What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2022-02-23 compared with 2021-02-23 · 387 added, 413 removed, 867 unchanged (48% of the section changed)

Financial Statements and Supplementary Data

CVR Energy, Inc.

and Subsidiaries

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248 )

Consolidated Balance Sheets as of December 31, 2021 and 2020

Consolidated Statements of Operations for the Years Ended December 31, 2021, 2020 and 2019

Consolidated Statements of Changes in Equity for the Years Ended December 31, 2021, 2020 and 2019

Consolidated Statements of Cash Flows for the Years Ended December 31, 2021, 2020 and 2019

Notes to the Consolidated Financial Statements

December 31, 2021 | 70

Report of Independent Registered Public Accounting Firm

16 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical audit matters

The critical audit matters communicated below 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.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Petroleum Segment’s Inventory Finished Goods Valuation

As described in Note 2 to the consolidated financial statements, the Company utilizes the ability-to-bear methodology to determine the valuation of its Petroleum Segment’s finished goods inventories, which was $123 million at December 31, 2020.

As described in Note 2 to the financial statements, the Company utilizes the ability-to-bear methodology to determine the valuation of its Petroleum Segment’s finished goods inventories, which was $198 million at December 31, 2021.

Management makes certain estimates based on observable inputs, including monthly sales prices and current market prices to determine how much raw materials and production costs are capitalized into inventories.

1 unchanged sentence

Changes in these estimates could have a significant impact on the Company’s valuation of finished goods inventory.

December 31, 2020 | 65

We identified the Company’s Petroleum Segment’s finished goods inventory valuation process as a critical audit matter.

The principal consideration for our determination that the inventory valuation process is a critical audit matter is the degree of complexity and subjectivity inherent in determining management’s valuation estimates.

December 31, 2021 | 71

Our audit procedures to evaluate the Company’s valuation of finished goods inventory included the following procedures to test management’s process, among others:

2 unchanged sentences

• We tested or evaluated the reasonableness of inputs including sales volumes, monthly sales prices, and current market prices for each product by obtaining third-party market prices and a sample of sales transactions by product to verify the accuracy of the information used by management.

• We tested management’s process of calculating the lower of cost or net realizable value including verifying the reasonableness of the methodology used and accuracy of the inputs such as selling prices for refined fuels and market pricing.

Nitrogen Fertilizer Segment’s Goodwill Impairment Assessment

As described in Note 2 to the consolidated financial statements, annually or as facts or circumstances may dictate, management performs a valuation of the Coffeyville reporting unit to determine if a goodwill impairment exists.

During the second quarter of 2020 following the completion of the spring planting season and observation of certain market and other conditions described in Note 2, the Company’s Nitrogen Fertilizer Segment’s Coffeyville Fertilizer Facility reporting unit concluded a triggering event occurred and performed an interim quantitative impairment assessment.

The identification of a triggering event and the determination of the fair value of the reporting unit required management to make significant estimates and develop assumptions related to cash flow forecasts using estimates of future nitrogen fertilizer product pricing, volumes to be sold, costs to be incurred for key process inputs and other operating expenses as well as estimating appropriate discount rates and growth rates for future periods.

Changes in these assumptions could have had a significant impact on the identification of a triggering event as well as the reporting unit’s estimated fair value.

As a result of the quantitative impairment assessment, a full goodwill impairment of $41 million was recorded during the year ended December 31, 2020.

We identified the goodwill impairment assessment of the Nitrogen Fertilizer Segment’s Coffeyville Fertilizer Facility reporting unit as a critical audit matter.

The principal consideration for our determination that the goodwill impairment assessment is a critical audit matter was the degree of complexity and subjectivity inherent in determining management’s estimates.

Our audit procedures related to the Nitrogen Fertilizer Segment’s Coffeyville Fertilizer Facility reporting unit’s goodwill impairment assessment included the following, among others:

• We tested the design and operating effectiveness of management’s processes and controls over the identification of a triggering event and the fair value assessment of the Coffeyville reporting unit.

• We evaluated the reasonableness of a triggering event by considering the current market conditions following the completion of the spring planting season as well as the economic uncertainty surrounding the COVID-19 pandemic.

• We evaluated the reasonableness of future nitrogen fertilizer pricing assumptions by comparing the prices used by management to current industry and economic trends considering the impacts of the COVID-19 pandemic as well as comparing those prices to the historical performance of the Coffeyville reporting unit, performed sensitivity analyses to evaluate the change in the fair value estimates that would result from changes in those price assumptions, and recalculated management’s estimates.

• We compared forecasted sales volumes and expenses to historical operating results.

• We utilized valuation professionals with specialized skills and knowledge to assist in evaluating the Nitrogen Fertilizer Segment’s Coffeyville Fertilizer Facility’s discounted cash flow model and guideline public company methods and certain significant assumptions, including the discount rate, terminal growth rate, and cost of capital.

• We evaluated whether the assumptions used were consistent with evidence obtained in other areas of the audit.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2013.

Houston, Texas

Dallas, Texas

February 22, 2022

24 unchanged sentences

/s/ GRANT THORNTON LLP

Houston, Texas

Dallas, Texas

February 22, 2022

5 unchanged sentences

Current assets:

Cash and cash equivalents (including $ 31 and $ 37 , respectively, of consolidated variable interest entities (VIEs))

Accounts receivable (including $ 37 and $ 34 , respectively, of VIEs)

Inventories (including $ 42 and $ 48 , respectively, of VIEs)

Prepaid expenses and other current assets (including $ 8 and $ 5 , respectively, of VIEs)

Cash and cash equivalents (including $ 113 and $ 31 , respectively, of consolidated variable interest entity (VIE))

Accounts receivable (including $ 88 and $ 37 , respectively, of VIE)

Inventories (including $ 52 and $ 42 , respectively, of VIE)

Prepaid expenses and other current assets (including $ 9 and $ 8 , respectively, of VIE)

Total current assets 1,369 1,402

Property, plant and equipment, net (including $ 898 and $ 952 , respectively, of VIEs)

Other long-term assets (including $ 17 and $ 61 , respectively, of VIEs)

Property, plant and equipment, net (including $ 850 and $ 898 , respectively, of VIE)

Other long-term assets (including $ 14 and $ 17 , respectively, of VIE)

Total assets $ 3,906 $ 3,978

1 unchanged sentence

Current liabilities:

Note payable and finance lease obligations (including $ 2 and $ 0 , respectively, of VIEs)

Accounts payable (including $ 25 and $ 24 , respectively, of VIEs)

Other current liabilities (including $ 49 and $ 52 , respectively, of VIEs)

Note payable and finance lease obligations (including $ 0 and $ 2 , respectively, of VIE)

Accounts payable (including $ 50 and $ 25 , respectively, of VIE)

Other current liabilities (including $ 111 and $ 49 , respectively, of VIE)

Total current liabilities 1,156 659

Long-term liabilities:

Long-term debt and finance lease obligations, net of current portion (including $ 634 and $ 632 , respectively of VIEs)

Long-term debt and finance lease obligations, net of current portion (including $ 611 and $ 634 , respectively, of VIE)

Deferred income taxes 268 368

Other long-term liabilities (including $ 8 and $ 10 , respectively, of VIEs)

Other long-term liabilities (including $ 12 and $ 8 , respectively, of VIE)

Total long-term liabilities 1,980 2,100

24 unchanged sentences

Depreciation and amortization 9 10 9

Loss (gain) on asset disposals 7 ( 4 ) 6

Loss (gain) on asset disposal 3 7 ( 4 )

Goodwill impairment — 41 —

Operating (loss) income ( 333 ) 580 532

Operating income (loss) 87 ( 333 ) 580

Other (expense) income:

Interest expense, net ( 117 ) ( 130 ) ( 102 )

Investment income from marketable securities 41 — —

Investment income on marketable securities 81 41 —

Other income, net 15 7 13

(Loss) income before income taxes ( 415 ) 491 445

Income (loss) before income tax expense 66 ( 415 ) 491

Income tax (benefit) expense ( 8 ) ( 95 ) 129

Net (loss) income ( 320 ) 362 366

Net (loss) income attributable to non-controlling interest ( 64 ) ( 18 ) 107

Net (loss) income attributable to CVR Energy stockholders $ ( 256 ) $ 380 $ 259

Basic and diluted (loss) earnings per share $ ( 2.54 ) $ 3.78 $ 2.80

Net income (loss) 74 ( 320 ) 362

Net income (loss) attributable to noncontrolling interest 49 ( 64 ) ( 18 )

Net income (loss) attributable to CVR Energy stockholders $ 25 $ ( 256 ) $ 380

Basic and diluted earnings (loss) per share $ 0.25 $ ( 2.54 ) $ 3.78

Dividends declared per share $ 4.89 $ 1.20 $ 3.05

12 unchanged sentences

Balance at December 31, 2018 100,629,209 $ 1 $ 1,474 $ ( 187 ) $ ( 2 ) $ 1,286 $ 657 $ 1,943

Exchange offer impact 13,699,549 — 276 — — 276 ( 192 ) 84

Dividends paid to CVR Energy stockholders — — — ( 306 ) — ( 306 ) — ( 306 )

Distributions from CVR Refining to public unitholders — — — — — — ( 93 ) ( 93 )

Other — — 1 — — 1 — 1

Net income — — — 259 — 259 107 366

Balance at December 31, 2018 100,629,209 1 1,474 ( 187 ) ( 2 ) 1,286 657 1,943

Dividends paid to CVR Energy stockholders — — — ( 306 ) — ( 306 ) — ( 306 )

Distributions from CVR Partners to public unitholders — — — — — — ( 30 ) ( 30 )

7 unchanged sentences

Balance at December 31, 2020 100,629,209 1 1,510 ( 490 ) ( 2 ) 1,019 200 1,219

Dividends paid to CVR Energy stockholders — — — ( 492 ) — ( 492 ) — ( 492 )

Distributions from CVR Partners to public unitholders — — — — — — ( 31 ) ( 31 )

Changes in equity due to CVR Partners’ common unit repurchases — — — — — — ( 1 ) ( 1 )

Other — — — 1 — 1 — 1

Net income — — — 25 — 25 49 74

Balance at December 31, 2021 100,629,209 $ 1 $ 1,510 $ ( 956 ) $ ( 2 ) $ 553 $ 217 $ 770

The accompanying notes are an integral part of these consolidated financial statements.

6 unchanged sentences

Cash flows from operating activities:

Net (loss) income $ ( 320 ) $ 362 $ 366

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Net income (loss) $ 74 $ ( 320 ) $ 362

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 279 278 287

2 unchanged sentences

Deferred income taxes ( 98 ) ( 30 ) 24

Unrealized gain on marketable securities ( 34 ) — —

Loss (gain) on asset disposals 7 ( 4 ) 6

(Gain) loss on marketable securities ( 81 ) ( 34 ) —

Loss (gain) on asset disposal 3 7 ( 4 )

(Gain) loss on derivatives ( 16 ) 10 14

Share-based compensation 46 4 17

4 unchanged sentences

Prepaid expenses and other current assets 12 ( 28 ) 16

Due to parent — 4 2

Accounts payable 122 ( 121 ) 94

7 unchanged sentences

Proceeds from sale of assets 7 1 37

Acquisition of pipeline assets ( 20 ) — —

Investment in marketable securities 3 ( 140 ) —

8 unchanged sentences

Dividends to CVR Energy’s stockholders ( 241 ) ( 121 ) ( 306 )

Distributions to CVR Refining’s noncontrolling interest holders — — ( 93 )

Distributions to CVR Partners’ noncontrolling interest holders ( 31 ) — ( 30 )

Other financing activities ( 10 ) ( 12 ) ( 5 )

Net cash provided by (used in) financing activities 355 ( 642 ) ( 334 )

Net increase (decrease) in cash and cash equivalents and restricted cash 22 ( 16 ) 186

Net cash (used in) provided by financing activities ( 315 ) 355 ( 642 )

Net (decrease) increase in cash and cash equivalents and restricted cash ( 157 ) 22 ( 16 )

Cash and cash equivalents and restricted cash, beginning of period 674 652 668

18 unchanged sentences

While the Stock Repurchase Program currently has a duration of four years , it does not obligate the Company to acquire any stock and may be terminated by the Board of Directors at any time.

