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What changed in CF Industries's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CF Industries's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+566 added−621 removedSource: 10-K (2025-02-20) vs 10-K (2024-02-22)

Top changes in CF Industries's 2024 10-K

566 paragraphs added · 621 removed · 427 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

75 edited+19 added−29 removed64 unchanged
Biggest changeSales are generated by our internal marketing and sales force. CHS was our largest customer in 2023 and accounted for approximately 13% of our consolidated net sales. We have a strategic venture with CHS under which CHS has a minority equity interest in CFN. See Note 19—Noncontrolling Interest for additional information on our strategic venture with CHS.
Biggest changeWe have a strategic venture with CHS under which CHS has a minority equity interest in CFN. See Note 19—Noncontrolling Interest for additional information on our strategic venture with CHS. Competition Our markets are global and intensely competitive, based primarily on delivered price and, to a lesser extent, on reliability, customer service and product quality.
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.
The Waggaman facility is wholly owned by us, and the other five U.S. manufacturing facilities are wholly owned directly or indirectly by CF Industries Nitrogen, LLC (CFN), of which we own approximately 89% and CHS Inc.
Copies of our Corporate Governance Guidelines, Code of Corporate Conduct and charters for the Audit Committee, Compensation and Management Development 1 Table of Contents CF INDUSTRIES HOLDINGS, INC. Committee, Corporate Governance and Nominating Committee, and Environmental Sustainability and Community Committee of our Board of Directors (the Board) are also available on our Internet website.
Copies of our Corporate Governance 1 Table of Contents CF INDUSTRIES HOLDINGS, INC. Guidelines, Code of Corporate Conduct and charters for the Audit Committee, Compensation and Management Development Committee, Corporate Governance and Nominating Committee, and Environmental Sustainability and Community Committee of our Board of Directors (the Board) are also available on our Internet website.
Urea liquor and DEF production capacities are included in Other. (5) AN includes prilled products (Amtrate and industrial-grade AN, or IGAN) and AN solution produced for sale. (6) Includes product tons of: urea liquor and DEF from the Donaldsonville, Port Neal, Woodward, Yazoo City, and Courtright facilities; nitric acid from the Billingham facility.
Urea liquor and DEF production capacities are included in Other. (5) AN includes prilled products (Amtrate and industrial-grade AN, or IGAN) and AN solution produced for sale. (6) Includes product tons of: urea liquor and DEF from the Donaldsonville, Port Neal, Woodward, Yazoo City, and Courtright facilities; and nitric acid from the Billingham facility.
Since that time, we have imported ammonia for upgrade at the facility into AN and other nitrogen products. In the third quarter of 2023, we approved our plan to permanently close the ammonia plant at the Billingham facility. Point Lisas, Trinidad The Point Lisas Nitrogen facility in Trinidad is owned jointly through a 50/50 venture with Koch Fertilizer LLC.
Since that time, we have imported ammonia for upgrade at the facility into AN and other nitrogen products. In the third quarter of 2023, we approved our plan to permanently close the ammonia plant at the Billingham facility. Point Lisas, Trinidad The Point Lisas facility in Trinidad is owned jointly through a 50/50 venture with Koch Fertilizer LLC.
(CHS) owns the remainder; • 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; • an extensive system of terminals and associated transportation equipment located primarily in the Midwestern United States; and • a 50% interest in Point Lisas Nitrogen Limited (PLNL), an ammonia production joint venture located in the Republic of Trinidad and Tobago (Trinidad) that we account for under the equity method.
(CHS) owns the remainder; • 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; • an extensive system of terminals and associated transportation equipment located primarily in the Midwestern United States; and • a 50% interest in Point Lisas Nitrogen Limited (PLNL), an ammonia production joint venture located in Trinidad and Tobago (Trinidad) that we account for under the equity method.
With our employees focused on safe and reliable operations, environmental stewardship, and disciplined capital and corporate management, we are on a path to decarbonize our ammonia production network – the world’s largest – to enable green and low-carbon hydrogen and nitrogen products for energy, fertilizer, emissions abatement and other industrial activities.
With our employees focused on safe and reliable operations, environmental stewardship, and disciplined capital and corporate management, we are on a path to decarbonize our ammonia production network – the world’s largest – to enable low-carbon hydrogen and nitrogen products for energy, fertilizer, emissions abatement and other industrial activities.
Billingham, United Kingdom The Billingham facility, located in the Teesside chemical area in northeastern England, is geographically split among three primary locations: the main site, which contains three nitric acid plants; the Portrack site, approximately two miles away, which contains an AN fertilizer plant; and the North Tees site, approximately seven miles away, which contains an ammonia storage area.
Billingham, United Kingdom The Billingham facility, located in the Teesside chemical area in northeastern England, is geographically split among three primary locations: the main site, which contains three nitric acid plants; the Portrack site, approximately two miles away, which contains one AN fertilizer plant; and the North Tees site, approximately seven miles away, which contains an ammonia storage area.
The complex has on-site storage for 139,000 tons of ammonia, 202,000 tons of UAN (measured on a 32% nitrogen content basis) and 130,000 tons of granular urea. Medicine Hat, Alberta, Canada The Medicine Hat facility, located in southeast Alberta, is the largest nitrogen complex in Canada. It has two ammonia plants and one urea plant.
The complex has on-site storage for 139,000 tons of ammonia, 202,000 tons of UAN (measured on a 32% nitrogen content basis) and 130,000 tons of granular urea. Medicine Hat, Alberta, Canada The Medicine Hat facility, located in southeast Alberta, is the largest ammonia production complex in Canada. It has two ammonia plants and one urea plant.
The following table shows the production capacities as of December 31, 2023 at each of our nitrogen manufacturing facilities: Average Annual Capacity (1) Gross Ammonia (2) Net Ammonia (2) UAN (3) Urea (4) AN (5) Other (6) (tons in thousands) Donaldsonville (Louisiana) (7)(8) 4,335 1,390 3,255 2,635 — 445 Medicine Hat (Alberta) 1,230 770 — 810 — — Port Neal (Iowa) 1,230 65 800 1,350 — 290 Verdigris (Oklahoma) (8) 1,210 430 1,955 — — — Waggaman (Louisiana) 880 880 — — — — Woodward (Oklahoma) 480 130 810 — — 115 Yazoo City (Mississippi) (8)(9) 570 — 160 — 1,035 125 Courtright (Ontario) (8)(10) 500 265 345 — — 400 Billingham (U.K.) (8) — — — — 595 410 10,435 3,930 7,325 4,795 1,630 1,785 Unconsolidated Affiliate PLNL (Trinidad) (11) 360 360 — — — — Total 10,795 4,290 7,325 4,795 1,630 1,785 _______________________________________________________________________________ (1) Average annual capacity includes allowance for normal outages and planned maintenance shutdowns.
The following table shows the production capacities as of December 31, 2024 at each of our manufacturing facilities: Average Annual Capacity (1) Gross Ammonia (2) Net Ammonia (2) UAN (3) Urea (4) AN (5) Other (6) (tons in thousands) Donaldsonville (Louisiana) (7)(8) 4,335 1,390 3,255 2,635 — 445 Medicine Hat (Alberta) 1,230 770 — 810 — — Port Neal (Iowa) 1,230 65 800 1,350 — 290 Verdigris (Oklahoma) (8) 1,210 430 1,955 — — — Waggaman (Louisiana) 880 880 — — — — Woodward (Oklahoma) 480 130 810 — — 115 Yazoo City (Mississippi) (8)(9) 570 — 160 — 1,035 125 Courtright (Ontario) (8)(10) 500 265 345 — — 400 Billingham (U.K.) (8) — — — — 595 410 10,435 3,930 7,325 4,795 1,630 1,785 Unconsolidated Affiliate PLNL (Trinidad) (11) 360 360 — — — — Total 10,795 4,290 7,325 4,795 1,630 1,785 _______________________________________________________________________________ (1) Average annual capacity includes allowance for normal outages and planned maintenance shutdowns.
Our facilities utilize the following natural gas hubs: Henry Hub, SONAT and TETCO ELA in Louisiana; ONEOK in Oklahoma; AECO in Alberta; Ventura in Iowa; Demarcation in Kansas; Welcome in Minnesota; Dawn and Parkway in Ontario; and the National Balancing Point (NBP) in the United Kingdom.
Our facilities utilize the following natural gas hubs: Henry Hub in Louisiana, SONAT and TETCO ELA in Mississippi; ONEOK in Oklahoma; AECO in Alberta; Ventura in Iowa; Demarcation in Kansas; Welcome in Minnesota; Dawn and Parkway in Ontario; and the National Balancing Point (NBP) in the United Kingdom.
Our nitrogen manufacturing complexes in the United States, Canada and the United Kingdom, an extensive storage, transportation and distribution network in North America, and logistics capabilities enabling a global reach underpin our strategy to leverage our unique capabilities to accelerate the world’s transition to clean energy. Our principal customers are cooperatives, independent fertilizer distributors, traders, wholesalers and industrial users.
Our manufacturing complexes in the United States, Canada and the United Kingdom, an extensive storage, transportation and distribution network in North America, and logistics capabilities enabling a global reach underpin our strategy to leverage our unique capabilities to accelerate the world’s transition to clean energy. Our principal customers are cooperatives, retailers, independent fertilizer distributors, traders, wholesalers and industrial users.
Nitrogen Manufacturing Facilities Donaldsonville, Louisiana The Donaldsonville facility is the world’s largest and most flexible nitrogen complex. It has six ammonia plants, five urea plants, four nitric acid plants, three UAN plants, and one DEF plant. The complex, which is located on the Mississippi River, includes deep-water docking facilities, access to an ammonia pipeline, and truck and railroad loading capabilities.
Manufacturing Facilities Donaldsonville, Louisiana The Donaldsonville facility is the world’s largest and most flexible ammonia production complex. It has six ammonia plants, five urea plants, four nitric acid plants, three UAN plants, and one DEF plant. The complex, which is located on the Mississippi River, includes deep-water docking facilities, access to an ammonia pipeline, and truck and railroad loading capabilities.
Our North American nitrogen production facilities can ship products via truck and rail to customers and to our storage facilities in the U.S. and Canada, with access to our leased railcar fleet of approximately 4,900 tank and hopper cars, as well as railcars provided by rail carriers. Our United Kingdom nitrogen production facility mainly ships products via truck.
Our North American nitrogen production facilities can ship products via truck and rail to customers and to our storage facilities in the U.S. and Canada, with access to our leased railcar fleet of approximately 4,800 tank and hopper cars, as well as railcars provided by rail carriers. Our United Kingdom nitrogen production facility mainly ships products via truck.
Regulation of Greenhouse Gases Our production facilities emit greenhouse gases (GHGs), such as carbon dioxide and nitrous oxide. Natural gas, a fossil fuel, is a primary raw material used in our nitrogen production process. We are subject to GHG regulations in the United Kingdom, Canada and the United States.
Regulation of Greenhouse Gases Our production facilities emit greenhouse gases (GHGs), such as carbon dioxide (CO 2 ) and nitrous oxide. Natural gas, a fossil fuel, is a primary raw material used in our nitrogen production process. We are subject to GHG regulations in the United Kingdom, Canada and the United States.
Our United Kingdom nitrogen manufacturing facility produces AN and serves primarily the agricultural and industrial markets in the United Kingdom.
Our United Kingdom manufacturing facility produces AN and primarily serves the agricultural and industrial markets in the United Kingdom.
In addition, to support safe and reliable operations at our continuous process manufacturing facilities, we conduct scheduled inspections, replacements and overhauls of our plant machinery and equipment, which are referred to as turnarounds.
In addition, to support safe and reliable operations at our continuous process manufacturing facilities, we conduct scheduled inspections, replacements and overhauls of our plant machinery and equipment, which are referred to as turnarounds or outages.
We are dedicated to creating a workplace where employees are proud to work and grow and where everyone feels empowered to do their best work. We do this by investing in extensive recruitment, training and professional development opportunities for our employees and fostering diversity and inclusion in our culture. Employee Population.
We are dedicated to creating a workplace where employees are proud to work and grow and where everyone feels empowered to do their best work. We do this by investing in extensive recruitment, training and professional development opportunities for our employees and fostering a culture of inclusion and engagement. Employee Population.
As of December 31, 2023, the combined production capacity of these eight facilities represented approximately 40%, 42%, 44% and 19% of North American ammonia, granular urea, UAN and AN production capacity, respectively. Each of our nitrogen manufacturing facilities in North America has on-site storage to provide flexibility to manage the flow of outbound shipments without impacting production.
As of December 31, 2024, the combined production capacity of these eight facilities represented approximately 40%, 40%, 44% and 19% of North American ammonia, granular urea, UAN and AN production capacity, respectively. Each of our manufacturing facilities in North America has on-site storage to provide flexibility to manage the flow of outbound shipments without impacting production.
We are also entitled to semi-annual cash distributions from CFN. See Note 19—Noncontrolling Interest for additional information on our strategic venture with CHS. For the years ended December 31, 2023, 2022 and 2021, we sold 19.1 million, 18.3 million and 18.5 million product tons generating net sales of $6.63 billion, $11.19 billion and $6.54 billion, respectively.
We are also entitled to semi-annual cash distributions from CFN. See Note 19—Noncontrolling Interest for additional information on our strategic venture with CHS. For the years ended December 31, 2024, 2023 and 2022, we sold 18.9 million, 19.1 million and 18.3 million product tons generating net sales of $5.94 billion, $6.63 billion and $11.19 billion, respectively.
Our Products Our primary nitrogen products are ammonia, granular urea, UAN and AN. Our historical sales of nitrogen products by segment are shown in the following table.
Our Products Our primary products are ammonia, granular urea, UAN and AN. Our historical sales by segment are shown in the following table.
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 its use for 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.
In 2023, natural gas accounted for approximately 40% of our total production costs for nitrogen products. Our nitrogen manufacturing facilities have access to abundant, competitively-priced natural gas through a reliable network of pipelines that are connected to major natural gas trading hubs.
