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Item 1A. Risk Factors

2025-02-19 compared with 2024-02-21 · 232 added, 150 removed, 383 unchanged (50% of the section changed)

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Risks Related to Our Entire Business

Certain developments in the global oil markets have had, and may continue to have, material adverse impacts on the operations, business, financial condition, liquidity, and results of operations of the Company or its customers, suppliers, and other counterparties.

Although there has been discussions among members of OPEC+ to stabilize oil prices, declines in the market prices of crude oil and certain other petroleum products below the carrying cost of such commodities in the Company’s inventory have required, and may continue to require, the Company to adjust the value of, and record a loss on, certain inventories, which has had, and may continue to have a negative impact on our operating income;

adversely impact our ability to profitably operate our facilities, and our results of operations, such as revenues and cost of sales;

could result in significant financial constraints on certain producers from which we acquire our crude oil;

and could result in an increased risk that customers, lenders, and other counterparties may be unable to fulfill their obligations in a timely manner, or at all.

Further, if general economic conditions continue to remain uncertain for an extended period of time, our liquidity and ability to repay our outstanding debt may be harmed and the trading price of our common stock, which has seen recent volatility, may decline.

Our petroleum and nitrogen fertilizer businesses are, and commodity prices are, cyclical and highly volatile, which could have a material adverse effect on our results of operations, financial condition and cash flows.

Our businesses are, and commodity prices are, cyclical and highly volatile, which could have a material adverse effect on our results of operations, financial condition and cash flows.

Our Petroleum Segment’s financial results are primarily affected by margin between refined product prices and prices for crude oil and other feedstocks.

Historically, refining margins have been volatile and vary by region, and we believe they will continue to be volatile in the future.

Our cost to acquire feedstocks and the price at which we can ultimately sell refined products depend upon several factors beyond our control, including regional and global supply of and demand for crude oil, gasoline, diesel, and other feedstocks and refined products.

These in turn depend on, among other things, the availability and quantity of imports, the production levels of U.S.

and international suppliers, levels of refined petroleum product inventories, productivity and growth (or the lack thereof) of U.S.

and global economies, U.S.

relationships with foreign governments, political affairs, and the extent of governmental regulation.

Profitability of some of our products, like renewable diesel, are also dependent upon government subsidies including carbon and tax credits, which may be reduced or eliminated.

We do not produce crude oil and must purchase all of the crude oil we refine long before we refine it and sell the refined products to our customers.

Price level changes during the period between purchasing feedstocks and selling the refined products from these feedstocks could have a significant effect on our financial results.

The Market prices for these and other commodities depend upon a wide range of factors beyond our control, including regional and global supply of and demand for crude oil, gasoline, diesel, and other feedstocks and refined products, which supply and demand is subject to volatility based on, among other things, the availability and quantity of imports, the capacity and production levels of U.S.

and foreign refineries and suppliers, levels of refined petroleum product inventories and the availability of petroleum alternatives, productivity and growth (or the lack thereof) of U.S.

and global economies, U.S.

foreign trade policy and relationships with foreign governments, political affairs, and the extent of governmental regulation, including executive orders.

A decline in market prices of these feedstocks and refined products may negatively impact the carrying value of our inventories.

Our Petroleum Segment profitability is also impacted by the ability to purchase crude oil at a discount to benchmark crude oils, such as WTI.

In addition, the profitability of our Petroleum Segment is also subject to our ability to purchase crude oil at a discount to benchmark crude oils, such as WTI.

Crude oil differentials can fluctuate significantly based upon overall economic and crude oil market conditions.

Adverse changes in crude oil differentials can adversely impact our refining margins, earnings and cash flows.

In addition, the Petroleum Segment’s purchases of crude oil, although based on WTI prices, have historically been at a discount to WTI because of the proximity of the Refineries to the sources, existing logistics infrastructure, and quality differences.

Further, the Petroleum Segment’s purchases of crude oil, although based on WTI prices, have historically been at a discount to WTI because of the proximity of the Refineries to the sources, existing logistics infrastructure, and quality differences.

Any changes to these factors could result in a reduction of the discount to WTI and may result in a reduction of the Petroleum Segment’s cost advantage.

For example, as described further below, volatile commodity pricing and higher industry utilization and oversupply have had an unfavorable impact on our petroleum business and have negatively impacted our cash from operating activities and liquidity.

As a result, in October 2024, the Board elected to suspend payment of the cash dividend, defer new growth capital spending, and reduce certain expected capital expenditures.

Refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” of this Report for further discussion of our liquidity.

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Additionally, our Renewables Segment is exposed to fluctuations in the prices of Vegetable oils and other feedstocks and renewable fuels, which are affected by numerous factors, such as Vegetable oil production capacity, system inventory, local and regional market conditions, inflation, and the operating levels of other facilities.

Widespread expansion or upgrades of third-party facilities, price volatility, international political and economic developments, and other factors are likely to continue to play an important role in renewable fuel industry economics.

These factors can impact, among other things, inventory levels in the market, resulting in renewable fuels price and product margin volatility.

Our Nitrogen Fertilizer Segment is exposed to fluctuations in nitrogen fertilizer demand in the agricultural industry.

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Nitrogen fertilizer products are commodities, the price of which can be highly volatile.

A decrease in nitrogen fertilizer prices could have a material adverse effect on our business, cash flow, and ability to make distributions.

The prices of nitrogen fertilizer products depend on a number of factors, including general economic conditions, cyclical trends in end-user markets, supply and demand imbalances, governmental policies, and weather conditions, which have a greater relevance because of the seasonal nature of fertilizer application.

If seasonal demand

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exceeds the projections on which we base our production levels, customers may acquire nitrogen fertilizer products from competitors, and our profitability may be negatively impacted.

If seasonal demand exceeds the projections on which we base our production levels, customers may acquire nitrogen fertilizer products from competitors, and our profitability may be negatively impacted.

If seasonal demand is less than expected, we may be left with excess inventory that will have to be stored or liquidated.

The international market for nitrogen fertilizers is influenced by such factors as the relative value of the U.S.

Supply is affected by available capacity and operating rates, raw material costs, government policies and global trade.

In addition, the international market for nitrogen fertilizers is influenced by such factors as the relative value of the U.S.

dollar and its impact upon the cost of importing nitrogen fertilizers, foreign agricultural policies, the existence of, or changes in, import or foreign currency exchange barriers in certain foreign markets, changes in the hard currency demands of certain countries, and other regulatory policies of foreign governments, as well as the laws and policies of the U.S.

affecting foreign trade and investment.

Supply is affected by available capacity and operating rates, raw material costs, government policies, and global trade.

A decrease in nitrogen fertilizer prices would have a material adverse effect on our nitrogen fertilizer business and cash flow, including CVR Partners’ ability to make distributions.

Petroleum and nitrogen fertilizer businesses face intense competition.

We cannot predict future changes in U.S.

policy with respect to foreign trade (including the imposition of trade barriers, tariffs on Canadian and other goods, or economic or trade sanctions, from the new administration or otherwise), including whether existing trade policies will be maintained or modified or whether the entry into new bilateral or multilateral trade agreements will occur, nor can we predict the effects that any such changes would have on our business.

Changes in U.S.

trade policy have resulted and could again result in reactions from U.S.

trading partners, including adopting responsive trade policies which could make it more difficult or costly to obtain feedstocks or market our products.

Such changes in U.S.

trade policy or in laws and policies governing foreign trade, and any resulting negative sentiments towards the U.S.

as a result of such changes, could materially and adversely affect our business, financial condition, results of operations and liquidity.

Our business is impacted by events and developments that impact the global markets for oil and other energy products, including, among others, decisions by and disputes among the members of OPEC+ relating to setting and maintaining production levels and the impact of non-OPEC+ producers on global supply.

Declines in the market prices of crude oil and certain other petroleum products below the carrying cost of such commodities in the Company’s inventory have required, and may continue to require, the Company to adjust the value of, and record a loss on, certain inventories, which has had, and may continue to have a negative impact on our operating income;

adversely impact our ability to profitably operate our facilities, and our results of operations, such as revenues and cost of sales;

could result in significant financial constraints on certain producers from which we acquire our crude oil;

and could result in an increased risk that customers, lenders, and other counterparties may be unable to fulfill their obligations in a timely manner, or at all.

Our businesses face intense competition.

