What changed in this filing

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Item 1. Financial Statements

2022-05-05 compared with 2021-11-05 · 220 added, 401 removed, 504 unchanged (55% of the section changed)

2 unchanged sentences

Three months ended

September 30, Nine months ended

September 30,

2021 2020 2021 2020

(in millions, except per share amounts)

3 unchanged sentences

Selling, general and administrative expenses 64 55

Goodwill impairment 259 — 259 —

Long-lived and intangible asset impairment 236 — 236 —

Other operating—net 2 ( 2 )

1 unchanged sentence

Equity in earnings of operating affiliate 26 11

Operating (loss) earnings ( 97 ) 40 600 467

Operating earnings 1,658 247

Interest expense 241 48

2 unchanged sentences

Other non-operating—net 1 —

(Loss) earnings before income taxes ( 137 ) ( 9 ) 458 346

Income tax (benefit) provision ( 46 ) ( 13 ) 57 33

Net (loss) earnings ( 91 ) 4 401 313

Earnings before income taxes 1,452 193

Income tax provision 401 18

Net earnings 1,051 175

Net earnings attributable to noncontrolling interest 168 24

Net (loss) earnings attributable to common stockholders $ ( 185 ) $ ( 28 ) $ 212 $ 230

Net (loss) earnings per share attributable to common stockholders:

Net earnings attributable to common stockholders $ 883 $ 151

Net earnings per share attributable to common stockholders:

Basic $ 4.23 $ 0.70

6 unchanged sentences

CF INDUSTRIES HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three months ended

September 30, Nine months ended

September 30,

2021 2020 2021 2020

(in millions)

Net (loss) earnings $ ( 91 ) $ 4 $ 401 $ 313

Net earnings $ 1,051 $ 175

Other comprehensive (loss) income:

1 unchanged sentence

Defined benefit plans—net of taxes 4 1

( 20 ) 38 4 ( 22 )

Comprehensive (loss) income ( 111 ) 42 405 291

Comprehensive income 1,042 190

Comprehensive income attributable to noncontrolling interest 168 24

Comprehensive (loss) income attributable to common stockholders $ ( 205 ) $ 10 $ 216 $ 208

Comprehensive income attributable to common stockholders $ 874 $ 166

See accompanying Notes to Unaudited Consolidated Financial Statements.

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

September 30,

2022 December 31,

33 unchanged sentences

Treasury stock—at cost, 2022— 1,563,679 shares and 2021— 27,962 shares

( 123 ) ( 2 )

Accumulated other comprehensive loss ( 266 ) ( 257 )

15 unchanged sentences

(in millions, except per share amounts)

Balance as of June 30, 2021 $ 2 $ — $ 1,357 $ 2,183 $ ( 296 ) $ 3,246 $ 2,712 $ 5,958

Net (loss) earnings — — — ( 185 ) — ( 185 ) 94 ( 91 )

Other comprehensive loss — — — — ( 20 ) ( 20 ) — ( 20 )

Purchases of treasury stock — ( 50 ) — — — ( 50 ) — ( 50 )

Acquisition of treasury stock under employee stock plans — ( 1 ) — — — ( 1 ) — ( 1 )

Issuance of $ 0.01 par value common stock under employee stock plans

— — 6 — — 6 — 6

Stock-based compensation expense — — 7 — — 7 — 7

Cash dividends ($ 0.30 per share)

— — — ( 65 ) — ( 65 ) — ( 65 )

Distribution declared to noncontrolling interest — — — — — — ( 130 ) ( 130 )

Balance as of September 30, 2021 $ 2 $ ( 51 ) $ 1,370 $ 1,933 $ ( 316 ) $ 2,938 $ 2,676 $ 5,614

Balance as of December 31, 2021 $ 2 $ ( 2 ) $ 1,375 $ 2,088 $ ( 257 ) $ 3,206 $ 2,830 $ 6,036

Net earnings — — — 883 — 883 168 1,051

Other comprehensive income — — — — 4 4 — 4

Other comprehensive loss — — — — ( 9 ) ( 9 ) — ( 9 )

Purchases of treasury stock — ( 100 ) — — — ( 100 ) — ( 100 )

6 unchanged sentences

— — — ( 64 ) — ( 64 ) — ( 64 )

Distributions declared to noncontrolling interest — — — — — — ( 194 ) ( 194 )

Balance as of September 30, 2021 $ 2 $ ( 51 ) $ 1,370 $ 1,933 $ ( 316 ) $ 2,938 $ 2,676 $ 5,614

CONSOLIDATED STATEMENTS OF EQUITY

(Continued) (Unaudited)

Common Stockholders

Stock Treasury

Stock Paid-In

Capital Retained

Earnings Accumulated

Comprehensive

Stockholders’ Equity Noncontrolling

Interest Total

(in millions, except per share amounts)

Balance as of June 30, 2020 $ 2 $ — $ 1,300 $ 1,997 $ ( 426 ) $ 2,873 $ 2,703 $ 5,576

Net (loss) earnings — — — ( 28 ) — ( 28 ) 32 4

Other comprehensive income — — — — 38 38 — 38

Acquisition of treasury stock under employee stock plans — ( 1 ) — — — ( 1 ) — ( 1 )

Issuance of $ 0.01 par value common stock under employee stock plans

— — 1 — — 1 — 1

Stock-based compensation expense — — 7 — — 7 — 7

Cash dividends ($ 0.30 per share)

— — — ( 64 ) — ( 64 ) — ( 64 )

Distribution declared to noncontrolling interest — — — — — — ( 247 ) ( 247 )

Balance as of September 30, 2020 $ 2 $ ( 1 ) $ 1,308 $ 1,905 $ ( 388 ) $ 2,826 $ 2,649 $ 5,475

Balance as of March 31, 2022 $ 2 $ ( 123 ) $ 1,482 $ 2,907 $ ( 266 ) $ 4,002 $ 2,751 $ 6,753

Balance as of December 31, 2020 $ 2 $ ( 4 ) $ 1,317 $ 1,927 $ ( 320 ) $ 2,922 $ 2,681 $ 5,603

Net earnings — — — 151 — 151 24 175

Other comprehensive loss — — — — ( 22 ) ( 22 ) — ( 22 )

Purchases of treasury stock — ( 100 ) — — — ( 100 ) — ( 100 )

Retirement of treasury stock — 107 ( 17 ) ( 90 ) — — — —

Other comprehensive income — — — — 15 15 — 15

Acquisition of treasury stock under employee stock plans — ( 10 ) — — — ( 10 ) — ( 10 )

4 unchanged sentences

— — — ( 65 ) — ( 65 ) — ( 65 )

Distributions declared to noncontrolling interest — — — — — — ( 174 ) ( 174 )

Balance as of September 30, 2020 $ 2 $ ( 1 ) $ 1,308 $ 1,905 $ ( 388 ) $ 2,826 $ 2,649 $ 5,475

Distribution declared to noncontrolling interest — — — — — — ( 64 ) ( 64 )

Balance as of March 31, 2021 $ 2 $ ( 14 ) $ 1,333 $ 2,013 $ ( 305 ) $ 3,029 $ 2,641 $ 5,670

See accompanying Notes to Unaudited Consolidated Financial Statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine months ended

September 30,

Three months ended

(in millions)

7 unchanged sentences

Unrealized net gain on natural gas derivatives ( 33 ) ( 6 )

Unrealized loss on embedded derivative 2 2

Goodwill impairment 259 —

Long-lived and intangible asset impairment 236 —

Gain on sale of EU carbon credits ( 20 ) —

Loss on disposal of property, plant and equipment — 1

10 unchanged sentences

Proceeds from sale of property, plant and equipment 1 —

Distribution received from unconsolidated affiliate — 1

Insurance proceeds for property, plant and equipment — 2

Purchase of investments held in nonqualified employee benefit trust ( 13 ) —

Proceeds from sale of investments held in nonqualified employee benefit trust 13 —

Purchase of U.K.

1 unchanged sentence

Proceeds from sale of EU emission credits 9 —

Other—net ( 1 ) —

Net cash used in investing activities ( 62 ) ( 71 )

Financing Activities:

Proceeds from short-term borrowings — 500

Repayments of short-term borrowings — ( 500 )

Payments of long-term borrowings — ( 255 )

Financing fees ( 4 ) —

Dividends paid on common stock ( 64 ) ( 65 )

14 unchanged sentences

With our employees focused on safe and reliable operations, environmental stewardship, and disciplined capital and corporate management, we are on a path to decarbonize our ammonia production network – the world’s largest – to enable green and blue hydrogen and nitrogen products for energy, fertilizer, emissions abatement and other industrial activities.

Our nine manufacturing complexes in the United States, Canada and the United Kingdom, an extensive storage, transportation and distribution network in North America, and logistics capabilities enabling a global reach underpin our strategy to leverage our unique capabilities to accelerate the world’s transition to clean energy.

Our nine nitrogen manufacturing complexes in the United States, Canada and the United Kingdom, an extensive storage, transportation and distribution network in North America, and logistics capabilities enabling a global reach underpin our strategy to leverage our unique capabilities to accelerate the world’s transition to clean energy.

Our principal customers are cooperatives, independent fertilizer distributors, traders, wholesalers and industrial users.

14 unchanged sentences

The accompanying unaudited interim consolidated financial statements should be read in conjunction with our audited consolidated financial statements and related disclosures included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on February 24, 2022.

The preparation of the unaudited interim consolidated financial statements requires us to make use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the unaudited consolidated financial statements and the reported revenues and expenses for the periods presented.

