Cvr Energy Inc 8-K, filed Nov 3, 2026
Cvr Energy Inc (CVI)
About this 8-K
Cvr Energy Inc filed this 8-K on November 3, 2026.
CVR Energy entered a definitive agreement to acquire Marathon Petroleum Corporation’s Saint Paul Park, Minnesota and Mandan, North Dakota refineries and related marketing business; the acquisition remains subject to closing conditions and required regulatory approvals. AI summary
Items reported
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
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| Item 8.01. | Other Events. |
As previously reported in the Current Report on Form 8-K filed by CVR Energy, Inc. (the “Company”) with the Securities and Exchange Commission (the “SEC”) on November 3, 2026, the Company entered into a definitive agreement with subsidiaries and affiliates of Marathon Petroleum Corporation (“Marathon”) under which CVR Energy will acquire Marathon’s Saint Paul Park, Minnesota and Mandan, North Dakota refineries, along with Marathon’s related marketing business (the “Acquisition”).
This Current Report on Form 8-K is being filed to provide the following documents for purposes of incorporating them by reference into one or more documents the Company intends to file with the SEC:
| • | Combined financial statements of The Mandan and Saint Paul Park Refining Business of Marathon Petroleum Corporation, consisting of the combined balance sheets as of December 31, 2025 and 2024 and the related combined statements of income (loss), of cash flows and of changes in net parent investment for the years then ended, together with the notes thereto and the report of PricewaterhouseCoopers LLP, independent auditors, dated September 14, 2026 (Exhibit 99.1). |
| • | Unaudited condensed combined financial statements of The Mandan and Saint Paul Park Refining Business of Marathon Petroleum Corporation, consisting of the unaudited condensed combined balance sheet as of September 30, 2026, the unaudited condensed combined balance sheet as of December 31, 2025 and the related unaudited condensed combined statements of income, of cash flows and of changes in net parent investment for the nine months ended September 30, 2026 and 2025, together with the notes thereto (Exhibit 99.2). |
| • | Unaudited pro forma condensed combined financial information of the Company giving effect to the Acquisition and related financing transactions, consisting of the unaudited pro forma condensed combined balance sheet as of September 30, 2026 and the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2025 and the nine months ended September 30, 2026 and 2025, together with the notes thereto (Exhibit 99.3). |
| • | Consent of PricewaterhouseCoopers LLP (Exhibit 23.1). |
The documents listed above are filed as exhibits to this Current Report on Form 8-K and incorporated herein by reference.
The unaudited pro forma condensed combined financial information is presented for illustrative purposes only and is not necessarily indicative of the financial position or results of operations that would have been achieved had the Acquisition and the related financing transactions occurred on the dates indicated or of the Company’s future financial position or results of operations. The Acquisition has not yet been consummated and remains subject to the satisfaction or waiver of certain closing conditions set forth in the acquisition agreement described above, including receipt of required regulatory approvals. No assurance can be given that the Acquisition or the related financing transactions will be consummated on the terms contemplated or at all.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
The following exhibits are filed as part of this Current Report on Form 8-K:
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: November 3, 2026
| CVR Energy, Inc. | ||
| By: | /s/ Richard J. Roberts, Jr. | |
| Richard J. Roberts, Jr. | ||
| Interim Chief Financial Officer, Vice President - Financial Planning & Analysis and Investor Relations | ||
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 333-291199) of CVR Energy Inc. of our report dated September 14, 2026, relating to the combined financial statements of The Mandan and Saint Paul Park Refining Business of Marathon Petroleum Corporation, which appears in this Current Report on Form 8-K of CVR Energy Inc.
/s/ PricewaterhouseCoopers LLP
Toledo, Ohio
November 3, 2026
Exhibit 99.1
The Mandan and Saint Paul Park Refining Business of Marathon Petroleum Corporation
Combined Financial Statements
As of December 31, 2025, and December 31, 2024 and
for the twelve months ended December 31, 2025 and December 31, 2024
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The Mandan and Saint Paul Park Refining Business of Marathon Petroleum Corporation
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Report of Independent Auditors
To the Management of Marathon Petroleum Corporation
Opinion
We have audited the accompanying combined financial statements of The Mandan and Saint Paul Park Refining Business of Marathon Petroleum Corporation (the “Business”), which comprise the combined balance sheets as of December 31, 2025 and 2024, and the related combined statements of income (loss), of changes in net parent investment and of cash flows for the years then ended, including the related notes (collectively referred to as the “combined financial statements”).
In our opinion, the accompanying combined financial statements present fairly, in all material respects, the financial position of the Business as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Combined Financial Statements section of our report. We are required to be independent of the Business and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Combined Financial Statements
Management is responsible for the preparation and fair presentation of the combined financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of combined financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the combined financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Business’s ability to continue as a going concern for one year after the date the combined financial statements are available to be issued.
Auditors’ Responsibilities for the Audit of the Combined Financial Statements
Our objectives are to obtain reasonable assurance about whether the combined financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the combined financial statements.
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In performing an audit in accordance with US GAAS, we:
| • | Exercise professional judgment and maintain professional skepticism throughout the audit. |
| • | Identify and assess the risks of material misstatement of the combined financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the combined financial statements. |
| • | Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Business’s internal control. Accordingly, no such opinion is expressed. |
| • | Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the combined financial statements. |
| • | Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Business’s ability to continue as a going concern for a reasonable period of time. |
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
/s/ PricewaterhouseCoopers LLP
Toledo, Ohio
September 14, 2026
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The Mandan and Saint Paul Park Refining Business of Marathon Petroleum Corporation
Combined Statements of Income (Loss)
| December 31, | ||||||||
| (In millions) | 2025 | 2024 | ||||||
| Revenues and other income: |
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| Sales and other operating revenues |
$ | 7,476 | $ | 7,496 | ||||
| Related party revenues |
246 | 268 | ||||||
| Income from equity method investment |
7 | 6 | ||||||
| Related party other income |
6 | 6 | ||||||
| Other income |
3 | 3 | ||||||
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| Total revenues and other income |
7,738 | 7,779 | ||||||
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| Costs and expenses: |
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| Cost of revenues (excludes items below) |
2,917 | 3,201 | ||||||
| Related party cost of revenues |
4,133 | 4,326 | ||||||
| Depreciation and amortization |
111 | 117 | ||||||
| Selling, general and administrative expenses |
167 | 152 | ||||||
| Other taxes |
20 | 18 | ||||||
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| Total costs and expenses |
7,348 | 7,814 | ||||||
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| Income (loss) before income taxes |
390 | (35 | ) | |||||
| Provision for income taxes |
101 | (8 | ) | |||||
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| Net income (loss) |
$ | 289 | $ | (27 | ) | |||
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The accompanying notes are an integral part of these Combined Financial Statements.
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The Mandan and Saint Paul Park Refining Business of Marathon Petroleum Corporation
| December 31, | ||||||||
| (In millions) | 2025 | 2024 | ||||||
| ASSETS |
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| Receivables |
$ | 34 | $ | 43 | ||||
| Related party receivables |
4 | 3 | ||||||
| Inventories |
440 | 462 | ||||||
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| Total current assets |
478 | 508 | ||||||
| Equity method investment |
162 | 166 | ||||||
| Property, plant and equipment, net |
858 | 910 | ||||||
| Intangibles, net |
46 | 43 | ||||||
| Other noncurrent assets |
25 | 26 | ||||||
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| Total assets |
$ | 1,569 | $ | 1,653 | ||||
| LIABILITIES |
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| Accounts payable |
$ | 135 | 138 | |||||
| Related party payables |
2 | 2 | ||||||
| Payroll and benefits payable |
26 | 25 | ||||||
| Accrued taxes |
142 | 133 | ||||||
| Environmental obligations |
46 | 114 | ||||||
| Other current liabilities |
3 | 4 | ||||||
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| Total current liabilities |
354 | 416 | ||||||
| Deferred income tax liabilities |
53 | 33 | ||||||
| Other long-term liabilities |
23 | 28 | ||||||
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| Total liabilities |
430 | 477 | ||||||
| Commitments and contingencies (see Note 12) |
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| EQUITY |
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| Net parent investment |
1,139 | 1,176 | ||||||
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| Total liabilities and equity |
$ | 1,569 | $ | 1,653 | ||||
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The accompanying notes are an integral part of these Combined Financial Statements.
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The Mandan and Saint Paul Park Refining Business of Marathon Petroleum Corporation
Combined Statements of Cash Flows
| December 31, | ||||||||
| (In millions) | 2025 | 2024 | ||||||
| Operating activities: |
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| Net income (loss) |
$ | 289 | $ | (27 | ) | |||
| Adjustments to reconcile net income to net cash provided by operating activities |
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| Depreciation and amortization |
111 | 117 | ||||||
| Deferred income taxes |
20 | (8 | ) | |||||
| Share-based compensation expenses |
7 | 6 | ||||||
| Income from equity method investment |
(7 | ) | (6 | ) | ||||
| Distributions from unconsolidated affiliates |
11 | 14 | ||||||
| Changes in: |
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| Receivables, net |
8 | (10 | ) | |||||
| Inventories |
21 | 39 | ||||||
| Accounts payable |
(4 | ) | (2 | ) | ||||
| Payroll and benefits payable |
1 | 1 | ||||||
| Accrued taxes |
8 | 13 | ||||||
| Environmental obligations |
(68 | ) | (88 | ) | ||||
| Other assets and liabilities |
(3 | ) | 1 | |||||
| All other, net |
5 | 4 | ||||||
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| Net cash provided by operating activities |
399 | 54 | ||||||
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| Investing activities: |
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| Additions to property, plant, and equipment and intangibles |
(69 | ) | (56 | ) | ||||
| Disposal of assets |
2 | — | ||||||
| Proceeds from asset sales |
1 | — | ||||||
| Net cash used in investing activities |
(66 | ) | (56 | ) | ||||
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| Financing activities: |
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| Net transfers from (to) Parent |
(333 | ) | 2 | |||||
| Net cash used for financing activities |
(333 | ) | 2 | |||||
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| Net change in cash, cash equivalents and restricted cash |
$ | — | — | |||||
| Cash, cash equivalents and restricted cash at beginning of period |
— | — | ||||||
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| Cash, cash equivalents and restricted cash at end of period |
$ | — | $ | — | ||||
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| Supplemental data |
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| Cash paid during the year for: |
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| Operating lease payments |
2 | 2 | ||||||
The accompanying notes are an integral part of these Combined Financial Statements.
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The Mandan and Saint Paul Park Refining Business of Marathon Petroleum Corporation
Combined Statements of Changes in Net Parent Investment
| (In millions) | Total | |||
| Balance January 1, 2024 |
$ | 1,195 | ||
| Net loss |
(27 | ) | ||
| Net transfers from (to) Parent |
8 | |||
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| Balance December 31, 2024 |
$ | 1,176 | ||
| Net income |
289 | |||
| Net transfers from (to) Parent |
(326 | ) | ||
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| Balance December 31, 2025 |
$ | 1,139 | ||
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The accompanying notes are an integral part of these Combined Financial Statements.
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Notes to Combined Financial Statements
1. Description of the Business and Basis of Presentation
Description of the Business
The accompanying Combined Financial Statements and notes present the Combined Statements of Income (Loss), Balance Sheets, Cash Flows, and Changes in Net Parent Investment of the Mandan and Saint Paul Park (“SPP”) refineries and accompanying refining logistics assets (“the Business,” “we,” or “our”) of Marathon Petroleum Corporation (“MPC” or “Parent”) and its midstream subsidiary MPLX LP (“MPLX”).
The Business operates as crude oil refineries within MPC’s mid-continent refining system. SPP, located in St. Paul Park, Minnesota, has a crude oil refining capacity of approximately 105,000 barrels per calendar day (“bpcd”) and processes sweet and heavy sour crude oils into gasoline, distillates, asphalt, propane, heavy fuel oil, natural gas liquids (“NGLs”), and petrochemicals, with distribution by truck, rail, and barge. The Mandan Refinery, located in Mandan, North Dakota, has a crude oil refining capacity of approximately 72,000 bpcd and processes primarily sweet domestic crude oil from North Dakota into gasoline, distillates, propane, heavy fuel oil, NGLs, and petrochemicals, with distribution by truck and rail. The combined crude oil refining capacity is approximately 177,000 bpcd.
The Business also owns a 17% interest in the Minnesota Pipe Line Company (“MPL”) along with Flint Hills Resources and Trof, Inc. MPL, transports crude oil to the Business’ SPP and Flint Hills Resources’ Pine Bend refineries.
Basis of Presentation
These Combined Financial Statements have been derived from the MPC consolidated financial statements and accounting records of MPC. These Combined Financial Statements include all majority-owned and controlled subsidiaries and reflect the combined historical results of operations, financial position and cash flows of the Business for the periods presented as historically managed within MPC in conformity with generally accepted accounting principles in the United States (“GAAP”). The Combined Financial Statements may not be indicative of the Business’ future performance and do not necessarily reflect what the financial position, results of operations and cash flows would have been had it operated as an independent company during the periods presented.
Transactions among components included within the Business have been eliminated and transactions with MPC, MPLX, and other affiliates outside of the Business have been retained as related party transactions in these Combined Financial Statements. Related party transactions between the Business and Parent have been settled through Net parent investment with the net effect reflected in the Combined Statements of Cash Flows as a financing activity and in the Combined Balance Sheets as Net parent investment. Related party transactions between the Business and MPLX historically settled in cash have been reflected in the Combined Balance Sheets as Related party receivables and payables with the net effect reflected in the Combined Statements of Cash Flows as operating activities. See Note 4 for additional information. The Business’ investments in which the Business exercises significant influence but does not control and does not have a controlling financial interest are accounted for using the equity method.
Historically, MPC provided certain corporate functions to the Business and costs associated with these functions were allocated to the Business. These functions include, but are not limited to, executive management, legal, human resources, treasury, finance, accounting, internal audit, information technology, and the related benefit costs associated with such functions, such as stock-based compensation. The costs of such services were allocated to the Business based on direct usage when identifiable, with the remainder allocated on a pro rata basis using an applicable measure of income from operations, total assets, headcount, or other relative drivers applied to the relevant cost pools. The charges for these functions are deemed settled in cash by the Business to MPC in the period in which the costs were recorded within Selling, general and administrative expenses and Cost of revenues in the Combined Statements of Income (Loss). Management believes the basis on which the expenses have been allocated is a reasonable reflection of the utilization of services provided to, or the benefit received by, the Business during the periods presented; however, they may not be indicative of the actual expense that would have been incurred had the Business been operating as an independent company for the periods presented. Actual costs that may have been incurred if the Business had been an independent company could materially differ from the amounts allocated as the costs would depend on a number of factors, including
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the organizational structure, whether functions were outsourced or performed by employees, and strategic decisions made in areas such as information technology and infrastructure. Management does not believe, however, that it is practicable to estimate what these expenses would have been for the periods presented had the Business operated as an independent company, including any expenses associated with obtaining any of these services from unaffiliated entities.
MPC utilizes a centralized treasury management function for financing its operations, with cash from MPC’s operating companies, including the Business, swept to shared MPC cash pooling accounts. The cash and cash equivalents held by MPC at the corporate level are not specifically identifiable to the Business and therefore have not been reflected in the Business’ Combined Balance Sheets. Cash transfers between the Parent and the Business are accounted for through Net parent investment.