The refining industry is highly competitive with respect to both crude oil and other feedstock supply and refined petroleum product markets.

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Our Petroleum Segment may be unable to compete effectively with competitors within and outside of the industry, which could result in reduced profitability.

In contrast to many of our competitors, we do not have a retail business and therefore are dependent upon others for outlets for our refined products, and we do not have arrangements exceeding a twelve-month period for much of our petroleum output and thus cannot offset losses from refining operations with profits from retail operations and may be less able to withstand periods of depressed refining margins or feedstock shortages.

In contrast to many of our competitors, we do not have a retail

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business and therefore are dependent upon others for outlets for our refined products, and we do not have arrangements exceeding a twelve-month period for much of our petroleum output and thus cannot offset losses from refining operations with profits from retail operations and may be less able to withstand periods of depressed refining margins or feedstock shortages.

Some of our competitors also have materially greater financial and other resources than us and a greater ability to bear the economic risks inherent in our industry.

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The more successful these alternatives become as a result of governmental incentives or regulations, technological advances, consumer demand, improved pricing, or otherwise, the greater the negative impact on pricing and demand for our products and profitability.

Our renewables business faces competition from other renewable fuel producers.

Our Renewables Segment faces competition from other renewable fuel producers.

In recent years, there has been an increase in renewable fuel capacity and production as new renewables projects have come online, which impacts the prices at which we are able to sell renewable fuel.

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An inability to compete successfully could result in a loss of customers, which could adversely affect our sales, profitability, and cash flows, and therefore, have a material adverse effect on our results of operations and financial condition.

For example, as described further below, volatile commodity pricing and higher industry utilization and oversupply have had an unfavorable impact on our business and have negatively impacted our cash from operating activities and liquidity.

As a result, in October 2024, the Board elected to suspend payment of the cash dividend, defer new growth capital spending, and reduce certain expected capital expenditures.

Our businesses are geographically concentrated, creating exposure to regional economic downturns and seasonal variations for us or our customers, which may affect our production levels, transportation costs, and inventory and working capital levels.

Our Refineries are both located in the southern portion of Group 3 of the PADD II region, and we primarily market refined products in a relatively limited geographic area.

As a result, our Petroleum Segment is more susceptible to regional economic conditions than the operations of more geographically diversified competitors, and any unforeseen circumstances that affect our

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operating area could also materially adversely affect our revenues and cash flows.

These factors include, among other things, changes in the economy, weather conditions, demographics and population, increased supply of refined products from competitors, and reductions in the supply of crude oil.

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As a consequence of this seasonality, distributions by our Nitrogen Fertilizer Segment of available cash, if any, may be volatile and may vary quarterly and annually.

Public health crises such as the COVID-19 pandemic have had, and may continue to have, adverse impacts on our business, financial condition, results of operations, and liquidity.

The economic effects from public health crises such as the COVID-19 pandemic on our business were and may again be significant.

Although there has been a recovery since the onset of the pandemic in March 2020, there continues to be uncertainty and unpredictability about the lingering impacts to the worldwide economy that could negatively affect our business, financial condition, results of operations, and liquidity in future periods.

The extent to which the pandemic and its ongoing effects may adversely impact our future business, financial, and operating results, and for what duration and magnitude, depends on factors that are continuing to evolve, are difficult to predict and, in many instances, are beyond our control.

The ultimate outcome of these and other factors may result in many adverse consequences including, but not limited to, disruption or delays to supply chains for critical equipment or feedstock, inflation, increased interest rates, and increased administrative, compliance, and operational costs.

In addition, future public health crises could also result in significant economic disruption and other effects that adversely impact our business, financial condition, results of operations, and liquidity in future periods in ways similar to the COVID-19 pandemic.

The adverse impacts of the COVID-19 pandemic had, and may continue to have, the effect of precipitating or heightening many of the other risks described in this section.

Both the Petroleum and Nitrogen Fertilizer Segments depend on significant customers, the loss of which may have a material adverse impact on our results of operations, financial condition and cash flows.

The Petroleum and Nitrogen Fertilizer Segments both have a significant concentration of customers.

The two largest customers of our Petroleum Segment represented 27% of its net sales for the year ended December 31, 2023.

The two largest customers of the Nitrogen Fertilizer Segment represented approximately 25% of its net sales for the same period.

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Public health crises have had, and may continue to have, adverse impacts on our business, financial condition, results of operations, and liquidity.

The economic effects from public health crises, such as a pandemic, on our business were and may again be significant.

The extent to which the effects of a pandemic or other public health crisis may adversely impact our future business, financial, and operating results, and for what duration and magnitude, depends on factors that continuously evolve, are difficult to predict and, in many instances, are beyond our control.

The ultimate outcome of these and other factors have in the past resulted and may again result in many adverse consequences including, but not limited to, disruption or delays to supply chains for critical equipment or feedstock, inflation, increased interest rates, and increased administrative, compliance, and operational costs.

In addition, pandemics or other public health crises have also resulted and could result in significant economic disruption and other effects that adversely impact our business, financial condition, results of operations, and liquidity.

The adverse impacts of a pandemic had, and the adverse impacts of a future pandemic or other public health crisis may have, the effect of precipitating or heightening many of the other risks described in this section.

Our segments each depend on significant customers, the loss of which may have a material adverse impact on our results of operations, financial condition and cash flows.

The Petroleum, Renewables, and Nitrogen Fertilizer Segments each have a significant concentration of customers.

The largest customer for each of our Petroleum and Nitrogen Fertilizer Segments represented 13% and 14% of their respective net sales for the year ended December 31, 2024, while the Renewables Segment has two customers that each accounted for approximately 50% of its net sales for the same period.

Given the nature of our businesses, and consistent with industry practice, we do not have long-term minimum purchase contracts with our customers.

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In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us.

Even if such licenses are available, we may be required to pay the licensor substantial royalties based on sales of our products, and such licenses may be non-exclusive, which

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could give our competitors access to the same intellectual property licensed to us.

Even if such licenses are available, we may be required to pay the licensor substantial royalties based on sales of our products, and such licenses may be non-exclusive, which could give our competitors access to the same intellectual property licensed to us.

Any of the foregoing could have a material adverse effect on our competitive position, results of operations, financial condition and cash flows.

Compliance with and changes in environmental laws and regulations, including those related to climate change and the ongoing “energy transition”, could result in increased operating costs and capital expenditures and changes in demand for the products we produce.

Our operations are subject to extensive federal, state, and local environmental laws and regulations relating to the protection of the environment, including those governing the emission or discharge of pollutants into the environment, climate change and the ongoing energy transition, product use and specifications, and the generation, treatment, storage, transportation, disposal, and remediation of solid and hazardous wastes.

Violations of applicable environmental laws and regulations or of the conditions of permits issued thereunder can result in substantial penalties, injunctive orders compelling installation of additional controls or other injunctive relief, civil and criminal sanctions, operating restrictions, permit revocations, and/or facility shutdowns, which may have a material adverse effect on our ability to operate our facilities and accordingly our financial performance.

In addition, new environmental laws and regulations, including as a result of climate change and the ongoing energy transition efforts, new interpretations of existing laws and regulations, or increased governmental enforcement of laws and regulations, could require us to make additional unforeseen expenditures.

It is unclear the impact the Biden Administration will have on the laws and regulations applicable to us, however, measures to address climate change and reduce GHG emissions (including carbon dioxide, methane, and nitrous oxides) are in various phases of discussion or implementation and could affect our operations by requiring increased operating and capital costs and/or increasing taxes on GHG emissions.

Compliance with and changes in environmental laws, rules, and regulations, including those related to climate change and the ongoing “energy transition”, could result in increased operating costs and capital expenditures and changes in demand for the products we produce.

Our operations are subject to extensive federal, state, and local environmental laws, rules, and regulations relating to the protection of the environment, including those governing the emission or discharge of pollutants into the environment, climate change and the ongoing energy transition, product use and specifications, and the generation, treatment, storage, transportation, disposal, and remediation of solid and hazardous wastes.

Violations of applicable environmental laws, rules, and regulations or of the conditions of permits issued thereunder can result in substantial penalties, injunctive orders compelling installation of additional controls or other injunctive relief, civil and criminal sanctions, operating restrictions, permit revocations, and/or facility shutdowns, which may have a material adverse effect on our ability to operate our facilities and accordingly our financial performance.

