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Item 1A. Risk Factors

2023-02-23 compared with 2022-02-24 · 138 added, 137 removed, 399 unchanged (41% of the section changed)

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Additional production capacity is expected to come on line over the next 12 months outside of North America.

In addition, plans for building new facilities for green and blue ammonia have been announced by other companies and CF Holdings, such as our proposed plans for an export-oriented greenfield blue ammonia production facility in the southeastern United States.

We cannot predict the impact of this additional capacity on nitrogen fertilizer selling prices.

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During periods of industry oversupply, our financial condition, results of operations and cash flows tend to be affected negatively as the price at which we sell our products typically declines, resulting in possible reduced profit margins, write-downs in the value of our inventory and temporary or permanent curtailments of production.

In 2016 and 2017, our financial performance, credit ratings and the trading price for our common stock were negatively impacted by the lower selling prices resulting from the global oversupply of nitrogen fertilizer.

While in 2018 and 2019, we experienced increases in the average selling price for our products, in 2020, the average selling price for our products decreased 14% to $203 per ton compared to $235 per ton in 2019.

In 2021, the average selling price for our products increased 74% to $353 per ton compared to 2020.

Due to the cyclical nature of our industry, we cannot predict the timing of oversupply and undersupply conditions, the period of time that these conditions will persist or the degree to which oversupply conditions will impact our business, financial condition, results of operations and cash flows.

Our nitrogen products are global commodities, and we face intense global competition from other producers.

In recent years, we have experienced periods of industry oversupply, which impacted our financial performance, credit ratings and the trading price for our common stock.

Due to the cyclical nature of our industry, we cannot predict the timing or duration of oversupply conditions or the degree to which oversupply conditions would impact our business, financial condition, results of operations and cash flows.

Nitrogen products are global commodities, and we face intense global competition from other producers.

We are subject to intense price competition from our competitors.

Most fertilizers and related nitrogen products that we produce, such as industrial grade ammonium nitrate (AN) and DEF, are global commodities, with little or no product differentiation, and customers make their purchasing decisions principally on the basis of delivered price and, to a lesser extent, customer service and product quality.

The nitrogen products that we produce are global commodities, with little or no product differentiation, and customers make their purchasing decisions principally on the basis of delivered price and, to a lesser extent, customer service and product quality.

As a consequence, conditions in the international market for nitrogen products significantly influence our operating results.

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Some of our competitors have greater total resources and are less dependent on earnings from fertilizer sales, which make them less vulnerable to industry downturns and better positioned to pursue new expansion and development opportunities.

Furthermore, certain governments, in some cases as owners of some of our competitors, may be willing to accept lower prices and profitability on their products or subsidize production or consumption in order to support domestic employment or other political or social

Our competitive position could suffer as a result of these factors, including if we are not able to expand our own resources to a similar extent, either through investments in new or existing operations or through acquisitions or joint ventures.

CF INDUSTRIES HOLDINGS, INC.

Our competitive position could suffer if we are not able to expand our own resources to a similar extent, either through investments in new or existing operations or through acquisitions or joint ventures.

China, the world’s largest producer and consumer of nitrogen fertilizers, currently has capacity surplus and many high-cost plants.

China, the world’s largest producer and consumer of nitrogen fertilizers, currently has surplus capacity and many high-cost plants.

As a result, the domestic nitrogen industry in China is operating at less than full capacity.

In addition, the Chinese government is currently limiting exports through a variety of measures.

A number of factors could encourage China to increase product capacity utilization, including changes in Chinese government policy, devaluation of the Chinese renminbi, the relaxation of Chinese environmental standards or decreases in Chinese producers’ underlying costs such as the price of Chinese coal.

Any resulting increase in export volume could adversely affect the balance between global supply and demand and may put downward pressure on global fertilizer prices, which could materially adversely affect our business, financial condition, results of operations and cash flows.

Any resulting increase in export volume could adversely affect the balance between global supply and demand and put downward pressure on global fertilizer prices, which could materially adversely affect our business, financial condition, results of operations and cash flows.

From time to time, certain of our competitors with significant nitrogen fertilizer export capacity have benefited from non-market pricing of natural gas, which has resulted in significant volumes of exports to the United States.

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antidumping measures on solid urea and fertilizer grade ammonium nitrate from Russia allowed for increased imports from that country into the United States in recent years.

In addition, high volumes of urea ammonium nitrate solution (UAN) imports from Russia and Trinidad and Tobago have negatively affected U.S.

In addition, in recent years, high volumes of urea ammonium nitrate solution (UAN) imports from Russia and The Republic of Trinidad and Tobago (Trinidad) have negatively affected U.S.

producers’ UAN profitability.

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Some of these producers also benefit from non-market or government-set rates for natural gas pricing.

Government policies in these regions may also stimulate future ammonia or hydrogen investments.

Recently, many proposed green and blue ammonia projects have been announced or considered, and future hydrogen, energy, or environmental/carbon policies may support development of additional nitrogen production in locations outside North America, including Europe, Australia and the Middle East.

In addition, the international market for nitrogen products is influenced by such factors as currency exchange rates, including the relative value of the U.S.

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Market participants customarily move product between regions of the world, or adjust trade flows, in response to these factors.

North America, where we manufacture and sell most of our products, is one of the largest and most liquid nitrogen trading regions in the world.

North America, where we manufacture and sell most of our products, is one of the largest and most accessible nitrogen trading regions in the world.

As a result, other manufacturers, traders and other market participants can move nitrogen products to North America when there is uncertainty associated with the supply and demand balance in other regions or when duties, tariffs or quotas impact prices or trade flows in other regions.

Thus, duties, tariffs and quotas can lead to uncertainty in the global marketplace and impact the supply and demand balance in many regions, which could adversely affect our business, financial condition, results of operations and cash flows.

On October 9, 2019, the European Commission (the Commission) imposed definitive anti-dumping duties on imports to the European Union of UAN manufactured in Russia, the Republic of Trinidad and Tobago and the United States.

On October 9, 2019, the European Commission (the Commission) imposed definitive anti-dumping duties on imports to the European Union (EU) of UAN manufactured in Russia, Trinidad and the United States.

For imports of UAN manufactured in the United States, the fixed duty rate is €29.48 per tonne (or €26.74 per ton).

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The long-term impact of these duties on the international market for nitrogen products is uncertain.

A decline in agricultural production or limitations on the use of our products for agricultural purposes could materially adversely affect the demand for our products.

Conditions in the United States, Europe, India, Brazil, China and other global agricultural areas significantly impact our operating results.

A decline in agricultural production, limitations on the use of our products for agricultural purposes or developments in crop technology could materially adversely affect the demand for our products.

Conditions in the United States, Europe, India, Brazil, China and other countries and regions of global significance in agricultural production significantly impact our operating results.