In 2024, natural gas accounted for approximately 28% of our total production costs for nitrogen products. Our nitrogen manufacturing facilities have access to abundant, competitively-priced natural gas through a reliable network of pipelines that are connected to major natural gas trading hubs.
In 2023, our nitrogen manufacturing facilities consumed, in the aggregate, approximately 340 million MMBtus of natural gas. We employ a combination of daily spot and term purchases from a variety of quality suppliers to maintain a reliable, competitively-priced supply of natural gas. We also use certain financial instruments to hedge natural gas prices.
In 2024, our manufacturing facilities consumed, in the aggregate, approximately 345 million MMBtus of natural gas. We employ a combination of daily spot and term purchases from a variety of quality suppliers to maintain a reliable, competitively-priced supply of natural gas. We also use certain financial instruments to hedge natural gas prices.
Under the terms of the asset purchase agreement, $425 million of the $1.675 billion purchase price, subject to adjustment, was allocated by the parties to the ammonia offtake agreement. We funded the balance of the purchase price with $1.223 billion of cash on hand.
Under the terms of the asset purchase agreement, $425 million of the $1.675 billion purchase price, subject to adjustment, was allocated by the parties to the ammonia offtake agreement. We funded the balance of the final purchase price, after adjustment, with $1.221 billion of cash on hand.
Our principal assets as of December 31, 2023 include: • six U.S. nitrogen manufacturing facilities, located in Donaldsonville, Louisiana (the largest nitrogen complex in the world); Sergeant Bluff, Iowa (our Port Neal complex); Yazoo City, Mississippi; Claremore, Oklahoma (our Verdigris complex); Woodward, Oklahoma; and Waggaman, Louisiana.
Our principal assets as of December 31, 2024 include: • six U.S. manufacturing facilities, located in Donaldsonville, Louisiana (the largest ammonia production complex in the world); Sergeant Bluff, Iowa (our Port Neal complex); Yazoo City, Mississippi; Claremore, Oklahoma (our Verdigris complex); Woodward, Oklahoma; and Waggaman, Louisiana.
All references to “CF Industries” refer to CF Industries, Inc., a 100% owned subsidiary of CF Industries Holdings, Inc. References to tons refer to short tons and references to tonnes refer to metric tons. Notes referenced throughout this document refer to consolidated financial statement note disclosures that are found in Item 8.
All references to “CF Industries” refer to CF Industries, Inc., a 100% owned subsidiary of CF Industries Holdings, Inc. References to tons refer to short tons. Notes referenced throughout this document refer to consolidated financial statement note disclosures that are found in Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements.
Gross margin was $2.55 billion, $5.86 billion and $2.39 billion for the years ended December 31, 2023, 2022 and 2021, respectively. We own and operate eight nitrogen manufacturing facilities in North America, including six nitrogen manufacturing facilities in the United States, and two in Canada.
Gross margin was $2.06 billion, $2.55 billion and $5.86 billion for the years ended December 31, 2024, 2023 and 2022, respectively. We own and operate eight manufacturing facilities in North America, including six manufacturing facilities in the United States, and two in Canada.
These locations collectively have on-site storage for 37,000 tons of ammonia and 138,000 tons of AN. In addition, we used to operate an ammonia plant at the main site of the Billingham facility. However, in September 2022, we idled ammonia production at the facility.
These locations collectively have on-site storage for 37,000 tons of ammonia and 138,000 tons of AN. In addition, we previously operated an ammonia plant at the main site of the Billingham facility. However, in September 2022, we idled ammonia production at the facility.
Total other operating costs and expenses (consisting primarily of selling, general and administrative expenses and other operating—net) and non-operating expenses (consisting primarily of interest and income taxes), are centrally managed and are not included in the measurement of segment profitability reviewed by management. See Note 22—Segment Disclosures for additional information.
Total other operating costs and expenses (consisting primarily of selling, general and administrative expenses and other operating—net) and non-operating expenses (consisting primarily of interest and income taxes), are centrally managed and are not included in the measurement of segment profitability reviewed by management. See Note 22—Segment Disclosures for additional information. 4 Table of Contents CF INDUSTRIES HOLDINGS, INC.
Production of DEF can be increased by reducing urea and/or UAN production. (7) The Donaldsonville facility capacities present an estimated production mix. This facility is capable of producing between 2.4 million and 3.3 million tons of granular urea and between 1.2 million and 4.3 million tons of UAN annually.
Production of DEF can be increased by reducing urea and/or UAN production. 5 Table of Contents CF INDUSTRIES HOLDINGS, INC. (7) The Donaldsonville facility capacities present an estimated production mix. This facility is capable of producing between 2.4 million and 3.3 million tons of granular urea and between 1.2 million and 4.3 million tons of UAN annually.
Waggaman, Louisiana The Waggaman facility is located near New Orleans, Louisiana on the Mississippi River approximately 60 miles southeast of the Donaldsonville facility. The facility consists of one ammonia plant, has access to an ammonia pipeline, and has on-site storage for approximately 39,000 tons of ammonia.
Waggaman, Louisiana The Waggaman facility is located near New Orleans, Louisiana on the Mississippi River approximately 60 miles southeast of the Donaldsonville facility. The facility consists of one ammonia plant, has access to an ammonia pipeline, and has on-site storage for approximately 39,000 tons of ammonia. 6 Table of Contents CF INDUSTRIES HOLDINGS, INC.
A further description of turnaround activities is included in Note 8—Property, Plant and Equipment—Net in the notes to consolidated financial statements included in Item 8 of this report. Environmental, health and safety laws and regulations are complex, change frequently and have tended to become more stringent over time.
A further description of turnaround activities is included in Note 8—Property, Plant and Equipment—Net in the notes to consolidated financial statements included in Item 8 of this report. Environmental, health and safety laws and regulations are complex and change frequently.
The following table summarizes our production volume for the last three years: December 31, 2023 2022 2021 (tons in thousands) Ammonia (1) 9,496 9,807 9,349 Granular urea 4,544 4,561 4,123 UAN (32%) 6,852 6,706 6,763 AN 1,520 1,517 1,646 _______________________________________________________________________________ (1) Gross ammonia production, including amounts subsequently upgraded on-site into granular urea, UAN or AN.
The following table summarizes our production volume for the last three years: December 31, 2024 2023 2022 (tons in thousands) Ammonia (1) 9,800 9,496 9,807 Granular urea 4,404 4,544 4,561 UAN (32%) 6,753 6,852 6,706 AN 1,392 1,520 1,517 _______________________________________________________________________________ (1) Gross ammonia production, including amounts subsequently upgraded on-site into granular urea, UAN or AN.
In February 2016, our strategic venture with CHS commenced, at which time CHS made a capital contribution of $2.8 billion to CFN in exchange for membership interests in CFN, which represented approximately 11% of the total membership interests of CFN. 3 Table of Contents CF INDUSTRIES HOLDINGS, INC.
In February 2016, our strategic venture with CHS commenced, at which time CHS made a capital contribution of $2.8 billion to CFN in exchange for membership interests in CFN, which represented approximately 11% of the total membership interests of CFN.
Our quarterly financial results can vary significantly from one year to the next due to weather-related shifts in planting and application schedules and purchasing patterns as well as import timing, import and distribution costs and logistical limitations, such as river conditions. 8 Table of Contents CF INDUSTRIES HOLDINGS, INC.
Our quarterly financial results can vary significantly from one year to the next due to weather-related shifts in planting and application schedules and purchasing patterns as well as import timing, import and distribution costs and logistical limitations, such as river conditions.
Storage Facilities and Other Properties As of December 31, 2023, we owned or leased space at 48 in-market storage terminals and warehouses located in a 22-state region of the United States, Canada and the United Kingdom. Including storage at our production facilities, we have an aggregate storage capacity for approximately 3.0 million tons of product.
Storage Facilities and Other Properties As of December 31, 2024, we owned or leased space at 41 in-market storage terminals and warehouses located in a 19-state region of the United States, Canada and the United Kingdom. Including storage at our production facilities, we have an aggregate storage capacity for approximately 2.8 million tons of product.
Full-time employees represented nearly 100% of our workforce as of December 31, 2023 and approximately 5% were covered by collective bargaining agreements. We supplement our workforce with contractors with specialized skill sets during periods of peak activity, such as during turnarounds and maintenance events. Culture, Inclusion and Diversity.
Full-time employees represented nearly 100% of our workforce as of December 31, 2024 and approximately 6% were covered by collective bargaining agreements. We supplement our workforce with contractors with specialized skill sets during periods of peak activity, such as during turnarounds and maintenance events. Workforce Health and Safety.
We believe this strategy builds upon the Company’s leadership in ammonia production to capture emerging opportunities available to ammonia produced with a lower carbon intensity than that of ammonia produced through traditional processes.
We believe this strategy builds upon our leadership in ammonia production to capture emerging opportunities to produce ammonia with a lower carbon intensity (“low-carbon ammonia”) than that of ammonia produced through traditional processes.
For calendar year 2024, the excess emissions fee under the federal, Alberta and Ontario regulatory programs is CAD $80 per tonne, which fee will increase by CAD $15 per tonne per year, reaching CAD $170 per tonne by 2030.
For calendar year 2025, the excess emissions fee under the federal, Alberta and Ontario regulatory programs is CAD $95 per metric ton, which fee will increase by CAD $15 per metric ton per year, reaching CAD $170 per metric ton by 2030.
Environmental, Health and Safety We are subject to numerous environmental, health and safety laws and regulations in the United States, Canada, the United Kingdom, the European Union (EU) and Trinidad, including laws and regulations relating to the generation and handling of hazardous substances and wastes; the introduction of new chemicals or substances into a market; the cleanup of hazardous substance releases; the discharge of regulated substances to air or water; and the demolition of existing plant sites upon permanent closure.
Environmental, Health and Safety We are subject to numerous environmental, health and safety laws and regulations in the United States, Canada, the United Kingdom, Trinidad and other locations, including laws and regulations relating to the generation, handling and disposal of hazardous substances and wastes; the cleanup of hazardous substance releases; the discharge of regulated substances to air or water; and the demolition of existing plant sites upon permanent closure.
As of December 31, 2023, our employee 12-month rolling average recordable incident rate (RIR) was 0.36 incidents per 200,000 work hours, and during the year ended December 31, 2023, our total recordable injury count was ten.
As of December 31, 2024, our employee 12-month rolling average recordable incident rate (RIR) was 0.31 incidents per 200,000 work hours, and during the year ended December 31, 2024, our total recordable injury/illness count was nine, including one fatality.
Seasonality is greatest for ammonia due to the short application season and the limited ability of our customers and their customers to store significant quantities of this product.
Seasonality is greatest for ammonia due to the short application season and the limited ability of our 8 Table of Contents CF INDUSTRIES HOLDINGS, INC. customers and their customers to store significant quantities of this product.
Environmental, Health and Safety Expenditures Our environmental, health and safety capital expenditures in 2023 totaled approximately $36 million. We estimate that we will have approximately $47 million of environmental, health and safety capital expenditures in 2024.
Environmental, Health and Safety Expenditures Our environmental, health and safety capital expenditures in 2024 totaled approximately $30 million. We estimate that we will have approximately $49 million of environmental, health and safety capital expenditures in 2025.
In contrast, we and other fertilizer producers generally manufacture and distribute products throughout the year. As a result, we and/or our customers generally build inventories during the low demand periods of the year to ensure timely product availability during the peak sales seasons.
As a result, we and/or our customers generally build inventories during the low demand periods of the year to ensure timely product availability during the peak sales seasons.
As of December 31, 2023, 11% of our employees have worked for the Company more than 20 years, 20% of our employees have worked for the Company between 11 and 20 years, 27% of our employees have worked for the Company between 6 and 10 years, and 42% of our employees have worked at the Company for less than 6 years.
As of December 31, 2024, approximately 10% of our employees have worked for the Company more than 20 years, 25% of our employees have worked for the Company between 11 and 20 years, 22% of our employees have worked for the Company between 6 and 10 years, and 43% of our employees have worked at the Company for less than 6 years.
(2) The owned facilities that store UAN also can store ammonia. (3) Our lease agreements are typically for periods of one to five years and commonly contain provisions for automatic renewal that can extend the lease term unless cancelled by either party. Customers The principal customers for our nitrogen products are cooperatives, independent fertilizer distributors, traders, wholesalers and industrial users.
(2) The owned facilities that store UAN also can store ammonia. (3) Our lease agreements are typically for periods of one to four years and commonly contain provisions for automatic renewal that can extend the lease term unless cancelled by either party.
We employed approximately 2,700 employees at December 31, 2023, of which 78% were located in the United States, 15% in Canada, and 7% in the United Kingdom.
We employed approximately 2,800 employees at December 31, 2024, of which 79% were located in the United States, 15% in Canada, and 6% in the United Kingdom.
Department of the Interior that the natural resource damage trustees were commencing a ‘subsequent’ phase of the natural resource damage assessment, but no further details were provided with respect to said assessment.
In June 2021, we received another notice from the U.S. Department of the Interior that the natural resource damage trustees were commencing a ‘subsequent’ phase of the natural resource damage assessment, but no further details were provided with respect to said assessment.
Since that time, we have imported ammonia for upgrade into AN and other nitrogen products at the Billingham facility.
Since that time, we have imported ammonia for upgrade into AN and other nitrogen products at the Billingham facility. 3 Table of Contents CF INDUSTRIES HOLDINGS, INC.
We will provide electronic or paper copies of these documents free of charge upon request. The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. Our Strategy Our strategy is to leverage our unique capabilities to accelerate the world’s transition to clean energy.
We will provide electronic or paper copies of these documents free of charge upon request. The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements and other information that we file electronically with the SEC. Our Strategy At our core, CF Industries is a producer of ammonia.