Significant estimates and assumptions are used for, but are not limited to, net realizable value of inventories, environmental remediation liabilities, environmental and litigation contingencies, the cost of carbon credits required to meet environmental regulations, the cost of customer incentives, the cost to fulfill contractual commitments to our customers, useful lives of property and identifiable intangible assets, the assumptions used in the evaluation of potential impairments of property, investments, identifiable intangible assets and goodwill, income tax and valuation reserves, allowances for doubtful accounts receivable, the measurement of the fair values of investments for which markets are not active, assumptions used in the determination of the funded status and annual expense of defined benefit pension and other postretirement benefit plans and the valuation of stock-based compensation awards granted to employees.

The preparation of the unaudited interim consolidated financial statements requires us to make use of estimates and assumptions that may significantly affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the unaudited consolidated financial statements and the reported revenues and expenses for the periods presented.

Such estimates and assumptions are used for, but are not limited to, net realizable value of inventories, environmental remediation liabilities, environmental and litigation contingencies, the cost of carbon credits required to meet environmental regulations, the cost of customer incentives, the cost to fulfill contractual commitments to our customers, useful lives of property and identifiable intangible assets, the assumptions used in the evaluation of potential impairments of property, investments, identifiable intangible assets and goodwill, income tax and valuation reserves, allowances for doubtful accounts receivable, the measurement of the fair values of investments for which markets are not active, assumptions used in the determination of the funded status and annual expense of defined benefit pension and other postretirement benefit plans and the valuation of stock-based compensation awards granted to employees.

CF INDUSTRIES HOLDINGS, INC.

2 unchanged sentences

See Note 17—Segment Disclosures for our revenue by reportable segment, which are Ammonia, Granular Urea, UAN, AN and Other.

The following table summarizes our revenue by product and by geography (based on destination of our shipment) for the three and nine months ended September 30, 2021 and 2020:

The following table summarizes our revenue by product and by geography (based on destination of our shipment) for the three months ended March 31, 2022 and 2021:

Ammonia Granular Urea UAN AN Other Total

(in millions)

Three months ended September 30, 2021

North America $ 279 $ 386 $ 324 $ 48 $ 94 $ 1,131

Europe and other 65 — 66 70 30 231

Total revenue $ 344 $ 386 $ 390 $ 118 $ 124 $ 1,362

Three months ended September 30, 2020

North America $ 116 $ 222 $ 221 $ 41 $ 56 $ 656

Europe and other 49 27 27 68 20 191

Total revenue $ 165 $ 249 $ 248 $ 109 $ 76 $ 847

Nine months ended September 30, 2021

Three months ended March 31, 2022

North America $ 583 $ 736 $ 1,013 $ 83 $ 153 $ 2,568

1 unchanged sentence

Total revenue $ 640 $ 765 $ 1,015 $ 223 $ 225 $ 2,868

Nine months ended September 30, 2020

Three months ended March 31, 2021

North America $ 168 $ 399 $ 222 $ 41 $ 77 $ 907

1 unchanged sentence

Total revenue $ 206 $ 399 $ 232 $ 105 $ 106 $ 1,048

As of September 30, 2021 and December 31, 2020, we had $ 375 million and $ 130 million, respectively, in customer advances on our consolidated balance sheets.

During the nine months ended September 30, 2021 and 2020, substantially all of the customer advances at the beginning of each respective period were recognized as revenue.

As of March 31, 2022 and December 31, 2021, we had $ 598 million and $ 700 million, respectively, in customer advances on our consolidated balance sheets.

The revenue recognized during the three months ended March 31, 2022 and 2021 that was included in our customer advances at the beginning of each respective period amounted to approximately $ 560 million and $ 85 million, respectively.

We offer cash incentives to certain customers generally based on the volume of their purchases over the fertilizer year ending June 30.

Our cash incentives do not provide an option to the customer for additional product.

The balances of customer incentives accrued as of September 30, 2021 and December 31, 2020 were not material.

From time to time, we will enter the marketplace to purchase product in order to satisfy obligations under contracts with our customers.

When we purchase product for this purpose, we are the principal in the transaction and recognize revenue on a gross basis.

As discussed in Note 8—Equity Method Investment, we have transactions in the normal course of business with Point Lisas Nitrogen Limited (PLNL), reflecting our obligation to purchase 50 % of the ammonia produced by PLNL at current market prices.

During the nine months ended September 30, 2021, in addition to products purchased from PLNL, we recognized $ 68 million of revenue from sales of granular urea, which we purchased in order to satisfy obligations under contracts with our customers due to lower production experienced as a result of Winter Storm Uri.

For the nine months ended September 30, 2020, other than products purchased from PLNL, products purchased in the marketplace in order to satisfy obligations under contracts with our customers were not material.

We have certain customer contracts with performance obligations where if the customer does not take the required amount of product specified in the contract, then the customer is required to make a payment to us, which may vary based upon the terms and conditions of the applicable contract.

As of September 30, 2021, excluding contracts with original durations of less than one year, and based on the minimum product tonnage to be sold and current market price estimates, our remaining performance obligations under these contracts are approximately $ 898 million.

We expect to recognize approximately 13 % of these performance obligations as revenue in the remainder of 2021, approximately 59 % as revenue during 2022 and 2023, approximately 24 % as revenue during 2024 and 2025, and the remainder thereafter.

Subject to the terms and conditions of the applicable contracts, if these customers do not satisfy their purchase obligations under such contracts, the minimum amount that they would be required to pay to us under these contracts, in the aggregate, is approximately $ 181 million as of September 30, 2021.

Other than the performance obligations described above, any performance obligations with our customers that were unfulfilled or partially fulfilled at December 31, 2020 were satisfied in 2021.

CF INDUSTRIES HOLDINGS, INC.

United Kingdom Energy Crisis and Impairment Charges

During the third quarter of 2021, the United Kingdom experienced an energy crisis that included a substantial increase in the price of natural gas.

In the first half of 2021, natural gas prices had increased to levels that were considered high compared to historical prices, and prices then more than doubled within the third quarter of 2021.

On September 15, 2021, we announced the halt of operations at both our Ince and Billingham manufacturing facilities in the United Kingdom due to negative profitability driven by the high cost of natural gas.

The halt of operations at our U.K.

plants impacted the availability of certain products in the United Kingdom, including carbon dioxide, which is a byproduct of ammonia production.

Due to the critical nature of carbon dioxide to certain industries in the United Kingdom, on September 21, 2021, we entered into an interim agreement with the U.K.

Under the terms of the agreement, the U.K.

government agreed to cover the costs to restart the ammonia plant at Billingham and to offset losses incurred from production for a 21-day period.

As a result, we resumed production of ammonia at the Billingham facility in order to produce carbon dioxide for the United Kingdom.

While the interim agreement was in place, we entered into carbon dioxide pricing and offtake agreements with our customers, which have an initial term through January 31, 2022.

The amount of financial support that will be provided by the U.K.

government for the September 2021 period of the interim agreement is not expected to be material to our results of operations.

As of the filing of this report, production continues to be idled at our Ince facility.

Impairment Charges

energy crisis necessitated an evaluation of the goodwill and long-lived assets, including definite-lived intangible assets, of our U.K.

operations to determine if their fair value had declined to below their carrying value.

We performed the impairment evaluations on the U.K.

ammonia, U.K.

Other asset groups’ long-lived assets, including definite-lived intangible assets, and the U.K.

ammonia, U.K.

Other reporting units’ goodwill as of September 30, 2021.

Based on these analyses, we concluded that a decline in the fair value had occurred and we recognized impairment charges of $ 495 million in the third quarter of 2021, consisting of a goodwill impairment charge of $ 259 million and long-lived and intangible asset impairment charges of $ 236 million.

The valuation of our asset groups and reporting units requires significant judgment in evaluating recent indicators of market activity and estimating future cash flows, discount rates, and other factors.

Expected cash flows used in both the goodwill and long-lived asset impairment tests include assumptions about product selling prices and natural gas costs, as well as estimates of future production and sales volumes, operating rates, operating expenses, inflation, discount rates, tax rates and capital spending.

These assumptions include the time it could take for the U.K.

energy crisis to be resolved.

For purposes of our goodwill impairment analysis, we estimated the fair value of the reporting units using the income approach, which incorporated the estimated future cash flows and a terminal value discounted to their present value using an appropriate risk-adjusted discount rate from the perspective of a market participant.

The estimated future cash flows were based on our internal forecasts, updated for recent events.

These estimated future cash flows went beyond the specific operating plans, using a terminal value calculation, which incorporated historical and forecasted trends and an estimate of long-term future growth rates.

The future growth rates were based on our view of the long-term outlook for each reporting unit.

The discount rates utilized in the income approach, for our goodwill impairment test, and to discount the cash flows in calculating the long-lived asset impairment were derived using a capital asset pricing model and analyzing published rates for industries relevant to our reporting units to estimate the cost of equity financing.

The discount rates are commensurate with the risks and uncertainties inherent in the business and in the United Kingdom and our cash flow forecasts, updated for recent events.

The discount rate utilized in the determination of fair value of our asset groups for the long-lived asset impairment test was 11.25 %.

The fair value of our property, plant and equipment utilized in the long-lived asset impairment analysis was estimated using the indirect method of the cost approach by determining the reproduction cost new of the assets and applying an appropriate inutility adjustment for certain assets in an idled state.

Additional assumptions utilized in the long-lived asset impairment analysis were royalty rates and attrition rates in estimating the fair value of our definite-lived intangible assets, consisting of trade names and customer relationships, for which we used the relief from royalty method of the income approach and the multi-period excess earnings method, respectively.