We did no t repurchase any of our common stock during the year ended December 31, 2020.

We did no t repurchase any of our common stock during the years ended December 31, 2021, 2020, and 2019.

CVR Refining, LP

4 unchanged sentences

Amounts drawn under the new credit agreement were fully repaid in February 2019.

See Note 6 (“Long-Term Debt and Finance Lease Obligations”) for further information on the credit agreement.

The consolidated results of operations and financial position of CVR Refining are reflected as CVR’s Petroleum Segment.

2 unchanged sentences

CVR Partners, LP

Interest Holders - As of December 31, 2020, public common unitholders held approximately 64 % of CVR Partners’ outstanding common units, and CVR Services, LLC (“CVR Services”) (formerly Coffeyville Resources, LLC), a wholly-owned subsidiary of CVR Energy, held approximately 36 % of CVR Partners’ outstanding common units.

Interest Holders - As of December 31, 2021, public common unitholders held approximately 64 % of CVR Partners’ outstanding common units, and CVR Services, LLC (“CVR Services”), a wholly-owned subsidiary of CVR Energy, held approximately 36 % of CVR Partners’ outstanding common units.

In addition, CVR Services held 100 % of CVR Partners’ general partner, CVR GP, LLC (“CVR GP”), which held a non-economic general partner interest in CVR Partners as of December 31, 2021.

Following the acquisition of the non-controlling interest in CVR Refining in January 2019, the non-controlling interest reflected on the Consolidated Balance Sheets of CVR is only impacted by the net income of, and distributions from, CVR Partners.

Unit Repurchase Program - On May 6, 2020, CVR Partners announced that the board of directors of its general partner (the “UAN GP Board”), on behalf of CVR Partners, authorized a unit repurchase program (the “Unit Repurchase Program”).

December 31, 2021 | 78

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NYSE Listing Requirements and Reverse Split - On April 20, 2020, the average closing price of CVR Partners’ common units over a 30 consecutive trading-day period fell below $1.00 per common unit, resulting in noncompliance with the continued listing compliance standards in Section 802.01C of the NYSE Listed Company Manual.

CVR Partners received written notification of this noncompliance from the NYSE on April 22, 2020, and had until January 1, 2021 to regain compliance or be subject to the NYSE’s suspension and delisting procedures.

See the Form 8-K filed by CVR Partners with the SEC on April 24, 2020 for further discussion.

On November 2, 2020, CVR Partners announced that the board of directors of its general partner (the "UAN GP Board") approved a 1-for-10 reverse split of CVR Partners’ common units that was completed on November 23, 2020, pursuant to which each ten common units of CVR Partners would be converted into one common unit of the CVR Partners (the “Reverse Unit Split”).

In accordance with CVR Partners’ Agreement of Limited Partnership, as amended, following the Reverse Unit Split, any fractional units of record holders were rounded up or down, as applicable, to the nearest whole common unit, with any fraction equal to or above 0.5 common units rounding up to the next higher common unit.

Following the Reverse Unit Split, the number of CVR Partners common units outstanding decreased from approximately 111 million common units to approximately 11 million common units, with proportionate adjustments to the common units under CVR Partners’ long-term incentive plan and outstanding awards thereunder.

CVR Partners’ common units began trading on a split-adjusted basis when markets opened on November 24, 2020, under the symbol “UAN” and a new CUSIP number.

The reverse split enabled the Partnership to regain compliance with NYSE listing requirements on November 30, 2020, in advance of the January 1, 2021 deadline.

Unit Repurchase Program - On May 6, 2020, the UAN GP Board, on behalf of CVR Partners, authorized a unit repurchase program (the “Unit Repurchase Program”).

The Unit Repurchase Program enables CVR Partners to repurchase up to $ 10 million of its common units.

During the year ended December 31, 2020, CVR Partners repurchased 623,177 common units, on the open market in accordance with a repurchase agreement under Rules 10b5-1 and 10b-18 of the Exchange Act, which was terminated on August 6, 2020, at a cost of $ 7 million, inclusive of transaction costs, or an average price of $ 11.35 per common unit.

At December 31, 2020, CVR Partners had $ 3 million in authority remaining under the Unit Repurchase Program.

The Unit Repurchase Program enabled CVR Partners to repurchase up to $ 10 million of its common units.

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

During the year ended December 31, 2021, CVR Partners 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 $ 1 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 CVR Partners’s common units that was effective as of November 23, 2020, CVR Partners repurchased 623,177 common units, respectively, at a cost of $ 7 million, inclusive of transaction costs, or an average price of $ 11.35 per common unit.

As of December 31, 2021, CVR Partners had $ 12 million in authority remaining under the Unit Repurchase Program.

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

As a result of these repurchases, and the resulting change in CVR Energy’s ownership of CVR Partners while maintaining control, CVR Energy recognized an increase of $ 3 million to additional paid-in capital from the non-cash reduction of non-controlling interests totaling $ 4 million and the recognition of a deferred tax liability totaling $ 1 million from changes in its book versus tax basis in CVR Partners.

As a result of these repurchases, and the resulting change in CVR Energy’s ownership of CVR Partners while maintaining control, CVR Energy recognized a no minal increase to additional paid-in capital from the reduction of non-controlling interests totaling $ 0.1 million and the recognition of a deferred tax liability totaling $ 0.1 million from changes in its book versus tax basis in CVR Partners as of December 31, 2021.

CVR Energy recognized an increase of $ 3 million to additional paid-in capital from the non-cash reduction of non-controlling interests totaling $ 4 million and the recognition of a deferred tax liability totaling $ 1 million from changes in its book versus tax basis in CVR Partners as of December 31, 2020.

Subsequent Events

9 unchanged sentences

CVR Partners is considered a VIE.

As the 100% owner of the general partner of CVR Partners, the Company has the sole ability to direct the activities that most significantly impact the economic performance of the partnership and is considered to be

December 31, 2020 | 73

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

the primary beneficiary.

As the 100% owner of the general partner of CVR Partners, the Company has the sole ability to direct the activities that most significantly impact the economic performance of CVR Partners and is considered to be the primary beneficiary.

In January 2019, following the CVRR Unit Purchase, CVR Refining was no longer considered a VIE and is accounted for as a wholly-owned subsidiary.

2 unchanged sentences

Reclassifications

Certain reclassifications have been made within the consolidated financial statements for the years ended December 31, 2019 and 2018 to conform with current presentation.

Catalyst inventory with a value of $ 17 million as of December 31, 2019 was reclassified in the first quarter of 2020 to Other long-term assets to conform to current presentation.

Certain 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.

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

Estimates are reviewed on an

December 31, 2021 | 79

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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.

8 unchanged sentences

The largest concentration of credit for any one customer was approximately 8 % and 11 % of the net accounts receivable balance at December 31, 2021 and 2020, respectively.

During the years ended December 31, 2020 and 2019, the Company had no minal bad debt expense, and during the year ended December 31, 2018, a recovery was recognized of $ 1 million related to bad debt expense previously written off.

During the year ended December 31, 2021, 2020 and 2019, the Company had no minal bad debt expense.

Inventories consist primarily of domestic and foreign crude oil, blending stock and components, work-in-progress, fertilizer products, and refined fuels and by-products.

3 unchanged sentences

The cost of inventories includes inbound freight costs.

December 31, 2020 | 74

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The carrying amounts of the Petroleum Segment’s inventories exceeded their net realizable value (market value) by $ 58 million resulting in the recognition of a lower of cost or net realizable value adjustment as of March 31, 2020.

9 unchanged sentences

At December 31, 2021 and 2020, inventories related to the Nitrogen Fertilizer Segment included depreciation of approximately $ 3 million and $ 2 million, respectively.

December 31, 2021 | 80

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Property, Plant and Equipment, net

22 unchanged sentences

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

December 31, 2020 | 75

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

costs are expensed when incurred.

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 Company’s Consolidated Statements of Operations.

6 unchanged sentences

Finance leases are included as ROU finance leases within Property, plant, and equipment, net, and finance lease liabilities within Note payable and finance lease obligations 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.

Leases with an

December 31, 2021 | 81

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

The Company recognizes lease expense for these leases on a straight-line basis over the expected lease term.

ROU assets represent the Company’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.

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.

15 unchanged sentences

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

December 31, 2020 | 76

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

One of the reporting units associated with our Nitrogen Fertilizer Segment’s Coffeyville, Kansas facility (the “Coffeyville Facility”) had a goodwill balance of $ 41 million at December 31, 2019.

One of the reporting units associated with our Nitrogen Fertilizer Segment’s Coffeyville, Kansas facility (the “Coffeyville Fertilizer Facility”) had a goodwill balance of $ 41 million at December 31, 2019.

During the second quarter of 2020, following the completion of the spring planting season, the market pricing for ammonia and UAN, the Nitrogen Fertilizer Segment’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.

2 unchanged sentences

Significant assumptions inherent in the valuation methodologies for goodwill are employed and 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.

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

As a result, the Company recorded a full, non-cash impairment charge of $ 41 million during the year ended December 31, 2020.

As there is no goodwill balance at December 31, 2020, no annual impairment review was performed.

The Company performed its annual impairment review of goodwill for 2019 and 2018 associated with CVR Partners’ Coffeyville, Kansas Nitrogen Fertilizer (the “Coffeyville Fertilizer 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 at December 31, 2018.

For the period ended December 31, 2018, the fair value of the Coffeyville Fertilizer Facility exceeded its carrying value by approximately 36 % based upon the results of the reporting unit’s goodwill impairment test.

As there was no goodwill balance at December 31, 2021 or 2020, no annual impairment review was performed.

The Company performed its annual impairment review of goodwill for 2019 associated with the Coffeyville Fertilizer Facility

December 31, 2021 | 82

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

reporting unit and concluded there were no impairments.

Loss Contingencies

1 unchanged sentence

The outcome of these matters cannot always be predicted accurately, but the Company accrues liabilities for these matters if the Company 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.

Refer to Note 11 (“Commitments and Contingencies”) for further discussion.

Environmental, Health & Safety (“EHS”) Matters

The Petroleum and Nitrogen Fertilizer Segments are subject to various federal, state, and local environmental, health, and safety rules and regulations.

The Petroleum Segment and Nitrogen Fertilizer Segment are subject to various 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.

4 unchanged sentences

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.

Refer to Note 11 (“Commitments and Contingencies”) for further discussion.