Agricultural planted areas and production can be affected by a number of factors, including weather patterns and field conditions, current and projected grain inventories and prices, crop disease and/or livestock disease, demand for agricultural products and governmental policies regarding production of or trade in agricultural products.

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corn demand, due in part to federal legislation mandating use of renewable fuels.

An increase in ethanol production has led to an increase in the amount of corn grown in the United States and to increased fertilizer usage on both corn and other crops that have also benefited from improved farm economics.

While the current Renewable Fuel Standard encourages continued high levels of corn-based ethanol production, various interested parties have called to eliminate or reduce the renewable fuel mandate, or to eliminate or reduce corn-based ethanol as part of the renewable fuel mandate.

Other factors that drive the ethanol market include the prices of

The resulting increase in ethanol production has led to an increase in the amount of corn grown in the United States and to increased fertilizer usage on both corn and other crops that have also

CF INDUSTRIES HOLDINGS, INC.

ethanol, gasoline and corn.

Lower gasoline prices and fewer aggregate miles, driven by increased automobile fuel efficiency, the continued expansion of electric vehicle use or the impact of decreased travel resulting from the coronavirus disease 2019 (COVID-19) pandemic, may put pressure on ethanol prices that could result in reduced profitability and lower production for the ethanol industry.

benefited from improved farm economics.

Other factors that drive the ethanol market include the prices of ethanol, gasoline and corn.

Lower gasoline prices and fewer aggregate miles, driven by increased automobile fuel efficiency, the continued expansion of electric vehicle use or the impact of decreased travel, such as the decreased travel experienced during the coronavirus disease 2019 (COVID-19) pandemic, may put pressure on ethanol prices that could result in reduced profitability and lower production for the ethanol industry.

This could have an adverse effect on corn-based ethanol production, planted corn acreage and fertilizer demand.

Additionally, government incentives and other policies and recent increased investment in renewable biodiesel and associated soybean crush capacity may drive higher soybean oil prices, resulting in more planted acres allocated to soybeans and other oil crops and displacing some acreage traditionally planted to more nitrogen intensive crops such as grains and cotton.

Developments in crop technology, such as nitrogen fixation, the conversion of atmospheric nitrogen into compounds that plants can assimilate, or nitrogen-efficient varieties, or developments in alternatives to traditional animal feed or alternative proteins, could also reduce the use of chemical fertilizers and adversely affect the demand for our products.

Widespread adoption of emerging application technologies or alternative farming techniques could disrupt traditional application practices, affecting the volume or types of products used and timing of applications.

In addition, from time to time various foreign government and U.S.

state legislatures have considered limitations on the use and application of chemical fertilizers due to concerns about the negative impact of these products on the environment.

For example, the United Kingdom is currently consulting with stakeholders and reviewing proposals to limit emissions from solid urea fertilizers, including a potential ban on urea fertilizers.

While CF Fertilisers UK Limited does not sell solid urea fertilizer in the United Kingdom, other jurisdictions may consider limits on fertilizer use, such as the European Union, which announced its Farm to Fork and Biodiversity Strategies, or Canada, which as part of its Healthy Environment, Healthy Economy plan announced plans in late 2020 to introduce a target of reducing emissions from fertilizers by 30% below 2020 levels and has begun informal consultations with industry and other stakeholders on this proposal.

In addition, from time to time various foreign governments and U.S.

state legislatures have considered limitations on the use and application of chemical fertilizers due to concerns about the negative impact that the application of these products can have on the environment.

Starting in October 2023, the United Kingdom will limit the use of unprotected or uninhibited urea products between January and March of every year.

While CF Fertilisers UK Limited does not sell solid urea fertilizer in the United Kingdom, limitations on fertilizer use have been and may be considered by other jurisdictions, such as the EU, which announced its Farm to Fork Strategy and Biodiversity Strategy, or Canada, which has begun consulting stakeholders on its target of reducing emissions from fertilizers by 30% below 2020 levels through improved nitrogen management and optimizing fertilizer use.

These or other more stringent limitations on greenhouse gas emissions applicable to farmers, the end-users of our nitrogen fertilizers, could reduce the demand for our fertilizer products to the extent their use of our products increases farm-level emissions.

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As a result, North American natural gas comprises a significant portion of the total production cost of our products.

In recent years, the cost of North American natural gas for the production of nitrogen fertilizers has been significantly lower than the energy costs of the industry’s marginal nitrogen producers.

Changes in the supply of and demand for natural gas can lead to extended periods of higher natural gas prices.

In addition, any increases in the volume of liquefied natural gas exported from the U.S.

to other regions, particularly regions where nitrogen products are produced, could increase our natural gas costs and/or lower natural gas costs for our competitors.

If high natural gas prices were to persist in North America and significantly erode our favorable energy cost differentials relative to the marginal nitrogen producers, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.

The price of natural gas in North America has been volatile in recent years.

During 2021, the daily closing price at the Henry Hub, the most heavily-traded natural gas pricing point in North America, reached a low of $2.36 per MMBtu on April 7, 2021 and a high of $23.61 per MMBtu on February 18, 2021.

During the three-year period ended December 31, 2021, the daily closing price at the Henry Hub reached a low of $1.34 per MMBtu on September 22, 2020 and three consecutive days in October 2020 and a high of $23.61 per MMBtu on February 18, 2021.

We also have manufacturing facilities located in the United Kingdom.

These facilities are subject to fluctuations associated with the price of natural gas in Europe, which has also been volatile in recent years and reached unprecedented high levels in 2021.

The major natural gas trading point for the United Kingdom is the National Balancing Point (NBP).

During 2021, the daily closing price at NBP reached a low of $5.58 per MMBtu on February 23, 2021 and a high of $60.10 per MMBtu on December 22, 2021.

During the three-year period ended December 31, 2021, the daily closing price at NBP reached a low of $1.04 per MMBtu on May 22, 2020 and a high of $60.10 per MMBtu on December 22, 2021.

The high price for natural gas in the United Kingdom has had an effect on our local operations, resulting in the idling of certain of our United Kingdom plants in 2021.

Since the third quarter of 2021, the price for natural gas in the United Kingdom has remained high.

The average daily market price of natural gas at NBP for January 2022 was $25.91 per MMBtu.

The price has declined on average due in part to the development of significant natural gas reserves, including shale gas, and the rapid improvement in shale gas extraction techniques, such as hydraulic fracturing and horizontal drilling.

However, future production of natural gas from shale formations could be reduced by regulatory changes that restrict drilling or hydraulic fracturing or increase its cost or by reduction in oil exploration and development prompted by lower oil prices resulting in production of less associated gas.

Changes in the supply of and demand for natural gas can lead to extended periods of higher natural gas prices.

In recent years, the cost of North American natural gas for the production of nitrogen fertilizers has been significantly lower than the energy costs of the industry’s marginal nitrogen producers.