Due to the inherent uncertainties involved in making estimates and assumptions, actual results may differ from those assumed in our forecasts.

Of the factors discussed above, the assumptions for product selling prices and natural gas costs included in the expected cash flows utilized in both the long-lived asset and goodwill impairment tests, and the discount rates utilized in the income approach, for our goodwill impairment test, and to discount the cash flows in calculating the long-lived asset impairment, are more sensitive than others.

Assuming that all other assumptions utilized in our expected cash flows and the other inputs used in our long-lived asset and goodwill impairment tests remain unchanged, a change in each of these three inputs would have the following effect on the amount of long-lived asset and goodwill impairment recognized in the three months ended September 30, 2021:

The balances of customer incentives accrued as of March 31, 2022 and December 31, 2021 were not material.

We have certain customer contracts with performance obligations under which, if the customer does not take the required amount of product specified in the contract, then the customer is required to make a payment to us, the amount of which payment may vary based upon the terms and conditions of the applicable contract.

As of March 31, 2022, excluding contracts with original durations of less than one year, and based on the minimum product tonnage to be sold and current market price estimates, our remaining performance obligations under these contracts are approximately $ 750 million.

We expect to recognize approximately 36 % of these performance obligations as revenue in the remainder of 2022, approximately 57 % as revenue during 2023-2024, approximately 5 % as revenue during 2025-2026, and the remainder thereafter.

Subject to the terms and conditions of the applicable contracts, if the customers do not satisfy their purchase obligations under such contracts, the minimum amount that they would be required to pay to us under such contracts, in the aggregate, is approximately $ 140 million as of March 31, 2022.

Other than the performance obligations described above, any performance obligations with our customers that were unfulfilled or partially fulfilled at December 31, 2021 will be satisfied in 2022.

CF INDUSTRIES HOLDINGS, INC.

Increase/(Decrease) in Increase/(Decrease) in

Long-lived Asset Impairment Goodwill Impairment

Assumption (in millions)

+$5.00 -$5.00 +$5.00 -$5.00

Average Selling Price per Product Ton $ ( 87 ) $ 8 $ ( 20 ) $ 25

+$0.50 -$0.50 +$0.50 -$0.50

Natural Gas Cost per MMBtu (1)

$ 7 $ ( 33 ) $ 20 $ ( 53 )

+50 bps -50 bps +50 bps -50 bps

Discount Rate $ 1 $ ( 1 ) $ 14 $ ( 22 )

_______________________________________________________________________________

(1) The sensitivity impact of a $0.50/MMBtu increase or decrease in the cost of natural gas includes any corresponding impact to selling prices from contractually stipulated sales provisions.

As of September 30, 2021, after the recognition of the $ 495 million of impairment charges noted above, the goodwill related to our U.K.

operations was approximately $ 26 million, and the remaining long-lived assets related to our U.K.

operations were approximately $ 450 million, primarily consisting of property, plant and equipment.

For further information see Note 6—Property, Plant and Equipment—Net and Note 7—Goodwill and Other Intangible Assets.

Net (Loss) Earnings Per Share

Net (loss) earnings per share were computed as follows:

Net Earnings Per Share

Net earnings per share were computed as follows:

Three months ended

September 30, Nine months ended

September 30,

2021 2020 2021 2020

(in millions, except per share amounts)

Net (loss) earnings attributable to common stockholders $ ( 185 ) $ ( 28 ) $ 212 $ 230

Basic (loss) earnings per common share:

Net earnings attributable to common stockholders $ 883 $ 151

Basic earnings per common share:

Weighted-average common shares outstanding 208.6 214.9

Net (loss) earnings attributable to common stockholders $ ( 0.86 ) $ ( 0.13 ) $ 0.99 $ 1.07

Diluted (loss) earnings per common share:

Net earnings attributable to common stockholders $ 4.23 $ 0.70

Diluted earnings per common share:

Weighted-average common shares outstanding 208.6 214.9

Dilutive common shares—stock-based awards 1.3 1.1

Diluted weighted-average shares outstanding 214.9 213.9 216.4 215.3

Net (loss) earnings attributable to common stockholders $ ( 0.86 ) $ ( 0.13 ) $ 0.98 $ 1.07

Diluted earnings per share is calculated using weighted-average common shares outstanding, including the dilutive effect of stock-based awards as determined under the treasury stock method.

Diluted weighted-average common shares outstanding 209.9 216.0

Net earnings attributable to common stockholders $ 4.21 $ 0.70

Diluted earnings per common share is calculated using weighted-average common shares outstanding, including the dilutive effect of stock-based awards as determined under the treasury stock method.

In the computation of diluted earnings per common share, potentially dilutive stock-based awards are excluded if the effect of their inclusion is anti-dilutive.

Shares for anti-dilutive stock-based awards not included in the computation of diluted earnings per common share were 3.5 million and 1.2 million in the three and nine months ended September 30, 2021, respectively, and 3.1 million and 3.3 million in the three and nine months ended September 30, 2020, respectively.

CF INDUSTRIES HOLDINGS, INC.

Shares for anti-dilutive stock-based awards not included in the computation of diluted earnings per common share were 1.2 million in the three months ended March 31, 2021.

Inventories consist of the following:

September 30,

2022 December 31,

3 unchanged sentences

Total inventories $ 488 $ 408

United Kingdom Energy Crisis and Impairment Charges

During the third quarter of 2021, the United Kingdom began experiencing an energy crisis that included a substantial increase in the price of natural gas, which impacted our U.K.

In the first half of 2021, natural gas prices had increased to levels that were considered high compared to historical prices, and prices then more than doubled within the third quarter of 2021.

After certain agreements were finalized, our Billingham facility resumed operations.

As of the filing of this report, production continues at our Billingham facility and continues to be idled at our Ince facility.

In the second half of 2021, the U.K.

energy crisis necessitated evaluations of the goodwill and long-lived assets, including definite-lived intangible assets, of our U.K.

operations to determine if their fair value had declined to below their carrying value.

Based on these analyses, we concluded that declines in fair value had occurred, and we recognized impairment charges of $ 521 million in 2021, consisting of long-lived and intangible asset impairment charges of $ 236 million and goodwill impairment charges of $ 285 million.

As a result, we had no remaining goodwill related to our U.K.

operations on our consolidated balance sheet as of December 31, 2021.

CF INDUSTRIES HOLDINGS, INC.

During the first quarter of 2022, we concluded that the continued impacts of the U.K.

energy crisis, including further increases and volatility in natural gas prices due in part to recent geopolitical events as a result of Russia’s invasion of Ukraine in February 2022, triggered an additional long-lived asset impairment test.

The results of the interim impairment test indicated that no additional long-lived asset impairment existed as the undiscounted estimated future cash flows were in excess of the carrying values for each of the U.K.

asset groups, consisting of U.K.

Ammonia, U.K.

Property, Plant and Equipment—Net

Property, plant and equipment—net consists of the following:

September 30,

2022 December 31,

10 unchanged sentences

_______________________________________________________________________________

(1) As of September 30, 2021, machinery and equipment, buildings and improvements, and construction in progress include impairment charges recorded in the three months ended September 30, 2021 of $ 169 million, $ 5 million and $ 8 million, respectively.

(2) As of September 30, 2021 and December 31, 2020, we had property, plant and equipment that was accrued but unpaid of approximately $ 78 million and $ 43 million, respectively.

As of September 30, 2020 and December 31, 2019, we had property, plant and equipment that was accrued but unpaid of approximately $ 73 million and $ 42 million, respectively.

Depreciation and amortization related to property, plant and equipment was $ 198 million and $ 637 million for the three and nine months ended September 30, 2021, respectively, and $ 207 million and $ 650 million for the three and nine months ended September 30, 2020, respectively.

Asset impairment —During the third quarter of 2021, in light of the unprecedented increase in natural gas prices in the United Kingdom and its estimated impact on our U.K.

operations, we identified a triggering event indicating possible impairment of the long-lived assets related to our U.K.

manufacturing facilities within our ammonia, AN and Other segments, including property, plant, and equipment, and performed a recoverability test on the U.K.

ammonia, U.K.

Other asset groups’ long-lived assets as of September 30, 2021.

Our assets groups are the same as our reporting units.

The recoverability tests were based on forecasts of undiscounted cash flows within each of our U.K.

(1) At both March 31, 2022 and December 31, 2021, machinery and equipment, buildings and improvements, and construction in progress include cumulative impairment charges of $ 169 million, $ 5 million and $ 8 million, respectively, which were recorded in 2021.

(2) As of March 31, 2022 and December 31, 2021, we had property, plant and equipment that was accrued but unpaid of approximately $ 22 million and $ 35 million, respectively.

As of March 31, 2021 and December 31, 2020, we had property, plant and equipment that was accrued but unpaid of approximately $ 33 million and $ 43 million, respectively.

Depreciation and amortization related to property, plant and equipment was $ 205 million and $ 200 million for the three months ended March 31, 2022 and 2021, respectively.

In the first quarter of 2022, we concluded that the continued impacts of the U.K.

energy crisis, including higher natural gas prices due in part to recent geopolitical events, triggered an impairment test of the long-lived assets in our U.K.

asset groups.

The results of the recoverability tests indicated that the long-lived assets within our U.K.

ammonia, U.K.

Other asset groups were not fully recoverable, and, as a result, long-lived asset impairment charges of $ 236 million were recorded, representing the excess of the carrying value of the asset groups over its fair value.