Revenue Recognition

6 unchanged sentences

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

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

• Nitrogen Fertilizer Segment - Revenue is recognized 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 considerations - For both segments, excise and other taxes collected from customers and remitted to governmental authorities are excluded from reported revenues.

December 31, 2021 | 83

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

exchanges and certain buy/sell transactions which are entered into in the normal course of business are included on a net cost basis in Cost of materials and other on the Consolidated Statements of Operations.

Other considerations - For both segments, excise and other taxes collected from customers and remitted to governmental authorities are excluded from reported revenues.

Cost Classifications

17 unchanged sentences

Further details of each segment’s turnaround expensing method are discussed below.

Petroleum Segment - Effective January 1, 2019, the Company revised its accounting policy method for the costs of planned major maintenance activities (turnarounds) specific to the Petroleum Segment from being expensed as incurred (the direct-expense method) to the deferral method.

Petroleum Segment - The Petroleum Segment follows the deferral method of accounting for turnaround activities.

Under the deferral method, the costs of turnarounds are deferred and amortized on a straight-line basis over a four-year period of time, which represents the estimated time until the next turnaround occurs.

The new method of accounting for turnarounds is considered preferable as it is more consistent with the accounting policy of our peer companies and better reflects the economic substance of the benefits earned from turnaround expenditures.

The related Consolidated Statements of Operations, Consolidated Statements of Changes in Equity, and Consolidated Statements of Cash Flows for the year ended December 31, 2018 have been recast to reflect our new accounting policy.

The deferral method of accounting for turnarounds is considered preferable as it is more consistent with the accounting policy of our peer companies and better reflects the economic substance of the benefits earned from turnaround expenditures.

Turnaround costs, and related accumulated amortization, are included in the Consolidated Balance Sheets as Other long-term assets.

The amortization

December 31, 2020 | 78

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

expense related to turnaround costs is included in Depreciation and amortization in the Consolidated Statements of Operations.

The amortization expense related to turnaround costs is included in Depreciation and amortization in the Consolidated Statements of Operations.

During the years ended December 31, 2021, 2020, and 2019, the Petroleum Segment capitalized $ 8 million, $ 155 million, and $ 38 million, respectively.

2 unchanged sentences

During the years ended December 31, 2021, 2020, and 2019, the Nitrogen Fertilizer Segment incurred turnaround expenses of $ 3 million, $ 1 million, and $ 10 million, respectively.

The following presents the financial statement line items impacted by the Petroleum Segment turnaround accounting change for each of the periods presented within these consolidated financial statements.

Effect of Turnaround Accounting on Consolidated Statement of Operations and Consolidated Statement of Cash Flows for the Year Ended December 31, 2018

Year Ended December 31,

(in millions) As Previously Reported Effect of Turnaround Accounting Change As Stated

Consolidated Statement of Operations

Direct operating expenses $ 523 $ ( 6 ) $ 517

Depreciation and amortization 202 61 263

Income tax expense (benefit) 89 ( 10 ) 79

Net income (loss) $ 411 $ ( 45 ) $ 366

Net income (loss) attributable to noncontrolling interest 122 ( 15 ) 107

Net income (loss) attributable to CVR Energy stockholders $ 289 $ ( 30 ) $ 259

Consolidated Statement of Cash Flows

Net cash provided by operating activities $ 620 $ 8 $ 628

Net cash used by investing activities $ ( 100 ) $ ( 8 ) $ ( 108 )

Share-Based Compensation

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

Currently, all of the Company’s share-based compensation awards, including those issued by CVR Refining and CVR Partners, are liability-classified and are measured at fair value at the end of each reporting period based on the applicable closing unit price.

December 31, 2021 | 84

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

the applicable closing unit price.

Compensation expense will fluctuate based on changes in the applicable share or unit prices and expense reversals resulting from employee terminations prior to award vesting.

5 unchanged sentences

See Note 9 (“Share-Based Compensation”) for further discussion.

December 31, 2020 | 79

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Income taxes are accounted for utilizing the asset and liability approach.

8 unchanged sentences

There were no dilutive awards outstanding during the years ended December 31, 2021, 2020, and 2019.

Recent Accounting Pronouncements - Adoption of Credit Losses Standard

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326).

The ASU replaces the incurred loss model with a current expected credit loss model for more timely recognition of expected impairment losses for most financial assets and certain other instruments that are not measured at fair value through net income.

Effective January 1, 2020, we adopted this ASU with no material impact on the Company’s consolidated financial position or results of operations.

Recent Accounting Pronouncements - Adoption of Fair Value Measurement Standard

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820).

The ASU eliminates such disclosures as the amount of, and reasons for, transfers between Level 1 and Level 2 of the fair value hierarchy.

Certain disclosures are required to be applied on a retrospective basis and others on a prospective basis.

Effective January 1, 2020, we adopted this ASU with no material impact on the Company’s disclosures.

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

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740).

Recent Accounting Pronouncements - Adoption of Income Tax 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.

This standard is effective for the Company beginning January 1, 2021, with early adoption permitted.

The Company is evaluating the effect of adopting this new accounting guidance on its consolidated financial statements, but does not currently expect adoption will have a material impact on the Company’s consolidated financial position or results of operations.

The Company does not intend to early adopt this ASU.

Effective January 1, 2021, we adopted this ASU with no material impact on the Company’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 Company’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).

2 unchanged sentences

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 Company is currently evaluating the impact that adopting this new accounting standard will have on its consolidated financial statements and related disclosures.

or results of operations.

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

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

This standard is effective for the Company

The Company 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.

December 31, 2021 | 85

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

beginning January 1, 2021, with early adoption permitted.

The Company does not intend to early adopt this ASU.

(3) Equity Method Investments

1 unchanged sentence

However, since CVR Refining has equal or proportionate influence over each committee as a joint partner without regard to its economic interest and does not serve as the day-to-day operator, we have determined that these entities should not be consolidated and have applied the equity method of accounting.

• Enable South Central Pipeline, LLC (“Enable JV”, formerly Velocity Pipeline Partners, LLC) - CVR Refining owns a 40 % interest in Enable JV, which operates a 12-inch 26 -mile crude oil pipeline with a capacity of approximately 115,000 barrels per day that is connected to the Wynnewood Refinery.

The remaining interest in Enable JV is owned by Enable Midstream Partners, LP.

• Enable South Central Pipeline, LLC (“Enable JV”) - CVR Refining owns a 40 % interest in Enable JV, which operates a 12-inch 26 -mile crude oil pipeline with a capacity of approximately 115,000 barrels per day that is connected to the Wynnewood Refinery.

The remaining interest in Enable JV is owned by Enable Midstream Partners, LP, which was merged with Energy Transfer LP in December 2021.

• Midway Pipeline, LLC (“Midway JV”) - CVR Refining owns a 50 % interest in Midway JV, which operates a 16-inch 99 -mile crude oil pipeline with a capacity of approximately 150,000 barrels per day which connects the Coffeyville Refinery to the Cushing Oklahoma oil hub.

The remaining interest in Midway JV is owned by Plains Pipeline, L.P.

(in millions) Enable JV Midway JV Total

14 unchanged sentences

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

December 31, 2020 | 81

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Balance Sheet Summary as of December 31, 2021 and 2020

The following tables summarize the right of use asset and lease liability balances for the Company’s operating and finance leases at December 31, 2020 and 2019:

(in millions) 2020 2019

Operating Leases:

ROU asset, net

The following table summarizes the right of use asset and lease liability balances for the Company’s operating and finance leases at December 31, 2021 and 2020:

December 31, 2021 December 31, 2020

(in millions) Operating Leases Finance Leases Operating Leases Finance Leases

ROU assets, net

Pipeline and storage $ 17 $ 23 $ 15 $ 26

5 unchanged sentences

Real estate and other 14 19 14 22

(in millions) 2020 2019

Finance Leases:

ROU asset, net

Pipeline and storage $ 26 $ 29

Real estate and other 21 24

Lease liability

Pipelines and storage $ 38 $ 40

Real estate and other 22 25

December 31, 2021 | 86

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Lease Expense Summary for the Year Ended December 31, 2021, 2020 and 2019

We recognize lease expense on a straight-line basis over the lease term.

We recognize lease expense on a straight-line basis over the lease term and short-term lease expense within Direct operating expenses (exclusive of depreciation and amortization).

For the year ended December 31, 2021, 2020, and 2019, we recognized lease expense comprised of the following components:

5 unchanged sentences

Interest expense on lease liability 5 6 6

Short-term lease expense, recognized within Direct operating expenses (exclusive of depreciation and amortization), was $ 8 million and $ 8 million for the year ended December 31, 2020 and 2019, respectively.

December 31, 2020 | 82

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Short-term lease expense $ 7 $ 8 $ 8

Lease Terms and Discount Rates

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

Weighted-average remaining lease term (years)

Operating Leases 3.1 3.7

Finance Leases 8.1 9.0

December 31, 2021 December 31, 2020

Operating Leases Finance Leases Operating Leases Finance Leases

Weighted-average remaining lease term 4.1 years 7.2 years 3.1 years 8.1 years

Weighted-average discount rate 5.4 % 9.0 % 5.5 % 9.0 %

Operating Leases 5.5 % 5.6 %

Finance Leases 9.0 % 8.9 %

Maturities of Lease Liabilities

1 unchanged sentence

(in millions) Operating Leases Finance Leases

Year Ended December 31,

2022 $ 14 $ 11

4 unchanged sentences

On July 31, 2020, Coffeyville Resources Nitrogen Fertilizers, LLC (“CRNF”), a subsidiary of CVR Partners, and Messer LLC (“Messer”) entered into an On-Site Product Supply Agreement (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, nitrogen, and compressed dry air from Messer’s facility.

This arrangement for CRNF’s purchase of oxygen, nitrogen, and dry air 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 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 and related equipment to be used solely by the Coffeyville Facility.

This arrangement for the use of the oxygen storage vessel and related equipment 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 Company expects the lease of the oxygen storage vessel to be classified as a financing lease with an amount between $ 20 and $ 25 million being capitalized upon lease commencement when the oxygen storage vessel is placed in service.

On February 21, 2022, CRNF 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 CRNF is obligated to take as available and pay for, oxygen, nitrogen, and compressed dry air from Messer’s facility.

This arrangement for CRNF’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 CRNF 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 Fertilizer Facility.

This arrangement for the use of the Oxygen Storage Vessel meets the definition of a lease under Topic 842, as CRNF will receive all

December 31, 2021 | 87

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

output associated with the Vessel.

Based on terms outlined in the Amended Messer Agreement, the Company 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.

(5) Other Current Liabilities

2 unchanged sentences

Accrued Renewable Fuel Standards (“RFS”) obligation $ 494 $ 214

Accrued taxes other than income taxes 32 28

Deferred revenue 87 31

Personnel accruals 46 23

Accrued taxes other than income taxes 45 32

Accrued interest 24 25

Accrued derivatives 17 7

Operating lease liabilities 14 14

Share-based compensation 15 4

Accrued income taxes — 24

Operating lease liabilities 13 14

Accrued derivatives 2 17

Other accrued expenses and liabilities 15 9

4 unchanged sentences

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

6.50 % Senior Notes, due April 2021, net of current portion (1)

6.125 % Senior Notes, due June 2028

Unamortized discount and debt issuance costs ( 4 ) ( 11 )

1 unchanged sentence

CVR Refining:

6.50 % Senior Notes, due November 2022 (2)

Finance lease obligations, net of current portion (2)

Unamortized debt issuance cost

Total CVR Refining debt 48 55

6 unchanged sentences

Total long-term debt and finance lease obligations, including current portion $ 1,660 $ 1,691

(1) The 6.50 % Senior Notes, due April 2021, mature within 12 months, and, therefore, the outstanding balance of $ 2 million has been classified as short-term as of December 31, 2020.