The Combined Financial Statements include certain assets and liabilities that have historically been held at the Parent corporate level but are specifically identifiable or otherwise attributable to the Business. MPC’s third-party long-term debt and the related interest expense have not been allocated to the Business for any of the periods presented as the Business was not the legal obligor of such debt and the MPC borrowings were not directly attributable to the Business.
Current and deferred income taxes have been determined based on the stand-alone results of the Business; however, because the Business filed as part of MPC’s tax group in certain jurisdictions, the Business’ actual tax balances may differ from those reported. The Business’ portion of income tax expense is deemed to have been settled in the period the related tax expense was recorded.
Unless otherwise noted, all figures within the Combined Financial Statements are stated in U.S. Dollars (“USD”) and millions.
| 2. | Summary of Principal Accounting Policies |
Use of Estimates
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the respective reporting periods. Actual results could differ materially from those estimates. Estimates are subject to uncertainties due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and affect items such as valuing identified intangible assets; evaluating impairments of long-lived assets and equity investments; establishing estimated useful lives for long-lived assets; estimating revenues, expense accruals and capital expenditures; valuing asset retirement obligations; recognizing equity-based compensation expense; and determining liabilities, if any, for environmental and legal contingencies.
Revenue Recognition
Revenue is measured based on consideration specified in a contract with a customer. The Business recognizes revenue when it satisfies a performance obligation by transferring control over a product or providing services to a customer.
The vast majority of the Business’ contracts contain pricing that is based on the market price for the product at the time of delivery. The Business’ obligations to deliver product volumes are typically satisfied and revenue is recognized when control of the product transfers to its customers. Concurrent with the transfer of control, the Business typically receives the right to payment for the delivered product, the customer accepts the product, and the customer has significant risks and rewards of ownership of the product. Payment terms require customers to pay shortly after delivery and do not contain significant financing components.
Revenues from services are recognized over time when the performance obligation is satisfied as services are provided in a series. The Business has elected to use the output measure of progress to recognize revenue based on the units delivered, processed or transported.
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Taxes collected from customers and remitted to the appropriate taxing authority are excluded from revenue. See Note 10 for further information on Revenue.
Revenue and Expense Accruals
The Business routinely makes accruals based on estimates for both revenues and expenses due to the timing of compiling billing information, receiving certain third-party information and reconciling the Business’ records with those of third parties. The delayed information from third parties includes, among other things, actual volumes purchased, transported or sold, invoices for purchases, and other operating expenses. The Business makes accruals to reflect estimates for these items based on its internal records and information from third parties. Estimated accruals are adjusted when actual information is received from third parties and the Business’ internal records have been reconciled.
Cost Classifications
Cost of revenues consists of the cost of crude oil, other feedstocks, purchased refined products, the related in-bound freight and transportation costs, direct costs of labor, maintenance and services, utilities, property taxes, environmental compliance costs and other direct operating costs incurred in connection with the Business’ refining operations and logistics assets. These expenses exclude depreciation related to refining and logistics assets that are integral to the refinery production process, which is presented separately as Depreciation and amortization expense as a component of Cost and expenses on the Business’ Combined Statements of Income (Loss).
Accounts Receivables and Allowance for Expected Credit Loss
Receivables primarily consist of customer accounts receivable, which are recorded at the invoiced amount and generally do not bear interest. Allowances for expected credit losses are estimated and recognized at each reporting period and are recorded as provision for credit losses. The allowance for expected credit loss is the best estimate of the amount of expected credit losses over the contractual life of the receivables in customer accounts receivable. The Business reviews the allowance quarterly and past-due balances over 150 days are reviewed individually for collectability. Balances that remain outstanding after reasonable collection efforts have been unsuccessful are written off against the allowance when deemed uncollectible and a credit to accounts receivable. The Business does not have an allowance for expected credit loss as of December 31, 2025 or December 31, 2024.
Leases
Contracts with a term greater than one year that convey the right to direct the use of and obtain substantially all of the economic benefit of an asset are accounted for as right-of-use (“ROU”) assets and lease liabilities.
ROU asset and lease liability balances are recorded at the commencement date at present value of the fixed lease payments using a secured incremental borrowing rate with a maturity similar to the lease term because our leases do not provide implicit rates. The Business has elected to include both lease and non-lease components in the present value of the lease payments for all lessee asset classes with the exception of third-party contractor service and equipment leases. The lease component of the payment for the equipment asset classes is determined using a relative standalone selling price. Operating lease expense is recognized on a straight-line basis over the lease term.
Other noncurrent assets include right-of-use assets of $5 million and $6 million as of December 31, 2025 and 2024, respectively. Other current liabilities include current operating lease liabilities of $2 million and $2 million, and other long-term liabilities include noncurrent operating lease liabilities of $3 million and $4 million, as of December 31, 2025 and 2024, respectively.
Inventories
Inventories are carried at the lower of cost or net realizable value. Cost of inventories is determined primarily under the FIFO method. The method differs to that of the parent who uses LIFO. Management believes that this method is preferable as it improves comparability with a majority of the Business’ small and midsize refinery peers. Additionally, utilizing FIFO also reflects a more appropriate valuation of the assets as the users of the financial statements place a greater emphasis on the balance sheet and FIFO results in an inventory value that is more indicative of current market prices compared to LIFO.
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No prior periods have previously been presented, and all periods reflect the application of FIFO. Because LIFO is applied at a consolidated level by MPC, and not at each location, it is not possible to determine what the amount of inventory would be on a LIFO basis for the combined entities and operations without undue cost and effort. See Note 6 for further information.
Investments
The Business holds an investment in an equity method investee. An equity investment is an investment in which the Business exercises significant influence but does not control and is not the primary beneficiary, are accounted for using the equity method and are reported in equity method investment on the accompanying Combined Balance Sheets. Differences in the basis of the investment and the net asset value of the investee, if any, are amortized into net income over the remaining useful lives of the underlying assets and liabilities, except for the excess related to goodwill. The equity method investment is evaluated for impairment whenever changes in the facts and circumstances indicate an other than temporary loss in value has occurred. When the loss is deemed to be other than temporary, the carrying value of the equity method investment is written down to fair value. See Note 5 for further information on equity method investment held by the Business.
An equity investment without a readily determinable fair value includes ownership rights that do not provide the Business with control or significant influence. An equity investment without a readily determinable fair value is recorded at cost and adjusted for subsequent observable price changes as of the date that an observable transaction takes place.
Equity securities without a readily determinable fair value are measured at cost minus impairment and are reported within Other noncurrent assets on the Combined Balance Sheets and approximated $19 million and $19 million as of December 31, 2025 and 2024, respectively.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost and depreciated on a straight-line basis over the estimated useful lives of the assets, generally 4 to 40 years for buildings, refinery, machinery and other equipment, and 4 to 30 years for other fixed assets. Such assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If the sum of the expected undiscounted future cash flows from the use of the asset group and its eventual disposition is less than the carrying amount of the asset group, an impairment assessment is performed and the excess of the book value over the fair value of the asset group is recorded as an impairment loss.
When items of property, plant and equipment are sold or otherwise disposed of, any gains or losses are reported in net income. Gains on the disposal of property, plant and equipment are recognized when earned, which is generally at the time of closing. If a loss on disposal is expected, such losses are recognized when the assets are classified as held for sale.
Interest expense is capitalized for qualifying assets under construction. Capitalized interest costs are included in property, plant and equipment and are depreciated over the useful life of the related asset. See Note 7 for further information on property, plant and equipment.
Intangibles
Amortization of intangibles with definite lives is calculated using the straight-line method, which is reflective of the benefit pattern in which the estimated economic benefit is expected to be received over the estimated useful life of the intangible asset. Intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible may not be recoverable. If the sum of the expected undiscounted future cash flows related to the asset is less than the carrying amount of the asset, an impairment loss is recognized based on the fair value of the asset. See Note 8 for additional disclosures about our intangible assets.
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Major Maintenance Activities
Costs for planned turnaround and other major maintenance activities are expensed in the period incurred. These types of costs include contractor repair services, materials and supplies, equipment rentals and our labor costs.
Pension and Other Postretirement Benefits
MPC-sponsored defined benefit plans
Many of the Business’ employees participate in defined benefit pension plans administered and sponsored by MPC. The Business does not record assets or liabilities to recognize the funded status of the plan because the Combined Financial Statements reflect the cost for these plans as if they were multi-employer plans. Costs are allocated to the Business. These costs reflect the Business’ employees’ proportionate share of total cost in MPC plans in which they participate as well as an allocation of MPC’s corporate cost for these plans. The Business was allocated service costs of $8 million and $8 million for the years ended December 31, 2025 and 2024, respectively, recorded within Cost of revenues and Selling, general and administrative expenses in the Combined Statements of Income (Loss).
Defined contribution plans
The Business also contributes to a defined contribution plan for eligible employees. Contributions to this plan totaled $7 million and $6 million in 2025 and 2024, respectively.
Environmental Costs
Environmental expenditures for additional equipment that mitigates or prevents future contamination or improves environmental safety or efficiency of the existing assets are capitalized. The Business recognizes remediation costs and penalties when the responsibility to remediate is probable and the amount of associated costs can be reasonably estimated. The timing of remediation accruals coincides with the completion of a feasibility study or the commitment to a formal plan of action. Remediation liabilities are accrued based on estimates of known environmental exposure and are discounted when the estimated amounts are reasonably fixed and determinable. If recoveries of remediation costs from third parties are probable, a receivable is recorded and is discounted when the estimated amount is reasonably fixed and determinable.
Asset Retirement Obligations
The fair value of asset retirement obligations is recognized in the period in which the obligations are incurred if a reasonable estimate of fair value can be made. The majority of the recognized asset retirement liability relates to conditional asset retirement obligations for removal and disposal of fire-retardant material from certain refining facilities. The remaining recognized asset retirement liability relates to other refining assets, certain pipelines and processing facilities and other related pipeline assets. The fair values recorded for such obligations are based on the most probable current cost projections. See Note 12 for further information on asset retirement obligations.
Income Taxes
Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their tax bases. Deferred tax assets are recorded when it is more likely than not that they will be realized. The realization of deferred tax assets is assessed periodically based on several factors, primarily our expectation to generate sufficient future taxable income. See Note 9 for further information on income taxes.
Accrued Taxes
The Business is subject to federal, state, or local excise taxes and other transactional taxes based on the sale of products. The liabilities for such taxes are recognized in the period in which the related taxable transaction occurs and are included in Accrued taxes on the Combined Balance Sheets until remitted to the applicable taxing authority.
13
Share-Based Compensation
The fair value of restricted stock awards granted to our employees is determined based on the fair market value of our common stock on the date of grant. The fair value of performance awards granted to our employees is determined using a Monte Carlo valuation model, which is updated quarterly, with appropriate mark-to-market adjustments made.
Our share-based compensation expense is recognized based on management’s estimate of the awards that are expected to vest, using the straight-line attribution method for all service-based awards with a graded vesting feature. Awards expected to vest are estimated using the historical data of our own employees. If actual forfeiture results are different than expected, adjustments to recognized compensation expense may be required in future periods. Unearned share-based compensation is charged to equity when restricted stock awards are granted. Compensation expense is recognized over the requisite service period and is adjusted if conditions of the restricted stock award are not met. See Note 11 for further information on share-based compensation.
Concentrations of Risk
The Business has a concentration of transactions with customers in the same industry. For the periods ended December 31, 2025 and December 31, 2024, one customer accounted for approximately 12% and 10%, respectively, of the Business’ total revenues and other income. The remaining customers account for less than 10% of the Business’ total revenues and other income.
Environmental Credits and Obligations
In order to comply with certain regulations, specifically the Renewable Fuel Standards (“RFS”) requirements implemented by the Environmental Protection Agency (“EPA”) and the cap-and-trade emission reduction program and low carbon fuel standard implemented by state programs, the Business is required to reduce its emissions, blend certain levels of biofuels or obtain allowances or credits to offset the obligations created by the Business’ operations. In regard to each program, the Business records an asset to Environmental credits on the Combined Balance Sheets, for allowances or credits owned in excess of our anticipated current period compliance requirements. The asset value is based on the product of the excess allowances or credits as of the balance sheet date, if any, and the weighted average cost of those allowances or credits. The Business did not have environmental credits as of December 31, 2025 or December 31, 2024. The Business records a liability to Environment obligations on the Combined Balance Sheets, when there are deficient allowances or credits based on the product of the deficient amount as of the balance sheet date, if any, and either the fixed contract price or the market price of the allowances or credits as of the balance sheet date. The cost of allowances or credits used for compliance is reflected in Cost of revenues in the Combined Statements of Income (Loss). Any gains or losses on the sale or expiration of allowances or credits are classified as Other income on the Combined Statements of Income (Loss). The Business did not sell allowances or credits for the twelve months ended December 31, 2025 or December 31, 2024.
Environmental obligations on the Combined Balance Sheets approximated $46 million and $114 million as of December 31, 2025 and 2024, respectively. The environmental obligation value in each period is primarily impacted by the timing of receipt of exemption credits, the settlement timing of obligations and changes in renewable fuel standards requirements. The decrease was primarily due to the receipt of the Mandan small refinery exemption (SRE) credit for $114 million which was offset by an increase in obligations. The EPA approved the SRE for the 2023 and 2024 compliance periods in August 2025. The Business recognized the $114 million compliance credit in Cost of revenues for the year ended December 31, 2025 and reduced the Environmental obligation by $114 million as of December 31, 2025 in the Combined Statements of Income (Loss) and Combined Balance Sheets, respectively.
14
| 3. | Accounting Standards Recently Adopted |
Recently Adopted
ASU 2023-01, Leases (Topic 842): Common Control Arrangements
The Financial Accounting Standards (“FASB”) issued this Accounting Standards Update (“ASU”) to amend certain provisions of Accounting Standards Codification (“ASC”) 842 that apply to arrangements between related parties under common control. The ASU amends the accounting for the amortization period of leasehold improvements in common-control leases for all entities and requires certain disclosures when the lease term is shorter than the useful life of the asset. During the first quarter of 2024, the Business adopted this ASU and it did not have a material impact on our financial statements or disclosures.
ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures
In December 2023, the FASB issued this ASU to update income tax disclosure requirements to provide consistent categories and greater disaggregation of information in the rate reconciliation and to disaggregate income taxes paid by jurisdiction. The Business adopted this ASU in 2025 and applied the amendments on a retrospective basis. The enhanced income tax disclosures are presented in Note 9.
| 4. | Related Party Transactions |
Transactions with MPC
Cash Management Agreement
The Business participates in MPC’s centralized treasury management function for financing its operations. MPC utilizes a centralized treasury management function for financing its operations, with all cash from its operating companies, including the Business, swept to shared MPC cash pooling accounts. Our net cash balance with MPC is included in Net parent investment on the Combined Balance Sheets, and the net cash activity is classified under financing activities on the Combined Statements of Cash Flows.
Trade Receivables Program
MPC participates in a trade receivables securitization program with a group of lenders. The trade receivables facility consists of certain of MPC’s wholly owned subsidiaries (“Originators”), including the Business, selling or contributing on an on-going basis all of the trade receivables generated by them (the “Pool Receivables”), together with all related security and interests in the proceeds thereof, without recourse, to another wholly owned, bankruptcy-remote special purpose entity (“BRSPE”), MPC Trade Receivables Company I LLC (“TRC”), in exchange for a combination of cash, equity and/or borrowings under a subordinated note issued by TRC to one or more of the Originators. MPC accounts for transfers under these securitization arrangements as sales because full title and ownership in the underlying receivables and control of the receivables is considered transferred and its assets are not available to MPC creditors. MPC wholly owns and therefore consolidates the BRSPE in its consolidated financial statements.