That impairment was allocated to each of the underlying assets reducing them to their fair value, of which $ 182 million was allocated to property, plant and equipment.

See Note 3—United Kingdom Energy Crisis and Impairment Charges and Note 7—Goodwill and Other Intangible Assets for additional information.

As a result of the long-lived asset impairment charges, long-lived assets on our consolidated balance sheet as of September 30, 2021 include $ 450 million related to the U.K.

asset groups, which primarily consists of approximately $ 390 million of property, plant and equipment.

This test indicated that no long-lived asset impairment existed as the undiscounted estimated future cash flows were in excess of the carrying values for each of the U.K.

asset groups.

Long-lived assets on our consolidated balance sheet as of March 31, 2022 include approximately $ 400 million, approximately $ 360 million of which consists of property, plant and equipment, related to the U.K.

asset groups.

See Note 5—United Kingdom Energy Crisis and Impairment Charges for additional information.

Plant turnarounds —Scheduled inspections, replacements and overhauls of plant machinery and equipment at our continuous process manufacturing facilities during a full plant shutdown are referred to as plant turnarounds.

The expenditures related to turnarounds are capitalized in property, plant and equipment when incurred.

The following is a summary of

CF INDUSTRIES HOLDINGS, INC.

capitalized plant turnaround costs:

Nine months ended

September 30,

The following is a summary of capitalized plant turnaround costs:

Three months ended

(in millions)

5 unchanged sentences

Ending balance $ 323 $ 211

Scheduled replacements and overhauls of plant machinery and equipment include the dismantling, repair or replacement and installation of various components including piping, valves, motors, turbines, pumps, compressors, heat exchangers and the replacement of catalysts when a full plant shutdown occurs.

Scheduled inspections are also conducted during full plant shutdowns, including required safety inspections which entail the disassembly of various components such as steam boilers, pressure vessels and other equipment requiring safety certifications.

CF INDUSTRIES HOLDINGS, INC.

Scheduled replacements and overhauls of plant machinery and equipment during a plant turnaround include the dismantling, repair or replacement and installation of various components including piping, valves, motors, turbines, pumps, compressors and heat exchangers and the replacement of catalysts when a full plant shutdown occurs.

Scheduled inspections, including required safety inspections which entail the disassembly of various components such as steam boilers, pressure vessels and other equipment requiring safety certifications, are also conducted during full plant shutdowns.

Internal employee costs and overhead amounts are not considered turnaround costs and are not capitalized.

Goodwill and Other Intangible Assets

The following table shows the carrying amount of goodwill by reportable segment as of September 30, 2021 and December 31, 2020:

Ammonia Granular Urea UAN AN Other Total

The following table shows the carrying amount of goodwill by reportable segment as of March 31, 2022 and December 31, 2021:

Granular Urea UAN AN (1)

(in millions)

Balance as of December 31, 2021 $ 579 $ 828 $ 576 $ 69 $ 39 $ 2,091

Impairment losses ( 4 ) — — ( 233 ) ( 22 ) ( 259 )

Effect of exchange rate changes — — — — — —

Balance as of September 30, 2021 $ 583 $ 828 $ 576 $ 77 $ 52 $ 2,116

Goodwill is not amortized, but is reviewed for impairment annually in the fourth quarter and when circumstances or other events indicate that impairment may have occurred.

During the third quarter of 2021, in light of the unprecedented increase in natural gas prices in the United Kingdom and its estimated impact on our U.K.

operations, we identified a triggering event indicating possible impairment of goodwill within our U.K.

ammonia, U.K.

Other reporting units.

Due to the triggering event identified above, we performed an interim quantitative goodwill impairment analysis as of September 30, 2021 for our U.K.

ammonia, U.K.

Other reporting units.

We estimated the fair value of the reporting units using the income approach described in Note 3—United Kingdom Energy Crisis and Impairment Charges.

Based on the evaluation performed, we determined that the carrying value of all three reporting units exceeded their fair value, which resulted in a goodwill impairment charge totaling $ 259 million in the third quarter of 2021.

The goodwill impairment was calculated as the amount that the carrying value of the reporting unit, including any goodwill, exceeded its fair value.

As a result of the goodwill impairment charge, goodwill on our consolidated balance sheet as of September 30, 2021 includes $ 5 million related to the U.K.

ammonia reporting unit, $ 8 million related to the U.K.

AN reporting unit and $ 13 million related to the U.K.

Other reporting unit, which are included in the ammonia, AN and Other reportable segments, respectively.

As a result of the goodwill impairment, all three U.K.

reporting units were written down to their respective fair values resulting in zero excess fair value over carrying amount as of the September 30, 2021 impairment test date.

CF INDUSTRIES HOLDINGS, INC.

Other Intangible Assets

Balance as of March 31, 2022 $ 579 $ 828 $ 576 $ 69 $ 39 $ 2,091

_______________________________________________________________________________

(1) At both March 31, 2022 and December 31, 2021, the carrying amount of goodwill includes accumulated impairment losses in our Ammonia, AN and Other segments of $ 9 million, $ 241 million and $ 35 million, respectively.

All of our identifiable intangible assets have definite lives and are presented in other assets on our consolidated balance sheets at gross carrying amount, net of accumulated amortization, as follows:

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Amount Accumulated

4 unchanged sentences

Customer relationships (1)

$ 83 $ ( 59 ) $ 24 $ 84 $ ( 60 ) $ 24

Trade names (1)

carbon credits 19 — 19 — — —

30 ( 10 ) 20 31 ( 10 ) 21

Total intangible assets $ 113 $ ( 69 ) $ 44 $ 115 $ ( 70 ) $ 45

_______________________________________________________________________________

(1) As of September 30, 2021, the gross carrying amount for customer relationships and trade names include impairment charges recorded in the three months ended September 30, 2021 of $ 49 million and $ 1 million, respectively.

(1) At both March 31, 2022 and December 31, 2021, the gross carrying amount for customer relationships and trade names includes cumulative impairment charges of $ 49 million and $ 1 million, respectively, which were recorded in 2021.

Our customer relationships and trade names are being amortized over a weighted-average life of approximately 20 years.

carbon credits are being amortized based on units of production.

Amortization expense of our identifiable intangible assets was $ 2 million and $ 6 million for the three and nine months ended September 30, 2021, respectively, and $ 2 million and $ 6 million for the three and nine months ended September 30, 2020, respectively.

Amortization expense of our identifiable intangible assets was $ 1 million and $ 2 million for the three months ended March 31, 2022 and 2021, respectively.

The gross carrying amount and accumulated amortization of our intangible assets are also impacted by the effect of exchange rate changes.

Total estimated amortization expense for the remainder of 2021 and each of the five succeeding fiscal years is as follows:

(in millions)

Remainder of 2021 $ 1

As a result of the triggering event described above, we also performed a recoverability test on our long-lived assets within the U.K.

ammonia, U.K.

Other asset groups, including our definite-lived intangible assets, as of September 30, 2021.

The recoverability test was based on forecasts of undiscounted cash flows, as described in Note 3—United Kingdom Energy Crisis and Impairment Charges.

The results of the recoverability test indicated that the long-lived assets within our U.K.

ammonia, U.K.

Other asset groups were not fully recoverable, and, as a result, long-lived asset impairment charges, inclusive of the definite-lived intangible assets, of $ 236 million were recorded, representing the excess of the carrying value of the asset groups over its fair value.

That impairment was allocated to each of the underlying assets reducing them to their fair value, of which $ 50 million was allocated to definite-lived intangible assets.

See Note 3—United Kingdom Energy Crisis and Impairment Charges and Note 6—Property, Plant and Equipment—Net for additional information.

As a result of the long-lived asset impairment charges, long-lived assets on our consolidated balance sheet as of September 30, 2021 include $ 450 million related to the U.K.

asset groups, including approximately $ 30 million of customer relationships and trade names.

Total estimated amortization expense for the remainder of 2022 is $ 3 million and for each of the fiscal years 2023-2027 is $ 4 million.

In the first quarter of 2022, we concluded that the continued impacts of the U.K.

energy crisis, including higher natural gas prices due in part to recent geopolitical events, triggered an impairment test of the long-lived assets in our U.K.

asset groups.

This test indicated that no long-lived asset impairment existed as the undiscounted estimated future cash flows were in excess of the carrying values for each of the U.K.

asset groups.

See Note 5—United Kingdom Energy Crisis and Impairment Charges for additional information.

Long-lived assets on our consolidated balance sheet as of March 31, 2022 include approximately $ 400 million, $ 25 million of which consists of customer relationships and trade names, related to the U.K.

asset groups.

CF INDUSTRIES HOLDINGS, INC.

Equity Method Investment

We have a 50 % ownership interest in PLNL, which operates an ammonia production facility in the Republic of Trinidad and Tobago.

We have a 50 % ownership interest in Point Lisas Nitrogen Limited (PLNL), which operates an ammonia production facility in the Republic of Trinidad and Tobago.

We include our share of the net earnings from this equity method investment as an element of earnings from operations because PLNL provides additional production to our operations and is integrated with our other supply chain and sales activities in the Ammonia segment.

As of September 30, 2021, the total carrying value of our equity method investment in PLNL was $ 92 million, $ 40 million more than our share of PLNL’s book value.

As of March 31, 2022, the total carrying value of our equity method investment in PLNL was $ 84 million, $ 38 million more than our share of PLNL’s book value.

The excess is attributable to the purchase accounting impact of our acquisition of the investment in PLNL and reflects the revaluation of property, plant and equipment.

2 unchanged sentences

We have transactions in the normal course of business with PLNL reflecting our obligation to purchase 50 % of the ammonia produced by PLNL at current market prices.