The location has on-site storage for 61,000 tons of ammonia and 16,000 tons of 32% UAN. 6 Table of Contents CF INDUSTRIES HOLDINGS, INC.
The location has on-site storage for 61,000 tons of ammonia and 16,000 tons of 32% UAN.
Net sales do not reflect amounts used internally, such as ammonia, in the manufacture of other products. 2023 2022 2021 Sales Volume (tons) Net Sales Sales Volume (tons) Net Sales Sales Volume (tons) Net Sales (tons in thousands; dollars in millions) Ammonia 3,546 $ 1,679 3,300 $ 3,090 3,589 $ 1,787 Granular Urea 4,570 1,823 4,572 2,892 4,290 1,880 UAN 7,237 2,068 6,788 3,572 6,584 1,788 AN 1,571 497 1,594 845 1,720 510 Other (1) 2,206 564 2,077 787 2,318 573 Total 19,130 $ 6,631 18,331 $ 11,186 18,501 $ 6,538 _______________________________________________________________________________ (1) Other segment products primarily include DEF, urea liquor, nitric acid and aqua ammonia. 4 Table of Contents CF INDUSTRIES HOLDINGS, INC.
Net sales do not reflect amounts used internally, such as ammonia, in the manufacture of other products. 2024 2023 2022 Sales Volume (tons) Net Sales Sales Volume (tons) Net Sales Sales Volume (tons) Net Sales (tons in thousands; dollars in millions) Ammonia 4,085 $ 1,736 3,546 $ 1,679 3,300 $ 3,090 Granular Urea 4,522 1,600 4,570 1,823 4,572 2,892 UAN 6,771 1,678 7,237 2,068 6,788 3,572 AN 1,464 419 1,571 497 1,594 845 Other (1) 2,101 503 2,206 564 2,077 787 Total 18,943 $ 5,936 19,130 $ 6,631 18,331 $ 11,186 _______________________________________________________________________________ (1) Other segment products primarily include DEF, urea liquor, nitric acid and aqua ammonia.
In addition, environmental, health and safety laws and regulations may impose joint and several liability, without regard to fault, for cleanup costs on potentially responsible parties who have released or disposed of hazardous substances into the environment. We may be subject to more stringent enforcement of existing or new environmental, health and safety laws in the future.
In addition, environmental, health and safety laws and regulations may impose joint and several liability, without regard to fault, for cleanup costs on potentially responsible parties who have released or disposed of hazardous substances into the environment or who own or operate property where hazardous substances have been released or disposed of by other parties.
Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements. Our mission is to provide clean energy to feed and fuel the world sustainably.
Our mission is to provide clean energy to feed and fuel the world sustainably.
We execute our strategy across four dimensions: decarbonizing our existing network to accelerate the availability of low-carbon ammonia; evaluating new low-carbon ammonia capacity growth; forging partnerships to accelerate our timeline and bridge 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.
We execute our strategy across four dimensions: • decarbonizing our existing network to accelerate the availability of low-carbon ammonia and upgraded nitrogen products for traditional agricultural and industrial applications; • evaluating new low-carbon ammonia capacity growth to supply emerging opportunities from power generation and marine shipping, among others; • 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.
We believe that focusing on leading indicators — such as the behavioral safety practices we have incorporated into our annual incentive plan — to drive and measure activities that prevent safety incidents, results in our industry-leading safety record.
Operating in a safe and responsible manner is a core value and an integral part of what sets the Company apart. We believe that focusing on leading indicators — such as the behavioral safety practices we have incorporated into our annual incentive plan — to drive and measure activities that prevent safety incidents, results in our industry-leading safety record.
For the year ended December 31, 2023, our days away, restricted or transferred (DART) incident rate was 0.11 injuries per 200,000 work hours, and our lost time incident rate was 0.04 injuries per 200,000 work hours. Talent Development.
For the year ended December 31, 2024, our days away, restricted or transferred (DART) incident rate was 0.17 injuries per 200,000 work hours, and our lost time incident rate was 0.07 injuries per 200,000 work hours. 11 Table of Contents CF INDUSTRIES HOLDINGS, INC.
We can also export nitrogen products via seagoing vessels from our Donaldsonville and Billingham manufacturing facilities. The Donaldsonville and Waggaman facilities are connected to the 2,000-mile long Nustar pipeline through which we have the ability to transport ammonia to ten terminals and shipping points in the Midwestern U.S. corn belt.
The Donaldsonville and Waggaman facilities are connected to the 2,000-mile long Sunoco ammonia pipeline through which we have the ability to transport ammonia to ten Company-owned terminals and additional shipping points in the Midwestern U.S. corn belt.
Ammonia Granular Urea UAN (1) AN Number of Facilities Capacity (000 Tons) Number of Facilities Capacity (000 Tons) Number of Facilities Capacity (000 Tons) Number of Facilities Capacity (000 Tons) Plants 9 552 3 315 6 551 2 148 Terminal and Warehouse Locations Owned (2) 22 766 — — 9 244 — — Leased (3) 5 69 3 35 19 279 — — Total In-Market 27 835 3 35 28 523 — — Total Storage Capacity 1,387 350 1,074 148 _______________________________________________________________________________ (1) Capacity is expressed as the equivalent volume of UAN measured on a 32% nitrogen content basis.
Our storage capabilities are summarized in the following table: Ammonia Granular Urea UAN (1) AN Number of Facilities Capacity (000 Tons) Number of Facilities Capacity (000 Tons) Number of Facilities Capacity (000 Tons) Number of Facilities Capacity (000 Tons) Plants 9 552 3 315 6 551 2 148 Terminal and Warehouse Locations Owned (2) 21 735 — — 9 236 — — Leased (3) 5 69 3 23 13 188 — — Total In-Market 26 804 3 23 22 424 — — Total Storage Capacity 1,356 338 975 148 _______________________________________________________________________________ (1) Capacity is expressed as the equivalent volume of UAN measured on a 32% nitrogen content basis.
(11) Represents our 50% interest in the capacity of PLNL. 5 Table of Contents CF INDUSTRIES HOLDINGS, INC.
(11) Represents our 50% interest in the capacity of PLNL.
The EPA issued a mandatory GHG reporting rule that required all of our U.S. manufacturing facilities, which are considered large emitters of GHGs, to commence monitoring GHG emissions beginning on January 1, 2010 and reporting the previous year’s emissions annually starting in 2011.
Pursuant to an EPA GHG reporting rule, all of our U.S. manufacturing facilities, which are considered large emitters of GHGs, are required to monitor GHG emissions and report the previous year’s emissions annually.
The degree of seasonality of our business can change significantly from year to year due to weather conditions in the agricultural industry and other factors. The strongest demand for our products in North America occurs during the spring planting season, with a second period of strong demand following the fall harvest.
The strongest demand for our products in North America occurs during the spring planting season, with a second period of strong demand following the fall harvest. However, we and other fertilizer producers generally manufacture and distribute products throughout the year.
The next step will be a risk assessment, followed by a feasibility study. In 2015, we and several other parties received a notice that the U.S. Department of the Interior and other trustees intended to undertake a natural resource damage assessment for 18 former phosphate mines and three former processing facilities in southeast Idaho.
Department of the Interior and other trustees intended to undertake a natural resource damage assessment for 18 former phosphate mines and three former processing facilities in southeast Idaho. The Georgetown Canyon former mine and processing facility was included in the group of former mines and processing facilities identified by the trustees.
Our core product is anhydrous ammonia (ammonia), which contains 82% nitrogen and 18% hydrogen. Our nitrogen products that are upgraded from ammonia are granular urea, urea ammonium nitrate solution (UAN) and ammonium nitrate (AN). Our other nitrogen products include diesel exhaust fluid (DEF), urea liquor, nitric acid and aqua ammonia, which are sold primarily to our industrial customers.
Products derived from ammonia that are sold primarily to industrial customers include diesel exhaust fluid (DEF), urea liquor, nitric acid and aqua ammonia.
Our primary United Kingdom competition comes from imported products supplied by companies including Yara International, Origin Fertilisers, Ameropa and Thomas Bell & Sons Ltd. Urea and UAN are not produced in the United Kingdom, but along with AN are widely-traded fertilizer products with limited barriers to entry. Seasonality The fertilizer business is seasonal.
Urea and UAN are not produced in the United Kingdom, but along with AN are widely-traded fertilizer products with limited barriers to entry. Seasonality The fertilizer business is seasonal. The degree of seasonality of our business can change significantly from year to year due to weather conditions in the agricultural industry and other factors.
We are also evaluating and in various stages of developing discussions and agreements with other companies for clean ammonia long-term offtake opportunities related to new applications of ammonia. Company History We were founded in 1946 as Central Farmers Fertilizer Company, and were owned by a group of regional agriculture cooperatives for the first 59 years of our existence.
These discussions continue to advance as we gain greater clarity regarding demand for low-carbon ammonia, including associated carbon intensity requirements, government incentives and regulatory developments. Company History We were founded in 1946 as Central Farmers Fertilizer Company, and were owned by a group of regional agriculture cooperatives for the first 59 years of our existence.
Decarbonization projects in our existing network include our green ammonia project at our Donaldsonville, Louisiana complex. Green ammonia refers to ammonia produced with hydrogen sourced through an electrolysis process that produces no carbon emissions.
Decarbonization projects in our existing network also include our electrolyzer project at our Donaldsonville complex to produce ammonia with hydrogen sourced from an electrolysis process that produces no CO 2 emissions. Commissioning of the 20-megawatt alkaline water electrolysis plant to produce hydrogen was suspended due to an issue experienced in the fourth quarter of 2024.
In addition to ongoing discussions with existing customers who have interest in forthcoming availability of low-carbon ammonia for traditional applications, we are engaged in advanced discussions regarding the supply of low-carbon ammonia for new applications. In the first quarter of 2023, we signed a memorandum of understanding (MOU) with JERA Co., Inc.
In addition to discussions with existing customers who have interest in using low-carbon ammonia for traditional applications, we are engaged in discussions regarding the supply of low-carbon ammonia for new applications. We are evaluating and are in various stages of discussions with other companies for long-term offtake and/or potential joint investments related to new and traditional applications for low-carbon ammonia.
Our primary competitors with North American operations include Nutrien Ltd., Koch Fertilizer LLC, N-7 LLC (a joint venture between OCI N.V. and Dakota Gasification Company) and Yara International. There is also significant competition from products sourced from other regions of the world, including some with lower natural gas or other feedstock costs, which may include the benefit of government subsidies.
There is also significant competition from products sourced from other regions of the world, including some with lower natural gas or other feedstock costs, which may include the benefit of government subsidies. Because ammonia, urea and UAN are widely-traded fertilizer products and there are limited barriers to entry, we experience competition from foreign-sourced products continuously.
Because ammonia, urea and UAN are widely-traded fertilizer products and there are limited barriers to entry, we experience competition from foreign-sourced products continuously. Producers of nitrogen-based fertilizers located in the Middle East, Trinidad, Africa and Russia have been major exporters to North America in recent years.
Producers of nitrogen-based fertilizers located in the Middle East, Trinidad, Africa and Russia have been major exporters to North America in recent years. Our primary United Kingdom competition comes from imported products supplied by companies including Yara International, Origin Fertilisers, Ameropa and Thomas Bell & Sons Ltd.
The FEED study estimates 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 site, such as ammonia storage and vessel loading docks.
The FEED study results estimate the costs of a project with these attributes to be approximately $4 billion for the approximately 1.4 million metric ton capacity greenfield ATR ammonia facility and CCS technologies.
Regulatory Permits and Approvals We hold numerous environmental and other governmental permits and approvals authorizing operations at each of our facilities.
There exists significant uncertainty with respect to how climate policy and GHG regulation will develop in the United States in the coming years. 10 Table of Contents CF INDUSTRIES HOLDINGS, INC. Regulatory Permits and Approvals We hold numerous environmental and other governmental permits and approvals authorizing operations at each of our facilities.
They also include new applications, such as power generation and marine shipping, that would use the hydrogen component of the ammonia molecule for clean energy given that ammonia does not contain or emit carbon when combusted.
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. Our strategy also strengthens our existing business.
Competition Our markets are global and intensely competitive, based primarily on delivered price and, to a lesser extent, on reliability, customer service and product quality. During the peak demand periods, product availability and delivery time also play a role in the buying decisions of customers.
During the peak demand periods, product availability and delivery time also play a role in the buying decisions of customers. Our primary competitors with North American operations include Nutrien Ltd., Koch Fertilizer LLC, LSB Industries, CVR Partners, LP and Yara International.
Removed
In April 2021, we signed an engineering and procurement contract with thyssenkrupp to supply a 20 MW alkaline water electrolysis plant to produce green hydrogen at our Donaldsonville complex. We will integrate the green hydrogen generated by the electrolysis plant into existing ammonia synthesis loops to enable the production of approximately 20,000 tons per year of green ammonia.
Added
Our core product is anhydrous ammonia (ammonia), which contains 82% nitrogen and 18% hydrogen. 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.
Removed
The green hydrogen production facility is mechanically complete, and commissioning activities began in early 2024. We believe that the Donaldsonville green ammonia project will be the largest of its kind in North America at the time of its startup. Decarbonization projects in our existing network also include the production of low-carbon ammonia.
Added
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, UAN and DEF.
Removed
Low-carbon ammonia is ammonia produced by conventional processes but with approximately 60-98% of the process and flue gas CO 2 generated by ammonia production removed through carbon capture and sequestration (CCS). We are executing a project also at our Donaldsonville complex that will enable us to produce a significant volume of low-carbon ammonia.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeInternational acquisitions, partnerships, joint ventures, investments or business combinations and other international expansions of our business involve additional risks and uncertainties, including, but not limited to: • the impact of particular economic, tax, currency, political, legal and regulatory risks associated with specific countries; • challenges caused by distance and by language and cultural differences; • difficulties and costs of complying with a wide variety of complex laws, treaties and regulations; • unexpected changes in regulatory environments; • political and economic instability, including the possibility for civil unrest; • nationalization of properties by foreign governments; • tax rates that may exceed those in the United States, and earnings that may be subject to withholding requirements; • the imposition of tariffs, exchange controls or other restrictions; and • the impact of currency exchange rate fluctuations.
