CVR ENERGY INC

Current report

The Acquisition is subject to a number of conditions, including regulatory approvals, some of which may be outside either party’s control, and the failure to satisfy or obtain any of them could delay the Acquisition or cause the Purchase Agreement to be terminated in accordance with its terms.

Current report

The closing of the Acquisition remains subject to the satisfaction or waiver of certain closing conditions, including expiration or termination of the waiting period under the HSR Act and any related agreement with the Antitrust Division of the U.S. Department of Justice (the “Antitrust Division”). In connection with the Acquisition, we and MPC have each filed the required notification and report forms under the HSR Act with the Antitrust Division and the U.S. Federal Trade Commission.

Current report

Under the terms of the Purchase Agreement, the Acquisition is required to close no later than 270 days after the execution of the Purchase Agreement (subject to extension to up to 360 days in specified circumstances), subject to the satisfaction or waiver of certain closing conditions. Any delay in closing or a failure to close could have a negative impact on our business and the trading price of our common stock.

Current report

Even after the expiration or termination of the HSR Act waiting period, the Antitrust Division or any state regulatory agency could take action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the completion of the Acquisition or requiring us or MPC to agree to other remedies or requirements. We cannot be certain that we or MPC will prevail in the face of legal challenges to the Acquisition. Failure to prevail in any legal challenge to the Acquisition may result in the delay or abandonment of the Acquisition.

Current report

These conditions to the completion of the Acquisition, some of which are beyond our control and/or the control of MPC, may not be satisfied or waived in a timely manner or at all. Accordingly, the Acquisition may be delayed or not completed.

Current report

As a condition to granting required regulatory approvals, governmental entities may impose conditions, limitations, obligations or costs or place restrictions on our conduct after the Acquisition Closing Date. Such conditions or changes and the process of obtaining regulatory approvals could, among other things, have the effect of delaying completion of the Acquisition or of imposing additional costs or limitations on us following the closing of the Acquisition, any of which may have an adverse effect on us.

Current report

Additionally, either we or the Sellers may terminate the Purchase Agreement under certain circumstances specified therein, subject to the payment of a “termination fee” in certain cases. If we are required to pay a termination fee, our liquidity and financial condition could be adversely affected.

Current report

The Acquisition may not be completed within the expected timeframe or at all, and the failure to complete the Acquisition may negatively affect the trading price of our common stock and our financial results.

Current report

The Acquisition is subject to risks and uncertainties, including (i) the risk that the Acquisition may not be completed, or may not be completed within the expected timeframe, including as a result of the possibility that a governmental entity may prohibit, delay or refuse an approval required to complete the Acquisition, and (ii) the risk that costs relating to the Acquisition (including in respect of the financing of the Acquisition) may be greater than expected. If the Acquisition is not completed or if there are significant delays in completing the Acquisition, any such failure or delay could negatively affect the trading price of our common stock, adversely affect our future business and financial results and result in our failure to realize anticipated synergies. Any failure to consummate the Acquisition could also result in a negative reaction from the financial markets, particularly if the current market prices reflect market assumptions that the Acquisition will be consummated, which could cause the value of our common stock to decline.

Current report

The Acquisition may present certain risks to our business and operations prior to the Acquisition Closing Date.

Current report

Our business and operations are subject to various risks related to the Acquisition prior to the Acquisition Closing Date, including:

Current report

•uncertainty about the effect of the Acquisition on employees, customers, suppliers and other persons with whom we or MPC have a business relationship, which could have an adverse effect on our business, operations and stock price;

Current report

•the Acquisition may disrupt our current business plans and operations;

Current report

•our management’s attention may be directed toward the completion of the Acquisition and diverted away from our day-to-day business operations;

Current report

•we may incur significantly higher transaction costs than we currently anticipate, such as legal, financing and accounting fees, and other costs, fees, expenses and charges related to the Acquisition, whether or not the transaction is completed; and

Current report

•the Acquisition may not be completed, which may have an adverse effect on our stock price and future business and financial results.

Current report

We may fail to realize all of the anticipated benefits of the Acquisition, or those benefits may take longer to realize than expected.

Current report

We expect to devote significant management attention to closing the Acquisition and, if it closes, integrating the operations of the Target Assets with CVR Energy. In the event the Acquisition closes, we may experience disruptions to our business and, if the integration is ineffective, such disruptions could prevent us from realizing the full expected benefits of the Acquisition. The failure to meet the challenges involved in the integration process and to realize the anticipated benefits of the Acquisition could cause an interruption or loss of momentum in our operations.

Current report

If the Acquisition successfully closes, difficulties in integrating the Target Assets into our business may include unforeseen operating difficulties and difficulties in coordinating geographically dispersed operations and facilities; additional and unfamiliar legal and regulatory requirements in Minnesota and North Dakota, where we do not currently operate refineries, including the ability to obtain, retain or renew the environmental and other governmental permits, licenses or authorizations necessary for the operation of the Target Assets; and the need to invest further in operational, financial and management information systems. Compliance with these requirements may increase our costs and complicate the integration and operation of the Target Assets. Even if integration of the Target Assets is successful, the financial and operational results may differ materially from our assumptions and forecasts due to unforeseen expenses, delays, conditions and liabilities. In addition, we may incur unanticipated costs or expenses following the Acquisition, including post-closing asset impairment charges, and other liabilities. Under the Purchase Agreement, we will also assume certain liabilities relating to the Target Assets, and the costs of satisfying those liabilities may exceed our estimates.