Our ammonia purchases from PLNL totaled $ 30 million and $ 93 million for the three and nine months ended September 30, 2021, respectively, and $ 14 million and $ 37 million for the three and nine months ended September 30, 2020, respectively.

Our ammonia purchases from PLNL totaled $ 74 million and $ 26 million for the three months ended March 31, 2022 and 2021, respectively.

Fair Value Measurements

Our cash and cash equivalents and other investments consist of the following:

September 30, 2021

March 31, 2022

Cost Basis Unrealized

26 unchanged sentences

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present assets and liabilities included in our consolidated balance sheets as of September 30, 2021 and December 31, 2020 that are recognized at fair value on a recurring basis, and indicate the fair value hierarchy utilized to determine such fair value:

September 30, 2021

The following tables present assets and liabilities included in our consolidated balance sheets as of March 31, 2022 and December 31, 2021 that are recognized at fair value on a recurring basis, and indicate the fair value hierarchy utilized to determine such fair value:

March 31, 2022

Value Quoted Prices

5 unchanged sentences

Derivative assets 3 — 3 —

Derivative liabilities ( 3 ) — ( 3 ) —

Embedded derivative liability ( 15 ) — ( 15 ) —

10 unchanged sentences

Cash Equivalents

As of September 30, 2021 and December 31, 2020, our cash equivalents consisted primarily of U.S.

As of March 31, 2022 and December 31, 2021, our cash equivalents consisted primarily of U.S.

and Canadian government obligations and money market mutual funds that invest in U.S.

18 unchanged sentences

This obligation is recognized on our consolidated balance sheets as an embedded derivative and is included within other current liabilities and other liabilities.

As of September 30, 2021 and December 31, 2020, the embedded derivative liability was $ 20 million and $ 18 million, respectively.

Included in other operating—net in our consolidated statement of operations for each of the nine-month periods ended September 30, 2021 and 2020 was a net loss of $ 2 million.

As of both March 31, 2022 and December 31, 2021, the embedded derivative liability was $ 15 million.

The inputs into the fair value measurement include the probability of future upgrades and downgrades of our credit rating based on historical credit rating movements of other public companies and the discount rates to be applied to potential annual payments based on applicable credit spreads of other public companies at different credit rating levels.

3 unchanged sentences

The carrying amount and estimated fair value of our financial instruments are as follows:

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Amount Fair Value Carrying

10 unchanged sentences

Since certain of the Company’s assumptions would involve inputs that are not observable, these fair values would reside within Level 3 of the fair value hierarchy.

See Note 3—United Kingdom Energy Crisis and Impairment Charges for additional information on the fair values and unobservable inputs utilized in the impairment evaluations performed as of September 30, 2021 for the long-lived assets, including definite-lived intangible assets, and goodwill related to our U.K.

For the three months ended March 31, 2022, we recorded an income tax provision of $ 401 million on pre-tax income of $ 1.45 billion, or an effective tax rate of 27.6 %, compared to an income tax provision of $ 18 million on pre-tax income of $ 193 million, or an effective tax rate of 9.3 %, for the three months ended March 31, 2021.

For the three months ended March 31, 2022, our income tax provision includes $ 20 million of income tax benefit due to share-based compensation activity and $ 78 million of income tax provision related to the Canada Revenue Agency Competent Authority Matter and certain transfer pricing reserves recorded in the period, as discussed below.

For the three months ended March 31, 2021, our income tax provision includes a $ 22 million benefit reflecting the impact of agreement on certain issues related to U.S.

federal income tax audits.

Our effective tax rate is also impacted by earnings attributable to the noncontrolling interest in CF Industries Nitrogen, LLC (CFN), as our consolidated income tax provision does not include a tax provision on the earnings attributable to the

CF INDUSTRIES HOLDINGS, INC.

For the three months ended September 30, 2021, we recorded an income tax benefit of $ 46 million on a pre-tax loss of $ 137 million, or an effective tax rate of 34.3 %, compared to an income tax benefit of $ 13 million on a pre-tax loss of $ 9 million, or an effective tax rate of 155.0 %, for the three months ended September 30, 2020.

For the three months ended September 30, 2021, we did not record an income tax benefit related to the goodwill impairment described in Note 3—United Kingdom Energy Crisis and Impairment Charges, above, as the impairment is non-deductible for income tax purposes.

In addition, as a result of the effective settlement of the U.S.

federal income tax audit for the 2012-2016 tax years, we reversed an accrual for unrecognized tax benefits and recognized a discrete income tax benefit of approximately $ 15 million.

For the nine months ended September 30, 2021, we recorded an income tax provision of $ 57 million on pre-tax income of $ 458 million, or an effective tax rate of 12.3 %, compared to an income tax provision of $ 33 million on pre-tax income of $ 346 million, or an effective tax rate of 9.4 %, for the nine months ended September 30, 2020.

For the nine months ended September 30, 2021, we did not record an income tax benefit related to the goodwill impairment described in Note 3—United Kingdom Energy Crisis and Impairment Charges, above, as the impairment is non-deductible for income tax purposes.

In addition, our income tax provision includes a $ 36 million benefit reflecting the impact of agreement on certain issues related to U.S.

federal income tax audits, including the reversal of an accrual for unrecognized tax benefits, as described above.

For the nine months ended September 30, 2020, our income tax provision includes a $ 25 million benefit related to the settlement of certain U.S.

and foreign income tax audits, which primarily related to the settlement of the audit of the Terra amended tax returns, which is further described below.

Our effective tax rate is also impacted by earnings attributable to the noncontrolling interest in CF Industries Nitrogen, LLC (CFN), as our consolidated income tax (benefit) provision does not include a tax provision on the earnings attributable to the noncontrolling interest.

Our effective tax rate for the three months ended September 30, 2021 of 34.3 %, which is based on a pre-tax loss of $ 137 million, including $ 94 million of earnings attributable to the noncontrolling interest, would be 14.0 percentage points lower if based on pre-tax loss exclusive of the $ 94 million of earnings attributable to the noncontrolling interest.

Our effective tax rate for the three months ended September 30, 2020 of 155.0 %, which is based on a pre-tax loss of $ 9 million, including $ 32 million of earnings attributable to the noncontrolling interest, would be 121.6 percentage points lower if based on pre-tax loss exclusive of the $ 32 million of earnings attributable to the noncontrolling interest.

Our effective tax rate for the nine months ended September 30, 2021 of 12.3 %, which is based on pre-tax income of $ 458 million, including $ 189 million attributable to the noncontrolling interest, would be 8.7 percentage points higher if based on pre-tax income exclusive of the $ 189 million of earnings attributable to the noncontrolling interest.

Our effective tax rate for the nine months ended September 30, 2020 of 9.4 %, which is based on pre-tax income of $ 346 million, including $ 83 million attributable to the noncontrolling interest, would be 3.0 percentage points higher if based on pre-tax income exclusive of the $ 83 million of earnings attributable to the noncontrolling interest.

See Note 14—Noncontrolling Interest for additional information.

During the third quarter of 2020, as a result of an intercompany transaction with a foreign affiliate, we recognized a capital loss, which we will carry forward, and for which we recorded a deferred tax asset of approximately $ 90 million.

However, as the foreign affiliate has operations that do not normally generate capital gains and no practical plans to do so in the future, we established a full valuation allowance of approximately $ 90 million against the deferred tax asset.

As a result, there was no net impact on our income tax provision.

Terra Amended Tax Returns

We completed the acquisition of Terra Industries Inc.

(Terra) in April 2010.

After the acquisition, we determined that the manner in which Terra reported the repatriation of cash from foreign affiliates to its U.S.

parent for U.S.

and foreign income tax purposes was not appropriate.

As a result, in 2012 we amended certain tax returns, including Terra’s income and withholding tax returns, back to 1999 (the Amended Tax Returns) and paid additional income and withholding taxes, and related interest and penalties.

In 2013, the Internal Revenue Service (IRS) commenced an examination of the U.S.

tax aspects of the Amended Tax Returns.

In the second quarter of 2020, we received IRS notices indicating the amount of tax and interest to be refunded and received with respect to the income tax and withholding tax returns.

As a result, we recognized $ 16 million of interest income ($ 13 million, net of tax) and $ 19 million of additional income tax benefit.

In addition, in the second quarter of 2020, we received U.S.

Federal income tax refunds, including interest, of $ 108 million relating to these matters.

In July 2020, we received an additional $ 2 million, which finalized these matters with the IRS.

noncontrolling interest.

Our effective tax rate for the three months ended March 31, 2022 of 27.6 %, which is based on pre-tax income of $ 1.45 billion, including $ 168 million of earnings attributable to the noncontrolling interest, would be 3.7 percentage points higher if based on pre-tax income exclusive of the $ 168 million of earnings attributable to the noncontrolling interest.

Our effective tax rate for the three months ended March 31, 2021 of 9.3 %, which is based on pre-tax income of $ 193 million, including $ 24 million of earnings attributable to the noncontrolling interest, would be 1.3 percentage points higher if based on pre-tax income exclusive of the $ 24 million of earnings attributable to the noncontrolling interest.

Canada Revenue Agency Competent Authority Matter

In 2016, the Canada Revenue Agency (CRA) and Alberta Tax and Revenue Administration (Alberta TRA) issued Notices of Reassessment for tax years 2006 through 2009 to one of our Canadian affiliates asserting a disallowance of certain patronage deductions.

We filed Notices of Objection with respect to the Notices of Reassessment with the CRA and Alberta TRA and posted letters of credit in lieu of paying the additional tax liability assessed.