As the BRSPE is not owned or controlled by the Business, the activities of the BRSPE is not presented in the Combined Financial Statements of the Business. The Business receivables included within MPC’s trade receivables securitization program, and transferred to the BRSPE, was $206 million and $202 million as of December 31, 2025 and 2024, respectively. These receivables have been derecognized and removed from our Combined Balance Sheets at the date of transfer.
Allocation of Centralized Costs
The Combined Statements of Income (Loss) include expenses of certain centralized functions and other programs provided and/or administered by MPC and MPLX that are charged directly to the Business. The functions and programs provided by the Parent include, but are not limited to, general corporate expenses such as executive management, legal, human resources, treasury, finance, accounting, internal audit, information technology, and the related benefit costs associated with such functions, such as stock-based compensation. In addition, for purposes of preparing these
15
Combined Financial Statements, a portion of MPC’s total corporate general and administrative expenses have been allocated to the Business. These expenses have been allocated to the Business based on a pro rata basis using an applicable measure of income from operations, total assets, headcount, or other relative drivers applied to the relevant cost pools. Details on MPC programs included in the centralized allocations are included below. The table below presents a summary of centralized allocations to the Business from MPC:
| December 31, | ||||||||
| (In millions) | 2025 | 2024 | ||||||
| Allocation of centralized costs: |
||||||||
| Cost of revenues |
$ | (2 | ) | $ | 13 | |||
| Selling, general and administrative expenses |
109 | 100 | ||||||
|
|
|
|
|
|||||
| Total corporate allocations |
$ | 107 | $ | 113 | ||||
|
|
|
|
|
|||||
Related Party Transactions
The Combined Financial Statements have been prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of MPC. Historically, the Business has entered into transactions with MPC and its affiliates in the ordinary course of its operations. The nature of these transactions are similar to those the Business enters into with third parties, which include but are not limited to, purchases of crude oil and feedstock and the sale of refined products. The table below summarizes sales and purchases between the Business and MPC that are included in the Combined Statements of Income (Loss):
| December 31, | ||||||||
| (In millions) | 2025 | 2024 | ||||||
| Related party revenues |
$ | 230 | $ | 243 | ||||
| Related party cost of revenues |
4,027 | 4,210 | ||||||
The table below summarizes the related party balances that have been included in the Combined Balance Sheets:
| December 31, | ||||||||
| (In millions) | 2025 | 2024 | ||||||
| Related party receivables |
$ | 4 | $ | 3 | ||||
| Other noncurrent assets |
1 | 1 | ||||||
Related party expenses consist primarily of Employee Service Agreement (ESA) charges and fees paid under co-location agreements. The Business has various employee service agreements with MPC under which the Business reimburses MPC for employee benefit expenses, along with the provision of operational and management services in support of both our crude oil and products logistics operations. The charges are classified as Related party cost of revenues or Selling, general and administrative expenses depending on the nature of the asset or activity with which the costs are associated. The table below summarizes the related party ESA expenses that have been included in the Combined Statements of Income (Loss):
| December 31, | ||||||||
| (In millions) | 2025 | 2024 | ||||||
| Related party cost of revenues |
$ | 72 | $ | 78 | ||||
| Selling, general and administrative expenses |
15 | 15 | ||||||
16
Net Transfers from (to) Parent
The net effect of transactions between the Business and MPC are included within Net transfers from (to) Parent in the Combined Statements of Cash Flows and within Net transfers from (to) Parent in the Combined Statements of Changes in Net Parent Investment. The components of Net transfers to Parent are as follows:
| December 31, | ||||||||
| (In millions) | 2025 | 2024 | ||||||
| Transfers from (to) Parent |
||||||||
| General financing activities |
$ | (440 | ) | $ | (111 | ) | ||
| Allocation of centralized costs |
107 | 113 | ||||||
|
|
|
|
|
|||||
| Net transfers from (to) Parent in the Combined Statements of Cash Flows |
(333 | ) | 2 | |||||
|
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|
|
|
|||||
| Stock-based compensation expense |
7 | 6 | ||||||
|
|
|
|
|
|||||
| Net transfers from (to) Parent in the Combined Statements of Changes in Net Parent Investment |
$ | (326 | ) | $ | 8 | |||
|
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|
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Other Non-MPC Related Party Transactions
Transactions with other related parties consists primarily of purchases of transportation services and other purchases from certain equity affiliates of the Business, which are included in Cost of revenues. The table below summarizes purchases with other related parties that have been included in the Combined Statements of Income (Loss):
| December 31, | ||||||||
| (In millions) | 2025 | 2024 | ||||||
| Related party revenues |
$ | 16 | $ | 25 | ||||
| Related party cost of revenues |
34 | 38 | ||||||
The table below summarizes payables with other related parties that have been included in the Combined Balance Sheets:
| December 31, | ||||||||
| (In millions) | 2025 | 2024 | ||||||
| Related party payables |
$ | 2 | $ | 2 | ||||
5. Equity Method Investment
The Business has equal influence as a joint interest partner in MPL and all significant decisions require the consent of the other investors without regard to economic interest. As such, we have determined that MPL should not be combined and applied the equity method of accounting with respect to the Business’ investment in MPL. The following table presents the Business’ equity method investment as of the dates indicated:
| Ownership as of | Carrying Value at December 31, |
|||||||||||
| (In millions) | December 31, 2025 | 2025 | 2024 | |||||||||
| Minnesota Pipeline Company LLC |
17 | % | 162 | 166 | ||||||||
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|
|
|||||||||
| Total |
$ | 162 | $ | 166 | ||||||||
|
|
|
|
|
|||||||||
Summarized financial information for the Business’ equity method investment is as follows:
| December 31, | ||||||||
| (In millions) | 2025 | 2024 | ||||||
| Income statement data: |
||||||||
| Revenues and other income |
$ | 132 | $ | 146 | ||||
| Income from operations |
79 | 85 | ||||||
| Net income |
42 | 41 | ||||||
| Balance sheet data: |
| |||||||
| Current assets |
$ | 10 | 13 | |||||
| Noncurrent assets |
365 | 383 | ||||||
| Current liabilities |
13 | 16 | ||||||
As of December 31, 2025 and December 31, 2024, the carrying value of the Business’ equity method investment exceeded the underlying net assets of its investees by $100 million and $102 million, respectively. The basis difference related to goodwill was $51 million as of each balance sheet date presented. There has been no recognized impairment as of December 31, 2025 and December 31, 2024.
17
6. Inventories
Inventories consist of the following:
| December 31, | ||||||||
| (In millions) | 2025 | 2024 | ||||||
| Crude oil and other feedstocks |
$ | 103 | $ | 118 | ||||
| Refined products |
247 | 268 | ||||||
| Materials and supplies |
90 | 76 | ||||||
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|
|
|
|||||
| Total inventories |
$ | 440 | $ | 462 | ||||
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|
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7. Property, Plant and Equipment
Property, plant and equipment with associated accumulated depreciation is shown below:
The Business capitalizes interest as part of the cost of major projects during the construction period. Capitalized interest, totaled $6 million and $4 million for the twelve months ended December 31, 2025 and December 31, 2024, respectively.
| December 31, | ||||||||||||
| (In millions) | Estimated Useful Lives |
2025 | 2024 | |||||||||
| Land |
$ | 43 | $ | 43 | ||||||||
| Buildings, refinery, machinery & other equipment |
4 - 40 years | 1,668 | 1,643 | |||||||||
| Tanks |
15 - 20 years | 126 | 124 | |||||||||
| Vehicles |
4 - 30 years | 6 | 8 | |||||||||
|
Construction-in-progress |
76 | 45 | ||||||||||
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|
|
|||||||||
| Total property, plant and equipment |
1,919 | 1,863 | ||||||||||
|
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|
|
|||||||||
| Less – accumulated depreciation |
(1,061 | ) | (953 | ) | ||||||||
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|
|
|||||||||
| Total property, plant and equipment – net (a) |
$ | 858 | $ | 910 | ||||||||
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|
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| (a) | Includes finance leases of $2 million and $3 million as of December 31, 2025 and 2024, respectively. |
8. Intangible Assets
The Business’ intangible assets are comprised of customer contracts and relationships, permits, and fuel supply arrangements. Customer contracts and relationships represented $38 million and $30 million and fuel supply arrangements represented $7 million and $9 million of Intangible assets, net as of December 31, 2025 and December 31, 2024, respectively. Gross intangible assets with accumulated amortization as of December 31, 2025 and December 31, 2024 is shown below:
| December 31, | ||||||||
| (In millions) | 2025 | 2024 | ||||||
| Gross |
$ | 154 | $ | 143 | ||||
| Accumulated amortization(a) |
(108 | ) | (100 | ) | ||||
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|
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| Net |
$ | 46 | $ | 43 | ||||
|
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|
|
|
|||||
| (a) | Amortization expense for twelve months ended December 31, 2025 and December 31, 2024 was $8 million and $7 million, respectively. $5 million and $4 million of amortization expense for the twelve months ended December 31, 2025 and December 31, 2024 respectively, is included in Sales and other operating revenues as it relates to specific performance obligations for customer contracts. |
18
Estimated future amortization expense related to the intangible assets at December 31, 2025 is as follows:
| (In millions) | Amount | |||
| 2026 |
$ | 9 | ||
| 2027 |
9 | |||
| 2028 |
8 | |||
| 2029 |
5 | |||
| 2030 |
4 | |||
| Thereafter |
11 | |||
9. Income Taxes
The components of income (loss) before income taxes are as follows:
| December 31, | ||||||||
| (In millions) | 2025 | 2024 | ||||||
| Domestic |
$ | 390 | $ | (35 | ) | |||
|
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|
|||||
| Income (loss) before income taxes |
$ | 390 | $ | (35 | ) | |||
|
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|
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The provision for income taxes consisted of:
| December 31, | ||||||||
| (In millions) | 2025 | 2024 | ||||||
| Current: |
||||||||
| Federal |
$ | 61 | $ | — | ||||
| State and local |
20 | — | ||||||
| Deferred: |
||||||||
| Federal |
16 | (6 | ) | |||||
| State and local |
4 | (2 | ) | |||||
|
|
|
|
|
|||||
| Income tax provision |
$ | 101 | $ | (8 | ) | |||
|
|
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|
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A reconciliation of the federal statutory income tax rate to the effective tax rate applied to income before income taxes is as follows:
| December 31, 2025 | December 31, 2024 | |||||||||||||||
| Amount | % | Amount | % | |||||||||||||
| Federal statutory rate |
$ | 82 | 21.0 | % | $ | (7 | ) | 21.0 | % | |||||||
| State and local income taxes, net of federal income tax effects |
19 | 4.9 | % | (2 | ) | 4.6 | % | |||||||||
| Nontaxable or nondeductible items |
— | 0.0 | % | 1 | -2.3 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income tax provision |
$ | 101 | 25.9 | % | $ | (8 | ) | 23.3 | % | |||||||
|
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|
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|
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|
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Deferred tax assets and liabilities resulted from the following:
| December 31, | ||||||||
| (In millions) | 2025 | 2024 | ||||||
| Deferred tax assets: |
||||||||
| Employee benefits |
$ | 9 | $ | 8 | ||||
| Net operating loss carryforwards |
— | 12 | ||||||
| Goodwill |
103 | 122 | ||||||
| Other |
4 | 6 | ||||||
|
|
|
|
|
|||||
| Total net deferred tax assets |
116 | 148 | ||||||
| Deferred tax liabilities: |
||||||||
| Property, plant and equipment |
(160 | ) | (172 | ) | ||||
| Investments in subsidiaries and affiliates |
(9 | ) | (9 | ) | ||||
| Total deferred tax liabilities |
(169 | ) | (181 | ) | ||||
|
|
|
|
|
|||||
| Net deferred tax liabilities |
$ | (53 | ) | $ | (33 | ) | ||
|
|
|
|
|
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The Business’ net deferred tax liabilities were classified in the Combined Balance Sheets as long-term liabilities for the periods ended December 31, 2025 and December 31, 2024.
At December 31, 2025, the Business had no remaining federal operating losses. At December 31, 2024, the Business had federal operating loss carryforwards of $47 million that carried forward indefinitely. At December 31, 2025, the Business had no remaining state operating losses. At December 31, 2024, the Business had state operating loss carryforwards of $36 million that would have expired starting in 2039.
As of December 31, 2025 and December 31, 2024, no valuation allowances have been recorded related to income taxes against the Business’ deferred tax assets.
The Business’ operations are subject to U.S. federal and state and local income taxes. In preparing these Combined Financial Statements, the Business has prepared its tax provision for operations following a separate return method. The separate return method applies ASC 740 to the Combined Financial Statements on the basis the Business was a separate taxpayer. As a result, the tax treatment of certain items reflected in the Combined Financial Statements may not be reflected in the consolidated tax returns of Parent. Therefore, such items as net operating losses, credit and other similar loss carryforwards, and other deferred taxes may exist in the Combined Financial Statements that may not exist or will differ from the amounts reported in Parent’s consolidated tax return.
As of December 31, 2025 and December 31, 2024, the Business has no unrecognized tax benefits.
10. Revenue
Disaggregation of Revenue
The following tables represent a disaggregation of revenue for the twelve months ended December 31, 2025 and December 31, 2024:
| December 31, | ||||||||
| (In millions) | 2025 | 2024 | ||||||
| Product and other revenues: |
||||||||
| Gasoline |
$ | 3,786 | $ | 3,950 | ||||
| Distillates |
2,785 | 2,731 | ||||||
| Crude oil |
461 | 276 | ||||||
| Asphalt |
238 | 269 | ||||||
| Propane |
96 | 117 | ||||||
| NGLs and petrochemicals |
71 | 103 | ||||||
| Heavy fuel oil |
20 | 32 | ||||||
| Others |
19 | 18 | ||||||
|
|
|
|
|
|||||
| Sales and other operating revenues |
7,476 | 7,496 | ||||||
| Gasoline |
9 | — | ||||||
| Distillates |
4 | 18 | ||||||
| Crude oil |
13 | — | ||||||
| Asphalt |
68 | 68 | ||||||
| Propane |
— | 7 | ||||||
| NGLs and petrochemicals |
103 | 114 | ||||||
| Heavy fuel oil |
48 | 57 | ||||||
| Others |
1 | 4 | ||||||
|
|
|
|
|
|||||
| Related party revenues |
246 | 268 | ||||||
| Other income: |
||||||||
| Income from equity method investment |
7 | 6 | ||||||
| Related party other income |
6 | 6 | ||||||
| Other income |
3 | 3 | ||||||
|
|
|
|
|
|||||
| Total revenues and other income |
$ | 7,738 | $ | 7,779 | ||||
|
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|
|
|
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20
We do not disclose information on the remaining performance obligations for any contract with expected duration of one year or less at inception. As of December 31, 2025, we do not have remaining performance obligations that are material to future periods.
11. Share-Based Compensation
MPC employees are eligible to participate in MPC’s share-based and other award programs. The awards issued under the plan consist primarily of restricted stock units (RSUs). Shares issued as a result of awards granted under these plans are funded through the issuance of new MPC common shares.
