What changed in this filing

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Item 1. Financial Statements

2024-05-02 compared with 2023-11-02 · 120 added, 306 removed, 456 unchanged (48% of the section changed)

2 unchanged sentences

Three months ended

September 30, Nine months ended

September 30,

2023 2022 2023 2022

(in millions, except per share amounts)

3 unchanged sentences

Selling, general and administrative expenses 88 74

long-lived and intangible asset impairment — 87 — 239

operations restructuring — 2

Transaction costs 11 — 27 —

Acquisition and integration costs 3 13

Other operating—net 17 ( 35 )

Total other operating costs and expenses 108 54

Equity in (losses) earnings of operating affiliate ( 36 ) 20 ( 12 ) 74

Equity in earnings of operating affiliate 2 17

Operating earnings 303 826

1 unchanged sentence

Interest income ( 30 ) ( 30 )

Loss on debt extinguishment — — — 8

Other non-operating—net ( 4 ) ( 3 )

15 unchanged sentences

Three months ended

September 30, Nine months ended

September 30,

2023 2022 2023 2022

(in millions)

3 unchanged sentences

Defined benefit plans—net of taxes — ( 1 )

( 26 ) 15 5 ( 13 )

Comprehensive income 222 656

4 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 30,

2024 December 31,

11 unchanged sentences

Goodwill 2,495 2,495

Intangible assets—net 532 538

Operating lease right-of-use assets 240 259

12 unchanged sentences

Operating lease liabilities 171 168

Supply contract liability 747 754

Other liabilities 303 314

22 unchanged sentences

(in millions, except per share amounts)

Balance as of June 30, 2023 $ 2 $ ( 226 ) $ 1,430 $ 4,797 $ ( 199 ) $ 5,804 $ 2,716 $ 8,520

Net earnings — — — 164 — 164 66 230

Other comprehensive loss — — — — ( 26 ) ( 26 ) — ( 26 )

Purchases of treasury stock — ( 151 ) — — — ( 151 ) — ( 151 )

Retirement of treasury stock — 226 ( 24 ) ( 202 ) — — — —

Stock-based compensation expense — — 10 — — 10 — 10

Dividends and dividend equivalents ($ 0.40 per share)

— — — ( 78 ) — ( 78 ) — ( 78 )

Distribution declared to noncontrolling interest — — — — — — ( 204 ) ( 204 )

Balance as of September 30, 2023 $ 2 $ ( 151 ) $ 1,416 $ 4,681 $ ( 225 ) $ 5,723 $ 2,578 $ 8,301

Balance as of December 31, 2023 $ 2 $ — $ 1,389 $ 4,535 $ ( 209 ) $ 5,717 $ 2,656 $ 8,373

Net earnings — — — 194 — 194 44 238

Other comprehensive income — — — — 5 5 — 5

Other comprehensive loss — — — — ( 16 ) ( 16 ) — ( 16 )

Purchases of treasury stock — ( 351 ) — — — ( 351 ) — ( 351 )

Retirement of treasury stock — 226 ( 24 ) ( 202 ) — — — —

Acquisition of treasury stock under employee stock plans — ( 23 ) — — — ( 23 ) — ( 23 )

4 unchanged sentences

— — — ( 95 ) — ( 95 ) — ( 95 )

Distributions declared to noncontrolling interest — — — — — — ( 459 ) ( 459 )

Balance as of September 30, 2023 $ 2 $ ( 151 ) $ 1,416 $ 4,681 $ ( 225 ) $ 5,723 $ 2,578 $ 8,301

CF INDUSTRIES HOLDINGS, INC.

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, 2022 $ 2 $ ( 331 ) $ 1,474 $ 3,729 $ ( 285 ) $ 4,589 $ 2,925 $ 7,514

Net earnings — — — 438 — 438 100 538

Other comprehensive income — — — — 15 15 — 15

Purchases of treasury stock — ( 532 ) — — — ( 532 ) — ( 532 )

Issuance of $0.01 par value common stock under employee stock plans — — 4 — — 4 — 4

Stock-based compensation expense — — 10 — — 10 — 10

Cash dividends ($0.40 per share) — — — ( 80 ) — ( 80 ) — ( 80 )

Distribution declared to noncontrolling interest — — — — — — ( 144 ) ( 144 )

Balance as of September 30, 2022 $ 2 $ ( 863 ) $ 1,488 $ 4,087 $ ( 270 ) $ 4,444 $ 2,653 $ 7,097

Balance as of March 31, 2024 $ 2 $ ( 374 ) $ 1,403 $ 4,634 $ ( 225 ) $ 5,440 $ 2,556 $ 7,996

Balance as of December 31, 2022 $ 2 $ — $ 1,412 $ 3,867 $ ( 230 ) $ 5,051 $ 2,802 $ 7,853

Net earnings — — — 560 — 560 90 650

Other comprehensive loss — — — — ( 13 ) ( 13 ) — ( 13 )

Other comprehensive income — — — — 6 6 — 6

Purchases of treasury stock — ( 75 ) — — — ( 75 ) — ( 75 )

Retirement of treasury stock — 283 ( 23 ) ( 260 ) — — — —

Acquisition of treasury stock under employee stock plans — ( 22 ) — — — ( 22 ) — ( 22 )

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

— 1 104 — — 105 — 105

Stock-based compensation expense — — 12 — — 12 — 12

Cash dividends ($ 1.10 per share)

Dividends and dividend equivalents ($ 0.40 per share)

— — — ( 79 ) — ( 79 ) — ( 79 )

Distributions declared to noncontrolling interest — — — — — — ( 619 ) ( 619 )

Balance as of September 30, 2022 $ 2 $ ( 863 ) $ 1,488 $ 4,087 $ ( 270 ) $ 4,444 $ 2,653 $ 7,097