The letters of credit serve as security until the matter is resolved.

In 2018, the matter, including the related transfer pricing topic regarding the allocation of profits between Canada and the United States, was accepted for consideration under the bilateral settlement provisions of the U.S.-Canada tax treaty (the Treaty) by the United States and Canadian competent authorities, and included tax years 2006 through 2011.

In the second quarter of 2021, the Company submitted the transfer pricing aspect of the matter into the arbitration process under the terms of the Treaty.

In February 2022, we were informed that a decision was reached by the arbitration panel for tax years 2006 through 2011.

In March 2022, we received further details of the results of the arbitration proceedings and the settlement provisions between the United States and Canadian competent authorities, and we accepted the decision of the arbitration panel.

Under the terms of the arbitration decision, additional income for tax years 2006 through 2011 will be subject to tax in Canada, resulting in our having additional Canadian tax liability for those tax years of approximately $ 127 million, based on current estimates.

We expect this resulting Canadian tax liability, plus interest of approximately $ 98 million, will be assessed in the second quarter of 2022 and that payment of those amounts, aggregating to approximately $ 225 million, based on current estimates, will be due in the third quarter of 2022.

The letters of credit we had posted in lieu of paying the additional tax liability assessed by the Notices of Reassessment will be cancelled upon payment of the additional tax and interest to Canada.

Due primarily to the availability of additional foreign tax credits to offset in part the increased Canadian tax referenced above, the Company will file amended tax returns in the United States to request a refund of tax overpaid.

In the three months ended March 31, 2022, as a result of the impact of these events on our Canadian and U.S.

federal and state income taxes, we recognized an income tax provision of $ 76 million, reflecting the net impact of $ 127 million of accrued income taxes payable to Canada for tax years 2006 to 2011, partially offset by net income tax receivables of approximately $ 51 million in the United States, and we accrued net interest of $ 99 million, primarily reflecting the impact of estimated interest payable to Canada.

Transfer pricing reserves

As a result of the outcome of the arbitration decision discussed above, we have also evaluated our transfer pricing positions between Canada and the United States for open years 2012 and after.

Based on this evaluation, for the three months ended March 31, 2022, we recorded the following:

• liabilities for unrecognized tax benefits of $ 319 million with a corresponding income tax provision, and accrued interest of $ 91 million related to the liabilities for unrecognized tax benefits, and

• noncurrent income tax receivables of $ 329 million with a corresponding income tax benefit, and accrued interest income of $ 28 million related to the noncurrent income tax receivables.

In the three months ended March 31, 2022, the impact of this evaluation of transfer pricing positions on our consolidated statement of operations, including a $ 12 million deferred income tax provision for other transfer pricing tax effects, was a $ 2 million income tax provision and $ 63 million of net interest expense before tax ($ 69 million after tax).

As of March 31, 2022, as a result of recording these transfer pricing reserves, the total amount of our unrecognized tax benefits was $ 349 million, and the total amounts accrued for interest and penalties related to income taxes included in other liabilities was $ 96 million.

As of December 31, 2021, the total amount of our unrecognized tax benefits was $ 27 million and the total amounts accrued for interest and penalties related to income taxes was $ 4 million.

We expect that the ultimate outcome of the transfer pricing reserves will not have a material net impact on our results of operations, financial condition or cash flows.

However, we can provide no assurance as to the ultimate outcome.

Based on the information currently available, we believe we have adequately reserved for the open tax years.

CF INDUSTRIES HOLDINGS, INC.

In 2017, we made a Voluntary Disclosures Program filing with the Canada Revenue Agency (CRA) with respect to the Canadian tax aspects of the amended returns and paid additional Canadian taxes due.

In late 2020, the CRA settled with us the voluntary disclosure matter, and, in the first quarter of 2021, we received approximately $ 20 million of withholding tax refunds, including interest, from the CRA.

These amounts were previously recorded in our consolidated balance sheet as of December 31, 2020.

Interest Expense

Details of interest expense are as follows:

Three months ended

September 30, Nine months ended

September 30,

2021 2020 2021 2020

(in millions)

Interest on borrowings (1)

$ 43 $ 46 $ 133 $ 139

Fees on financing agreements (1)

Interest on tax liabilities (2)

Total interest expense $ 46 $ 48 $ 140 $ 141

_______________________________________________________________________________

(1) See Note 12—Financing Agreements for additional information.

(2) Interest on tax liabilities for the nine months ended September 30, 2020 consists of a reduction in interest accrued on the reserve for unrecognized tax benefits.

Financing Agreements

7 unchanged sentences

The specified margin and the amount of the commitment fee depend on CF Holdings’ credit rating at the time.

As of September 30, 2021, we had unused borrowing capacity under the Revolving Credit Agreement of $ 750 million and no outstanding letters of credit.

There were no borrowings outstanding under the Revolving Credit Agreement as of September 30, 2021 or December 31, 2020, or during the nine months ended September 30, 2021.

Maximum borrowings under the Revolving Credit Agreement during the nine months ended September 30, 2020 were $ 500 million.

The weighted-average annual interest rate of borrowings under the Revolving Credit Agreement during the nine months ended September 30, 2020 was 2.05 %.

Borrowings under the Revolving Credit Agreement as of March 31, 2020 were repaid in full in April 2020.

As of March 31, 2022, we had unused borrowing capacity under the Revolving Credit Agreement of $ 750 million and no outstanding letters of credit.

There were no borrowings outstanding under the Revolving Credit Agreement as of March 31, 2022 or December 31, 2021, or during the three months ended March 31, 2022.

The Revolving Credit Agreement contains representations and warranties and affirmative and negative covenants, including financial covenants.

As of September 30, 2021, we were in compliance with all covenants under the Revolving Credit Agreement.

As of March 31, 2022, we were in compliance with all covenants under the Revolving Credit Agreement.

Letters of Credit

In addition to the letters of credit that may be issued under the Revolving Credit Agreement, as described above, we have also entered into a bilateral agreement with capacity to issue up to $ 250 million of letters of credit.

As of September 30, 2021, approximately $ 229 million of letters of credit were outstanding under this agreement.

CF INDUSTRIES HOLDINGS, INC.

Long-term debt presented on our consolidated balance sheets as of September 30, 2021 and December 31, 2020 consisted of the following debt securities issued by CF Industries:

Effective Interest Rate September 30, 2021 December 31, 2020

As of March 31, 2022, approximately $ 197 million of letters of credit were outstanding under this agreement.

Long-term debt presented on our consolidated balance sheets as of March 31, 2022 and December 31, 2021 consisted of the following debt securities issued by CF Industries:

Effective Interest Rate March 31, 2022 December 31, 2021

Principal Carrying Amount (1)

13 unchanged sentences

4.783 % 750 741 750 742

4.500 % due December 2026 (2)

4.759 % 750 741 750 740

Total long-term debt $ 3,500 $ 3,462 $ 3,500 $ 3,465

3 unchanged sentences

(1) Carrying amount is net of unamortized debt discount and deferred debt issuance costs.

Total unamortized debt discount was $ 8 million and $ 9 million as of September 30, 2021 and December 31, 2020, respectively, and total deferred debt issuance costs were $ 27 million and $ 30 million as of September 30, 2021 and December 31, 2020, respectively.

Total unamortized debt discount was $ 8 million as of both March 31, 2022 and December 31, 2021, and total deferred debt issuance costs were $ 30 million and $ 27 million as of March 31, 2022 and December 31, 2021, respectively.

(2) These notes were redeemed in full on April 21, 2022.

(3) Effective August 23, 2021, these notes are no longer secured, in accordance with the terms of the applicable indenture.

Under the indentures (including the applicable supplemental indentures) governing the senior notes due 2023, 2034, 2043 and 2044 identified in the table above (the Public Senior Notes), each series of Public Senior Notes is guaranteed by CF Holdings.

Under the terms of the indenture governing the 4.500 % senior secured notes due December 2026 (the 2026 Notes) identified in the table above, the 2026 Notes are guaranteed on a senior secured basis by CF Holdings.

CF INDUSTRIES HOLDINGS, INC.

As of March 31, 2022 , u nder the indentures (including the applicable supplemental indentures) governing the senior notes due 2023, 2034, 2043 and 2044 identified in the table above (the Public Senior Notes), each series of Public Senior Notes was guaranteed by CF Holdings.

As of March 31, 2022 , u nder the terms of the indenture governing the 4.500 % senior secured notes due December 2026 (the 2026 Notes) identified in the table above, the 2026 Notes were guaranteed by CF Holdings.

Until August 23, 2021, the 2026 Notes were guaranteed by certain subsidiaries of CF Industries.

The requirement for subsidiary guarantees of the 2026 Notes was eliminated, and all subsidiary guarantees were automatically released, as a result of an investment grade rating event under the terms of the indenture governing the 2026 Notes on August 23, 2021.

On March 20, 2021, we redeemed in full all of the remaining $ 250 million outstanding principal amount of the 3.400 % senior secured notes due December 2021 (the 2021 Notes), in accordance with the optional redemption provisions in the indenture governing the 2021 Notes.

The total aggregate redemption price paid on the 2021 Notes in connection with the redemption was $ 258 million, including accrued interest.

As a result, we recognized a loss on debt extinguishment of $ 6 million, primarily consisting of a premium paid on the early redemption of the notes.

On September 10, 2021, we redeemed $ 250 million principal amount, representing one-third of the $ 750 million principal amount outstanding prior to such redemption, of the 3.450 % senior notes due 2023 (2023 Notes), in accordance with the optional redemption provisions in the indenture governing the 2023 Notes.

