What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-10-31 compared with 2024-08-08 · 355 added, 294 removed, 522 unchanged (55% of the section changed)

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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.

Our principal assets as of June 30, 2024 include:

nitrogen manufacturing facilities located in Donaldsonville, Louisiana (the largest nitrogen complex in the world);

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.

Our principal assets as of September 30, 2024 include:

manufacturing facilities located in Donaldsonville, Louisiana (the largest ammonia production complex in the world);

Sergeant Bluff, Iowa (our Port Neal complex);

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The Waggaman facility is wholly owned by us, and the other five U.S.

nitrogen manufacturing facilities are wholly owned directly or indirectly by CF Industries Nitrogen, LLC (CFN), of which we own approximately 89% and CHS Inc.

manufacturing facilities are wholly owned directly or indirectly by CF Industries Nitrogen, LLC (CFN), of which we own approximately 89% and CHS Inc.

(CHS) owns the remainder (see Note 14—Noncontrolling Interest for additional information on our strategic venture with CHS);

• two Canadian nitrogen manufacturing facilities, located in Medicine Hat, Alberta (the largest nitrogen complex in Canada) and Courtright, Ontario;

• a United Kingdom nitrogen manufacturing facility located in Billingham;

• two Canadian manufacturing facilities, located in Medicine Hat, Alberta (the largest ammonia production complex in Canada) and Courtright, Ontario;

• a United Kingdom manufacturing facility located in Billingham;

CF INDUSTRIES HOLDINGS, INC.

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We use the Haber-Bosch process to fix atmospheric nitrogen with hydrogen from natural gas to produce anhydrous ammonia, whose chemical composition is NH 3 .

We sell the ammonia itself or upgrade it to products such as granular urea, urea ammonium nitrate solution (UAN) and diesel exhaust fluid (DEF).

We sell the ammonia itself or upgrade it to products such as granular urea, UAN and DEF.

A majority of the ammonia and ammonia-derived products we manufacture are used as fertilizer, as the nitrogen content provides energy essential for crop growth.

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We believe this strategy builds upon our leadership in ammonia production to capture emerging opportunities to produce ammonia with a lower carbon intensity than that of ammonia produced through traditional processes.

These opportunities include traditional applications in agriculture to help reduce the carbon footprint of food production and the life cycle carbon intensity of ethanol production, enabling ammonia’s use as a sustainable aviation fuel, among other purposes.

These opportunities include traditional applications in agriculture to help reduce the carbon footprint of food production and the life cycle carbon intensity of ethanol production, enabling production of sustainable aviation fuel, among other purposes.

These opportunities also include new growth opportunities from energy-intensive industries, such as power generation and marine shipping, as ammonia represents an efficient mechanism to both ship and store hydrogen, as well as a clean energy fuel source in its own right as ammonia does not contain or emit carbon when combusted.

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• forging partnerships to accelerate our timeline, reducing risks and bridging gaps in areas where we do not have expertise;

and collaborating to build understanding of ammonia’s clean energy capability, safety track record and regulatory environment.

• collaborating to build understanding of ammonia’s clean energy capability, safety track record and regulatory environment.

Decarbonization projects in our existing network include our green ammonia project at our Donaldsonville, Louisiana, complex.

Our green hydrogen production facility, consisting of a 20-megawatt alkaline water electrolysis plant to produce hydrogen, is mechanically complete, and commissioning activities are nearing completion.

In the third quarter of 2024 and in anticipation of start-up, we entered into an agreement to procure 45V-compliant renewable energy certificates to pair with the electricity consumed by electrolyzer operation.

As a result, the electrolyzer will generate green hydrogen that enables us to produce green ammonia, which refers to ammonia produced with hydrogen sourced from an electrolysis process that produces no carbon dioxide emissions.

Green ammonia refers to ammonia produced with hydrogen sourced from an electrolysis process that produces no carbon dioxide emissions.

Commissioning of our green hydrogen production facility, consisting of a 20-megawatt alkaline water electrolysis plant to produce hydrogen, continues.

At full electrolyzer capacity, we will be able to produce approximately 20,000 tons of green ammonia per year.

At the time of its startup, we believe that the Donaldsonville green ammonia project will represent North America’s first commercial-scale green ammonia capacity.

Under current regulations, the hydrogen produced and used in our green ammonia production is expected to qualify under Section 45V of the Internal Revenue Code for tax credits based on the carbon intensity of the hydrogen produced.

Under proposed regulations, the hydrogen produced and used in our green ammonia production is expected to qualify for tax credits under Section 45V of the Internal Revenue Code.

We are also advancing decarbonization projects at our Donaldsonville and Yazoo City complexes that leverage carbon capture and sequestration (CCS) to enable the production of low-carbon ammonia.

Low-carbon ammonia is ammonia produced by conventional processes but with approximately 60-98% of the process and flue gas carbon dioxide (CO 2 ) generated by ammonia production and currently emitted to the atmosphere removed through CCS.

CCS requires the construction of CO 2 dehydration and compression units to enable CO 2 already captured from the ammonia production process to be transported and sequestered.

CCS requires the construction of CO 2 dehydration and compression units to enable CO 2 captured from the ammonia production process to be transported and sequestered.

Construction of the dehydration and compression unit at our Donaldsonville complex is in advanced stages, with an estimated total cost of approximately $200 million over the life of the project.

Activities related to the construction of the dehydration and compression unit at our Yazoo City complex will commence in the second half of 2024 with an estimated total cost of $100 million over the life of the project.

In addition, for each facility we have contracted with ExxonMobil to transport and sequester the captured CO 2 in permanent geologic storage.

Construction of the dehydration and compression unit at our Yazoo City complex is expected to cost approximately $100 million over the life of the project.

For each facility we have contracted with ExxonMobil to transport and sequester the captured CO 2 in permanent geologic storage.

At Donaldsonville, CCS is expected to commence in 2025 and annually will capture up to approximately 2 million tonnes of CO 2 .

At Yazoo City, CCS is expected to commence in 2028 and annually will capture up to approximately 500,000 tonnes of CO 2 .

Under current regulations, each project is expected to qualify under Section 45Q of the Internal Revenue Code for tax credits per tonne of sequestered CO 2 .

Each project is expected to qualify under Section 45Q of the Internal Revenue Code for tax credits per tonne of sequestered CO 2 .

We are also evaluating the construction of export-oriented greenfield low-carbon ammonia capacity at our Blue Point complex in Ascension Parish, Louisiana.

This evaluation includes assessing ammonia production technology options that will meet the carbon intensity requirements of end users.

In the fourth quarter of 2023, we completed a front-end engineering and design (FEED) study on a potential approximately 1.2 million tonne capacity greenfield steam methane reforming (SMR) ammonia facility with CCS technologies that would enable sequestration of process CO 2 emissions.

The FEED study estimates

This evaluation includes assessing ammonia production technology options that will

CF INDUSTRIES HOLDINGS, INC.

the cost of a project with these attributes to be in the range of $3 billion, with approximately $2.5 billion allocated to the ammonia facility and CCS technologies and approximately $500 million allocated to scalable common infrastructure for the Blue Point complex, such as ammonia storage and a vessel loading dock.

meet the carbon intensity requirements of end users.

The FEED study estimated the cost of a project with these attributes to be in the range of $3 billion, with approximately $2.5 billion allocated to the ammonia facility and CCS technologies and approximately $500 million allocated to scalable common infrastructure for the Blue Point complex, such as ammonia storage and a vessel loading dock.

We, along with our partners, are also progressing two additional FEED studies focused on technologies that would further reduce the ammonia product’s carbon intensity.

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We expect to obtain results from both FEED studies in the fourth quarter of 2024.

We have entered into joint development agreements (JDAs) with two potential partners for the development of low-carbon ammonia capacity at our Blue Point complex, Mitsui & Co., Ltd.

We have entered into joint development agreements (JDAs) with two potential partners, Mitsui & Co., Ltd.

and JERA Co., Inc.

(JERA), Japan’s largest power generator.

The JDAs guide our evaluation of potential joint ventures to build a greenfield ammonia plant to supply low-carbon ammonia to developing energy markets in Japan and traditional ammonia markets where demand for low-carbon product is emerging.

The JDA with JERA contemplates a project to build an approximately 1.4 million tonne capacity low-carbon ammonia plant, with JERA expected to own a 48% stake and offtake more than 500,000 tonnes of low-carbon ammonia annually for its proposed coal and ammonia co-firing project.

In addition to discussions with existing customers who have interest in using low-carbon ammonia for traditional applications, we are engaged in advanced discussions regarding the supply of low-carbon ammonia for new applications, such as JERA’s co-firing project discussed above.

The JDAs guide our evaluation of potential joint ventures to build a greenfield ammonia plant to supply low-carbon ammonia to developing energy markets and traditional ammonia markets where demand for low-carbon product is emerging.

We are evaluating and are in various stages of discussions and agreements with other companies for long-term offtake and joint investment opportunities related to new applications of ammonia.

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In general, the prevailing global prices for nitrogen products must be at a level to incent the high-cost marginal producer to produce product at a breakeven or above price, or else they would cease production and leave a portion of global demand unsatisfied.

In the second quarter of 2024, the average selling price for our products was $322 per ton, a decrease of 10% compared to $359 per ton in the second quarter of 2023, reflecting lower average selling prices across most of our segments, as lower global energy costs reduced the global market clearing price required to meet global demand.

Lower average selling prices resulted in a decrease in net sales of approximately $165 million in the second quarter of 2024 compared to the second quarter of 2023.

In the six months ended June 30, 2024, the average selling price for our products was $324 per ton, or 19% lower compared to $400 per ton in the six months ended June 30, 2023.

This resulted in a decrease in net sales of approximately $732 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

In the third quarter of 2024, the average selling price for our products was $286 per ton, an increase of 7% compared to $268 per ton in the third quarter of 2023, primarily reflecting a higher average selling price in our Ammonia segment.

Higher average selling prices resulted in an increase in net sales of approximately $52 million in the third quarter of 2024 compared to the third quarter of 2023.

In the nine months ended September 30, 2024, the average selling price for our products was $311 per ton, or 13% lower compared to $356 per ton in the nine months ended September 30, 2023.

This resulted in a decrease in net sales of approximately $680 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Nitrogen Sales Volume

Sales volume in the second quarter of 2024 was 4.88 million tons compared to 4.94 million tons in the second quarter of 2023, which resulted in a decrease in net sales of approximately $38 million.

Lower sales volume reflects the impact of lower supply availability resulting from lower beginning inventory entering the second quarter of 2024, partially offset by an increase in sales volume as a result of the Waggaman acquisition.

Sales volume in the six months ended June 30, 2024 was 9.40 million tons compared to 9.47 million tons in the six months ended June 30, 2023.

This resulted in a decrease in net sales of approximately $13 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Sales volume in the third quarter of 2024 was 4.8 million tons compared to 4.7 million tons in the third quarter of 2023, which resulted in an increase in net sales of approximately $45 million.

Higher sales volume reflects an increase in sales volume as a result of the Waggaman acquisition on December 1, 2023, as further described below, partially offset by lower supply availability resulting from lower beginning inventory entering the third quarter of 2024.

Sales volume was approximately 14.2 million tons in both the nine months ended September 30, 2024 and 2023.

An increase in sales volume as a result of the Waggaman acquisition on December 1, 2023, was largely offset by lower sales volume due primarily to (i) lower production excluding the impact of the Waggaman acquisition, due in part to the impact of production outages from a winter storm in the first quarter of 2024, and (ii) lower beginning inventory compared to the prior year period.

CF INDUSTRIES HOLDINGS, INC.

In January 2024, a winter storm produced extremely cold temperatures that impacted our operations, including the temporary shut-down and lost production at certain of our plants.