Biggest changeInternational acquisitions, partnerships, joint ventures, investments or business combinations and other international expansions of our business involve additional risks and uncertainties, including the impact of tariffs on the import of industrial goods and the export of nitrogen products, exchange controls or other restrictions, nationalization of properties by foreign governments and difficulties and costs of complying with a wide variety of complex laws, treaties and regulations.
Any reduction in the demand for our nitrogen fertilizer products, including as a result of technological developments and/or limitations on the use and application of nitrogen fertilizers, could have a material adverse effect on our business, financial condition, results of operations and cash flows. Our business is dependent on natural gas, the prices of which are subject to volatility.
Any reduction in the demand for our nitrogen fertilizer products, including as a result of technological developments or limitations on the use and application of nitrogen fertilizers, could have a material adverse effect on our business, financial condition, results of operations and cash flows. Our business is dependent on natural gas, the prices of which are subject to volatility.
For example, recent low water levels on the U.S. river system and in the Panama Canal have delayed shipping in these locations, resulting in an increase in shipping costs. Weather conditions or, in certain cases, weather forecasts, also can disrupt our operations and can affect the price of natural gas, the principal raw material used to make our nitrogen products.
For example, recent low water levels on the U.S. river system and in the Panama Canal have delayed shipping in these locations, resulting in an increase in shipping costs. Weather conditions or, in certain cases, weather forecasts, can also disrupt our operations and can affect the price of natural gas, the principal raw material used to make our nitrogen products.
If shipping of our products is delayed or we are unable to obtain raw materials as a result of these transportation companies’ failure to operate properly, or if new and more stringent regulatory requirements were implemented affecting transportation operations or equipment, or if there were significant increases in the cost of these services or equipment, our revenues and cost of operations could be adversely affected.
If shipping of our products is delayed or we are unable to obtain raw materials as a result of these transportation companies’ failure to operate properly, if new and more stringent regulatory requirements were implemented affecting transportation operations or equipment, or if there were significant increases in the cost of these services or equipment, our revenues and cost of operations could be adversely affected.
Foreign Corrupt Practices Act of 1977, the United Kingdom Bribery Act 2010, the Canadian Corruption of Foreign Public Officials Act; economic sanctions programs administered by the United Nations (UN), the EU and the Office of Foreign Assets Control of the U.S. Department of the Treasury; and regulations under the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010.
Foreign Corrupt Practices Act of 1977, the United Kingdom Bribery Act 2010, the Canadian Corruption of Foreign Public Officials Act; regulations under the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010; and economic sanctions programs administered by the United Nations (UN), the EU and the Office of Foreign Assets Control of the U.S. Department of the Treasury.
We may use natural gas futures, swaps and option contracts traded in over-the-counter markets or on exchanges. In addition, from time to time, we use fixed-price, physical purchase and sales contracts to hedge our exposure to natural gas price volatility.
We may use natural gas futures, swaps and option contracts traded in over-the-counter markets or on exchanges. In addition, from time to time, we may use fixed-price, physical purchase and sales contracts to hedge our exposure to natural gas price volatility.
These efforts, however, may not be effective and could have a material adverse effect on our business, financial condition, results of operations and cash flows. We are subject to anti-corruption laws and regulations and economic sanctions programs in various jurisdictions, including the U.S.
These efforts, however, may not be effective and could have a material adverse effect on our business, financial condition, results of operations and cash flows. We are subject to anti-corruption laws and regulations and economic sanctions programs in various jurisdictions, including the following: U.S.
In the event that the growth in supply of green and low-carbon ammonia and green and low-carbon hydrogen exceeds the growth in demand for those products, the resulting unfavorable supply and demand balance could lead to lower selling prices than we expect for many of our products, which could negatively affect our business, financial condition, results of operations and cash flows.
In the event that the growth in supply of low-carbon ammonia and low-carbon hydrogen exceeds the growth in demand for those products, the resulting unfavorable supply and demand balance could lead to lower selling prices than we expect for many of our products, which could negatively affect our business, financial condition, results of operations and cash flows.
Any disruption of our ability to produce or distribute our products could result in a significant decrease in revenues and significant additional costs to replace, repair or insure our assets, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Any disruption of our ability to produce or distribute our products could result in a significant decrease in revenues and require significant additional costs to replace, repair or insure our assets, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
The recognition and acceptance of green and low-carbon ammonia as a transport and storage mechanism for green and low-carbon hydrogen, the use of green and low-carbon ammonia as a fuel in its own right, the use of green and low-carbon ammonia as a fertilizer, and the development and growth of end market demand and applications for green and low-carbon hydrogen and green and low-carbon ammonia are uncertain and dependent on a number of factors outside of our control.
The recognition and acceptance of low-carbon ammonia as a transport and storage mechanism for low-carbon hydrogen, the use of low-carbon ammonia as a fuel in its own right, the use of low-carbon ammonia as a fertilizer, and the development and growth of end market demand and applications for low-carbon hydrogen and low-carbon ammonia are uncertain and dependent on a number of factors outside of our control.
We believe the demand for green and low-carbon ammonia could take several years to materialize and then ten or more years to fully develop and mature, and we cannot be certain that this market or the market for green and low-carbon hydrogen will grow to the size or at the rate we expect or at all.
We believe the demand for low-carbon ammonia could take several years to materialize and then ten or more years to fully develop and mature, and we cannot be certain that this market or the market for low-carbon hydrogen will grow to the size or at the rate we expect or at all.
Recently, many proposed green and low-carbon ammonia projects have been announced or considered, and future hydrogen, energy, or environmental/carbon policies may support development of additional nitrogen production in locations outside North America, including Europe, Australia, and the Middle East.
Recently, many proposed low-carbon ammonia projects have been announced or considered, and future hydrogen, energy, or environmental/carbon policies may support development of additional nitrogen production in locations outside North America, including Europe, Australia, and the Middle East.
We want to caution you not to place undue reliance on any forward-looking statements. We do not undertake any responsibility to release publicly any revisions to these forward-looking statements to take into account events or circumstances that occur after the date of this document.
We caution you not to place undue reliance on any forward-looking statements. We do not undertake any responsibility to release publicly any revisions to these forward-looking statements to take into account events or circumstances that occur after the date of this document.
Moreover, we may not be successful in the development and implementation of our green and low-carbon ammonia projects in a timely or economic manner, or at all, due to a number of factors, many of which are beyond our control.
Moreover, we may not be successful in the development and implementation of our low-carbon ammonia projects in a timely or economic manner, or at all, due to a number of factors, many of which are beyond our control.
Over time, as we seek to convert additional existing facilities to green and low-carbon production and further expand our green and low-carbon ammonia production capacity, we may face operational difficulties and execution risks related to the design, development and construction.
Over time, as we seek to convert additional existing facilities to low-carbon production and further expand our low-carbon ammonia production capacity, we may face operational difficulties and execution risks related to the design, development and construction.
Our international business operations are subject to numerous risks and uncertainties, including difficulties and costs associated with complying with a wide variety of complex laws, treaties and regulations; unexpected changes in regulatory environments; currency fluctuations; tax rates that may exceed those in the United States; earnings that may be subject to withholding requirements; and the imposition of tariffs, exchange controls or other restrictions.
Our international business operations are subject to numerous risks and uncertainties, including difficulties and costs associated with complying with a wide variety of complex laws, treaties and regulations; unexpected or conflicting changes in regulatory environments; currency fluctuations; tax rates that may exceed those in the United States; earnings that may be subject to withholding requirements; and the imposition of tariffs, embargoes, exchange controls or other restrictions.
These factors include, among others, the extent to which and rate at which cost competitive global renewable energy capacity increases, the pricing of traditional and alternative sources of energy, the realization of technological improvements required to increase the efficiency and lower the costs of production of green and low-carbon ammonia, the regulatory environment, the rate and extent of infrastructure investment and development which may be affected by the relevant parties’ ability to obtain permits for these investments, the availability of tax benefits and other incentives, the implementation of policy in foreign jurisdictions providing economic support for or otherwise mandating decarbonization and our ability to provide green and low-carbon ammonia offerings cost-effectively.
These factors include, among others, the extent to which and rate at which cost competitive global renewable energy capacity increases, the pricing of traditional and alternative sources of energy, the realization of technological improvements required to increase the efficiency and lower the costs of production of low-carbon ammonia, the regulatory environments, the rate and extent of infrastructure investment and development which may be affected by the relevant parties’ ability to obtain permits for these investments, the availability of tax benefits and other incentives, the implementation of policy in foreign jurisdictions providing economic support for or otherwise mandating decarbonization and our ability to provide low-carbon ammonia offerings cost-effectively.
Our clean energy strategy also depends on the realization of certain technical improvements required to increase the efficiency and lower the costs of production of green and low-carbon ammonia.
Our clean energy strategy also depends on the realization of certain technical improvements required to increase the efficiency and lower the costs of production of low-carbon ammonia.
These factors may also affect the market criteria for green and low-carbon ammonia, including the degree of reduction of direct GHG emissions and the requirements of renewable electricity.
These factors may also affect the market criteria for low-carbon ammonia, including the degree of reduction of direct GHG emissions and the requirements of renewable electricity.
If reduced production, increased demand or changes in basis were to occur, or if other developments adversely impact the supply and demand balance for natural gas in North America or elsewhere, natural gas prices could rise, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
If reduced production, increased demand or changes in price were to occur, or if other developments adversely impact the supply and demand balance for natural gas in North America or elsewhere, natural gas prices could rise, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
How long and at what level these duties will remain in effect and their long-term impact on the international market for nitrogen products are uncertain. A decline in agricultural production, limitations on the use of our products for agricultural purposes or developments in crop technology could materially adversely affect the demand for our products.
How long and at what level these duties will remain in effect and their long-term impact on the global market for nitrogen products are uncertain. A decline in agricultural production, limitations on the use of our products for agricultural purposes or developments in crop technology could materially adversely affect the demand for our products.
Changes in governmental trade policies can lead to the imposition of new taxes, levies, duties, tariffs or quotas affecting agricultural commodities, fertilizer or industrial products. These can alter or impact costs, trade flows, demand for our products, access to raw materials and other supplies, and regional supply and demand balances for our products.
Changes in governmental trade policies can lead to the imposition of new taxes, levies, duties, tariffs or quotas affecting agricultural commodities, fertilizer or industrial products. These can alter or impact costs, trade flows, demand for our products, access to raw materials, capital equipment, and other supplies, and regional supply and demand balances for our products.
Additionally, basis differentials may become materially unfavorable due to a lack of inbound gas pipeline or storage capacity in other regions during periods of unusually high demand. Increased demand for natural gas, particularly in the Gulf Coast Region, due to increased industrial demand and increased natural gas exports, could result in increased natural gas prices.
Additionally, price differentials may become materially unfavorable due to a lack of inbound gas pipeline or storage capacity in other regions during periods of unusually high demand. Increased demand for natural gas, particularly in the Gulf Coast Region, due to increased industrial demand and increased natural gas exports, could result in increased natural gas prices.
As a result, we and/or our customers generally build inventories during the low demand periods of the year to ensure timely product availability during the peak demand periods. Seasonality is greatest for ammonia due to the short application seasons and the limited ability of our customers and their customers to store significant quantities of this product.
As a result, we and/or our customers generally build inventories during the low demand periods of the year to facilitate timely product availability during the peak demand periods. Seasonality is greatest for ammonia due to the short application seasons and the limited ability of our customers and their customers to store significant quantities of this product.
Certain of our operating facilities are located near natural gas hubs that have experienced increased natural gas development and have favorable basis differences as compared to other North American hubs. Favorable basis differences in certain regions may dissipate over time due to increases in natural gas pipeline or storage capacity in those regions.
Certain of our operating facilities are located near natural gas hubs that have experienced increased natural gas development and have favorable price differences as compared to other North American hubs. Favorable price differences in certain regions may dissipate over time due to increases in natural gas pipeline or storage capacity in those regions.
While the current Renewable Fuel Standard encourages continued high levels of corn-based ethanol production, various interested parties have called to eliminate or reduce the renewable fuel mandate, or to eliminate or reduce corn-based ethanol as part of the renewable fuel mandate. Other factors that drive the ethanol market include the prices of ethanol, gasoline and corn.
Conversely, while the current Renewable Fuel Standard encourages continued high levels of corn-based ethanol production, various interested parties have called to eliminate or reduce the renewable fuel mandate, or to eliminate or reduce corn-based ethanol as part of the renewable fuel mandate. Additionally, other factors that drive the ethanol market include the prices of ethanol, gasoline and corn.
Major investments in our business, including acquisitions, partnerships, joint ventures, business combination transactions or other major investments, such as our green and low-carbon ammonia projects, require significant managerial resources, the diversion of which from our other activities or opportunities may negatively affect the existing operations of our business.
Major investments in our business, including acquisitions, partnerships, joint ventures, business combination transactions or other major investments, such as our low-carbon ammonia projects, require significant managerial resources, the diversion of which from our other activities or opportunities may negatively affect the existing operations of our business.
The production of low-carbon ammonia depends to a large extent upon the ability of third parties to develop class VI carbon sequestration wells and carbon dioxide transportation pipelines, which currently do not exist at large scale and are subject to a permitting process and operational risks, which may result in delays, impact viability in some or all situations, or create long-term liabilities.
The production of low-carbon ammonia depends to a large extent upon the ability of third parties to develop class VI carbon sequestration wells and CO 2 transportation pipelines, which currently do not exist at large scale and are subject to a permitting process and operational risks, which may result in delays, impact viability in some or all situations, or create long-term liabilities.