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In addition, new environmental laws, rules, and regulations, including as a result of climate change and the ongoing energy transition efforts, new interpretations of existing laws, rules, and regulations, including as a result of the change in U.S.

presidential administration, or increased governmental enforcement of laws, rules, and regulations, could require us to make additional unforeseen expenditures.

More aggressive efforts by governments and non-governmental organizations to put in place laws requiring or otherwise driving reductions in GHG emissions appear likely and any such future laws and regulations could result in increased compliance costs or additional operating restrictions applicable to our customers and/or us, and any increase in the prices of refined products resulting from such increased costs, GHG cap-and-trade programs or taxes on GHGs, could results in reduced demand for our refined petroleum products.

For example, in August 2022, President Biden signed into law the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”), which directs the EPA to impose a charge on methane emissions from certain petroleum system facilities and could have an indirect impact on demand for the goods and services of our Petroleum Segment.

For example, in August 2022, President Biden signed into law the Inflation Reduction Act, which directs the EPA to impose a charge on methane emissions from certain petroleum system facilities and could have an indirect impact on demand for the goods and services of our Petroleum Segment.

On January 26, 2024, the EPA issued a proposed rule to implement the methane emissions reduction program.

Public comments on the proposal are due March 11, 2024.

Following a public comment period that ended March 11, 2024, the EPA announced the final rule on November 12, 2024, which took effect on January 17, 2025.

Our business could also be impacted by governmental initiatives to incentivize the conservation of energy or the use of alternative energy sources.

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These initiatives to reduce energy consumption or incentivize a shift away from fossil fuels could reduce demand for hydrocarbons, thereby reducing demand for the products of our Petroleum Segment, and adversely impact our business, financial condition, results of operations and cash flows.

There is also increased agency interest in polyfluoroalkyl substances or PFAS.

In September 2022, the EPA proposed to designate two PFAS compounds as hazardous substances.

If PFAS compounds are designated as hazardous substances, the EPA and states could have the ability to order remediation of those compounds and cost recovery at clean-up sites.

The EPA and states could also have the authority to reopen closed sites which are shown to be impacted by these PFAS compounds.

This could lead to increased monitoring obligations and potential liability related thereto.

If we are unable to maintain sales of our products at a price that reflects such increased costs, or could result in reduced demand for our fertilizer and hydrocarbon products, there could be a material adverse effect on our business, financial condition and results of operations.

In 2024, there was an increased agency interest in polyfluoroalkyl substances or PFAS.

Although not yet finalized, in February 2024, the EPA proposed changes to the RCRA regulations by adding nine PFAS compounds to its list of “hazardous constituents.” In April 2024, EPA finalized a rule to designate two PFAS compounds as “hazardous substances” under CERCLA.

Industry and environmental groups have challenged the final CERCLA rule in the United States District Court for the District of Columbia, and while that case is still ongoing, in February 2025, the EPA requested that the court hold the case in abeyance for sixty days to allow agency leadership review and the court has not yet ruled on that motion.

In addition, in April 2024, the EPA released a memorandum providing direction on the EPA’s enforcement discretion under CERCLA in matters involving PFAS.

The EPA’s request to stay the April 2024 PFAS Rule, and the withdrawal of a June 2024 draft proposal (that would likely not apply to us) setting PFAS effluent limits for the chemical manufacturing sector, among other indicators, suggest that the January 2025 change in the presidential administration could impact the EPA’s level of interest in the regulation of PFAS and that PFAS regulation and enforcement will be less of a priority for the EPA in 2025.

Nevertheless, to the extent these new PFAS compounds remain designated as hazardous substances, the EPA and states have the ability to order remediation of those compounds and cost recovery at clean-up sites.

The EPA and states also have the authority to reopen closed sites which are shown to be impacted by these PFAS compounds.

This could lead to increased monitoring obligations, costs and potential liability related thereto.

If we are unable to maintain sales of our products at a price that reflects such increased costs, or those costs result in reduced demand for our fertilizer and hydrocarbon products, there could be a material adverse effect on our business, financial condition and results of operations.

Under the new Trump Administration the White House issued EO 14154 titled “Unleashing American Energy” that seeks to establish American energy dominance through, among other actions, purported revocation of certain executive and regulatory actions taken under the prior U.S.

presidential administration, abolishment of certain offices such as the American Climate Corps and the Interagency Working Group on the Social Cost of Greenhouse Gases and other actions including, for example, directives to revise permitting processes, promote domestic mining and energy production and eliminate the “electric vehicle mandate” by ensuring a level regulatory playing field for gasoline-powered automobiles and eliminating subsidies or other incentives for purchasing electric vehicles (EVs).

Also on January 20, 2025, the White House issued EO 14162, “Putting America First in International Environmental Agreements”, directing the United States’ withdrawal from the Paris Agreement under the United Nations Framework Convention on Climate Change.

It is unclear the impact the Trump Administration and these EOs and others will have on the laws, rules, and regulations applicable to us or on our operations, and we cannot predict future developments related thereto.

Our facilities face significant risks due to physical damage hazards, environmental liability risk exposure, and unplanned or emergency partial or total plant shutdowns which could cause property damage and a material decline in production which may not be fully insured.

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(i) major unplanned maintenance requirements;

(ii) catastrophic events caused by mechanical breakdown, electrical injury, pressure vessel rupture, explosion, contamination, fire, or natural disasters, including floods, windstorms, and other similar events;

(iii) labor supply shortages or labor difficulties that result in a work stoppage or slowdown;

(iv) cessation or suspension of a plant or specific operations

(ii) catastrophic events caused by mechanical breakdown, electrical injury, pressure vessel rupture, explosion,

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dictated by environmental authorities;

contamination, fires, or natural disasters, including floods, windstorms, and other similar events;

(iii) labor supply shortages or labor difficulties that result in a work stoppage or slowdown;

(iv) cessation or suspension of a plant or specific operations dictated by environmental authorities;

(v) acts of terrorism, cyberattacks or other deliberate malicious acts;

and (vi) an event or incident involving a large clean-up, decontamination, or the imposition of laws and ordinances regulating the cost and schedule of demolition or reconstruction, which can cause significant delays in restoring property to its pre-loss condition.

For example, in May 2023, an explosion and resulting fire occurred at our Wynnewood Refinery, which resulted in injuries to two employees (one of whom subsequently passed away).

Operations and equipment at the Wynnewood Refinery were not materially impacted by the incident;

however, any similar events in the future or claims related to the Wynnewood Refinery incident could have a significant impact on the Company and its operations, may not be insured, and could be the subject of litigation or an enforcement action, which could result in significant expense to the Company and which could have a material adverse effect on our results of operations, financial condition and cash flow.

For example, on April 28, 2024, a fire commenced at the Wynnewood Refinery during severe weather and damaged pipe racks and pumps in the area of the naphtha processing units, which damage to the pipe rack impacted service to other units.

Refer to “ Adverse weather conditions or other unforeseen developments could damage our facilities or logistics assets and impair our ability to produce and deliver our products ” below and Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Petroleum Segment” of this Report for additional information on this incident.

Any similar events in the future or claims related thereto could have a significant impact on the Company and its operations, may not be insured, and could be the subject of litigation or an enforcement action, which could result in significant expense to the Company, and which could have a material adverse effect on our results of operations, financial condition and cash flow.

We are insured under casualty, environmental, property, and business interruption insurance policies.

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We continue to work with the applicable governmental authorities to implement remediation of these three sites on a timely basis.

As of December 31, 2023, we have established an accrual of approximately $19 million for probable and reasonably estimable obligations associated with environmental matters, approximately $5 million of which is for remedial activities.

As of December 31, 2024, we have established an accrual of approximately $3 million for probable and reasonably estimable obligations associated with environmental matters.

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Regulations concerning the transportation, storage, and handling of hazardous chemicals and materials could result in higher operating costs.

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Some of these possible changes include increasingly stringent fuel-economy environmental regulations, limits on vehicle weight and size, and increases to federal, state or local taxes, including taxes on motor fuels, which may increase our costs or adversely impact the recruitment of drivers.

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Acts of terror or sabotage, threats of war, armed conflict, or war may have an adverse impact on our business, our future results of operations and our overall financial performance.