Due to the impact of plant downtime resulting from the adverse weather and additional plant maintenance activity in the first quarter of 2024, we purchased and sold approximately 62,000 tons of ammonia and 48,000 tons of granular urea at near breakeven margins in order to fulfill sales commitments.

Due to the impact of plant downtime resulting from the adverse weather and additional plant maintenance activity in the first quarter of 2024, we purchased and resold approximately 62,000 tons of ammonia and 48,000 tons of granular urea at near breakeven margins in order to fulfill sales commitments.

The plant downtime led to approximately $75 million of additional costs in the first quarter of 2024 for maintenance, repairs and certain unabsorbed fixed costs.

CF INDUSTRIES HOLDINGS, INC.

Additionally, the Waggaman acquisition, which we completed on December 1, 2023, increased our ammonia sales volume in the second quarter and first six months of 2024 by approximately 161,000 tons and 283,000 tons, respectively.

The Waggaman acquisition, which we completed on December 1, 2023, increased our ammonia sales volume in the third quarter and first nine months of 2024 by approximately 217,000 tons and 500,000 tons, respectively.

Natural gas is the principal raw material used to produce our nitrogen products.

Natural gas is both a chemical feedstock and a fuel used to produce nitrogen products.

Natural gas is a significant cost component of our manufactured nitrogen products, representing approximately 28% and 40% of our production costs in the first six months of 2024 and the year ended December 31, 2023, respectively.

Natural gas is a significant cost component of our manufactured nitrogen products, representing approximately 27% and 40% of our production costs in the first nine months of 2024 and the year ended December 31, 2023, respectively.

Most of our nitrogen manufacturing facilities are located in the United States and Canada.

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The following table presents the average daily market price of natural gas at the Henry Hub, the most heavily-traded natural gas pricing point in North America:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 v.

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Average daily market price of natural gas Henry Hub (Louisiana) (per MMBtu) $ 2.08 $ 2.58 $ (0.50) (19) % $ 2.19 $ 2.46 $ (0.27) (11) %

In the second quarter of 2024, our cost of natural gas used for production, which includes the impact of realized natural gas derivatives, decreased 31% to $1.90 per MMBtu from $2.75 per MMBtu in the second quarter of 2023.

This decrease in natural gas costs resulted in an increase in gross margin of $81 million, excluding the impact of the Waggaman acquisition, compared to the second quarter of 2023.

In the first half of 2024, our cost of natural gas used for production, which includes the impact of realized natural gas derivatives, decreased 45% to $2.53 per MMBtu from $4.56 per MMBtu in the first half of 2023.

This decrease in natural gas costs resulted in an increase in gross margin of $350 million compared to the first half of 2023.

In the third quarter of 2024, our cost of natural gas used for production, which includes the impact of realized natural gas derivatives, decreased 17% to $2.10 per MMBtu from $2.54 per MMBtu in the third quarter of 2023.

This decrease in natural gas costs resulted in an increase in gross margin of $40 million, excluding the impact of the Waggaman acquisition, compared to the third quarter of 2023.

In the first nine months of 2024, our cost of natural gas used for production, which includes the impact of realized natural gas derivatives, decreased 39% to $2.38 per MMBtu from $3.90 per MMBtu in the first nine months of 2023.

This decrease in natural gas costs resulted in an increase in gross margin of $390 million, excluding the impact of the Waggaman acquisition, compared to the first nine months of 2023.

Natural Gas Market Factors

In the first quarter of 2024, warmer-than-normal average temperatures in North America drove lower heating demand for natural gas, in spite of a short-lived period of extremely cold temperatures in January 2024 that affected most of North America.

North American natural gas supply remained strong through the quarter, with a decline in supply occurring near the end of the quarter as producers responded to the weaker price environment.

North American natural gas supply remained strong through the quarter, with a decline in supply occurring near the end of the quarter as producers responded to a weaker price environment.

In addition, although the higher cost for natural gas outside of North America incentivized liquefaction facilities in the United States to export domestic natural gas during the first quarter of 2024, an outage at the Freeport liquefied natural gas facility limited total gas exports, supporting domestic supply.

During the second quarter of 2024, there was a decline in natural gas supply as producers responded to the weaker price environment, limiting the domestic supply available to be injected into storage during the quarter.

In addition, natural gas demand for power generation reached record levels in the second quarter as higher-than-normal temperatures drove increased cooling demand.

Despite lower supply availability and increased demand, North America ended the second quarter of 2024 with storage levels 10% higher compared to one year ago and 19% higher than the five-year average.

Financial Executive Summary

We reported net earnings attributable to common stockholders of $420 million for the three months ended June 30, 2024 compared to $527 million for the three months ended June 30, 2023, a decrease in net earnings of $107 million, or 20%.

The decrease in net earnings for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily reflects a decrease in gross margin.

Gross margin decreased by $125 million, or 16%, to $679 million for the three months ended June 30, 2024 compared to $804 million for the three months ended June 30, 2023.

The decrease in gross margin was due primarily to a 10% decrease in average selling prices to $322 per ton in the second quarter of 2024 from $359 per ton in the second quarter of 2023, which decreased gross margin by $165 million, and including the impact of the Waggaman acquisition, a decrease in sales volume, which decreased gross margin by $59 million.

The impact of lower selling prices was partially offset by lower natural gas costs, which increased gross margin by $81 million, excluding the impact of the Waggaman acquisition.

Diluted net earnings per share attributable to common stockholders decreased $0.40 per share, or 15%, to $2.30 per share, in the second quarter of 2024 compared to $2.70 per share in the second quarter of 2023, due primarily to lower net earnings, partially offset by lower weighted-average common shares outstanding as a result of shares repurchased under our share repurchase programs.

During the second quarter of 2024, there was a decline in natural gas supply as producers responded to a weaker price environment, limiting the domestic supply available to be injected into storage during the quarter.

In addition, natural gas demand for power generation reached record levels in the second quarter of 2024 as higher-than-normal temperatures drove increased cooling demand.

In the third quarter of 2024, the decline in natural gas supply continued as producers curtailed production in response to low natural gas prices.

Natural gas demand from the power generation sector set records despite increased solar and wind generation, as low natural gas prices increased demand for gas-fired power.

Liquefied natural gas exports were steady through the quarter as delays on commissioning of new facilities and maintenance activities at existing plants held exports at levels reached during the second quarter of 2024.

Natural gas in storage remained above historical levels despite continued below-average injections into storage during the quarter.

At the end of the third quarter of 2024, storage levels in North America were 4% higher compared to one year ago and 6% higher than the five-year average.

CF INDUSTRIES HOLDINGS, INC.

Financial Executive Summary

We reported net earnings attributable to common stockholders of $276 million for the three months ended September 30, 2024 compared to $164 million for the three months ended September 30, 2023, an increase in net earnings of $112 million, or 68%.

The increase in net earnings for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily reflects the following:

• an increase in gross margin of $67 million, as described below;

• a $40 million reduction in interest expense—net related to the Canada Revenue Agency Competent Authority Matter, which is described below under “Items Affecting Comparability of Results;” and

• a pre-tax impairment of our equity method investment of $43 million in the third quarter of 2023 that did not recur in 2024, which is described below under “Items Affecting Comparability of Results.”

These factors that increased gross margin were partially offset by a higher income tax provision as a result of an increase in earnings.

Gross margin increased by $67 million, or 18%, to $444 million for the three months ended September 30, 2024 compared to $377 million for the three months ended September 30, 2023.

The increase in gross margin was due primarily to a 7% increase in average selling prices to $286 per ton in the third quarter of 2024 from $268 per ton in the third quarter of 2023, which increased gross margin by $52 million, and including the impact of the Waggaman acquisition, an increase in sales volume, which increased gross margin by $18 million.

In addition, lower natural gas costs increased gross margin by $40 million, excluding the impact of the Waggaman acquisition.

These factors that increased gross margin were partially offset by higher costs for maintenance activity.

Diluted net earnings per share attributable to common stockholders increased $0.70 per share, or 82%, to $1.55 per share in the third quarter of 2024 compared to $0.85 per share in the third quarter of 2023, due primarily to higher net earnings and lower weighted-average common shares outstanding as a result of shares repurchased under our share repurchase program.

Diluted weighted-average common shares outstanding were 178.6 million shares for the three months ended September 30, 2024, a decrease of 7% compared to diluted weighted-average common shares outstanding of 192.9 million shares for the three months ended September 30, 2023.

Acquisition of Waggaman Ammonia Production Facility

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In connection with recording the acquisition, we recognized, among other items, goodwill, intangible assets and a supply contract liability.

CF INDUSTRIES HOLDINGS, INC.

Items Affecting Comparability of Results

For the three months ended June 30, 2024 and 2023, we reported net earnings attributable to common stockholders of $420 million and $527 million, respectively.

For the six months ended June 30, 2024 and 2023, we reported net earnings attributable to common stockholders of $614 million and $1.09 billion, respectively.

In addition to the impact of market conditions and the acquisition of the Waggaman ammonia production facility discussed above, certain items affected the comparability of our financial results for the three and six months ended June 30, 2024 and 2023.

For the three months ended September 30, 2024 and 2023, we reported net earnings attributable to common stockholders of $276 million and $164 million, respectively.

For the nine months ended September 30, 2024 and 2023, we reported net earnings attributable to common stockholders of $890 million and $1.25 billion, respectively.

The following table and related discussion outline these items and their impact on the comparability of our financial results for these periods.

The descriptions of items below that refer to amounts in the table refer to the pre-tax amounts unless otherwise noted.

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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(in millions)

Unrealized net mark-to-market gain on natural gas derivatives (1)

Unrealized net mark-to-market loss (gain) on natural gas derivatives (1)

$ 1 $ 1 $ 7 $ 5 $ (33) $ (25) $ (65) $ (50)

(Gain) loss on foreign currency transactions, including intercompany loans (2)

Loss on foreign currency transactions, including intercompany loans (2)

1 1 7 5 2 2 5 4

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Acquisition and integration costs — — 11 9 4 3 27 21

Impairment of equity method investment in PLNL (3)

— — 43 33 — — 43 33

Canada Revenue Agency Competent Authority Matter:

Interest expense (income)—net (4)

(40) (39) — — (40) (39) — —

______________________________________________________________________________

(1) Included in cost of sales in our consolidated statements of operations.

(2) Included in other operating—net in our consolidated statements of operations.

Unrealized net mark-to-market gain on natural gas derivatives

(3) Included in equity in earnings (losses) of operating affiliate in our consolidated statements of operations.

(4) Included in interest expense and interest income in our consolidated statements of operations.

Unrealized net mark-to-market loss (gain) on natural gas derivatives

Natural gas is the largest and most volatile single component of the manufacturing cost for our nitrogen-based products.

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This can result in volatility in reported earnings due to the unrealized mark-to-market adjustments that occur from changes in the value of the derivatives, which are reflected in cost of sales in our consolidated statements of operations.

In the three months ended June 30, 2024, we recognized an unrealized net mark-to-market gain on natural gas derivatives of $1 million.

In the six months ended June 30, 2024 and 2023, we recognized unrealized net mark-to-market gains on natural gas derivatives of $34 million and $72 million, respectively.

(Gain) loss on foreign currency transactions, including intercompany loans

In the six months ended June 30, 2024 and 2023, we recognized a loss (gain) on foreign currency transactions of $1 million and $(2) million, respectively.

(Gain) loss on foreign currency transactions consists of foreign currency exchange

CF INDUSTRIES HOLDINGS, INC.

rate impacts on foreign currency denominated transactions, including the impact of changes in foreign currency exchange rates on intercompany loans that are not permanently invested.

In the three months ended September 30, 2024 and 2023, we recognized unrealized net mark-to-market losses on natural gas derivatives of $1 million and $7 million, respectively.

In the nine months ended September 30, 2024 and 2023, we recognized unrealized net mark-to-market gains on natural gas derivatives of $33 million and $65 million, respectively.