Total share-based compensation expense for employees who exclusively support the Business’ operations was $1 million and $1 million for the years ended December 31, 2025 and December 31, 2024, respectively. Total share-based compensation expense allocated to the Business for corporate and shared employees was $6 million and $5 million for the years ended December 31, 2025 and December 31, 2024, respectively. Share-based compensation expense is recognized within Selling, general and administrative expenses in our Combined Statements of Income (Loss).
The tax benefit recognized for stock awards was $2 million and $3 million for the years ended December 31, 2025 and December 31, 2024.
Share-based compensation expense for corporate or shared employees was allocated to the Business based on revenue as the allocation driver.
12. Commitments and Contingencies
The Business is the subject of, or a party to, pending or threatened legal actions, contingencies and commitments involving a variety of matters, including laws and regulations relating to the environment. Some of these matters are discussed below. For matters for which the Business has not recorded a liability, the Business is unable to estimate a range of possible loss because the issues involved have not been fully developed through pleadings, discovery or court proceedings. However, the ultimate resolution of some of these contingencies could, individually or in the aggregate, be material.
Environmental Matters
The Business is subject to federal, state and local laws and regulations relating to the environment. These laws generally provide for control of pollutants released into the environment and require responsible parties to undertake remediation of hazardous waste disposal sites. Penalties may be imposed for non-compliance.
As of December 31, 2025, and December 31, 2024, accrued liabilities for remediation totaled $5 million and $6 million, respectively. It is not presently possible to estimate the ultimate amount of all remediation costs that might be incurred or the penalties, if any, that may be imposed.
The Business is involved in environmental enforcement matters arising in the ordinary course of business. While the outcome and impact to the Business cannot be predicted with certainty, management believes the resolution of these environmental matters will not, individually or collectively, have a material adverse effect on its results of operations, financial position or cash flows. The pending environmental matters are: United States EPA v. St. Paul Park Refinery (date instituted January 9, 2024) and Department of Justice Environment and Natural Resources Division (DOJ) v. Mandan Refinery (date instituted March 5, 2025). At this stage, the ultimate outcome of these matters remains uncertain, and neither the likelihood of an unfavorable outcome nor the ultimate liability, if any, can be determined.
Asset Retirement Obligations
The Business’ short-term retirement obligations were $1 million and $1 million as of December 31, 2025 and December 31, 2024, respectively, and are included in Other current liabilities in our Combined Balance Sheets. The long-term asset retirement obligations were $8 million and $8 million as of December 31, 2025 and December 31, 2024, respectively, which are included in Other long-term liabilities in our Combined Balance Sheets.
21
13. Subsequent Events
On August 31, 2026, the Environmental Protection Agency (EPA) granted a partial small refinery exemption (SRE) for the 2025 compliance period to MPC for the Mandan refinery. The partial exemption is for 50% of the 2025 renewable fuel standards (RFS) obligation at the Mandan refinery and is estimated to result in a reduction of the RFS obligated volumes of 66 million gallons. As the exemption notification was received subsequent to the periods presented, an adjustment has not been recorded in the accompanying Combined Financial Statements.
The Business has evaluated subsequent events from the balance sheet date through September 14, 2026, the date these financial statements were available to be issued.
22
Exhibit 99.2
The Mandan and Saint Paul Park Refining Business of Marathon Petroleum Corporation
Condensed Combined Financial Statements (Unaudited)
As of September 30, 2026, and December 31, 2025, and
for the nine months ended September 30, 2026 and September 30, 2025
1
The Mandan and Saint Paul Park Refining Business of Marathon Petroleum Corporation
Table of Contents
| Page | ||||
| Condensed Combined Financial Statements (Unaudited): |
||||
| Condensed Combined Statements of Income (Unaudited) |
3 | |||
| Condensed Combined Balance Sheets (Unaudited) |
4 | |||
| Condensed Combined Statements of Cash Flows (Unaudited) |
5 | |||
| Condensed Combined Statements of Changes in Net Parent Investment (Unaudited) |
6 | |||
| Notes to Condensed Combined Financial Statements |
7 | |||
2
The Mandan and Saint Paul Park Refining Business of Marathon Petroleum Corporation
Condensed Combined Statements of Income (Unaudited)
| Nine Months Ended September 30, | ||||||||
| (In millions) | 2026 | 2025 | ||||||
| Revenues and other income: |
||||||||
| Sales and other operating revenues |
$ | 7,308 | $ | 5,649 | ||||
| Related party revenues |
286 | 189 | ||||||
| Income from equity method investment |
5 | 6 | ||||||
| Related party other income |
5 | 5 | ||||||
| Other income |
1 | 1 | ||||||
|
|
|
|
|
|||||
| Total revenues and other income |
7,605 | 5,850 | ||||||
|
|
|
|
|
|||||
| Costs and expenses: |
||||||||
| Cost of revenues (excludes items below) |
2,874 | 2,041 | ||||||
| Related party cost of revenues |
3,559 | 3,220 | ||||||
| Depreciation and amortization |
69 | 89 | ||||||
| Selling, general and administrative expenses |
149 | 124 | ||||||
| Other taxes |
11 | 15 | ||||||
|
|
|
|
|
|||||
| Total costs and expenses |
6,662 | 5,489 | ||||||
|
|
|
|
|
|||||
| Income before income taxes |
943 | 361 | ||||||
| Provision for income taxes |
246 | 94 | ||||||
|
|
|
|
|
|||||
| Net income |
$ | 697 | $ | 267 | ||||
|
|
|
|
|
|||||
The accompanying notes are an integral part of these Condensed Combined Financial Statements.
3
The Mandan and Saint Paul Park Refining Business of Marathon Petroleum Corporation
Condensed Combined Balance Sheets (Unaudited)
| September 30, | December 31, | |||||||
| (In millions) | 2026 | 2025 | ||||||
| ASSETS |
||||||||
| Receivables |
$ | 41 | $ | 34 | ||||
| Related party receivables |
3 | 4 | ||||||
| Inventories |
840 | 440 | ||||||
|
|
|
|
|
|||||
| Total current assets |
884 | 478 | ||||||
| Equity method investment |
159 | 162 | ||||||
| Property, plant and equipment, net |
825 | 858 | ||||||
| Intangibles, net |
42 | 46 | ||||||
| Other noncurrent assets |
27 | 25 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 1,937 | $ | 1,569 | ||||
|
|
|
|
|
|||||
| LIABILITIES |
||||||||
| Accounts payable |
$ | 273 | $ | 135 | ||||
| Related party payables |
4 | 2 | ||||||
| Payroll and benefits payable |
27 | 26 | ||||||
| Accrued taxes |
150 | 142 | ||||||
| Environmental obligations |
108 | 46 | ||||||
| Other current liabilities |
4 | 3 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
566 | 354 | ||||||
| Deferred income tax liabilities |
103 | 53 | ||||||
| Other long-term liabilities |
24 | 23 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
693 | 430 | ||||||
| Commitments and contingencies (see Note 9) |
||||||||
| EQUITY |
||||||||
| Net parent investment |
1,244 | 1,139 | ||||||
|
|
|
|
|
|||||
| Total liabilities and equity |
$ | 1,937 | $ | 1,569 | ||||
|
|
|
|
|
|||||
The accompanying notes are an integral part of these Condensed Combined Financial Statements.
4
The Mandan and Saint Paul Park Refining Business of Marathon Petroleum Corporation
Condensed Combined Statements of Cash Flows (Unaudited)
| Nine Months Ended September 30, | ||||||||
| (In millions) | 2026 | 2025 | ||||||
| Operating activities: |
||||||||
| Net income |
$ | 697 | $ | 267 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities |
| |||||||
| Depreciation and amortization |
69 | 89 | ||||||
| Deferred income taxes |
50 | 19 | ||||||
| Share-based compensation expenses |
14 | 8 | ||||||
| Income from equity method investment |
(5 | ) | (6 | ) | ||||
| Distributions from unconsolidated affiliates |
8 | 8 | ||||||
| Changes in: |
||||||||
| Receivables, net |
(6 | ) | (5 | ) | ||||
| Inventories |
(400 | ) | (49 | ) | ||||
| Accounts payable |
140 | 7 | ||||||
| Payroll and benefits payable |
1 | (3 | ) | |||||
| Accrued taxes |
8 | 5 | ||||||
| Environmental obligations |
62 | (3 | ) | |||||
| Other assets and liabilities |
1 | (3 | ) | |||||
| All other, net |
5 | 4 | ||||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
644 | 338 | ||||||
|
|
|
|
|
|||||
| Investing activities: |
||||||||
| Additions to property, plant, and equipment and intangibles |
(39 | ) | (42 | ) | ||||
| Disposal of assets |
1 | — | ||||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(38 | ) | (42 | ) | ||||
|
|
|
|
|
|||||
| Financing activities: |
||||||||
| Net transfers to Parent |
(606 | ) | (296 | ) | ||||
|
|
|
|
|
|||||
| Net cash used for financing activities |
(606 | ) | (296 | ) | ||||
|
|
|
|
|
|||||
| Net change in cash, cash equivalents and restricted cash |
$ | — | $ | — | ||||
| Cash, cash equivalents and restricted cash at beginning of period |
— | — | ||||||
|
|
|
|
|
|||||
| Cash, cash equivalents and restricted cash at end of period |
$ | — | $ | — | ||||
|
|
|
|
|
|||||
| Supplemental data |
||||||||
| Cash paid during the period for: |
||||||||
| Operating lease payments |
2 | 1 | ||||||
The accompanying notes are an integral part of these Condensed Combined Financial Statements.
5
The Mandan and Saint Paul Park Refining Business of Marathon Petroleum Corporation
Condensed Combined Statements of Changes in Net Parent Investment (Unaudited)
| (In millions) | Total | |||
| Balance December 31, 2024 |
$ | 1,176 | ||
| Net income |
267 | |||
| Net transfers to Parent |
(288 | ) | ||
|
|
|
|||
| Balance September 30, 2025 |
$ | 1,155 | ||
|
|
|
|||
| Balance December 31, 2025 |
$ | 1,139 | ||
| Net income |
697 | |||
| Net transfers to Parent |
(592 | ) | ||
|
|
|
|||
| Balance September 30, 2026 |
$ | 1,244 | ||
|
|
|
|||
The accompanying notes are an integral part of these Condensed Combined Financial Statements.
6
Notes to Condensed Combined Financial Statements
1.Description of the Business and Basis of Presentation
Description of the Business
The accompanying Condensed Combined Financial Statements and notes present the Condensed Combined Statements of Income, Balance Sheets, Cash Flows, and Changes in Net Parent Investment of the Mandan and Saint Paul Park (“SPP”) refineries and accompanying refining logistics assets (“the Business,” “we,” or “our”) of Marathon Petroleum Corporation (“MPC” or “Parent”) and its midstream subsidiary MPLX LP (“MPLX”).
The Business operates as crude oil refineries within MPC’s mid-continent refining system. SPP, located in St. Paul Park, Minnesota, has a crude oil refining capacity of approximately 105,000 barrels per calendar day (“bpcd”) and processes sweet and heavy sour crude oils into gasoline, distillates, asphalt, propane, heavy fuel oil, natural gas liquids (“NGLs”), and petrochemicals, with distribution by truck, rail, and barge. The Mandan Refinery, located in Mandan, North Dakota, has a crude oil refining capacity of approximately 72,000 bpcd and processes primarily sweet domestic crude oil from North Dakota into gasoline, distillates, propane, heavy fuel oil, NGLs, and petrochemicals, with distribution by truck and rail. The combined crude oil refining capacity is approximately 177,000 bpcd.
The Business also owns a 17% interest in the Minnesota Pipe Line Company (“MPL”) along with Flint Hills Resources and Trof, Inc. MPL transports crude oil to the Business’ SPP and Flint Hills Resources’ Pine Bend refineries.
Basis of Presentation
These Condensed Combined Financial Statements have been derived from the MPC consolidated financial statements and accounting records of MPC. These Condensed Combined Financial Statements include all majority-owned and controlled subsidiaries and reflect the combined historical results of operations, financial position and cash flows of the Business for the periods presented as historically managed within MPC in conformity with generally accepted accounting principles in the United States (“GAAP”). The Condensed Combined Financial Statements may not be indicative of the Business’ future performance and do not necessarily reflect what the financial position, results of operations and cash flows would have been had it operated as an independent company during the periods presented. In the opinion of management, these Condensed Combined Financial Statements include all adjustments (consisting of normal, recurring adjustments, unless otherwise disclosed) necessary for a fair statement of the condensed combined results of operations, financial position, and cash flows for each period presented. The combined results for the interim periods are not necessarily indicative of results to be expected for the full year. The December 31, 2025 Combined Balance Sheets were derived from audited financial statements but do not include all disclosures required by GAAP. These financial statements should be read in conjunction with the financial statements and related notes included in our audited Combined Financial Statements for the year ended December 31, 2025.
Transactions among components included within the Business have been eliminated and transactions with MPC, MPLX, and other affiliates outside of the Business have been retained as related party transactions in these Condensed Combined Financial Statements. Related party transactions between the Business and Parent have been settled through Net parent investment with the net effect reflected in the Condensed Combined Statements of Cash Flows as a financing activity and in the Condensed Combined Balance Sheets as Net parent investment. Related party transactions between the Business and MPLX historically settled in cash have been reflected in the Condensed Combined Balance Sheets as Related party receivables and payables with the net effect reflected in the Condensed Combined Statements of Cash Flows as operating activities. See Note 4 for additional information. The Business’ investments in which the Business exercises significant influence but does not control and does not have a controlling financial interest are accounted for using the equity method.
Historically, MPC provided certain corporate functions to the Business and costs associated with these functions were allocated to the Business. These functions include, but are not limited to, executive management, legal, human resources, treasury, finance, accounting, internal audit, information technology, and the related benefit costs associated with such functions, such as stock-based compensation. The costs of such services were allocated to the Business based on direct usage when identifiable, with the remainder allocated on a pro rata basis using an applicable measure of income from
7
operations, total assets, headcount, or other relative drivers applied to the relevant cost pools. The charges for these functions are deemed settled in cash by the Business to MPC in the period in which the costs were recorded within Selling, general and administrative expenses and Cost of revenues in the Condensed Combined Statements of Income. Management believes the basis on which the expenses have been allocated is a reasonable reflection of the utilization of services provided to, or the benefit received by, the Business during the periods presented; however, they may not be indicative of the actual expense that would have been incurred had the Business been operating as an independent company for the periods presented. Actual costs that may have been incurred if the Business had been an independent company could materially differ from the amounts allocated as the costs would depend on a number of factors, including the organizational structure, whether functions were outsourced or performed by employees, and strategic decisions made in areas such as information technology and infrastructure. Management does not believe, however, that it is practicable to estimate what these expenses would have been for the periods presented had the Business operated as an independent company, including any expenses associated with obtaining any of these services from unaffiliated entities.
MPC utilizes a centralized treasury management function for financing its operations, with cash from MPC’s operating companies, including the Business, swept to shared MPC cash pooling accounts. The cash and cash equivalents held by MPC at the corporate level are not specifically identifiable to the Business and therefore have not been reflected in the Business’ Condensed Combined Balance Sheets. Cash transfers between the Parent and the Business are accounted for through Net parent investment.