Acts of sabotage or terrorist attacks (including cyberattacks), threats of war, armed conflict, or war, as well as events occurring in response to or in connection with such events may harm our business or have an adverse impact on our future results of operations and financial condition.

For example, the conflict between Israel and Hamas, which began in October 2023, and the ongoing Russia-Ukraine war, pose significant geopolitical risks to global crude oil, fertilizer, and agriculture markets.

Acts of terror or sabotage, threats of war, armed conflict, or war or trade wars may have an adverse impact on our business, our future results of operations and our overall financial performance.

Acts of sabotage or terrorist attacks (including cyberattacks), threats of war, armed conflict, or war or trade wars, as well as events occurring in response to or in connection with such events may harm our business or have an adverse impact on our future results of operations and financial condition.

For example, the ongoing Russia-Ukraine war poses significant geopolitical risks to global crude oil, fertilizer, and agriculture markets.

In addition, despite recent de-escalation and the ongoing ceasefire, the conflict between Israel and Hamas, which began in October 2023, continues to pose similar risks to the global crude oil, fertilizer, and agriculture markets.

The threat or imposition of trade restrictions or economic sanctions could lead to further volatility in the price and disruptions in the production and trade of fertilizer, grains, and feedstock.

The ultimate outcome of these conflicts, or further escalation or expansion thereof, and any associated market disruptions are difficult to predict and may affect our business, operations, and cash flows in unforeseen ways.

Critical infrastructure such as petroleum refining and chemical manufacturing facilities may be at greater risk of terrorist attacks than other businesses in the United States.

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Instability in the financial markets as a result of war, terrorism, sabotage or cyberattack could also affect our ability to raise capital, including our ability to repay or refinance debt.

Adverse weather conditions or other unforeseen developments could damage our facilities or logistics assets and impair our ability to produce and deliver our refined petroleum or nitrogen fertilizer products.

The regions in which our facilities are located and in which our customers operate are susceptible to severe storms, including hurricanes, thunderstorms, tornadoes, floods, extended periods of rain, ice storms and snow, some of which we or our customers have experienced in recent years.

Adverse weather conditions or other unforeseen developments could damage our facilities or logistics assets and impair our ability to produce and deliver our products.

The regions in which our facilities are located and in which our customers operate are susceptible to severe storms, hurricanes, thunderstorms, tornadoes, floods, extended periods of rain, ice storms, snow, and wildfires, some of which we or our customers have experienced in recent years.

Such inclement weather conditions or other unforeseen developments could damage our facilities or logistics assets.

If such weather conditions prevail near our facilities or logistics assets, they could interrupt or undermine our ability to produce and transport products or to manage our business.

If events such as storms, including hurricanes, thunderstorms, tornadoes, floods, extended periods of rain, ice storms and snow become more intense or more frequent, they could have an adverse effect on our continued operations, as well as the operations of our suppliers and customers.

If such weather conditions or developments prevail near our facilities or logistics assets, they could interrupt or undermine our ability to produce and transport products or to manage our business.

For example, on April 28, 2024, a fire commenced at the Wynnewood Refinery during severe weather.

The fire was extinguished shortly after it started, no employees or contractors were injured.

The damages were limited to pipe racks and pumps in the area of the naphtha processing units, which damage to the pipe rack impacted service to other units.

During 2024, the Company also experienced weather-related external power outages at both refineries.

If events such as severe storms, hurricanes, thunderstorms, tornadoes, floods, extended periods of rain, ice storms, snow, and wildfires become more intense or more frequent, they could have an adverse effect on our continued operations, as well as the operations of our suppliers and customers.

Regional occurrences, such as energy shortages or increases in commodity prices, geological hazards, and natural disasters, could also have a material adverse effect on our business, financial condition and results of operations.

The physical effects of adverse weather conditions have the potential to directly affect our operations and result in increased costs related to our operations.

The physical effects of adverse weather conditions have the potential to directly affect our operations

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and result in increased costs related to our operations.

Since climate change may change weather patterns and the severity of weather events, any such changes could consequently materially adversely affect our revenues and cash flows and the demand for our products by our customers.

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The limited number of companies available for ammonia transport may also impact the availability of transportation for our Nitrogen Fertilizer Segment’s products.

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Any interruption in the supply of natural gas to our Facilities could have a material adverse effect on our results of operations and financial condition.

Operations at our Facilities depend on the availability of natural gas.

We have two agreements for pipeline transportation of natural gas with expiration dates in April 2025.

We typically purchase natural gas from third parties on a spot basis and, from time to time, we may enter into fixed-price forward purchase contracts.

Upon expiration of the agreements, we may be unable to extend the service under the terms of the existing agreements or renew the agreements on satisfactory terms, or at all, necessitating construction of a new connection that could be costly and disruptive.

Any disruption in the supply of natural gas to our East Dubuque Fertilizer Facility could restrict our ability to continue to make products at the facility and have a material adverse effect on our results of operations and financial condition.

We may be unable to obtain or renew permits or approvals necessary for our operations, which could inhibit our ability to do business.

Our businesses hold numerous environmental and other governmental permits and approvals authorizing operations at our facilities and future expansion of our operations is predicated upon the ability to secure approvals therefore.

A decision by a government agency to deny or delay issuing a new or renewed material permit or approval, or to revoke or substantially modify an existing permit or approval, could have a material adverse effect on our ability to continue operations and on our financial condition, results of operations and cash flows.

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We may not be able to locate or employ such qualified personnel on acceptable terms, or at all.

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Furthermore, our operations require skilled and experienced laborers with proficiency in multiple tasks.

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A failure to do so may increase our costs.

For example, a labor union representing approximately 90 employees at our East Dubuque Fertilizer Facility went on strike in October 2023, after its collective bargaining agreement expired.

While our East Dubuque Fertilizer Facility has been operating during the strike, in the event that the strike continues for a long duration, our operations could be negatively affected.

See Part II, Item 7, “Company Overview—Other Events” for more information.

For example, a labor union representing approximately 90 employees at the East Dubuque Fertilizer Facility went on strike in October 2023, after its collective bargaining agreement expired.

However, the East Dubuque Fertilizer Facility continued to operate during the strike, which ended in February 2024;

and employees began returning to work in March 2024.

In addition, our existing labor agreements may not prevent a strike or work stoppage at any of our facilities in the future, and any work stoppage could negatively affect our results of operations, financial condition and cash flows.

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Inflation has also caused and may in the future cause increases in employee-related costs, both due to higher wages and other compensation.

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We are subject to cybersecurity risks and may experience cyber incidents resulting in disruption or harm to our businesses.

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Although we implement controls on third-party connectivity to our systems, we have limited control in ensuring their systems consistently enforce strong cybersecurity controls.

Any disruption of these systems or security breach or event resulting in the misappropriation, loss or other unauthorized disclosure of confidential information, whether by us directly or our third-party service providers, could damage our reputation, expose us to the risks of litigation and liability, disrupt our business, or otherwise affect our results of operations.

The advancement and use of artificial intelligence (“AI”) also presents both external and internal cybersecurity risks, such as more sophisticated phishing and breach attempts, and the potential for incorrect information generated by AI models to be used for business decisions.

We mitigate these risks through comprehensive cybersecurity training, the deployment of cybersecurity monitoring tools, and regular reviews for external cyber threats, as well as by requiring authorization from the IT and Legal Departments for any AI use case.

Despite our mitigation efforts, any disruption of these systems or security breach or event resulting in the misappropriation, loss or other unauthorized disclosure of confidential information, whether by us directly or our third-party service providers, could damage our reputation, expose us to the risks of litigation and liability, disrupt our business, or otherwise affect our results of operations.

Our business is subject to complex and evolving laws, regulations and security standards regarding privacy, cybersecurity and data protection (“data protection laws”).

Many of these data protection laws are subject to change and uncertain interpretation, and could result in claims, increased costs of operations, or other harm to our business.

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The constantly evolving regulatory and legislative environment surrounding data privacy and protection poses increasingly complex compliance challenges, and complying with such data protection laws could increase the costs and complexity of compliance.

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Inflation in the United States increased beginning in the second half of 2021 and continued into the beginning of 2023, due to a substantial increase in money supply, a stimulative fiscal policy, a significant rebound in consumer demand as COVID-19 restrictions were relaxed, the Russia-Ukraine war and worldwide supply chain disruptions resulting from the economic contraction caused by COVID-19 and lockdowns followed by a rapid recovery.