Loss on foreign currency transactions, including intercompany loans

In the three months ended September 30, 2024 and 2023, we recognized a loss on foreign currency transactions of $1 million and $7 million, respectively.

In the nine months ended September 30, 2024 and 2023, we recognized a loss on foreign currency transactions of $2 million and $5 million, respectively.

Loss on foreign currency transactions consists of foreign currency exchange rate impacts on foreign currency denominated transactions, including the impact of changes in foreign currency exchange rates on intercompany loans that are not permanently invested.

operations restructuring

In the six months ended June 30, 2023, we incurred restructuring costs of $2 million related to the permanent closure of our Ince facility in the United Kingdom.

In the three and nine months ended September 30, 2023, we incurred restructuring costs of $5 million and $7 million, respectively, consisting primarily of the recognition of an asset retirement obligation and post-employment benefits related to contractual and statutory obligations due to employees as a result of our approved plan to permanently close the Billingham ammonia plant.

CF INDUSTRIES HOLDINGS, INC.

Acquisition and integration costs

On December 1, 2023, we acquired an ammonia production facility located in Waggaman, Louisiana, as described above under “Acquisition of Waggaman Ammonia Production Facility.” In the three months ended June 30, 2024 and 2023, we incurred $1 million and $3 million, respectively, of acquisition and integration costs related to the Waggaman acquisition.

In the six months ended June 30, 2024 and 2023, we incurred $4 million and $16 million, respectively, of acquisition and integration costs related to the Waggaman acquisition.

On December 1, 2023, we acquired an ammonia production facility located in Waggaman, Louisiana, as described above under “Acquisition of Waggaman Ammonia Production Facility.” 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.

Impairment of equity method investment in PLNL

PLNL, our joint venture in Trinidad, 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.

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 $40 million of income consisting of a $37 million reduction in interest expense and $3 million of interest income.

CF INDUSTRIES HOLDINGS, INC.

Consolidated Results of Operations

The following table presents our consolidated results of operations and certain supplemental data for the three and six months ended June 30, 2024 and 2023:

Three Months Ended June 30, Six Months Ended June 30,

The following table presents our consolidated results of operations and certain supplemental data for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 v.

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Acquisition and integration costs — 11 (11) (100) % 4 27 (23) (85) %

Other operating—net (39) 3 (42) N/M (22) (32) 10 31 %

Other operating—net 4 13 (9) (69) % (18) (19) 1 5 %

Total other operating costs and expenses 82 97 (15) (15) % 228 228 — — %

Equity in (losses) earnings of operating affiliate (3) 7 (10) N/M (1) 24 (25) N/M

Equity in earnings (losses) of operating affiliate 2 (36) 38 N/M 1 (12) 13 N/M

Operating earnings 364 244 120 49 % 1,305 1,804 (499) (28) %

Interest expense (income)—net 9 (4) 13 N/M 16 6 10 167 %

Interest expense — 39 (39) (100) % 74 115 (41) (36) %

Interest income (32) (45) 13 29 % (90) (115) 25 22 %

Other non-operating—net (4) (3) (1) (33) % (8) (8) — — %

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Average daily market price of natural gas Henry Hub (Louisiana) $ 2.08 $ 2.58 $ (0.50) (19) % $ 2.19 $ 2.46 $ (0.27) (11) %

Unrealized net mark-to-market gain on natural gas derivatives $ (1) $ — $ (1) N/M $ (34) $ (72) $ 38 53 %

Unrealized net mark-to-market loss (gain) on natural gas derivatives $ 1 $ 7 $ (6) (86) % $ (33) $ (65) $ 32 49 %

Depreciation and amortization $ 229 $ 213 $ 16 8 % $ 704 $ 640 $ 64 10 %

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UAN (32%) (4)

1,521 1,749 (228) (13) % 4,985 5,012 (27) (1) %

AN 364 416 (52) (13) % 1,038 1,104 (66) (6) %

CF INDUSTRIES HOLDINGS, INC.

___________________________________________________________________________

N/M—Not Meaningful

CF INDUSTRIES HOLDINGS, INC.

(1) Includes the cost of natural gas used for production and related transportation that is included in cost of sales during the period under the first-in, first-out inventory cost method.

2 unchanged sentences

(3) Gross ammonia production, including amounts subsequently upgraded on-site into granular urea, UAN, or AN.

Second Quarter of 2024 Compared to Second Quarter of 2023

Our total net sales decreased $203 million, or 11%, to $1.57 billion in the second quarter of 2024 compared to $1.78 billion in the second quarter of 2023.

The change in our net sales reflects (i) the impact of the Waggaman acquisition completed on December 1, 2023, which increased our net sales by $59 million, and (ii) a $262 million, or 15%, decline in our net sales excluding the impact of the Waggaman acquisition, due to a decrease in our average selling price and lower sales volumes.

Our average selling price decreased 10% to $322 per ton in the second quarter of 2024 compared to $359 per ton in the second quarter of 2023, due to lower average selling prices across most of our segments, as lower global energy costs reduced the global market clearing price required to meet global demand.

The impact of lower average selling prices was a decrease in net sales of approximately $165 million for the second quarter of 2024 compared to the second quarter of 2023.

Our total sales volume was approximately 4.9 million product tons in both the second quarter of 2024 and 2023 as lower sales volume in our Ammonia, UAN and AN segments was partially offset by higher sales volume in our Granular Urea segment.

The impact of lower sales volumes, excluding the impact of the Waggaman acquisition that increased our net sales by $59 million, was a decrease in net sales of approximately $97 million.

Gross ammonia production for the three and six months ended June 30, 2024 was 2.6 million tons and 4.8 million tons, respectively.

(4) UAN product tons assume a 32% nitrogen content basis for production volume.

Third Quarter of 2024 Compared to Third Quarter of 2023

Our total net sales increased $97 million, or 8%, to $1.37 billion in the third quarter of 2024 compared to $1.27 billion in the third quarter of 2023.

The change in our net sales reflects (i) the impact of the Waggaman acquisition completed on December 1, 2023, which increased our net sales by $77 million, and (ii) a $20 million, or 2%, increase in our net sales excluding the impact of the Waggaman acquisition, due primarily to an increase in our average selling price.

Our average selling price increased 7% to $286 per ton in the third quarter of 2024 compared to $268 per ton in the third quarter of 2023, due to higher average selling prices across most of our segments.

The impact of higher average selling prices was an increase in net sales of approximately $52 million for the third quarter of 2024 compared to the third quarter of 2023.

Our total sales volume was approximately 4.8 million product tons in the third quarter of 2024 compared to 4.7 million in the third quarter of 2023 as higher sales volume in our Ammonia and Granular Urea segments was partially offset by lower sales volume in our UAN, Other and AN segments.

Higher sales volume in our Ammonia segment includes the impact of the Waggaman acquisition of 217,000 product tons.

Gross ammonia production for the three and nine months ended September 30, 2024 was 2.4 million tons and 7.2 million tons, respectively.

We expect gross ammonia production for 2024 will be approximately 9.8 million tons.

Cost of Sales

Our total cost of sales decreased $78 million, or 8%, to $893 million in the second quarter of 2024 from $971 million in the second quarter of 2023.

The decrease in our cost of sales was due primarily to lower costs for natural gas, including the impact of realized derivatives, which decreased cost of sales by $81 million, excluding the impact of the Waggaman acquisition.

The impact of the Waggaman acquisition increased our cost of sales by $47 million.

Cost of sales averaged $183 per ton in the second quarter of 2024 compared to $196 per ton in the second quarter of 2023.

Our cost of natural gas, including the impact of realized derivatives, decreased 31% to $1.90 per MMBtu in the second quarter of 2024 from $2.75 per MMBtu in the second quarter of 2023.

Our total cost of sales increased $30 million, or 3%, to $926 million in the third quarter of 2024 from $896 million in the third quarter of 2023.

The increase in our cost of sales was due primarily to the impact of the Waggaman acquisition, which increased our cost of sales by $50 million, and higher costs for maintenance activity, partially offset by lower costs for natural gas, including the impact of realized derivatives, which decreased cost of sales by $40 million, excluding the impact of the Waggaman acquisition, and lower sales volume, excluding the impact of the Waggaman acquisition, which decreased cost of sales by $20 million.

Cost of sales averaged $193 per ton in the third quarter of 2024 compared to $189 per ton in the third quarter of 2023.

The increase was due primarily to higher costs for maintenance activity, partially offset by lower realized natural gas costs, including the impact of realized derivatives.

Our cost of natural gas, including the impact of realized derivatives, decreased 17% to $2.10 per MMBtu in the third quarter of 2024 from $2.54 per MMBtu in the third quarter of 2023.

The impact of the Waggaman acquisition on our cost of sales per ton was not material.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $76 million in the second quarter of 2024, a 7% increase from $71 million in the second quarter of 2023.

The increase was due primarily to higher amortization expense related to the customer relationships recorded in conjunction with the Waggaman acquisition on December 1, 2023.

Selling, general and administrative expenses were $78 million in the third quarter of 2024, a 15% increase from $68 million in the third quarter of 2023.

The increase was due primarily to an increase in amortization expense resulting from the customer relationships recognized in conjunction with the Waggaman acquisition on December 1, 2023.

Acquisition and Integration Costs

On December 1, 2023, we acquired an ammonia production facility located in Waggaman, Louisiana, as described above under “Acquisition of Waggaman Ammonia Production Facility.” In the three months ended September 30, 2023, we incurred $9 million of acquisition-related costs and $2 million of integration costs.

Other Operating—Net

Other operating—net was $39 million of income in the second quarter of 2024 compared to $3 million of expense in the second quarter of 2023.

The $39 million of income in the second quarter of 2024 consists primarily of gains on sales of emission credits, partially offset by costs related to FEED studies for our clean energy initiatives.

See “Our Strategy,” above, for additional information related to our clean energy initiatives.

Other operating—net was $4 million of expense in the third quarter of 2024 compared to $13 million of expense in the third quarter of 2023.

The $4 million of expense in the third quarter of 2024 consists primarily of costs related to FEED studies for our clean energy initiatives.

The $13 million of expense in the third quarter of 2023 consists primarily of a loss on foreign currency transactions and costs related to FEED studies for our clean energy initiatives.

See “Our Strategy,” above, for

CF INDUSTRIES HOLDINGS, INC.

Equity in (Losses) Earnings of Operating Affiliate

Equity in (losses) earnings of operating affiliate was a $3 million loss in the second quarter of 2024 compared to $7 million of earnings in the second quarter of 2023.

Lower equity in earnings of operating affiliate reflects a decrease in the operating results of PLNL as a result of a plant turnaround in the second quarter of 2024 at the PLNL facility in Trinidad and lower ammonia selling prices.

Interest Expense (Income)—Net

Net interest expense was $9 million of expense in the second quarter of 2024 compared to $4 million of income in the second quarter of 2023.

The change of $13 million was due primarily to a decrease in interest income on short-term investments.

additional information related to our clean energy initiatives.

Equity in Earnings (Losses) of Operating Affiliate

Equity in earnings (losses) of operating affiliate was $2 million of earnings in the third quarter of 2024 compared to $36 million of losses in the third quarter of 2023, which includes an impairment of our equity method investment in PLNL of $43 million.

See “Items Affecting Comparability of Results—Impairment of equity method investment in PLNL,” above, for further discussion.

Lower equity in earnings of operating affiliate in the third quarter of 2024 compared to the third quarter of 2023, excluding the impact from the impairment charge, primarily reflects a decrease in the operating results of PLNL as a result of higher natural gas costs and lower operating rates at PLNL due to lower availability of natural gas.

Interest Expense

The decrease in interest expense of $39 million in the third quarter of 2024 compared to the third quarter of 2023 was due primarily to a $37 million reduction in interest expense related to discretionary interest relief that is further described above under “Items Affecting Comparability of Results—Canada Revenue Agency Competent Authority Matter.”