(2) On January 27, 2020, the Company redeemed all of the 6.50 % Senior Notes, due November 2022 (the “2022 Notes”) for a redemption price equal to 101.083 %, plus accrued and unpaid interest on the redeemed notes.

(1) The call price of the 9.25 % Senior Secured Notes due June 2023 (the “2023 UAN Notes”) decreased to par on June 15, 2021.

On June 23, 2021, September 23, 2021, and December 22, 2021, CVR Partners redeemed $ 550 million, $ 15 million, and $ 15 million, respectively, of the 2023 UAN 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 UAN Notes was paid in full on February 22, 2022 at par, plus accrued and unpaid interest.

(2) Current portion of finance lease obligations was approximately $ 6 million and $ 6 million as of December 31, 2021 and 2020, respectively.

(3) The $ 2 million outstanding balance of the 6.50 % Notes, due April 2021, was paid in full on April 15, 2021.

December 31, 2021 | 88

10 unchanged sentences

$ 400 $ — $ 39 $ 361 November 14, 2022

(1) Through December 31, 2020, loans under the Nitrogen Fertilizer ABL bear interest at an annual rate equal to (i) 1.00 % plus a base rate.

Thereafter, loans will bear interest (i) at such rates if our quarterly excess availability is greater than 50% and (ii) 1.50 % plus a base rate, otherwise.

(2) The Nitrogen Fertilizer ABL was amended on September 29, 2020, to, among other things, reduce the commitments thereunder to $ 35 million and extended the maturity date to September 30, 2022.

Deferred financing costs of less than $ 1 million were capitalized related to this amendment and will be amortized from Prepaid expenses and other current assets and Other long-term assets over the remaining term of Nitrogen Fertilizer ABL.

(3) Loans under the Petroleum ABL bear interest at an annual rate equal to (i) 0.50 % plus a base rate, if our quarterly excess availability is greater than 50% and (ii) 0.75 % plus a base rate, otherwise.

The Company is in compliance with all covenants of the Nitrogen Fertilizer ABL, Petroleum ABL, and the senior notes as of December 31, 2020.

2023 Notes - On June 10, 2016, CVR Partners and CVR Nitrogen Finance Corporation (“CVR Nitrogen Finance”), an indirect wholly-owned subsidiary of CVR Partners (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 Nitrogen Fertilizer Partnership’s existing subsidiaries.

On or after June 15, 2019, the 2023 Notes Issuers may on any one or more occasions, redeem all or part of the 2023 Notes at the redemption prices set forth below expressed as a percentage of the principal amount of the 2023 Notes plus accrued and unpaid interest to the applicable redemption date.

(1) On September 30, 2021, CVR Partners entered into a senior secured asset based ABL Credit Facility with an aggregate principal amount of up to $ 35 million with a maturity date of September 30, 2024 (the “Nitrogen Fertilizer ABL”) and terminated its $ 35 million ABL Credit Agreement , dated as of September 30, 2016, as amended (the “UAN 2016 ABL Credit Agreement”).

(2) Beginning September 30, 2021, loans under the Nitrogen Fertilizer ABL 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) Loans under the Petroleum ABL bear interest at an annual rate equal to (i) (a) 1.50 % plus LIBOR, to the extent available, or (b) 0.50 % plus a base rate, if our quarterly excess availability is greater than 50%, and (ii) (a) 1.75 % plus LIBOR, to the extent available, or (b) 0.75 % plus a base rate, otherwise.

2028 UAN Notes - 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 2028 (the “2028 UAN Notes”).

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

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

The 2028 UAN 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 UAN Notes, CVR Partners received $ 547 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 UAN Notes totaled approximately $ 4 million and are being amortized over the term of the 2028 UAN Notes as interest expense using the effective-interest amortization method.

The Issuers may, at their 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 UAN 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, the Issuers may, on any one or more occasions, redeem all or part of the 2028 UAN 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 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:

The indenture governing the 2028 UAN Notes contains covenants that are substantially the same as the indenture governing the 2023 UAN Notes.

However, the 2028 UAN 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.

2023 UAN Notes - 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 UAN Notes”).

December 31, 2021 | 89

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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

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

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

The 2023 UAN 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;

3 unchanged sentences

(v) create or incur certain liens;

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

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

(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.

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.

Nitrogen Fertilizer ABL - On September 29, 2020, CVR Partners entered into Amendment No.

1 to the Nitrogen Fertilizer ABL with a group of lenders and UBS AG, Stamford Branch (“UBS”), as administrative agent and collateral agent.

The Nitrogen Fertilizer ABL reduced its aggregate principal amount of availability from $ 50 million to $ 35 million, and extended

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 UAN Notes to cause the acceleration of the 2023 UAN Notes, in addition to the pursuit of other available remedies.

On June 23, 2021, CVR Partners redeemed $ 550 million aggregate principal amount of the outstanding 2023 UAN Notes at par and settled accrued interest of approximately $ 1 million through the date of redemption.

As a result of the redemption, CVR Partners recognized in Interest expense, net an $ 8 million loss on extinguishment of debt in the second quarter of 2021, which includes the write-off of unamortized deferred financing costs and discount of $ 3 million and $ 5 million, respectively.

On September 23, 2021 and December 22, 2021, CVR Partners redeemed $ 15 million and $ 15 million respectively, in aggregate principal amount of the outstanding 2023 UAN Notes at par and settled accrued interest of less than $ 1 million through the date of each redemption.

As a result of these redemptions and for the year ended December 31, 2021, CVR Partners recognized in Interest expense, net a loss on extinguishment of debt of less than $ 1 million in 2021, which includes the write-off of unamortized deferred financing costs and discount.

On February 22, 2022, CVR Partners redeemed all of the outstanding 2023 UAN Notes at par and settled accrued interest of approximately $ 1 million through the date of redemption.

As a result of this transaction, CVR Partners will recognize a loss on extinguishment of debt of $ 1 million in the first quarter of 2022, which includes the write-off of unamortized deferred financing costs and discount of less than $ 1 million each.

Nitrogen Fertilizer ABL - 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.

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

The Nitrogen Fertilizer ABL has an aggregate principal amount of availability of up to $ 35 million with an incremental facility, which permits an increase in borrowings of up to $ 15 million in the aggregate subject to additional lender commitments and certain other conditions.

The proceeds of the loans may be used for general corporate purposes of CVR Partners and its subsidiaries.

The Nitrogen Fertilizer ABL provides for loans and letters of credit, subject to meeting certain borrowing base conditions, with sub-limits of $ 4 million for swingline loans and $ 10 million for letters of credit.

The Nitrogen Fertilizer ABL is scheduled to mature on September 30, 2024.

Loans under the Nitrogen Fertilizer ABL 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.

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

The Nitrogen Fertilizer ABL contains customary covenants for a financing of this type and requires CVR Partners in certain circumstances to comply with a minimum fixed charge coverage ratio test and contains other restrictive covenants that limit the ability of CVR Partners 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 CVR Partners or its subsidiaries.

December 31, 2021 | 90

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

the scheduled maturity to September 30, 2022.

The amendment also removed from the borrowing base calculation the restricted cash and cash equivalent component and increased the advance rate for certain eligible inventory.

2022 Notes - On October 23, 2012, CVR Refining, LLC (“Refining LLC”) and Coffeyville Finance Inc.

(“Coffeyville Finance”) completed a private offering of $ 500 million aggregate principal amount of 6.50 % Second Lien Senior Notes due 2022 (the “2022 Notes”).

The 2022 Notes mature on November 1, 2022, unless earlier redeemed or repurchased by the issuers.

Interest is payable on the 2022 Notes semi-annually on May 1 and November 1 of each year, commencing on May 1, 2013.

The 2022 Notes are unsecured and fully and unconditionally guaranteed by CVI, CVR Refining and each of Refining LLC’s existing domestic subsidiaries (other than the co-issuer, Coffeyville Finance) on a joint and several basis.

CVR Refining has no independent assets or operations and Refining LLC is a 100% owned finance subsidiary of CVR Refining.

On January 29, 2019, the Company, and certain of the Company’s subsidiaries, executed a full and unconditional guarantee of the 2022 Notes.

On January 27, 2020, the Company redeemed all of the outstanding 2022 Notes and settled accrued interest of approximately $ 8 million through the date of redemption.

The redeemed notes were repurchased for approximately $ 505 million, or 101.083 % of par value.

Previously deferred financing charges related to the 2022 Notes totaled approximately $ 3 million.

As a result of this transaction, the Company will recognize a $ 8 million loss on extinguishment of debt in the first quarter of 2020, which includes the total premiums paid of $ 5 million and the write-off of previously deferred financing charges of $ 3 million.

In connection with the Nitrogen Fertilizer ABL, CVR Partners incurred lender and other third-party costs of $ 1 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 Nitrogen Fertilizer ABL using the straight-line amortization method.

Petroleum ABL - On November 14, 2017, CVR Services, CVR Refining, its wholly-owned subsidiary, CVR Refining, LLC (“Refining LLC”) and each of the operating subsidiaries of Refining LLC (collectively, the “Credit Parties”) entered into Amendment No.

1 to the Amended and Restated ABL Credit Agreement (the “Amendment”) with a group of lenders and Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent and collateral agent.

The Amended and Restated ABL is a $ 400 million asset-based revolving credit facility, with sub-limits for letters of credit and swingline loans of $ 60 million and $ 40 million, respectively.

The Amended and Restated ABL also includes a $ 200 million uncommitted incremental facility.

1 to the Amended and Restated ABL Credit Agreement (the “Amendment”, and collectively, the “Petroleum ABL”) with a group of lenders and Wells Fargo, as administrative agent and collateral agent.

The Petroleum ABL is a $ 400 million asset-based revolving credit facility, with sub-limits for letters of credit and swingline loans of $ 60 million and $ 40 million, respectively.

The Petroleum ABL also includes a $ 200 million uncommitted incremental facility.

2025 Notes and 2028 Notes - On January 27, 2020, CVR Energy completed a private offering of $ 600 million aggregate principal amount of 5.25 % Senior Unsecured Notes due 2025 (the “2025 Notes”) and $ 400 million aggregate principal amount of 5.75 % Senior Unsecured Notes due 2028 (the “2028 Notes” and, collectively with the 2025 Notes, the “Notes”).

12 unchanged sentences

2026 and thereafter 100.000 %

December 31, 2020 | 86

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The indenture governing the Notes imposes covenants that will, among other things, limit our ability and the ability of our restricted subsidiaries to:

10 unchanged sentences

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 2025 Notes and 2028 Notes to cause, amongst other available remedies, the acceleration of the respective notes.

Credit Agreement - On January 29, 2019, the Company entered into a credit agreement (the “Credit Agreement”) with Jefferies Finance LLC to provide a term loan credit facility with a maturity date of March 10, 2019.

The borrowings under the Credit Agreement of $ 105 million were used to fund a portion of the CVRR Unit Purchase.

