Equity Method Investments

12 Months Ended

Dec. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

(5) Equity Method Investments

In January 2023, CVR Partners and its subsidiary entered into a series of agreements with CapturePoint LLC, an unaffiliated Texas limited liability company, and certain unaffiliated third-party investors intended to qualify under the Internal

Revenue Service (“IRS”) safe harbor described in Revenue Procedure 2020-12 for certain joint ventures that are eligible to claim certain tax credits available to joint ventures under Section 45Q of the Internal Revenue Code of 1986, as amended (“Section 45Q Credits”) and allow us to monetize Section 45Q Credits we expect to generate from January 6, 2023 until March 31, 2030 (the “45Q Transaction”). Among other items, the 45Q Transaction resulted in the creation of a joint venture entity, CVR-CapturePoint Parent LLC, which was accounted for by CVR Partners as an equity-method investment.

We have the following investments which have applied the equity method of accounting and are presented within Other long-term assets on our Consolidated Balance Sheets:

•CVR-CapturePoint Parent LLC (“CVRP JV”) - Through our subsidiaries, and in connection with the 45Q Transaction, we received a 50% interest in CVRP JV in connection with a modification to a carbon oxide contract (“CO Contract”) with a customer. We applied the VIE model under FASB ASC Topic 810, Consolidation, to our variable interest in CVRP JV and determined that CVRP JV is a VIE. While we concluded we are not the primary beneficiary of CVRP JV, we do have significant influence over CVRP JV’s operating and financial policies and, therefore, applied the equity method of accounting for our investment in CVRP JV.

We deferred the recognition of the noncash consideration received and have recognized such revenue as the performance obligation associated with the CO Contract is satisfied. Refer to Note 9 (“Revenue”) for further discussion. We have elected to record our share of the earnings or loss of CVRP JV one quarter in arrears. Distributions received from CVRP JV will reduce our equity method investment and will be recorded in the period in which they are received.

•Enable South Central Pipeline, LLC (“Enable JV”) - Through our subsidiaries, we own a 40% interest in Enable JV, which operates a 12-inch 26-mile crude oil pipeline with a capacity of approximately 80,000 barrels per day that is connected to the Wynnewood Refinery. The remaining interest in Enable JV is owned by Enable Midstream Partners, LP, which was merged with Energy Transfer LP in December 2021.

•Midway Pipeline, LLC (“Midway JV”) - Through our subsidiaries, we own a 50% interest in Midway JV, which operates a 16-inch 99-mile crude oil pipeline with a capacity of approximately 131,000 barrels per day which connects the Coffeyville Refinery to the Cushing, Oklahoma oil hub. The remaining interest in Midway JV is owned by Plains Pipeline, L.P.


(in millions)	CVRP JV		Enable JV		Midway JV		Total
Balance at December 31, 2021	—		6		73		79

Cash distributions	—		(4)		(9)		(13)
Equity income	—		3		7		10
Balance at December 31, 2022	—		5		71		76
CVRP JV inception	46		—		—		46

Cash distributions (1)	(21)		(4)		(9)		(34)
Equity income	—		4		8		12
Balance at December 31, 2023	$	25	$	5	$	70	$	100

(1)Of the CVRP JV amount, approximately $1 million related to incremental costs associated with obtaining the CO Contract were capitalized and included in Prepaid expenses and other current assets and Other long-term assets in our Consolidated Balance Sheets.

As a result of exceeding certain carbon oxide capture and sequestration milestones during 2023, in February 2024, CVR Partners received a $2 million distribution from CVRP JV which will be recognized in the first quarter of 2024.