Interest Income

Interest income was $32 million in the third quarter of 2024 compared to $45 million in the third quarter of 2023.

The decrease of $13 million was due primarily to a decrease in interest income on short-term investments, partially offset by $3 million in interest income related to discretionary interest relief that is further described above under “Items Affecting Comparability of Results—Canada Revenue Agency Competent Authority Matter.”

Income Tax Provision

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 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%.

Our effective tax rate is impacted by earnings attributable to the noncontrolling interest in 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, or 22.6%, if based on pre-tax income exclusive of the earnings attributable to the noncontrolling interest of $86 million.

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, or 20.3%, if based on pre-tax income exclusive of the $79 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, or 17.7%, if based on pre-tax income exclusive of the earnings attributable to the noncontrolling interest of $65 million.

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, or 12.3%, if based on pre-tax income exclusive of the $66 million of earnings attributable to the noncontrolling interest.

See Note 14—Noncontrolling Interest for additional information.

Net Earnings Attributable to Noncontrolling Interest

Net earnings attributable to noncontrolling interest increased $7 million to $86 million in the second quarter of 2024 compared to $79 million in the second quarter of 2023 due to higher earnings of CFN driven by lower natural gas costs.

Net earnings attributable to noncontrolling interest were $65 million in the third quarter of 2024, essentially unchanged from $66 million in the third quarter of 2023.

Diluted Net Earnings Per Share Attributable to Common Stockholders

Diluted net earnings per share attributable to common stockholders decreased $0.40, or 15%, to $2.30 per share in the second quarter of 2024 from $2.70 per share in the second quarter of 2023.

This decrease was due primarily to a decrease in gross margin, driven by lower average selling prices, partially offset by lower costs for natural gas.

Additionally, diluted weighted-average common shares outstanding declined 6% from 195.0 million shares for the three months ended June 30, 2023 to 182.8 million shares for the three months ended June 30, 2024, due primarily to repurchases of common shares under our share repurchase programs.

Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

Our total net sales decreased $0.75 billion, or 20%, to $3.04 billion in the first six months of 2024 compared to $3.79 billion in the first six months of 2023.

The change in our net sales reflects (i) the impact of the Waggaman acquisition completed on December 1, 2023, which increased our net sales by $114 million, and (ii) a $0.86 billion, or 23%, decline in our net sales excluding the impact of the Waggaman acquisition, due primarily to a decrease in average selling prices of approximately 19%.

Our average selling price was $324 per ton in the first six months of 2024 compared to $400 per ton in the first six months of 2023, due to lower average selling prices across all our segments, as lower global energy costs reduced the global market clearing price required to meet global demand.

The impact of lower average selling prices was a decrease in net sales of approximately $732 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Our total sales volume was 9.4 million product tons in the first six months of 2024 compared to 9.5 million in the first six months of 2023, respectively, as lower sales volume in our Granular Urea and UAN segments was partially offset by higher sales volume in our Ammonia segment.

The impact of lower sales volume, excluding the impact of the Waggaman acquisition, was a decrease in net sales of approximately $127 million.

Diluted net earnings per share attributable to common stockholders increased $0.70, or 82%, to $1.55 per share in the third quarter of 2024 from $0.85 per share in the third quarter of 2023.

This increase was due primarily to an increase in gross margin, driven by higher average selling prices and lower costs for natural gas, a reduction in interest expense, and a pre-tax impairment of our equity method investment in the third quarter of 2023 that did not recur in 2024.

These factors were partially offset by an increase in the income tax provision resulting from higher profitability.

Additionally, diluted weighted-average common shares outstanding declined 7% from 192.9 million shares for the three months ended September 30, 2023 to 178.6 million shares for the three months ended September 30, 2024, due primarily to repurchases of common shares under our share repurchase program.

CF INDUSTRIES HOLDINGS, INC.

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

Our total net sales decreased $648 million, or 13%, to $4.41 billion in the first nine months of 2024 compared to $5.06 billion in the first nine months of 2023.

The change in our net sales reflects (i) the impact of the Waggaman acquisition completed on December 1, 2023, which increased our net sales by $191 million, and (ii) a $839 million, or 17%, decline in our net sales excluding the impact of the Waggaman acquisition, due primarily to a decrease in average selling prices of approximately 13%.

Our average selling price was $311 per ton in the first nine months of 2024 compared to $356 per ton in the first nine months of 2023, due to lower average selling prices across all our segments, as lower global energy costs reduced the global market clearing price required to meet global demand.

The impact of lower average selling prices was a decrease in net sales of approximately $680 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Our total sales volume was 14.2 million product tons in both the first nine months of 2024 and the first nine months of 2023, as lower sales volume in our UAN, Other and AN segments was partially offset by higher sales volume in our Ammonia segment driven by the impact of the Waggaman acquisition.

Excluding the impact of the Waggaman acquisition, the impact of lower sales volume was a decrease in net sales of approximately $159 million.

Cost of Sales

Our total cost of sales decreased $166 million, or 8%, to $1.95 billion in the first six months of 2024 from $2.12 billion in the first six months of 2023.

Our total cost of sales decreased $136 million, or 5%, to $2.88 billion in the first nine months of 2024 from $3.02 billion in the first nine months of 2023.

The decrease in our cost of sales primarily reflects lower costs for natural gas, including the impact of realized derivatives.

The impact of lower natural gas costs decreased cost of sales by $390 million, excluding the impact of the Waggaman acquisition.

The impact of lower natural gas costs was partially offset by higher costs for planned and unplanned maintenance and repair activities in the first six months of 2024, including as a result of the adverse weather in January 2024, as discussed above under “Nitrogen Sales Volume,” which increased cost of sales by approximately $75 million.

The impact of the Waggaman acquisition increased our cost of sales by $108 million.

Cost of sales also includes the impact of a $34 million unrealized net mark-to-market gain on natural gas derivatives in the first six months of 2024 compared to a $72 million gain in the first six months of 2023.

Cost of sales averaged $208 per ton in the first six months of 2024 compared to $224 per ton in the first six months of 2023.

Our cost of natural gas, including the impact of realized derivatives, decreased 45% to $2.53 per MMBtu in the first six months of 2024 from $4.56 per MMBtu in the first six months of 2023.

The impact of lower natural gas costs was partially offset by higher costs for planned and unplanned maintenance and repair activities in the first nine months of 2024, including as a result of the adverse weather in January 2024, as discussed above under “Nitrogen Sales Volume,” and the impact of the Waggaman acquisition, which increased our cost of sales by $158 million.

Cost of sales also includes the impact of a $33 million unrealized net mark-to-market gain on natural gas derivatives in the first nine months of 2024 compared to a $65 million gain in the first nine months of 2023.

Cost of sales averaged $203 per ton in the first nine months of 2024 compared to $212 per ton in the first nine months of 2023.

Our cost of natural gas, including the impact of realized derivatives, decreased 39% to $2.38 per MMBtu in the first nine months of 2024 from $3.90 per MMBtu in the first nine months of 2023.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $19 million to $164 million in the first six months of 2024 compared to $145 million in the first six months of 2023.

The increase was due primarily to higher amortization expense related to the customer relationships recorded in conjunction with the Waggaman acquisition on December 1, 2023, and an increase in costs related to certain corporate initiatives.

Selling, general and administrative expenses increased $29 million to $242 million in the first nine months of 2024 compared to $213 million in the first nine months of 2023.

The increase was due primarily to an increase in amortization expense as a result of the customer relationships recognized in conjunction with the Waggaman acquisition on December 1, 2023, and an increase in costs related to certain corporate initiatives.

Acquisition and Integration Costs

On December 1, 2023, we acquired an ammonia production facility located in Waggaman, Louisiana, as described above under “Acquisition of Waggaman Ammonia Production Facility.” In the six months ended June 30, 2024 and 2023, we incurred $4 million and $16 million, respectively, of acquisition and integration costs related to the Waggaman acquisition.

On December 1, 2023, we acquired an ammonia production facility located in Waggaman, Louisiana, as described above under “Acquisition of Waggaman Ammonia Production Facility.” In the nine months ended September 30, 2024, we incurred $4 million of integration costs related to the Waggaman acquisition.

In the nine months ended September 30, 2023, we incurred $25 million of acquisition-related costs and $2 million of integration costs.

Other Operating—Net

Other operating—net was $22 million of income in the first six months of 2024 compared to $32 million of income in the first six months of 2023.

The $22 million of income in the first six months of 2024 consists primarily of gains on sales of emission credits, partially offset by costs related to FEED studies for our clean energy initiatives.

Other operating—net was $18 million of income in the first nine months of 2024 compared to $19 million of income in the first nine months of 2023.

In both the first nine months of 2024 and 2023, the income recognized consists primarily of gains on sales of emission credits, partially offset by costs related to FEED studies for our clean energy initiatives.

See “Our Strategy,” above, for additional information related to our clean energy initiatives.

The $32 million of income in the first six months of 2023 consists primarily of gains on sales of emission credits.

Equity in (Losses) Earnings of Operating Affiliate

Equity in (losses) earnings of operating affiliate was a $1 million loss in the first six months of 2024 compared to $24 million of earnings in the first six months of 2023.

Interest Expense—Net

Net interest expense was $16 million in the first six months of 2024 compared to $6 million in the first six months of 2023.

The increase of $10 million was due primarily to a decrease in interest income on short-term investments, partially offset by a decrease in interest on tax liabilities.

CF INDUSTRIES HOLDINGS, INC.

Equity in Earnings (Losses) of Operating Affiliate

Equity in earnings (losses) of operating affiliate was $1 million of earnings in the first nine months of 2024 compared to $12 million of losses in the first nine months of 2023, which includes an impairment of our equity method investment in PLNL of $43 million.

See “Items Affecting Comparability of Results—Impairment of equity method investment in PLNL,” above, for further discussion.

Lower equity in earnings of operating affiliate in the first nine months of 2024 compared to the first nine months of 2023, excluding the impact from the impairment charge, primarily reflects a decrease in the operating results of PLNL as a result of a plant turnaround in the second quarter of 2024 at the PLNL facility in Trinidad, lower ammonia selling prices, higher natural gas costs and lower operating rates at PLNL due to lower availability of natural gas.

Interest Expense

Interest expense was $74 million in the first nine months of 2024 compared to $115 million in the first nine months of 2023.

The decrease of $41 million was due primarily to a $37 million reduction in interest expense related to discretionary interest relief that is further described above under “Items Affecting Comparability of Results—Canada Revenue Agency Competent Authority Matter.”

Interest Income

Interest income was $90 million in the first nine months of 2024 compared to $115 million in the first nine months of 2023.

The decrease of $25 million was due primarily to a decrease in interest income on short-term investments, partially offset by $3 million in interest income related to discretionary interest relief that is further described above under “Items Affecting Comparability of Results—Canada Revenue Agency Competent Authority Matter.”

Income Tax Provision

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.

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 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, or 23.1%, if based on pre-tax income exclusive of the earnings attributable to the noncontrolling interest of $130 million.

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

CF INDUSTRIES HOLDINGS, INC.

earnings attributable to the noncontrolling interest, would be 2.3 percentage points higher, or 21.8%, if based on pre-tax income exclusive of the earnings attributable to the noncontrolling interest of $169 million.

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, or 21.5%, if based on pre-tax income exclusive of the earnings attributable to the noncontrolling interest of $195 million.

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, or 20.7%, if based on pre-tax income exclusive of the earnings attributable to the noncontrolling interest of $235 million.

Net Earnings Attributable to Noncontrolling Interest

Net earnings attributable to noncontrolling interest decreased $39 million to $130 million in the first six months of 2024 compared to $169 million in the first six months of 2023 due to lower earnings of CFN driven by lower average selling prices, partially offset by lower natural gas costs.