According to the Consumer Price Index, inflation rose from 5.4% in June 2021 to 7.0% in December 2021 to 8.2% in September 2022.

As of December 2022 and December 2023, inflation was at 6.5% and 3.4%, respectively.

According to the Consumer Price Index, annual inflation was at 2.9% and 3.4% as of December 2024 and 2023, respectively.

An increase in inflation rates could negatively affect our profitability and cash flows, due to higher wages, higher operating costs, higher financing costs and/or higher supplier prices.

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In addition, inflation may adversely affect our customers’ financing costs, cash flows and profitability, which could adversely impact their operations and our ability to offer credit and collect receivables.

Risks Related to the Petroleum Segment

Risks Related to the Petroleum and Renewables Segments

If our Petroleum Segment loses the benefit of a crude oil supply agreement or is unable to gather crude oil in the regions in which we operate, our exposure to the risks associated with volatile crude oil prices may increase, crude oil transportation costs could increase and our liquidity may be reduced.

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Our Petroleum Segment obtains substantially all of its crude oil supply through crude oil gathering operations in Kansas and Oklahoma or through the crude oil intermediation agreement with Gunvor USA LLC.

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Crude oil production disruptions could have a material impact on the Petroleum Segment because in such an event, we may be unable to obtain an adequate supply of crude oil, or we may only be able to obtain crude oil at unfavorable prices and we may experience a reduction in liquidity and our results of operations could be materially adversely affected.

Compliance with the Renewable Fuel Standard (“RFS”) could have a material adverse effect on our business, financial condition and results of operations.

The EPA has promulgated and implemented the RFS pursuant to the Energy Policy Act of 2005 and the EISA.

Compliance with the RFS could have a material adverse effect on our business, financial condition and results of operations.

The EPA has promulgated and implemented the RFS pursuant to the Energy Policy Act of 2005 and the Energy Independence and Security Act.

Under the RFS program, a RIN is assigned to each gallon of renewable fuel produced in or imported into the United States.

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We cannot predict the future prices of RINs.

RIN prices are dependent upon a variety of factors, including EPA regulations, the availability of RINs for purchase, levels of transportation fuels produced, the mix of the petroleum business’ petroleum products, our purchasing as well as the fuel blending performed at the Refineries and downstream terminals, all of which can vary significantly from period to period.

RIN prices may also be impacted by the timing and content of the EPA’s actions or inactions relating to the RFS and communications relating thereto, as well as the actions of market participants, such as non-obligated parties.

RIN prices are dependent upon a variety of factors, including EPA regulations, the availability of RINs for purchase from third parties or our Renewables Segment, levels of transportation fuels produced, the mix of the petroleum business’ petroleum products, our purchasing as well as the fuel blending performed at the Refineries and downstream terminals, all of which can vary significantly from period to period.

RIN prices may also be

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impacted by the timing and content of the EPA’s actions or inactions relating to the RFS and communications relating thereto, as well as the actions of market participants, such as non-obligated parties.

We may also be adversely impacted by the timing by which we purchase RINs, either ratably or at all.

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Changes in our credit profile may affect the way crude oil suppliers view our ability to make payments and may induce them to shorten the payment terms for purchases or require us to post security.

For example, our corporate credit ratings were downgraded in the second half of 2024 and further downgrades to our corporate credit ratings could be seen as a significant change to our credit profile by our crude oil suppliers.

Given the large dollar amounts and volume of our crude oil and other feedstock purchases, a burdensome change in payment terms may have a material adverse effect on liquidity and our ability to make payments to suppliers.

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A failure to operate at full capacity could adversely affect our profitability and cash flows.

The Petroleum Segment’s commodity derivative strategy and/or contracts may limit potential gains, exacerbate potential losses, and involve other risks.

The Petroleum Segment’s commodity derivative strategy and contracts may limit potential gains, exacerbate potential losses, and involve other risks.

We may enter into both short- and long-term commodity derivatives contracts to mitigate crack spread risk with respect to a portion of expected refined products production.

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Moreover, such transactions may limit our ability to benefit from favorable changes in margins.

In addition, our hedging activities may expose us to the risk of financial loss in certain circumstances, including instances in which the volumes of our actual use of crude oil or production of

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the applicable refined products is less than the volumes subject to the hedging arrangement;

In addition, our hedging activities may expose us to the risk of financial loss in certain circumstances, including instances in which the volumes of our actual use of crude oil or production of the applicable refined products is less than the volumes subject to the hedging arrangement;

accidents, interruptions in transportation, inclement weather, or other events cause unscheduled shutdowns or otherwise adversely affect a refinery, suppliers, or customers;

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If we are unable to make up for the delays or to recover the related costs, or if market conditions change, we could materially and adversely affect our financial condition, results of operations or cash flows.

One of the ways we may grow our business is through the conversion or expansion of our existing facilities, such as the conversion of the Wynnewood Refinery’s hydrocracker to an RDU and the conversion of a hydrotreater to renewable diesel service at the Coffeyville Refinery, which were completed in 2022 and 2023, respectively.

One of the ways we may grow our business is through the conversion or expansion of our existing facilities, such as the conversion of the Wynnewood Refinery’s hydrocracker to an RDU, which was completed in 2022, and the conversion of a hydrotreater to renewable diesel service at the Coffeyville Refinery, which is currently being evaluated.

If we are unable to complete capital projects at their expected costs or in a timely manner, our financial condition, results of operations, or cash flows could be materially and adversely affected.

Delays in making required changes or upgrades to our facilities could subject us to fines or penalties and also affect our ability to supply certain products we make.

Delays in making required changes or upgrades to our facilities could subject

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us to fines or penalties and also affect our ability to supply certain products we make.

Moreover, we may construct facilities to capture anticipated future growth in demand for refined products or renewable diesel in a region in which such growth does not materialize, or we may return previously converted equipment to hydrocarbon service based on our expectations concerning market conditions, including but not limited to renewable diesel margins and contractual obligations, and our revenue may not increase immediately upon the expend of funds on a particular project.

In addition, the long-term success of our Petroleum Segment depends on our ability to effectively address energy transition matters, which will require that we continue to adapt our existing facilities to potentially changing government requirements, among other things.

In addition, the long-term success of our Petroleum Segment depends on our ability to adapt to potentially changing government requirements, among other things.

As a result, new capital investments may not achieve our expected investment return, which could materially and adversely affect our financial position, results of operations or cash flows.

Investor and market sentiment towards climate change, fossil fuels, GHG emissions, environmental justice, and other Environmental, Social and Governance (“ESG”) matters could adversely affect our business, cost of capital, and the price of our common stock and debt securities.

Investor and market sentiment towards climate change, fossil fuels, GHG emissions, environmental justice, and other ESG matters could adversely affect our business, cost of capital, and the price of our common stock and debt securities.

There have been efforts in recent years aimed at the investment community, including investment advisors, sovereign wealth funds, public pension funds, universities, and other groups, to promote the divestment of securities of companies in the energy industry, as well as to pressure lenders and other financial services companies to limit or curtail activities with companies in the energy industry.

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If these or similar divestment efforts are continued, the price of our common stock or debt securities, and our ability to access capital markets or to otherwise obtain new investment or financing, may be negatively impacted.

Members of the investment community are also increasing their focus on ESG practices and disclosures, including those related to climate change, GHG emissions targets, business resilience under demand-constraint scenarios, and net-zero ambitions in the energy industry in particular, and diversity, equity, and inclusion initiatives, political activities, and governance standards among companies more generally.

Some members of the investment community are focused on ESG practices and disclosures, including those related to climate change, GHG emissions targets, business resilience under demand-constraint scenarios, and net-zero ambitions in the energy industry in particular, and diversity, equity, and inclusion initiatives, political activities, and governance standards among companies more generally.

In addition to voluntary disclosures in response to investor and stakeholder requests, some governments have also proposed or adopted regulations that impose disclosure obligations with respect to various climate change and other ESG matters.

As a result, we may face negative publicity, increasing pressure regarding our

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ESG practices and disclosures, and demands for ESG-focused engagement commenced by investors, stakeholders, and other interested parties.

As a result, we may face negative publicity, increasing pressure regarding our ESG practices and disclosures, and demands for ESG-focused engagement commenced by investors, stakeholders, and other interested parties.