Any increases in the volume of liquefied natural gas exported from the United States to other regions, or increases in the usage of hydraulic fracturing outside the United States, particularly in regions where nitrogen products are produced, could increase our natural gas costs and/or lower natural gas costs for our competitors.

If natural gas prices outside of North America were to decrease or North American natural gas prices were to increase, our favorable energy cost differentials relative to the industry’s marginal nitrogen producers could significantly erode, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

During 2022, the daily closing price at the Henry Hub, the most heavily-traded natural gas pricing point in North America, reached a low of $3.45 per MMBtu on November 10, 2022 and a high of $9.85 per MMBtu on August 23, 2022.

During the three-year period ended December 31, 2022, the daily closing price at the Henry Hub reached a low of $1.34 per

CF INDUSTRIES HOLDINGS, INC.

The price of natural gas in North America and worldwide has been volatile in recent years and has declined on average due in part to the development of significant natural gas reserves, including shale gas, and the rapid improvement in shale gas extraction techniques, such as hydraulic fracturing and horizontal drilling.

Future production of natural gas from shale formations could be reduced by regulatory changes that restrict drilling or hydraulic fracturing or increase its cost or by reduction in oil exploration and development prompted by lower oil prices resulting in production of less associated gas.

MMBtu on September 22, 2020 and three consecutive days in October 2020 and a high of $23.61 per MMBtu on February 18, 2021.

Certain of our operating facilities are located near natural gas hubs that have experienced increased natural gas development and have favorable basis differences as compared to other North American hubs.

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If reduced production, increased demand or changes in basis were to occur, or if other developments adversely impact the supply and demand balance for natural gas in North America or elsewhere, natural gas prices could rise, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We also have a manufacturing facility located in the United Kingdom.

This facility is subject to fluctuations in production cost associated with the price of natural gas in Europe, which has been volatile in recent years and reached unprecedented high levels in 2021.

The major natural gas trading point for the United Kingdom is the National Balancing Point (NBP).

During 2022, the daily closing price at NBP reached a low of $1.23 per MMBtu on June 10, 2022 and a high of $67.08 per MMBtu on March 8, 2022.

During the three-year period ended December 31, 2022, the daily closing price at NBP reached a low of $1.04 per MMBtu on May 22, 2020 and a high of $67.08 per MMBtu on March 8, 2022.

Since the third quarter of 2021, the price for natural gas in the United Kingdom has generally remained high relative to historical NBP prices.

The high price for natural gas in the United Kingdom has had an effect on our local operations in the United Kingdom, including the permanent closure of our Ince facility and the temporary idling of ammonia production at our Billingham complex.

The average daily market price of natural gas at NBP for January 2023 was $18.93 per MMBtu.

Adverse weather conditions may decrease demand for our fertilizer products, increase the cost of natural gas or materially disrupt our operations.

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Weather conditions or, in certain cases, weather forecasts, also can disrupt our operations and can affect the price of natural gas, the principal raw material used to make our nitrogen products.

Colder and/or longer than normal winters and warmer than normal summers increase the demand for natural gas for power generation and for residential and industrial use, which can increase the cost and/or decrease the availability of natural gas.

Colder and/or longer than normal winters and warmer than normal summers increase the demand for natural gas for residential and industrial use and for power generation, which can increase the cost and/or decrease the availability of natural gas.

In addition, adverse weather events not only can cause loss of power at our facilities or damage to or delays in logistics capabilities disrupting our operations, but also can impact the supply of natural gas and utilities and cause prices to rise.

All of the adverse weather conditions described above, including those impacting our customers and our operations, such as the physical risk from storms, hurricanes, tornadoes, or floods could become more frequent and/or more severe as a result of climate change.

Our Donaldsonville complex is located in an area of the United States that experiences a relatively high level of hurricane or high wind activity and several of our complexes are located in areas that experience severe weather.

In the last several years, there has been an increase in the frequency and severity of adverse weather conditions, including in the geographic areas where we have operations.

Any significant adverse weather event or combination of adverse weather events could decrease demand for our fertilizer products, increase the cost of natural gas or materially disrupt our operations — any of which could have a material adverse impact on our business, financial condition, results of operations and cash flows.

Any significant adverse weather event or combination of adverse weather events

CF INDUSTRIES HOLDINGS, INC.

could decrease demand for our fertilizer products, increase the cost of natural gas or materially disrupt our operations — any of which could have a material adverse impact on our business, financial condition, results of operations and cash flows.

Our operating results fluctuate due to seasonality.

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The degree of seasonality of our business can change significantly from year to year due to conditions in the agricultural industry and other factors.

The strongest demand for our products in North America occurs

CF INDUSTRIES HOLDINGS, INC.

during the spring planting season, with a second period of strong demand following the fall harvest.

The strongest demand for our products in North America occurs during the spring planting season, with a second period of strong demand following the fall harvest.

In contrast, we and other fertilizer producers generally manufacture and distribute products throughout the year.

As a result, we and/or our customers generally build inventories during the low demand periods of the year to ensure timely product availability during the peak sales seasons.

As a result, we and/or our customers generally build inventories during the low demand periods of the year to ensure timely product availability during the peak demand periods.

Seasonality is greatest for ammonia due to the short application seasons and the limited ability of our customers and their customers to store significant quantities of this product.

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We believe the ability to purchase products on a forward basis is most appealing to our customers during periods of generally increasing prices for nitrogen fertilizers.

Our customers may be less willing or even unwilling to purchase products on a forward basis during periods of generally decreasing or stable prices or during periods of relatively high fertilizer prices due to the expectation of lower prices in the future or limited capital resources.

In addition, our customers may be unwilling to purchase products on a forward basis due to their limited capital resources.

Fixing the selling prices of our products, often months in advance of their ultimate delivery to customers, typically causes our reported selling prices and margins to differ from spot market prices and margins available at the time of shipment.

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Our natural gas is transported by pipeline to our facilities by third party transportation providers or through the use of facilities owned by third parties.

Delays or interruptions in the delivery of natural gas or other raw materials may be caused by, among other things, severe weather or natural disasters, unscheduled downtime, labor difficulties or shortages, insolvency of our suppliers or their inability to meet existing contractual arrangements, deliberate sabotage and terrorist incidents, or mechanical failures.

Delays or interruptions in the delivery of natural gas or other raw materials may be caused by, among other things, extreme weather or natural disasters, unscheduled downtime, labor difficulties or shortages, insolvency of our suppliers or their inability to meet existing contractual arrangements, deliberate sabotage and terrorist incidents, or mechanical failures.

In addition, the transport of natural gas by pipeline is subject to additional risks, including delays or interruptions caused by capacity constraints, leaks or ruptures.