The Condensed Combined Financial Statements include certain assets and liabilities that have historically been held at the Parent corporate level but are specifically identifiable or otherwise attributable to the Business. MPC’s third-party long-term debt and the related interest expense have not been allocated to the Business for any of the periods presented as the Business was not the legal obligor of such debt and the MPC borrowings were not directly attributable to the Business.
Current and deferred income taxes have been determined based on the stand-alone results of the Business; however, because the Business filed as part of MPC’s tax group in certain jurisdictions, the Business’ actual tax balances may differ from those reported. The Business’ portion of income tax expense is deemed to have been settled in the period the related tax expense was recorded.
Unless otherwise noted, all figures within the Condensed Combined Financial Statements are stated in U.S. Dollars (“USD”) and millions.
2. Summary of Principal Accounting Policies
The significant accounting policies of the Business are set forth in Note 2 - Summary of Principal Accounting Policies within the Business’ audited Combined Financial Statements as of December 31, 2025.
3. Accounting Standards Recently Adopted
Not Yet Adopted
ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818)
In May 2026, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) to provide specific authoritative guidance on the recognition, measurement, presentation, and disclosure requirements for environmental credits and environmental credit obligations. This ASU is effective for fiscal years beginning after December 15, 2028, and for interim periods within those fiscal years. Early adoption is permitted. The amendments in this ASU should be applied retrospectively through a cumulative-effect adjustment but do not require restating prior period financial statements. The Business is currently assessing the impact that adoption will have on the Condensed Combined Financial Statements and disclosures.
8
ASU 2025-11, Interim Reporting (Topic 270)
In December 2025, the FASB issued Accounting Standards Update 2025-11, Narrow-Scope Improvements (“ASU 2025-11”). ASU 2025-11 clarifies the current interim disclosure requirements and the applicability of ASC 270, Interim Reporting by creating a comprehensive list of required interim disclosures and adding a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2028, with early adoption permitted. The Business is currently assessing the impact that adoption will have on the Condensed Combined Financial Statements and disclosures.
4. Related Party Transactions
Transactions with MPC
Cash Management Agreement
The Business participates in MPC’s centralized treasury management function for financing its operations. MPC utilizes a centralized treasury management function for financing its operations, with all cash from its operating companies, including the Business, swept to shared MPC cash pooling accounts. Our net cash balance with MPC is included in Net parent investment on the Condensed Combined Balance Sheets, and the net cash activity is classified under financing activities on the Condensed Combined Statements of Cash Flows.
Trade Receivables Program
MPC participates in a trade receivables securitization program with a group of lenders. The trade receivables facility consists of certain of MPC’s wholly owned subsidiaries (“Originators”), including the Business, selling or contributing on an on-going basis all of the trade receivables generated by them (the “Pool Receivables”), together with all related security and interests in the proceeds thereof, without recourse, to another wholly owned, bankruptcy-remote special purpose entity (“BRSPE”), MPC Trade Receivables Company I LLC (“TRC”), in exchange for a combination of cash, equity and/or borrowings under a subordinated note issued by TRC to one or more of the Originators. MPC accounts for transfers under these securitization arrangements as sales because full title and ownership in the underlying receivables and control of the receivables is considered transferred and its assets are not available to MPC creditors. MPC wholly owns and therefore consolidates the BRSPE in its consolidated financial statements.
As the BRSPE is not owned or controlled by the Business, the activities of the BRSPE are not presented in the Condensed Combined Financial Statements of the Business. The Business receivables included within MPC’s trade receivables securitization program, and transferred to the BRSPE, was $389 million and $206 million as of September 30, 2026 and December 31, 2025, respectively. These receivables have been derecognized and removed from our Condensed Combined Balance Sheets at the date of transfer.
Allocation of Centralized Costs
The Condensed Combined Statements of Income include expenses of certain centralized functions and other programs provided and/or administered by MPC and MPLX that are charged directly to the Business. The functions and programs provided by the Parent include, but are not limited to, general corporate expenses such as executive management, legal, human resources, treasury, finance, accounting, internal audit, information technology, and the related benefit costs associated with such functions, such as stock-based compensation. In addition, for purposes of preparing these Condensed Combined Financial Statements, a portion of MPC’s total corporate general and administrative expenses have been allocated to the Business. These expenses have been allocated to the Business based on a pro-rata basis using an applicable measure of income from operations, total assets, headcount, or other relative drivers applied to the relevant cost pools. Details on MPC programs included in the centralized allocations are included below. The table below presents a summary of centralized allocations to the Business from MPC.
9
| Nine Months Ended September 30, | ||||||||
| (In millions) | 2026 | 2025 | ||||||
| Allocation of centralized costs: |
||||||||
| Cost of revenues |
$ | (10 | ) | $ | (5 | ) | ||
| Selling, general and administrative expenses |
84 | 81 | ||||||
|
|
|
|
|
|||||
| Total corporate allocations |
$ | 74 | $ | 76 | ||||
|
|
|
|
|
|||||
Related Party Transactions
The Condensed Combined Financial Statements have been prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of MPC. Historically, the Business has entered into transactions with MPC and its affiliates in the ordinary course of its operations. The nature of these transactions are similar to those the Business enters into with third parties, which include but are not limited to, purchases of crude oil and feedstock and the sale of refined products. The table below summarizes sales and purchases between the Business and MPC that are included in the Condensed Combined Statements of Income:
| Nine Months Ended September 30, | ||||||||
| (In millions) | 2026 | 2025 | ||||||
| Related party revenues |
$ | 268 | $ | 177 | ||||
| Related party cost of revenues |
3,466 | 3,142 | ||||||
The table below summarizes the related party balances that have been included in the Condensed Combined Balance Sheets:
| (In millions) | September 30, 2026 |
December 31, 2025 |
||||||
| Related party receivables |
$ | 3 | $ | 4 | ||||
| Other noncurrent assets |
— | 1 | ||||||
Related party expenses consists primarily of Employee Service Agreement (ESA) charges and fees paid under co-location agreements. The Business has various employee service agreements with MPC under which the Business reimburses MPC for employee benefit expenses, along with the provision of operational and management services in support of both our crude oil and products logistics operations. The charges are classified as Related party cost of revenues or Selling, general and administrative expenses depending on the nature of the asset or activity with which the costs are associated. The table below summarizes the related party ESA expenses that have been included in the Condensed Combined Statements of Income:
| Nine Months Ended September 30, | ||||||||
| (In millions) | 2026 | 2025 | ||||||
| Related party cost of revenues |
$ | 63 | $ | 53 | ||||
| Selling, general and administrative expenses |
16 | 11 | ||||||
10
Net Transfers to Parent
The net effect of transactions between the Business and MPC are included within Net transfers to Parent in the Condensed Combined Statements of Cash Flows and within Net transfers to Parent in the Condensed Combined Statements of Changes in Net Parent Investment. The components of Net transfers to Parent are as follows:
| Nine Months Ended September 30, | ||||||||
| (In millions) | 2026 | 2025 | ||||||
| Transfers to Parent: |
| |||||||
| General financing activities |
$ | (680 | ) | $ | (372 | ) | ||
| Allocation of centralized costs |
74 | 76 | ||||||
|
|
|
|
|
|||||
| Net transfers to Parent in the Unaudited Condensed Combined Statements of Cash Flows |
(606 | ) | (296 | ) | ||||
|
|
|
|
|
|||||
| Stock-based compensation expense |
14 | 8 | ||||||
|
|
|
|
|
|||||
| Net transfers to Parent in the Unaudited Condensed Combined Statements of Changes in Net Parent Investment |
$ | (592 | ) | $ | (288 | ) | ||
|
|
|
|
|
|||||
Other Non-MPC Related Party Transactions
Transactions with other related parties include, but are not limited to, sales of refined products, purchases of transportation services, and other purchases from certain equity affiliates of the Business. The table below summarizes sales and purchases with other related parties that are included in the Condensed Combined Statements of Income:
| Nine Months Ended September 30, | ||||||||
| (In millions) | 2026 | 2025 | ||||||
| Related party revenues |
$ | 18 | $ | 12 | ||||
| Related party cost of revenues |
30 | 25 | ||||||
The table below summarizes payables with other related parties that have been included in the Condensed Combined Balance Sheets:
| (In millions) | September 30, 2026 |
December 31, 2025 |
||||||
| Related party payables |
$ | 4 | $ | 2 | ||||
5. Inventories
Inventories consist of the following:
| (In millions) | September 30, 2026 |
December 31, 2025 |
||||||
| Crude oil and other feedstocks |
$ | 166 | $ | 103 | ||||
| Refined products |
574 | 247 | ||||||
| Materials and supplies |
100 | 90 | ||||||
|
|
|
|
|
|||||
| Total inventories |
$ | 840 | $ | 440 | ||||
|
|
|
|
|
|||||
6. Environmental Obligations
Environmental obligations on the Condensed Combined Balance Sheets approximated $108 million and $46 million as of September 30, 2026 and December 31, 2025, respectively. The environmental obligation value in each period is primarily impacted by the timing of receipt of exemption credits, the settlement timing of obligations and changes in renewable fuel standards (RFS) requirements. The increase as of September 30, 2026 was primarily attributable to $230 million of incremental accruals recorded to comply with RFS requirements for the 2026 compliance period. The increase in incremental accruals was offset by the $46 million settlement of the 2025 RFS obligation in September 2026 and the receipt of small refinery exemption (SRE) credits. In August 2026 and 2025, the Environmental Protection Agency (EPA) approved the Mandan SRE for the 2023, 2024, and 2025 compliance periods, resulting in a $122 million and $114 million reduction of the Environmental obligations as of September 30, 2026 and December 31, 2025, respectively, in the Condensed Combined Balance Sheets.
11
7. Income Taxes
The Business recorded a combined U.S. federal and state income tax provision of $246 million for the nine months ended September 30, 2026, which was higher than the U.S. statutory rate primarily due to state taxes.
The Business recorded a combined U.S. federal and state income tax provision of $94 million for the nine months ended September 30, 2025, which was higher than the U.S. statutory rate primarily due to state taxes.
The Business’ operations are subject to U.S. federal and state and local income taxes. In preparing these Condensed Combined Financial Statements, the Business has prepared its tax provision for operations following a separate return method. The separate return method applies ASC 740 to the Condensed Combined Financial Statements on the basis the Business was a separate taxpayer. As a result, the tax treatment of certain items reflected in the Condensed Combined Financial Statements may not be reflected in the consolidated tax returns of Parent. Therefore, such items as net operating losses, credit and other similar loss carryforwards, and other deferred taxes may exist in the Condensed Combined Financial Statements that may not exist or will differ from the amounts reported in Parent’s consolidated tax return.
8. Revenue
Disaggregation of Revenue
The following tables represent a disaggregation of revenue for the nine months ended September 30, 2026 and September 30, 2025:
| Nine Months Ended September 30, | ||||||||
| (In millions) | 2026 | 2025 | ||||||
| Revenue by type: |
||||||||
| Product and other revenues: |
||||||||
| Gasoline |
$ | 3,826 | $ | 2,921 | ||||
| Distillates |
2,939 | 2,016 | ||||||
| Crude oil |
151 | 365 | ||||||
| Asphalt |
198 | 176 | ||||||
| Propane |
62 | 75 | ||||||
| NGLs and petrochemicals |
63 | 64 | ||||||
| Heavy fuel oil |
57 | 16 | ||||||
| Others |
12 | 16 | ||||||
|
|
|
|
|
|||||
| Sales and other operating revenues |
7,308 | 5,649 | ||||||
| Gasoline |
10 | 8 | ||||||
| Distillates |
73 | 4 | ||||||
| Crude oil |
— | 13 | ||||||
| Asphalt |
69 | 45 | ||||||
| NGLs and petrochemicals |
87 | 84 | ||||||
| Heavy fuel oil |
45 | 35 | ||||||
| Others |
2 | — | ||||||
|
|
|
|
|
|||||
| Related party revenues |
286 | 189 | ||||||
| Other income: |
||||||||
| Income from equity method investment |
5 | 6 | ||||||
| Related party other income |
5 | 5 | ||||||
| Other income |
1 | 1 | ||||||
|
|
|
|
|
|||||
| Total revenues and other income |
$ | 7,605 | $ | 5,850 | ||||
|
|
|
|
|
|||||
We do not disclose information on the remaining performance obligations for any contract with expected duration of one year or less at inception. As of September 30, 2026, we do not have remaining performance obligations that are material to future periods.
12
9. Commitments and Contingencies
The Business is the subject of, or a party to, pending or threatened legal actions, contingencies and commitments involving a variety of matters, including laws and regulations relating to the environment. Some of these matters are discussed below. For matters for which the Business has not recorded a liability, the Business is unable to estimate a range of possible loss because the issues involved have not been fully developed through pleadings, discovery or court proceedings. However, the ultimate resolution of some of these contingencies could, individually or in the aggregate, be material.
Environmental Matters
The Business is subject to federal, state and local laws and regulations relating to the environment. These laws generally provide for control of pollutants released into the environment and require responsible parties to undertake remediation of hazardous waste disposal sites. Penalties may be imposed for non-compliance.
As of September 30, 2026 and December 31, 2025, accrued liabilities for remediation totaled $5 million and $5 million, respectively, and are included in Other long-term liabilities in our Condensed Combined Balance Sheets. It is not presently possible to estimate the ultimate amount of all remediation costs that might be incurred or the penalties, if any, that may be imposed.
The Business is involved in environmental enforcement matters arising in the ordinary course of business. While the outcome and impact to the Business cannot be predicted with certainty, management believes the resolution of these environmental matters will not, individually or collectively, have a material adverse effect on its results of operations, financial position or cash flows. The pending environmental matters are: United States EPA v. St. Paul Park Refinery (date instituted January 9, 2024) and Department of Justice Environment and Natural Resources Division (DOJ) v. Mandan Refinery (date instituted March 5, 2025). At this stage, the ultimate outcome of these matters remains uncertain, and neither the likelihood of an unfavorable outcome nor the ultimate liability, if any, can be determined.
Asset Retirement Obligations
The Business’ short-term retirement obligations were $1 million and $1 million as of September 30, 2026, and December 31, 2025, respectively, and are included in Other current liabilities in our Condensed Combined Balance Sheets. The long-term asset retirement obligations were $9 million and $8 million at September 30, 2026, and December 31, 2025, respectively, which are included in Other long-term liabilities in our Condensed Combined Balance Sheets.
Other
On September 20, 2026, a contractor died while performing work at the St. Paul Park refinery. The incident remains under investigation. At this time, the Company cannot reasonably estimate the potential loss, if any, arising from this matter.
10. Subsequent Events
The Business has evaluated subsequent events from the balance sheet date through November 1, 2026, the date these financial statements were available to be issued.
13
Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
On November 2, 2026, CVR Energy, Inc. (“CVR Energy” or the “Company”) entered into an Equity and Asset Purchase Agreement (the “Purchase Agreement”) with certain indirect subsidiaries and affiliates of Marathon Petroleum Corporation (the “Sellers”) to acquire the refineries located in St. Paul Park, Minnesota and Mandan, North Dakota, a 17% interest in each of Minnesota Pipe Line Company, LLC and MPL Investments, Inc., and associated wholesale marketing and logistics assets (collectively, “Mandan/SPP”), and to assume certain liabilities related to Mandan/SPP, for total estimated aggregate cash consideration of $4.2 billion of base purchase price plus $0.8 billion of incremental consideration attributable to net working capital, subject to the purchase price adjustments and final settlement procedures described in the Purchase Agreement (the “Acquisition”).