This could result in higher costs, disruption and diversion of management attention, an increased strain on company resources, and the implementation of certain ESG practices or disclosures that may present a heightened level of legal and regulatory risk, or that threaten our credibility with other investors and stakeholders.

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While we would vehemently defend against any such litigation, we could incur significant costs in such defense and if we failed to prevail and were required to pay significant damages and/or materially alter our business, there could be a material adverse impact on our operations, financial condition or results of operations.

Additionally, members of the investment community may screen companies such as ours for ESG performance and climate-related practices to limit GHG emissions before investing in our common stock or debt securities, or lending to us.

Credit ratings agencies are also increasingly using ESG as a factor in assigning their ratings, which could impact our cost of capital or access to financing.

There has also been an acceleration in investor demand for ESG investing opportunities, and many institutional investors have committed to increasing the percentage of their portfolios that are allocated towards ESG-focused investments.

As a result, there has been a proliferation of ESG-focused investment funds, and market participants seeking ESG-oriented investment products.

There has also been an increase in third-party providers of company ESG ratings, and more ESG-focused voting policies among proxy advisory firms, portfolio managers and institutional investors.

Some investors and stakeholders are also increasingly focused on pursuing strategies centered on ESG-related activism.

In addition, such climate-related trends may lead to decreased demand for products that produce significant GHG emissions and increased demand for products that result in lower emissions than fossil fuel-based products, and our business could be adversely affected.

If we are unable to meet the ESG standards or investment, lending, ratings, or voting criteria and policies set by these parties, we may lose investors, investors may allocate a portion of their capital away from us, we may become a target for ESG-focused activism, our cost of capital may increase, the price of our securities may be negatively impacted, and our reputation may also be negatively affected.

Additionally, the investment community may screen companies like ours for ESG performance and climate-related practices to limit GHG emissions before investing in our common stock, debt securities, or lending to us.

Credit ratings agencies are also using ESG as a factor in assigning their ratings, which could impact our cost of capital or access to financing.

There is also investor demand for ESG investing opportunities, and some institutional investors have committed to increasing the percentage of their portfolios allocated towards ESG-focused investments.

As a result, some investment funds have been reallocated with an ESG focus.

There continue to be third-party providers of company ESG ratings and ESG-focused voting policies among proxy advisory firms, portfolio managers, and institutional investors.

Such climate-related activities could lead to decreased demand for fossil fuel-based products and increased demand for products that result in lower emissions than fossil fuel-based products, and our business could be adversely affected.

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focused activism, our cost of capital may increase, the price of our securities may be negatively impacted, and our reputation may also be negatively affected.

Our Renewables Segment is highly dependent on government credits, resulting in uncertainty and volatility.

Current market prices for renewable feedstocks are higher than the prices for renewable fuels.

As a result, profitability in the Renewables Segment is highly dependent on the prices of government credits generated through the production of renewable fuels, particularly RINs prices, LCFS credit prices, and the BTC.

RINs prices are mainly influenced by supply and demand dynamics, with the demand being heavily impacted by the annual Renewable Volume Obligation levels established by the EPA.

The $1 per gallon BTC expired on December 31, 2024, and its intended replacement, the Clean Fuels Production Credit, has not yet been finalized.

With the loss of the BTC there could be additional volatility in pricing for renewable fuels feedstocks, as well as in prices of other credits generated by renewable fuels production, particularly RINs prices and LCFS credit prices.

Without sufficient government support to stabilize prices for credits generated by renewable fuels production, our Renewables Segment may not be able to generate profits.

Tariffs and bans on renewable feedstocks could result in supply restriction and feedstock pricing volatility.

Although the PTC guidelines have not yet been finalized, one of the proposed measures would exclude certain imported renewable feedstocks from being eligible to claim the credit.

In addition, tariffs imposed by the new Presidential Administration could impact the pricing and availability of imported renewable feedstocks into the United States.

Reduced supplies of imported feedstocks due to tariff restrictions or producers’ inability to claim credits could result in increased demand for domestic feedstocks.

Increased demand for domestic feedstocks could reduce available supplies and increase feedstock pricing, which in turn could negatively impact the profitability of our Renewables Segment.

Our renewables customer base is dependent on some environmental credits only available in certain states, thereby limiting our customer pool.

One of the components of our Renewables Segment’s gross margin and profitability is LCFS credits generated by selling our product to customers who ship it to California.

While several other states offer similar credit programs, such as Oregon and Washington, the California market is significantly larger due to the greater population and fuel demand in the state.

As a result, most of the renewable diesel produced in the U.S.

is shipped to California, which has significantly increased the amount of LCFS credits generated in the state and negatively impacted the pricing for those credits.

Renewable diesel and biodiesel sales as a percentage of total diesel sales in California reached 70% in 2024.

Without a wider adoption of LCFS programs in larger states, the customer pool will likely remain limited to states that currently offer LCFS programs.

Potential Renewables Projects at the Refineries could impact the operations and/or profitability of our Renewables Segment.

Two projects that we have evaluated for the Renewables Segment are the potential conversion of the Wynnewood RDU to produce sustainable aviation fuel (“SAF”), and the potential construction of a new renewable diesel or SAF project at our Coffeyville Refinery.

If we were to proceed with these potential projects, there is no guarantee that operating performance or expected profitability, including that associated with SAF production, will meet expectations.

Moreover, such potential projects could involve the formation of a joint venture, reliance on capital from joint venture partners to fund the project, or the contribution of some of our assets, such as the RDU, to any potential joint venture.

Such actions could reduce the benefits that our Petroleum Segment receives from the RINs generated by the Wynnewood RDU, could fail to produce expected returns, and could otherwise negatively impact the operations and profitability of our Renewables Segment.

Risks Related to the Nitrogen Fertilizer Segment

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agricultural industry can be affected by a number of factors, including weather patterns and field conditions, current and projected grain inventories and prices, domestic and international population changes, demand for U.S.

agricultural products, U.S., state and foreign policies regarding trade in agricultural products, and changes in governmental regulations and incentives for ethanol production that could affect future corn-based ethanol demand and production, including the RFS program.

agricultural products, U.S., state and foreign policies regarding trade in agricultural products, and changes in governmental regulations and incentives for ethanol production that

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could affect future corn-based ethanol demand and production, including the RFS program.

Developments in crop technology could also reduce the use of chemical fertilizers and adversely affect the demand for nitrogen fertilizer.

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Should our Coffeyville Refinery fail to perform in accordance with the existing agreement or to the extent pet coke from the Coffeyville Refinery is insufficient, we would need to purchase pet coke from third parties on the open market, which could negatively impact our results of operations to the extent third-party pet coke is unavailable or available only at higher prices.

Currently, we purchase

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100% of the pet coke our Coffeyville Refinery produces.

Currently, we purchase 100% of the pet coke our Coffeyville Refinery produces.

However, we are still required to procure additional pet coke at fixed prices from third parties to maintain our production rates.

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In addition, an increase in natural gas prices in the United States relative to prices of natural gas paid by foreign nitrogen fertilizer producers may negatively affect our competitive position in the corn belt, and such changes could have a material adverse effect on our results of operations, financial condition, and cash flows.

Any interruption in the supply of natural gas to our East Dubuque Fertilizer Facility could have a material adverse effect on our results of operations and financial condition.

Operations at our East Dubuque Fertilizer Facility depend on the availability of natural gas.

We have two agreements for pipeline transportation of natural gas with expiration dates in 2025.

We typically purchase natural gas from third parties on a spot basis and, from time to time, may enter into fixed-price forward purchase contracts.

Our operations are dependent on third-party suppliers, which could have a material adverse effect on our results of operations, financial condition and cash flows.

Operations of our Coffeyville Fertilizer Facility depend in large part on the performance of third-party suppliers, including the adjacent third-party air separation plant and a third-party electric supplier.

Our nitrogen fertilizer business depends in large part on third-party suppliers, which could have a material adverse effect on our results of operations, financial condition and cash flows.

Our nitrogen fertilizer business depends in large part on the performance of third-party suppliers, such as the adjacent third-party air separation plant and a third-party electric supplier.

Our East Dubuque Fertilizer Facility operations also depend in large part on the performance of third-party suppliers, including for the purchase of electricity.

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Such an event could result in civil lawsuits, fines, penalties and regulatory enforcement proceedings, all of which could lead to significant liabilities.