All amounts were repaid on February 11, 2019.

As the original maturity was less than three months from the issuance date, the borrowings and repayments under the credit agreement qualified for net reporting on the Consolidated Statements of Cash Flows.

Covenant Compliance

The Company is in compliance with all covenants of the Nitrogen Fertilizer ABL, the Petroleum ABL, and the senior notes as of December 31, 2021.

December 31, 2021 | 91

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following tables present the Company’s revenue disaggregated by major product, which include a reconciliation of the disaggregated revenue by product and other revenue components for the Company’s reportable segments.

3 unchanged sentences

Distillates (1)

2,809 — — 2,809

Ammonia — 146 — 146

2 unchanged sentences

Freight revenue 21 31 — 52

Other (2) 79 10 ( 6 ) 83

163 11 ( 12 ) 162

Revenue from product sales 6,672 533 ( 12 ) 7,193

2 unchanged sentences

Total revenue $ 6,721 $ 533 $ ( 12 ) $ 7,242

December 31, 2020 | 87

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Year Ended December 31, 2020

2 unchanged sentences

Distillates (1)

1,543 — — 1,543

Ammonia — 94 — 94

2 unchanged sentences

Freight revenue 18 33 — 51

Other (2) 129 8 ( 8 ) 129

79 10 ( 6 ) 83

Revenue from product sales 3,522 350 ( 6 ) 3,866

2 unchanged sentences

Total revenue $ 3,586 $ 350 $ ( 6 ) $ 3,930

December 31, 2021 | 92

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Year Ended December 31, 2019

2 unchanged sentences

Distillates (1)

2,705 — — 2,705

Ammonia — 94 — 94

2 unchanged sentences

Freight revenue 23 33 — 56

Other (2) 190 8 ( 7 ) 191

129 8 ( 8 ) 129

Revenue from product sales 5,907 404 ( 8 ) 6,303

11 unchanged sentences

The Petroleum Segment determined that it does not need to estimate the variable consideration because the uncertainty related to the consideration is resolved on the pricing date or the date when the product is delivered.

December 31, 2020 | 88

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Petroleum Segment may incur broker commissions or transportation costs prior to product transfer on some of its sales.

11 unchanged sentences

The Nitrogen Fertilizer Segment 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 Nitrogen Fertilizer Segment’s manufacturing facilities, at one of the Nitrogen Fertilizer Segment’s off-site loading facilities, or at the customer’s designated facility.

The customer acceptance point is stated in the contract and may be

December 31, 2021 | 93

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

at one of the Nitrogen Fertilizer Segment’s manufacturing facilities, at one of the Nitrogen Fertilizer Segment’s off-site loading facilities, or at the customer’s designated facility.

Freight revenue recognized by the Nitrogen Fertilizer Segment represents the pass-through finished goods delivery costs incurred prior to customer acceptance and is reimbursed by customers.

14 unchanged sentences

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

December 31, 2020 | 89

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

prepaid contract amounts.

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.

5 unchanged sentences

Revenue recognized related to contracts entered into during the period ( 60 )

Other changes ( 1 )

Balance at December 31, 2021 $ 87

(1) Includes $ 94 million where the payment associated with prepaid contracts was collected.

December 31, 2021 | 94

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Major Customers

Petroleum Segment - The Petroleum Segment has two customers who comprised 26 %, 25 %, and 25 % of petroleum net sales for the years ended December 31, 2020, 2019, and 2018, respectively.

Nitrogen Fertilizer Segment - The Nitrogen Fertilizer Segment has two customers who comprised 26 %, 28 %, and 20 % of nitrogen fertilizer net sales for the years ended December 31, 2020, 2019, and 2018, respectively.

Petroleum Segment - The Petroleum Segment had one customer who comprised 16 % of petroleum net sales for the year ended December 31, 2021 and two customers who comprised 26 % and 25 % of petroleum net sales for the years ended December 31, 2020 and 2019, respectively.

Nitrogen Fertilizer Segment - The Nitrogen Fertilizer Segment had one customer who comprised 13 % for the year ended December 31, 2021 and two customers who comprised 26 % and 28 % of nitrogen fertilizer net sales for the years ended December 31, 2020 and 2019, respectively.

(8) Derivative Financial Instruments, Investments and Fair Value Measurements

10 unchanged sentences

Commodity derivatives include commodity swaps and forward purchase and sale commitments.

There were 7 million outstanding commodity swap positions as of December 31, 2020 and no open commodity swaps in 2019.

There were approximately 4 million and 3 million in forward purchase commitments as of December 31, 2020 and 2019, respectively, and 2 million and 1 million in forward sale commitments as of December 31, 2020 and 2019, respectively.

December 31, 2020 | 90

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

There were no outstanding commodity swap positions as of December 31, 2021 compared to 7 million barrels in outstanding commodity swap positions as of December 31, 2020.

As of December 31, 2021 and 2020, there were approximately 1 million and 4 million barrels in forward purchase commitments, respectively, and 1 million and 2 million barrels in forward sale commitments, respectively.

The following outlines the gains (losses) recognized on the Company’s derivative activities, all of which are recorded in Cost of materials and other on the Consolidated Statements of Operations:

Gain (Loss) on Derivatives

Year Ended December 31,

3 unchanged sentences

Futures contracts ( 1 ) 10 ( 1 )

Total gain (loss) on derivatives, net $ 55 $ 19 $ 146

Total (loss) gain on derivatives, net $ ( 44 ) $ 55 $ 19

Offsetting Assets and Liabilities

The Company elected to offset the fair value amounts recognized for multiple derivative contracts executed with the same counterparty.

These amounts are recognized as current assets and current liabilities within the Prepaid expenses and other current assets and Other current liabilities financial statement line items, respectively, in the Consolidated Balance Sheets as follows:

These amounts are recognized as current assets and current liabilities within the Prepaid expenses and other

December 31, 2021 | 95

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

current assets and Other current liabilities financial statement line items, respectively, in the Consolidated Balance Sheets as follows:

Derivative Assets Derivative Liabilities

6 unchanged sentences

These investments are considered trading securities.

Investment income from marketable securities consists of the following:

Investment income on marketable securities consists of the following:

Year Ended December 31,

1 unchanged sentence

Dividend income $ — $ 7 $ —

Unrealized gain 34 — —

Investment income from marketable securities $ 41 $ — $ —

Gain on marketable securities 81 34 —

Investment income on marketable securities $ 81 $ 41 $ —

On June 10, 2021, the Company distributed its investment of 10,539,880 shares of common stock of Delek US Holdings, Inc.

(“Delek”) in the form of a special dividend to its stockholders (the “Stock Distribution”).

Following the Stock Distribution, the Company continued to hold a nominal investment in other marketable securities of Delek as of December 31, 2021.

See further discussion of the distribution in Note 14 (“Related Party Transactions”).

Fair Value Measurements

10 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table sets forth the assets and liabilities measured or disclosed at fair value on a recurring basis, by input level, as of December 31, 2020 and 2019:

The following tables set forth the assets and liabilities measured or disclosed at fair value on a recurring basis, by input level, as of December 31, 2021 and 2020:

December 31, 2021

1 unchanged sentence

Location and Description

Prepaid expenses and other current assets (investments) $ 173 $ — $ — $ 173

Other current assets (commodity derivatives) $ — $ 1 $ — $ 1

Total Assets $ — $ 1 $ — $ 1

Current portion of long-term debt $ — $ ( 2 ) $ — $ ( 2 )

Other current liabilities (commodity derivatives) $ — $ ( 2 ) $ — $ ( 2 )

Other current liabilities (RFS obligation) — ( 494 ) — ( 494 )

Long-term debt and finance lease obligations, net of current portion — ( 1,604 ) — ( 1,604 )

Long-term debt and finance lease obligations, net of current portion (long-term debt) — ( 1,620 ) — ( 1,620 )

Total Liabilities $ — $ ( 2,116 ) $ — $ ( 2,116 )

2 unchanged sentences

Location and Description

Prepaid expenses and other current assets (investments) $ 173 $ — $ — $ 173

Total Assets $ 173 $ — $ — $ 173

Note payable and finance lease obligations (current portion of long-term debt) $ — $ ( 2 ) $ — $ ( 2 )

Other current liabilities (commodity derivatives) — ( 17 ) — ( 17 )

Other current liabilities (RFS obligation) — ( 214 ) — ( 214 )

Long-term debt and finance lease obligations, net of current portion — ( 1,180 ) — ( 1,180 )

Long-term debt and finance lease obligations, net of current portion (long-term debt) — ( 1,604 ) — ( 1,604 )

Total Liabilities $ — $ ( 1,837 ) $ — $ ( 1,837 )

4 unchanged sentences

(9) Share-Based Compensation

CVR Energy, CVR Refining, and CVR Partners all have Long-Term Incentive Plans (collectively, the “LTIPs”) which permit the granting of options, stock and unit appreciation rights, 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).

Individuals who are eligible to receive awards and grants under the LTIPs include the employees, officers, and directors of the Company, CVR Refining, and CVR Partners.

CVR Energy, CVR Refining, and CVR Partners all have Long-Term Incentive Plans (collectively, the “LTIPs”) that permit the granting of options, stock and unit appreciation rights, 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).

Individuals who are eligible to receive awards and grants under or in connection with the LTIPs include the employees, officers, and directors of the Company, CVR Refining, and CVR Partners.

The Company had 6.8 million shares or units, as applicable, available for future grants under our plans at December 31, 2021.

Incentive and Phantom Unit Awards

Incentive and phantom unit awards have been granted to officers, employees, and directors (collectively, the “Share-Based Awards”) under the LTIPs.

As a result, Share-Based Awards that reflect the value and dividend or distributions of CVR Energy, CVR Refining, or CVR Partners, as applicable, have been granted and remain outstanding as of December 31, 2020.

Each Share-Based Award and the related dividend or distribution equivalent right represents the right to receive, upon vesting, a cash payment equal to (i) the average fair market value of one share or unit, as applicable, in accordance with the award agreement, plus (ii) the per share or unit cash value of all dividends or 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-

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

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

Each Share-Based Award and the related dividend or distribution equivalent right represents the right to receive, upon vesting, a cash payment equal to (i) the

December 31, 2021 | 97

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

third of the award vesting each year the grantee remains employed by the Company or its subsidiaries.

average fair market value of one share or unit, as applicable, in accordance with the award agreement, plus (ii) the per share or unit cash value of all dividends or 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 Company or its subsidiaries.

Compensation expense is recognized ratably, based on service provided to the Company 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.

A summary of activity for the Company’s Share-Based Awards for the year ended December 31, 2021 is presented below:

Shares or Units Weighted-Average Grant-Date Fair Value

Shares or Units (1)

Weighted-Average Grant-Date Fair Value

(per share or unit)

6 unchanged sentences

Non-vested at December 31, 2021 2,293,105 $ 18.23 $ 62

(1) As of December 31, 2021, there are no outstanding awards under the LTIPs, and the only outstanding and unvested awards are issued in connection with and not under the LTIPs.

Performance Unit Awards

4 unchanged sentences

The CEO Performance Award represents the right to receive upon vesting, a cash payment equal to $ 10 million if the average closing price of the Company’s common stock over the 30 -trading day period from January 4, 2022 to February 15, 2022 is equal to or greater than $ 60 per share.

