What changed in this filing

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Item 1. Financial Statements

2024-10-31 compared with 2024-08-08 · 152 added, 115 removed, 545 unchanged (33% of the section changed)

2 unchanged sentences

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2024 2023 2024 2023

8 unchanged sentences

Total other operating costs and expenses 82 97 228 228

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

Equity in earnings (losses) of operating affiliate 2 ( 36 ) 1 ( 12 )

Operating earnings 364 244 1,305 1,804

18 unchanged sentences

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2024 2023 2024 2023

1 unchanged sentence

Net earnings $ 341 $ 230 $ 1,085 $ 1,486

Other comprehensive (loss) income:

Other comprehensive income (loss):

Foreign currency translation adjustment—net of taxes 27 ( 27 ) 5 3

7 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 30,

2024 December 31,

51 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

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

Net earnings — — — 276 — 276 65 341

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

Other comprehensive income — — — — 23 23 — 23

Purchases of treasury stock — ( 481 ) — — — ( 481 ) — ( 481 )

Retirement of treasury stock — 15 ( 1 ) ( 14 ) — — — —

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

— 2 ( 2 ) — — — — —

Acquisition of treasury stock under employee stock plans — ( 2 ) — — — ( 2 ) — ( 2 )

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

1 unchanged sentence

— — — ( 89 ) — ( 89 ) — ( 89 )

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

Distribution declared to noncontrolling interest — — — — — — ( 164 ) ( 164 )

Balance as of September 30, 2024 $ 2 $ ( 483 ) $ 1,351 $ 4,533 $ ( 209 ) $ 5,194 $ 2,543 $ 7,737

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

Net earnings — — — 890 — 890 195 1,085

Other comprehensive loss — — — — ( 23 ) ( 23 ) — ( 23 )

Purchases of treasury stock — ( 1,140 ) — — — ( 1,140 ) — ( 1,140 )

6 unchanged sentences

— — — ( 275 ) — ( 275 ) — ( 275 )

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

Distributions declared to noncontrolling interest — — — — — — ( 308 ) ( 308 )

Balance as of September 30, 2024 $ 2 $ ( 483 ) $ 1,351 $ 4,533 $ ( 209 ) $ 5,194 $ 2,543 $ 7,737

CF INDUSTRIES HOLDINGS, INC.

10 unchanged sentences

(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

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 income — — — — 25 25 — 25

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

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

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

— 2 ( 1 ) — — 1 — 1

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

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

1 unchanged sentence

— — — ( 78 ) — ( 78 ) — ( 78 )

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

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, 2022 $ 2 $ — $ 1,412 $ 3,867 $ ( 230 ) $ 5,051 $ 2,802 $ 7,853

2 unchanged sentences

Purchases of treasury stock — ( 357 ) — — — ( 357 ) — ( 357 )

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

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

4 unchanged sentences

— — — ( 235 ) — ( 235 ) — ( 235 )

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

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

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

See accompanying Notes to Unaudited Consolidated Financial Statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six months ended

Nine months ended

September 30,

(in millions)

6 unchanged sentences

Unrealized net gain on natural gas derivatives ( 33 ) ( 65 )

Impairment of equity method investment in PLNL — 43

Gain on sale of emission credits ( 47 ) ( 39 )

Loss on disposal of property, plant and equipment 7 4

Undistributed losses of affiliate—net of taxes 1 —

Undistributed earnings of affiliate—net of taxes ( 1 ) ( 2 )

Changes in assets and liabilities:

34 unchanged sentences

Our core product is anhydrous ammonia (ammonia), which contains 82% nitrogen and 18% hydrogen.

Our nitrogen products that are upgraded from ammonia are granular urea, urea ammonium nitrate solution (UAN) and ammonium nitrate (AN).

Our other nitrogen products include diesel exhaust fluid (DEF), urea liquor, nitric acid and aqua ammonia, which are sold primarily to our industrial customers.

Products derived from ammonia that are most often used as nitrogen fertilizers include granular urea, urea ammonium nitrate solution (UAN) and ammonium nitrate (AN).

AN is also used extensively by the commercial explosives industry as a component of explosives.

Products derived from ammonia that are sold primarily to industrial customers include diesel exhaust fluid (DEF), urea liquor, nitric acid and aqua ammonia.

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

11 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, 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.