Any damage or injury to persons, equipment or property or other disruption of our ability to produce or distribute products could result in a significant decrease in operating revenues and significant additional costs to replace or repair and insure our assets, which could have a material adverse effect on our results of operations, financial condition and ability to pay dividends.

Any damage or injury to persons, equipment or property or other disruption of our ability to produce or distribute products could result in a

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significant decrease in operating revenues and significant additional costs to replace or repair and insure our assets, which could have a material adverse effect on our results of operations, financial condition and ability to pay dividends.

In addition, we may incur significant losses or increased costs relating to the operation of railcars used for the purpose of carrying various products, including ammonia.

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(x) increasing our vulnerability to general adverse economic and industry conditions or adverse pricing of products;

(xi) increasing the likelihood for a reduction in the borrowing base under the Amended and Restated ABL Credit Facility (the "CVR Energy ABL Credit Facility"), which certain subsidiaries of the Company are parties to, following a periodic redetermination could require us to repay a portion of our then-outstanding bank borrowings;

(xi) increasing the likelihood for a reduction in the borrowing base under CVR Energy’s Amended and Restated ABL Credit Facility (the “CVR Energy ABL”), which certain subsidiaries of the Company are parties to, following a periodic redetermination could require us to repay a portion of our then-outstanding bank borrowings;

and (xii) limiting our ability to react to changing market conditions in our industries and in respective customers’ industries.

Covenants in our debt agreements could limit our ability to incur additional indebtedness and engage in certain transactions, as well as limit operational flexibility, which could adversely affect our liquidity and ability to pursue our business strategies.

Our debt facilities and instruments contain, and any instruments governing future indebtedness would likely contain, a number of covenants that impose significant operating and financial restrictions on us and our subsidiaries and may limit our ability to engage in acts that may be in our long-term best interest, including restrictions on the ability, among other things, to:

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ability to engage in acts that may be in our long-term best interest, including restrictions on the ability, among other things, to:

incur, assume, or guarantee additional indebtedness or issue redeemable or preferred stock;

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prepay, redeem, or repurchase certain debt;

enter into agreements

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that restrict distributions from restricted subsidiaries;

enter into agreements that restrict distributions from restricted subsidiaries;

make certain payments on debt that is subordinated or secured on a junior basis;

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In addition, a default under existing debt facilities and instruments would trigger a cross default under other agreements and could trigger a cross default under the agreements governing future indebtedness.

Our operating segments’ results may not be sufficient to service existing indebtedness or to fund other expenditures, and we may not be able to obtain financing to meet these requirements.

Our segments’ results may not be sufficient to service existing indebtedness or to fund other expenditures, and we may not be able to obtain financing to meet these requirements.

We may not be able to generate sufficient cash to service existing indebtedness and may be forced to take other actions to satisfy debt obligations that may not be successful.

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future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory, and other factors, many of which are beyond our control;

future ability to borrow under the CVR Energy ABL Credit Facility and CVR Partners’ ABL Credit Facility, the availability of which depends on, among other things, complying with the covenants in the applicable facility;

future ability to borrow under the CVR Energy ABL and the CVR Partners’ ABL, the availability of which depends on, among other things, complying with the covenants in the applicable facility and with covenants in our new term loan facility in the amount of $325 million (the “Term Loan”);

and future ability to obtain other financing.

During the second half of 2024, certain external factors such as volatile commodity pricing, higher industry utilization and oversupply had an unfavorable impact on our business, especially on our Petroleum Segment, and negatively impacted cash from operations, our primary source of liquidity.

The fire incident at the Wynnewood Refinery in the second quarter of 2024 and weather-related external power outages at both refineries in the third quarter of 2024 also contributed to the negative impact on our cash from operations during the second half of 2024, as further discussed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” of this Report.

We cannot offer any assurance that our businesses will generate sufficient cash flow from operations, or that we will be able to draw under our credit facilities or from other sources of financing, in an amount sufficient to fund respective liquidity needs.

In addition, our board of directors may in the future elect to pursue other strategic options, including acquisitions of other businesses or asset purchases, which would reduce cash available to service our debt obligations.

In addition, our Board may in the future elect to pursue other strategic options, including acquisitions of other businesses or asset purchases, which would reduce cash available to service our debt obligations.

If cash flows and capital resources are insufficient to service existing indebtedness, we may be forced to reduce or delay capital expenditures, sell assets, seek additional capital, restructure or refinance existing indebtedness, or seek bankruptcy protection.

These alternative measures may not be successful and may not permit the meeting of scheduled debt service and other obligations.

Our ability to restructure or refinance debt will depend on the condition of the capital markets and our financial condition, including that of our operating segments, at such time.

Our ability to restructure or refinance debt will depend on the condition of the capital markets and our financial condition, including that of our segments, at such time.

Any refinancing of existing debt could be at higher interest rates and may require compliance with more onerous covenants, which could further restrict business operations.

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We are authorized to issue up to a total of 350 million shares of our common stock and 50 million shares of preferred stock, potentially diluting equity ownership of current holders and the share price of our common stock.

Our board of directors may authorize us to issue the available authorized shares of common stock or preferred stock without notice to, or further action by, our stockholders, unless stockholder approval is required by law or the rules of the NYSE.

The issuance of additional shares of common stock or preferred stock may significantly dilute the equity ownership of the current holders of our common stock.

Our Board may authorize us to issue the available authorized shares of common stock or preferred stock without notice to, or further action by, our stockholders, unless stockholder approval is required by law or the rules of the NYSE.

The issuance of

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additional shares of common stock or preferred stock may significantly dilute the equity ownership of the current holders of our common stock.

An increase in interest rates will cause our debt service obligations to increase.

Since March 2022, the Federal Reserve has raised its target range for the federal funds rate by 525 basis points through January 31, 2024.

An increase in the interest rates associated with our floating rate debt would increase our debt service costs and affect our results of operations and cash flow available for payments of our debt obligations.

While the Federal Reserve lowered its target range for the federal funds rate 100 basis points in the later half of 2024, it previously raised the rate by 525 basis points from March 2022 through July 2023.

Any subsequent increase in the interest rates associated with our floating rate debt would increase our debt service costs and affect our results of operations and cash flow available for payments of our debt obligations.

In addition, an increase in interest rates could adversely affect our future ability to obtain financing or materially increase the cost of any additional financing.

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We cannot predict future U.S.

fiscal policy, including with respect to interest rates, and adverse changes with respect thereto have resulted and could again result in a material adverse effect on our results of operations, financial condition and cash flows.

Risks Related to Our Corporate Structure

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Consequently, our cash flow and our ability to meet our obligations or to pay dividends or make other distributions in the future will depend upon the cash flow of our subsidiaries and the payment of funds by our subsidiaries to us in the form of distributions.

Icahn exerts significant influence over the Company, and his interests may conflict with the interests of the Company’s other stockholders.

Icahn indirectly controls approximately 66% of the voting power of our common stock and, by virtue of such stock ownership, is able to control or exert substantial influence over the Company, including the election and appointment of directors;

Icahn exerts significant influence over the Company, and his interests or those of IEP or their affiliates may conflict with the interests of the Company’s other stockholders.

As of December 31, 2024, Mr.

Icahn indirectly controlled approximately 66% of the voting power of our common stock and, by virtue of such stock ownership, is able to control or exert substantial influence over the Company, including the election and appointment of directors;

business strategy and policies;

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The existence of a controlling stockholder may have the effect of making it difficult for, or may discourage or delay, a third-party from seeking to acquire a majority of the Company’s outstanding common stock, which may adversely affect the market price of the Company’s common stock.

On January 8, 2025, IEP acquired via cash tender offer a total of 878,212 additional shares at a price of $18.25 per share, increasing his indirect control of CVR Energy’s outstanding common stock to approximately 67%.

In connection with the tender offer, the Company entered into a Tender Offer Agreement (the “Tender Offer Agreement”) among the Company, IEP, Icahn Enterprises Holdings L.P.

(“Icahn Enterprises”) and Mr.

Icahn (together with IEP and Icahn Enterprises, the “Icahn Parties”), pursuant to which Icahn Enterprises agreed to commence a tender offer to purchase up to 17,753,322 of the outstanding shares of the Company’s common stock, par value $0.01 per share (collectively, the “TO Shares”), at a price of $18.25 per TO Share, subject to any required withholding of taxes, net to seller in cash, without interest (the “Offer”).

