CVR Energy (CVI) risk factors, FY2024 10-K

Risks Related to Our Entire Business

1. 01Our 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
2. 02Certain 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
3. 03Our businesses face intense competition
4. 04Our 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
5. 05Public health crises have had, and may continue to have, adverse impacts on our business, financial condition, results of operations, and liquidity
6. 06Our 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
7. 07If licensed technology were no longer available or able to be licensed economically or at all, our business may be adversely affected
8. 08Compliance 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
9. 09Our 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
10. 10We could incur significant costs in cleaning up contamination at or associated with our facilities
11. 11Regulations concerning the transportation, storage, and handling of hazardous chemicals and materials could result in higher operating costs
12. 12Acts 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
13. 13Adverse weather conditions or other unforeseen developments could damage our facilities or logistics assets and impair our ability to produce and deliver our products
14. 14If our access to transportation on which we rely for the supply of our feedstocks and the distribution of our products is interrupted, our inventory and costs may increase and we may be unable to distribute our products efficiently or at all
15. 15Any interruption in the supply of natural gas to our Facilities could have a material adverse effect on our results of operations and financial condition
16. 16We may be unable to obtain or renew permits or approvals necessary for our operations, which could inhibit our ability to do business
17. 17We are subject to strict laws and regulations regarding employee and process safety, and failure to comply with these laws and regulations could have a material adverse effect on our results of operations, financial condition and profitability
18. 18Our business may suffer due to the departure of any of our key senior executives or other key employees. Furthermore, a shortage of skilled labor may make it difficult for us to maintain labor productivity
19. 19A portion of our workforce is unionized, and we are subject to the risk of labor disputes, slowdowns or strikes, which may disrupt our business and increase our costs
20. 20We are subject to cybersecurity risks and may experience cyber incidents resulting in disruption or harm to our businesses
21. 21An increase in inflation could have adverse effects on our results of operations

Risks Related to the Petroleum and Renewables Segments

1. 22If 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
2. 23Compliance with the RFS could have a material adverse effect on our business, financial condition and results of operations
3. 24Changes in our credit profile may affect our relationship with our suppliers, which could have a material adverse effect on our liquidity and ability to operate the Refineries at full capacity
4. 25The Petroleum Segment’s commodity derivative strategy and contracts may limit potential gains, exacerbate potential losses, and involve other risks
5. 26If we are unable to complete capital projects at their expected costs, in a timely manner or at all, or if the market conditions assumed in project economics deteriorate, our financial condition, results of operations or cash flows could be adversely affected
6. 27Investor 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
7. 28Our Renewables Segment is highly dependent on government credits, resulting in uncertainty and volatility
8. 29Tariffs and bans on renewable feedstocks could result in supply restriction and feedstock pricing volatility
9. 30Our renewables customer base is dependent on some environmental credits only available in certain states, thereby limiting our customer pool
10. 31Potential Renewables Projects at the Refineries could impact the operations and/or profitability of our Renewables Segment

Risks Related to the Nitrogen Fertilizer Segment

1. 32Any decline in U.S. agricultural production or limitations on the use of nitrogen fertilizer for agricultural purposes could have a material adverse effect on the sales, and on our results of operations, financial condition and cash flows
2. 33Failure by our Coffeyville Refinery or other third parties to continue to supply our Coffeyville Fertilizer Facility with pet coke could negatively impact the Nitrogen Fertilizer Segment’s results of operations
3. 34The market for natural gas has been volatile, and fluctuations in natural gas prices could affect our competitive position
4. 35Our 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
5. 36Any liability for accidents involving ammonia or other products we produce or transport that cause severe damage to property or injury to the environment and human health could have a material adverse effect on our results of operations, financial condition and ability to pay dividends
6. 37significant 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

Risks Related to Our Capital Structure

1. 38Instability and volatility in the capital, credit, and commodity markets in the global economy could negatively impact our business, financial condition, results of operations and cash flows
2. 39Our indebtedness may increase and affect our ability to operate our businesses, and have a material adverse effect on our financial flexibility, financial condition and results of operations
3. 40Covenants 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
4. 41We 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
5. 42We 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
6. 43An increase in interest rates will cause our debt service obligations to increase

Risks Related to Our Corporate Structure

1. 44The Company’s reorganization of its entities and assets could trigger increased costs, complexity and risks
2. 45We are a holding company and depend upon our subsidiaries for our cash flow
3. 46We 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
4. 47We have various mechanisms in place to discourage takeover attempts, which may reduce or eliminate our stockholders’ ability to sell their shares for a premium in a change of control transaction
5. 48Compliance with and changes in the tax laws could adversely affect our performance
6. 49changes 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

Risks Related to Our Ownership in CVR Partners

1. 50We may have liability to repay distributions that are wrongfully distributed to us
2. 51CVR Partners is managed by the executive officers of its general partner, who are employed by and also serve as part of the senior management team of the Company. Conflicts of interest could arise as a result of this arrangement
3. 52The acquisition, expansion and investment strategy of our businesses involves significant risks
4. 53We are subject to the risk of becoming an investment company
5. 54Internally generated cash flows and other sources of liquidity may not be adequate for the capital needs of our businesses
6. 55Our ability to pay dividends on our common stock is subject to market conditions and numerous other factors