At closing, the Sellers will sell, convey, assign and transfer to the Company the purchased assets and purchased interests specified in the Purchase Agreement, and CVR Energy will assume the related assumed liabilities, in each case subject to the terms and conditions in the Purchase Agreement. The purchased assets include the Mandan refinery; terminals, pipeline systems, logistics racks, tankage and other refining logistics assets; hydrocarbon and non-hydrocarbon catalyst assets; specified contracts, permits, books and records, real property interests and purchased intellectual property; and other tangible assets primarily related to Mandan/SPP. The purchased interests include Western Refining Southwest LLC’s 100% membership interest in St. Paul Park Refining Co. LLC, Tesoro Refining & Marketing Company LLC’s Mandan refining assets, and Tesoro Logistics Operations LLC’s 17% interests in each of Minnesota Pipe Line Company, LLC and MPL Investments, Inc. Certain balances associated with cash, receivables, trademarks, specified contracts, pre-closing renewable identification numbers and other assets identified in the Purchase Agreement will remain excluded assets. CVR Energy will assume liabilities related to the purchased assets and interests other than liabilities expressly retained by the Sellers, including specified excluded employment, environmental, tax and indebtedness-related liabilities.
In connection with the closing of the Acquisition, CVR Energy expects to enter into the following financing transactions: (i) an amendment to CVR Energy’s existing asset-based revolving credit facility (the “Existing ABL Facility”), together with $550 million of incremental commitments thereunder, bringing total commitments under the Existing ABL Facility to $1.1 billion, and borrowings of approximately $225 million thereunder on the closing date of the Acquisition; (ii) the incurrence of approximately $2.5 billion of senior secured indebtedness (the “Permanent Financing”) or, to the extent necessary, borrowings under a senior secured 364-day bridge loan facility in an aggregate principal amount of up to $2.5 billion (the “Bridge Facility”), for which Barclays Bank PLC and certain other financial institutions have provided a debt commitment letter; (iii) the issuance and sale of equity securities to certain commercial counterparties in a private placement for an aggregate purchase price of approximately $800 million (the “Commercial Partner Equity Investment”); (iv) a subscription agreement with an affiliate of Icahn Enterprises L.P, its controlling stockholder, providing for up to $500 million of equity financing (the “IEP Equity Investment”), which is intended to terminate upon the consummation of an equity offering generating gross proceeds of at least $500 million; (v) a supplemental indenture pursuant to which CVR Energy’s 7.500% Senior Notes due 2031 and 7.875% Senior Notes due 2034 will become secured on an equal and ratable basis with the Bridge Facility and/or any Permanent Financing; and (vi) the redemption of all $183 million aggregate principal amount of CVR Energy’s outstanding 5.750% Senior Notes due 2028.
The following unaudited pro forma condensed combined financial information illustrates the effects of the Acquisition and the related financing transactions described in Note 5 (together, the “Transactions”) and includes the unaudited pro forma condensed combined balance sheet as of September 30, 2026, and the unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2026 and 2025 and the year ended December 31, 2025, and the accompanying notes. The unaudited pro forma condensed combined statements of operations give effect to the Transactions as if they had occurred on January 1, 2025, and the unaudited pro forma condensed combined balance sheet gives effect to the Transactions as if they had occurred on September 30, 2026.
The unaudited pro forma condensed combined financial information is based on and should be read in conjunction with the following historical financial statements of CVR Energy and Mandan/SPP:
| • | CVR Energy’s historical audited consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2025, and CVR Energy’s historical unaudited condensed consolidated financial statements and related notes as of September 30, 2026, and for the nine months ended September 30, 2026 and 2025, included in its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2026; and |
| • | Mandan/SPP’s historical audited carve-out combined financial statements and related notes for the year ended December 31, 2025, and the historical unaudited carve-out condensed combined financial statements for the nine months ended September 30, 2026 and 2025, attached as Exhibits 99.1 and 99.2, respectively, to the Form 8-K to which this unaudited pro forma condensed combined financial information is attached. |
1
The unaudited pro forma condensed combined financial information has been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) using the acquisition method of accounting for business combinations under Accounting Standards Codification (“ASC”) 805, Business Combinations. Under the acquisition method, the aggregate consideration transferred is allocated to Mandan/SPP including the underlying tangible and identifiable intangible assets acquired and liabilities assumed, based on their estimated acquisition-date fair values, with any excess recorded as goodwill. For purposes of this preliminary presentation, CVR Energy has assumed that the consummation of the Acquisition occurred on September 30, 2026. The Purchase Agreement provides for an aggregate purchase price for the Mandan/SPP business, subject to post-closing adjustments based on, among other items, hydrocarbon inventory, non-hydrocarbon catalyst assets, working capital, certain asset taxes, repair costs and 2026 pro-rated bonus amounts, as applicable. The final consideration and allocation will be determined from the closing and final settlement statements and may differ materially from the preliminary amounts reflected herein.
In accordance with Article 11 of Regulation S-X, the unaudited pro forma condensed combined financial information has been prepared for illustrative and informational purposes only and is not intended to represent what CVR Energy’s results of operations or financial position would have been had the Acquisition occurred on the dates indicated, or what they will be for any future periods or as of any future date. The unaudited pro forma condensed combined financial information does not reflect the realization of any expected cost savings or other synergies or dis-synergies that may be realized as a result of the Acquisition.
2
CVR ENERGY, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of September 30, 2026
| Historical CVR Energy, Inc |
Historical Mandan/SPP as reclassified |
Acquisition Accounting Adjustments |
Notes | Other Accounting Adjustments |
Notes | Pro Forma Combined |
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| (in millions) | (Note 3) | |||||||||||||||||||||||||||
| ASSETS |
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| Current Assets: |
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| Cash and cash equivalents |
$ | 1,278 | $ | — | $ | (4,969 | ) | (4A | ) | 3,970 | (5A | ) | $ | 96 | ||||||||||||||
| (183 | ) | (5D | ) | |||||||||||||||||||||||||
| Accounts receivable, net |
464 | 44 | (44 | ) | (4B | ) | 464 | |||||||||||||||||||||
| Inventories |
655 | 840 | (5 | ) | (4B | ) | 1,490 | |||||||||||||||||||||
| Prepaid expenses |
20 | — | 20 | |||||||||||||||||||||||||
| Other current assets |
17 | — | 17 | |||||||||||||||||||||||||
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| Total current assets |
2,434 | 884 | (5,018 | ) | 3,787 | 2,087 | ||||||||||||||||||||||
| Property, plant and equipment, net |
2,011 | 817 | 1,356 | (4C | ) | 4,184 | ||||||||||||||||||||||
| Goodwill |
— | — | 1,499 | (4F | ) | 1,499 | ||||||||||||||||||||||
| Intangible assets |
— | 42 | 360 | (4C | ) | 402 | ||||||||||||||||||||||
| Other long-term assets |
335 | 194 | (27 | ) | (4C | ) | 502 | |||||||||||||||||||||
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| Total assets |
$ | 4,780 | $ | 1,937 | $ | (1,830 | ) | $ | 3,787 | $ | 8,674 | |||||||||||||||||
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| LIABILITIES AND EQUITY |
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| Current liabilities: |
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| Accounts payable |
$ | 620 | $ | 277 | $ | (188 | ) | (4B | ) | $ | 729 | |||||||||||||||||
| 20 | (4G | ) | ||||||||||||||||||||||||||
| Other current liabilities |
785 | 289 | (288 | ) | (4B | ) | 786 | |||||||||||||||||||||
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| Total current liabilities |
1,405 | 566 | (456 | ) | — | 1,515 | ||||||||||||||||||||||
| Long-term liabilities: |
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| Long-term debt and finance lease obligations, net of current portion |
1,769 | — | 2,675 | (5A | ) | 4,261 | ||||||||||||||||||||||
| (183 | ) | (5D | ) | |||||||||||||||||||||||||
| Deferred income taxes |
245 | 103 | (103 | ) | (4B | ) | 245 | |||||||||||||||||||||
| Other long-term liabilities |
104 | 24 | (7 | ) | (4B | ) | 121 | |||||||||||||||||||||
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| Total long-term liabilities |
2,118 | 127 | (110 | ) | 2,492 | 4,627 | ||||||||||||||||||||||
| CVR Energy stockholders’ equity: |
||||||||||||||||||||||||||||
| Preferred stock |
— | — | ||||||||||||||||||||||||||
| Common stock |
1 | 1 | (5A | ) | 2 | |||||||||||||||||||||||
| Additional paid-in capital |
1,508 | 1,294 | (5A | ) | 2,802 | |||||||||||||||||||||||
| Accumulated deficit |
(422 | ) | (20 | ) | (4G | ) | (442 | ) | ||||||||||||||||||||
| Treasury stock |
(2 | ) | (2 | ) | ||||||||||||||||||||||||
| Net parent investment |
— | 1,244 | (1,244 | ) | (4H | ) | — | |||||||||||||||||||||
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| Total CVR Energy stockholders’ equity |
1,085 | 1,244 | (1,264 | ) | 1,295 | 2,360 | ||||||||||||||||||||||
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| Noncontrolling interest |
172 | 172 | ||||||||||||||||||||||||||
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| Total equity |
1,257 | 1,244 | (1,264 | ) | 1,295 | 2,532 | ||||||||||||||||||||||
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| Total liabilities and equity |
$ | 4,780 | $ | 1,937 | $ | (1,830 | ) | $ | 3,787 | $ | 8,674 | |||||||||||||||||
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See notes to unaudited pro forma condensed combined financial statements.
3
CVR ENERGY, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 2026
| Historical CVR Energy, Inc. |
Historical Mandan/SPP as reclassified |
Acquisition Accounting Adjustments |
Notes | Other Accounting Adjustments |
Notes | Pro Forma Combined |
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| (in millions, except per share data) | (Note 3) | |||||||||||||||||||||||||||
| Net sales |
$ | 8,000 | $ | 7,594 | $ | (53 | ) | (4K | ) | $ | 15,541 | |||||||||||||||||
| Operating costs and expenses: |
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| Cost of materials and other |
6,398 | 6,339 | (54 | ) | (4K | ) | 12,683 | |||||||||||||||||||||
| Direct operating expenses (exclusive of depreciation and amortization) |
573 | — | 573 | |||||||||||||||||||||||||
| Depreciation and amortization |
232 | 69 | 121 | (4D | ) | 391 | ||||||||||||||||||||||
| 38 | (4E | ) | ||||||||||||||||||||||||||
| (69 | ) | (4J | ) | |||||||||||||||||||||||||
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| Cost of sales |
7,203 | 6,408 | 36 | — | 13,647 | |||||||||||||||||||||||
| Selling, general and administrative expenses (exclusive of depreciation and amortization) |
131 | 149 | 280 | |||||||||||||||||||||||||
| Depreciation and amortization |
5 | — | 5 | |||||||||||||||||||||||||
| Other operating expenses, net |
4 | 11 | 15 | |||||||||||||||||||||||||
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| Operating income |
657 | 1,026 | (89 | ) | — | 1,594 | ||||||||||||||||||||||
| Other (expense) income: |
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| Interest expense, net |
(105 | ) | — | (166 | ) | (5B | ) | (261 | ) | |||||||||||||||||||
| 10 | (5D | ) | ||||||||||||||||||||||||||
| Other income, net |
19 | 11 | 30 | |||||||||||||||||||||||||
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| Income before income taxes |
571 | 1,037 | (89 | ) | (156 | ) | 1,363 | |||||||||||||||||||||
| Income tax (benefit) expense |
122 | 269 | (22 | ) | (4M | ) | (38 | ) | (5C | ) | 331 | |||||||||||||||||
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| Net income |
449 | 768 | (67 | ) | (118 | ) | 1,032 | |||||||||||||||||||||
| Less: Net income attributable to noncontrolling interest |
74 | 74 | ||||||||||||||||||||||||||
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| Net income attributable to CVR Energy stockholders |
$ | 375 | $ | 768 | $ | (67 | ) | $ | (118 | ) | $ | 958 | ||||||||||||||||
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| Basic and diluted earnings per share (4L) |
$ | 3.73 | $ | 7.67 | ||||||||||||||||||||||||
| Weighted average common shares outstanding: |
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| Basic and diluted (4L) |
100.5 | 124.9 | ||||||||||||||||||||||||||
See notes to unaudited pro forma condensed combined financial statements.
4
CVR ENERGY, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2025
| Historical CVR Energy, Inc. |
Historical Mandan/SPP as reclassified |
Acquisition Accounting Adjustments |
Notes | Other Accounting Adjustments |
Notes | Pro Forma Combined |
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| (in millions, except per share data) | (Note 3) | |||||||||||||||||||||||||||
| Net sales |
$ | 7,162 | $ | 7,722 | $ | (69 | ) | (4K | ) | $ | 14,815 | |||||||||||||||||
| Operating costs and expenses: |
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| Cost of materials and other |
5,722 | 7,045 | (73 | ) | (4K | ) | 12,694 | |||||||||||||||||||||
| Direct operating expenses (exclusive of depreciation and amortization) |
700 | — | 700 | |||||||||||||||||||||||||
| Depreciation and amortization |
394 | 111 | 162 | (4D | ) | 606 | ||||||||||||||||||||||
| 50 | (4E | ) | ||||||||||||||||||||||||||
| (111 | ) | (4J | ) | |||||||||||||||||||||||||
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| Cost of sales |
6,816 | 7,156 | 28 | — | 14,000 | |||||||||||||||||||||||
| Selling, general and administrative expenses (exclusive of depreciation and amortization) |
148 | 167 | 20 | (4G | ) | 335 | ||||||||||||||||||||||
| Depreciation and amortization |
9 | — | 9 | |||||||||||||||||||||||||
| Other operating expenses, net |
7 | 20 | 27 | |||||||||||||||||||||||||
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| Operating income |
182 | 379 | (117 | ) | — | 444 | ||||||||||||||||||||||
| Other (expense) income: |
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| Interest expense, net |
(108 | ) | — | (221 | ) | (5B | ) | (306 | ) | |||||||||||||||||||
| 23 | (5D | ) | ||||||||||||||||||||||||||
| Other income, net |
6 | 16 | 22 | |||||||||||||||||||||||||
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| Income before income taxes |
80 | 395 | (117 | ) | (198 | ) | 160 | |||||||||||||||||||||
| Income tax (benefit) expense |
(10 | ) | 102 | (29 | ) | (4M | ) | (49 | ) | (5C | ) | 14 | ||||||||||||||||
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| Net income |
90 | 293 | (88 | ) | (149 | ) | 146 | |||||||||||||||||||||
| Less: Net income attributable to noncontrolling interest |
63 | 63 | ||||||||||||||||||||||||||
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| Net income attributable to CVR Energy stockholders |
$ | 27 | $ | 293 | $ | (88 | ) | $ | (149 | ) | $ | 83 | ||||||||||||||||
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| Basic and Diluted earnings per share: (4L) |
$ | 0.27 | $ | 0.66 | ||||||||||||||||||||||||
| Weighted average common shares outstanding: |
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| Basic and diluted (4L) |
100.5 | 124.9 | ||||||||||||||||||||||||||
See notes to unaudited pro forma condensed combined financial statements.