Net earnings attributable to noncontrolling interest decreased $40 million to $195 million in the first nine months of 2024 compared to $235 million in the first nine months of 2023 due to lower earnings of CFN driven by lower average selling prices, partially offset by lower natural gas costs.

Diluted Net Earnings Per Share Attributable to Common Stockholders

Diluted net earnings per share attributable to common stockholders decreased $2.24, or 40%, to $3.31 per share in the first six months of 2024 from $5.55 per share in the first six months of 2023.

Diluted net earnings per share attributable to common stockholders decreased $1.56, or 24%, to $4.86 per share in the first nine months of 2024 from $6.42 per share in the first nine months of 2023.

This decrease was due primarily to a decrease in gross margin, driven by lower average selling prices, partially offset by lower costs for natural gas.

Lower gross margin was partially offset by a decrease in the income tax provision resulting from lower profitability and a decrease in net earnings attributable to noncontrolling interest.

Additionally, diluted weighted-average common shares outstanding declined 5% from 195.9 million shares for the six months ended June 30, 2023 to 185.5 million shares for the six months ended June 30, 2024, due primarily to repurchases of common shares under our share repurchase programs.

Additionally, diluted weighted-average common shares outstanding declined 6% from 194.9 million shares for the nine months ended September 30, 2023 to 183.1 million shares for the nine months ended September 30, 2024, due primarily to repurchases of common shares under our share repurchase programs.

CF INDUSTRIES HOLDINGS, INC.

Operating Results by Business Segment

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(dollars 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

Gross margin percentage 23.5 % 41.2 % 33.0 % 22.6 % 36.8 % 32.4 %

Three months ended June 30, 2023

Three months ended September 30, 2023

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

2 unchanged sentences

Gross margin percentage 8.9 % 37.2 % 30.6 % 30.7 % 41.9 % 29.6 %

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

Gross margin percentage 25.3 % 43.2 % 37.7 % 17.6 % 39.5 % 34.7 %

Six months ended June 30, 2023

Nine months ended September 30, 2023

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

10 unchanged sentences

The following table presents summary operating data for our Ammonia segment:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2024 (1)

14 unchanged sentences

Depreciation and amortization $ 55 $ 39 $ 16 41 % $ 176 $ 117 $ 59 50 %

Unrealized net mark-to-market gain on natural gas derivatives $ — $ — $ — — % $ (12) $ (21) $ 9 43 %

Unrealized net mark-to-market loss (gain) on natural gas derivatives $ — $ 2 $ (2) (100) % $ (12) $ (19) $ 7 37 %

_______________________________________________________________________________

3 unchanged sentences

Nutrient tons represent the tons of nitrogen within the product tons.

Second Quarter of 2024 Compared to Second Quarter of 2023

Net sales in our Ammonia segment decreased by $116 million, or 22%, to $409 million in the second quarter of 2024 from $525 million in the second quarter of 2023.

The decrease in our net sales reflects a 16% decrease in average selling prices and a 7% decrease in sales volume, including the impact of the Waggaman acquisition completed on December 1, 2023.

Average selling prices decreased to $418 per ton in the second quarter of 2024 compared to $499 per ton in the second quarter of 2023 as lower global energy costs reduced the global market clearing price required to meet global demand.

Ammonia sales volume in the second quarter of 2024 was approximately 979,000 tons, a decrease of 7% compared to the second quarter of 2023.

The decrease in sales volume was due primarily to lower supply availability resulting from lower beginning inventory and, due to unfavorable weather, lower spring ammonia applications in North America compared to the second quarter of 2023, partially offset by the impact of the Waggaman acquisition completed on December 1, 2023, which increased our ammonia sales volume in the second quarter of 2024 by approximately 161,000 tons.

Third Quarter of 2024 Compared to Third Quarter of 2023

Net sales in our Ammonia segment increased by $118 million, or 50%, to $353 million in the third quarter of 2024 from $235 million in the third quarter of 2023.

The increase in our net sales reflects a 21% increase in average selling prices and a 24% increase in sales volume, including the impact of the Waggaman acquisition completed on December 1, 2023.

Average selling prices increased to $372 per ton in the third quarter of 2024 compared to $308 per ton in the third quarter of 2023.

The increase in our average selling price was due primarily to lower global supply availability due in part to lower natural gas availability in Trinidad and Egypt.

Ammonia sales volume in the third quarter of 2024 was approximately 948,000 tons, an increase of 184,000 tons, or 24%, compared to the third quarter of 2023.

The increase in sales volume was due primarily to the impact of the Waggaman acquisition completed on December 1, 2023, which increased our ammonia sales volume in the third quarter of 2024 by approximately 217,000 tons.

The impact of the Waggaman acquisition was partially offset by lower supply availability resulting from lower beginning inventory entering the third quarter of 2024.

Cost of Sales.

Cost of sales in our Ammonia segment averaged $268 per ton in the second quarter of 2024, a 7% decrease from $288 per ton in the second quarter of 2023.

The decrease was due primarily to lower realized natural gas costs, including the impact of realized derivatives, partially offset by higher costs for maintenance activity.

Cost of sales in our Ammonia segment averaged $284 per ton in the third quarter of 2024, a 1% increase from $281 per ton in the third quarter of 2023.

The increase was due primarily to higher costs for maintenance activity, partially offset by lower realized natural gas costs, including the impact of realized derivatives.

The impact of the Waggaman acquisition on our cost of sales per ton in our Ammonia segment was not material.

Gross Margin .

Gross margin in our Ammonia segment decreased by $75 million to $147 million in the second quarter of 2024 from $222 million in the second quarter of 2023, and our gross margin percentage was 35.9% in the second quarter of 2024 compared to 42.3% in the second quarter of 2023 .

The decrease in gross margin was due primarily to a 16% decrease in average selling prices, which decreased gross margin by $60 million and, excluding the impact of the Waggaman acquisition completed on December 1, 2023, a decrease in sales volume, which decreased gross margin by $62 million and a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $15 million.

These factors that decreased gross margin were partially offset by a decrease in realized natural gas costs, including the impact of realized derivatives, which

Gross margin in our Ammonia segment increased by $62 million to $83 million in the third quarter of 2024 from $21 million in the third quarter of 2023, and our gross margin percentage was 23.5% in the third quarter of 2024 compared to 8.9% in the third quarter of 2023 .

The increase in gross margin was due primarily to a 21% increase in average selling prices, which increased gross margin by $56 million, the impact of the Waggaman acquisition, which increased gross margin by $27 million, and a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $17 million.

These factors that increased gross margin were partially offset by a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $37 million, and, excluding the impact of the

CF INDUSTRIES HOLDINGS, INC.

increased gross margin by $50 million, and the impact of the Waggaman acquisition, which increased gross margin by $12 million.

Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

Net sales in our Ammonia segment decreased by $138 million, or 15%, to $811 million in the six months ended June 30, 2024 from $949 million in the six months ended June 30, 2023.

The decrease in our net sales reflects a 23% decrease in average selling prices, partially offset by an 11% increase in sales volume, including the impact of the Waggaman acquisition completed on December 1, 2023.

Average selling prices decreased to $428 per ton in the six months ended June 30, 2024 compared to $557 per ton in the six months ended June 30, 2023 as lower global energy costs reduced the global market clearing price required to meet global demand.

Waggaman acquisition completed on December 1, 2023, a decrease in sales volume, which decreased gross margin by $3 million.

Gross margin also includes the impact of a $2 million unrealized net mark-to-market loss on natural gas derivatives in the third quarter of 2023.

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

Net sales in our Ammonia segment decreased by $20 million, or 2%, to $1.16 billion in the nine months ended September 30, 2024 from $1.18 billion in the nine months ended September 30, 2023.

The decrease in our net sales reflects a 15% decrease in average selling prices, partially offset by a 15% increase in sales volume, including the impact of the Waggaman acquisition completed on December 1, 2023.

Average selling prices decreased to $409 per ton in the nine months ended September 30, 2024 compared to $480 per ton in the nine months ended September 30, 2023 as lower global energy costs reduced the global market clearing price required to meet global demand.

In January 2024, a winter storm produced extremely cold temperatures that impacted our operations, including the temporary shut-down of certain of our plants.

As a result of the adverse weather, we incurred additional maintenance costs in the first quarter of 2024.

Due to the impact of plant downtime resulting from the adverse weather and additional plant maintenance activity in the first quarter of 2024, we purchased and sold approximately 62,000 tons of ammonia at near breakeven margins in order to fulfill sales commitments.

Ammonia sales volume in the six months ended June 30, 2024 was 1.9 million tons, an increase of 11% compared to 1.7 million tons in the six months ended June 30, 2023.

The increase in sales volume reflects the impact of the Waggaman acquisition completed on December 1, 2023, which increased our ammonia sales volume in the six months ended June 30, 2024 by approximately 283,000 tons, and approximately 62,000 tons of ammonia purchased and sold as described above, partially offset by lower supply availability resulting from lower beginning inventory, and, due to unfavorable weather, lower spring ammonia applications in North America compared to the six months ended June 30, 2023.

Due to the impact of plant downtime resulting from the adverse weather and additional plant maintenance activity in the first quarter of 2024, we purchased and resold approximately 62,000 tons of ammonia at near breakeven margins in order to fulfill sales commitments.

Ammonia sales volume in the nine months ended September 30, 2024 was 2.8 million tons, an increase of 15% compared to 2.5 million tons in the nine months ended September 30, 2023.

The increase in sales volume reflects the impact of the Waggaman acquisition completed on December 1, 2023, which increased our ammonia sales volume in the nine months ended September 30, 2024 by approximately 500,000 tons, and approximately 62,000 tons of ammonia purchased and resold as described above, partially offset by lower supply availability resulting from lower beginning inventory, and, due to unfavorable weather, lower spring ammonia applications in North America compared to the nine months ended September 30, 2023.

Cost of Sales.

Cost of sales in our Ammonia segment averaged $316 per ton in the six months ended June 30, 2024, an 8% decrease from $342 per ton in the six months ended June 30, 2023.

Cost of sales in our Ammonia segment averaged $305 per ton in the nine months ended September 30, 2024, a 6% decrease from $323 per ton in the nine months ended September 30, 2023.

The decrease was due primarily to lower realized natural gas costs, including the impact of realized derivatives, partially offset by higher costs for maintenance, repairs and certain unabsorbed fixed costs as a result of plant downtime, including the impact of the adverse weather in January 2024 as discussed above.

1 unchanged sentence

Gross Margin .

Gross margin in our Ammonia segment decreased by $154 million to $212 million in the six months ended June 30, 2024 from $366 million in the six months ended June 30, 2023, and our gross margin percentage was 26.1% in the six months ended June 30, 2024 compared to 38.6% in the six months ended June 30, 2023 .

Gross margin in our Ammonia segment decreased by $92 million, or 24%, to $295 million in the nine months ended September 30, 2024 from $387 million in the nine months ended September 30, 2023, and our gross margin percentage was 25.3% in the nine months ended September 30, 2024 compared to 32.7% in the nine months ended September 30, 2023 .

The decrease in gross margin was due primarily to a 15% decrease in average selling prices, which decreased gross margin by $164 million, a net increase in manufacturing, maintenance and other costs, which decrease d gross margin by $100 million, and, excluding the impact of the Waggaman acquisition, a decrease in sales volume, which decreased gross margin by $20 million.

These factors that decreased gross margin were partially offset by the impact of a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $166 million, and the impact of the Waggaman acquisition, which increased gross margin by $33 million.

Gross margin also includes the impact of a $12 million unrealized net mark-to-market gain on natural gas derivatives in the six months ended June 30, 2024 compared to a $21 million gain in the six months ended June 30, 2023.

Gross margin also includes the impact of a $12 million unrealized net mark-to-market gain on natural gas derivatives in the nine months ended September 30, 2024 compared to a $19 million gain in the nine months ended September 30, 2023.