We are reliant on a limited number of key facilities. Our nitrogen manufacturing facilities are located at nine separate nitrogen complexes, the largest of which is the Donaldsonville complex, which represented approximately 40% of our ammonia production capacity as of December 31, 2023.
We are reliant on a limited number of key facilities. Our nitrogen manufacturing facilities are located at nine separate nitrogen complexes, the largest of which is the Donaldsonville complex, which represented approximately 40% of our ammonia production capacity as of December 31, 2024.
We are subject to numerous environmental, health and safety laws and regulations in the United States, Canada, the United Kingdom, the EU, Trinidad and other locations, including laws and regulations relating to the generation and handling of hazardous substances and wastes; the introduction of new chemicals or substances into a market; the cleanup of hazardous substance releases; the discharge of regulated substances to land, air or water; and the demolition and cleanup of existing plant sites upon permanent closure.
We are subject to numerous environmental, health and safety laws and regulations in the United States, Canada, the United Kingdom, Trinidad and other locations, including laws and regulations relating to the generation, handling and disposal of hazardous substances and wastes; the introduction of new chemicals or substances into a market; the cleanup of hazardous substance releases; the discharge of regulated substances to land, air or water; and the demolition and cleanup of plant sites upon permanent closure.
For imports that enter the EU starting in 2026, charges will be required for emissions over certain thresholds, with the EU still to set forth additional details. Other governments are also considering border adjustment mechanisms for carbon intensive products. The imposition of any carbon border adjustment taxes may impact investment and trade flows, which could adversely impact our business.
For imports that enter the EU starting in 2026, charges will be required for emissions over certain thresholds, with the EU still to set forth additional details. Other governments are also considering border taxes for carbon intensive products. The imposition of any such taxes may impact investment and trade flows, which could adversely impact our business.
A decision by a government agency to deny or delay issuing a new or renewed regulatory permit or approval, or to revoke or substantially modify an existing permit or approval, or a determination that we have violated a law or permit could have a material adverse effect on our ability to continue operations at our facilities and on our business, financial condition, results of operations and cash flows.
A decision by a government agency to deny or delay issuing a new or renewed regulatory permit or approval, or to revoke or substantially modify an existing permit or approval, a legal challenge to our permits, or a determination that we have violated a law or permit could have a material adverse effect on our ability to continue operations at our facilities and on our business, financial condition, results of operations and cash flows.
Delays or interruptions in the delivery of raw materials and utilities may be caused by, among other things, extreme weather or natural disasters, unscheduled downtime, labor difficulties or shortages, insolvency of our suppliers or their inability to meet existing contractual arrangements, deliberate sabotage and terrorist incidents, unplanned maintenance or mechanical failures.
Delays or interruptions in the delivery of raw materials and utilities may be caused by, among other things, adverse weather conditions or natural disasters, unscheduled downtime, labor difficulties or shortages, insolvency of our suppliers or their inability to meet existing contractual arrangements, deliberate sabotage and terrorist incidents, unplanned maintenance or mechanical failures.
If seasonal demand is less than we expect, we may be left with excess inventory that will have to be stored (in which case our results of operations would be negatively affected by any related increased storage costs) or liquidated (in which case the selling price could be below our production, procurement and storage costs).
If seasonal demand is less than we expect, we may be left with excess inventory that would need to be stored (in which case our results of operations would be negatively affected by any related increased storage costs) or liquidated (in which case the selling price could be below our production, procurement and storage costs).
As a result of doing business internationally, we are exposed to a risk of violating anti-corruption laws and sanctions regulations applicable in those countries where we, our partners or our agents operate.
As a result of doing business internationally, we are exposed to risks of violating anti-corruption laws and sanctions regulations applicable in those countries where we, our partners or our agents operate.
As of December 31, 2023, we had approximately $3.0 billion of total funded indebtedness, consisting primarily of unsecured senior notes with varying maturity dates between 2026 and 2044, or approximately 26% of our total capitalization (total debt plus total equity), and an additional $750 million of unsecured senior borrowing availability (reflecting no outstanding borrowings and no outstanding letters of credit) for general corporate purposes under our revolving credit agreement (the Revolving Credit Agreement).
As of December 31, 2024, we had approximately $3.0 billion of total funded indebtedness, consisting primarily of unsecured senior notes with varying maturity dates between 2026 and 2044, or approximately 28% of our total capitalization (total debt plus total equity), and an additional $750 million of unsecured senior borrowing availability (reflecting no outstanding borrowings and no outstanding letters of credit) for general corporate purposes under our revolving credit agreement (the Revolving Credit Agreement).
Our ability to obtain any financing, whether through the issuance of new debt securities or otherwise, and the terms of any such financing are dependent on, among other things, our financial condition, financial market conditions within our industry and generally, credit ratings and numerous other factors, including factors beyond our control.
Our ability to obtain any financing, whether through the issuance of new debt securities or otherwise, and the terms of any such financing are dependent on, among other things, our financial condition, financial market conditions within our industry and generally, interest rate fluctuations, credit ratings and numerous other factors, including factors beyond our control.
Governmental policies, including farm and biofuel subsidies, commodity support programs and tariffs, environmental and greenhouse gas policies, as well as the prices of fertilizer products, may also directly or indirectly influence the number of acres planted, the mix of crops planted and the use of fertilizers for particular agricultural applications.
Governmental policies and changes thereto, including farm and biofuel subsidies, commodity support programs and tariffs, environmental and greenhouse gas (GHG) policies, as well as the prices of fertilizer products, may also directly or indirectly influence the number of acres planted, the mix of crops planted and the use of fertilizers for particular agricultural applications.
Our operating results fluctuate due to seasonality. Our inability to predict future seasonal fertilizer demand accurately could result in our having excess inventory, potentially at costs in excess of market value. The fertilizer business is seasonal. The degree of seasonality of our business can change significantly from year to year due to conditions in the agricultural industry and other factors.
Our inability to predict future seasonal fertilizer demand accurately could result in our having excess inventory, potentially at costs in excess of market value. The fertilizer business is seasonal. The degree of seasonality of our business can change significantly from year to year due to conditions in the agricultural industry and other factors.
We believe the ability to purchase products on a forward basis is most appealing to our customers during periods of generally increasing prices for nitrogen fertilizers.
We believe the ability to purchase products on a forward basis is more appealing to our customers during periods of generally increasing prices for nitrogen fertilizers.
More stringent GHG regulations, if they are enacted, are likely to have a significant impact on us, because our production facilities emit GHGs such as carbon dioxide and nitrous oxide and because natural gas, a fossil fuel that releases methane when extracted from the earth, is a primary raw material used in our nitrogen production process.
More stringent GHG regulations, if they are enacted, are likely to have a significant impact on us, because our production facilities emit GHGs such as CO 2 and nitrous oxide and because natural gas, a fossil fuel that releases methane when extracted from the earth, is a primary raw material used in our nitrogen production process.
Some of our competitors have greater total resources and are less dependent on earnings from fertilizer sales, which make them less vulnerable to fertilizer industry downturns and better positioned to pursue new expansion and development opportunities.
Some of our competitors have greater total resources and are less dependent on earnings from nitrogen product sales, which make them less vulnerable to fertilizer and other nitrogen product industry downturns and better positioned to pursue new expansion and development opportunities.
Thus, duties, tariffs and quotas can lead to uncertainty in the global marketplace and impact the supply and demand balance in many regions, which could adversely affect our business, financial condition, results of operations and cash flows.
Any such duties, tariffs and quotas can lead to uncertainty in the global marketplace and impact the supply and demand balance in many regions, which could adversely affect our business, financial condition, results of operations and cash flows.
These or other more stringent limitations on greenhouse gas emissions applicable to farmers, the end-users of our nitrogen fertilizers, could reduce the demand for our fertilizer products to the extent their use of our products increases farm-level emissions.
These or other more stringent limitations on GHG emissions applicable to farmers, the end-users of our nitrogen fertilizers, could reduce the demand for our fertilizer products to the extent their use of our products increases farm-level emissions.
We expect to consider options to refinance our outstanding indebtedness from time to time.
We consider options to refinance our outstanding indebtedness from time to time.
More stringent environmental, health and safety laws and regulations, a reinterpretation of or changes to current laws and regulations, or community opposition to permits and approvals could make it more difficult to obtain necessary governmental permits (including renewals of our existing permits) or approvals.
More stringent environmental, health and safety laws and regulations, a reinterpretation of or changes to current laws and regulations, or community opposition to permits and approvals could make it more difficult to obtain necessary governmental permits (including renewals thereof) or approvals.
Future regulatory or legislative restrictions on greenhouse gas (GHG) emissions in the jurisdictions in which we operate or conduct business could materially adversely affect our business, financial condition, results of operations and cash flows.
Regulatory or legislative restrictions on GHG emissions in the jurisdictions in which we operate or conduct business could materially adversely affect our business, financial condition, results of operations and cash flows.
We also export nitrogen fertilizer products via seagoing vessels from deep-water docking facilities at certain of our manufacturing sites on the U.S. river system through the U.S. Gulf of Mexico.
We also export nitrogen fertilizer products via seagoing vessels from deep-water docking facilities at certain of our manufacturing sites on the U.S. river system near the U.S. Gulf.
The risks associated with excess inventory and product shortages are exacerbated by the volatility of nitrogen fertilizer prices, the constraints of our storage capacity, and the relatively brief periods during which farmers can apply nitrogen fertilizers. If prices for our products rapidly decrease, we may be subject to inventory write-downs, adversely affecting our operating results.
The risks associated with excess inventory and product shortages are exacerbated by the volatility of nitrogen fertilizer prices, the constraints of our storage capacity, and the relatively brief periods during which farmers can apply nitrogen fertilizers. If prices for our products rapidly decrease, we may be required to write-down the value of our inventory, adversely affecting our operating results.
A number of factors could encourage China to increase product capacity utilization, including changes in Chinese government policy, devaluation of the Chinese renminbi, the relaxation of Chinese environmental standards or decreases in Chinese producers’ underlying costs such as the price of Chinese coal.
A number of factors could encourage China to increase product capacity utilization or expand exports of nitrogen fertilizers, including changes in Chinese government policy, devaluation of the Chinese renminbi, the relaxation of Chinese environmental standards or decreases in Chinese producers’ underlying costs such as the price of Chinese coal.
Due to the cyclical nature of our industry, we cannot predict the timing or duration of such periods of industry oversupply or the degree to which oversupply conditions would impact our business, financial condition, results of operations and cash flows. Nitrogen products are global commodities, and we face intense global competition from other producers.
We cannot predict the timing or duration of such periods of industry oversupply or the degree to which oversupply conditions would impact our business, financial condition, results of operations and cash flows. Nitrogen products are global commodities, and we face intense global competition from other producers. We are subject to intense price competition from other producers.
As with most large systems, our information technology systems (and those of our suppliers) have in the past been, and in the future likely will be, subject to computer viruses, malicious codes, unauthorized access and other cyberattacks, and we expect the sophistication and frequency of such attacks to continue to increase.
As with most large systems, our information technology systems (and those of our business partners and other third-parties) have in the past been, and in the future likely will be, subject to computer viruses, malicious codes, unauthorized access and other cyberattacks, and we expect the sophistication and frequency of such attacks to continue to increase.
As a result, other manufacturers, traders and other market participants can move nitrogen products to North America when there is uncertainty associated with the supply and demand balance in other regions or when duties, tariffs or quotas impact prices or trade flows in other regions.
As a result, other manufacturers, traders and other market participants have historically moved nitrogen products to North America when there is uncertainty associated with the supply and demand balance in other regions or when duties, tariffs or quotas impact prices or trade flows in other regions.
As a consequence, conditions in the international market for nitrogen products significantly influence our operating results. We compete with many producers, including state-owned and government-subsidized entities.
As a consequence, conditions in the global market, including pricing competition, for nitrogen products significantly influence our operating results. We compete with many producers, including state-owned and government-subsidized entities.
In the United States and Canada, the railroad industry continues various efforts to limit the railroads’ potential liability stemming from the transportation of Toxic Inhalation Hazard materials, such as the anhydrous ammonia we transport to and from our manufacturing and distribution facilities.
In the United States and Canada, the railroad industry continues various efforts to limit its potential liability with respect to transportation of Toxic Inhalation Hazard materials, such as the anhydrous ammonia we transport to and from our manufacturing and distribution facilities.
If our assumptions about the engineering and project execution requirements necessary to successfully build or convert the facility capacity that we are contemplating and to scale up to larger production quantities prove to be incorrect, we may be unable to produce substantial quantities of green or low-carbon ammonia, and the cost to construct such green and low-carbon ammonia 24 Table of Contents CF INDUSTRIES HOLDINGS, INC. facilities, or the production costs associated with the operation of such facilities, may be higher than we project.
If our assumptions about the engineering and project execution requirements necessary to successfully build or convert the facility capacity that we are contemplating and to scale up to larger production quantities prove to be incorrect, we may be unable to produce substantial quantities of low-carbon ammonia, and the cost to construct such low-carbon ammonia facilities, or the production costs associated with the operation of such facilities, may be higher than we project.
These transportation operations, equipment and services are subject to various hazards and other sources of disruption, including adverse operating conditions on the inland waterway system or on the seas with respect to oceangoing vessels, extreme weather conditions, system failures, unscheduled downtime, labor difficulties or shortages, shutdowns, delays, accidents such as spills and derailments, vessel groundings and other accidents and operating hazards.
These transportation operations, equipment and services are subject to various hazards and other sources of disruption, including adverse operating conditions 16 Table of Contents CF INDUSTRIES HOLDINGS, INC. on the inland waterway system or on the seas with respect to oceangoing vessels, adverse weather conditions, system failures, unscheduled downtime, labor difficulties or shortages, shutdowns, delays, accidents such as spills and derailments, vessel groundings and other accidents and operating hazards.
