership recognized revenue of $ 15.7 million and $ 46.4 million, respectively, that was included in the deferred revenue balances as of December 31, 2023 and December 31, 2022, respectively. Major Customers CVR Partners had one customer who comprised 14 % of net sales for the year ended December 31, 2024. CVR Partners had two customers that accounted for 10% or more of net sales at approximately 13 % and 12 % for the year ended December 31, 2023 and 16 % and 14 % for the year ended December 31, 2022. December 31, 2024 | 69 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (10) Share-Based Compensation CVR Partners issues long-term cash phantom unit awards (“Share-Based Awards”) in connection with (and not under) the CVR Partners Long-Term Incentive Plan (“CVR Partners LTIP”), which represent the right to receive, upon vesting, a cash payment equal to (i) the average fair market value of one unit of CVR Partners’ common units, calculated in accordance with the award agreement, plus (ii) the per unit value of all distributions declared and paid on CVR Partners common units from the grant date through the vesting date, subject to the terms of the applicable award agreement. The Share-Based Awards are graded-vesting awards, which vest over three years with one-third of the award vesting each year provided the grantee remains employed by the Partnership and its subsidiaries on the applicable vesting date. 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 the Share-Based Award activity during the year ended December 31, 2024 is presented below: (in thousands, except per unit data) Units (1) Weighted- Average Grant Date Fair Value Aggregate Intrinsic Value Non-vested at December 31, 2023 97,870 $ 74.95 $ 6,410 Granted 60,661 76.45 Vested ( 41,633 ) 77.86 Forfeited ( 7,811 ) 74.63 Non-vested at December 31, 2024 109,087 $ 74.70 $ 8,286 (1) Units reflected above are phantom units awarded by the Partnership and do not include any incentive units granted by CVR Energy for which it shares in the expense. As of December 31, 2024, there are no outstanding awards under the CVR Partners LTIP, and the outstanding Share-Based Awards have only been issued in connection with, not under, the CVR Partners LTIP. The CVR Partners LTIP expired by its terms in 2021. Unrecognized compensation expense associated with the Share-Based Awards at December 31, 2024 was approximately $ 6.6 million, which is expected to be recognized over a weighted average period of 1.8 years. Compensation expense recorded for the years ended December 31, 2024, 2023, and 2022 related to these awards was $ 4.6 million, $ 6.4 million, and $ 25.7 million, respectively. As of December 31, 2024 and 2023, the Partnership had a liability of $ 1.8 million and $ 1.5 million, respectively, for cash settled non-vested Share-Based Awards and associated distribution equivalent rights, and for the years ended December 31, 2024, 2023, and 2022, paid $ 3.3 million, $ 12.6 million, and $ 17.7 million, respectively, to settle Share-Based Awards upon vesting. Incentive Unit Awards — CVR Energy CVR Energy grants awards of incentive units and dividend equivalent rights to certain of its officers and employees and those of its subsidiaries, including officers of the Partnership’s subsidiaries, who provide shared services for CVR Energy and its subsidiaries. Costs related to these incentive unit awards are allocated to the Partnership based on time spent on Partnership business. Total compensation expense allocated to the Partnership for the years ended December 31, 2024, 2023, and 2022 related to the incentive units was $ 1.4 million, $ 3.4 million and $ 5.3 million, respectively. The Partnership had no separate liabilities related to these incentive unit awards as of December 31, 2024 and 2023, as the allocation of compensation expense for incentive unit awards is part of the amount charged to the Partnership under the Corporate Master Service Agreement (“Corporate MSA”). For the years ended December 31, 2024, 2023, and 2022, the Partnership had no reimbursements related to its allocated portion of CVR Energy’s incentive unit awards payments. See Note 13 (“Related Party Transactions”) for further discussion of the Corporate MSA. December 31, 2024 | 70 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Performance Unit Awards A performance award agreement effective November 1, 2017, as amended on December 22, 2021 between CVR Energy and our Executive Chairman (the “PU Award”) represents our Executive Chairman’s 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 (subject to any equitable adjustments required to account for splits, dividends, combinations, acquisitions, dispositions, recapitalizations, and the like). The Performance Cycle (as such term is defined in the PU Award) ended on December 31, 2024, and the measurement period thereunder will expire on February 20, 2025, after which the PU Award will no longer be in effect. At this time, it is not probable that the condition under the PU Award will be achieved or that any amounts will be paid thereunder. No compensation costs related to the PU Award were recognized for the years ended December 31, 2024, 2023, and 2022. 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 (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. CVR Partners provides a matching contribution of 100 % of the first 6 % of eligible compensation contributed by participants. Participants in both Plans are immediately vested in their individual contributions. 