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, including any related interest and penalties, 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

3 unchanged sentences

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.

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.

We are currently evaluating the impact that our adoption of this ASU will have on the disclosures in our consolidated financial statements that will first be included in our Annual Report on Form 10-K for the fiscal year ending December 31, 2024.

In December 2023, the FASB issued ASU No.

2 unchanged sentences

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.

The amendments are effective for fiscal

CF INDUSTRIES HOLDINGS, INC.

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.

Revenue Recognition

1 unchanged sentence

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 six months ended June 30, 2024 and 2023:

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

Ammonia Granular Urea UAN AN Other Total

(in millions)

Three months ended June 30, 2024

Three months ended September 30, 2024

North America $ 297 $ 328 $ 313 $ 53 $ 94 $ 1,085

1 unchanged sentence

Total revenue $ 353 $ 388 $ 406 $ 106 $ 117 $ 1,370

Three months ended June 30, 2023

Three months ended September 30, 2023

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

1 unchanged sentence

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

Six months ended June 30, 2024

Nine months ended September 30, 2024

North America $ 961 $ 1,180 $ 1,108 $ 152 $ 310 $ 3,711

1 unchanged sentence

Total revenue $ 1,164 $ 1,252 $ 1,306 $ 318 $ 372 $ 4,412

Six months ended June 30, 2023

Nine months ended September 30, 2023

North America $ 955 $ 1,375 $ 1,312 $ 189 $ 357 $ 4,188

1 unchanged sentence

Total revenue $ 1,184 $ 1,431 $ 1,650 $ 377 $ 418 $ 5,060

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.

As of September 30, 2024 and December 31, 2023, we had $ 348 million and $ 130 million, respectively, in customer advances on our consolidated balance sheets.

During the nine months ended September 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 June 30, 2024 and December 31, 2023 were not material.

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

The balances of customer incentives accrued as of September 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 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.

As of September 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 $ 1.8 billion.

We expect to recognize approximately 11 % of these performance obligations as revenue in the remainder of 2024, approximately 29 % 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 June 30, 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.

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

CF INDUSTRIES HOLDINGS, INC.

2 unchanged sentences

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2024 2023 2024 2023

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

Acquisition of Waggaman Ammonia Production Facility

2 unchanged sentences

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.

Our acquisition of the Waggaman facility expanded 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.

3 unchanged sentences

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.

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 second quarter of 2024.

In the nine months ended September 30, 2024, we incurred $ 4 million of integration costs related to the Waggaman acquisition.

In the three and nine months ended September 30, 2023, we incurred $ 9 million and $ 25 million, respectively, of acquisition-related costs related to the Waggaman acquisition.

In addition, we incurred $ 2 million of integration costs in both the three and nine months ended September 30, 2023.

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

1 unchanged sentence

Inventories consist of the following:

September 30,

2024 December 31,

5 unchanged sentences

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

September 30,

2024 December 31,

9 unchanged sentences

_______________________________________________________________________________

(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.

(1) As of September 30, 2024 and December 31, 2023, we had property, plant and equipment that was accrued but unpaid of $ 122 million and $ 68 million, respectively.

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

Depreciation and amortization related to property, plant and equipment was $ 229 million and $ 701 million for the three and nine months ended September 30, 2024, respectively, and $ 211 million and $ 633 million for the three and nine months ended September 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.

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

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

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

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

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

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

The following is a summary of capitalized plant turnaround costs:

Six months ended

Nine months ended

September 30,

(in millions)

Net capitalized turnaround costs as of January 1 $ 352 $ 312

Net capitalized plant turnaround costs as of January 1 $ 352 $ 312

Additions 120 121

1 unchanged sentence

Effect of exchange rate changes and other — ( 4 )

Net capitalized turnaround costs as of June 30

Net capitalized plant turnaround costs as of September 30

CF INDUSTRIES HOLDINGS, INC.

2 unchanged sentences

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 June 30, 2024, the total carrying value of our equity method investment in PLNL was $ 25 million.

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 earnings (losses) of operating affiliate on our consolidated statements of operations for the three and nine months ended September 30, 2023.

As of September 30, 2024, the total carrying value of our equity method investment in PLNL was $ 28 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 $ 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.

Our ammonia purchases from PLNL totaled $ 22 million and $ 68 million for the three and nine months ended September 30, 2024, respectively, and $ 20 million and $ 115 million for the three and nine months ended September 30, 2023, respectively.

Fair Value Measurements

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

June 30, 2024

September 30, 2024

Cost Basis Unrealized

26 unchanged sentences

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present assets and liabilities included in our consolidated balance sheets as of 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

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

September 30, 2024

Value Quoted Prices

17 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 June 30, 2024 and December 31, 2023, our cash equivalents consisted primarily of U.S.

As of September 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.

14 unchanged sentences

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Amount Fair Value Carrying

10 unchanged sentences

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

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.

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 8—Equity Method Investment for additional information.

For the three months ended September 30, 2024, we recorded an income tax provision of $ 59 million on pre-tax income of $ 400 million, or an effective tax rate of 14.8 %, compared to an income tax provision of $ 23 million on pre-tax income of $ 253 million, or an effective tax rate of 9.1 %, for the three months ended September 30, 2023.

For the three months ended September 30, 2024, our income tax provision includes a $ 9 million income tax benefit arising from the finalization of tax return filing positions.

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.

For the three months ended September 30, 2024 and 2023, these income tax benefits in relation to pre-tax income of $ 400 million and $ 253 million, respectively, contributed to a lower effective tax rate compared to the U.S.

statutory rate of 21%.

For the nine months ended September 30, 2024, we recorded an income tax provision of $ 244 million on pre-tax income of $ 1.33 billion, or an effective tax rate of 18.4 %, compared to an income tax provision of $ 326 million on pre-tax income of $ 1.81 billion, or an effective tax rate of 18.0 %, for the nine months ended September 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.

Our effective tax rate for the three months ended September 30, 2024 of 14.8 %, which is based on pre-tax income of $ 400 million, including $ 65 million of earnings attributable to the noncontrolling interest, would be 2.9 percentage points higher if based on pre-tax income exclusive of the $ 65 million of 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 nine months ended September 30, 2024 of 18.4 %, which is based on pre-tax income of $ 1.33 billion, including $ 195 million of earnings attributable to the noncontrolling interest, would be 3.1 percentage points higher if based on pre-tax income exclusive of the $ 195 million of earnings attributable to the noncontrolling interest.

CF INDUSTRIES HOLDINGS, INC.

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.

Canada Revenue Agency Competent Authority Matter

In the second half of 2022, as a result of the conclusion of arbitration proceedings and the settlement provisions between the United States and Canadian competent authorities related to tax years 2006-2011, we paid additional income taxes and related interest of $ 124 million and $ 100 million, respectively, to the Canada Revenue Agency (CRA) and Alberta Tax and Revenue Administration (Alberta TRA).

In the third quarter of 2024, we were informed that the CRA granted us discretionary interest relief for certain tax years from 2006 through 2011.

Based on current estimates and foreign currency exchange rates as of September 30, 2024, the interest relief from the CRA and Alberta TRA is estimated to be approximately $ 40 million, consisting of interest refunds of $ 37 million and related interest of $ 3 million.

As a result, in the third quarter of 2024, we recognized a $ 37 million reduction in interest expense and $ 3 million of interest income in our consolidated statement of operations.

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 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.

As of September 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 September 30, 2024 or December 31, 2023, or during the nine months ended September 30, 2024.

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

As of June 30, 2024, we were in compliance with all covenants under the Revolving Credit Agreement.

As of September 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 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

As of September 30, 2024, approximately $ 344 million of letters of credit were outstanding under this agreement.

CF INDUSTRIES HOLDINGS, INC.

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

Effective Interest Rate September 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 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.

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

September 30, Nine months ended

September 30,

2024 2023 2024 2023

4 unchanged sentences

Interest on tax liabilities (2)

( 37 ) 1 ( 37 ) 1

Interest capitalized ( 3 ) ( 2 ) ( 8 ) ( 4 )

2 unchanged sentences

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

(2) See Note 10—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 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 September 30, 2024, we had natural gas derivative contracts covering certain periods through March 2025.

As of September 30, 2024, our open natural gas derivative contracts consisted of natural gas basis swaps for 17.5 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 six months ended June 30, 2024, we used derivatives to cover approximately 27 % of our natural gas consumption.