Any delay or interruption in the delivery of natural gas or other raw materials, even for a limited period, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

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Our transportation and distribution activities rely on third party providers and are subject to environmental, safety and regulatory oversight.

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We also lease rail cars in order to ship raw materials and finished products.

These transportation operations, equipment and services are subject to various hazards, including adverse operating conditions on the

CF INDUSTRIES HOLDINGS, INC.

inland waterway system, extreme weather conditions, system failures, work stoppages, shutdowns, delays, accidents such as spills and derailments, vessel groundings and other accidents and operating hazards.

These transportation operations, equipment and services are subject to various hazards and other sources of disruption, including adverse operating conditions on the inland waterway system, extreme weather conditions, system failures, unscheduled downtime, labor difficulties or shortages, shutdowns, delays, accidents such as spills and derailments, vessel groundings and other accidents and operating hazards.

Additionally, due to the aging infrastructure of certain rail lines, bridges, roadways, pipelines, river locks, and equipment that our third party service providers utilize, we may experience delays in both the receipt of raw materials or the shipment of finished product while repairs, maintenance or replacement activities are conducted.

Also, certain third party service providers, such as railroads, have experienced periodic service delays or shutdowns due to capacity constraints in their systems, operational and maintenance difficulties, blockades, weather or safety-related embargoes and delays, and other events, which could impact the shipping of our products and cause disruption in our supply chain.

Also, certain third party service providers, such as railroads, have from time to time experienced service delays or shutdowns due to capacity constraints in their systems, operational and maintenance difficulties, blockades, organized labor strikes, weather or safety-related embargoes and delays, and other events, which could impact the shipping of our products and cause disruption in our supply chain.

These transportation operations, equipment and services are also subject to environmental, safety, and regulatory oversight.

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In the United States and Canada, the railroad industry continues various efforts to limit the railroads’ potential liability stemming from the transportation of Toxic Inhalation Hazard materials, such as the anhydrous ammonia we transport to and from our manufacturing and distribution facilities.

For example, various railroads shift liability to shippers by contract, purport to shift liability to shippers by tariff, or otherwise seek to require shippers to indemnify and defend the railroads from and against liabilities (including in negligence, strict liability, or statutory liability) that may arise from certain acts or omissions of the railroads, third parties who may have insufficient resources, or the Company, unknown causes or acts of god.

For example, various railroads shift liability to shippers by contract, purport to shift liability to shippers by tariff, or otherwise seek to require shippers to indemnify and defend the railroads from and against liabilities (including in negligence, strict liability, or statutory liability) that may arise from certain acts or omissions of the railroads, third parties that may have insufficient resources, or the Company or from unknown causes or acts of god.

These initiatives could materially and adversely affect our operating expenses and potentially our ability to transport anhydrous ammonia and increase our liability for releases of our anhydrous ammonia while in the care, custody and control of the railroads, third parties or us, for which our insurance may be insufficient or unavailable.

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We are reliant on a limited number of key facilities.

Our nitrogen manufacturing facilities are located at nine separate nitrogen complexes, the largest of which is the Donaldsonville complex, which represented approximately 40% of our ammonia production capacity as of December 31, 2021.

Our nitrogen manufacturing facilities are located at eight separate nitrogen complexes, the largest of which is the Donaldsonville complex, which represented approximately 41% of our ammonia production capacity as of December 31, 2022.

The suspension of operations at any of these complexes could adversely affect our ability to produce our products and fulfill our commitments, and could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Operational disruptions could occur for many reasons, including natural disasters, weather, unplanned maintenance and other manufacturing problems, disease, strikes or other labor unrest or transportation interruptions.

For example, our Donaldsonville complex is located in an area of the United States that experiences severe weather, including a relatively high level of hurricane or high wind activity, and several of our other complexes are also located in areas that experience severe weather.

Such storms and severe weather events, depending on their severity and location, have the potential not only to damage our facilities and disrupt our operations, but also to affect adversely the shipping and distribution of our products.

For example, our Donaldsonville complex is located in an area of the United States that experiences extreme weather events, including a relatively high level of hurricane or high wind activity, and several of our other complexes are also located in areas that experience extreme weather events.

Extreme weather events, including temperature extremes, depending on their severity and location, have the potential not only to damage our facilities and disrupt our operations, but also to affect adversely the shipping and distribution of our products.

Moreover, our facilities may be subject to failure of equipment that may be difficult to replace or have long delivery lead times, due in part to a limited number of suppliers, and could result in operational disruptions.

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Security breaches of our systems (or the systems of our customers, suppliers or other business partners) could result in the misappropriation, destruction or unauthorized disclosure of confidential information or personal data belonging to us or to our employees, business partners, customers or suppliers, and may subject us to legal liability.

As with most large systems, our information technology systems (and the systems of our suppliers) have in the past been, and in the future likely will be, subject to computer viruses, malicious codes, unauthorized access and other cyber attacks, and we expect the sophistication and frequency of such attacks to continue to increase.

As with most large systems, our information technology systems (and those of our suppliers) have in the past been, and in the future likely will be, subject to computer viruses, malicious codes, unauthorized access and other cyberattacks, and we expect the sophistication and frequency of such attacks to continue to increase.

To date, we are not aware of any significant impact on our operations or financial results from such attempts;

however, unauthorized access could disrupt our business operations, result in the loss of assets, and have a material adverse effect on our business, financial condition, or results of operations.

however, unauthorized access or other types of cyberattacks could disrupt our business operations, result in the loss of assets, and have a material adverse effect on our business, financial condition, or results of operations.

Any of the attacks, breaches or other disruptions or damage described above could:

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The protection of such information, as well as our proprietary information, is critical to us.

The regulatory environment surrounding information security and privacy is increasingly demanding, with the frequent imposition of new and constantly changing requirements.

Breaches of our security measures or the accidental loss, inadvertent disclosure, or unapproved dissemination of proprietary information or sensitive or confidential data about us or our employees, customers or suppliers, including the potential loss or disclosure of such information or data as a result of fraud, trickery, or other forms of deception, could expose us or our employees, customers, suppliers or other individuals affected to a risk of loss or misuse of this information, which could ultimately result in litigation and potential legal and financial liability.

The regulatory environment surrounding information security and privacy is increasingly demanding, with frequent imposition of new requirements and changes to existing requirements.

Breaches of our security measures or the accidental loss, inadvertent disclosure, or unapproved dissemination of proprietary information or sensitive or confidential data about us or our employees, customers or suppliers, including the potential loss or disclosure of such information or data as a result of fraud, trickery, or other forms of deception, could expose us or our employees, customers, suppliers or other individuals or entities affected to a risk of loss or misuse of this information, which could ultimately result in litigation and potential legal and financial liability.

These events could also damage our reputation or otherwise harm our business.

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Due to concerns related to terrorism or the potential use of certain nitrogen products as explosives, we are subject to various security laws and regulations.