5
CVR ENERGY, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 2025
| Historical CVR Energy, Inc. |
Historical Mandan/SPP as reclassified |
Acquisition Accounting Adjustments |
Notes | Other Accounting Adjustments |
Notes | Pro Forma Combined |
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| (in millions, except per share data) | (Note 3) | |||||||||||||||||||||||||||
| Net sales |
$ | 5,352 | $ | 5,838 | $ | (52 | ) | (4K | ) | $ | 11,138 | |||||||||||||||||
| Operating costs and expenses: |
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| Cost of materials and other |
4,195 | 5,257 | (55 | ) | (4K | ) | 9,397 | |||||||||||||||||||||
| Direct operating expenses (exclusive of depreciation and amortization) |
503 | — | 503 | |||||||||||||||||||||||||
| Depreciation and amortization |
251 | 89 | 121 | (4D | ) | 410 | ||||||||||||||||||||||
| 38 | (4E | ) | ||||||||||||||||||||||||||
| (89 | ) | (4J | ) | |||||||||||||||||||||||||
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| Cost of sales |
4,949 | 5,346 | 15 | — | 10,310 | |||||||||||||||||||||||
| Selling, general and administrative expenses (exclusive of depreciation and amortization) |
115 | 124 | 20 | (4G | ) | 259 | ||||||||||||||||||||||
| Depreciation and amortization |
7 | — | 7 | |||||||||||||||||||||||||
| Other operating expenses, net |
4 | 15 | 19 | |||||||||||||||||||||||||
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| Operating income (loss) |
277 | 353 | (87 | ) | — | 543 | ||||||||||||||||||||||
| Other (expense) income: |
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| Interest expense, net |
(79 | ) | — | (166 | ) | (5B | ) | (227 | ) | |||||||||||||||||||
| 18 | (5D | ) | ||||||||||||||||||||||||||
| Other income, net |
5 | 12 | 17 | |||||||||||||||||||||||||
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| Income before income taxes |
203 | 365 | (87 | ) | (148 | ) | 333 | |||||||||||||||||||||
| Income tax (benefit) expense |
(3 | ) | 95 | (21 | ) | (4M | ) | (36 | ) | (5C | ) | 35 | ||||||||||||||||
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| Net income |
206 | 270 | (66 | ) | (112 | ) | 298 | |||||||||||||||||||||
| Less: Net income attributable to noncontrolling interest |
69 | 69 | ||||||||||||||||||||||||||
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| Net income attributable to CVR Energy stockholders |
$ | 137 | $ | 270 | $ | (66 | ) | $ | (112 | ) | $ | 229 | ||||||||||||||||
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| Basic and diluted earnings per share (4L) |
$ | 1.37 | $ | 1.83 | ||||||||||||||||||||||||
| Weighted average common shares outstanding: |
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| Basic and diluted (4L) |
100.5 | 124.9 | ||||||||||||||||||||||||||
See notes to unaudited pro forma condensed combined financial statements.
6
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
(1) Basis of Presentation
The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of SEC Regulation S-X. The unaudited pro forma condensed combined balance sheet is derived from the historical balance sheets of CVR Energy and Mandan/SPP as of September 30, 2026, and the unaudited pro forma condensed combined statements of operations are derived from the historical results of CVR Energy and Mandan/SPP for the nine months ended September 30, 2026 and 2025, and the year ended December 31, 2025, as applicable.
The Acquisition is expected to be accounted for as a business combination using the acquisition method of accounting under GAAP, in accordance with the provisions of ASC 805, which requires assets acquired and liabilities assumed to be recorded at their acquisition date fair value. The transaction has not yet closed. ASC 820, Fair Value Measurements, defines the term “fair value” as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” Fair value measurements can be highly subjective, and it is possible the application of reasonable judgment could develop different assumptions resulting in a range of alternative estimates based on the same facts and circumstances.
As of the date hereof, CVR Energy has not completed the detailed valuation studies necessary to determine the fair value of the purchased assets, the purchased interests and the assumed liabilities. Accordingly, the allocation reflected in the unaudited pro forma condensed combined financial information is based on management’s preliminary estimates. The final allocation will be completed after the consummation of the Acquisition and resolution of the applicable closing and final settlement statements in accordance with the Purchase Agreement, including the allocation of aggregate consideration among the purchased assets, the purchased interests and the assumed liabilities. Adjustments to the preliminary fair values, purchase price and related tax effects could materially affect the unaudited pro forma condensed combined financial information and CVR Energy’s future results of operations and financial position.
CVR Energy’s historical financial statements and the historical carve-out combined financial statements of the purchased assets and interests were prepared in accordance with GAAP. As discussed in Note 3, certain reclassifications have been made to align the Mandan/SPP historical presentation with CVR Energy’s presentation for purposes of preparing the unaudited pro forma condensed combined financial information. Mandan/SPP has not historically operated as a standalone business, and their historical financial statements are not necessarily indicative of the financial position or results that would have occurred on a standalone basis. CVR Energy will continue to evaluate accounting policy differences and may identify additional conforming adjustments after the consummation of the Acquisition or as additional information becomes available.
There were no material intercompany transactions or balances between CVR Energy and Mandan/SPP as of September 30, 2026, and for the nine months ended September 30, 2026 and 2025, and the year ended December 31, 2025.
(2) Preliminary Purchase Price Allocation
The following table presents the preliminary estimated consideration for Mandan/SPP:
| (in millions) | ||||
| Base cash purchase price |
$ | 4,200 | ||
| Adjustments: |
||||
| Hydrocarbon inventory (1) |
740 | |||
| Non-hydrocarbon catalyst assets |
20 | |||
| Working capital amount |
10 | |||
| Mandan/SPP accrued property tax liabilities |
(1 | ) | ||
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|
|
|||
| Total cash consideration transferred |
$ | 4,969 | ||
|
|
|
|||
| (1) | As disclosed in Note 5, CVR Energy is contemporaneously entering into commercial agreements with a commercial partner. Under these agreements, the commercial partner will acquire certain crude inventory at the closing of the Acquisition, which will reduce the amount of cash required from CVR Energy to fund the transactions. |
The aggregate purchase price is expected to be $4.2 billion of base purchase price plus $0.8 billion of incremental consideration attributable to net working capital, with final consideration subject to the applicable adjustments and the closing and final settlement procedures in the Purchase Agreement. The final consideration transferred for Mandan/SPP will be determined under the Purchase Agreement based on the final purchased assets and interests, assumed liabilities, and applicable closing and post-closing adjustments. Accordingly, the final consideration may differ from the preliminary amount used in the purchase price allocation.
7
Under the acquisition method of accounting, the identifiable assets acquired and liabilities assumed of Mandan/SPP are recognized and measured at fair value. The allocation remains preliminary and is subject to change as additional information becomes available and the final valuation and purchase-price adjustments are completed, and any such changes could be material. The following table presents a preliminary allocation of the total estimated cash consideration to the identified tangible and intangible assets of Mandan/SPP to be acquired and liabilities to be assumed based on preliminary estimated fair values as of September 30, 2026:
| (in millions) | ||||
| Total consideration for the Acquisition |
$ | 4,969 | ||
| Inventories |
835 | |||
| Property, plant and equipment |
2,173 | |||
| Other long-term assets |
167 | |||
| Intangible assets |
402 | |||
|
|
|
|||
| Total assets acquired |
3,577 | |||
| Accounts payable and accrued liabilities |
89 | |||
| Other current liabilities |
1 | |||
| Other long-term liabilities |
17 | |||
|
|
|
|||
| Total liabilities assumed |
107 | |||
|
|
|
|||
| Net assets acquired |
3,470 | |||
|
|
|
|||
| Preliminary allocation to goodwill |
1,499 | |||
|
|
|
|||
(3) Reclassification and Accounting Policy Adjustments
The historical carve-out combined financial statements of Mandan/SPP were prepared in accordance with GAAP. In preparing the unaudited pro forma condensed combined financial information, CVR Energy performed a preliminary analysis to identify differences between the historical financial statement presentation and accounting policies of Mandan/SPP and those of CVR Energy. The reclassifications described below conform the presentation of the Mandan/SPP historical financial information to CVR Energy’s presentation and do not affect Mandan/SPP’s historical total assets, total liabilities, net parent investment or net income. In addition, an accounting policy adjustment has been made to conform Mandan/SPP’s accounting for turnaround costs to CVR Energy’s policy of capitalizing such costs, which affects Mandan/SPP’s net income as shown below. CVR Energy will continue to evaluate accounting policy and presentation differences and may identify additional conforming adjustments as further information becomes available.
8
The following table presents a summary of reclassification adjustments made to present Mandan/SPP’s unaudited condensed combined balance sheet as of September 30, 2026, in conformity with that of CVR Energy:
Mandan/SPP
Unaudited Condensed Combined Balance Sheet
As of September 30, 2026
(in millions)
| Presentation in Historical Financial Statements |
Presentation in Unaudited Pro Forma |
Mandan/SPP Before Reclassification |
Reclassifications | Mandan/SPP as Reclassified |
||||||||||||||
| Assets |
||||||||||||||||||
| Receivables |
Accounts receivable, net | $ | 41 | $ | 3 | (i | ) | $ | 44 | |||||||||
| Related party receivables |
3 | (3 | ) | (i | ) | — | ||||||||||||
| Inventories |
Inventories | 840 | 840 | |||||||||||||||
|
|
|
|
|
|
|
|||||||||||||
| Total current assets |
884 | — | 884 | |||||||||||||||
| Equity method investment |
Other long-term assets | 159 | $ | (159 | ) | (iv | ) | — | ||||||||||
| Property, plant and equipment, net |
Property, plant, and equipment, net | 825 | (8 | ) | (v | ) | 817 | |||||||||||
| Intangibles, net |
Intangible assets | 42 | 42 | |||||||||||||||
| Other noncurrent assets |
Other long-term assets | 27 | 159 | (iv | ) | 194 | ||||||||||||
| 8 | (v | ) | ||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||
| Total assets |
$ | 1,937 | $ | — | $ | 1,937 | ||||||||||||
|
|
|
|
|
|
|
|||||||||||||
| Liabilities and Equity |
||||||||||||||||||
| Accounts payable |
Accounts payable | $ | 273 | $ | 4 | (ii | ) | $ | 277 | |||||||||
| Related party payables |
4 | (4 | ) | (ii | ) | — | ||||||||||||
| Payroll and benefits payable |
27 | (27 | ) | (iii | ) | — | ||||||||||||
| Accrued taxes |
150 | (150 | ) | (iii | ) | — | ||||||||||||
| Environmental obligations |
108 | (108 | ) | (iii | ) | — | ||||||||||||
| Other current liabilities |
Other current liabilities | 4 | 285 | (iii | ) | 289 | ||||||||||||
|
|
|
|
|
|
|
|||||||||||||
| Total current liabilities |
566 | — | 566 | |||||||||||||||
| Deferred income tax liabilities |
Deferred income taxes | 103 | 103 | |||||||||||||||
| Other long-term liabilities |
Other long-term liabilities | 24 | 24 | |||||||||||||||
|
|
|
|
|
|
|
|||||||||||||
| Total liabilities |
693 | — | 693 | |||||||||||||||
| Net Parent Investment |
Net Parent Investment | 1,244 | 1,244 | |||||||||||||||
|
|
|
|
|
|
|
|||||||||||||
| Total liabilities and equity |
Total liabilities and equity |
$ | 1,937 | $ | — | $ | 1,937 | |||||||||||
|
|
|
|
|
|
|
|||||||||||||
| (i) | Reclassification of “Related-party receivables” to “Accounts receivable, net.” |
| (ii) | Reclassification of “Related-party payables” to “Accounts payable.” |
| (iii) | Reclassification from “Payroll and benefits payable”, “Accrued taxes” and “Environmental obligations” to “Other current liabilities.” |
| (iv) | Reclassification from “Equity method investment” to “Other long-term assets.” |
| (v) | Reclassification from “Property, plant, and equipment, net” to “Other long-term assets.” |
9
The following table presents a summary of reclassification adjustments made to present Mandan/SPP unaudited condensed combined statement of operations for the nine months ended September 30, 2026, in conformity with that of CVR Energy:
Mandan/SPP
Unaudited Condensed Combined Statement of Operations
For the Nine Months Ended September 30, 2026
(in millions)
| Presentation in Historical Financial Statements |
Presentation in Unaudited Pro |
Mandan/SPP Before Reclassification |
Reclassifications | Accounting Policy Adjustment |
Mandan/SPP as Reclassified |
|||||||||||||||||||||
| Revenues and other income: |
||||||||||||||||||||||||||
| Sales and other operating revenues |
Net sales | $ | 7,308 | $ | 286 | (i | ) | $ | 7,594 | |||||||||||||||||
| Related party revenues |
286 | (286 | ) | (i | ) | — | ||||||||||||||||||||
| Income from equity method investment |
5 | (5 | ) | (ii | ) | — | ||||||||||||||||||||
| Other income |
Other income, net | 1 | 10 | (ii | ) | 11 | ||||||||||||||||||||
| Related party other income |
5 | (5 | ) | (ii | ) | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total revenues and other income |
7,605 | — | — | |||||||||||||||||||||||
| Costs and Expenses: |
||||||||||||||||||||||||||
| Cost of revenues (excludes items below) |
Cost of materials and other | 2,874 | 3,559 | (iii | ) | 6,339 | ||||||||||||||||||||
| (94 | ) | (iv | ) | |||||||||||||||||||||||
| Related party cost of revenues |
3,559 | (3,559 | ) | (iii | ) | — | ||||||||||||||||||||
| Depreciation and amortization |
Depreciation and amortization | 69 | 69 | |||||||||||||||||||||||
| Selling, general and administrative expenses |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 149 | 149 | |||||||||||||||||||||||
| Other taxes |
Other operating expenses , net | 11 | 11 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total costs and expenses |
6,662 | — | (94 | ) | ||||||||||||||||||||||
| Income before income taxes |
943 | — | 94 | 1,037 | ||||||||||||||||||||||
| Provision for income taxes |
Income tax expense | 246 | 23 | (iv | ) | 269 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Net income |
$ | 697 | $ | — | $ | 71 | $ | 768 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| (i) | Reclassification of “Sales and other operating revenues” and “Related party revenues” to “Net sales.” |
| (ii) | Reclassification from “Income from equity method investment”, “Other income” and “Related party other income” to “Other income, net.” |
| (iii) | Reclassification from “Cost of revenues (excludes items below)” and “Related party cost of revenues” to “Cost of materials and other.” |
| (iv) | Accounting policy adjustment to remove expenses and the appropriate income-tax effect, associated with turnaround cost as CVR Energy capitalizes such expenses within “Other long-term assets.” |
10
The following table presents a summary of reclassification adjustments made to present Mandan/SPP’s combined statement of operations for the year ended December 31, 2025, in conformity with that of CVR Energy:
Mandan/SPP
Combined Statement of Operations
For the Year Ended December 31, 2025
(in millions)
| Presentation in Historical Financial Statements |
Presentation in Unaudited Pro |
Mandan/SPP Before Reclassification |
Reclassifications | Accounting Policy Adjustment |
Mandan/SPP as Reclassified |
|||||||||||||||||||||
| Revenues and other income: |
||||||||||||||||||||||||||
| Sales and other operating revenues |
Net sales | 7,476 | $ | 246 | (i | ) | $ | 7,722 | ||||||||||||||||||