Effective as of December 22, 2021, the Company entered into an amendment to the CEO Performance Award, 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 the Company’s common stock is based to January 6, 2025 through February 20, 2025.

Compensation Expense

8 unchanged sentences

CEO Performance Award (1)

2018 CEO Performance Award — — 2 — 0.0

Former CEO Performance Award — — — — 0.0

( 3 ) — — 10 3.0

Total expense $ 46 $ 4 $ 17 $ 56

The total tax benefit recognized during the years ended December 31, 2020, 2019, and 2018 related to compensation expense was $ 1 million, $ 4 million and $ 4 million respectively.

For the years ended December 31, 2020, 2019, and 2018, the Company paid cash of $ 8 million, $ 23 million, and $ 17 million, respectively, to settle liability-classified awards upon vesting.

(1) All expenses, recognized and unrecognized, related to the CEO Performance Award are contingent upon whether the performance parameters are probable of being met.

If the performance parameters are not met, no expense will be recognized.

December 31, 2021 | 98

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The total tax benefit recognized during the years ended December 31, 2021, 2020, and 2019 related to compensation expense was $ 12 million, $ 1 million and $ 4 million respectively.

As of December 31, 2021 and 2020, the Company had a liability of $ 23 million and $ 5 million, respectively, for cash settled non-vested Share-Based Awards and associated dividend and distribution equivalent rights.

For the years ended December 31, 2021, 2020, and 2019, the Company paid cash of $ 30 million, $ 8 million, and $ 23 million, respectively, to settle liability-classified awards upon vesting.

Other Benefit Plans

4 unchanged sentences

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

The Company’s contributions under the Plans were approximately $ 10 million, $ 9 million, and $ 9 million for the years ended December 31, 2020, 2019, and 2018, respectively.

Effective January 1, 2021, the matching contributions for the Plans have been suspended.

The Company did no t have contributions under the Plans for the year ended December 31, 2021, as the Company matching contributions for the Plans were suspended effective January 1, 2021, and had approximately $ 10 million and $ 9 million for the years ended December 31, 2020 and 2019, respectively.

The Company matching contributions for the Plans resumed effective January 1, 2022.

(10) Income Taxes

12 unchanged sentences

The payable is recognized in Other current liabilities in the Consolidated Balance Sheets.

As of December 31, 2020 and 2019, the Company’s Consolidated Balance Sheets reflected a receivable of $ 44 million from and a payable of $ 20 million to, respectively, the IRS and certain state jurisdictions.

As of December 31, 2021 and 2020, the Company’s Consolidated Balance Sheets reflected a receivable of $ 26 million and $ 44 million, respectively, from the IRS and certain state jurisdictions.

December 31, 2021 | 99

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Income Tax (Benefit) Expense

10 unchanged sentences

$ ( 8 ) $ ( 95 ) $ 129

December 31, 2020 | 94

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following is a reconciliation of total income tax (benefit) expense to income tax (benefit) expense computed by applying the statutory federal income tax rate to pretax (loss) income:

The following is a reconciliation of total income tax (benefit) expense to income tax (benefit) expense computed by applying the statutory federal income tax rate to pretax income (loss):

Year Ended December 31,

2 unchanged sentences

State income taxes, net of federal tax benefit 3 ( 18 ) 29

Changes in enacted state tax rates, net of federal tax benefit ( 10 ) — —

State tax incentives, net of federal tax expense ( 6 ) ( 7 ) ( 4 )

19 unchanged sentences

Net deferred income tax liabilities $ ( 268 ) $ ( 368 )

December 31, 2021 | 100

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Although realization is not assured, management believes that it is more likely than not that all of the deferred income tax assets will be realized, and therefore, no valuation allowance was recognized as of December 31, 2021 and 2020.

10 unchanged sentences

Balance, end of year $ 17 $ 17 $ 22

December 31, 2020 | 95

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Included in the balance of unrecognized tax benefits as of December 31, 2021, 2020, and 2019 are $ 13 million, $ 13 million, and $ 15 million, respectively, of tax benefits that, if recognized, would affect the effective tax rate.

Additionally, the Company reasonably believes that no unrecognized tax positions related to state income tax credits will be recognized by the end of 2021 as a result of the expiration of statute of limitations.

Additionally, the Company reasonably believes that $ 5 million unrecognized tax positions related to state income tax credits will be recognized by the end of 2022 as a result of the expiration of statute of limitations.

Approximately $ 7 million and $ 8 million of unrecognized tax benefits were netted with Deferred income tax asset carryforwards as of December 31, 2021 and 2020, respectively.

The remaining unrecognized tax benefits are included in Other long-term liabilities in the Consolidated Balance Sheets.

CVR Energy recognized no minal interest expense and $ 1 million liability for interest as of December 31, 2020, no minal interest benefit and no minal liability for interest as of December 31, 2019, and interest benefit of approximately $ 1 million and no minal liability for interest as of December 31, 2018.

CVR Energy recognized $ 1 million interest expense and $ 2 million liability for interest as of December 31, 2021, no minal interest expense and $ 1 million liability for interest as of December 31, 2020, and a no minal interest benefit and a no minal liability for interest as of December 31, 2019.

No penalties were recognized during 2021, 2020, or 2019.

3 unchanged sentences

The minimum required payments for unconditional purchase obligations are as follows:

Year Ended December 31, Unconditional

(in millions)

(in millions) Unconditional

Year Ended December 31,

Thereafter 252

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

December 31, 2021 | 101

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

its facilities’ operations.

For the years ended December 31, 2021, 2020, and 2019, amounts purchased under these supply agreements totaled approximately $ 176 million, $ 153 million, and $ 167 million, respectively.

Crude Oil Supply Agreement

On August 31, 2012, an indirect, wholly-owned subsidiary of CVR Refining entered into an Amended and Restated Crude Oil Supply Agreement (as amended, the “Crude Oil Supply Agreement”) with Vitol Inc.

Under the Crude Oil Supply Agreement, Vitol supplies the Petroleum Segment with crude oil and intermediation logistics helping to reduce the amount of inventory held at a certain locations and mitigate crude oil pricing risk.

Effective on August 4, 2021, an indirect, wholly-owned subsidiary of CVR Refining entered into the Second Amended and Restated Crude Oil Supply Agreement (the “2021 Supply Agreement”) with Vitol Inc.

(“Vitol”) which superseded, in its entirety, the August 31, 2012 Amended and Restated Crude Oil Supply Agreement (the “2012 Supply Agreement” and collectively with the 2021 Supply Agreement, the “Crude Oil Supply Agreement”) between the parties.

The 2021 Supply Agreement is on substantially similar terms as the 2012 Supply Agreement, other than revisions to certain inventory turnover and insurance provisions.

Under the Crude Oil Supply Agreement, Vitol supplies the Petroleum Segment with crude oil and intermediation logistics helping to reduce the amount of inventory held at certain locations and mitigate crude oil pricing risk.

Volumes contracted under the Crude Oil Supply Agreement, as a percentage of the total crude oil purchases (in barrels), was approximately 42 %, 33 %, and 36 % for the years ended December 31, 2021, 2020, and 2019, respectively.

1 unchanged sentence

Contingencies

Call Option - In 2019, the Company, CVR Refining and its general partner, CVR Refining Holdings, IEP, and certain directors and affiliates were named in at least one of nine lawsuits filed in the Delaware Court of Chancery by purported former unitholders of CVR Refining, on behalf of themselves and an alleged class of similarly situated unitholders relating to the Company’s exercise of the call option (“Call Option”) under the CVR Refining Amended and Restated Agreement of Limited Partnership assigned to it by CVR Refining’s general partner (the “Delaware Lawsuits”).

The Delaware Lawsuits primarily

Attorney’s office for the Southern District of New York contacted CVR Energy in September 2017 seeking production of information pertaining to CVR Refining’s, CVR Energy’s and Mr.

Icahn’s activities relating to the RFS and Mr.

Icahn’s former role as an advisor to former President Trump.

CVR Energy cooperated with the request and provided information in response to the subpoena.

Attorney’s office has not made any claims or allegations against CVR Energy or Mr.

CVR Energy believes it maintains a strong compliance program and, while no assurances can be made, CVR Energy does not believe this inquiry will have a material impact on its business, financial condition, results of operations or cash flows.

Call Option Lawsuits - In 2019, the Company, CVR Refining and its general partner, CVR Refining Holdings, IEP, and certain directors and affiliates (collectively, the “Call Defendants”) were named in at least one of nine now consolidated lawsuits filed in the Delaware Court of Chancery by purported former unitholders of CVR Refining, on behalf of themselves and an alleged class of similarly situated unitholders relating to the Company’s exercise of the call option (“Call Option”) under the CVR Refining Amended and Restated Agreement of Limited Partnership assigned to it by CVR Refining’s general partner (collectively, the “Call Option Lawsuits”).

The Call Option Lawsuits primarily allege breach of contract, tortious interference and breach of the implied covenant of good faith and fair dealing and seek monetary damages and attorneys’ fees, among other remedies.

In January 2020, the court dismissed CVR Holdings and certain former directors of CVR Refining’s general partner from the Call Option Lawsuits, though permitted some or all of the claims to proceed against each remaining defendant.

Trial of the Call Option Lawsuits concluded in July 2021, and the parties are currently in post-trial proceedings.

The Company believes the Call Option Lawsuits are without merit and is vigorously defending against them.

The plaintiffs filed their Opening Post-Trial Brief on December 22, 2021, now quantifying alleged damages in excess of $ 300 million;

the Call Defendants strongly dispute the plaintiffs’ claims and are preparing responsive briefings.

Accordingly, the Company cannot determine at this time the outcome of the Call Option Lawsuits, including whether such outcome would have a material impact on the Company’s financial position, results of operations, or cash flows.

However, while we firmly believe this matter is without merit, if it is concluded in a manner adverse to the Company, it could have a material effect on the Company’s financial position, results of operations, or cash flows.

The Call Defendants are also parties to two lawsuits relating to insurance coverage for the Call Option Lawsuits, one filed on January 27, 2021, in the 434th Judicial District Court of Fort Bend County, Texas by the Call Defendants’ primary and excess insurers (the “Insurers”) seeking a declaratory judgment determining that they owe no indemnity coverage for the Call Option Lawsuits in relation to insurance policies that have coverage limits of $ 50 million, and another filed on January 30, 2022 in the Superior Court of the State of Delaware by the Call Defendants against the Insurers for anticipatory breach of contract and breach of the implied covenant of good faith and fair dealing (the “Delaware Coverage Case”).

On November 23, 2021, the court in the Delaware Coverage Case granted partial summary judgment in favor of the Call Defendants relating to the amount of the deductible.

As both lawsuits are in their early stages, the Company cannot determine at this time the outcome of these lawsuits, including whether the outcome would have a material impact on the Company’s financial position, results of operations, or cash flows.

December 31, 2021 | 102

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

allege breach of contract, tortious interference, and breach of the implied covenant of good faith and fair dealing and seek monetary damages and attorneys’ fees, among other remedies.

In January 2020, the court dismissed CVR Holdings and certain former directors of CVR Refining’s general partner from the Delaware Lawsuits, though permitted some or all of the claims to proceed against each remaining defendant.