Current report

Furthermore, the successful closing of the Acquisition and the subsequent integration of the Target Assets into our business may result in material unanticipated problems, expenses, charges, liabilities, competitive responses, loss of customers and other business relationships, and diversion of management’s attention. Additional integration challenges may include difficulty in achieving anticipated growth prospects and other benefits from the Acquisition; the failure to maintain appropriate and consistent operating policies and internal controls across our business and the various geographic regions in which we operate, which could adversely affect our business and results of operations as a result of inconsistent operating, financial and legal practices; and involvement in labor, commercial or regulatory disputes or litigation relating to the acquired operations. Many of these factors will be outside of our control and any one of them could result in increased costs, including restructuring charges, decreases in revenues and diversion of management’s time and energy, which could adversely affect our business, financial condition and results of operations. Additionally, achieving the anticipated benefits, including synergies and cost savings, is subject to a number of uncertainties, including whether the business acquired can be operated in the manner we intend and whether our costs to fund the Acquisition will be consistent with our expectations. Our success in realizing these synergies and cost savings, and the timing of this realization, depends on many factors, many of which are outside our control. Even if we consummate the Acquisition successfully, this may not result in the full realization of the synergies and cost savings that we currently expect, either within the expected timeframe or at all. In addition, the costs to achieve these synergies and cost savings may be higher than we anticipate. If our synergies and cost savings are less than our estimates, cost more or take longer to implement than we project, or our assumptions prove to be inaccurate, our results could be lower than we anticipate, which could adversely affect the market price of our common stock.

Current report

Thus, the integration of the Target Assets may be unpredictable, and subject to delays or changed circumstances. The acquired business may not perform in accordance with our expectations, and our expectations with respect to integration, synergies or cost savings as a result of the Acquisition may not materialize. In addition, our anticipated costs to achieve the integration of the Target Assets may differ significantly from our current estimates. The integration may place an additional burden on our management and internal resources, and the diversion of management’s attention during the integration process could have an adverse effect on our business, financial condition and expected operating results.

Current report

Upon closing of the Acquisition, the Target Assets may underperform relative to our expectations.

Current report

Following completion of the Acquisition, we may not be able to maintain the levels of production, operating efficiency, revenue or earnings that the Target Assets or we have historically achieved. The business and financial performance of the Target Assets are subject to certain risks and uncertainties, including the risk of a material decline in production levels at the Target Assets, potential operating hazards, downtime and damage to the Target Assets from accidents, fires, severe weather, floods or other natural disasters or other unscheduled shutdowns, and exposure to the risks associated with volatile margins in the refining industry and with volatile crude oil, refined product and feedstock prices and associated market conditions.

Current report

Following the closing of the Acquisition, we may be unable to achieve the same growth, revenues and profitability that the Target Assets have achieved in the past.

Current report

We will incur a substantial amount of indebtedness in connection with the financing of the Acquisition.

Current report

We expect to partially fund the Acquisition by incurring additional third-party indebtedness, including the Permanent Financing and/or, to the extent necessary, borrowings under the Bridge Facility, as well as borrowings under the CVR Energy ABL. We face risks associated with increases in overall indebtedness. The Target Assets and CVR Energy may not be able to generate sufficient cash flow to service and repay this indebtedness, and we may not be able to refinance such indebtedness on favorable terms, or at all. If we are unable to service our indebtedness and fund our operations, we may be forced to, among other things, reduce or delay capital expenditures, seek additional capital, sell assets, or refinance our indebtedness. Any such action may not be successful, and we may be unable to service such indebtedness. Any of the above risks could have a material adverse effect on our business, financial condition, results of operations, cash flows or the market price of our common stock.

Current report

We expect to incur substantial expenses related to the Acquisition and to the integration of the Target Assets into our business, and the expenses may be greater than anticipated due to unexpected events.

Current report

We have incurred and expect to incur a number of significant non-recurring costs associated with the Acquisition and, upon closing of the Acquisition, the integration of the Target Assets into our business. These costs include legal, financial advisory, accounting, consulting and other advisory fees, public company filing fees and other regulatory fees, financial printing and other printing costs and other related costs. In addition, we expect to incur integration costs following the closing of the Acquisition as we integrate the Target Assets’ operations with ours, including facilities and systems consolidation costs. There are a large number of processes, policies, procedures, operations, technologies and systems that may need to be integrated, including purchasing, accounting and finance, compliance, treasury management, refinery and terminal operations, vendor management, risk management, lines of business and pricing.

Current report

While we have assumed that a certain level of costs will be incurred, there are many factors beyond our control that could affect the total amount or the timing of these expenses. Moreover, many of the expenses that we will incur are, by their nature, difficult to estimate accurately. These expenses could, particularly in the near term, exceed the savings that we expect to achieve from the elimination of duplicative expenses and the realization of economies of scale. These expenses may result in us recording increased expenses as a result of the Acquisition or the integration of the Target Assets into our business, and the amount and timing of such charges are uncertain at present and could exceed initial estimates.

Current report

Litigation relating to the Acquisition could result in an injunction preventing the completion of the Acquisition and/or substantial costs to us.

Current report

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into significant acquisitions, mergers or other business combination agreements, like the Purchase Agreement. Even if such a lawsuit is without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on our business, financial condition and results of operations.

Current report

Lawsuits that may be brought against us or our directors could also seek, among other things, injunctive relief or other equitable relief, including a request to rescind parts of the Purchase Agreement already implemented and to otherwise enjoin the parties from consummating the Acquisition. One of the conditions to the completion of the Acquisition is that no injunction or law by any governmental entity of competent jurisdiction will be in effect that has the effect of restraining, enjoining or otherwise prohibiting the consummation of the Acquisition. As such, if an injunction prohibiting the consummation of the Acquisition is obtained, that injunction may prevent the Acquisition from closing or from closing within the expected timeframe or at all, which may adversely affect our business, financial condition and results of operations.