XML 57 R18.htm IDEA: XBRL DOCUMENT v3.24.3
Fair Value Measurements
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements
(11) Fair Value Measurements

Assets and liabilities measured at fair value on a recurring basis

The following tables set forth information about the assets and liabilities measured at fair value on a recurring basis, by input level, as of September 30, 2024 and December 31, 2023. Such amounts are presented on a gross basis, before the effects of netting and allocation of collateral. The Company elected to offset the fair value amounts recognized for derivative assets and liabilities executed with the same counterparty under a master netting arrangement, including fair value amounts recognized for the right to reclaim or the obligation to return cash collateral.
September 30, 2024
Fair Value HierarchyTotal gross fair valueContract netting
Collateral netting (1)
Net value
(in millions)Level 1Level 2Level 3
Assets
Commodity derivative instruments$— $32 $— $32 $(16)$— $16 
Liabilities
Commodity derivative instruments— 23 —23 (16)— 7 
RFS— 374 —374 — — 374 
December 31, 2023
Fair Value HierarchyTotal gross fair valueContract netting
Collateral netting (1)
Net value
(in millions)Level 1Level 2Level 3
Assets
Commodity derivative instruments$— $31 $— $31 $(6)$— $25 
Liabilities
Commodity derivative instruments— 6 —6 (6)— — 
RFS— 329 —329 — — 329 
(1)At September 30, 2024 and December 31, 2023, the Company had $12 million and $13 million of collateral under master netting arrangements not offset against the derivatives within Other current assets on the Condensed Consolidated Balance Sheets, respectively, primarily related to initial margin requirements.

The Petroleum Segment’s commodity derivative contracts consist of exchange traded futures, commodity price swaps, and sale and purchase forwards that are measured at fair value using a market approach based on available broker quoted market prices of identical or similar instruments. Similarly, RFS obligations are measured at fair value using a market approach based on available broker quoted market RIN spot prices for each specific or closest vintage year.

The Company had no transfers of assets or liabilities between any of the above levels during the nine months ended September 30, 2024 and year ended December 31, 2023.

Assets and liabilities measured at fair value on a nonrecurring basis

CVR Partners performed a nonrecurring fair value measurement of the equity interest received as part of the 45Q Transaction in January 2023. Such valuation used a combination of the market approach and the discounted cash flow methodology with key inputs including the discount rate, contractual and expected future cash flows, and market multiples. In January 2023, CVR Partners determined the estimated fair value of the consideration received to be $46 million, which is a non-recurring Level 3 measurement, as defined by FASB ASC Topic 820, Fair Value Measurements, based on the use of CVR Partners’ own assumptions described above. There are no other assets or liabilities that were measured at fair value on a nonrecurring basis for the periods presented.
Assets and liabilities not required to be measured at fair value

CVR Energy holds cash equivalents which consist primarily of bank time deposits with maturities of 90 days or less. Cash and cash equivalents and reserved funds had carrying and fair values of $534 million and $1.2 billion at September 30, 2024 and December 31, 2023, respectively, and are classified as Level 1 in the fair value hierarchy.

Long-term debt of $1.5 billion and $2.1 billion at September 30, 2024 and December 31, 2023, respectively, had estimated fair values of $1.5 billion and $2.1 billion, respectively, and are classified as Level 2 in the fair value hierarchy.

Other short-term financial assets and liabilities, which consist of restricted cash, accounts receivable, accounts payable, and operating and finance lease obligations, are carried at cost on the Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023 and approximate their estimated fair values.