In the United States, these security laws include the Maritime Transportation Security Act of 2002 and the Chemical Facilities Anti-Terrorism Standards regulation.

In the United States, these security laws include the Maritime Transportation Security Act of 2002 and the Chemical Facility Anti-Terrorism Standards regulation.

In addition, President Obama issued in 2013 Executive Order 13650 Improving Chemical Facility Safety and Security to improve chemical facility safety in coordination with owners and operators.

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Changes in governmental trade policies can lead to the imposition of new taxes, levies, duties, tariffs or quotas affecting agricultural commodities, fertilizer or industrial products.

These can alter costs, trade flows, access to supplies or demand, and regional balances for our products.

These can alter or impact costs, trade flows, demand for our products, access to raw materials and other supplies, and regional supply and demand balances for our products.

Our principal reporting currency is the U.S.

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We are subject to anti-corruption laws and regulations and economic sanctions programs in various jurisdictions, including the U.S.

Foreign Corrupt Practices Act of 1977, the United Kingdom Bribery Act of 2010, the Canadian Corruption of Foreign Public Officials Act, and economic sanctions programs administered by the United Nations, the European Union and the Office of Foreign Assets Control of the U.S.

Department of the Treasury, and regulations set forth under the Comprehensive Iran Accountability Divestment Act.

As a result of doing business internationally, we are exposed to a risk of violating anti-corruption laws and sanctions regulations applicable in those countries where we, our partners or agents operate.

Foreign Corrupt Practices Act of 1977, the United Kingdom Bribery Act 2010, the Canadian Corruption of Foreign Public Officials Act;

economic sanctions programs administered by the United Nations, the EU and the Office of Foreign Assets Control of the U.S.

Department of the Treasury;

and regulations under the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010.

Violations of anti-corruption and sanctions laws and regulations are punishable by civil penalties, including fines, denial of export privileges, injunctions, asset seizures, debarment from government contracts (and termination of existing contracts) and revocations or restrictions of licenses, as well as criminal fines and imprisonment.

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These hazards include:

severe weather and natural disasters;

extreme weather and natural disasters;

train derailments, collisions, vessel groundings and other transportation and maritime incidents;

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Some of these hazards can cause bodily injury and loss of life, severe damage to or destruction of property and equipment and environmental damage, and may result in suspension of operations for an extended period of time and/or the imposition of civil or criminal penalties and liabilities.

In April 2013, there was a fire and explosion at the West Fertilizer Co.

fertilizer storage and distribution facility in West, Texas.

According to published reports, 15 people were killed and approximately 200 people were injured in the incident, and the fire and explosion damaged or destroyed a number of homes and buildings around the facility.

Various subsidiaries of CF Industries Holdings, Inc.

(the CF Entities) were named as defendants along with other companies in lawsuits alleging various theories of negligence, strict liability, and breach of warranty under Texas law.

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.

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

CF INDUSTRIES HOLDINGS, INC.

$37 million, before prejudgment interest.

For example, in 2013, a fire and explosion occurred at a fertilizer storage and distribution facility in West, Texas.

The incident resulted in 15 fatalities and claims of injuries to approximately 200 people, and damaged or destroyed a number of homes and buildings around the facility.

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

We were named as defendants along with other companies in lawsuits alleging various theories of negligence, strict liability, and breach of warranty under Texas law.

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 increased focus on the risks associated with fertilizers as a result of the incident could impact the regulatory environment and requirements applicable to fertilizer manufacturing and storage facilities.

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We maintain property, business interruption, casualty and liability insurance policies, but we are not fully insured against all potential hazards and risks incident to our business.

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Our substantial indebtedness could adversely affect our cash flow, prevent us from fulfilling our obligations and impair our ability to pursue or achieve other business objectives.

As of December 31, 2021, we had approximately $3.5 billion of total funded indebtedness, consisting primarily of unsecured senior notes with varying maturity dates between 2023 and 2044, or approximately 36% of our total capitalization (total debt plus total stockholders’ equity), and an additional $750 million of unsecured senior borrowing availability (reflecting no outstanding borrowings and no outstanding letters of credit) for general corporate purposes under our revolving credit agreement (the Revolving Credit Agreement).

As of December 31, 2022, we had approximately $3.0 billion of total funded indebtedness, consisting primarily of unsecured senior notes with varying maturity dates between 2026 and 2044, or approximately 27% of our total capitalization (total debt plus total equity), and an additional $750 million of unsecured senior borrowing availability (reflecting no outstanding borrowings and no outstanding letters of credit) for general corporate purposes under our revolving credit agreement (the Revolving Credit Agreement).

Our substantial debt service obligations will have an impact on our earnings and cash flow for so long as the indebtedness is outstanding.

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If our financial condition or operating results deteriorate, our relations with our creditors, including the holders of our outstanding debt securities, the lenders under the Revolving Credit Agreement and our suppliers, may be materially and adversely affected.

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A failure to satisfy the financial maintenance covenants under the Revolving Credit Agreement or a breach of the covenants under any of the agreements governing our indebtedness could limit the borrowing availability under the Revolving Credit Agreement or result in an event of default under such agreements.

Our ability to comply with the covenants in the agreements and instruments governing our indebtedness, including the consolidated interest coverage ratio and consolidated net leverage ratio maintenance covenants contained in the Revolving Credit Agreement, will depend upon our future performance and various other factors, such as market prices for our nitrogen products, natural gas prices and other business, competitive and regulatory factors, many of which are beyond our control.

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Credit Agreement, will depend upon our future performance and various other factors, such as market prices for our nitrogen products, natural gas prices and other business, competitive and regulatory factors, many of which are beyond our control.

We may not be able to maintain compliance with all of these covenants.

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our corporate credit rating by Moody’s Investor Services, Inc.

is Ba1 with a positive outlook;

is Baa3 with a stable outlook;

and our corporate credit rating with Fitch Ratings, Inc.

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The enactment of, or increases in, carbon taxes, tariffs or value added taxes, or other changes in the application of existing taxes, in markets in which we are currently active, or may be active in the future, or on specific products that we sell or with which our products compete, could have an adverse effect on our financial condition and results of operations.

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The United States and other countries in which we operate are in the process of implementing the Organization for Economic Co-operation and Development’s (OECD) Base Erosion and Profit Shifting Project (BEPS), which is intended to improve tax disclosure and transparency and eliminate structures and activities that could be perceived by a particular country as resulting in tax avoidance.

The countries in which we operate are in the process of implementing the Base Erosion and Profit Shifting Project (BEPS) of the Organisation for Economic Co-operation and Development (OECD).

BEPS is intended to improve tax disclosure and transparency and eliminate structures and activities that could be perceived by a particular country as resulting in tax avoidance.

The OECD has partially developed and continues with development of a framework to assist member countries in adopting BEPS related legislation.

Each country is permitted to introduce its own legislation to implement BEPS legislation.

As a number of our business operations do business across country lines, we are subject to BEPS.

Each country is permitted to introduce its own legislation to implement the measures contemplated by the BEPS framework.

As a number of our business operations are conducted across national borders, we are subject to BEPS.

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The implementation of BEPS could result in tax changes and may adversely affect our provision for income taxes, results of operations and cash flows.

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Our business is subject to risks involving derivatives and the risk that our hedging activities might not prevent losses.

We may utilize natural gas derivatives to hedge our financial exposure to the price volatility of natural gas, the principal raw material used in the production of nitrogen-based products.

We may utilize natural gas derivatives to hedge our financial exposure to the price volatility of natural gas, the principal raw material we use in the production of nitrogen-based products.

We have used natural gas futures, swaps and option contracts traded in over-the-counter markets or on exchanges.

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We are subject to numerous environmental, health and safety laws, regulations and permitting requirements, as well as potential environmental liabilities, which may require us to make substantial expenditures.

We are subject to numerous environmental, health and safety laws and regulations in the United States, Canada, the United Kingdom, the European Union, the Republic of Trinidad and Tobago and other locations, including laws and regulations relating to the generation and handling of hazardous substances and wastes;

We are subject to numerous environmental, health and safety laws and regulations in the United States, Canada, the United Kingdom, the EU, Trinidad and other locations, including laws and regulations relating to the generation and handling of hazardous substances and wastes;

the introduction of new chemicals or substances into a market;

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In November 2021, the Infrastructure Investment and Jobs Act reinstated and doubled the Superfund tax on chemicals, including ammonia and nitric acid.

These taxes will be in place from July 1, 2022 through December 31, 2031 and apply to all domestic and imported products not used as fertilizer.

As a producer of nitrogen fertilizer products working with hazardous substances, our business faces risks of spills, discharges or other releases of those substances into the environment.

These taxes were put in place from July 1, 2022 through December 31, 2031 and apply to all of these domestic and imported products not used as fertilizer.

As a producer of nitrogen products working with hazardous substances, our business faces risks of spills, discharges or other releases of those substances into the environment.

Certain environmental laws, including CERCLA, impose joint and several liability, without regard to fault, for cleanup costs on persons who have disposed of or released hazardous substances into the environment.

Given the nature of our business, we have incurred, are incurring currently, and are likely to incur periodically in the future, liabilities under CERCLA and other environmental cleanup laws at our current facilities or facilities previously owned by us or other acquired businesses, adjacent or nearby third-party facilities or offsite disposal

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The costs associated with future cleanup activities that we may be required to conduct or finance may be material.

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Violations of environmental, health and safety laws can result in substantial penalties, court orders to install pollution-control equipment, civil and criminal sanctions, permit revocations and facility shutdowns.

Environmental, health and safety laws change regularly and have tended to become more stringent over time.

Environmental, health and safety

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laws change regularly and have tended to become more stringent over time.

As a result, we have not always been and may not always be in compliance with all environmental, health and safety laws and regulations.

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Expansion or modification of our operations is predicated upon securing necessary environmental or other permits or approvals.

A decision by a government agency to deny or delay issuing a new or renewed regulatory material permit or approval, or to revoke or substantially modify an existing permit or approval, or a determination that we have violated a law or permit as a result of a governmental inspection of our facilities could have a material adverse effect on our ability to continue operations at our facilities and on our business, financial condition, results of operations and cash flows.

More stringent environmental, health and safety laws and regulations, or a reinterpretation of current laws and regulations, could make it more difficult to obtain necessary governmental permits or approvals.

In addition, a focus on the cumulative impact of industrial operations on minority, lower income, and other historically underrepresented and/or disadvantaged communities could impact decisions relating to the issuance of new or renewal of existing permits to the extent that our operations are located in the vicinity of such communities.

A decision by a government agency to deny or delay issuing a new or renewed regulatory permit or approval, or to revoke or substantially modify an existing permit or approval, or a determination that we have violated a law or permit as a result of a governmental inspection of our facilities could have a material adverse effect on our ability to continue operations at our facilities and on our business, financial condition, results of operations and cash flows.

Future regulatory or legislative restrictions on greenhouse gas (GHG) emissions in the jurisdictions in which we operate could materially adversely affect our business, financial condition, results of operations and cash flows.

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New facilities that we build, or existing facilities that we modify in the future, could also be subject to GHG emissions standards included in their air permits.

Beginning on January 1, 2021, our U.K.

manufacturing plants became subject to the UK Emissions Trading Scheme (UK ETS), which generally requires us to hold or obtain emissions allowances to offset GHG emissions from those aspects of our operations that are subject to regulation under this program.

Given the recent development of the UK ETS, there is substantial uncertainty as to the liquidity in the market for, and the stability of the price of, emission allowances that will be necessary for compliance with the regulations.

Our manufacturing plants in the Alberta and Ontario provinces of Canada are subject to provincial or federal laws that impose a price on excess GHG emissions.

Each of these laws establishes carbon dioxide equivalent (CO 2 e) emissions standards applicable to our facilities in terms of emissions per unit of production, with the provincial laws and the federal law using different formulas for establishing these intensity limits and changes in these limits over time.

manufacturing plant is subject to the UK Emissions Trading Scheme (UK ETS), which requires us to hold or obtain emissions allowances corresponding to the GHG emissions from those aspects of our operations that are subject to regulation under the UK ETS.

Given the recent development of the UK ETS, and the impact of energy security concerns in Europe, there is substantial uncertainty as to the stability of the price of emission allowances that will be necessary for compliance with the regulations.

Our manufacturing plants in the Alberta and Ontario provinces of Canada are subject to federal and provincial regulations that impose a price on excess GHG emissions.

These regulations establish carbon dioxide equivalent (CO 2 e) emissions standards applicable to our facilities in terms of emissions per unit of production, with each province using different formulas for establishing these intensity limits and changes in these limits over time (and federal law applying if provincial plans are not considered sufficiently stringent).

If CO 2 e emissions exceed the applicable limits, the excess emissions must be offset, either through obtaining qualifying emission credits or offsets or by making a payment for each ton of excess emissions.

Increasing concern over the impacts of climate change is driving countries to establish ever more ambitious GHG reduction targets.

Approximately 200 countries, including the United States, Canada, the United Kingdom and the members of the European Union (EU), have joined the Paris Agreement, an international agreement intended to provide a framework pursuant to which the parties to the agreement will attempt to hold the increase in global average temperatures to below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5ºC above pre-industrial levels.

In Canada, emissions are subject to an annual increase in price on CO 2 through 2030, and these GHG regulations are becoming more stringent effective January 1, 2023.

Increasing concern over the effects of climate change is driving countries to establish ever more ambitious GHG reduction targets.

Approximately 200 countries, including the United States, Canada, the United Kingdom and the members of the EU, have joined the Paris Agreement, an international agreement intended to provide a framework pursuant to which the parties to the agreement will attempt to hold the increase in global average temperatures to below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5ºC above pre-industrial levels.

Each signatory is required to develop its own national plan to attain this objective.

In December 2020, the United Kingdom announced a target to reduce GHG emissions 68% from 1990 levels by 2030.

In December 2020, the United Kingdom announced a target to reduce GHG emissions 68% from the baseline year of 1990 levels by 2030.

Canada has increased its emissions reduction target under the Paris Agreement to 40-45% (up from 30%) below 2005 levels by 2030.

In April 2021, the United States increased its goal to reduce emissions to 50-52% below 2005 levels by 2030.

The Biden administration has also issued several executive orders focused on climate change to promote more active management of these issues across the executive branch, including by the EPA and the Departments of Agriculture, Interior, Transportation and Treasury.

The Biden administration has also issued several executive orders focused on climate change to promote more active management of these issues across the executive branch, including by the EPA and the

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In July 2021, the EU proposed a new carbon border adjustment mechanism that would require importers of certain products, including nitrogen fertilizers, to pay an import tax approximately equal to the costs incurred by EU producers of the products starting in 2026.

Departments of Agriculture, Interior, Transportation and Treasury, and issued proposed regulations related to methane and other GHG reduction efforts.

The EU reached a provisional agreement in December 2022 to adopt a new carbon border adjustment mechanism that would require importers of certain products, including nitrogen fertilizers, to pay an import tax approximately equal to the costs incurred by EU producers of the products starting in 2026.

The EU is seeking to finalize this regulation in the first quarter of 2023.

Other governments are also considering border adjustment mechanisms for carbon intensive products.

The imposition of any carbon border adjustment taxes may distort investment and trade flows, which could adversely impact our business.

The imposition of any carbon border adjustment taxes may impact investment and trade flows, which could adversely impact our business.

More stringent GHG regulations, if they are enacted, are likely to have a significant impact on us, because our production facilities emit GHGs such as carbon dioxide and nitrous oxide and because natural gas, a fossil fuel, is a primary raw material used in our nitrogen production process.

Regulation of GHGs may require us to make changes in our operating activities that would increase our operating costs, reduce our efficiency, limit our output, require us to make capital improvements to our facilities, increase our costs for or limit the availability of energy, raw materials or transportation, or otherwise materially adversely affect our business, financial condition, results of operations and cash flows.

Changes could also be made to tax policies related to decarbonization and clean energy that could impact our business and investment decisions.

Changes could also be made to tax policies related to decarbonization, electricity generation or clean energy that could impact our business and investment decisions.

In addition, to the extent that GHG restrictions are not imposed in countries where our competitors operate or are less stringent than regulations that may be imposed in the United States, Canada or the United Kingdom, our competitors may have cost or other competitive advantages over us.

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The market for green and blue (low-carbon) ammonia is developing and evolving, may not develop to the size or at the rate we expect, and is dependent in part on the developing market for green and blue (low-carbon) hydrogen, for which ammonia can serve as a transport and storage mechanism.

These markets are heavily influenced by demand for clean energy, technology evolution and federal, state and local government laws, regulations and policies concerning carbon emissions, clean energy, and corporate accountability in the United States and abroad.

We believe the demand for green and blue ammonia could take several years to materialize and then ten or more years to fully develop and mature, and we cannot be certain that this market or the market for green and blue hydrogen will grow to the size or at the rate we expect.

These markets are heavily influenced by demand for clean energy, technology evolution and federal, state and local government laws, regulations and policies concerning carbon emissions, renewable electricity, clean energy, and corporate accountability in the United States and abroad.

Hydrogen currently accounts for less than 1% of the world’s energy needs.

The recognition and acceptance of green and blue ammonia as a transport and storage mechanism for green and blue hydrogen, the use of green and blue ammonia as a fuel in its own right, the use of green and blue ammonia as a fertilizer, and the development and growth of end market demand and applications for green and blue hydrogen and green and blue ammonia are uncertain and dependent on a number of factors outside of our control.

These factors include, among others, the extent to which and rate at which cost competitive global renewable energy capacity increases, the pricing of traditional and alternative sources of energy, the realization of technological improvements required to increase the efficiency and lower the costs of production of green and blue ammonia, the regulatory environment, the rate and extent of infrastructure investment and development, which may be affected by the relevant parties’ ability to obtain permits for these investments, the availability of tax benefits and other incentives and our ability to provide green and blue ammonia offerings cost-effectively.

These factors include, among others, the extent to which and rate at which cost competitive global renewable energy capacity increases, the pricing of traditional and alternative sources of energy, the realization of technological improvements required to increase the efficiency and lower the costs of production of green and blue ammonia, the regulatory environment, the rate and extent of infrastructure investment and development which may be affected by the relevant parties’ ability to obtain permits for these investments, the availability of tax benefits and other incentives, the implementation of policy in foreign jurisdictions providing economic support for or otherwise mandating decarbonization and our ability to provide green and blue ammonia offerings cost-effectively.

In addition, further development of alternative decarbonization technologies may result in viable alternatives to the use of blue ammonia for many potential decarbonization applications, resulting in lower than expected market demand growth relative to our current expectations.

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Over time, as we seek to convert additional existing facilities to green and blue production and further expand our green and blue ammonia production capacity, we may face operational difficulties and execution risks related to the design, development and construction.

If our assumptions about the engineering and processing characteristics necessary to successfully build the facility capacity that we are contemplating and to scale up to larger production quantities prove to be incorrect, we may be unable to produce substantial quantities of green or blue ammonia, and the cost to construct or convert such green and blue ammonia facilities, or the production costs associated with the operation of such facilities, may be higher than we project.

The production of blue ammonia depends to a large extent upon development by third parties of carbon capture and storage wells, which are not well-established technologies and are subject to a permitting process and operational risks, which may result in delays, impact viability in some or all situations, or create long-term liabilities.

If our assumptions about the engineering and project execution requirements necessary to successfully build or convert the facility capacity that we are contemplating and to scale up to larger production quantities prove to be incorrect, we may be unable to produce substantial quantities of green or blue ammonia, and the cost to construct such green and blue ammonia facilities, or the production costs

CF INDUSTRIES HOLDINGS, INC.

associated with the operation of such facilities, may be higher than we project.

The production of blue ammonia depends to a large extent upon the ability of third parties to develop class VI carbon sequestration wells, which currently do not exist at large scale and are subject to a permitting process and operational risks, which may result in delays, impact viability in some or all situations, or create long-term liabilities.

In the event that the growth in supply of green and blue ammonia and green and blue hydrogen exceeds the growth in demand for those products, the resulting unfavorable supply and demand balance could lead to lower selling prices than we expect, which could negatively affect our business, financial condition, results of operations and cash flows.

We may not be successful in the expansion of our business.

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In addition, these efforts may require capital resources that could otherwise be used for the improvement and expansion of our existing business.

As a result of these and other factors, including general economic risk, we may not be able to realize our projected returns from any future acquisitions, partnerships, joint ventures, business combination transactions or other major investments.

As a result of these and other factors, including general economic risk, we may not be able to realize our projected returns or other expected benefits from any future acquisitions, partnerships, joint ventures, business combination transactions or other major investments.

Among the risks associated with the pursuit and consummation of acquisitions, partnerships, joint ventures or other major investments or business combinations are those involving:

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Moreover, legal proceedings or other risks from acquisitions and other business combinations may arise years after a transaction has been completed and may involve matters unrelated to the business acquired.

For example, we were recently named along with other parties in certain product liability actions relating to a product containing the herbicide paraquat, which was allegedly sold, manufactured, distributed and/or marketed by Terra Industries Inc.

For example, in 2022, we were named along with other parties in certain product liability actions relating to a product containing the herbicide paraquat, which was allegedly sold, manufactured, distributed and/or marketed by Terra Industries Inc.

(Terra) before it exited such lines of business, which exit occurred more than ten years before CF Holdings acquired Terra in April 2010.

In addition, major capital projects may be dependent on the availability and performance of engineering firms, construction firms, equipment and material suppliers, transportation providers and other vendors necessary to design and implement those projects on a timely basis and on acceptable terms.

Major investments such as capital improvements at our facilities are subject to a number of risks, any of which could prevent us from completing capital projects in a timely or economic manner or at all, including, without limitation, cost overruns, non-performance of third parties, the inability to obtain necessary permits or other permitting matters, adverse weather, defects in materials and workmanship, labor and raw material shortages, transportation constraints, engineering and construction change orders, errors in design, construction or start-up, and other unforeseen difficulties.

In addition, most major capital projects are dependent on the availability and performance of engineering firms, construction firms, equipment and material suppliers, transportation providers and other vendors necessary to design and implement those projects on a timely basis and on acceptable terms.

Major investments such as capital improvements at our

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facilities are subject to a number of risks, any of which could prevent us from completing capital projects in a timely or economic manner or at all, including, without limitation, cost overruns, non-performance of third parties, the inability to obtain necessary permits or other permitting matters, adverse weather, defects in materials and workmanship, labor and raw material shortages, transportation constraints, engineering and construction change orders, errors in design, construction or start-up, and other unforeseen difficulties.

International acquisitions, partnerships, joint ventures, investments or business combinations and other international expansions of our business involve additional risks and uncertainties, including, but not limited to:

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• unexpected changes in regulatory environments;

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• political and economic instability, including the possibility for civil unrest;

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Additionally, any challenges related to the CHS strategic venture could harm our relationships with CHS or our other customers.

COVID-19 Pandemic Risk

Our business and operations may be adversely affected by the COVID-19 pandemic.

The coronavirus disease 2019 (COVID-19) pandemic could have a material and adverse effect on our business, financial condition, results of operations or cash flows.

The rapid spread of COVID-19 has resulted in governmental authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter in place orders and shutdowns.

If significant portions of our workforce are unable to work effectively, including because of illness, quarantines, government actions, facility closures or other restrictions, we may be unable to meet customer demand or perform fully under our contracts.

The COVID-19 pandemic could also affect our customers, suppliers and third party service providers, including transportation providers, and result in restrictions on or disruptions of transportation, port closures or increased border controls or closures, or other impacts on domestic and global supply chains or distribution channels, which could increase our costs and/or limit our ability to meet customer demand.

In addition, the COVID-19 pandemic could reduce, and has in the past reduced, the demand for energy, including crude oil, as well as natural gas and coal, which are nitrogen feedstocks.

Reduced demand for nitrogen feedstocks could reduce the cost of nitrogen production outside of North America, which could increase global nitrogen supply and reduce the market prices of our products.

Lower demand for crude oil could also reduce the supply and therefore increase the cost of natural gas, which is the principal raw material used in our production of nitrogen products.

The pandemic has also disrupted traditional food supply chains, which may have a material impact on livestock and food demand, including the demand for corn.

Each of these consequences could have a material adverse effect on our business, financial condition, results of operations or cash flows.

We are unable to predict the ultimate impact the COVID-19 pandemic may have on our business, financial condition, results of operations or cash flows.

The extent to which our operations may be impacted by COVID-19 will depend on future developments, which are highly uncertain and cannot be accurately predicted, including the further spread of the virus, the rise of new variants of COVID-19, the duration of the pandemic and the type and duration of actions that may be taken by various governmental authorities in response to these developments.

In 2020, the pandemic significantly increased global market uncertainty and caused an economic slowdown, which resulted in a global recession.

Persistent weakness in economic activity caused by a deterioration of global market and economic conditions could materially adversely affect our business, financial condition, results of operations or cash flows.

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• the global commodity nature of our nitrogen products, the conditions in the international market for nitrogen products, and the intense global competition from other producers;

• conditions in the United States, Europe and other agricultural areas, including the influence of governmental policies and technological developments on the demand for agricultural products;

• conditions in the United States, Europe and other agricultural areas, including the influence of governmental policies and technological developments on the demand for our fertilizer products;

• the volatility of natural gas prices in North America and the United Kingdom;

• weather conditions and the impact of severe adverse weather events;

• weather conditions and the impact of adverse weather events;

• the seasonality of the fertilizer business;

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• our reliance on a limited number of key facilities;

• risks associated with cyber security;

• risks associated with cybersecurity;

• acts of terrorism and regulations to combat terrorism;

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• risks associated with changes in tax laws and disagreements with taxing authorities;

• risks involving derivatives and the effectiveness of our risk measurement and hedging activities;

• risks involving derivatives and the effectiveness of our risk management and hedging activities;

• potential liabilities and expenditures related to environmental, health and safety laws and regulations and permitting requirements;

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• risks associated with the operation or management of the CHS strategic venture, risks and uncertainties relating to the market prices of the fertilizer products that are the subject of our supply agreement with CHS over the life of the supply agreement, and the risk that any challenges related to the CHS strategic venture will harm our other business relationships.

• the impact of the novel coronavirus disease 2019 (COVID-19) pandemic on our business and operations.

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Business—Storage Facilities and Other Properties.

LEGAL PROCEEDINGS.

For information on pending proceedings relating to environmental remediation matters, see Item 1.

Business—Environmental, Health and Safety—CERCLA/Remediation Matters and Note 20—Contingencies in the notes to consolidated financial statements included in Item 8 of this report.

MINE SAFETY DISCLOSURES.

Not applicable.

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-K

Item 1A. Risk Factors