For example, in the two-year period ended December 31, 2017, additional production capacity came online and, at the same time, the average selling price for our products declined 34%, from $314 per ton in 2015 to $207 per ton in 2017. Additional nitrogen production capacity is expected to come online over the next 12 months outside of North America.
For example, in the two-year period ended December 31, 2017, additional production capacity came online, and the average selling price for our products declined 34%, from $314 per ton in 2015 to $207 per ton in 2017. Additional nitrogen production capacity is expected to come online over the next 12 months.
Such factors include, among others: • the cyclical nature of our business and the impact of global supply and demand on our selling prices; • the global commodity nature of our nitrogen products, the conditions in the international market for nitrogen products, and the intense global competition from other producers; • conditions in the United States, Europe and other agricultural areas, including the influence of governmental policies and technological developments on the demand for our fertilizer products; • the volatility of natural gas prices in North America and the United Kingdom; • weather conditions and the impact of adverse weather events; • the seasonality of the fertilizer business; • the impact of changing market conditions on our forward sales programs; • difficulties in securing the supply and delivery of raw materials or utilities, increases in their costs or delays or interruptions in their delivery; • reliance on third party providers of transportation services and equipment; • our reliance on a limited number of key facilities; • risks associated with cybersecurity; • acts of terrorism and regulations to combat terrorism; • risks associated with international operations; • the significant risks and hazards involved in producing and handling our products against which we may not be fully insured; • our ability to manage our indebtedness and any additional indebtedness that may be incurred; • our ability to maintain compliance with covenants under our revolving credit agreement and the agreements governing our indebtedness; • downgrades of our credit ratings; • risks associated with changes in tax laws and disagreements with taxing authorities; • risks involving derivatives and the effectiveness of our risk management and hedging activities; • potential liabilities and expenditures related to environmental, health and safety laws and regulations and permitting requirements; • regulatory restrictions and requirements related to greenhouse gas emissions; • 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; and • risks associated with expansions of our business, including unanticipated adverse consequences and the significant resources that could be required. 27 Table of Contents CF INDUSTRIES HOLDINGS, INC.
Such factors include, among others: • the cyclical nature of our business and the impact of global supply and demand on our selling prices and operating results; • the global commodity nature of our nitrogen products, the conditions in the international market for nitrogen products, and the intense global competition from other producers; • conditions in the United States, Europe and other agricultural areas, including the influence of governmental policies and technological developments on the demand for our fertilizer products; • the volatility of natural gas prices in North America; • weather conditions and the impact of adverse weather events; • the seasonality of the fertilizer business; • the impact of changing market conditions on our forward sales programs; • difficulties in securing the supply and delivery of raw materials or utilities, increases in their costs or delays or interruptions in their delivery; • reliance on third party providers of transportation services and equipment; • our reliance on a limited number of key facilities; • risks associated with cybersecurity; • acts of terrorism and regulations to combat terrorism; • the significant risks and hazards involved in producing and handling our products against which we may not be fully insured; • risks associated with international operations; • our ability to manage our indebtedness and any additional indebtedness that may be incurred; • risks associated with changes in tax laws and adverse determinations by taxing authorities; • risks involving derivatives and the effectiveness of our risk management and hedging activities; • potential liabilities and expenditures related to environmental, health and safety laws and regulations and permitting requirements; • regulatory restrictions and requirements related to GHG emissions; • the development and growth of the market for low-carbon ammonia and the risks and uncertainties relating to the development and implementation of our low-carbon ammonia projects; • risks associated with investments in and expansions of our business, including unanticipated adverse consequences and the significant resources that could be required; and • failure of technologies to perform, develop or be available as expected. 27 Table of Contents CF INDUSTRIES HOLDINGS, INC.
Government policies in these regions may also stimulate future ammonia or hydrogen investments. Recently, many proposed green and low-carbon ammonia projects have been announced or considered, and future hydrogen, energy, or environmental/carbon policies may support development of additional nitrogen production in locations outside North America, including Europe, Australia, India, and the Middle East.
Recently, many proposed low-carbon ammonia projects have been announced or considered, and future hydrogen, energy, or environmental/carbon policies may support development of additional nitrogen production in locations outside North America, including Europe, Australia, India, and the Middle East.
Major investments such as capital improvements at our 25 Table of Contents CF INDUSTRIES HOLDINGS, INC. facilities are subject to a number of risks, any of which could prevent us from completing capital projects in a timely or economic manner or at all, including, without limitation, cost overruns, non-performance of third parties, the inability to obtain necessary permits or other permitting matters, adverse weather, defects in materials and workmanship, labor and raw material shortages, transportation constraints, changes to international trade-related policy, engineering and construction change orders, errors in design, construction or start-up, and other unforeseen difficulties.
Major investments such as capital improvements at our facilities are subject to a number of risks, any of which could prevent us from completing capital projects in a timely or economic manner or at all, including, without limitation, cost overruns, non-performance of third parties, slowdowns or other delays in contemplated construction timelines, modularization of certain components, the inability to obtain necessary permits or other permitting matters, adverse weather, defects in materials and workmanship, labor and raw material shortages, transportation constraints, changes to international trade-related policy, engineering and construction change orders, errors in design, construction or start-up, and other unforeseen difficulties.
From time to time, our production, distribution or storage of anhydrous ammonia and other hazardous or regulated substances has resulted in accidental releases that have temporarily disrupted our operations and/or resulted in liability for administrative penalties, cleanup costs, and/or claims for personal injury.
From time to time, our production, distribution or storage of anhydrous ammonia and other hazardous or regulated substances has resulted in accidental releases that have temporarily disrupted our operations and/or resulted in liability for administrative penalties, cleanup costs, and/or claims for personal injury. To date, our costs to resolve these liabilities have not been material.
The strongest demand for our products in North America occurs during the spring planting season, with a second period of strong demand following the fall harvest. In contrast, we and other fertilizer producers generally manufacture and distribute products throughout the year.
The strongest demand for our products in North America occurs during the spring planting season, with a second period of strong demand following the fall harvest. In contrast, we and other 15 Table of Contents CF INDUSTRIES HOLDINGS, INC. fertilizer producers generally manufacture and distribute products throughout the year.
We have used the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will” or “would” and similar terms and phrases, including references to assumptions, to identify forward-looking statements in this document.
We use the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will” or “would” and similar terms and phrases, including references to assumptions, to identify forward-looking statements.
We are subject to intense price competition from our competitors. The nitrogen products that we produce are global commodities, with little or no product differentiation, and customers make their purchasing decisions principally on the basis of delivered price and, to a lesser extent, customer service and product quality.
The nitrogen products that we produce are global commodities or are derived from global commodities, with little or no product differentiation. Customers tend to make their purchasing decisions of these products principally on the basis of delivered price and, to a lesser extent, customer service and product quality.
Our Donaldsonville and Waggaman complexes are located in an area of the United States that experiences a relatively high level of hurricane or high wind activity and several of our complexes are located in areas that experience extreme weather events.
Our Donaldsonville and Waggaman complexes are located in an area of the United States that experiences a relatively high level of hurricane or high wind activity and several of our complexes are located in areas that experience extreme weather events for which insurance may be insufficient or unavailable.
Consequently, in the event that we need to access the credit markets, including to refinance our debt, there can be no assurance that we will be able to obtain financing on acceptable terms or within an acceptable timeframe, if at all.
Consequently, in the event that we need to access the credit markets, including to refinance our debt, there can be no assurance that we will be able to obtain financing on 20 Table of Contents CF INDUSTRIES HOLDINGS, INC. acceptable terms or within an acceptable timeframe, if at all.
In addition, the international market for nitrogen products is influenced by such factors as currency exchange rates, including the relative value of the U.S. dollar and its impact on the cost of importing nitrogen products into the United States, foreign agricultural policies, the existence of, or changes in, import or foreign currency exchange barriers in certain foreign markets and the laws and policies of the markets in which we operate, including the imposition of new duties, tariffs or quotas, that affect foreign trade and investment.
Global competition for nitrogen products is also influenced by other factors, including currency exchange rates, including the relative value of the U.S. dollar and its impact on the cost of importing nitrogen products into the United States, foreign agricultural policies, the existence of, or changes in, import or foreign currency exchange barriers in certain foreign jurisdictions and the laws and policies of the regions in which we operate, including the imposition of new duties, tariffs or quotas, that affect foreign trade and investment.
We purchase raw materials and utilities from third party suppliers. Our natural gas is transported by pipeline to our facilities by third party transportation providers or through the use of facilities owned by third parties.
We purchase raw materials and utilities from third party suppliers. Our natural gas is transported by pipeline to our facilities by third party transportation providers or through the use of facilities owned by third parties, and certain of our plants are reliant on only one natural gas pipeline.
Operational disruptions could occur for many reasons, including natural disasters, weather, unplanned maintenance and other manufacturing problems, disease, strikes or other labor unrest or transportation interruptions.
Operational disruptions could occur for many reasons, including natural disasters, adverse weather conditions, unplanned maintenance and other manufacturing problems, such as mechanical failures, disease, strikes or other labor unrest or transportation interruptions.
Additionally, the International Swaps and Derivative Association master netting arrangements for most of our derivative instruments contain credit-risk-related contingent features, such as cross default provisions and credit support requirements.
Additionally, 21 Table of Contents CF INDUSTRIES HOLDINGS, INC. the International Swaps and Derivative Association master netting arrangements for most of our derivative instruments contain credit-risk-related contingent features, such as cross-default provisions and credit support requirements.
Our competitive position could suffer as a result of these factors, including if we are not able to expand our own resources to a similar extent, either through investments in new or existing operations or through acquisitions or joint ventures. 12 Table of Contents CF INDUSTRIES HOLDINGS, INC.
We may not be 12 Table of Contents CF INDUSTRIES HOLDINGS, INC. able to be competitive with these entities, including if we are not able to expand our own resources to a similar extent, either through investments in new or existing operations or through acquisitions or joint ventures.
Tax laws or rates in the various jurisdictions in which we operate may be subject to significant change.
Tax laws or rates, including tax credits relating to decarbonization projects, in the various jurisdictions in which we operate may be subject to significant change.
Hydrogen currently accounts for less than 1% of the world’s energy needs.
Hydrogen currently accounts for approximately 1% of the world’s energy needs.
These producers, depending on market conditions, fluctuating input prices, geographic location and freight economics, may take actions at times with respect to price or selling volumes that adversely affect our business, financial condition, results of operations and cash flows. Some of these producers also benefit from non-market or government-set rates for natural gas pricing.
These producers, depending on market conditions, fluctuating input prices, geographic location and freight economics, may take actions at times with respect to price or selling volumes that adversely affect our business, financial condition, results of operations and cash flows.
In addition, plans for building new facilities for green and low-carbon ammonia have been announced by other companies and CF Holdings, such as our proposed plans for an export-oriented greenfield low-carbon ammonia production facility in the southeastern United States. We cannot predict the impact of this additional capacity on nitrogen selling prices.
In addition, we and other companies have announced plans to build new facilities for low-carbon ammonia, such as our proposed plans for an export-oriented greenfield low-carbon ammonia production facility in Louisiana. We cannot predict the impact of this additional capacity on nitrogen selling prices.
Any significant adverse weather event or combination of adverse weather events could decrease demand for our fertilizer products, increase the cost of natural gas or materially disrupt our operations — any of which could have a material adverse impact on our business, financial condition, results of operations and cash flows. 15 Table of Contents CF INDUSTRIES HOLDINGS, INC.
Any significant adverse weather event or combination of adverse weather events could decrease demand for our fertilizer products, increase the cost of natural gas or materially disrupt our operations — any of which could have a material adverse impact on our business, financial condition, results of operations and cash flows. Our operating results fluctuate due to seasonality.
Ethanol production in the United States contributes significantly to corn demand, representing approximately 40% of total U.S. corn demand, due in part to federal legislation mandating use of renewable fuels.
For example, ethanol production in the United States contributes significantly to corn demand, representing approximately 40% of total U.S. corn demand, and is impacted by federal legislation mandating renewable fuels use.
Any of the attacks, breaches or other disruptions or damage described above could: interrupt our operations at one or more sites; delay production and shipments; result in the theft of our and our customers’ intellectual property and trade secrets; damage customer and business partner relationships and our reputation; result in legal claims and proceedings, liability and penalties under privacy or other laws, or increased costs for security and remediation; or raise concerns regarding our accounting for transactions.
Any of the attacks, breaches or other disruptions or damage described above could: result in an operational interruption or failure at one or more sites; damage our operations; delay production and shipments; expose us to ransom payment, other demands, or paralyze our operations; result in the theft of our and our customers’ intellectual property and trade secrets; damage customer and business partner relationships and our reputation; result in legal claims and proceedings, liability and penalties under privacy or other laws, including for unauthorized disclosure of personally identifiable information, or increased costs for security and remediation; or raise concerns regarding our accounting for transactions.
If a sustainable market for green or low-carbon ammonia or hydrogen fails to develop, develops more slowly than we anticipate, or develops in a way that is not viable to serve with our assets and capabilities, we may decide not to implement, or may not be successful in implementing, one or more elements of our multi-year strategic plan.
If a sustainable market for low-carbon ammonia or hydrogen fails to develop, develops more slowly than we anticipate, or develops in a way that is not viable to serve with our assets and capabilities, we may decide not to implement, or may not be successful in implementing, one or more elements of our multi-year strategic plan or may have committed to investments involving substantial capital expenditures which might not yield returns required to justify such investments.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

12 edited+2 added−0 removed8 unchanged
Biggest changeThe Audit Committee of the Board provides oversight in connection with management’s cybersecurity efforts. The Audit Committee receives periodic reports summarizing threat detection and mitigation plans, audits of internal controls, training and certification and other cyber priorities and initiatives, as well as timely updates from senior leaders on material incidents relating to cybersecurity.
Biggest changeThe Audit Committee receives periodic reports summarizing threat detection and mitigation plans, audits of internal controls, summaries of training activities and certification achievements, assessments of cybersecurity program effectiveness and reports on other cybersecurity priorities and initiatives. This is in addition to management’s periodic updates on cybersecurity incidents involving the Company or other industry and global participants.