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 had contributions under the Plans of $ 2.5 million, $ 2.4 million, and $ 2.3 million for the years ended December 31, 2024, 2023, and 2022, respectively. (11) Commitments Unconditional Purchase Obligations The minimum required payments for unconditional purchase obligations, as defined in ASC 440, Commitments , related to ancillary production supplies are as follows: (in thousands) Unconditional Purchase Obligations Year Ending December 31, 2025 $ 3,940 2026 3,940 2027 3,940 2028 3,940 2029 3,940 Thereafter 37,761 $ 57,461 Expenses associated with these obligations are included in Direct operating expenses (exclusive of depreciation and amortization), and, for the years ended December 31, 2024, 2023, and 2022, totaled $ 3.9 million, $ 3.7 million, and $ 3.8 million, respectively. (12) Business Segments CVR Partners has one operating and reportable segment: Nitrogen Fertilizer. The Partnership derives revenue by producing and marketing nitrogen fertilizer products within the United States, which are used by farmers to improve the yield and quality of their crops. The segment determination is based on the management approach, reflecting the internal reporting used by the Chief Operating Decision Maker (“CODM”), the Partnership’s Chief Executive Officer, to evaluate performance and make strategic decisions. December 31, 2024 | 71 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The CODM evaluates the performance of the Nitrogen Fertilizer Segment and decides how to allocate resources based on net income, which is reported in the consolidated statement of operations. The CODM uses net income to assess the income generated by the nitrogen fertilizer segment and to decide whether to reinvest profits into the Partnership or pay distributions. Net income is also used to analyze performance against the budget and the Partnership’s competitors. While segment assets are not reported to, or used by, the CODM to allocate resources or to assess performance of the segment, total assets are disclosed in the Consolidated Balance Sheets. The following table presents the operating results and capital expenditures information for the Nitrogen Fertilizer Segment: Year Ended December 31, (in thousands) 2024 2023 2022 Net sales $ 525,324 $ 681,477 $ 835,584 Less: Feedstocks 55,427 76,831 92,306 Distribution costs 49,898 52,036 42,362 Other costs of materials (1) ( 1,184 ) 5,510 ( 3,755 ) Cost of materials and other 104,141 134,377 130,913 Less: Direct operating expenses (exclusive of depreciation and amortization and turnaround expenses) 213,736 233,138 236,759 Turnaround expenses 486 1,778 33,408 Depreciation and amortization 88,096 79,720 82,137 Selling, general and administrative expenses 28,414 29,523 32,192 Interest expense 34,044 34,317 35,586 Interest income ( 4,217 ) ( 5,664 ) ( 1,521 ) Other segment items (2) ( 276 ) 1,855 ( 691 ) Net income $ 60,900 $ 172,433 $ 286,801 Capital expenditures $ 37,063 $ 29,081 $ 41,446 (1) Other costs of materials includes inventory cost adjustments and lease expense. (2) Other segment items includes (gain) loss on asset disposal, other (income) expense, and income tax expense. (13) Related Party Transactions Limited Partnership Agreement The Partnership’s general partner manages the Partnership’s operations and activities as specified in CVR Partners’ limited partnership agreement. The General Partner is managed by its board of directors. The partnership agreement provides that the Partnership will reimburse the General Partner for all direct and indirect expenses it incurs or payments it makes on behalf of the Partnership, including salary, bonus, incentive compensation, and other amounts paid to any person to perform services for the Partnership or for its general partner in connection with operating the Partnership. Omnibus Agreement We are party to an omnibus agreement with CVR Energy and our general partner, pursuant to which we have agreed that CVR Energy will have a preferential right to acquire any assets or group of assets that do not constitute assets used in a fertilizer restricted business. In determining whether to exercise any preferential right under the omnibus agreement, CVR Energy will be permitted to act in its sole discretion, without any fiduciary obligation to us or the unitholders whatsoever. These obligations will continue so long as CVR Energy owns at least 50 % of our general partner. There was no activity reported under this agreement during the years ended December 31, 2024, 2023, and 2022. December 31, 2024 | 72 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Coffeyville MSA Under the Coffeyville MSA, CRNF and an indirect, wholly owned subsidiary of CVR Energy (“CVR Energy Subsidiary”) are party to various services, including cross easements, hydrogen purchase and sale, raw water and facilities sharing, pet coke supply, feedstock and shared services, and a lease. The Coffeyville MSA provides for monthly payments for all goods and services supplied under the Coffeyville MSA and is in effect until terminated in writing, in whole or in part, by either party, or until terminated automatically in the event a party falls out of common control with the other party. Corporate MSA Under the Corporate MSA, the General Partner and the Partnership and its subsidiaries, as “service recipients” thereunder, obtain certain management and other administrative and professional services from CVR Services. The Corporate MSA provides for payment by each service recipient, including the General Partner and the Partnership and its subsidiaries, of a monthly fee for goods and services supplied thereunder, subject to an annual true up, as well as pass-through of any direct costs incurred on behalf of a service recipient without markup. Any party may terminate the Corporate MSA upon at least 90 days’ notice. Environmental Agreement CRNF and certain of CVR Energy’s subsidiaries are parties to an environmental agreement 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 the Coffeyville refinery but is also commingled with environmental contamination caused by CRNF, the Coffeyville refinery 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 it does 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, 2024 and 2023. Terminal and Operating Agreement CRNF entered into a lease and operating agreement with an affiliated CVR Energy subsidiary, 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 $ 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. December 31, 2024 | 73 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Related Party Activity Activity associated with the Partnership’s related party arrangements for the years ended December 31, 2024, 2023, and 2022 is summarized below: Year Ended December 31, (in thousands) 2024 2023 2022 Sales to related parties: (1) CVR Energy subsidiary $ 1,395 $ 4 $ 312 CVRP JV 2,690 3,613 — Expenses from related parties: (2) CVR Energy subsidiary 13,890 21,336 24,149 CVR Services 27,227 28,505 32,278 December 31, 2024 2023 Due to related parties (3) $ 6,213 $ 5,319 (1) Sales to related parties, included in Net sales in our consolidated financial statements, consist of (a) sales of feedstocks and services under the Coffeyville MSA and (b) CO sales to CVRP JV and its subsidiaries. (2) Expenses from related parties, included in Cost of materials and other, Direct operating expenses (exclusive of depreciation and amortization), and Selling, general and administrative expenses in our consolidated financial statements, consist primarily of pet coke and hydrogen purchased under the Coffeyville MSA and management and other professional services under the Corporate MSA. (3) Consists primarily of amounts payable to CVR Energy subsidiaries under the Coffeyville MSA and Corporate MSA. Distributions to CVR Partners’ Unitholders 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. Available Cash for Distribution for each quarter is determined by the Board following the end of such quarter. Distributions, if any, including the payment, amount, and timing thereof, and the Board’s distribution policy, including the definition of Available Cash for Distribution, are subject to change at the discretion of the Board. The following tables present quarterly distributions paid by the Partnership to CVR Partners’ unitholders, including amounts paid to CVR Energy, during 2024, 2023, and 2022 (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 2023 - 4th Quarter March 11, 2024 $ 1.68 $ 11,218 $ 6,539 $ 17,757 2024 - 1st Quarter May 20, 2024 1.92 12,821 7,472 20,293 2024 - 2nd Quarter August 19, 2024 1.90 12,688 7,395 20,082 2024 - 3rd Quarter November 18, 2024 1.19 7,946 4,632 12,578 Total 2024 quarterly distributions $ 6.69 $ 44,673 $ 26,037 $ 70,710 2022 - 4th Quarter March 13, 2023 $ 10.50 $ 70,115 $ 40,866 $ 110,981 2023 - 1st Quarter May 22, 2023 10.43 69,647 40,594 110,241 2023 - 2nd Quarter August 21, 2023 4.14 27,646 16,113 43,759 2023 - 3rd Quarter November 20, 2023 1.55 10,350 6,033 16,383 Total 2023 quarterly distributions $ 26.62 $ 177,759 $ 103,605 $ 281,364 December 31, 2024 | 74 Table of Contents CVR PARTNERS, LP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 2022 quarterly distributions $ 19.32 $ 129,597 $ 75,193 $ 204,790 For the fourth quarter of 2024, the Partnership, upon approval by the Board on February 18, 2025, declared a distribution of $ 1.75 per common unit, or $ 18.5 million, which is payable March 10, 2025 to unitholders of record as of March 3, 2025. Of this amount, CVR Energy and IEP will receive approximately $ 6.8 million and $ 0.3 million, respectively, with the remaining amount payable to public unitholders. (14) Supplemental Cash Flow Information Cash flows related to income taxes, interest, leases, and capital expenditures included in accounts payable are as follows: Year Ended December 31, (in thousands) 2024 2023 2022 Supplemental disclosures: Cash paid for income taxes, net of refunds $ 84 $ 281 $ 110 Cash paid for interest 34,135 34,083 35,164 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 4,981 3,786 3,474 Operating cash flows from finance leases 213 — — Financing cash flows from finance leases 2,361 — — Noncash investing and financing activities: Change in capital expenditures included in accounts payable ( 11 ) 4,885 ( 3,222 ) ROU assets obtained in exchange for new or modified operating lease liabilities 8,143 — 6,598 ROU assets obtained in exchange for new or modified finance lease liabilities 25,307 — — December 31, 2024 | 75 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.