On April 6, 2020, a lawsuit was filed in the United States District Court for the Southern District of New York against the Company, CVR Refining and its general partner, CVR Refining Holdings, IEP, and the Company’s Chief Executive Officer by purported former unitholders of CVR Refining on behalf of themselves and an alleged class of similarly situated unitholders (the “New York Lawsuit” and together with the Delaware Lawsuits, the “Call Option Lawsuits”) primarily alleging violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 thereunder and seeking monetary damages and attorney’s fees, among other remedies.

The Company believes the Call Option Lawsuits are without merit and intends to vigorously defend against them.

Discovery is currently on-going.

On January 27, 2021, a lawsuit was filed against the Company, CVR Refining and its general partner, CVR Refining Holdings, IEP, and certain directors and affiliates in the 434th Judicial District Court of Fort Bend County, Texas by their primary and excess insurers (the “Insurers”) seeking a declaratory judgement determining that they owe no indemnity coverage for the Call Option Lawsuits in relation to insurance policies that have coverage limits of $ 50 million.

The Company believes this lawsuit is without merit and intends to vigorously defend the claims against them.

The lawsuit is in the early stages of litigation.

Accordingly, the Company cannot determine at this time the outcome of the litigation, including whether the outcome of this matter would have a material impact on the Company’s financial position, results of operations, or cash flows.

Wynnewood Small Refinery Exemption - During 2019, WRC intervened in a lawsuit filed by four ethanol and biofuels trade associations against the Environmental Protection Agency (“EPA”), claiming the EPA exceeded its authority in granting WRC’s Wynnewood Refinery’s 2017 small refinery exemption (“SRE”) under the RFS program under the CAA, as well as the SREs of two other unrelated refineries.

In January 2020, the 10th Circuit vacated the three SREs and remanded the matter to the EPA for further proceedings, holding, in part, that the “extension” language in the CAA requires a small refinery to have received an SRE continuously in every year since inception of the program to be eligible.

After the 10th Circuit refused to rehear the case, WRC and others filed a petition for writ of certiorari in the Supreme Court of the United States (the “Supreme Court”) on September 4, 2020, which was granted by the Supreme Court on January 8, 2021.

The case is currently expected to be argued in April 2021.

As it is not yet clear how the Supreme Court will rule, or what steps the EPA will take with respect to SREs, we cannot currently estimate the outcome, impact, or timing of resolution of this matter.

Renewable Fuel Standards - The Company’s Petroleum Segment is subject to the RFS, implemented by the Environmental Protection Agency (the “EPA”), which requires refiners to either blend renewable fuels into their transportation fuels or purchase renewable fuel credits, known as RINs, in lieu of blending.

The Petroleum Segment is not able to blend the substantial majority of its transportation fuels and must either purchase RINs on the open market or obtain waiver credits for cellulosic biofuels, or other exemptions from the EPA, in order to comply with the RFS.

For the years ended December 31, 2021, 2020, and 2019, the Company recognized an expense of approximately $ 435 million, $ 190 million, and $ 43 million, respectively, for the Petroleum Segment’s compliance with the RFS (based on the 2020 renewable volume obligation (“RVO”) and proposed preliminary 2021 RVO range, for the respective periods, excluding the impacts of any exemptions or waivers to which the Petroleum Segment may be entitled).

The recognized amounts are included within Cost of materials and other in the Consolidated Statements of Operations and represent costs to comply with the RFS obligation through purchasing of RINs not otherwise reduced by blending of ethanol or biodiesel.

At each reporting period, to the extent RINs purchased and generated through blending are less than the RFS obligation (excluding the impact of exemptions or waivers to which the Petroleum Segment may be entitled), the remaining position is marked-to-market using RIN market prices at period end.

As of December 31, 2021 and 2020, the Petroleum Segment’s RFS position was approximately $ 494 million and $ 214 million, respectively, which is recorded in Other current liabilities in the Consolidated Balance Sheets.

RFS Disputes - On June 25, 2021, the Supreme Court of the United States (the “Supreme Court”) overturned a decision of the 10 th Circuit Court of Appeals (“10 th Circuit”) vacating three small refinery exemptions (“SREs”) under the RFS, including one issued to the Wynnewood Refinery for 2017, to the extent such SREs were vacated based on failure to have continuously received an SRE in all applicable preceding years.

Following the Supreme Court ruling, the Environmental Protection Agency (the “EPA”) notified WRC that it would reconsider WRC’s 2017 SRE on other grounds referenced in the 10th Circuit decision.

On July 20, 2021, after remand from the Supreme Court, the 10th Circuit vacated its prior judgment, recalled its previous mandate denying WRC’s 2017 SRE, entered a new judgment and issued a new mandate transferring jurisdiction back to the EPA.

On August 26, 2021, the EPA filed a Motion for Clarification asking the 10th Circuit whether the alternative holdings that supported the 10th Circuit’s prior judgment remain in effect and whether the new mandate returns the agency actions back to the EPA, which Motion for Clarification was denied.

On September 15, 2021, WRC advised the EPA it considered its 2017 SRE intact and demanded that the EPA return the status of WRC’s 2017 SRE to “granted.” The EPA has not yet responded to WRC’s demand.

Given the EPA’s failure to respond, we cannot currently estimate the outcome, impact or timing of resolution of this matter.

WRC and CRRM are also involved in or expected to be involved in several lawsuits relating to the RFS, including a lawsuit filed in 2019 in the D.C.

Circuit by four ethanol and biofuels trade associations against the EPA claiming the EPA exceeded its authority in granting SREs for the 2018 compliance year, including the 2018 SRE granted to WRC’s Wynnewood Refinery (the “2018 SRE Lawsuit”), which 2018 SRE petitions were remanded by the court back to the EPA on December 8, 2021, with instructions to act on such petitions by April 7, 2022;

a lawsuit by WRC against the EPA relating to damages sustained by WRC as a result of the EPA’s failure to timely issue WRC’s 2018 SRE (the “WRC 2018 SRE Lawsuit”);

and a Petition for Review of the EPA’s February 2, 2022, final rule changing compliance deadlines under the RFS filed by WRC and CRRM with the D.C.

Circuit on February 4, 2022 (the “Deadline Lawsuit”).

The Company anticipates additional litigation to be filed in the future relating to the RFS, including one or more lawsuits by WRC against the EPA should it finalize the position set forth in its Proposed RFS Small Refinery Exemption Decision dated December 7, 2021 (the “Proposed Denial”), in which the EPA announced its intention to change its statutory interpretation of the CAA and deny 65 pending SRE petitions, including those submitted by WRC for 2019, 2020, and 2021, through which the Proposed Denial by the EPA has informed WRC it intends to also apply to deny all 2018 SREs previously approved by the EPA, including for WRC’s Wynnewood Refinery.

These matters are in their early stages, and the Company cannot determine at this time the outcomes of these matters, including whether such outcomes would have a material impact on the Company’s financial position, results of operations, or cash flows.

Environmental, Health, and Safety (“EHS”) Matters

Clean Air Act Matter - On August 21, 2018, CRRM received a letter from the United States Department of Justice (“DOJ”) on behalf of the EPA and KDHE alleging violations of the CAA and a 2012 Consent Decree (the “CD”) between Coffeyville Resources Refining & Marketing, LLC (“CRRM”), the United States (on behalf of the EPA) and the Kansas Department of Health and Environment (“KDHE”) at CRRM’s Coffeyville refinery.

In June 2020, a tolling agreement between the parties relating to such allegations expired, and the DOJ and KDHE sent demand letters relating to the allegations (the “Stipulated Claims”) and seeking stipulated penalties.

In February 2021, the DOJ and KDHE sent CRRM a statement of position under the CD regarding its demand for Stipulated Claims.

As CRRM disputes most claims asserted by the government, in accordance with the CD, CRRM deposited funds into a commercial escrow account pending resolution of disputed claims.

The escrowed funds are legally restricted for use and are included within Prepaid expenses and other current assets on the consolidated balance sheets.

In December 2020, the DOJ and KDHE filed a supplement complaint in the United States District Court for the District of Kansas (“D.

Kan”) asserting nine counts for alleged violations of the Clean Air Act, the Kansas State Implementation Plan and Kansas law (“the Statutory Claims”) and seeking civil penalties, injunctive and related relief.

Negotiations relating to the Stipulated Claims and the Statutory Claims are ongoing and the Company cannot determine at this time the outcome of these matters, including whether such outcome, or any subsequent enforcement or litigation relating thereto would have a material impact on the Company’s financial position, results of operations, or cash flows.

Renewable Fuel Standards - The Company’s Petroleum Segment is subject to the RFS of the EPA that require refiners to either blend renewable fuels in with their transportation fuels or purchase renewable fuel credits, known as RINs, in lieu of blending.

The Petroleum Segment is not able to blend the substantial majority of its transportation fuels and has to purchase RINs on the open market, and may have to obtain waiver credits for cellulosic biofuels from the EPA, in order to comply with the RFS.

In June 2020, a tolling agreement between the parties relating to such allegations expired, and the DOJ and KDHE sent demand letters relating to the

December 31, 2021 | 103

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company recognized an expense of approximately $ 190 million, $ 43 million, and $ 60 million for the years ended December 31, 2020, 2019, and 2018, respectively, for the Petroleum Segment’s compliance with the RFS.

At each reporting period, to the extent RINs purchased or generated through blending are less than the RFS obligation, the remaining obligation is marked-to-market using RIN market prices at period end.

As of December 31, 2020 and 2019, the Petroleum Segment’s RFS obligation was approximately $ 214 million and $ 7 million, respectively, which is recorded in Other current liabilities in the Consolidated Balance Sheets.

allegations (the “Stipulated Claims”) and seeking stipulated penalties under the CD.

In February 2021, the DOJ and KDHE sent CRRM a statement of position under the CD regarding its demand for Stipulated Claims.

As CRRM disputes most claims asserted by the government, in accordance with the CD, CRRM deposited funds into a commercial escrow account pending resolution of disputed claims.

The escrowed funds are legally restricted for use and are included within Prepaid expenses and other current assets on the consolidated balance sheets.

In April 2021, CRRM filed a petition for judicial review of the Stipulated Claims with the United States District Court for the District of Kansas (“D.

Kan.”), in accordance with the dispute resolution provisions of the CD.

On September 23, 2021, the court ordered briefing on CRRM’s petition, which was completed in December 2021.

Separately, in December 2020, the DOJ and KDHE filed a supplement complaint in the D.

Kan asserting nine counts for alleged violations of the CAA, the Kansas State Implementation Plan and Kansas law seeking civil penalties, injunctive and related relief, which they sought leave to amend on February 10, 2022, to add an additional eight counts under Part 63 of the National Emission Standards for Hazardous Air Pollutants from Petroleum Refineries Subparts CC and R (“NESHAP”), Kansas law, and CRRM’s permits relating to flares, heaters, and related matters (collectively, the “Statutory Claims”).

In March 2021, CRRM filed a partial motion to dismiss certain Statutory Claims, which is still pending with the D.

Environmental Remediation - As of December 31, 2021 and 2020, environmental accruals representing estimated costs for future remediation efforts at certain Petroleum Segment sites totaled approximately $ 12 million and $ 11 million, respectively.

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

Wynnewood Refinery Incident - In October 2020, the 10 th Circuit affirmed a 2019 decision of the Occupational Safety and Health Review Commission which (a) upheld citations issued by the Occupational Safety and Health Administration (“OSHA”) to WRC in 2013 for violations of the OSHA arising from a September 2012 explosion in a boiler unit at the Wynnewood Refinery, but (b) found that such violations were not “repeat violations” under the OSHA.

