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Commitments and Contingencies | 12 Months Ended
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Dec. 31, 2024
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | (14) Commitments and Contingencies Unconditional Purchase Obligations The minimum required payments for unconditional purchase obligations, as defined in ASC 440, Commitments, primarily related to transportation agreements are as follows:
(in millions) | Unconditional Purchase Obligations
Year Ended December 31, |
2025 | $ | 73 |
2026 | 75 |
2027 | 96 |
2028 | 96 |
2029 | 94 |
Thereafter | 577 |
| $ | 1,011 |
Expenses associated with these obligations are included in Direct operating expenses (exclusive of depreciation and amortization), and, for the years ended December 31, 2024, 2023, and 2022, totaled $75 million, $72 million, and $72 million, respectively. Crude Oil Supply Agreement The Petroleum Segment has a crude oil supply agreement with Gunvor USA LLC (“Gunvor”), which commenced on January 1, 2024 (as amended, the “Gunvor Crude Oil Supply Agreement”), pursuant to which Gunvor supplies the Petroleum Segment with certain crude oil and intermediation logistics helping to reduce the amount of inventory held at certain locations and mitigate crude oil pricing risk. The Gunvor Crude Oil Supply Agreement replaced a similar agreement with a different supplier that expired on December 31, 2023. Volumes contracted under these agreements, as a percentage of the total crude oil purchases (in barrels), were approximately 21%, 26%, and 34% for the years ended December 31, 2024, 2023, and 2022, respectively. The Gunvor Crude Oil Supply Agreement, which currently extends through January 31, 2026, is subject to automatic one-year renewals following the expiration of the initial term in the absence of either party providing 180 days’ notice of termination. 45Q Transaction Under the agreements entered into in connection with the 45Q Transaction, the Company’s indirect subsidiary CRNF is obligated to meet certain minimum quantities of carbon oxide supply each year during the term of the agreement and is subject to fees of up to $15 million per year (reduced pro rata for partial years) to the unaffiliated third-party investors, subject to an overall $45 million cap, if these minimum quantities are not delivered. CVR Partners issued a guarantee to the unaffiliated third-party investors and certain of their affiliates involved in the 45Q Transaction of the payment and performance obligations of CRNF and CVRP JV, which include the aforementioned fees. This guarantee has no impacts on the accounting records of CVR Partners unless the parties fail to comply with the terms of the 45Q Transaction contracts. Contingencies Call Option Coverage Cases - The Company and certain of its affiliates (the “Call Defendants”) are engaged in two lawsuits relating to settlement of the consolidated lawsuits (collectively, the “Call Option Lawsuits”) filed by purported former unitholders of CVR Refining on behalf of themselves and an alleged class of similarly situated unitholders against the Company and certain of its affiliates (the “Call Defendants”) relating to the Company’s exercise of the call option under the CVR Refining Amended and Restated Agreement of Limited Partnership assigned to it by CVR Refining’s general partner including the Stipulation, Compromise and Release (the “Settlement”), which Settlement was entered into in August 2022 and had no further impact on the Company’s financial position or results of operations beyond the amount recognized within Other (expense) income, net in the Consolidated Statements of Operations for the year ended December 31, 2022. In the Texas declaratory judgment action commenced by the Company’s primary and excess insurers (the “Insurers”) seeking determination that the Insurers owe no indemnity coverage under policies with coverage limits of $50 million, the Call Defendants have appealed the entry of summary judgment by the lower court to the Texas First Court of Appeals, which appeal remains pending. In the Delaware action filed by the Call Defendants against the Insurers seeking recovery of all amounts paid in connection with Settlement, mediation in 2024 was unsuccessful and motion practice remains in process. While both cases remain pending, the Company does not expect the outcome of these lawsuits to have a material adverse impact on the Company’s financial position, results of operations, or cash flows. Renewable Fuel Standard - Coffeyville Resources Refining & Marketing, LLC (“CRRM”) and Wynnewood Refining Company, LLC (“WRC”, and together with CRRM, the “obligated-party subsidiaries”) are subject to the RFS implemented by the U.S. Environmental Protection Agency (the “EPA”), which requires obligated parties to blend a certain amount of renewable fuels, called a Renewable Volume Obligation (“RVO”), into their transportation fuels or purchase renewable fuel credits, known as RINs, in lieu of blending. The Petroleum Segment’s obligated-party subsidiaries are not able to blend the majority of their transportation fuels with renewable fuels and, unless their RFS obligations are waived or exempted, must either purchase RINs from third parties including its affiliate or obtain waiver credits for cellulosic biofuels in order to comply with the RFS. For the years ended December 31, 2024, 2023, and 2022, the Company’s obligated-party subsidiaries recognized, net of RINs sales, an expense of approximately $46 million, a benefit of $114 million, and an expense of $435 million, respectively, for their compliance with the RFS (based on the 2020 through 2024 renewable volume obligation (“RVO”), for the respective periods, excluding the impacts of any exemptions or waivers to which the Company’s obligated-party subsidiaries may be entitled). The costs to comply with the RFS obligation