We consistently evaluate the threat landscape, adopting a multifaceted approach to cybersecurity risks through a zero-trust strategy focusing on prevention, detection, and mitigation, which includes the following programs and practices: • Our cybersecurity team conducts an annual review of cybersecurity risks at the ERM level, integrating significant cybersecurity risks into our overall ERM program.
We consistently evaluate the threat landscape, adopting a multifaceted approach to cybersecurity risks that through a zero trust strategy focusing on prevention, detection, and mitigation, which includes the following programs and practices: • Our cybersecurity team conducts an annual review of cybersecurity risks at the ERM level, integrating significant cybersecurity risks into our overall ERM program.
Additionally, we conduct periodic external penetration tests and maturity testing to assess the effectiveness of our security controls, including processes, procedures, and our readiness to face the evolving threat landscape. • We consider and assess the cybersecurity risks associated with the utilization of third-party service providers under our third-party risk management program.
Additionally, we conduct periodic external penetration tests and maturity testing to assess the effectiveness of our security controls, including processes, procedures, and our readiness to face the evolving threat landscape. • We consider and assess the cybersecurity risks associated with the utilization of third-party service providers, including cybersecurity vendors, consultants, and auditors, under our third-party risk management program.
The Board regularly reviews and discusses with the key members of management responsible for management of risk the guidelines and policies governing the ERM process, the key risks identified in the ERM process, the likelihood of occurrence and the potential impact assigned to those risks by management, and the risk mitigation strategies in each instance.
The Board regularly reviews and discusses with members of management responsible for risk management the guidelines and policies governing the ERM process. This includes the key risks identified in the ERM process, the likelihood of occurrence and the potential impact assigned to those risks by management, in addition to the risk mitigation strategies in each instance.
We contract with an external auditing firm to assess our cybersecurity controls relative to industry peers using the NIST CSF, which has five functions: identify, protect, detect, respond and recover.
We contract with an external auditing firm to assess our cybersecurity controls relative to industry peers using the NIST CSF, which has six functions: govern, identify, protect, detect, respond and recover.
The ERM program seeks to integrate consideration of risk and risk management into business decision-making throughout the company, including through the implementation of policies and procedures intended to ensure that necessary information with respect to material risks, including material risks from cybersecurity threats, is transmitted to senior executives and, as appropriate, to the Board of Directors (Board) or relevant committees.
The ERM program seeks to integrate consideration of risk and risk management into business decision-making throughout the Company, including through the implementation of policies and procedures intended to ensure that necessary information with respect to material risks, including material risks from cybersecurity threats, is appropriately communicated to senior executives and the Board of Directors (Board) or relevant committees.
To date, we have not identified any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or that we believe are reasonably likely to materially affect our business strategy, results 28 Table of Contents CF INDUSTRIES HOLDINGS, INC. of operations, or financial condition.
To date, we have not identified any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or that we believe are reasonably likely to materially affect our business strategy, results of operations, or financial condition.
The response plan includes coordinated processes for handling security and data privacy incidents, encompassing communication and effective response. • Our global business continuity program includes information technology disaster recovery, supporting resilience in both our business and information technology.
The response plan includes coordinated processes for handling security and data privacy incidents, encompassing communication and effective response, and as appropriate, escalation to the Audit Committee or the Board. 28 Table of Contents CF INDUSTRIES HOLDINGS, INC. • Our global business continuity program includes information technology disaster recovery, supporting resilience in both our business and information technology.
The ERM program includes an annual assessment process designed to identify risks, including those from cybersecurity threats, that could affect us and the achievement of our objectives; to understand, assess, and prioritize those risks; and to facilitate the implementation of risk management strategies and processes across the company that are responsive to the company’s risk profile, business strategies, and specific material risk exposures.
The ERM program includes an annual assessment process designed to identify risks, including those from cybersecurity threats, that could affect achievement of our business, operations and strategic objectives and to understand, assess, and prioritize those risks.
Risk Factors under “Operational Risks—We are subject to risks relating to our information technology systems, and any technology disruption or cybersecurity incident could negatively affect our operations.” ITEM 2. PROPERTIES. Information regarding our facilities and properties is included in Item 1. Business—Nitrogen Manufacturing Facilities and Item 1. Business—Storage Facilities and Other Properties. ITEM 3. LEGAL PROCEEDINGS.
Risk Factors under “Operational Risks—Failure, inadequacy, breach of, or unauthorized access to, our information technology systems or those of third-party service providers or customers could negatively affect our business and operations.” ITEM 2. PROPERTIES. Information regarding our facilities and properties is included in Item 1. Business—Manufacturing Facilities and Item 1. Business—Storage Facilities and Other Properties. ITEM 3. LEGAL PROCEEDINGS.
Our cybersecurity strategy prioritizes protection, detection, analysis, and response to known, anticipated or unexpected cyber threats, effective management of cyber risks and resilience against cyber incidents.
Our chief information officer is supported by a dedicated team of certified cybersecurity professionals, with an average of over 13 years of relevant experience. Our cybersecurity strategy prioritizes governance, protection, detection, analysis, and response to known, anticipated, or unexpected cyber threats, effective management of cyber risks and resilience against cyber incidents.
The Audit Committee also receives regular reports on the efficacy of our cybersecurity risks and related policies and procedures from our chief information officer and other members of senior management who are tasked with monitoring cybersecurity risks. Our chief information officer oversees a dedicated team of certified cybersecurity professionals, with an average of over 12 years of relevant experience.
The Audit Committee also receives regular updates on the efficacy of our cybersecurity program and risk management from our chief information officer and other members of management that are tasked with monitoring cybersecurity risks. Our chief information officer has over 10 years of experience overseeing cybersecurity teams at both the Company and two other public companies.
Added
The ERM program also intends to facilitate the implementation of risk management strategies and risk mitigation processes across the Company that are responsive to the Company’s risk profile, overall business strategies, and specific material risk exposures.
Added
The Audit Committee of the Board oversees management’s cybersecurity risk management efforts. Our chief information officer oversees information technology, cybersecurity risk and efforts to prevent and mitigate such risks.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+1 added−1 removed2 unchanged
Biggest changeThe following table sets forth share repurchases, on a trade date basis, for each of the three months of the quarter ended December 31, 2023: Issuer Purchases of Equity Securities Period Total number of shares (or units) purchased Average price paid per share (or unit) (1) Total number of shares (or units) purchased as part of publicly announced plans or programs (2) Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs (in thousands) (2) October 1, 2023 - October 31, 2023 1,298 (3) $ 80.27 — $ 2,800,052 November 1, 2023 - November 30, 2023 2,870,066 (4) 78.40 2,870,023 2,575,052 December 1, 2023 - December 31, 2023 — — — 2,575,052 Total 2,871,364 78.40 2,870,023 __________________________________________________________________________ (1) Average price paid per share of CF Industries Holdings, Inc.
Biggest changeThe following table sets forth share repurchases, on a trade date basis, for each of the three months of the quarter ended December 31, 2024: Issuer Purchases of Equity Securities Period Total number of shares (or units) purchased Average price paid per share (or unit) (1) Total number of shares (or units) purchased as part of publicly announced plans or programs (2) Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs (in thousands) (2) October 1, 2024 - October 31, 2024 309,508 $ 84.72 309,508 $ 1,420,331 November 1, 2024 - November 30, 2024 2,082,243 (3) 86.56 2,082,199 1,240,097 December 1, 2024 - December 31, 2024 2,055,703 86.75 2,055,703 1,061,767 Total 4,447,454 86.52 4,447,410 __________________________________________________________________________ (1) Average price paid per share of CF Industries Holdings, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Share Repurchase Programs and in Note 20—Stockholders’ Equity, in the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data. (3) Represents shares withheld to pay employee tax obligations upon the lapse of restrictions on restricted stock units.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Share Repurchase Programs and in Note 20—Stockholders’ Equity, in the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data. (3) Includes 44 shares withheld to pay employee tax obligations upon the lapse of restrictions on restricted stock units.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our common stock is traded on the New York Stock Exchange under the symbol “CF.” As of February 12, 2024, there were 680 stockholders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our common stock is traded on the New York Stock Exchange under the symbol “CF.” As of February 10, 2025, there were 657 stockholders of record.
Removed
(4) Includes 43 shares withheld to pay employee tax obligations upon the lapse of restrictions on restricted stock units.
Added
ITEM 6. [RESERVED] 29 Table of Contents CF INDUSTRIES HOLDINGS, INC.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

194 edited+69 added−129 removed79 unchanged
Biggest changeConsolidated Results of Operations The following table presents our consolidated results of operations for the years ended December 31, 2023, 2022 and 2021: Year ended December 31, 2023 2022 2021 2023 v. 2022 2022 v. 2021 (in millions, except as noted) Net sales $ 6,631 $ 11,186 $ 6,538 $ (4,555) (41) % $ 4,648 71 % Cost of sales (COS) 4,086 5,325 4,151 (1,239) (23) % 1,174 28 % Gross margin 2,545 5,861 2,387 (3,316) (57) % 3,474 146 % Gross margin percentage 38.4 % 52.4 % 36.5 % (14.0) % 15.9 % Selling, general and administrative expenses 289 290 223 (1) — % 67 30 % U.K. goodwill impairment — — 285 — — % (285) (100) % U.K. long-lived and intangible asset impairment — 239 236 (239) (100) % 3 1 % U.K. operations restructuring 10 19 — (9) (47) % 19 N/M Acquisition and integration costs 39 — — 39 N/M — — % Other operating—net (31) 10 (39) (41) N/M 49 N/M Total other operating costs and expenses 307 558 705 (251) (45) % (147) (21) % Equity in (loss) earnings of operating affiliate (8) 94 47 (102) N/M 47 100 % Operating earnings 2,230 5,397 1,729 (3,167) (59) % 3,668 212 % Interest expense 150 344 184 (194) (56) % 160 87 % Interest income (158) (65) (1) (93) (143) % (64) N/M Loss on debt extinguishment — 8 19 (8) (100) % (11) (58) % Other non-operating—net (10) 15 (16) (25) N/M 31 N/M Earnings before income taxes 2,248 5,095 1,543 (2,847) (56) % 3,552 230 % Income tax provision 410 1,158 283 (748) (65) % 875 309 % Net earnings 1,838 3,937 1,260 (2,099) (53) % 2,677 212 % Less: Net earnings attributable to noncontrolling interest 313 591 343 (278) (47) % 248 72 % Net earnings attributable to common stockholders $ 1,525 $ 3,346 $ 917 $ (1,821) (54) % $ 2,429 265 % Diluted net earnings per share attributable to common stockholders $ 7.87 $ 16.38 $ 4.24 $ (8.51) (52) % $ 12.14 286 % Diluted weighted-average common shares outstanding 193.8 204.2 216.2 (10.4) (5) % (12.0) (6) % Dividends declared per common share $ 1.60 $ 1.50 $ 1.20 $ 0.10 7 % $ 0.30 25 % ______________________________________________________________________________ N/M—Not Meaningful 39 Table of Contents CF INDUSTRIES HOLDINGS, INC.
Biggest changeConsolidated Results of Operations The following table presents our consolidated results of operations and certain supplemental data for the years ended December 31, 2024, 2023 and 2022: Year ended December 31, 2024 2023 2022 2024 v. 2023 2023 v. 2022 (in millions, except as noted) Net sales $ 5,936 $ 6,631 $ 11,186 $ (695) (10) % $ (4,555) (41) % Cost of sales (COS) 3,880 4,086 5,325 (206) (5) % (1,239) (23) % Gross margin 2,056 2,545 5,861 (489) (19) % (3,316) (57) % Gross margin percentage 34.6 % 38.4 % 52.4 % (3.8) % (14.0) % Selling, general and administrative expenses 320 289 290 31 11 % (1) — % U.K. long-lived and intangible asset impairment — — 239 — — % (239) (100) % U.K. operations restructuring — 10 19 (10) (100) % (9) (47) % Acquisition and integration costs 4 39 — (35) (90) % 39 N/M Other operating—net (10) (31) 10 21 68 % (41) N/M Total other operating costs and expenses 314 307 558 7 2 % (251) (45) % Equity in earnings (loss) of operating affiliate 4 (8) 94 12 N/M (102) N/M Operating earnings 1,746 2,230 5,397 (484) (22) % (3,167) (59) % Interest expense 121 150 344 (29) (19) % (194) (56) % Interest income (123) (158) (65) 35 22 % (93) (143) % Loss on debt extinguishment — — 8 — — % (8) (100) % Other non-operating—net (14) (10) 15 (4) (40) % (25) N/M Earnings before income taxes 1,762 2,248 5,095 (486) (22) % (2,847) (56) % Income tax provision 285 410 1,158 (125) (30) % (748) (65) % Net earnings 1,477 1,838 3,937 (361) (20) % (2,099) (53) % Less: Net earnings attributable to noncontrolling interest 259 313 591 (54) (17) % (278) (47) % Net earnings attributable to common stockholders $ 1,218 $ 1,525 $ 3,346 $ (307) (20) % $ (1,821) (54) % Diluted net earnings per share attributable to common stockholders $ 6.74 $ 7.87 $ 16.38 $ (1.13) (14) % $ (8.51) (52) % Diluted weighted-average common shares outstanding 180.7 193.8 204.2 (13.1) (7) % (10.4) (5) % Dividends declared per common share $ 2.00 $ 1.60 $ 1.50 $ 0.40 25 % $ 0.10 7 % Natural gas supplemental data (per MMBtu) Natural gas costs in COS (1) $ 2.28 $ 3.26 $ 7.16 $ (0.98) (30) % $ (3.90) (54) % Realized derivatives loss in COS (2) 0.12 0.41 0.02 (0.29) (71) % 0.39 N/M Cost of natural gas used for production in COS $ 2.40 $ 3.67 $ 7.18 $ (1.27) (35) % $ (3.51) (49) % Average daily market price of natural gas Henry Hub (Louisiana) $ 2.25 $ 2.53 $ 6.38 $ (0.28) (11) % $ (3.85) (60) % Unrealized net mark-to-market (gain) loss on natural gas derivatives $ (35) $ (39) $ 41 $ 4 10 % $ (80) N/M Depreciation and amortization $ 925 $ 869 $ 850 $ 56 6 % $ 19 2 % Capital expenditures $ 518 $ 499 $ 453 $ 19 4 % $ 46 10 % Sales volume by product tons (000s) 18,943 19,130 18,331 (187) (1) % 799 4 % Production volume by product tons (000s): Ammonia (3) 9,800 9,496 9,807 304 3 % (311) (3) % Granular urea 4,404 4,544 4,561 (140) (3) % (17) — % UAN (32%) (4) 6,753 6,852 6,706 (99) (1) % 146 2 % AN 1,392 1,520 1,517 (128) (8) % 3 — % 37 Table of Contents CF INDUSTRIES HOLDINGS, INC. ______________________________________________________________________________ N/M—Not Meaningful (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.