For the nine months ended September 30, 2024, we used derivatives to cover approximately 20 % 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

September 30, Nine months ended

September 30,

Location 2024 2023 2024 2023

(in millions)

Unrealized net gains on natural gas derivatives Cost of sales $ 1 $ — $ 34 $ 72

Unrealized net (losses) gains on natural gas derivatives Cost of sales $ ( 1 ) $ ( 7 ) $ 33 $ 65

Realized net losses on natural gas derivatives Cost of sales ( 1 ) ( 1 ) ( 39 ) ( 119 )

1 unchanged sentence

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

As of June 30, 2024 and December 31, 2023, none of our derivative instruments were designated as hedging instruments.

As of September 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 June 30,

2024 December 31, 2023 Balance Sheet

Location June 30,

Balance Sheet

Location September 30,

2024 December 31,

2023 Balance Sheet

Location September 30,

2024 December 31,

(in millions) (in millions)

Natural gas derivatives Other current assets $ 4 $ 1 Other current liabilities $ ( 5 ) $ ( 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 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.

As of September 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 $ 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 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:

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

Amounts presented in consolidated

3 unchanged sentences

(in millions)

June 30, 2024

September 30, 2024

Total derivative assets $ 4 $ — $ — $ 4

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 ( 308 ) ( 459 )

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

Balance as of September 30 $ 2,543 $ 2,578

Distributions payable to noncontrolling interest:

2 unchanged sentences

Distributions to noncontrolling interest ( 308 ) ( 459 )

Balance as of June 30 $ — $ —

Balance as of September 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.

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.

CF INDUSTRIES HOLDINGS, INC.

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.

2022 Share Repurchase Program

Shares Amounts (1)

1 unchanged sentence

Shares repurchased in 2023:

First quarter — $ —

Second quarter 0.8 $ 50

5 unchanged sentences

Second quarter 4.0 305

Third quarter 6.1 476

Total shares repurchased in 2024 14.4 1,128

Shares repurchased as of June 30, 2024

Shares repurchased as of September 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 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.

In the nine months ended September 30, 2024, we repurchased approximately 14.4 million shares under the 2022 Share Repurchase Program for $ 1.13 billion, and we retired approximately 8.5 million shares of repurchased stock.

As of September 30, 2024, we held approximately 6.1 million shares of treasury stock.

In the second quarter 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 we retired approximately 3.3 million shares of repurchased stock.

CF INDUSTRIES HOLDINGS, INC.

Accumulated Other Comprehensive Loss

9 unchanged sentences

Effect of exchange rate changes and deferred taxes 5 — ( 3 ) 2

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

Balance as of September 30, 2024 $ ( 141 ) $ 3 $ ( 71 ) $ ( 209 )

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

Gain arising during the period — — 5 5

Reclassification to earnings — — ( 1 ) ( 1 )

Effect of exchange rate changes and deferred taxes 3 — ( 2 ) 1

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

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

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 six months ended June 30, 2024 and 2023 are presented in the table below.

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

Ammonia Granular Urea (1)

(in millions)

Three months ended June 30, 2024

Three months ended September 30, 2024

Net sales $ 353 $ 388 $ 406 $ 106 $ 117 $ 1,370

2 unchanged sentences

Total other operating costs and expenses 82

Equity in loss of operating affiliate ( 3 )

Equity in earnings of operating affiliate 2

Operating earnings $ 364

Three months ended June 30, 2023

Three months ended September 30, 2023

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

2 unchanged sentences

Total other operating costs and expenses 97

Equity in earnings of operating affiliate 7

Equity in losses of operating affiliate (2)

Operating earnings $ 244

Six months ended June 30, 2024

Nine months ended September 30, 2024

Net sales $ 1,164 $ 1,252 $ 1,306 $ 318 $ 372 $ 4,412

2 unchanged sentences

Total other operating costs and expenses 228

Equity in loss of operating affiliate ( 1 )

Equity in earnings of operating affiliate 1

Operating earnings $ 1,305

Six months ended June 30, 2023

Nine months ended September 30, 2023

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

2 unchanged sentences

Total other operating costs and expenses 228

Equity in earnings of operating affiliate 24

Equity in losses of operating affiliate (2)

Operating earnings $ 1,804

1 unchanged sentence

(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 includes an impairment of our equity method investment in PLNL of $ 43 million.

See Note 8—Equity Method Investment for additional information.

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