Distribution declared to noncontrolling interest — — — — — — ( 255 ) ( 255 )

Balance as of March 31, 2023 $ 2 $ ( 97 ) $ 1,424 $ 4,348 $ ( 224 ) $ 5,453 $ 2,637 $ 8,090

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)

5 unchanged sentences

Stock-based compensation expense 13 12

Loss on debt extinguishment — 8

Unrealized net gain on natural gas derivatives ( 33 ) ( 72 )

Impairment of equity method investment in PLNL 43 —

long-lived and intangible asset impairment — 239

Pension settlement loss — 24

Gain on sale of emission credits — ( 35 )

1 unchanged sentence

Undistributed earnings of affiliate—net of taxes ( 2 ) ( 7 )

Changes in assets and liabilities:

Accounts receivable—net ( 50 ) 101

7 unchanged sentences

Additions to property, plant and equipment ( 98 ) ( 69 )

Proceeds from sale of property, plant and equipment 1 1

Distributions received from unconsolidated affiliate — 4

Purchase of investments held in nonqualified employee benefit trust — ( 1 )

Proceeds from sale of investments held in nonqualified employee benefit trust — 1

Purchase of emission credits ( 2 ) —

2 unchanged sentences

Financing Activities:

Payments of long-term borrowings — ( 507 )

Financing fees — ( 4 )

Dividends paid ( 235 ) ( 227 )

Dividends paid on common stock ( 97 ) ( 79 )

Distributions to noncontrolling interest ( 144 ) ( 255 )

4 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 2 ) ( 1 )

Increase in cash and cash equivalents 931 564

(Decrease) increase in cash and cash equivalents ( 259 ) 502

Cash and cash equivalents at beginning of period 2,032 2,323

5 unchanged sentences

Our mission is to provide clean energy to feed and fuel the world sustainably.

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.

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 low-carbon hydrogen and nitrogen products for energy, fertilizer, emissions abatement and other industrial activities.

Our 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.

4 unchanged sentences

All references to “CF Holdings,” “the Company,” “we,” “us” and “our” refer to CF Industries Holdings, Inc.

and its subsidiaries, except where the context makes clear that the reference is only to CF Industries Holdings, Inc.

itself and not its subsidiaries.

and its subsidiaries, except where the context makes clear that the reference is to CF Industries Holdings, Inc.

only and not its subsidiaries.

All references to “CF Industries” refer to CF Industries, Inc., a 100% owned subsidiary of CF Industries Holdings, Inc.

8 unchanged sentences

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 interim 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, plant closure and asset retirement obligations, the cost of emission credits required to meet environmental regulations, the cost of customer incentives, useful lives of property and identifiable intangible assets, the evaluation of potential impairments of property, investments, identifiable intangible assets and goodwill, income tax reserves and the assessment of the realizability of deferred tax assets, the determination of the funded status and annual expense of defined benefit pension and other postretirement plans and the valuation of stock-based compensation awards granted to employees.

Such estimates and assumptions are used for, but are not limited to, net realizable value of inventories, environmental remediation liabilities, environmental and litigation contingencies, plant closure and asset retirement obligations, the cost of emission credits required to meet environmental regulations, the cost of customer incentives, the fair values utilized in the allocation of purchase price in an acquisition, useful lives of property and identifiable intangible assets, the evaluation of potential impairments of property, investments, identifiable intangible assets and goodwill, income tax reserves and the assessment of the realizability of deferred tax assets, the determination of the funded status and annual expense of defined benefit pension and other postretirement plans and the valuation of stock-based compensation awards granted to employees.

New Accounting Standards

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

This ASU is intended to improve reportable segment disclosures through enhanced disclosures about significant segment expenses.

The guidance in this ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the impact that our adoption of this ASU will have on the disclosures in our consolidated financial statements.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

This ASU adds new guidance that further enhances income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

The amendments are effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the impact that our adoption of this ASU will have on the disclosures in our consolidated financial statements.

CF INDUSTRIES HOLDINGS, INC.

2 unchanged sentences

See Note 16—Segment Disclosures for the revenue of each of our reportable segments, 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, 2023 and 2022:

The following table summarizes our revenue by product and by geography (based on destination of our shipment) for the three months ended March 31, 2024 and 2023:

Ammonia Granular Urea UAN AN Other Total

(in millions)

Three months ended September 30, 2023

North America $ 165 $ 340 $ 330 $ 50 $ 111 $ 996

Europe and other 70 20 105 64 18 277

Total revenue $ 235 $ 360 $ 435 $ 114 $ 129 $ 1,273

Three months ended September 30, 2022

North America $ 367 $ 571 $ 531 $ 70 $ 132 $ 1,671

Europe and other 164 118 205 110 53 650

Total revenue $ 531 $ 689 $ 736 $ 180 $ 185 $ 2,321

Nine months ended September 30, 2023

Three months ended March 31, 2024

North America $ 334 $ 403 $ 373 $ 48 $ 102 $ 1,260

1 unchanged sentence

Total revenue $ 402 $ 407 $ 425 $ 114 $ 122 $ 1,470

Nine months ended September 30, 2022

Three months ended March 31, 2023

North America $ 330 $ 575 $ 519 $ 74 $ 126 $ 1,624

1 unchanged sentence

Total revenue $ 424 $ 611 $ 667 $ 159 $ 151 $ 2,012

As of September 30, 2023 and December 31, 2022, we had $ 282 million and $ 229 million, respectively, in customer advances on our consolidated balance sheets.

During the nine months ended September 30, 2023 and 2022, substantially all of the customer advances at the beginning of each respective period were recognized as revenue.

As of March 31, 2024 and December 31, 2023, we had $ 104 million and $ 130 million, respectively, in customer advances on our consolidated balance sheets.