through purchasing of RINs not otherwise reduced by blending of ethanol, biodiesel, or renewable diesel are included within Cost of materials and other in the Consolidated Statements of Operations. At each reporting period, to the extent RINs purchased and generated through blending are less than the RFS obligation (excluding the impact of exemptions or waivers to which the Company may be entitled), the remaining position is valued using RIN market prices at period end for each specific or closest vintage year. As of December 31, 2024 and 2023, the Company’s obligated-party subsidiaries’ RFS positions were approximately $323 million and $329 million, respectively, and are recorded in Other current liabilities in the Consolidated Balance Sheets. RFS Disputes - CRRM and WRC have been parties to numerous lawsuits relating to the RFS, including lawsuits relating to petitions for small refinery exemptions (“SREs”) filed by WRC for the 2017 through 2024 compliance periods, which petitions are in various stages of review by the EPA and/or various courts, primarily including the following: •Regarding WRC’s petitions for the 2017 to 2021 compliance periods which, together with the SRE petitions from certain other small refineries, had been denied by the EPA in 2022 (the “2022 Denials”), the EPA has yet to act on those petitions after the EPA’s denials were vacated by the United States Court of Appeals for the Fifth Circuit (the “Fifth Circuit”) in November 2023 and remanded back to the EPA on the grounds that the EPA’s denials were impermissibly retroactive and that the EPA’s interpretation was contrary to law and arbitrary and capricious as applied to petitioners’ exemptions. In May 2024, the EPA and certain biofuels groups sought certiorari before the Supreme Court of the United States (“SCOTUS”) seeking review of whether venue for these challenges to the 2022 Denials lies exclusively in the United States Court of Appeals for the District of Colombia Circuit (the “DC Circuit”), which certiorari was granted in October 2024. Oral argument is expected sometime in 2025. •Regarding WRC’s petition for the 2022 compliance period, that petition was denied by the EPA in July 2023 largely on the same grounds as the 2022 Denials and had been stayed by the Fifth Circuit pending issuance of the mandate in a case brought by other small refiners in July 2024 in the DC Circuit, which ruled in favor of certain small refineries also challenging the 2022 Denials, holding that the 2022 Denials as applicable to those small refineries was arbitrary and capricious, vacating such denials and remanding such petitions back to the EPA. The DC Circuit also dismissed a challenge brought by biofuel producers to the EPA’s alternative compliance action, concluding that the petitioners had not established any harm from EPA’s decision and therefore lacked standing to sue. WRC’s SRE petition for the 2022 compliance period, which was denied by the EPA in July 2023 largely on the same grounds as the 2022 Denials, had been stayed pending issuance of the mandate in the DC Circuit case. •Regarding WRC’s petition for the 2023 compliance period, the United States District Court for the Southern District of Texas ruled in favor of WRC in its suit seeking a declaration that the Administrator of the EPA violated the CAA by failing to rule on WRC’s petition within 90 days, and issued a ruling that EPA must act on WRC’s petition in January 2025. In January 2025, the EPA denied WRC’s petition. In February 2025, WRC filed a petition with the Fifth Circuit seeking stay of WRC’s obligations under the RFS. In its filings with the Fifth Circuit in February 2025, the EPA reported that it was reviewing its denial and did not oppose WRC’s stay. •Regarding WRC’s petition for the 2024 compliance period, EPA has not yet ruled on WRC’s petition despite its ninety day deadline. WRC served on the EPA a notice of intent to sue EPA for this failure. As these matters are in various stages, the Company cannot yet determine at this time the outcomes of these matters. While we intend to prosecute these actions vigorously, if these matters are ultimately concluded in a manner adverse to the Company, they could have a material effect on the Company’s financial position, results of operations, or cash flows. Guaranty Dispute – In connection with mediation conducted in September 2024, Exxon Mobil Corporation (“XOM”) formally demanded, pursuant to a guaranty claimed by XOM to have been issued in its favor in 1993 by a subsidiary of CVR Energy (the “Alleged Guaranty”), that such subsidiary defend and indemnify it against claims by numerous property owners in Louisiana alleging contamination from historic well operations relating to oil and gas leases in Lousiana sold by XOM in 1993 (the “LA Leases”). The Company disputes the validity of the alleged guaranty and has filed suit in the Superior Court of the State of Delaware for declaratory judgment relating thereto, which suit remains pending. While CVR Energy vigorously opposes XOM’s claims, if the Alleged Guaranty is determined to obligate CVR Energy to indemnify XOM for all damages it could incur relating to the LA Leases, it could have a material effect on CVR Energy’s financial position, results of operations, or cash flows. However, as this matter remains in its early stages, the Company cannot yet determine whether it will have such an outcome. Environmental, Health, and Safety (“EHS”) Matters Environmental Accruals - As of December 31, 2024 and 2023, environmental accruals which also include estimated costs for future remediation efforts at certain Petroleum Segment sites, totaled approximately $3 million and $19 million, respectively. These amounts are reflected in Other current liabilities and Other long-term liabilities depending on when the Company expects to expend such amounts.

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