The total aggregate redemption price paid on the 2023 Notes was approximately $ 265 million, including accrued interest.

As a result, we recognized a loss on debt extinguishment of $ 13 million, primarily consisting of a premium paid on the early redemption of the notes.

Interest on the Public Senior Notes and the 2026 Notes is payable semiannually, and the Public Senior Notes and the 2026 Notes are redeemable at our option, in whole at any time or in part from time to time, at specified make-whole redemption prices.

CF INDUSTRIES HOLDINGS, INC.

On March 20, 2021, we redeemed in full all of the $ 250 million outstanding principal amount of the 3.400 % senior secured notes due December 2021 (the 2021 Notes) in accordance with the optional redemption provisions in the indenture governing the 2021 Notes.

The total aggregate redemption price paid in connection with the redemption of the 2021 Notes was $ 258 million, including accrued interest.

As a result, we recognized a loss on debt extinguishment of $ 6 million, consisting primarily of the premium paid on the redemption of the 2021 Notes prior to their scheduled maturity.

On March 21, 2022, we announced that CF Industries elected to redeem in full all of the $ 500 million outstanding principal amount of the 3.450 % senior notes due June 2023 (the 2023 Notes) on April 21, 2022, in accordance with the optional redemption provisions in the indenture governing the 2023 Notes.

See Note 18—Subsequent Events for additional information.

Interest on the outstanding Public Senior Notes and the 2026 Notes is payable semiannually, and the outstanding Public Senior Notes and the 2026 Notes are redeemable at our option, in whole at any time or in part from time to time, at specified make-whole redemption prices.

Interest Expense

Details of interest expense are as follows:

Three months ended

(in millions)

Interest on borrowings (1)

Fees on financing agreements (1)

Interest on tax liabilities (2)

Interest capitalized ( 1 ) —

Total interest expense $ 241 $ 48

_______________________________________________________________________________

(1) See Note 11—Financing Agreements for additional information.

(2) See Note 10—Income Taxes for additional information.

Derivative Financial Instruments

7 unchanged sentences

As a result, changes in fair value of these contracts are recognized in earnings.

As of September 30, 2021, we had natural gas derivative contracts covering certain periods through March 2022.

As of September 30, 2021, our open natural gas derivative contracts consisted of natural gas basis swaps and options for 20.7 million MMBtus.

As of December 31, 2020, we had open natural gas derivative contracts consisting of natural gas fixed price swaps and basis swaps for 34.1 million MMBtus of natural gas.

For the nine months ended September 30, 2021, we used derivatives to cover approximately 9 % of our natural gas consumption.

As of March 31, 2022, we had natural gas derivative contracts covering certain periods through March 2023.

As of March 31, 2022, our open natural gas derivative contracts consisted of natural gas fixed price swaps and basis swaps for 2.9 million MMBtus.

As of December 31, 2021, we had open natural gas derivative contracts consisting of natural

CF INDUSTRIES HOLDINGS, INC.

gas fixed price swaps, basis swaps and options for 60.0 million MMBtus of natural gas.

For the three months ended March 31, 2022, we used derivatives to cover approximately 45 % of our natural gas consumption.

The effect of derivatives in our consolidated statements of operations is shown in the table below.

1 unchanged sentence

Three months ended

September 30, Nine months ended

September 30,

Location 2022 2021

1 unchanged sentence

Unrealized net gains on natural gas derivatives Cost of sales $ 33 $ 6

Realized net losses on natural gas derivatives Cost of sales — — ( 3 ) ( 16 )

Realized net gains (losses) on natural gas derivatives Cost of sales 17 ( 3 )

Gain on net settlement of natural gas derivatives due to Winter Storm Uri Cost of sales — 112

Net derivative gains (losses) $ 12 $ — $ 127 $ ( 4 )

Net derivative gains $ 50 $ 115

Gain on net settlement of natural gas derivatives due to Winter Storm Uri

3 unchanged sentences

We utilize the Normal Purchase Normal Sales (NPNS) derivative scope exception for these fixed price contracts and therefore, we do not account for them as derivatives.

In February 2021, the central portion of the United States experienced extreme and unprecedented cold weather due to the impact of Winter Storm Uri.

Certain natural gas suppliers and natural gas pipelines declared force majeure events due to natural gas well freeze-offs or frozen equipment.

In the first quarter of 2021, the central portion of the United States experienced extreme and unprecedented cold weather due to the impact of Winter Storm Uri.

Certain natural gas suppliers and natural gas pipelines declared force majeure events due to frozen equipment.

This occurred at the same time as large increases in natural gas demand were occurring due to the extreme cold temperatures.

2 unchanged sentences

We no longer qualified for the NPNS derivative scope exception for the natural gas that was net settled with our suppliers due to the impact of Winter Storm Uri.

As a result, we recognized a gain of $ 112 million from the net settlement of these natural gas contracts, which is reflected in cost of sales in our consolidated statement of operations for the nine months ended September 30, 2021.

CF INDUSTRIES HOLDINGS, INC.

The fair values of derivatives on our consolidated balance sheets are shown below.

As of September 30, 2021 and December 31, 2020, none of our derivative instruments were designated as hedging instruments.

As of March 31, 2022 and December 31, 2021, none of our derivative instruments were designated as hedging instruments.

See Note 9—Fair Value Measurements for additional information on derivative fair values.

Asset Derivatives Liability Derivatives

Balance Sheet Location September 30,

2021 December 31, 2020 Balance Sheet Location September 30,

Balance Sheet Location March 31,

2022 December 31, 2021 Balance Sheet

Location March 31,

2022 December 31, 2021

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Most of our International Swaps and Derivatives Association (ISDA) agreements contain credit-risk-related contingent features such as cross default provisions.

In the event of certain defaults or termination events, our counterparties may request early termination and net settlement of certain derivative trades.

As of September 30, 2021 and December 31, 2020, the aggregate fair value of the derivative instruments with credit-risk-related contingent features in net liability positions was zero and $ 6 million, respectively, which also approximates the fair value of the assets that may be needed to settle the obligations if the credit-risk-related contingent features were triggered at the reporting dates.

In the event of certain defaults or termination events, our counterparties may request early termination and net settlement of certain derivative trades, or under certain ISDA agreements, may require us to collateralize derivatives in a net liability position.

As of March 31, 2022 and December 31, 2021, the aggregate fair value of the derivative instruments with credit-risk-related contingent features in net liability positions was zero and $ 31 million, respectively, which also approximates the fair value of the assets that may be needed to settle the obligations if the credit-risk-related contingent features were triggered at the reporting dates.

The credit support documents executed in connection with certain of our ISDA agreements generally provide us and our counterparties the right to set off collateral against amounts owing under the ISDA agreements upon the occurrence of a default or a specified termination event.

As of September 30, 2021 and December 31, 2020, we had no cash collateral on deposit with counterparties for derivative contracts.

The following table presents amounts relevant to offsetting of our derivative assets and liabilities as of September 30, 2021 and December 31, 2020:

As of March 31, 2022 and December 31, 2021, we had no cash collateral on deposit with counterparties for derivative contracts.

CF INDUSTRIES HOLDINGS, INC.

The following table presents amounts relevant to offsetting of our derivative assets and liabilities as of March 31, 2022 and December 31, 2021:

Amounts presented in consolidated

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(in millions)

September 30, 2021

March 31, 2022

Total derivative assets $ 3 $ — $ — $ 3

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We do not believe the contractually allowed netting, close-out netting or setoff of amounts owed to, or due from, the counterparties to our ISDA agreements would have a material effect on our financial position.

CF INDUSTRIES HOLDINGS, INC.

Noncontrolling Interest

We have a strategic venture with CHS under which they own an equity interest in CFN, a subsidiary of CF Holdings, which represents approximately 11 % of the membership interests of CFN.

We have a strategic venture with CHS under which CHS owns an equity interest in CFN, a subsidiary of CF Holdings, which represents approximately 11 % of the membership interests of CFN.

We own the remaining membership interests.

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Declaration of distributions payable ( 247 ) ( 64 )

Balance as of September 30 $ 2,676 $ 2,649

Balance as of March 31 $ 2,751 $ 2,641

Distributions payable to noncontrolling interest:

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Distributions to noncontrolling interest ( 247 ) ( 64 )

Balance as of September 30 $ — $ —

Balance as of March 31 $ — $ —

CF INDUSTRIES HOLDINGS, INC.

CHS also receives deliveries pursuant to a supply agreement under which CHS has the right to purchase annually from CFN up to approximately 1.1 million tons of granular urea and 580,000 tons of UAN at market prices.

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See Note 9—Fair Value Measurements for additional information.

CF INDUSTRIES HOLDINGS, INC.

Stockholders’ Equity

Treasury Stock

On February 13, 2019, the Board authorized the repurchase of up to $ 1 billion of CF Holdings common stock through December 31, 2021 (the 2019 Share Repurchase Program).

Repurchases under the 2019 Share Repurchase Program may be made from time to time in the open market, through privately negotiated transactions, block transactions or otherwise.

On November 3, 2021, our Board of Directors (the Board) authorized the repurchase of up to $ 1.5 billion of CF Holdings common stock through December 31, 2024 (the 2021 Share Repurchase Program).

Repurchases under the 2021 Share Repurchase Program may be made from time to time in the open market, through privately negotiated transactions, through block transactions or otherwise.

The manner, timing and amount of repurchases will be determined by our management based on the evaluation of market conditions, stock price, and other factors.

See Note 18—Subsequent Event for additional information.