Pursuant to the terms of the Tender Offer Agreement, the Company filed with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 disclosing that a special committee of the Board had determined to express no opinion and remain neutral with respect to the Offer.

The foregoing description of the Tender Offer Agreement is qualified in its entirety by reference to the Tender Offer Agreement, which is incorporated by reference as Exhibit 10.45 to this Report and is incorporated herein by reference.

Icahn’s interests may not always be consistent with the Company’s interests or with the interests of the Company’s other stockholders.

Icahn and entities controlled by him may also pursue acquisitions or business opportunities in industries in which we compete, and there is no requirement that any additional business opportunities be presented to us.

Icahn and entities controlled by him may also pursue acquisitions or business opportunities in industries

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in which we compete, and there is no requirement that any additional business opportunities be presented to us.

We also have and may in the future enter into transactions to purchase goods or services with affiliates of Mr.

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In addition, in the event of a sale or transfer of some or all of Mr.

Icahn’s interests in us to an unrelated party or group, a change of control could be deemed to have occurred under the terms of the indenture governing CVR Energy’s 5.750% Senior Notes due 2028, under the indenture governing CVR Partners’ 6.125% Senior Secured Notes due 2028 and under the indenture governing CVR Energy’s 8.500% Senior Notes due 2029, which, in each case, could require the issuers to offer to repurchase all outstanding notes at 101% of their principal amount plus accrued interest to the date of repurchase, and an event of default could be deemed to have occurred under the CVR Energy ABL Credit Facility and under CVR Partners’ ABL Credit Facility, which, in each case, could allow lenders to accelerate indebtedness owed to them.

If such an event were to occur, it is possible that we will not have sufficient funds at the time of the change of control to make the required repurchase of notes or repay amounts outstanding under the CVR Energy ABL Credit Facility or CVR Partners’ ABL Credit Facility, if any.

Icahn’s interests in us to an unrelated party or group, a change of control could be deemed to have occurred under the terms of the indenture governing CVR Energy’s 5.750% Senior Notes due 2028, under the indenture governing CVR Partners’ 6.125% Senior Secured Notes due 2028 and under the indenture governing CVR Energy’s 8.500% Senior Notes due 2029, which, in each case, could require the issuers to offer to repurchase all outstanding notes at 101% of their principal amount plus accrued interest to the date of repurchase, and an event of default could be deemed to have occurred under the CVR Energy ABL and the CVR Partners ABL, which, in each case, could allow lenders to accelerate indebtedness owed to them.

Our stock price may decline due to sales of shares by Mr.

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Icahn could elect in the future to request that the Company file a registration statement to sell shares of the Company’s common stock.

Icahn were to sell a large number of shares into the public markets, Mr.

Icahn could cause the price of the Company’s common stock to decline.

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Icahn were to sell a large number of shares into the public markets, or if investors perceived that such a sale may occur, the price of the Company’s common stock could decline.

We cannot predict future fluctuations in our stock price resulting from actions of Mr.

Icahn, nor can we control perceptions in the market or investor sentiment with respect to actions Mr.

Icahn may or may not take concerning his ownership of our common stock.

We are a “controlled company” within the meaning of the NYSE rules and, as a result, qualify for, and are relying on, exemptions from certain corporate governance requirements.

A company of which more than 50% of the voting power is held by an individual, a group, or another company is a “controlled company” within the meaning of the NYSE rules and may elect not to comply with certain corporate governance requirements of the NYSE, including the requirements that a majority of our board of directors consist of independent directors;

we have a nominating/corporate governance committee that is composed entirely of independent directors;

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Public stockholders who might desire to participate in such a transaction may not have the opportunity to do so.

These anti-takeover provisions could substantially impede the ability of public stockholders to benefit from a change of control or change in our management and board of directors.

These provisions include preferred stock that could be issued by our board of directors to make it more difficult for a third-party to acquire, or to discourage a third-party from acquiring, a majority of our outstanding voting stock;

These anti-takeover provisions could substantially impede the ability of public stockholders to benefit from a change of control or change in our management and Board.

These provisions include preferred stock that could be issued by our Board to make it more difficult for a third-party to acquire, or to discourage a third-party from acquiring, a majority of our outstanding voting stock;

limitations on the ability of stockholders to call special meetings of stockholders;

limitations on the ability of stockholders to act by written consent in lieu of a stockholders’ meeting;

and advance notice requirements for nominations of candidates for election to our board of directors or for proposing matters that can be acted upon by our stockholders at stockholder meetings.

and advance notice requirements for nominations of candidates for election to our Board or for proposing matters that can be acted upon by our stockholders at stockholder meetings.

Compliance with and changes in the tax laws could adversely affect our performance.

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New tax laws and regulations are continuously being enacted or proposed that could result in increased expenditures for tax liabilities in the future.

We cannot predict whether any future

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changes to U.S.

tax policy, including as a result of the new presidential administration, will occur, nor can we predict the impact to our business of any such changes.

In August 2022, President Biden signed into law the Inflation Reduction Act.

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Therefore, treatment of CVR Partners as a corporation would result in a material reduction in the anticipated cash flow and after-tax return to its common unitholders (including us), likely causing a substantial reduction in the value of such common units.

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We may have liability to repay distributions that are wrongfully distributed to us.

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Moreover, the Company may terminate the services agreement with CVR Partners at any time, subject to a 90-day notice period.

In addition, key executive officers of the Company, including its president and chief executive officer, chief financial officer, and general counsel, will face conflicts of interest if decisions arise in which CVR Partners and the Company have conflicting points of view or interests.

In addition, key executive officers of the Company, including its president and chief

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executive officer, chief financial officer, and general counsel, will face conflicts of interest if decisions arise in which CVR Partners and the Company have conflicting points of view or interests.

General Risks Related to CVR Energy

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Our joint ventures involve similar risks.

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We are subject to the risk of becoming an investment company.

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For instance, crude oil price volatility can significantly impact working capital on a week-to-week and month-to-month basis.

Operational issues at our facilities, including the fire incident at the Wynnewood Refinery in the second quarter of 2024 and weather-related external power outages at both refineries in the third quarter of 2024, negatively impacted our cash from operations during 2024.

Moreover, the planned turnaround at the Coffeyville Refinery started in January 2025, with a total estimated cash outlay of $175 million to $200 million.

As a result of these factors, the Board elected to suspend payment of the cash dividend in October 2024 and has implemented additional cost-saving factors that are discussed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” of this Report.

If we cannot generate adequate cash flow or otherwise secure sufficient liquidity to meet our working capital needs or support our short-term and long-term capital requirements, we may be unable to meet our debt obligations, pursue our business strategies, or comply with certain environmental standards, which would have a material adverse effect on our business and results of operations.

Our ability to pay dividends on our common stock is subject to market conditions and numerous other factors.

Dividends are subject to change at the discretion of the board of directors and may change from quarter to quarter and may not be paid at historical rates or at all.

Our ability to continue paying dividends is subject to our ability to continue to generate sufficient cash flow from our operating segments, and the amount of dividends we are able to pay each year may vary, possibly substantially, based on market conditions, crack spreads, our capital expenditure and other business needs, covenants contained in any debt agreements we may enter into in the future, covenants contained in existing debt agreements, and the amount of distributions we receive from CVR Partners.

Dividends are subject to change at the discretion of the Board and may change from quarter to quarter and may not be paid at historical rates or at all.

Our ability to continue paying dividends is subject to our ability to continue to generate sufficient

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cash flow from our segments, and the amount of dividends we are able to pay each year may vary, possibly substantially, based on market conditions, crack spreads, our capital expenditure and other business needs, covenants contained in any debt agreements we may enter into in the future, covenants contained in existing debt agreements, and the amount of distributions we receive from CVR Partners.

If the amount of our dividends decreases, the trading price of our common stock could be materially adversely affected as a result.

As described further below, volatile commodity pricing and higher industry utilization and oversupply have had an unfavorable impact on our business and have negatively impacted our cash from operating activities and liquidity.

As a result, in October 2024, the Board elected to suspend payment of the cash dividend, defer new growth capital spending, and reduce certain expected capital expenditures, as further discussed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” of this Report.

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 1A. Risk Factors