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Leases | 12 Months Ended
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Dec. 31, 2021
Leases [Abstract] |
Leases | (4) Leases Lease Overview We lease certain pipelines, storage tanks, railcars, office space, land, and equipment across our refining, fertilizer, and corporate operations. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 20 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. Certain of our lease agreements include rental payments which are adjusted periodically for factors such as inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Additionally, we do not have any material lessor or sub-leasing arrangements. Balance Sheet Summary as of December 31, 2021 and 2020 The following table summarizes the right of use asset and lease liability balances for the Company’s operating and finance leases at December 31, 2021 and 2020:
| December 31, 2021 |  | December 31, 2020
(in millions) | Operating Leases |  | Finance Leases |  | Operating Leases |  | Finance Leases
ROU assets, net |  |  |  |  |  |  |
Pipeline and storage | $ | 17 |  |  | $ | 23 |  |  | $ | 15 |  |  | $ | 26 |
Railcars | 6 |  |  | — |  |  | 8 |  |  | — |
Real estate and other | 14 |  |  | 18 |  |  | 14 |  |  | 21 |
Lease liability |  |  |  |  |  |  |
Pipelines and storage | $ | 17 |  |  | $ | 35 |  |  | $ | 16 |  |  | $ | 38 |
Railcars | 6 |  |  | — |  |  | 8 |  |  | — |
Real estate and other | 14 |  |  | 19 |  |  | 14 |  |  | 22 |
Lease Expense Summary for the Year Ended December 31, 2021, 2020 and 2019 We recognize lease expense on a straight-line basis over the lease term and short-term lease expense within Direct operating expenses (exclusive of depreciation and amortization). For the year ended December 31, 2021, 2020, and 2019, we recognized lease expense comprised of the following components:
| Year Ended December 31,
(in millions) | 2021 |  | 2020 |  | 2019
Operating lease expense | $ | 15 |  |  | $ | 17 |  |  | $ | 12 |
Finance lease expense: |  |  |  |  |
Amortization of ROU asset | $ | 6 |  |  | $ | 6 |  |  | $ | 7 |
Interest expense on lease liability | 5 |  |  | 6 |  |  | 6 |
Short-term lease expense | $ | 7 |  |  | $ | 8 |  |  | $ | 8 |
Lease Terms and Discount Rates The following outlines the remaining lease terms and discount rates used in the measurement of the Company’s ROU assets and liabilities:
| December 31, 2021 |  | December 31, 2020
| Operating Leases |  | Finance Leases |  | Operating Leases |  | Finance Leases
Weighted-average remaining lease term | 4.1 years |  | 7.2 years |  | 3.1 years |  | 8.1 years
Weighted-average discount rate | 5.4 | % |  | 9.0 | % |  | 5.5 | % |  | 9.0 | %
Maturities of Lease Liabilities The following summarizes the remaining minimum lease payments through maturity of the Company’s right-of-use assets and liabilities at December 31, 2021:
(in millions) | Operating Leases |  | Finance Leases
Year Ended December 31, |  |  |
2022 | $ | 14 |  |  | $ | 11 |
2023 | 12 |  |  | 10 |
2024 | 8 |  |  | 10 |
2025 | 3 |  |  | 10 |
2026 | 1 |  |  | 10 |
Thereafter | 4 |  |  | 23 |
Total lease payments | 42 |  |  | 74 |
Less: imputed interest | (5) |  |  | (20) |
Total lease liability | $ | 37 |  |  | $ | 54 |
On July 31, 2020, Coffeyville Resources Nitrogen Fertilizers, LLC (“CRNF”), a subsidiary of CVR Partners, and Messer LLC (“Messer”) entered into an On-Site Product Supply Agreement (the “Messer Agreement”). On February 21, 2022, CRNF entered into the First Amendment to the On-Site Product Supply Agreement (the “Messer Amendment”, and collectively, the “Amended Messer Agreement”) with Messer. Under the Amended Messer Agreement, among other obligations, Messer is obligated to supply and make certain capital improvements during the term of the Amended Messer Agreement, and CRNF is obligated to take as available and pay for, oxygen, nitrogen, and compressed dry air from Messer’s facility. This arrangement for CRNF’s purchase of oxygen, nitrogen, and dry air from Messer does not meet the definition of a lease under FASB Accounting Standards Codification (“ASC”) Topic 842, Leases, (“Topic 842”), as CRNF does not expect to receive substantially all of the output of Messer’s on-site production from its air separation unit over the life of the Amended Messer Agreement. The Amended Messer Agreement also obligates Messer to install a new oxygen storage vessel, related equipment and infrastructure (“Oxygen Storage Vessel” or “Vessel”) to be used solely by the Coffeyville Fertilizer Facility. This arrangement for the use of the Oxygen Storage Vessel meets the definition of a lease under Topic 842, as CRNF will receive all output associated with the Vessel. Based on terms outlined in the Amended Messer Agreement, the Company expects the lease of the Oxygen Storage Vessel to be classified as a financing lease with an amount of approximately $25 million being capitalized upon lease commencement when the Vessel is placed in service.