Since the 2019 Share Repurchase Program was announced in February 2019, we have repurchased approximately 11.3 million shares for $ 487 million, consisting of:

• 1.1 million shares repurchased during the third quarter of 2021 for $ 50 million,

• 2.6 million shares repurchased during the first quarter of 2020 for $ 100 million, and

• 7.6 million shares repurchased during 2019 for $ 337 million.

At September 30, 2021, we held 1,100,921 shares of treasury stock.

In the three months ended March 31, 2022, we repurchased approximately 1.3 million shares under the 2021 Share Repurchase Program for $ 100 million.

In the three months ended March 31, 2022, we retired 27,962 shares of repurchased stock, including shares repurchased under the share repurchase program that expired on December 31, 2021.

At March 31, 2022, we held 1,563,679 shares of treasury stock.

Accumulated Other Comprehensive Loss

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Balance as of December 31, 2020 $ ( 144 ) $ 4 $ ( 180 ) $ ( 320 )

Gain arising during the period — — 1 1

Reclassification to earnings (1)

Effect of exchange rate changes and deferred taxes 14 — ( 1 ) 13

Balance as of September 30, 2020 $ ( 218 ) $ 5 $ ( 175 ) $ ( 388 )

Balance as of March 31, 2021 $ ( 130 ) $ 4 $ ( 179 ) $ ( 305 )

Balance as of December 31, 2021 $ ( 141 ) $ 4 $ ( 120 ) $ ( 257 )

Loss arising during the period — — ( 4 ) ( 4 )

Reclassification to earnings (1)

Effect of exchange rate changes and deferred taxes ( 13 ) — 3 ( 10 )

Balance as of September 30, 2021 $ ( 146 ) $ 4 $ ( 174 ) $ ( 316 )

Balance as of March 31, 2022 $ ( 154 ) $ 4 $ ( 116 ) $ ( 266 )

____________________________________________________________________________

(1) Reclassifications out of accumulated other comprehensive loss to earnings during the three and nine months ended September 30, 2021 and 2020 were not material.

(1) Reclassifications out of accumulated other comprehensive loss to the consolidated statements of operations during the three months ended March 31, 2022 and 2021 were not material.

CF INDUSTRIES HOLDINGS, INC.

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Plaintiffs allege various theories of negligence, strict liability, and breach of warranty under Texas law.

Although we do not own or operate the facility or directly sell our products to West Fertilizer Co., products that the CF Entities manufactured and sold to others were delivered to the facility and may have been stored at the West facility at the time of the incident.

The Court granted in part and denied in part the CF Entities’ Motions for Summary Judgment in August 2015.

Nearly all of the cases, including all wrongful death and personal injury claims, have been resolved pursuant to confidential settlements that have been or we expect will be fully funded by insurance.

The remaining subrogation and statutory indemnification claims total approximately $ 37 million, before prejudgment interest, and are in various stages of discovery and pre-trial proceedings.

The remaining claims are expected to be set for trial in 2022.

Although we did not own or operate the facility or directly sell our products to West Fertilizer Co., products that the CF Entities manufactured and sold to others were delivered to the facility and may have been stored at the West facility at the time of the incident.

All but two of the claims, including all wrongful death and personal injury claims, have been resolved pursuant to confidential settlements that have been or we expect will be fully funded by insurance.

The two remaining subrogation and statutory indemnification claims have not yet been set for trial.

We believe we have strong legal and factual defenses and intend to continue defending the CF Entities vigorously in the remaining lawsuits.

The Company cannot provide a range of reasonably possible loss due to the uncertain nature of this litigation, including uncertainties around the potential allocation of responsibility by a jury to other defendants or responsible third parties.

The recognition of a potential loss in the future in the West Fertilizer Co.

litigation could negatively affect our results in the period of recognition.

However, based upon currently available information, we expect any potential loss to be fully indemnified by insurance and do not believe that this litigation will have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Based upon currently available information, we expect any potential loss to be immaterial and fully indemnified by insurance.

Other Litigation

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Forest Service to conduct a remedial investigation and feasibility study of the site.

A remedial investigation was submitted to the agencies in 2021.

The next step will be a risk assessment, followed by a feasibility study.

In 2015, we and several other parties received a notice that the U.S.

Department of the Interior and other trustees intended to undertake a natural resource damage assessment for 18 former phosphate mines and three former processing facilities in southeast Idaho, which includes the Georgetown Canyon former mine and processing facility.

Department of the Interior and other trustees intended to undertake a natural resource damage assessment for 18 former phosphate mines and three former processing facilities in southeast Idaho.

The Georgetown Canyon former mine and processing facility was included in the group of former mines and processing facilities identified by the trustees.

In June 2021, we received another notice from the U.S.

Department of the Interior that the natural resource damage trustees were commencing a ‘subsequent’ phase of the natural resource damage assessment, but no further details were provided with respect to said assessment.

Because the former mine site is still in the remedial investigation and feasibility study stage, we are not able to estimate at this time our potential liability, if any, with respect to the cleanup of the site or a possible claim for natural resource damages.

Because the former Georgetown Canyon mine site is still in the risk assessment and feasibility study stage, we are not able to estimate at this time our potential liability, if any, with respect to the cleanup of the site or a possible claim for natural resource damages.

However, based on the results of the site investigation conducted to date, we do not expect the remedial or financial obligations to which we may be subject involving this or other cleanup sites will have a material adverse effect on our consolidated financial position, results of operations or cash flows.

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Our management uses gross margin to evaluate segment performance and allocate resources.

Total other operating costs and expenses (consisting of selling, general and administrative expenses and other operating—net) and non-operating expenses (interest and income taxes) are centrally managed and are not included in the measurement of segment profitability reviewed by management.

Total other operating costs and expenses (consisting primarily of selling, general and administrative expenses and other operating—net) and non-operating expenses (consisting primarily of interest and income taxes) are centrally managed and are not included in the measurement of segment profitability reviewed by management.

Our assets, with the exception of goodwill, are not monitored by or reported to our chief operating decision maker by segment;

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Goodwill by segment is presented in Note 7—Goodwill and Other Intangible Assets.

Segment data for sales, cost of sales and gross margin for the three and nine months ended September 30, 2021 and 2020 are presented in the tables below.

Segment data for sales, cost of sales and gross margin for the three months ended March 31, 2022 and 2021 are presented in the table below.

Granular Urea (2)

(in millions)

Three months ended September 30, 2021

Net sales $ 344 $ 386 $ 390 $ 118 $ 124 $ 1,362

Cost of sales 262 200 233 122 105 922

Gross margin $ 82 $ 186 $ 157 $ ( 4 ) $ 19 440

Total other operating costs and expenses (3)

Equity in earnings of operating affiliate 15

Operating loss $ ( 97 )

Three months ended September 30, 2020

Net sales $ 165 $ 249 $ 248 $ 109 $ 76 $ 847

Cost of sales 174 183 237 96 74 764

Gross margin $ ( 9 ) $ 66 $ 11 $ 13 $ 2 83

Total other operating costs and expenses 45

Equity in earnings of operating affiliate 2

Operating earnings $ 40

Nine months ended September 30, 2021

Three months ended March 31, 2022

Net sales $ 640 $ 765 $ 1,015 $ 223 $ 225 $ 2,868

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Operating earnings $ 1,658

Nine months ended September 30, 2020

Three months ended March 31, 2021

Net sales $ 206 $ 399 $ 232 $ 105 $ 106 $ 1,048

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_______________________________________________________________________________

(1) Cost of sales and gross margin for the ammonia segment in the nine months ended September 30, 2021, include a $ 112 million gain on the net settlement of certain natural gas contracts with our suppliers.

(1) Cost of sales and gross margin for the Ammonia segment for the three months ended March 31, 2021 include a $ 112 million gain on the net settlement of certain natural gas contracts with our suppliers.

See Note 13—Derivative Financial Instruments for additional information.

(2) The cost of the products that are upgraded into other products is transferred at cost into the upgraded product results.

(3) Total other operating costs and expenses in the three and nine months ended September 30, 2021 includes goodwill, long-lived and intangible asset impairment charges of $ 495 million.

CF INDUSTRIES HOLDINGS, INC.

Subsequent Event

On November 3, 2021, the Board authorized the repurchase of up to $ 1.5 billion of CF Holdings common stock from January 1, 2022 through December 31, 2024 (the 2021 Share Repurchase Program).

Repurchases under the 2021 Share Repurchase Program may be made from time to time in the open market, through privately negotiated transactions, block transactions or otherwise.

The manner, timing and amount of repurchases will be determined by our management based on the evaluation of market conditions, stock price, and other factors.

See Note 15—Stockholders’ Equity for information related to the 2019 Share Repurchase Program, which expires on December 31, 2021.

Subsequent Events

On April 21, 2022, we redeemed in full all of the $ 500 million outstanding principal amount of the 2023 Notes in accordance with the optional redemption provisions in the indenture governing the 2023 Notes.

The total aggregate redemption price paid in connection with the redemption of the 2023 Notes was approximately $ 513 million, including accrued interest.

As a result, we will recognize a loss on debt extinguishment of approximately $ 8 million in the second quarter of 2022.

See Note 11—Financing Agreements for additional information.

On April 27, 2022, the Board declared a quarterly dividend of $ 0.40 per common share, representing an increase from the quarterly dividend of $ 0.30 per common share that was declared and paid in the first quarter of 2022.

The dividend will be paid on May 31, 2022 to stockholders of record as of May 16, 2022.

CF INDUSTRIES HOLDINGS, INC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements