What changed in this filing

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Item 1. Financial Statements

2024-08-08 compared with 2024-05-02 · 154 added, 70 removed, 506 unchanged (31% of the section changed)

2 unchanged sentences

Three months ended

June 30, Six months ended

2024 2023 2024 2023

(in millions, except per share amounts)

7 unchanged sentences

Total other operating costs and expenses 38 77 146 131

Equity in earnings of operating affiliate 2 17

Equity in (losses) earnings of operating affiliate ( 3 ) 7 ( 1 ) 24

Operating earnings 638 734 941 1,560

18 unchanged sentences

Three months ended

June 30, Six months ended

2024 2023 2024 2023

(in millions)

3 unchanged sentences

Defined benefit plans—net of taxes ( 1 ) 2 ( 1 ) 1

( 7 ) 25 ( 23 ) 31

Comprehensive income 499 631 721 1,287

57 unchanged sentences

(in millions, except per share amounts)

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

Net earnings — — — 420 — 420 86 506

Other comprehensive loss — — — — ( 7 ) ( 7 ) — ( 7 )

Purchases of treasury stock — ( 308 ) — — — ( 308 ) — ( 308 )

Retirement of treasury stock — 665 ( 62 ) ( 603 ) — — — —

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

— 2 ( 2 ) — — — — —

Stock-based compensation expense — — 6 — — 6 — 6

Dividends and dividend equivalents ($ 0.50 per share)

— — — ( 91 ) — ( 91 ) — ( 91 )

Balance as of June 30, 2024 $ 2 $ ( 15 ) $ 1,345 $ 4,360 $ ( 232 ) $ 5,460 $ 2,642 $ 8,102

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

2 unchanged sentences

Purchases of treasury stock — ( 659 ) — — — ( 659 ) — ( 659 )

Retirement of treasury stock — 665 ( 62 ) ( 603 ) — — — —

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

5 unchanged sentences

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

Balance as of June 30, 2024 $ 2 $ ( 15 ) $ 1,345 $ 4,360 $ ( 232 ) $ 5,460 $ 2,642 $ 8,102

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

Net earnings — — — 527 — 527 79 606

Other comprehensive income — — — — 25 25 — 25

Purchases of treasury stock — ( 131 ) — — — ( 131 ) — ( 131 )

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

— 2 ( 1 ) — — 1 — 1

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

Dividends and dividend equivalents ($ 0.40 per share)

— — — ( 78 ) — ( 78 ) — ( 78 )

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

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

3 unchanged sentences

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

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

— 2 ( 1 ) — — 1 — 1

Stock-based compensation expense — — 19 — — 19 — 19

2 unchanged sentences

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

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

See accompanying Notes to Unaudited Consolidated Financial Statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended

Six months ended

(in millions)

8 unchanged sentences

Loss on disposal of property, plant and equipment 6 1

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

Undistributed losses of affiliate—net of taxes 1 —

Changes in assets and liabilities:

8 unchanged sentences

Additions to property, plant and equipment ( 182 ) ( 164 )

Purchase of Waggaman ammonia production facility 2 —

Proceeds from sale of property, plant and equipment — 1

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

Purchase of emission credits ( 2 ) —

54 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 months ended March 31, 2024 and 2023:

The following table summarizes our revenue by product and by geography (based on destination of our shipment) for the three and six months ended June 30, 2024 and 2023:

Ammonia Granular Urea UAN AN Other Total

(in millions)

Three months ended March 31, 2024

Three months ended June 30, 2024

North America $ 330 $ 449 $ 422 $ 51 $ 114 $ 1,366

1 unchanged sentence

Total revenue $ 409 $ 457 $ 475 $ 98 $ 133 $ 1,572

Three months ended March 31, 2023

Three months ended June 30, 2023

North America $ 460 $ 460 $ 463 $ 65 $ 120 $ 1,568

1 unchanged sentence

Total revenue $ 525 $ 460 $ 548 $ 104 $ 138 $ 1,775

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.

Six months ended June 30, 2024

North America $ 664 $ 852 $ 795 $ 99 $ 216 $ 2,626

Europe and other 147 12 105 113 39 416

Total revenue $ 811 $ 864 $ 900 $ 212 $ 255 $ 3,042

Six months ended June 30, 2023

North America $ 790 $ 1,035 $ 982 $ 139 $ 246 $ 3,192

Europe and other 159 36 233 124 43 595

Total revenue $ 949 $ 1,071 $ 1,215 $ 263 $ 289 $ 3,787

As of June 30, 2024 and December 31, 2023, we had $ 8 million and $ 130 million, respectively, in customer advances on our consolidated balance sheets.

During the six months ended June 30, 2024 and 2023, substantially all of the customer advances at the beginning of each respective period were recognized as revenue.

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 March 31, 2024 and December 31, 2023 were not material.

The balances of customer incentives accrued as of June 30, 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.

As of June 30, 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 $ 1.9 billion.

We expect to recognize approximately 18 % of these performance obligations as revenue in the remainder of 2024, approximately 19 % as revenue during 2025-2027, approximately 17 % 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.

3 unchanged sentences

Three months ended

June 30, Six months ended

2024 2023 2024 2023

(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 months ended March 31, 2024 and 2023.

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 six months ended June 30, 2024 and the three and six months ended June 30, 2023.

Acquisition of Waggaman Ammonia Production Facility

4 unchanged sentences

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.

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

The consideration transferred on the acquisition date reflected an estimated net working capital adjustment and other adjustments to the purchase price, which was subject to further adjustment pursuant to the terms of the asset purchase agreement.

The purchase price adjustments required under the asset purchase agreement were finalized in the second quarter of 2024, which resulted in a $ 2 million reduction in the purchase price with a corresponding reduction in goodwill.

As a result, the final purchase price was $ 1.221 billion, and we finalized our purchase accounting for the Waggaman ammonia production facility.

In the three and six months ended June 30, 2024, we incurred $ 1 million and $ 4 million, respectively, of integration costs related to the Waggaman acquisition.

In the three and six months ended June 30, 2023, we incurred $ 3 million and $ 16 million, respectively, of acquisition-related costs related to the Waggaman acquisition.

These costs are included in acquisition and integration costs in our consolidated statements of operations.

CF INDUSTRIES HOLDINGS, INC.

Inventories consist of the following:

4 unchanged sentences

Total inventories $ 302 $ 299

CF INDUSTRIES HOLDINGS, INC.

Property, Plant and Equipment—Net

11 unchanged sentences

_______________________________________________________________________________

(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.

(1) As of June 30, 2024 and December 31, 2023, we had property, plant and equipment that was accrued but unpaid of $ 71 million and $ 68 million, respectively.

As of June 30, 2023 and December 31, 2022, we had property, plant and equipment that was accrued but unpaid of $ 63 million and $ 53 million, respectively.

Depreciation and amortization related to property, plant and equipment was $ 220 million and $ 472 million for the three and six months ended June 30, 2024, respectively, and $ 218 million and $ 422 million for the three and six months ended June 30, 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.

4 unchanged sentences

The following is a summary of capitalized plant turnaround costs:

Three months ended

Six months ended

(in millions)

3 unchanged sentences

Effect of exchange rate changes and other ( 1 ) 1

Net capitalized turnaround costs as of March 31

Net capitalized turnaround costs as of June 30

CF INDUSTRIES HOLDINGS, INC.

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.

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

As of June 30, 2024, the total carrying value of our equity method investment in PLNL was $ 25 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 $ 30 million and $ 59 million for the three months ended March 31, 2024 and 2023, respectively.

CF INDUSTRIES HOLDINGS, INC.

Our ammonia purchases from PLNL totaled $ 16 million and $ 46 million for the three and six months ended June 30, 2024, respectively, and $ 36 million and $ 95 million for the three and six months ended June 30, 2023, respectively.

Fair Value Measurements

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

March 31, 2024

June 30, 2024

Cost Basis Unrealized

24 unchanged sentences

and those guaranteed by entities affiliated with governmental entities.

CF INDUSTRIES HOLDINGS, INC.

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 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

The following tables present assets and liabilities included in our consolidated balance sheets as of June 30, 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:

June 30, 2024

Value Quoted Prices

6 unchanged sentences

Derivative liabilities ( 2 ) — ( 2 ) —

CF INDUSTRIES HOLDINGS, INC.

December 31, 2023

9 unchanged sentences

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.

As of June 30, 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.

11 unchanged sentences

See Note 13—Derivative Financial Instruments for additional information.

CF INDUSTRIES HOLDINGS, INC.

Financial Instruments

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Amount Fair Value Carrying

7 unchanged sentences

that is, the assets and liabilities are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment, when there is allocation of purchase price in an acquisition or when a new liability is being established that requires fair value measurement.

These include long-lived assets, goodwill and other

CF INDUSTRIES HOLDINGS, INC.

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.

These include long-lived assets, goodwill and other 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 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.

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.

For the three months ended June 30, 2024, we recorded an income tax provision of $ 123 million on pre-tax income of $ 629 million, or an effective tax rate of 19.5 %, compared to an income tax provision of $ 134 million on pre-tax income of $ 740 million, or an effective tax rate of 18.2 %, for the three months ended June 30, 2023.

For the six months ended June 30, 2024, we recorded an income tax provision of $ 185 million on pre-tax income of $ 929 million, or an effective tax rate of 19.9 %, compared to an income tax provision of $ 303 million on pre-tax income of $ 1.56 billion, or an effective tax rate of 19.5 %, for the six months ended June 30, 2023.

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 June 30, 2024 of 19.5 %, which is based on pre-tax income of $ 629 million, including $ 86 million of earnings attributable to the noncontrolling interest, would be 3.1 percentage points higher if based on pre-tax income exclusive of the $ 86 million of earnings attributable to the noncontrolling interest.

Our effective tax rate for the three months ended June 30, 2023 of 18.2 %, which is based on pre-tax income of $ 740 million, including $ 79 million of earnings attributable to the noncontrolling interest, would be 2.1 percentage points higher if based on pre-tax income exclusive of the $ 79 million of earnings attributable to the noncontrolling interest.

Our effective tax rate for the six months ended June 30, 2024 of 19.9 %, which is based on pre-tax income of $ 929 million, including $ 130 million of earnings attributable to the noncontrolling interest, would be 3.2 percentage points higher if based on pre-tax income exclusive of the $ 130 million of earnings attributable to the noncontrolling interest.

Our effective tax rate for the six months ended June 30, 2023 of 19.5 %, which is based on pre-tax income of $ 1.56 billion, including $ 169 million of earnings attributable to the noncontrolling interest, would be 2.3 percentage points higher if based on pre-tax income exclusive of the $ 169 million of earnings attributable to the noncontrolling interest.

CF INDUSTRIES HOLDINGS, INC.

Financing Agreements

9 unchanged sentences

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

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.

As of June 30, 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 June 30, 2024 or December 31, 2023, or during the six months ended June 30, 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.

As of June 30, 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 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

As of June 30, 2024, approximately $ 340 million of letters of credit were outstanding under this agreement.

Long-term debt presented on our consolidated balance sheets as of June 30, 2024 and December 31, 2023 consisted of the following debt securities issued by CF Industries:

Effective Interest Rate June 30, 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 $ 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.

Total unamortized debt discount was $ 6 million and $ 7 million as of June 30, 2024 and December 31, 2023, respectively, and total deferred debt issuance costs were $ 24 million and $ 25 million as of June 30, 2024 and December 31, 2023, respectively.

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

2 unchanged sentences

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

CF INDUSTRIES HOLDINGS, INC.

Interest Expense

1 unchanged sentence

Three months ended

June 30, Six months ended

2024 2023 2024 2023

(in millions)

Interest on borrowings (1)

$ 38 $ 37 $ 75 $ 74

Fees on financing agreements (1)

4 unchanged sentences

(1) See Note 11—Financing Agreements 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 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 June 30, 2024, we had natural gas derivative contracts covering certain periods through March 2025.

As of June 30, 2024, our open natural gas derivative contracts consisted of natural gas basis swaps for 9.0 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 three months ended March 31, 2024, we used derivatives to cover approximately 55 % of our natural gas consumption.

For the six months ended June 30, 2024, we used derivatives to cover approximately 27 % 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

June 30, Six months ended

Location 2024 2023 2024 2023

4 unchanged sentences

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

As of March 31, 2024 and December 31, 2023, none of our derivative instruments were designated as hedging instruments.

As of June 30, 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 March 31,

Balance Sheet Location June 30,

2024 December 31, 2023 Balance Sheet

Location March 31,

Location June 30,

2024 December 31, 2023

1 unchanged sentence

Natural gas derivatives Other current assets $ 2 $ 1 Other current liabilities $ ( 2 ) $ ( 35 )

CF INDUSTRIES HOLDINGS, INC.

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

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

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.

As of June 30, 2024 and December 31, 2023, the aggregate fair value of the derivative instruments with credit-risk-related contingent features in net liability positions was zero 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 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:

As of June 30, 2024 and December 31, 2023, 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 June 30, 2024 and December 31, 2023:

Amounts presented in consolidated

3 unchanged sentences

(in millions)

March 31, 2024

June 30, 2024

Total derivative assets $ 2 $ — $ — $ 2

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

11 unchanged sentences

Declaration of distributions payable ( 144 ) ( 255 )

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

Balance as of June 30 $ 2,642 $ 2,716

Distributions payable to noncontrolling interest:

2 unchanged sentences

Distributions to noncontrolling interest ( 144 ) ( 255 )

Balance as of March 31 $ — $ —

Balance as of June 30 $ — $ —

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.

On July 31, 2024, the CFN Board of Managers approved semi-annual distribution payments for the distribution period ended June 30, 2024 in accordance with CFN’s limited liability company agreement.

On July 31, 2024, CFN distributed $ 165 million to CHS for the distribution period ended June 30, 2024.

Stockholders’ Equity

4 unchanged sentences

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.

CF INDUSTRIES HOLDINGS, INC.

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

10 unchanged sentences

First quarter 4.3 347

Second quarter 4.0 305

Total shares repurchased in 2024 8.3 652

Shares repurchased as of March 31, 2024

Shares repurchased as of June 30, 2024

______________________________________________________________________________

(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.

In the six months ended June 30, 2024, we repurchased approximately 8.3 million shares under the 2022 Share Repurchase Program for $ 652 million, of which $ 14 million was accrued and unpaid as of June 30, 2024.

In the six months ended June 30, 2023, we completed the 2021 Share Repurchase Program with the repurchase of approximately 2.3 million shares for $ 155 million, and we repurchased approximately 0.8 million shares under the 2022 Share Repurchase Program for $ 50 million.

In the second quarter of 2024, we retired approximately 8.4 million shares of repurchased stock, and we held approximately 0.2 million shares of treasury stock as of June 30, 2024.

Accumulated Other Comprehensive Loss

7 unchanged sentences

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

Loss arising during the period — — ( 2 ) ( 2 )

Effect of exchange rate changes and deferred taxes ( 22 ) — 1 ( 21 )

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

Balance as of June 30, 2024 $ ( 168 ) $ 3 $ ( 67 ) $ ( 232 )

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

Gain arising during the period — — 5 5

Effect of exchange rate changes and deferred taxes 30 — ( 4 ) 26

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

Balance as of June 30, 2023 $ ( 149 ) $ 3 $ ( 53 ) $ ( 199 )

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 months ended March 31, 2024 and 2023 are presented in the table below.

Segment data for sales, cost of sales and gross margin for the three and six months ended June 30, 2024 and 2023 are presented in the table below.

Ammonia Granular Urea (1)

(in millions)

Three months ended March 31, 2024

Three months ended June 30, 2024

Net sales $ 409 $ 457 $ 475 $ 98 $ 133 $ 1,572

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Total other operating costs and expenses 38

Equity in loss of operating affiliate ( 3 )

Operating earnings $ 638

Three months ended June 30, 2023

Net sales $ 525 $ 460 $ 548 $ 104 $ 138 $ 1,775

Cost of sales 303 222 289 81 76 971

Gross margin $ 222 $ 238 $ 259 $ 23 $ 62 804

Total other operating costs and expenses 77

Equity in earnings of operating affiliate 7

Operating earnings $ 734

Three months ended March 31, 2023

Six months ended June 30, 2024

Net sales $ 811 $ 864 $ 900 $ 212 $ 255 $ 3,042

2 unchanged sentences

Total other operating costs and expenses 146

Equity in loss of operating affiliate ( 1 )

Operating earnings $ 941

Six months ended June 30, 2023

Net sales $ 949 $ 1,071 $ 1,215 $ 263 $ 289 $ 3,787

Cost of sales 583 549 635 185 168 2,120

Gross margin $ 366 $ 522 $ 580 $ 78 $ 121 1,667

Total other operating costs and expenses 131

Equity in earnings of operating affiliate 24

4 unchanged sentences

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