Wichita — CVR Energy Inc. reports that on Jan. 13, 2012, the Kansas Court of Tax Appeals (COTA) issued a ruling concerning the property tax valuation of the Coffeyville Resources Nitrogen Fertilizers LLC (CRNF) fertilizer plant, affirming a 2008 assessment of CRNF’s fertilizer plant as almost entirely real property instead of almost entirely personal property was appropriate. The 2008 assessment resulted in an increase to annual property tax expense for CRNF by approximately $10.7 million. CRNF is a wholly owned subsidiary of CVR Partners LP. CVR Energy owns the general partner and 69.7 percent of the common units of the LP. CVR disagrees with the ruling and plans to file a petition for reconsideration with COTA, and if necessary, an appeal to the Kansas Court of Appeals. The LP is also protesting the valuation of the CRNF fertilizer plant for tax years 2009 – 2011, which cases remain pending before COTA. CRNF has fully accrued and paid the property taxes the county claims are owed for the years ended Dec. 31, 2010, 2009, and 2008, and has fully accrued such amounts for the year ended Dec. 31, 2011. The first payment in respect of CRNF’s 2011 property taxes was paid in December 2011, and the second payment will be made in May 2012. If CRNF is successful in having the nitrogen fertilizer plant reclassified as personal property, in whole or in part, a portion of the accrued and paid expenses would be refunded to CRNF, which could have a material positive effect on CRNF’s and the company’s results of operations. If CRNF is not successful in having the nitrogen fertilizer plant reclassified as personal property, in whole or in part, CRNF expects that it will continue to pay property taxes at elevated rates.
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