The revenue recognized during the three months ended March 31, 2024 and 2023 that was included in our customer advances at the beginning of each respective period amounted to approximately $ 110 million and $ 160 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, 2023 and December 31, 2022 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 September 30, 2023, 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 were approximately $ 910 million.

We expect to recognize approximately 14 % of these performance obligations as revenue in the remainder of 2023, approximately 52 % as revenue during 2024-2026, approximately 15 % as revenue during 2027-2029, 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, was approximately $ 280 million as of September 30, 2023.

Other than the performance obligations described above, we expect that any performance obligations under our customer contracts that were unfulfilled or partially fulfilled at December 31, 2022 will be satisfied in 2023.

The balances of customer incentives accrued as of March 31, 2024 and December 31, 2023 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, the amount of which payment may vary based upon the terms and conditions of the applicable contract.

As of March 31, 2024, 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 were approximately $ 2.1 billion.

We expect to recognize approximately 23 % of these performance obligations as revenue in the remainder of 2024, approximately 19 % as revenue during 2025-2027, approximately 16 % as revenue during 2028-2030, and the remainder as revenue 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 such contracts, in the aggregate, was approximately $ 1.3 billion as of March 31, 2024.

Other than the performance obligations described above, any performance obligations with our customers that were unfulfilled or partially filled at December 31, 2023 will be satisfied in 2024.

CF INDUSTRIES HOLDINGS, INC.

2 unchanged sentences

Three months ended

September 30, Nine months ended

September 30,

2023 2022 2023 2022

(in millions, except per share amounts)

10 unchanged sentences

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 zero in both the three and nine months ended September 30, 2023 and the three and nine months ended September 30, 2022.

Shares for anti-dilutive stock-based awards not included in the computation of diluted earnings per common share were zero in both the three months ended March 31, 2024 and 2023.

Acquisition of Waggaman Ammonia Production Facility

On December 1, 2023, we acquired an ammonia production facility located in Waggaman, Louisiana, from Dyno Nobel Louisiana Ammonia, LLC (DNLA), a U.S.

subsidiary of Australia-based Incitec Pivot Limited (IPL), pursuant to an asset purchase agreement with DNLA and IPL.

The facility has a nameplate production capacity of 880,000 tons of ammonia annually.

Our acquisition of the Waggaman facility is intended to expand our ammonia manufacturing and distribution capacity, including our ability to enable low-carbon ammonia production.

In connection with the acquisition, we entered into a long-term ammonia offtake agreement providing for us to supply up to 200,000 tons of ammonia per year to IPL’s Dyno Nobel, Inc.

subsidiary (the Supply Contract).

Under the terms of the asset purchase agreement, $ 425 million of the purchase price of $ 1.675 billion, subject to adjustment, was allocated by the parties to the ammonia offtake agreement.

We funded the balance of the purchase price with $ 1.223 billion of cash on hand.

The consideration transferred reflects an estimated net working capital adjustment and other adjustments to the purchase price, which is subject to further adjustment pursuant to the terms of the asset purchase agreement.

We expect any further purchase price adjustments required under the asset purchase agreement will not be material and will be completed in the second quarter of 2024.

In the three months ended March 31, 2024 and 2023, we incurred $ 3 million of integration costs and $ 13 million of acquisition-related costs, respectively, related to the Waggaman acquisition, which are included in acquisition and integration costs in our consolidated statements of operations.

Inventories consist of the following:

September 30,

2024 December 31,

3 unchanged sentences

Total inventories $ 271 $ 299

United Kingdom Operations Restructuring

In the second quarter of 2022, we approved and announced our proposed plan to restructure our U.K.

operations, including the planned permanent closure of the Ince facility, which had been idled since September 2021, and optimization of the remaining manufacturing operations at our Billingham facility.

Pursuant to our proposed plan to restructure our U.K.

operations and dispose of the Ince facility assets before we originally intended, we concluded that an evaluation of our long-lived assets and an impairment test was required.

Our assessment then identified the U.K.

asset groups as U.K.

Ammonia, U.K.

Other, comprising our ongoing U.K.

operations, and Ince, U.K.

In response to this impairment indicator, we compared the undiscounted cash flows expected to result from the use and eventual disposition of the Ince, U.K.

asset group to its carrying amount and concluded the carrying amount was not recoverable and should be adjusted to its fair value.

As a result, in the second quarter of 2022, we recorded total charges of $ 162 million related to the Ince facility as follows:

• asset impairment charges of $ 152 million consisting of the following:

◦ an impairment charge of $ 135 million related to property, plant and equipment that is planned for abandonment at the Ince facility, including a liability of approximately $ 9 million for the costs of certain asset retirement activities related to the Ince site;

◦ an intangible asset impairment charge of $ 8 million related to trade names;

CF INDUSTRIES HOLDINGS, INC.

◦ an impairment charge of $ 9 million related to the write-down of spare parts and certain raw materials at the Ince facility;

• a charge for post-employment benefits totaling $ 10 million, which is included in the U.K.

operations restructuring line item in our consolidated statements of operations, related to contractual and statutory obligations due to employees whose employment would be terminated in the proposed plan.

In August 2022, the final restructuring plan for our U.K.

operations was approved, and decommissioning activities at our Ince facility were initiated.

As a result, in the third quarter of 2022, we incurred additional charges related to our U.K.

restructuring of $ 8 million, primarily related to one-time termination benefits, which are included in the U.K.

operations restructuring line item in our consolidated statement of operations.

As of June 30, 2023, the decommissioning of our Ince facility and other approved restructuring actions had been completed.

In the third quarter of 2022, the United Kingdom continued to experience extremely high and volatile natural gas prices.

Russian natural gas pipeline flows to Europe via the Nord Stream 1 pipeline ceased, causing the United Kingdom to experience unprecedented natural gas prices.

In addition, the European Union announced a desire to cap the price that Europe would pay Russia for natural gas deliveries, further contributing to the uncertainty in European energy markets.

Given these factors and the lack of a corresponding increase in global nitrogen product market prices, in September 2022, we idled ammonia production at our Billingham complex.

As a result, we concluded that an additional impairment test was triggered for the asset groups that comprise the continuing U.K.

The results of our impairment test indicated that the carrying values for our U.K.

Ammonia and U.K.

AN asset groups exceeded the undiscounted estimated future cash flows.

As a result, we recognized asset impairment charges of $ 87 million, primarily related to property, plant and equipment and definite-lived intangible assets, which are included in the U.K.

long-lived and intangible asset impairment line item in our consolidated statement of operations.

In July 2023, we approved and announced our proposed plan to permanently close the Billingham ammonia plant, and, in September 2023, the final plan was approved.

As a result, in the third quarter of 2023, we recognized total charges of $ 5 million consisting primarily of the recognition of an asset retirement obligation and post-employment benefits related to contractual and statutory obligations due to employees whose employment would be terminated.

Property, Plant and Equipment—Net

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

September 30,

2024 December 31,

9 unchanged sentences

_______________________________________________________________________________

(1) As of September 30, 2023 and December 31, 2022, we had property, plant and equipment that was accrued but unpaid of approximately $ 80 million and $ 53 million, respectively.

As of September 30, 2022 and December 31, 2021, we had property, plant and equipment that was accrued but unpaid of approximately $ 60 million and $ 35 million, respectively.

Depreciation and amortization related to property, plant and equipment was $ 211 million and $ 633 million for the three and nine months ended September 30, 2023, respectively, and $ 219 million and $ 643 million for the three and nine months ended September 30, 2022, respectively.

(1) As of March 31, 2024 and December 31, 2023, we had property, plant and equipment that was accrued but unpaid of approximately $ 72 million and $ 68 million, respectively.

As of March 31, 2023 and December 31, 2022, we had property, plant and equipment that was accrued but unpaid of approximately $ 45 million and $ 53 million, respectively.

Depreciation and amortization related to property, plant and equipment was $ 252 million and $ 204 million for the three months ended March 31, 2024 and 2023, respectively.

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.

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.

2 unchanged sentences

The following is a summary of capitalized plant turnaround costs:

Nine months ended

September 30,

Three months ended

(in millions)

2 unchanged sentences

Depreciation ( 52 ) ( 31 )

Impairment related to U.K.

operations — ( 21 )

Effect of exchange rate changes and other ( 1 ) —

Net capitalized turnaround costs as of September 30

Net capitalized turnaround costs as of March 31

Equity Method Investment

1 unchanged sentence

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.

PLNL operates an ammonia plant that relies on natural gas supplied, under a gas sales contract (the NGC Contract), by The National Gas Company of Trinidad and Tobago Limited (NGC).

The NGC Contract had an expiration date of September 2023.

In the third quarter of 2023, PLNL entered into a new gas sales contract with NGC (the New NGC Contract), which is effective October 2023 through December 2025.

In the third quarter of 2023 and due to the terms of the New NGC Contract, we assessed our investment in PLNL for impairment and determined that the carrying value of our equity method investment in PLNL exceeded its fair value.

As a result, we recorded an impairment of our equity method investment in PLNL of $ 43 million, which is reflected in equity in (losses) earnings of operating affiliate on our consolidated statements of operations for the three and nine months ended September 30, 2023.

As of September 30, 2023, the total carrying value of our equity method investment in PLNL was $ 32 million.

As of March 31, 2024, the total carrying value of our equity method investment in PLNL was $ 29 million.

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 $ 20 million and $ 115 million for the three and nine months ended September 30, 2023, respectively, and $ 61 million and $ 212 million for the three and nine months ended September 30, 2022, respectively.

Our ammonia purchases from PLNL totaled $ 30 million and $ 59 million for the three months ended March 31, 2024 and 2023, respectively.

CF INDUSTRIES HOLDINGS, INC.

1 unchanged sentence

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

September 30, 2023

March 31, 2024

Cost Basis Unrealized

19 unchanged sentences

Nonqualified employee benefit trusts 16 1 — 17

Under our short-term investment policy, we may invest our cash balances, either directly or through mutual funds, in several types of investment-grade securities, including notes and bonds issued by governmental entities or corporations.

Securities issued by governmental entities include those issued directly by the U.S.

3 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, 2023 and December 31, 2022 that are recognized at fair value on a recurring basis, and indicate the fair value hierarchy utilized to determine such fair value:

September 30, 2023

The following tables present assets and liabilities included in our consolidated balance sheets as of March 31, 2024 and December 31, 2023 that are recognized at fair value on a recurring basis, and indicate the fair value hierarchy utilized to determine such fair value:

March 31, 2024

Value Quoted Prices

17 unchanged sentences

Cash Equivalents

Cash equivalents include highly liquid investments that are readily convertible to known amounts of cash with original maturities of three months or less.

As of September 30, 2023 and December 31, 2022, our cash equivalents consisted primarily of U.S.

Cash equivalents include highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less.

As of March 31, 2024 and December 31, 2023, our cash equivalents consisted primarily of U.S.

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

13 unchanged sentences

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Amount Fair Value Carrying

10 unchanged sentences

intangible assets and investments in unconsolidated subsidiaries, such as equity method investments, which may be written down to fair value as a result of impairment.

The fair value measurements related to each of these rely primarily on Company-specific inputs and the Company’s assumptions about the use of the assets.

The fair value measurements related to assets and liabilities measured at fair value on a nonrecurring basis rely primarily on Company-specific inputs.

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.

In the third quarter of 2023, we determined the carrying value of our equity method investment in PLNL exceeded its fair value and recorded an impairment of our equity method investment in PLNL of $ 43 million.

See Note 7—Equity Method Investment for additional information.

For the three months ended September 30, 2023, we recorded an income tax provision of $ 23 million on pre-tax income of $ 253 million, or an effective tax rate of 9.1 %, compared to an income tax provision of $ 155 million on pre-tax income of $ 693 million, or an effective tax rate of 22.3 %, for the three months ended September 30, 2022.

For the three months ended September 30, 2023, our income tax provision includes a $ 9 million income tax benefit arising from the finalization of tax return filing positions and adjustments to accrued withholding taxes as a result of changes reflected on our filed U.S.

federal return.

This income tax benefit in relation to pre-tax income of $ 253 million contributed to a lower effective tax rate in the third quarter of 2023 compared to the U.S.

statutory rate of 21%.

For the nine months ended September 30, 2023, we recorded an income tax provision of $ 326 million on pre-tax income of $ 1.81 billion, or an effective tax rate of 18.0 %, compared to an income tax provision of $ 913 million on pre-tax income of $ 3.84 billion, or an effective tax rate of 23.8 %, for the nine months ended September 30, 2022.

For the three and nine months ended September 30, 2022, our income tax provision includes $ 18 million of income tax expense to record a valuation allowance in the United Kingdom due to the uncertainty surrounding the realization of the deferred tax assets as a result of the impairment described in Note 5—United Kingdom Operations Restructuring.

In addition, for the nine months ended September 30, 2022, our income tax provision includes $ 22 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, as discussed below.

Our effective tax rate is 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 noncontrolling interest.

Our effective tax rate for the three months ended September 30, 2023 of 9.1 %, which is based on pre-tax income of $ 253 million, including $ 66 million of earnings attributable to the noncontrolling interest, would be 3.2 percentage points higher if based on pre-tax income exclusive of the $ 66 million of earnings attributable to the noncontrolling interest.

Our effective tax rate for the three months ended September 30, 2022 of 22.3 %, which is based on pre-tax income of $ 693 million, including $ 100 million of earnings attributable to the noncontrolling interest, would be 3.7 percentage points higher if based on pre-tax income exclusive of the $ 100 million of earnings attributable to the noncontrolling interest.

Our effective tax rate for the nine months ended September 30, 2023 of 18.0 %, which is based on pre-tax income of $ 1.81 billion, including $ 235 million of earnings attributable to the noncontrolling interest, would be 2.7 percentage points higher if based on pre-tax income exclusive of the $ 235 million of earnings attributable to the noncontrolling interest.

Our effective tax rate for the nine months ended September 30, 2022 of 23.8 %, which is based on pre-tax income of $ 3.84 billion, including $ 442 million of earnings attributable to the noncontrolling interest, would be 3.1 percentage points higher if based on pre-tax income exclusive of the $ 442 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 served as security until the matter was resolved, as discussed below.

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

CF INDUSTRIES HOLDINGS, INC.

the arbitration decision, additional income for tax years 2006 through 2011 was subject to tax in Canada, resulting in our having additional Canadian tax liability for those tax years.

In the nine months ended September 30, 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 $ 78 million, reflecting the net impact of $ 129 million of accrued income taxes payable to Canada for tax years 2006 through 2011, partially offset by net income tax receivables of approximately $ 51 million in the United States, and we accrued net interest of $ 103 million, primarily reflecting the impact of estimated interest payable to Canada.

Of the $ 78 million of income tax provision and $ 103 million of net interest expense recognized in the nine months ended September 30, 2022, a reduction of $ 1 million of net interest expense was recognized in the three months ended September 30, 2022.

In the second half of 2022, this tax liability and the related interest were assessed and paid, resulting in total payments of $ 224 million, which also reflect the impact of changes in foreign currency exchange rates.

As a result, the letters of credit we had posted in lieu of paying the additional tax liability assessed by the Notices of Reassessment were cancelled.

Due primarily to the availability of additional foreign tax credits to offset in part the increased Canadian tax referenced above, the Company has filed amended tax returns in the United States to request a refund of taxes paid.

Transfer pricing positions

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

Based on this evaluation, we recorded the following in the nine months ended September 30, 2022:

• liabilities for unrecognized tax benefits of approximately $ 314 million, with a corresponding income tax provision, and accrued interest of approximately $ 123 million related to the liabilities for unrecognized tax benefits, and

• noncurrent income tax receivables of approximately $ 359 million, with a corresponding income tax benefit, and accrued interest income of approximately $ 33 million related to the noncurrent income tax receivables.

In the nine months ended September 30, 2022, the impact on our consolidated statement of operations of the amounts recorded as a result of this evaluation of transfer pricing positions, including $ 29 million of net deferred income tax provision for other transfer pricing tax effects, was $ 16 million of income tax benefit and $ 90 million of net interest expense before tax ($ 98 million after tax).

Of the $ 16 million of income tax benefit and $ 90 million of net interest expense recognized in the nine months ended September 30, 2022, $ 3 million of income tax provision and $ 4 million of net interest expense ($ 5 million after tax) was recognized in the three months ended September 30, 2022.

Pension Retiree Annuity Purchase

On July 15, 2022, we entered into an agreement with an insurance company to purchase a non-participating group annuity contract and transfer approximately $ 375 million of our primary U.S.

defined benefit pension plan’s projected benefit obligation.

The transaction closed on July 22, 2022 and was funded with plan assets.

Under the transaction, the insurance company assumed responsibility for pension benefits and annuity administration for approximately 4,000 retirees or their beneficiaries.

As a result of this transaction, in the third quarter of 2022, we remeasured the plan's projected benefit obligation and plan assets and recognized a non-cash pre-tax pension settlement loss of $ 24 million, reflecting the unamortized net unrecognized postretirement benefit costs related to the settled obligations, with a corresponding offset to accumulated other comprehensive loss.

In the fourth quarter of 2022, the final settlement of the non-participating group annuity contract resulted in a refund of $ 4 million, which decreased the settlement loss by $ 3 million to $ 21 million.

CF INDUSTRIES HOLDINGS, INC.

For the three months ended March 31, 2024, we recorded an income tax provision of $ 62 million on pre-tax income of $ 300 million, or an effective tax rate of 20.7 %, compared to an income tax provision of $ 169 million on pre-tax income of $ 819 million, or an effective tax rate of 20.6 %, for the three months ended March 31, 2023.

Our effective tax rate for the three months ended March 31, 2024 of 20.7 %, which is based on pre-tax income of $ 300 million, including $ 44 million of earnings attributable to the noncontrolling interest, would be 3.6 percentage points higher if based on pre-tax income exclusive of the $ 44 million of earnings attributable to the noncontrolling interest.

Our effective tax rate for the three months ended March 31, 2023 of 20.6 %, which is based on pre-tax income of $ 819 million, including $ 90 million of earnings attributable to the noncontrolling interest, would be 2.6 percentage points higher if based on pre-tax income exclusive of the $ 90 million of earnings attributable to the noncontrolling interest.

Financing Agreements

Revolving Credit Agreement

On October 26, 2023, we entered into a new senior unsecured revolving credit agreement (the New Revolving Credit Agreement), which replaced our prior senior unsecured revolving credit agreement (the Prior Revolving Credit Agreement).

See Note 18—Subsequent Event for additional information.

The Prior Revolving Credit Agreement provided for a revolving credit facility of up to $ 750 million with a maturity of December 5, 2024 and included a letter of credit sub-limit of $ 125 million.

Borrowings under the Prior Revolving Credit Agreement could be used for working capital, capital expenditures, acquisitions, share repurchases and other general corporate purposes.

Borrowings under the Prior Revolving Credit Agreement could be denominated in U.S.

We have a senior unsecured revolving credit agreement (the Revolving Credit Agreement), which provides for a revolving credit facility of up to $ 750 million with a maturity of October 26, 2028 and includes a letter of credit sub-limit of $ 125 million.

Borrowings under the Revolving Credit Agreement may be used for working capital, capital expenditures, acquisitions, share repurchases and other general corporate purposes.

CF Industries is the lead borrower, and CF Holdings is the sole guarantor, under the Revolving Credit Agreement.

Borrowings under the Revolving Credit Agreement can be denominated in U.S.

dollars, Canadian dollars, euros and British pounds.

Borrowings in U.S.

dollars bore interest at a per annum rate equal to, at our option, an applicable adjusted term Secured Overnight Financing Rate or base rate plus, in either case, a specified margin.

We were required to pay an undrawn commitment fee on the undrawn portion of the commitments under the Prior Revolving Credit Agreement and customary letter of credit fees.

dollars bear interest at a per annum rate equal to, at our option, an applicable adjusted term Secured Overnight Financing Rate or base rate plus, in either case, a specified margin.

We are required to pay an undrawn commitment fee on the undrawn portion of the commitments under the Revolving Credit Agreement and customary letter of credit fees.

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

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

As of September 30, 2023, we were in compliance with all covenants under the Prior Revolving Credit Agreement.

As of September 30, 2023, we had unused borrowing capacity under the Prior Revolving Credit Agreement of $ 750 million and no outstanding letters of credit under the Prior Revolving Credit Agreement.

There were no borrowings outstanding under the Prior Revolving Credit Agreement as of September 30, 2023 or December 31, 2022, or during the nine months ended September 30, 2023.

As of March 31, 2024, we had unused borrowing capacity under the Revolving Credit Agreement of $ 750 million and no outstanding letters of credit under the Revolving Credit Agreement.

There were no borrowings outstanding under the Revolving Credit Agreement as of March 31, 2024 or December 31, 2023, or during the three months ended March 31, 2024.

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

As of March 31, 2024, we were in compliance with all covenants under the Revolving Credit Agreement.

Letters of Credit Under Bilateral Agreement

We are party to a bilateral agreement providing for the issuance of up to $ 425 million of letters of credit.

As of September 30, 2023, approximately $ 200 million of letters of credit were outstanding under this agreement.

Long-term debt presented on our consolidated balance sheets as of September 30, 2023 and December 31, 2022 consisted of the following debt securities issued by CF Industries:

Effective Interest Rate September 30, 2023 December 31, 2022

As of March 31, 2024, approximately $ 302 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 March 31, 2024 and December 31, 2023 consisted of the following debt securities issued by CF Industries:

Effective Interest Rate March 31, 2024 December 31, 2023

Principal Carrying Amount (1)

14 unchanged sentences

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

Total unamortized debt discount was $ 7 million as of both September 30, 2023 and December 31, 2022, and total deferred debt issuance costs were $ 26 million and $ 28 million as of September 30, 2023 and December 31, 2022, respectively.

Total unamortized debt discount was $ 6 million and $ 7 million as of March 31, 2024 and December 31, 2023, respectively, and total deferred debt issuance costs were $ 25 million as of both March 31, 2024 and December 31, 2023.

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

1 unchanged sentence

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 by CF Holdings.

CF INDUSTRIES HOLDINGS, INC.

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.

2 unchanged sentences

Three months ended

September 30, Nine months ended

September 30,

2023 2022 2023 2022

(in millions)

Interest on borrowings (1)

$ 38 $ 38 $ 112 $ 118

Fees on financing agreements (1)

4 unchanged sentences

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

(2) See Note 9—Income Taxes for additional information.

CF INDUSTRIES HOLDINGS, INC.

Derivative Financial Instruments

7 unchanged sentences

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

As of September 30, 2023, we had natural gas derivative contracts covering certain periods through March 2024.

As of September 30, 2023, our open natural gas derivative contracts consisted of natural gas fixed price swaps, basis swaps and options for 65.3 million MMBtus of natural gas.

As of March 31, 2024, we had natural gas derivative contracts covering certain periods through March 2025.

As of March 31, 2024, our open natural gas derivative contracts consisted of natural gas fixed price swaps and basis swaps for 8.0 million MMBtus of natural gas.

As of December 31, 2023, we had open natural gas derivative contracts consisting of natural gas fixed price swaps, basis swaps and options for 49.0 million MMBtus of natural gas.

For the nine months ended September 30, 2023, we used derivatives to cover approximately 27 % of our natural gas consumption.

For the three months ended March 31, 2024, we used derivatives to cover approximately 55 % 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 2024 2023

(in millions)

Unrealized net (losses) gains on natural gas derivatives Cost of sales $ ( 7 ) $ ( 11 ) $ 65 $ 39

Realized net (losses) gains on natural gas derivatives Cost of sales ( 1 ) 12 ( 119 ) 20

Net derivative (losses) gains $ ( 8 ) $ 1 $ ( 54 ) $ 59

CF INDUSTRIES HOLDINGS, INC.

Unrealized net gains on natural gas derivatives Cost of sales $ 33 $ 72

Realized net losses on natural gas derivatives Cost of sales ( 37 ) ( 118 )

Net derivative losses $ ( 4 ) $ ( 46 )

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

As of September 30, 2023 and December 31, 2022, none of our derivative instruments were designated as hedging instruments.

As of March 31, 2024 and December 31, 2023, 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,

Balance Sheet Location March 31,

2024 December 31, 2023 Balance Sheet

Location September 30,

Location March 31,

2024 December 31, 2023

3 unchanged sentences

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 September 30, 2023 and December 31, 2022, the aggregate fair value of the derivative instruments with credit-risk-related contingent features in net liability positions was $ 8 million and $ 73 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.

As of March 31, 2024 and December 31, 2023, the aggregate fair value of the derivative instruments with credit-risk-related contingent features in net liability positions was $ 1 million and $ 34 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, 2023 and December 31, 2022, 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, 2023 and December 31, 2022:

As of March 31, 2024 and December 31, 2023, 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, 2024 and December 31, 2023:

Amounts presented in consolidated

3 unchanged sentences

(in millions)

September 30, 2023

March 31, 2024

Total derivative assets $ 1 $ — $ — $ 1

9 unchanged sentences

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

5 unchanged sentences

CHS’ interest in the strategic venture is recorded in noncontrolling interest in our consolidated financial statements.

A reconciliation of the beginning and ending balances of noncontrolling interest and distributions payable to noncontrolling interest in our consolidated balance sheets is provided below.

A reconciliation of the beginning and ending balances of noncontrolling interest and distributions payable to the noncontrolling interest in our consolidated balance sheets is provided below.

(in millions)

3 unchanged sentences

Declaration of distributions payable ( 144 ) ( 255 )

Balance as of September 30 $ 2,578 $ 2,653

Balance as of March 31 $ 2,556 $ 2,637

Distributions payable to noncontrolling interest:

2 unchanged sentences

Distributions to noncontrolling interest ( 144 ) ( 255 )

Balance as of September 30 $ — $ —

Balance as of March 31 $ — $ —

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.

2 unchanged sentences

The amounts of distributions from CFN to us and CHS are based generally on the profitability of CFN and determined based on the volume of granular urea and UAN sold by CFN to us and CHS pursuant to supply agreements, less a formula driven amount based primarily on the cost of natural gas used to produce the granular urea and UAN, and adjusted for the allocation of items such as operational efficiencies and overhead amounts.

CF INDUSTRIES HOLDINGS, INC.

Stockholders’ Equity

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).

The 2021 Share Repurchase Program was completed in the second quarter of 2023.

On November 2, 2022, the Board authorized the repurchase of up to $ 3 billion of CF Holdings common stock commencing upon completion of the 2021 Share Repurchase Program and effective through December 31, 2025 (the 2022 Share Repurchase Program).

Repurchases under these programs may be made from time to time in the open market, through privately negotiated transactions, through block transactions or otherwise.

Repurchases under our share repurchase programs may be made from time to time in the open market, through privately negotiated transactions, through block transactions, through accelerated share repurchase programs, 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.

The following table summarizes the share repurchases under the 2022 Share Repurchase Program and the 2021 Share Repurchase Program.

CF INDUSTRIES HOLDINGS, INC.

2022 Share Repurchase Program 2021 Share Repurchase Program

Shares Amounts (1)

The following table summarizes the share repurchases under the 2022 Share Repurchase Program.

2022 Share Repurchase Program

Shares Amounts (1)

6 unchanged sentences

Total shares repurchased in 2023 5.6 425

Shares repurchased as of December 31, 2022 — $ — 14.9 $ 1,345

Shares repurchased in 2024:

First quarter 4.3 347

Second quarter 0.8 50 1.2 80

Third quarter 1.9 150 — —

Total shares repurchased in 2024 4.3 347

Shares repurchased as of September 30, 2023

2.7 $ 200 17.2 $ 1,500

Shares repurchased as of March 31, 2024

______________________________________________________________________________

(1) As defined in the share repurchase programs, amounts reflect the price paid for the shares of common stock repurchased, excluding commissions paid to brokers and excise taxes.

In the first half of 2023, we completed the 2021 Share Repurchase Program with the repurchase of approximately 2.3 million shares for $ 155 million.

In the nine months ended September 30, 2023, we repurchased approximately 2.7 million shares under the 2022 Share Repurchase Program for $ 200 million and retired approximately 3.3 million shares of repurchased stock.

We held approximately 1.9 million shares of treasury stock as of September 30, 2023.