CF INDUSTRIES HOLDINGS, INC.

4 unchanged sentences

The following table presents summary operating data for our Granular Urea segment:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 v.

15 unchanged sentences

Depreciation and amortization $ 73 $ 66 $ 7 11 % $ 218 $ 216 $ 2 1 %

Unrealized net mark-to-market gain on natural gas derivatives $ — $ — $ — — % $ (9) $ (20) $ 11 55 %

Unrealized net mark-to-market loss (gain) on natural gas derivatives $ — $ 2 $ (2) (100) % $ (9) $ (18) $ 9 50 %

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1 unchanged sentence

Nutrient tons represent the tons of nitrogen within the product tons.

Second Quarter of 2024 Compared to Second Quarter of 2023

Net sales in our Granular Urea segment decreased $3 million, or 1%, to $457 million in the second quarter of 2024 from $460 million in the second quarter of 2023 due primarily to a 9% decrease in average selling prices, partially offset by a 9% increase in sales volume.

Average selling prices decreased to $365 per ton in the second quarter of 2024 compared to $401 per ton in the second quarter of 2023 as lower global energy costs reduced the global market clearing price required to meet global demand.

Sales volume was higher due primarily to higher supply availability resulting from increased production in the second quarter of 2024 compared to the second quarter of 2023.

Third Quarter of 2024 Compared to Third Quarter of 2023

Net sales in our Granular Urea segment increased $28 million, or 8%, to $388 million in the third quarter of 2024 from $360 million in the third quarter of 2023 due primarily to an 11% increase in sales volume, partially offset by a 3% decrease in average selling prices.

Sales volume was higher due primarily to a production mix that favored granular urea production in the third quarter of 2024 compared to the third quarter of 2023.

Average selling prices decreased to $330 per ton in the third quarter of 2024 compared to $339 per ton in the third quarter of 2023 as lower global energy costs reduced the global market clearing price required to meet global demand.

Cost of Sales.

Cost of sales in our Granular Urea segment averaged $184 per ton in the second quarter of 2024 compared to $194 per ton in the second quarter of 2023.

The decrease was due primarily to lower realized natural gas costs, including the impact of realized derivatives, partially offset by higher costs associated with maintenance activity in the second quarter of 2024.

Cost of sales in our Granular Urea segment averaged $194 per ton in the third quarter of 2024, a decrease of 9% from $213 per ton in the third quarter of 2023.

The decrease was due primarily to lower realized natural gas costs, including the impact of realized derivatives.

Gross Margin .

Gross margin in our Granular Urea segment decreased by $11 million to $227 million in the second quarter of 2024 from $238 million in the second quarter of 2023, and our gross margin percentage was 49.7% in the second quarter of 2024 compared to 51.7% in the second quarter of 2023.

The decrease in gross margin was due primarily to a 9% decrease in average selling prices, which decreased gross margin by $43 million.

These factors that decreased gross margin were partially offset by a 9% increase in sales volume, which increased gross margin by $19 million and a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $13 million.

Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

Net sales in our Granular Urea segment decreased $207 million, or 19%, to $864 million in the six months ended June 30, 2024 from $1.07 billion in the six months ended June 30, 2023 due primarily to a 15% decrease in average selling prices and a 5% decrease in sales volume.

Average selling prices decreased to $369 per ton in the six months ended June 30, 2024 compared to $434 per ton in the six months ended June 30, 2023 as lower global energy costs reduced the global market clearing price required to meet global demand.

Sales volume for the six months ended June 30, 2024 was 2.3 million tons compared to 2.5 million tons in the six months ended June 30, 2023 due primarily to a reduction in ammonia available for upgrade and lower supply availability from the impact of severe weather that caused urea plant outages in the first quarter of

Gross margin in our Granular Urea segment increased by $26 million, or 19%, to $160 million in the third quarter of 2024 from $134 million in the third quarter of 2023, and our gross margin percentage was 41.2% in the third quarter of 2024 compared to 37.2% in the third quarter of 2023.

The increase in gross margin was due primarily to an 11% increase in sales volume, which increased gross margin by $22 million, a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $15 million, and a net decrease in manufacturing, maintenance and other costs, which increased gross margin by $1 million.

These factors that increased gross margin were partially offset by 3% decrease in average selling prices, which decreased gross margin by $14 million.

Gross margin also includes the impact of a $2 million unrealized net mark-to-market loss on natural gas derivatives in the third quarter of 2023.

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

Net sales in our Granular Urea segment decreased $179 million, or 13%, to $1.25 billion in the nine months ended September 30, 2024 from $1.43 billion in the nine months ended September 30, 2023 due primarily to a 12% decrease in average selling prices.

Average selling prices decreased to $356 per ton in the nine months ended September 30, 2024 compared to $405 per ton in the nine months ended September 30, 2023 as lower global energy costs reduced the global market clearing price required to meet global demand.

Sales volume was 3.5 million tons in both the nine months ended September 30, 2024 and 2023.

Lower sales volume in the first quarter of 2024, which was due primarily to a reduction in ammonia available

CF INDUSTRIES HOLDINGS, INC.

Sales volume includes the impact of approximately 48,000 tons of granular urea purchased and sold in the first quarter of 2024 due to a winter storm that produced extremely cold temperatures that impacted our operations, including the temporary shut-down of certain of our plants.

for upgrade and lower supply availability from the impact of severe weather that caused urea plant outages, was largely offset by higher sales volume in the second and third quarters of 2024 due primarily to a production mix that favored granular urea production.

Sales volume in the nine months ended September 30, 2024 includes the impact of approximately 48,000 tons of granular urea purchased and resold in the first quarter of 2024 due to the impact of the severe weather described above.

Cost of Sales.

Cost of sales in our Granular Urea segment averaged $206 per ton in the six months ended June 30, 2024 compared to $223 per ton in the six months ended June 30, 2023.

Cost of sales in our Granular Urea segment averaged $202 per ton in the nine months ended September 30, 2024, an 8% decrease from $219 per ton in the nine months ended September 30, 2023.

Gross Margin .

Gross margin in our Granular Urea segment decreased by $141 million to $381 million in the six months ended June 30, 2024 from $522 million in the six months ended June 30, 2023, and our gross margin percentage was 44.1% in the six months ended June 30, 2024 compared to 48.7% in the six months ended June 30, 2023.

Gross margin in our Granular Urea segment decreased by $115 million, or 18%, to $541 million in the nine months ended September 30, 2024 from $656 million in the nine months ended September 30, 2023, and our gross margin percentage was 43.2% in the nine months ended September 30, 2024 compared to 45.8% in the nine months ended September 30, 2023.

The decrease in gross margin was due primarily to a 12% decrease in average selling prices, which decreased gross margin by $151 million, a decrease in sales volume, which decreased gross margin by $17 million, and a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $32 million.

These factors that decreased gross margin were partially offset by a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $94 million.

Gross margin also includes the impact of a $9 million unrealized net mark-to-market gain on natural gas derivatives in the six months ended June 30, 2024 compared to a $20 million gain in the six months ended June 30, 2023.

Gross margin also includes the impact of a $9 million unrealized net mark-to-market gain on natural gas derivatives in the nine months ended September 30, 2024 compared to an $18 million gain in the nine months ended September 30, 2023.

Our UAN segment produces urea ammonium nitrate solution (UAN).

2 unchanged sentences

The following table presents summary operating data for our UAN segment:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 v.

15 unchanged sentences

Depreciation and amortization $ 69 $ 78 $ (9) (12) % $ 206 $ 214 $ (8) (4) %

Unrealized net mark-to-market gain on natural gas derivatives $ — $ — $ — — % $ (10) $ (21) $ 11 52 %

Unrealized net mark-to-market loss (gain) on natural gas derivatives $ 1 $ 3 $ (2) (67) % $ (9) $ (18) $ 9 50 %

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1 unchanged sentence

Nutrient tons represent the tons of nitrogen within the product tons.

Second Quarter of 2024 Compared to Second Quarter of 2023

Net sales in our UAN segment decreased $73 million, or 13%, to $475 million in the second quarter of 2024 from $548 million in the second quarter of 2023 due to a 10% decrease in average selling prices, and a 3% decrease in sales volume.

Average selling prices decreased to $272 per ton in the second quarter of 2024 compared to $303 per ton in the second quarter of 2023 as lower global energy costs reduced the global market clearing price required to meet global demand.

Cost of Sales.

Cost of sales in our UAN segment averaged $148 per ton in the second quarter of 2024, an 8% decrease from $160 per ton in the second quarter of 2023, due primarily to the impact of lower realized natural gas costs, including the impact of realized derivatives.

Third Quarter of 2024 Compared to Third Quarter of 2023

Net sales in our UAN segment decreased $29 million, or 7%, to $406 million in the third quarter of 2024 from $435 million in the third quarter of 2023 due to an 8% decrease in sales volume, partially offset by a 1% increase in average selling prices.

Sales volume was lower due primarily to lower supply availability resulting from lower production in the third quarter of 2024 compared to the third quarter of 2023.

CF INDUSTRIES HOLDINGS, INC.

Cost of Sales.

Cost of sales in our UAN segment averaged $152 per ton in the third quarter of 2024, a 2% decrease from $155 per ton in the third quarter of 2023, due primarily to the impact of lower realized natural gas costs, including the impact of realized derivatives, partially offset by higher costs for maintenance activity.

Gross Margin .

Gross margin in our UAN segment decreased by $43 million to $216 million in the second quarter of 2024 from $259 million in the second quarter of 2023, and our gross margin percentage was 45.5% in the second quarter of 2024 compared to 47.3% in the second quarter of 2023.

The decrease in gross margin was due primarily to a 10% decrease in average selling prices, which decreased gross margin by $50 million and a 3% decrease in sales volume, which decreased gross margin by $16 million.

These factors that decreased gross margin were partially offset by a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $16 million and a net decrease in manufacturing, maintenance and other costs, which increased gross margin by $7 million.

Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

Net sales in our UAN segment decreased $315 million, or 26%, to $900 million in the six months ended June 30, 2024 from $1.22 billion in the six months ended June 30, 2023 due primarily to a 23% decrease in average selling prices and a 3% decrease in sales volume.

Average selling prices decreased to $268 per ton in the six months ended June 30, 2024 compared to $350 per ton in the six months ended June 30, 2023 as lower global energy costs reduced the global market clearing price required to meet global demand.

Gross margin in our UAN segment increased by $1 million, or 1%, to $134 million in the third quarter of 2024 from $133 million in the third quarter of 2023, and our gross margin percentage was 33.0% in the third quarter of 2024 compared to 30.6% in the third quarter of 2023.

The increase in gross margin was due primarily to a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $7 million, a 1% increase in average selling prices, which increased gross margin by $5 million, and a net decrease in manufacturing, maintenance and other costs, which increased gross margin by $2 million.

These factors that increased gross margin were offset by an 8% decrease in sales volume, which decreased gross margin by $15 million.

Gross margin also includes the impact of a $1 million unrealized net mark-to-market loss on natural gas derivatives in the third quarter of 2024 compared to a $3 million loss in the third quarter of 2023.

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

Net sales in our UAN segment decreased $344 million, or 21%, to $1.31 billion in the nine months ended September 30, 2024 from $1.65 billion in the nine months ended September 30, 2023 due primarily to a 17% decrease in average selling prices and a 5% decrease in sales volume.

Average selling prices decreased to $253 per ton in the nine months ended September 30, 2024 compared to $304 per ton in the nine months ended September 30, 2023 as lower global energy costs reduced the global market clearing price required to meet global demand.

Sales volume was lower due primarily to lower supply availability resulting from lower beginning inventory entering 2024.

Cost of Sales.