As a result of the decision, WRC is obligated to pay a penalty by March 2021, the amount of which is not material.

In addition, WRC has been removed from the OSHA Severe Violators Enforcement Program.

(12) Business Segments

15 unchanged sentences

Other ( 12 ) ( 6 ) ( 8 )

Total $ 3,930 $ 6,364 $ 7,124

Operating (loss) income

Total net sales $ 7,242 $ 3,930 $ 6,364

Operating income (loss):

Petroleum $ ( 27 ) $ ( 281 ) $ 574

1 unchanged sentence

Other ( 20 ) ( 17 ) ( 21 )

Total ( 333 ) 580 532

Total operating income (loss)

87 ( 333 ) 580

Interest expense, net ( 117 ) ( 130 ) ( 102 )

1 unchanged sentence

Other income, net 15 7 13

(Loss) income before income taxes $ ( 415 ) $ 491 $ 445

Income (loss) before income tax expense $ 66 $ ( 415 ) $ 491

Depreciation and amortization:

1 unchanged sentence

Nitrogen Fertilizer 73 76 80

Total $ 278 $ 287 $ 274

Total depreciation and amortization $ 279 $ 278 $ 287

Capital expenditures:

1 unchanged sentence

Nitrogen fertilizer 26 16 20

Total $ 121 $ 114 $ 111

Total capital expenditures $ 226 $ 121 $ 114

The following table summarizes total assets by segment:

2 unchanged sentences

Nitrogen Fertilizer 1,127 1,033

Other (2) ( 46 ) ( 420 )

Other, including intersegment eliminations ( 589 ) ( 46 )

Total assets $ 3,906 $ 3,978

(1) Capital expenditures are shown exclusive of capitalized turnaround expenditures.

(2) Includes elimination of intercompany assets and net cash proceeds from the Notes issued during the year ended December 31, 2020 .

(1) Capital expenditures are shown exclusive of capitalized turnaround expenditures and business combinations.

(2) Other includes expenses related to and amounts incurred for the Wynnewood renewable diesel unit project.

December 31, 2021 | 105

3 unchanged sentences

(13) Supplemental Cash Flow Information

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

Cash flows related to income taxes, interest, leases, capital expenditures and deferred financing costs included in accounts payable, and non-cash dividends were as follows:

Year Ended December 31,

1 unchanged sentence

Supplemental disclosures:

Cash (received for income taxes, net of payments) paid for income taxes, net of refunds $ ( 2 ) $ 69 $ 31

Cash paid, net of refunds (received, net of payments) for income taxes $ 72 $ ( 2 ) $ 69

Cash paid for interest 114 107 104

5 unchanged sentences

Change in construction in progress included in accounts payable (1)

(1) The lease standard was adopted on January 1, 2019 on a prospective basis.

Therefore, only 2020 and 2019 disclosures are applicable to be included within the table above.

2 ( 3 ) ( 7 )

Change in deferred financing costs included in accounts payable 1 — —

Non-cash dividends to CVR Energy stockholders 251 — —

(1) Capital expenditures are shown exclusive of capitalized turnaround expenditures.

5 unchanged sentences

(2) The restricted cash balance is included within Prepaid expenses and other current assets on the Consolidated Balance Sheets.

December 31, 2020 | 100

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(14) Related Party Transactions

4 unchanged sentences

Cost of materials and other:

Joint Venture Transportation Agreement:

Enable $ 11 $ 12 $ 8

Enable Joint Venture Transportation Agreement $ 11 $ 11 $ 12

Payments (received) made:

Dividends (1)

Tax Allocation Agreement:

AEP — ( 3 ) 12

AEP Tax Allocation Agreement — — ( 3 )

(1) See below for a summary of the dividends paid to IEP for the years ended December 31, 2021, 2020, and 2019 .

1 unchanged sentence

CVR Refining is party to a transportation agreement as part of the Enable JV for an initial term of 20 years under which Enable provides transportation services for crude oil purchased within a defined geographic area.

Additionally, CVR Refining entered into a terminalling services agreement with Enable JV under which it receives access to Enable JV’s terminal in Lawrence, Oklahoma to unload and pump crude oil into Enable JV’s pipeline for an initial term of 20 years.

Midway Joint Venture

For the years ended December 31, 2020, 2019, and 2018, CRRM incurred costs of $ 17 million, $ 21 million, and $ 18 million, respectively, from crude oil transportation services incurred on the Midway JV through Vitol as the intermediary purchasing agent.

Agency Arrangement with IEP

On February 4, 2020, CVR Energy and Icahn Enterprises Holdings LP (“IEH”), a subsidiary of IEP, entered into an agency arrangement wherein IEH would act as the agent for CVR Energy.

Under this arrangement, the Company invested approximately $ 140 million in certain marketable securities of Delek US Holdings, Inc.

(“Delek”) (NYSE ticker symbol:

DK) and could make additional investments in Delek or invest in other public companies in the future under this arrangement.

The Company reimbursed IEH for all costs associated with the initial purchase and did not incur any additional fees as part of this transaction.

Property Exchange

On October 18, 2019, the Conflicts Committee of the UAN GP Board and on October 22, 2019, the audit committee of the Board of Directors, each agreed to authorize the exchange of certain parcels of property owned by CRRM with an equal number of parcels owned by CRNF, all located in Coffeyville, Kansas (the “Property Exchange”).

On February 19, 2020, CRRM and CRNF executed the Property Exchange agreement.

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

This transaction resulted in no net impact on the Company’s condensed consolidated financial statements.

Additionally, CVR Refining

December 31, 2021 | 106

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

entered into a terminalling services agreement with Enable JV under which it receives access to Enable JV’s terminal in Lawrence, Oklahoma to unload and pump crude oil into Enable JV’s pipeline for an initial term of 20 years.

Midway Joint Venture

For the years ended December 31, 2021, 2020, and 2019, CRRM incurred costs, which are included in Cost of materials and other, of $ 20 million, $ 17 million, and $ 21 million, respectively, from crude oil transportation services incurred on the Midway JV through Vitol as the intermediary purchasing agent.

Dividends to CVR Energy Stockholders

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

IEP, through its ownership of the Company’s common shares, is entitled to receive dividends that are declared and paid by the Company based on the number of shares held at each record date.

The following presents dividends paid to the Company's stockholders, including IEP, during the year ended December 31, 2020 (amounts presented in tables below may not add to totals presented due to rounding).

Dividends Paid (in millions)

Related Period Date Paid Dividend Per Share Stockholders IEP Total

2019 - 4th Quarter March 9, 2020 $ 0.80 $ 23 $ 57 $ 80

2020 - 1st Quarter May 26, 2020 0.40 12 28 40

Total $ 1.20 $ 35 $ 85 $ 121

No dividends were declared for the second, third and fourth quarters of 2020.

Dividends, if any, including the payment, amount and timing thereof, are determined in the discretion of CVR Energy’s board of directors (the “Board”).

IEP, through its ownership of the Company’s common stock, is entitled to receive dividends that are declared and paid by the Company based on the number of shares held at each record date.

No dividends were declared related to the fourth quarter of 2021, and there were no quarterly dividends declared or paid during 2021 related to the first, second, and third quarters of 2021 and fourth quarter of 2020.

During the years ended December 31, 2020 and 2019, the Company paid dividends totaling $ 1.20 and $ 3.05 per common share, or $ 121 million and $ 306 million, respectively.

Of these dividends, IEP received $ 85 million and $ 218 million, respectively, for the same periods.

On May 26, 2021, the Company announced a special dividend of approximately $ 492 million, or equivalent to $ 4.89 per share of the Company’s common stock, to be paid in a combination of cash (the “Cash Distribution”) and the Stock Distribution.

On June 10, 2021, the Company distributed an aggregate amount of approximately $ 241 million, or $ 2.40 per share of the Company’s common stock, pursuant to the Cash Distribution, and approximately 10,539,880 shares of Delek common stock, which represented approximately 14.3 % of the outstanding shares of Delek common stock, pursuant to the Stock Distribution.

IEP received approximately 7,464,652 shares of common stock of Delek and $ 171 million in cash.

The Stock Distribution was recorded as a reduction to equity through a derecognition of our investment in Delek, and the Company recognized a gain of $ 112 million from the initial investment in Delek through the date of the Stock Distribution.

Distributions to CVR Partners ’ Unitholders

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

There were no distributions declared or paid by CVR Partners during the year ended December 31, 2020 related to the fourth quarter of 2019 or the first, second, and third quarters of 2020, and no distributions were declared for the fourth quarter of 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 million.

Of these distributions, CVR Energy received $ 16 million for the year ended December 31, 2019.

The Partnership did no t pay distributions during the year ended December 31, 2018.

Affiliate Pension Obligations

Prior to the exchange offer discussed in Note 1 (“Organization and Nature of Business”), Mr.

Icahn, through certain affiliates, owned approximately 82 % of the Company’s capital stock.

Applicable pension and tax laws make each member of a “controlled group” of entities, generally defined as entities in which there is at least an 80 % common ownership interest, jointly and severally liable for certain pension plan obligations of any member of the controlled group.

These pension obligations include ongoing contributions to fund the plan, as well as liability for any unfunded liabilities that may exist at the time the plan is terminated.

As a result of the historical ownership interest in CVR Energy by Mr.

Icahn’s affiliates (prior to the exchange offer), the Company was subject to the pension liabilities of all entities in which Mr.

Icahn had a direct or indirect ownership interest of at least 80 %.

Two such entities, ACF Industries LLC (“ACF”) and Federal-Mogul, are the sponsors of several pension plans.

As members of the controlled group, CVR Energy would be liable for any failure of ACF and Federal-Mogul to make ongoing pension contributions or to pay the unfunded liabilities upon a termination of their respective pension plans.

The unfunded plan balances for these sponsors was $ 435 million as of June 30, 2018.

These results are based on the information provided by Mr.

Icahn’s affiliates based on information from the plans’ actuaries.

As of December 31, 2020 and 2019, and following the exchange offer, Mr.

Icahn’s affiliates owned approximately 71 % of the Company’s capital stock, and therefore, the Company is no longer considered to be liable for the aforementioned pension obligations of the controlled group.

On October 1, 2018, Federal-Mogul was sold by Mr.

Icahn’s affiliates to a third-party.

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

Distributions Paid (in millions)

Related Period Date Paid Distribution Per

Common Unit Public Unitholders CVR Energy Total

2021 - 2nd Quarter August 23, 2021 $ 1.72 $ 11 $ 7 $ 18

2021 - 3rd Quarter November 22, 2021 2.93 20 11 31

Total dividends $ 4.65 $ 31 $ 18 $ 49

There were no distributions declared or paid by CVR Partners 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, CVR Partners paid distributions totaling $ 4.00 per common unit on a split-adjusted basis, or $ 45 million.

Of these distributions, CVR Energy received $ 16 million.

For the fourth quarter of 2021, CVR Partners, upon approval by the UAN GP Board on February 21, 2022, declared a distribution of $ 5.24 per common unit, or $ 56 million, which is payable March 14, 2022 to unitholders of record as of March 7, 2022.

Of this amount, CVR Energy will receive approximately $ 20 million, with the remaining amount payable to public unitholders.

December 31, 2021 | 107

1 unchanged sentence

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