In the nine months ended September 30, 2022, we repurchased approximately 12.7 million shares under the 2021 Share Repurchase Program for $ 1.12 billion, of which $ 27 million was accrued and unpaid as of September 30, 2022.

In the nine months ended September 30, 2022, we retired approximately 3.2 million shares of repurchased stock.

(1) As defined in the 2022 Share Repurchase Program, amounts reflect the price paid for the shares of common stock repurchased, excluding commissions paid to brokers and excise taxes.

In the three months ended March 31, 2024, we repurchased approximately 4.3 million shares under the 2022 Share Repurchase Program for $ 347 million, of which $ 14 million was accrued and unpaid as of March 31, 2024.

In the three months ended March 31, 2023, we repurchased approximately 1.1 million shares under the 2021 Share Repurchase Program for $ 75 million, of which $ 21 million was accrued and unpaid as of March 31, 2023.

Accumulated Other Comprehensive Loss

7 unchanged sentences

Balance as of December 31, 2023 $ ( 146 ) $ 3 $ ( 66 ) $ ( 209 )

Gain arising during the period — — 5 5

Reclassification to earnings — — ( 1 ) ( 1 )

Effect of exchange rate changes and deferred taxes ( 16 ) — — ( 16 )

Balance as of September 30, 2023 $ ( 176 ) $ 3 $ ( 52 ) $ ( 225 )

Balance as of March 31, 2024 $ ( 162 ) $ 3 $ ( 66 ) $ ( 225 )

Balance as of December 31, 2022 $ ( 179 ) $ 3 $ ( 54 ) $ ( 230 )

Gain arising during the period — — 3 3

Reclassification to earnings (1)

Effect of exchange rate changes and deferred taxes 7 — ( 1 ) 6

Balance as of September 30, 2022 $ ( 190 ) $ 4 $ ( 84 ) $ ( 270 )

_______________________________________________________________________________

(1) Reclassifications out of accumulated other comprehensive loss to the consolidated statements of operations during the three and nine months ended September 30, 2022 include a non-cash pre-tax pension settlement loss of $ 24 million.

See Note 10—Pension Retiree Annuity Purchase for additional information.

Balance as of March 31, 2023 $ ( 172 ) $ 3 $ ( 55 ) $ ( 224 )

CF INDUSTRIES HOLDINGS, INC.

4 unchanged sentences

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.

Segment data for sales, cost of sales and gross margin for the three and nine months ended September 30, 2023 and 2022 are presented in the table below.

Segment data for sales, cost of sales and gross margin for the three months ended March 31, 2024 and 2023 are presented in the table below.

Ammonia Granular Urea (1)

(in millions)

Three months ended September 30, 2023

Net sales $ 235 $ 360 $ 435 $ 114 $ 129 $ 1,273

Cost of sales 214 226 302 79 75 896

Gross margin $ 21 $ 134 $ 133 $ 35 $ 54 377

Total other operating costs and expenses 97

Equity in losses of operating affiliate (2)

Operating earnings $ 244

Three months ended September 30, 2022

Three months ended March 31, 2024

Net sales $ 402 $ 407 $ 425 $ 114 $ 122 $ 1,470

4 unchanged sentences

Operating earnings $ 303

Nine months ended September 30, 2023

Net sales $ 1,184 $ 1,431 $ 1,650 $ 377 $ 418 $ 5,060

Cost of sales 797 775 937 264 243 3,016

Gross margin $ 387 $ 656 $ 713 $ 113 $ 175 2,044

Total other operating costs and expenses 228

Equity in losses of operating affiliate (2)

Operating earnings $ 1,804

Nine months ended September 30, 2022

Three months ended March 31, 2023

Net sales $ 424 $ 611 $ 667 $ 159 $ 151 $ 2,012

6 unchanged sentences

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

(2) Equity in losses of operating affiliate for the three and nine months ended September 30, 2023 include an impairment of our equity method investment in PLNL of $ 43 million.

See Note 7—Equity Method Investment for additional information.

(3) Total other operating costs and expenses for the three and nine months ended September 30, 2022 include $ 95 million and $ 257 million, respectively, of asset impairment and restructuring charges related to our U.K.

See Note 5—United Kingdom Operations Restructuring for additional information.

CF INDUSTRIES HOLDINGS, INC.

Agreement To Purchase Ammonia Production Facility

On March 20, 2023, we entered into an asset purchase agreement with Dyno Nobel Louisiana Ammonia, LLC (DNLA), a U.S.

subsidiary of Australian-based Incitec Pivot Limited (IPL), and IPL.

Under the terms of the agreement, we will purchase DNLA’s ammonia production complex located in Waggaman, Louisiana for a purchase price of $ 1.675 billion, subject to adjustment.

The facility has a nameplate capacity of 880,000 tons of ammonia annually.

The parties will allocate $ 425 million of the purchase price to a long-term ammonia offtake agreement providing for us to supply up to 200,000 tons of ammonia per year to IPL’s Dyno Nobel, Inc.

We expect to fund the balance of the purchase price, representing the $ 1.675 billion purchase price, as adjusted, less $ 425 million, with cash on hand.

The consummation of the transaction is subject to the satisfaction or waiver of customary conditions, including, among others, the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

The agreement includes certain customary termination rights, including the right of either party to terminate the agreement if the closing has not occurred by March 20, 2025.

We have agreed to pay a termination fee of $ 75 million if the agreement is terminated in certain circumstances and certain regulatory approvals are not obtained.

Subsequent Event

On October 26, 2023, we entered into the New Revolving Credit Agreement, which replaced the Prior Revolving Credit Agreement that was scheduled to mature on December 5, 2024.

The New Revolving Credit Agreement provides for a revolving credit facility of up to $ 750 million with a maturity of October 26, 2028 and includes a letter of credit sub-limit of $ 125 million.

See Note 11—Financing Agreements for additional information on the Prior Revolving Credit Agreement.

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