Cost of sales in our UAN segment averaged $161 per ton in the six months ended June 30, 2024, a 12% decrease from $183 per ton in the six months ended June 30, 2023, due primarily to the impact of lower realized natural gas costs, including the impact of realized derivatives.

Cost of sales in our UAN segment averaged $157 per ton in the nine months ended September 30, 2024, a 9% decrease from $173 per ton in the nine months ended September 30, 2023, due primarily to the impact of lower realized natural gas costs, including the impact of realized derivatives.

Gross Margin .

Gross margin in our UAN segment decreased by $221 million to $359 million in the six months ended June 30, 2024 from $580 million in the six months ended June 30, 2023, and our gross margin percentage was 39.9% in the six months ended June 30, 2024 compared to 47.7% in the six months ended June 30, 2023.

Gross margin in our UAN segment decreased by $220 million, or 31%, to $493 million in the nine months ended September 30, 2024 from $713 million in the nine months ended September 30, 2023, and our gross margin percentage was 37.7% in the nine months ended September 30, 2024 compared to 43.2% in the nine months ended September 30, 2023.

The decrease in gross margin was due primarily to a 17% decrease in average selling prices, which decreased gross margin by $273 million, a 5% decrease in sales volume, which decreased gross margin by $37 million, and a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $1 million.

Gross margin also includes the impact of a $10 million unrealized net mark-to-market gain on natural gas derivatives in the six months ended June 30, 2024 compared to a $21 million gain in the six months ended June 30, 2023.

CF INDUSTRIES HOLDINGS, INC.

Our AN segment produces ammonium nitrate (AN).

AN, which has a nitrogen content between 29% and 35%, is produced by combining anhydrous ammonia and nitric acid.

AN is used as nitrogen fertilizer and is also used by industrial customers for commercial explosives and blasting systems.

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

AN is produced at our Yazoo City and Billingham complexes.

The following table presents summary operating data for our AN segment:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 v.

19 unchanged sentences

Nutrient tons represent the tons of nitrogen within the product tons.

CF INDUSTRIES HOLDINGS, INC.

Second Quarter of 2024 Compared to Second Quarter of 2023

Net sales in our AN segment decreased $6 million, or 6%, to $98 million in the second quarter of 2024 from $104 million in the second quarter of 2023 due to an 8% decrease in sales volume, partially offset by a 2% increase in average selling prices.

Sales volume declined due primarily to lower supply availability resulting from lower beginning inventory.

Average selling prices were $288 per ton in the second quarter of 2024 compared to $282 per ton in the second quarter of 2023.

Third Quarter of 2024 Compared to Third Quarter of 2023

Net sales in our AN segment decreased $8 million, or 7%, to $106 million in the third quarter of 2024 from $114 million in the third quarter of 2023 due to a 9% decrease in sales volume, partially offset by a 2% increase in average selling prices.

Sales volume declined due primarily to lower supply availability resulting from lower production in the third quarter of 2024.

Average selling prices were $281 per ton in the third quarter of 2024 compared to $275 per ton in the third quarter of 2023.

Cost of Sales.

Cost of sales per ton in our AN segment averaged $220 per ton in both the second quarter of 2024 and the second quarter of 2023 as higher costs for maintenance activity were offset by the impact of lower realized natural gas costs, including the impact of realized derivatives.

Cost of sales per ton in our AN segment averaged $217 per ton in the third quarter of 2024, a 14% increase from $190 per ton in the third quarter of 2023 due primarily to a higher cost per ton for purchased ammonia used for upgrading into AN in our United Kingdom operations and higher costs for maintenance activity in North America.

Gross Margin .

Gross margin in our AN segment was $23 million in both the second quarter of 2024 and the second quarter of 2023, and our gross margin percentage was 23.5% in the second quarter of 2024 compared to 22.1% in the second quarter of 2023.

The factors that decreased gross margin were an 8% decrease in sales volume, which decreased gross margin by $10 million, and unfavorable product mix, which decreased gross margin by $7 million.

These factors that decreased gross margin were offset by a net decrease in manufacturing, maintenance and other costs, which increased gross margin by $17 million.

Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

Net sales in our AN segment decreased $51 million, or 19%, to $212 million in the six months ended June 30, 2024 from $263 million in the six months ended June 30, 2023 due to an 18% decrease in average selling prices and a 2% decrease in sales volume.

Average selling prices decreased to $290 per ton in the six months ended June 30, 2024 compared to $354 per ton in the six months ended June 30, 2023 as lower global energy costs reduced the global market clearing price required to meet global demand.

Gross margin in our AN segment decreased $11 million, or 31%, to $24 million in third quarter of 2024 from $35 million in the third quarter of 2023, and our gross margin percentage was 22.6% in the third quarter of 2024 compared to 30.7% in the third quarter of 2023.

The factors that decreased gross margin were a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $10 million, and a 9% decrease in sales volume, which decreased gross margin by $4 million.

These factors that decreased gross margin were partially offset by a 2% increase in average selling prices, which increased gross margin by $2 million, and a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $1 million.

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

Net sales in our AN segment decreased $59 million, or 16%, to $318 million in the nine months ended September 30, 2024 from $377 million in the nine months ended September 30, 2023 due to a 12% decrease in average selling prices and a 4% decrease in sales volume.

Average selling prices decreased to $287 per ton in the nine months ended September 30, 2024 compared to $326 per ton in the nine months ended September 30, 2023 as lower global energy costs reduced the global market clearing price required to meet global demand.

CF INDUSTRIES HOLDINGS, INC.

Cost of Sales.

Cost of sales in our AN segment averaged $246 per ton in the six months ended June 30, 2024, a 1% decrease from $249 per ton in the six months ended June 30, 2023.

The decrease was due primarily to the impact of lower realized natural gas costs, including the impact of realized derivatives, partially offset by higher costs for maintenance activity.

Cost of sales in our AN segment averaged $236 per ton in the nine months ended September 30, 2024, a 4% increase from $228 per ton in the nine months ended September 30, 2023.

The increase was due primarily to higher costs for maintenance activity in North America, which was partially offset by the impact of lower realized natural gas costs, including the impact of realized derivatives, and, for our United Kingdom operations, a lower cost per ton for purchased ammonia used for upgrading into AN.

Gross Margin .

Gross margin in our AN segment decreased $46 million to $32 million in the six months ended June 30, 2024 from $78 million in the six months ended June 30, 2023, and our gross margin percentage was 15.1% in the six months ended June 30, 2024 compared to 29.7% in the six months ended June 30, 2023.

The decrease in gross margin was due primarily to an 18% decrease in average selling prices, which decreased gross margin by $67 million and a 2% decrease in sales volume, which decreased gross margin by $6 million.

These factors that decreased gross margin were partially offset by a net decrease in manufacturing, maintenance and other costs, which increased gross margin by $19 million and a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $10 million.

Gross margin also includes the impact of a $1 million unrealized net mark-to-market gain on natural gas derivatives in the six months ended June 30, 2024 compared to a $3 million gain in the six months ended June 30, 2023.

CF INDUSTRIES HOLDINGS, INC.

Gross margin in our AN segment decreased $57 million, or 50%, to $56 million in the nine months ended September 30, 2024 from $113 million in the nine months ended September 30, 2023, and our gross margin percentage was 17.6% in the nine months ended September 30, 2024 compared to 30.0% in the nine months ended September 30, 2023.

The decrease in gross margin was due primarily to a 12% decrease in average selling prices, which decreased gross margin by $65 million and a 4% decrease in sales volume, which decreased gross margin by $10 million.

These factors that decreased gross margin were partially offset by a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $11 million, and a net decrease in manufacturing, maintenance and other costs, which increased gross margin by $9 million.

Gross margin also includes the impact of a $1 million unrealized net mark-to-market gain on natural gas derivatives in the nine months ended September 30, 2024 compared to a $3 million gain in the nine months ended September 30, 2023.

Other Segment

4 unchanged sentences

The following table presents summary operating data for our Other segment:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 v.

15 unchanged sentences

Depreciation and amortization $ 15 $ 15 $ — — % $ 48 $ 48 $ — — %

Unrealized net mark-to-market gain on natural gas derivatives $ (1) $ — $ (1) N/M $ (2) $ (7) $ 5 71 %

Unrealized net mark-to-market gain on natural gas derivatives $ — $ — $ — — % $ (2) $ (7) $ 5 71 %

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N/M—Not Meaningful

(1) Nutrient tons represent the tons of nitrogen within the product tons.

Second Quarter of 2024 Compared to Second Quarter of 2023

Net sales in our Other segment decreased by $5 million, or 4%, to $133 million in the second quarter of 2024 from $138 million in the second quarter of 2023 due to a 3% decrease in average selling prices and a 1% decrease in sales volume.

The decrease in average selling prices was due primarily to lower global energy costs reducing the global market clearing price required to meet global demand.

Third Quarter of 2024 Compared to Third Quarter of 2023

Net sales in our Other segment decreased by $12 million, or 9%, to $117 million in the third quarter of 2024 from $129 million in the third quarter of 2023 due to a 10% decrease in sales volume, partially offset by a 1% increase in average selling prices.

The decrease in sales volume was due primarily to lower DEF sales volume.

Cost of Sales.

Cost of sales in our Other segment averaged $121 per ton in the second quarter of 2024, a 10% decrease from $135 per ton in the second quarter of 2023, due primarily to lower costs for maintenance activity and the impact of lower realized natural gas costs, including the impact of realized derivatives.

Gross Margin .

Gross margin in our Other segment increased by $4 million to $66 million in the second quarter of 2024 from $62 million in the second quarter of 2023, and our gross margin percentage was 49.6% in the second quarter of 2024 compared to 44.9% in the second quarter of 2023.

The increase in gross margin was due primarily to a net decrease in manufacturing, maintenance and other costs, which increased gross margin by $8 million, and a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $2 million.

These factors that increased gross margin were partially offset by a 3% decrease in average selling prices, which decreased gross margin by $5 million, and a 1% decrease in sales volume, which decreased gross margin by $2 million.

Gross margin also includes the impact of a $1 million unrealized net mark-to-market gain on natural gas derivatives in the second quarter of 2024.

Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

Net sales in our Other segment decreased by $34 million, or 12%, to $255 million in the six months ended June 30, 2024 from $289 million in the six months ended June 30, 2023 due to an 11% decrease in average selling prices and a

Cost of sales in our Other segment averaged $149 per ton in the third quarter of 2024, a 10% increase from $136 per ton in the third quarter of 2023, due primarily to higher costs for maintenance activity.

CF INDUSTRIES HOLDINGS, INC.

1% decrease in sales volume.

Gross Margin .

Gross margin in our Other segment decreased by $11 million, or 20%, to $43 million in the third quarter of 2024 from $54 million in the third quarter of 2023, and our gross margin percentage was 36.8% in the third quarter of 2024 compared to 41.9% in the third quarter of 2023.

The decrease in gross margin was due primarily to a 10% decrease in sales volume, which decreased gross margin by $9 million and a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $5 million.

These factors that decreased gross margin were partially offset by a 1% increase in average selling prices, which increased gross margin by $3 million.

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

Net sales in our Other segment decreased by $46 million, or 11%, to $372 million in the nine months ended September 30, 2024 from $418 million in the nine months ended September 30, 2023 due to a 7% decrease in average selling prices and a 4% decrease in sales volume.

The decrease in average selling prices was due primarily to lower global energy costs reducing the global market clearing price required to meet global demand.

The decrease in sales volume was due primarily to lower DEF sales volume, partially offset by higher nitric acid sales volume.

Cost of Sales.

Cost of sales in our Other segment averaged $141 per ton in the six months ended June 30, 2024, a 9% decrease from $155 per ton in the six months ended June 30, 2023, due primarily to the impact of lower realized natural gas costs, including the impact of realized derivatives.