| Related party revenues |
246 | (246 | ) | (i | ) | — | ||||||||||||||||||||
| Income from equity method investment |
7 | (7 | ) | (ii | ) | — | ||||||||||||||||||||
| Other income |
Other income, net | 3 | 13 | (ii | ) | 16 | ||||||||||||||||||||
| Related party other income |
6 | (6 | ) | (ii | ) | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total revenues and other income |
7,738 | — | — | |||||||||||||||||||||||
| Costs and Expenses: |
||||||||||||||||||||||||||
| Cost of revenues (excludes items below) |
Cost of materials and other | 2,917 | 4,133 | (iii | ) | 7,045 | ||||||||||||||||||||
| (5 | ) | (iv | ) | |||||||||||||||||||||||
| Related party cost of revenues |
4,133 | (4,133 | ) | (iii | ) | — | ||||||||||||||||||||
| Depreciation and amortization |
Depreciation and amortization | 111 | 111 | |||||||||||||||||||||||
| Selling, general and administrative expenses |
Selling, general and administrative expenses | 167 | 167 | |||||||||||||||||||||||
| Other taxes |
Other operating expenses (income), net | 20 | 20 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total costs and expenses |
7,348 | — | (5 | ) | ||||||||||||||||||||||
| Income before income taxes |
Income (loss) before income taxes | 390 | — | 5 | 395 | |||||||||||||||||||||
| Provision for income taxes |
Income tax expense (benefit) | 101 | 1 | (iv | ) | 102 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Net income |
Net income (loss) | $ | 289 | $ | — | $ | 4 | $ | 293 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| (i) | Reclassification of “Sales and other operating revenues” and “Related party revenues” to “Net sales.” |
| (ii) | Reclassification from “Income from equity method investment”, “Other income” and “Related party other income” to “Other income, net.” |
| (iii) | Reclassification from “Cost of revenues (excludes items below)” and “Related party cost of revenues” to “Cost of materials and other.” |
| (iv) | Accounting policy adjustment to remove expenses and the appropriate income-tax effect, associated with turnaround cost as CVR Energy capitalizes such expenses within “Other long-term assets.” |
11
The following table presents a summary of reclassification adjustments made to present Mandan/SPP unaudited condensed combined statement of operations for the nine months ended September 30, 2025, in conformity with that of CVR Energy:
Mandan/SPP
Unaudited Condensed Combined Statement of Operations
For the Nine Months Ended September 30, 2025
(in millions)
| Presentation in Historical Financial Statements |
Presentation in Unaudited Pro |
Mandan/SPP Before Reclassification |
Reclassifications | Accounting Policy Adjustment |
Mandan/SPP as Reclassified |
|||||||||||||||||||||
| Revenues and other income: |
||||||||||||||||||||||||||
| Sales and other operating revenues |
Net sales | $ | 5,649 | $ | 189 | (i | ) | $ | 5,838 | |||||||||||||||||
| Related party revenues |
189 | (189 | ) | (i | ) | — | ||||||||||||||||||||
| Income from equity method investment |
6 | (6 | ) | (ii | ) | — | ||||||||||||||||||||
| Other income |
Other income, net | 1 | 11 | (ii | ) | 12 | ||||||||||||||||||||
| Related party other income |
5 | (5 | ) | (ii | ) | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total revenues and other income |
5,850 | — | — | |||||||||||||||||||||||
| Costs and Expenses: |
||||||||||||||||||||||||||
| Cost of revenues (excludes items below) |
Cost of materials and other | 2,041 | 3,220 | (iii | ) | 5,257 | ||||||||||||||||||||
| (4 | ) | (iv | ) | |||||||||||||||||||||||
| Related party cost of revenues |
3,220 | (3,220 | ) | (iii | ) | — | ||||||||||||||||||||
| Depreciation and amortization |
Depreciation and amortization | 89 | 89 | |||||||||||||||||||||||
| Selling, general and administrative expenses |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 124 | 124 | |||||||||||||||||||||||
| Other taxes |
Other operating expenses (income), net | 15 | 15 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total costs and expenses |
5,489 | — | (4 | ) | ||||||||||||||||||||||
| Income before income taxes |
Income (loss) before income taxes | 361 | — | 4 | 365 | |||||||||||||||||||||
| Provision for income taxes |
Income tax expense (benefit) | 94 | 1 | (iv | ) | 95 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Net income |
Net income (loss) | $ | 267 | $ | — | $ | 3 | $ | 270 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| (i) | Reclassification of “Sales and other operating revenues” and “Related party revenues” to “Net sales.” |
| (ii) | Reclassification from “Income from equity method investment”, “Other income” and “Related party other income” to “Other income, net.” |
| (iii) | Reclassification from “Cost of revenues (excludes items below)” and “Related party cost of revenues” to “Cost of materials and other.” |
| (iv) | Accounting policy adjustment to remove expenses and the appropriate income-tax effect, associated with turnaround cost as CVR Energy capitalizes such expenses within “Other long-term assets.” |
(4) Acquisition Pro Forma Adjustments and Assumptions
| A. | Cash consideration transferred - Reflects the estimated cash consideration of $4.2 billion of base purchase price plus $0.8 billion of incremental consideration attributable to net working capital. Refer to Note 2 for the preliminary estimated consideration. |
12
| B. | Balance sheet items not transferring - The following balance sheet items were not transferred as part of the net assets acquired: |
| (in millions) | Net assets/liabilities not acquired | |||
| Accounts receivable |
$ | (44 | ) | |
| Inventory |
(5 | ) | ||
| Accounts Payable |
(188 | ) | ||
| Other current liabilities |
(288 | ) | ||
| Other long-term liabilities |
(7 | ) | ||
| Deferred Taxes |
(103 | ) | ||
| C. | Fair-value step-up adjustments - Reflects the preliminary adjustment of certain acquired assets from historical carrying value to estimated fair value as of the acquisition date. |
| Step-up adjustments (in millions) |
Mandan/SPP Historical Value as of September 30, 2026 |
Fair Value as of September 30, 2026 |
Step-up / Step-down | |||||||||
| Property, plant and equipment |
$ | 817 | $ | 2,173 | $ | 1,356 | ||||||
| Intangible assets |
42 | 402 | 360 | |||||||||
| Other long-term assets (1) |
194 | 167 | (27 | ) | ||||||||
|
|
|
|
|
|
|
|||||||
| Total |
$ | 1,053 | $ | 2,742 | $ | 1,689 | ||||||
|
|
|
|
|
|
|
|||||||
| (1) | The fair value adjustment is associated with (a) $39 million reduction in the equity method investment comprising the 17% interests in each of Minnesota Pipe Line Company, LLC and MPL Investments, Inc., offset by a (b) $12 million step-up on non-hydrocarbon catalyst assets acquired in the Transaction. |
| D. | Depreciation expense - Reflects depreciation based on the preliminary fair values and estimated remaining useful lives (“RUL”) of the acquired real and personal property for the nine months ended September 30, 2026 and 2025, and the year ended December 31, 2025. No depreciation is recorded for land and improvements or construction in progress. |
| (in millions) | Preliminary Fair Value |
Estimated RUL (years) |
Nine Months Ended September 30, 2026 |
Nine Months Ended September 30, 2025 |
Year Ended December 31, 2025 |
|||||||||||||
| Land and improvements |
$ | 64 | N/A | $ | — | $ | — | $ | — | |||||||||
| Machinery and equipment |
2,032 | 3-18 | 121 | 121 | 162 | |||||||||||||
| Construction in progress |
77 | N/A | — | — | — | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
$ | 2,173 | $ | 121 | $ | 121 | $ | 162 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||
| E. | Amortization expense - Reflects amortization based on the preliminary fair values and estimated RUL of the identifiable intangible assets using the economic benefit approach for the nine months ended September 30, 2026 and 2025, and the year ended December 31, 2025. |
| (in millions) | Preliminary Fair Value |
Estimated RUL (years) |
Nine Months Ended September 30, 2026 |
Nine Months Ended September 30, 2025 |
Year Ended December 31, 2025 |
|||||||||||||
| Fuel supply agreements - branded |
$ | 105 | 20 | $ | 5 | $ | 5 | $ | 7 | |||||||||
| Fuel supply agreements - unbranded |
280 | 20 | 32 | 32 | 42 | |||||||||||||
| Brand rights |
14 | 10 | 1 | 1 | 1 | |||||||||||||
| Permits and licenses |
3 | N/ A |
— | — | — | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
$ | 402 | $ | 38 | $ | 38 | $ | 50 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||
| F. | Goodwill - Reflects the recognition of preliminary estimated goodwill resulting from the Acquisition. Refer to Note 2 for the preliminary purchase price allocation. |
| G. | Transaction costs - Represents estimated acquisition-related transaction costs for legal, communications, banking, structuring and due-diligence services. The estimates below are preliminary amounts that remain subject to update. |
| (in millions) |
||||
| Estimated Total Transaction Costs |
$ | 24 | ||
| Less: Transaction Costs already booked (Merger Costs) |
4 | |||
|
|
|
|||
| Total Pro Forma Adjustment |
$ | 20 | ||
|
|
|
13
| H. | Elimination of historical net parent investment - Reflects the elimination of Mandan/SPP’s historical net parent investment. |
| I. | Not used. |
| J. | Elimination of historical depreciation and amortization - Reflects the elimination of Mandan/SPP’s historical depreciation and amortization related to property, plant and equipment and intangible assets. The adjustment is $69 million for the nine months ended September 30, 2026, $89 million for the nine months ended September 30, 2025, and $111 million for the year ended December 31, 2025. |
| K. | Statement of operations items not transferring - In line with the Purchase Agreement, certain activity within the net sales and cost of materials and other line items will not be acquired by CVR Energy. As such, a pro forma adjustment must be made to adjust the historical results of Mandan/SPP. |
| (in millions) | Nine Months Ended September 30, 2026 |
Nine Months Ended September 30, 2025 |
Year Ended December 31, 2025 |
|||||||||
| Net sales |
$ | (53 | ) | $ | (52 | ) | $ | (69 | ) | |||
| Cost of materials and other |
(54 | ) | (55 | ) | (73 | ) | ||||||
| L. | Pro forma income per share - Reflects pro forma net income attributable to CVR Energy stockholders divided by pro forma weighted-average common shares outstanding for the nine months ended September 30, 2026, the year ended December 31, 2025, and the nine months ended September 30, 2025. The 124.9 million weighted-average common shares outstanding used for the calculation is comprised of the historical weighted-average common shares outstanding of 100.5 million shares and the incremental 24.4 million shares of CVR Energy preferred stock to be issued, shown on an as-converted to common stock basis. |
| (in millions, except per share data) | Nine Months Ended September 30, 2026 |
Nine Months Ended September 30, 2025 |
Year Ended December 31, 2025 |
|||||||||
| Pro forma net income attributable to CVR Energy stockholders |
$ | 958 | $ | 229 | $ | 83 | ||||||
| Weighted-average shares of common stock |
124.9 | 124.9 | 124.9 | |||||||||
| Pro forma income per share – basic and diluted |
$ | 7.67 | $ | 1.83 | $ | 0.66 | ||||||
| M. | Income tax effects - Represents the income-tax effect of the pro forma acquisition adjustments using a 24.5% marginal tax rate. |
14
(5) Other Accounting Pro Forma Adjustments and Assumptions
| A. | Sources of cash - For purposes of the unaudited pro forma condensed combined financial information, it is assumed that CVR Energy will finance the Acquisition, including payment of fees, costs and expenses associated with the Purchase Agreement with available cash, as well as with the proceeds of the financing transactions, subject to market conditions. CVR Energy is expected to receive $3,970 million in net cash proceeds from the following sources: |
| Financing Sources (in millions) |
Pro Forma Total (Net of Fees and Discounts) |
|||
| Equity: |
||||
| Commercial Partner Equity Investment (1) |
$ | 800 | ||
| IEP Equity Investment (2) |
495 | |||
|
|
|
|||
| Additional paid in capital pro forma adjustment |
$ | 1,295 | ||
|
|
|
|||
| Debt: |
||||
| Bridge Facility (3) |
$ | 2,450 | ||
| Existing ABL Facility (4) |
225 | |||
|
|
|
|||
| Debt pro forma adjustment |
$ | 2,675 | ||
|
|
|
|||
| Total cash received |
$ | 3,970 | ||
|
|
|
|||
| (1) | Represents approximately 14.97 million shares of preferred stock, shown on an as-converted to common stock basis, issued at an estimated price of $53.43, which reflects a 10% discount to the volume weighted average price of CVR Energy’s common stock over the last 20 trading days. Traditional fees and discounts were considered as part of a contemporaneously executed long-term commercial agreement at prevailing market terms. |
| (2) | Represents approximately 9.36 million shares of preferred stock, shown on an as-converted to common stock basis, issued at an estimated price of $53.43, which reflects a 10% discount to the volume weighted average price of CVR Energy’s common stock over the last 20 trading days, net of a 1% commitment fee, pursuant to a subscription agreement with an affiliate of Icahn Enterprises L.P. CVR Energy’s controlling stockholder to provide for up to $500 million of committed equity financing. The commitment under the subscription agreement would terminate upon the consummation of a subsequent equity offering generating gross proceeds of at least $500 million to CVR Energy. |
| (3) | Represents $2.5 billion under the Bridge Facility with an estimated 8.0% interest rate, net of associated debt issuance fees of $50 million. We do not intend to fund the Bridge Facility and currently expect to replace the commitments under the Bridge Facility prior to the closing of the Acquisition with the Permanent Financing. However, there are no assurances that we will be able to do so and any such financings would be subject to prevailing market conditions at that time. |
| (4) | Represents a draw from CVR Energy’s ABL facility which we intend to amend and upsize at an estimated 4.25% interest rate, net of associated debt issuance fees of $8 million. |
| B. | Incremental interest expense - This adjustment reflects pro forma adjustment to interest expense related to assumed incurrence of indebtedness on terms applicable to borrowings under the anticipated new debt facilities. Under the terms of the debt instruments, borrowings would be expected to accrue interest on a weighted average basis at a rate equal to 7.7%. For purposes of the pro forma statements of operations, it is assumed that borrowings occur on January 1, 2025, and remain outstanding throughout the periods presented. |
The following table presents the pro forma adjustments for the expected contractual interest expense and the amortization of debt issuance cost in connection with the financing transactions relating to the Acquisition:
| (in millions) | Nine Months Ended September 30, 2026 |
Nine Months Ended September 30, 2025 |
Year Ended December 31, 2025 |
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| Interest expense on new debt facilities |
$ | 158 | $ | 158 | $ | 210 | ||||||
| Amortization of debt issuance cost |
8 | 8 | 11 | |||||||||
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| Pro forma adjustment to interest expense |
$ | 166 | $ | 166 | $ | 221 | ||||||
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A 0.125% change in interest rates on the variable-rate borrowings would increase or decrease interest expense on a pro forma basis by $2 million for the nine months September 30, 2026 and 2025, and by $3 million for the year ended December 31, 2025.
| C. | Income tax effects - Represents the income-tax effect of the pro forma other accounting adjustments using a 24.5% marginal tax rate. |
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| D. | Redemption of 5.75% Senior Notes due 2028 - Represents the $183 million early redemption of CVR Energy’s 5.75% Senior Notes due 2028 from the cash and liabilities on the balance sheet, as well as removing the impacts of associated interest expense and unamortized debt issuance costs from the statements of operations for the presented periods. |
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