Leases | (4) Leases Lease Overview We lease certain pipelines, storage tanks, railcars, office space, land, and equipment across our refining, fertilizer, and corporate operations. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 20 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. Certain of our lease agreements include rental payments which are adjusted periodically for factors such as inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Additionally, we do not have any material lessor or sub-leasing arrangements. Balance Sheet Summary as of December 31, 2021 and 2020 The following table summarizes the right of use asset and lease liability balances for the Company’s operating and finance leases at December 31, 2021 and 2020:
| December 31, 2021 |  | December 31, 2020
(in millions) | Operating Leases |  | Finance Leases |  | Operating Leases |  | Finance Leases
ROU assets, net |  |  |  |  |  |  |
Pipeline and storage | $ | 17 |  |  | $ | 23 |  |  | $ | 15 |  |  | $ | 26 |
Railcars | 6 |  |  | — |  |  | 8 |  |  | — |
Real estate and other | 14 |  |  | 18 |  |  | 14 |  |  | 21 |
Lease liability |  |  |  |  |  |  |
Pipelines and storage | $ | 17 |  |  | $ | 35 |  |  | $ | 16 |  |  | $ | 38 |
Railcars | 6 |  |  | — |  |  | 8 |  |  | — |
Real estate and other | 14 |  |  | 19 |  |  | 14 |  |  | 22 |
Lease Expense Summary for the Year Ended December 31, 2021, 2020 and 2019 We recognize lease expense on a straight-line basis over the lease term and short-term lease expense within Direct operating expenses (exclusive of depreciation and amortization). For the year ended December 31, 2021, 2020, and 2019, we recognized lease expense comprised of the following components:
| Year Ended December 31,
(in millions) | 2021 |  | 2020 |  | 2019
Operating lease expense | $ | 15 |  |  | $ | 17 |  |  | $ | 12 |
Finance lease expense: |  |  |  |  |
Amortization of ROU asset | $ | 6 |  |  | $ | 6 |  |  | $ | 7 |
Interest expense on lease liability | 5 |  |  | 6 |  |  | 6 |
Short-term lease expense | $ | 7 |  |  | $ | 8 |  |  | $ | 8 |
Lease Terms and Discount Rates The following outlines the remaining lease terms and discount rates used in the measurement of the Company’s ROU assets and liabilities:
| December 31, 2021 |  | December 31, 2020
| Operating Leases |  | Finance Leases |  | Operating Leases |  | Finance Leases
Weighted-average remaining lease term | 4.1 years |  | 7.2 years |  | 3.1 years |  | 8.1 years
Weighted-average discount rate | 5.4 | % |  | 9.0 | % |  | 5.5 | % |  | 9.0 | %
Maturities of Lease Liabilities The following summarizes the remaining minimum lease payments through maturity of the Company’s right-of-use assets and liabilities at December 31, 2021:
(in millions) | Operating Leases |  | Finance Leases
Year Ended December 31, |  |  |
2022 | $ | 14 |  |  | $ | 11 |
2023 | 12 |  |  | 10 |
2024 | 8 |  |  | 10 |
2025 | 3 |  |  | 10 |
2026 | 1 |  |  | 10 |
Thereafter | 4 |  |  | 23 |
Total lease payments | 42 |  |  | 74 |
Less: imputed interest | (5) |  |  | (20) |
Total lease liability | $ | 37 |  |  | $ | 54 |
On July 31, 2020, Coffeyville Resources Nitrogen Fertilizers, LLC (“CRNF”), a subsidiary of CVR Partners, and Messer LLC (“Messer”) entered into an On-Site Product Supply Agreement (the “Messer Agreement”). On February 21, 2022, CRNF entered into the First Amendment to the On-Site Product Supply Agreement (the “Messer Amendment”, and collectively, the “Amended Messer Agreement”) with Messer. Under the Amended Messer Agreement, among other obligations, Messer is obligated to supply and make certain capital improvements during the term of the Amended Messer Agreement, and CRNF is obligated to take as available and pay for, oxygen, nitrogen, and compressed dry air from Messer’s facility. This arrangement for CRNF’s purchase of oxygen, nitrogen, and dry air from Messer does not meet the definition of a lease under FASB Accounting Standards Codification (“ASC”) Topic 842, Leases, (“Topic 842”), as CRNF does not expect to receive substantially all of the output of Messer’s on-site production from its air separation unit over the life of the Amended Messer Agreement. The Amended Messer Agreement also obligates Messer to install a new oxygen storage vessel, related equipment and infrastructure (“Oxygen Storage Vessel” or “Vessel”) to be used solely by the Coffeyville Fertilizer Facility. This arrangement for the use of the Oxygen Storage Vessel meets the definition of a lease under Topic 842, as CRNF will receive all output associated with the Vessel. Based on terms outlined in the Amended Messer Agreement, the Company expects the lease of the Oxygen Storage Vessel to be classified as a financing lease with an amount of approximately $25 million being capitalized upon lease commencement when the Vessel is placed in service.

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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