Cost of sales in our Other segment averaged $144 per ton in the nine months ended September 30, 2024, a 3% decrease from $149 per ton in the nine months ended September 30, 2023, due primarily to the impact of lower realized natural gas costs, including the impact of realized derivatives, partially offset by higher costs for maintenance activity.

Gross Margin .

Gross margin in our Other segment decreased by $17 million to $104 million in the six months ended June 30, 2024 from $121 million in the six months ended June 30, 2023, and our gross margin percentage was 40.8% in the six months ended June 30, 2024 compared to 41.9% in the six months ended June 30, 2023.

The decrease in gross margin was due primarily to an 11% decrease in average selling prices, which decreased gross margin by $30 million and a 1% decrease in sales volume, which decreased gross margin by $6 million.

These factors that decreased gross margin were partially offset by a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $19 million and a net decrease in manufacturing, maintenance and other costs, which increased gross margin by $5 million.

Gross margin also includes the impact of a $2 million unrealized net mark-to-market gain on natural gas derivatives in the six months ended June 30, 2024 compared to a $7 million gain in the six months ended June 30, 2023.

Gross margin in our Other segment decreased by $28 million, or 16%, to $147 million in the nine months ended September 30, 2024 from $175 million in the nine months ended September 30, 2023, and our gross margin percentage was 39.5% in the nine months ended September 30, 2024 compared to 41.9% in the nine months ended September 30, 2023.

The decrease in gross margin was due primarily to a 7% decrease in average selling prices, which decreased gross margin by $27 million and a 4% decrease in sales volume, which decreased gross margin by $15 million.

These factors that decreased gross margin were partially offset by a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $19 million.

Gross margin also includes the impact of a $2 million unrealized net mark-to-market gain on natural gas derivatives in the nine months ended September 30, 2024 compared to a $7 million gain in the nine months ended September 30, 2023.

Liquidity and Capital Resources

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We may also from time to time access the capital markets or engage in borrowings under our revolving credit agreement.

As of June 30, 2024, our cash and cash equivalents balance was $1.82 billion, a decrease of $213 million from $2.03 billion at December 31, 2023.

The decrease in cash and cash equivalents primarily reflects cash used for share repurchases, the semi-annual distribution to the noncontrolling interest, the payment of dividends and capital expenditures, partially offset by cash generated by operations, as described below under “Cash Flows.” At June 30, 2024, we were in compliance with all applicable covenant requirements under our revolving credit agreement and senior notes, and unused borrowing capacity under our revolving credit agreement was $750 million.

In the first and second quarters of 2024, quarterly dividends of $0.50 per common share were declared and paid, representing a 25% increase from the quarterly dividend of $0.40 per common share that was declared and paid in the fourth quarter of 2023.

As of September 30, 2024, our cash and cash equivalents balance was $1.88 billion, a decrease of $155 million from $2.03 billion at December 31, 2023.

The decrease in cash and cash equivalents primarily reflects cash used for share repurchases, capital expenditures, distributions to the noncontrolling interest, and the payment of dividends, partially offset by cash generated by operations, as described below under “Cash Flows.” At September 30, 2024, we were in compliance with all applicable covenant requirements under our revolving credit agreement and senior notes, and unused borrowing capacity under our revolving credit agreement was $750 million.

In the first, second and third quarters of 2024, quarterly dividends of $0.50 per common share were declared and paid, representing a 25% increase from the quarterly dividend of $0.40 per common share that was declared and paid in the fourth quarter of 2023.

Cash Equivalents

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

and Canadian federal governments;

CF INDUSTRIES HOLDINGS, INC.

federal governments;

those issued by state, local or other governmental entities;

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We make capital expenditures to sustain our asset base, increase our capacity or capabilities, improve plant efficiency, comply with various environmental, health and safety requirements, and invest in our clean energy strategy.

Capital expenditures totaled $182 million in the first six months of 2024 compared to $164 million in the first six months of 2023.

Capital expenditures totaled $321 million in the first nine months of 2024 compared to $311 million in the first nine months of 2023.

We currently anticipate that capital expenditures for the full year 2024 will be approximately $525 million.

Planned capital expenditures are generally subject to change due to delays in regulatory approvals or permitting, unanticipated increases in cost, changes in scope and completion time, performance of third parties, delays in the receipt of equipment, adverse weather, defects in materials and workmanship, labor or material shortages, transportation constraints, acceleration or delays in the timing of the work and other unforeseen difficulties.

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Any of these changes in planned capital expenditures, individually or in the aggregate, could have a material impact on our results of operations and cash flows.

Acquisition of Waggaman Ammonia Production Facility

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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.

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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.

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Shares repurchased in 2023:

First quarter — $ —

Second quarter 0.8 $ 50

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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 13.9 $ 1,077

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

CF INDUSTRIES HOLDINGS, INC.

shares for $155 million, and we repurchased approximately 0.8 million shares under the 2022 Share Repurchase Program for $50 million.

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.

In the nine months ended September 30, 2024, we retired approximately 8.5 million shares of repurchased stock, and we held approximately 6.1 million shares of treasury stock as of September 30, 2024.

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.

Canada Revenue Agency Competent Authority Matter

In connection with the matter described above under “Items Affecting Comparability of Results—Canada Revenue Agency Competent Authority Matter,” 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.

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.

We expect to receive the interest refunds in late 2024 or 2025.

Revolving Credit Agreement

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

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.

CF INDUSTRIES HOLDINGS, INC.

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.

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.

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)

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(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.

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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.

Forward Sales and Customer Advances

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Any cash payments received in advance from customers in connection with forward sales contracts are reflected on our consolidated balance sheets as a current liability until control transfers and revenue is recognized.

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.

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.

While customer advances are generally a significant source of liquidity, the level of forward sales contracts is affected by many factors, including current market conditions, our customers’ outlook of future market fundamentals and seasonality.

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If the level of sales under our forward sales programs were to decrease in the future, our cash received from customer advances would likely decrease and our accounts receivable balances would likely increase.

CF INDUSTRIES HOLDINGS, INC.

Additionally, borrowing under the Revolving Credit Agreement could become necessary.

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Volatility in reported quarterly earnings can result from the unrealized mark-to-market adjustments in the value of the derivatives.

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, 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, our open natural gas derivative contracts consisted of natural gas fixed price swaps, basis swaps and options for 49.0 million MMBtus of natural gas.

Defined Benefit Pension Plans

We contributed $21 million to our pension plans in the six months ended June 30, 2024.

We contributed $22 million to our pension plans in the nine months ended September 30, 2024.

Over the remainder of 2024, we expect to contribute approximately $1 million to our pension plans, which would result in our making total contributions of approximately $23 million to our pension plans for the full year 2024.

In addition, in the three-year period from 2025 to 2027, we expect to contribute a total of approximately £18 million (or $22 million) to our U.K.

pension plans as currently agreed with the plans’ trustees.

Distribution to Noncontrolling Interest in CFN

On January 31, 2024, CFN distributed $144 million to CHS for the distribution period ended December 31, 2023.

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, and CFN distributed $165 million to CHS for this distribution period.

Net cash provided by operating activities during the first six months of 2024 was $920 million, a decrease of $739 million, compared to $1.66 billion in the first six months of 2023.

In addition, as of September 30, 2024, we expect to contribute to our U.K.

pension plans a total of approximately £18 million (or $24 million) for the three-year period from 2025 to 2027, as currently agreed with the plans’ trustees.

Distributions to Noncontrolling Interest in CFN

On January 31, 2024, CFN distributed approximately $144 million to CHS for the distribution period ended December 31, 2023.

The estimate of the partnership distribution earned by CHS, but not yet declared, for the third quarter of 2024 is approximately $65 million.

Net cash provided by operating activities during the first nine months of 2024 was $1.85 billion, a decrease of $426 million, compared to $2.28 billion in the first nine months of 2023.

The decrease in cash flow from operations was due primarily to lower net earnings and changes in net working capital.

Net earnings for the first six months of 2024 was $744 million compared to $1.26 billion for the first six months of 2023, a decrease of $512 million.

Net earnings for the first nine months of 2024 was $1.09 billion compared to $1.49 billion for the first nine months of 2023, a decrease of $401 million.

The decrease in net earnings was due primarily to a decrease in gross margin, driven by lower average selling prices, partially offset by lower natural gas costs.

During the first six months of 2024, net changes in working capital reduced cash flow from operations by $136 million, while in the first six months of 2023, net changes in working capital increased cash flow from operations by $146 million.

The decrease in cash flow from working capital changes was attributable primarily to movements in accounts

CF INDUSTRIES HOLDINGS, INC.

receivable as the first six months of 2024 was a net cash outflow of $45 million as compared to a net cash inflow of $198 million the first six months of 2023.

Net cash used in investing activities was $134 million in the first six months of 2024 compared to $127 million in the first six months of 2023.

Capital expenditures totaled $182 million during the first six months of 2024 compared to $164 million in the first six months of 2023.

Proceeds from the sale of emission credits was $47 million in the first six months of 2024 compared to $36 million in the first six months of 2023.

Net cash used in financing activities was $998 million in the first six months of 2024 compared to $639 million in the first six months of 2023.

During the first nine months of 2024, net changes in working capital contributed $64 million less toward net cash from operations, than in the first nine months of 2023.

These changes primarily occurred in accounts receivable and inventories, partially offset by changes in accounts payable, accrued expenses and customer advances.

Net cash used in investing activities was $273 million in the first nine months of 2024 compared to $271 million in the first nine months of 2023.

Capital expenditures totaled $321 million during the first nine months of 2024 compared to $311 million in the first nine months of 2023.

Proceeds from the sale of emission credits was $47 million in the first nine months of 2024 compared to $39 million in the first nine months of 2023.

Net cash used in financing activities was $1.74 billion in the first nine months of 2024 compared to $1.07 billion in the first nine months of 2023.

The increase was due primarily to an increase in share repurchases and dividends paid, partially offset by a decrease in distributions to noncontrolling interest.

In the first six months of 2024, we paid $644 million for share repurchases compared to $205 million paid for share repurchases in the first six months of 2023.

In the first six months of 2024, dividends paid on common stock was $188 million compared to $158 million in the first six months of 2023.

The increase in dividends paid on common stock reflects quarterly dividends of $0.50 per common share declared and paid in the first two quarters of 2024, compared to quarterly dividends of $0.40 per common share that were declared and paid in the first two quarters of 2023.

In the first six months of 2024, distributions to the noncontrolling interest were $144 million compared to $255 million in the first six months of 2023.

In the first nine months of 2024, we paid $1.13 billion for share repurchases compared to $355 million paid for share repurchases in the first nine months of 2023.

In the first nine months of 2024, dividends paid on common stock was $278 million compared to $235 million in the first nine months of 2023.

The increase in dividends paid on common stock reflects quarterly dividends of $0.50 per common share declared and paid in the first three quarters of 2024, compared to quarterly dividends of $0.40 per common share that were declared and paid in the first three quarters of 2023.

In the first nine months of 2024, distributions to the noncontrolling interest were $308 million compared to $459 million in the first nine months of 2023.

CF INDUSTRIES HOLDINGS, INC.

Critical Accounting Estimates

During the first six months of 2024, there were no material changes to our critical accounting estimates as described in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

During the first nine months of 2024, there were no material changes to our critical accounting estimates as described in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Recent Accounting Pronouncements

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• difficulties in securing the supply and delivery of raw materials or utilities, increases in their costs or delays or interruptions in their delivery;

CF INDUSTRIES HOLDINGS, INC.

• reliance on third party providers of transportation services and equipment;

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• regulatory restrictions and requirements related to greenhouse gas emissions;

CF INDUSTRIES HOLDINGS, INC.

• the development and growth of the market for green and low-carbon (blue) ammonia and the risks and uncertainties relating to the development and implementation of our green and low-carbon ammonia projects;

• risks associated with expansions of our business, including unanticipated adverse consequences and the significant resources that could be required.

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 2. Management’s Discussion and Analysis