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.
The Waggaman facility is wholly owned by us, and the other five U.S. manufacturing facilities are wholly owned directly or indirectly by CF Industries Nitrogen, LLC (CFN), of which we own approximately 89% and CHS Inc.
Changes in currency values may also alter our cost competitiveness relative to producers in other regions of the world. The North American nitrogen fertilizer market for certain nitrogen products is dependent on imports to balance supply and demand, and imports traditionally account for a significant portion of nitrogen fertilizer products consumed in North America.
Changes in currency values may also alter our cost competitiveness relative to producers in other regions of the world. The North American nitrogen fertilizer market for certain products is dependent on imports to balance supply and demand, and imports traditionally account for a significant portion of nitrogen fertilizer products consumed in North America.
Acquisition of Waggaman Ammonia Production Facility On December 1, 2023, we acquired an ammonia production facility located in Waggaman, Louisiana from Dyno Nobel Louisiana Ammonia, LLC (DNLA), a U.S. subsidiary of Australia-based Incitec Pivot Limited (IPL), pursuant to an asset purchase agreement with DNLA and IPL. The facility has a nameplate capacity of 880,000 tons of ammonia annually.
Acquisition of Waggaman Ammonia Production Facility On December 1, 2023, we acquired an ammonia production facility located in Waggaman, Louisiana from Dyno Nobel Louisiana Ammonia, LLC (DNLA), a U.S. subsidiary of Australia-based Incitec Pivot Limited (IPL), pursuant to an asset purchase agreement with DNLA and IPL. The facility has a nameplate production capacity of 880,000 tons of ammonia annually.
As a result, we recorded an impairment of our equity method investment in PLNL of $43 million, which is reflected in equity in (loss) earnings of operating affiliate in our consolidated statement of operations for the year ended December 31, 2023.
As a result, we recorded an impairment of our equity method investment in PLNL of $43 million, which is reflected in equity in earnings (loss) of operating affiliate in our consolidated statement of operations for the year ended December 31, 2023.
Equity in (Loss) Earnings of Operating Affiliate Equity in (loss) earnings of operating affiliate consists of our 50% ownership interest in PLNL.
Equity in Earnings (Loss) of Operating Affiliate Equity in earnings (loss) of operating affiliate consists of our 50% ownership interest in PLNL.
Other Segment Our Other segment primarily includes the following products: • diesel exhaust fluid (DEF), an aqueous urea solution typically made with 32.5% or 50% high-purity urea and the remainder deionized water; • urea liquor, a liquid product that we sell in concentrations of 40%, 50% and 70% urea as a chemical intermediate; and • nitric acid, a nitrogen-based mineral acid that is used in the production of nitrate-based fertilizers, nylon precursors and other specialty chemicals.
Other Segment Our Other segment primarily includes the following products: • diesel exhaust fluid (DEF), an aqueous urea solution typically made with 32.5% or 50% high-purity urea and the remainder deionized water; • urea liquor, a liquid product that we sell in concentrations of 40%, 50% and 70% high-purity urea as a chemical intermediate; and • nitric acid, a nitrogen-based mineral acid that is used in the production of nitrate-based fertilizers, nylon precursors and other specialty chemicals.
Under the indentures (including the applicable supplemental indentures) governing our senior notes due 2034, 2043 and 2044 identified in the table above (the Public Senior Notes), each series of Public Senior Notes is guaranteed by CF Holdings.
Public Senior Notes Under the indentures (including the applicable supplemental indentures) governing our senior notes due 2034, 2043 and 2044 identified in the table above (the Public Senior Notes), each series of Public Senior Notes is guaranteed by CF Holdings.
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.
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.
(CHS) owns the remainder (see Note 19—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; • an extensive system of terminals and associated transportation equipment located primarily in the Midwestern United States; and 30 Table of Contents CF INDUSTRIES HOLDINGS, INC. • a 50% interest in Point Lisas Nitrogen Limited (PLNL), an ammonia production joint venture located in the Republic of Trinidad and Tobago (Trinidad) that we account for under the equity method.
(CHS) owns the remainder (see Note 19—Noncontrolling Interest for additional information on our strategic venture with CHS); • 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; • an extensive system of terminals and associated transportation equipment located primarily in the Midwestern United States; and 30 Table of Contents CF INDUSTRIES HOLDINGS, INC. • a 50% interest in Point Lisas Nitrogen Limited (PLNL), an ammonia production joint venture located in Trinidad and Tobago (Trinidad) that we account for under the equity method.
The financial covenant requires that the total net leverage ratio (as defined in the New Revolving Credit Agreement) be not greater than 3.75:1.00 (the Maximum Total Net Leverage Ratio) as of the last day of each fiscal quarter, provided that, if any borrower or subsidiary consummates a material acquisition during any fiscal quarter, CF Industries may elect to increase the Maximum Total Net Leverage Ratio to 4.25:1.00 for the period of four consecutive fiscal quarters commencing with such fiscal quarter (and no further such election may be made unless and until the Maximum Total Net Leverage Ratio is less than or equal to 3.75:1.00 as of the end of two consecutive fiscal quarters after the end of such period).
The financial covenant requires that the total net leverage ratio (as defined in the Revolving Credit Agreement) be not greater than 3.75:1.00 (the Maximum Total Net Leverage Ratio) as of the last day of each fiscal quarter, provided that, if any borrower or subsidiary consummates a material acquisition during any fiscal quarter, CF Industries may elect to increase the Maximum Total Net Leverage Ratio to 4.25:1.00 for the period of four consecutive fiscal quarters commencing with such fiscal quarter (and no further such election may be made unless and until the Maximum Total Net Leverage Ratio is less than or equal to 3.75:1.00 as of the end of two consecutive fiscal quarters after the end of such period).
U.K. operations In 2023, we recognized total charges of $10 million, 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 ammonia plant at our Billingham complex.
U.K. operations restructuring In 2023, we recognized total charges of $10 million, 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 ammonia plant at our Billingham complex.
Operations In 2023, related to our U.K. operations, we recognized total charges of $10 million, 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 ammonia plant at our Billingham complex.
Operations Restructuring In 2023, related to our U.K. operations, we recognized total charges of $10 million, 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 ammonia plant at our Billingham complex.
The New Revolving Credit Agreement contains events of default (with notice requirements and cure periods, as applicable) customary for a financing of this type, including, but not limited to, non-payment of principal, interest or fees; inaccuracy of representations and warranties in any material respect; and failure to comply with specified covenants.
The Revolving Credit Agreement contains events of default (with notice requirements and cure periods, as applicable) customary for a financing of this type, including, but not limited to, non-payment of principal, interest or fees; inaccuracy of representations and warranties in any material respect; and failure to comply with specified covenants.
With our employees focused on safe and reliable operations, environmental stewardship, and disciplined capital and corporate management, we are on a path to decarbonize our ammonia production network – the world’s largest – to enable green and low-carbon hydrogen and nitrogen products for energy, fertilizer, emissions abatement, and other industrial activities.
With our employees focused on safe and reliable operations, environmental stewardship, and disciplined capital and corporate management, we are on a path to decarbonize our ammonia production network – the world’s largest – to enable low-carbon hydrogen and nitrogen products for energy, fertilizer, emissions abatement, and other industrial activities.
Upon the occurrence and during the continuance of an event of default under the New Revolving Credit Agreement and after any applicable cure period, subject to specified exceptions, the administrative agent may, and at the request of the requisite lenders is required to, accelerate the loans under the New Revolving Credit Agreement or terminate the lenders’ commitments under the New Revolving Credit Agreement.
Upon the occurrence and during the continuance of an event of default under the Revolving Credit Agreement and after any applicable cure period, subject to specified exceptions, the administrative agent may, and at the request of the requisite lenders is required to, accelerate the loans under the Revolving Credit Agreement or terminate the lenders’ commitments under the Revolving Credit Agreement.
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. Additionally, borrowing under the New Revolving Credit Agreement could become necessary.
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. Additionally, borrowing under the Revolving Credit Agreement could become necessary.
Our nitrogen manufacturing complexes in the United States, Canada and the United Kingdom, an extensive storage, transportation and distribution network in North America, and logistics capabilities enabling a global reach underpin our strategy to leverage our unique capabilities to accelerate the world’s transition to clean energy. Our principal customers are cooperatives, independent fertilizer distributors, traders, wholesalers and industrial users.
Our manufacturing complexes in the United States, Canada and the United Kingdom, an extensive storage, transportation and distribution network in North America, and logistics capabilities enabling a global reach underpin our strategy to leverage our unique capabilities to accelerate the world’s transition to clean energy. Our principal customers are cooperatives, retailers, independent fertilizer distributors, traders, wholesalers and industrial users.
Declines in comparable bond yields would increase our PBO. For our United Kingdom plans, the 3.0% RPI used to calculate our PBO is developed using a U.K. government gilt prices only retail price inflation curve, which is based on the difference between yields on fixed interest government bonds and index-linked government bonds.
Declines in comparable bond yields would increase our PBO. For our United Kingdom plans, the 3.1% RPI used to calculate our PBO is developed using a U.K. government gilt prices only retail price inflation curve, which is based on the difference between yields on fixed interest government bonds and index-linked government bonds.
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 during the years ended December 31, 2023 and 2022. The following table and related discussion outline these items and their impact on the comparability of our financial results for these periods.
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 during the years ended December 31, 2024 and 2023. The following table and related discussion outline these items and their impact on the comparability of our financial results for these periods.
Certain of the operating assumptions are particularly sensitive to the cyclical nature of the fertilizer business. Adverse changes in demand for our products, increases in supply and the availability and costs of key raw materials could significantly affect the results of our review.
Certain of the operating assumptions are particularly sensitive to the cyclical nature of the fertilizer industry. Adverse changes in demand for our products, increases in supply and the availability and costs of key raw materials could significantly affect the results of our review.
See “Acquisition of Waggaman Ammonia Production Facility” for additional information. (2) Ammonia represents 82% nitrogen content. Nutrient tons represent the tons of nitrogen within the product tons. Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Net Sales.
See “Acquisition of Waggaman Ammonia Production Facility” for additional information. (2) Ammonia represents 82% nitrogen content. Nutrient tons represent the tons of nitrogen within the product tons. Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Net Sales.
The New Revolving Credit Agreement contains representations and warranties and affirmative and negative covenants, including one financial covenant.
The Revolving Credit Agreement contains representations and warranties and affirmative and negative covenants, including one financial covenant.
Liquidity and Capital Resources Our primary uses of cash are generally for operating costs, working capital, capital expenditures, debt service, investments, taxes, share repurchases, and dividends. Our working capital requirements are affected by several factors, including demand for our products, selling prices, raw material costs, freight costs and seasonal factors inherent in the business.
Liquidity and Capital Resources Our primary uses of cash are generally for operating costs, working capital, capital expenditures, debt service, investments, taxes, share repurchases, dividends, and our clean energy initiatives. Our working capital requirements are affected by several factors, including demand for our products, selling prices, raw material costs, freight costs and seasonal factors inherent in the business.
The following is a discussion and analysis of our consolidated results of operations for the year ended December 31, 2023, compared to the year ended December 31, 2022. For a discussion and analysis of our consolidated results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021, see Item 7.
The following is a discussion and analysis of our consolidated results of operations for the year ended December 31, 2024, compared to the year ended December 31, 2023. For a discussion and analysis of our consolidated results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022, see Item 7.
Senior Notes Long-term debt presented on our consolidated balance sheets as of December 31, 2023 and 2022 consisted of the following debt securities issued by CF Industries: Effective Interest Rate December 31, 2023 December 31, 2022 Principal Outstanding Carrying Amount (1) Principal Outstanding Carrying Amount (1) (in millions) Public Senior Notes: 5.150% due March 2034 5.293% $ 750 $ 741 $ 750 $ 741 4.950% due June 2043 5.040% 750 742 750 742 5.375% due March 2044 5.478% 750 741 750 740 Senior Secured Notes: 4.500% due December 2026 (2) 4.783% 750 744 750 742 Total long-term debt $ 3,000 $ 2,968 $ 3,000 $ 2,965 _______________________________________________________________________________ (1) Carrying amount is net of unamortized debt discount and deferred debt issuance costs.
Senior Notes Long-term debt presented on our consolidated balance sheets as of December 31, 2024 and 2023 consisted of the following debt securities issued by CF Industries: Effective Interest Rate December 31, 2024 December 31, 2023 Principal Outstanding Carrying Amount (1) Principal Outstanding Carrying Amount (1) (in millions) Public Senior Notes: 5.150% due March 2034 5.293% $ 750 $ 742 $ 750 $ 741 4.950% due June 2043 5.040% 750 742 750 742 5.375% due March 2044 5.478% 750 741 750 741 Senior Secured Notes: 4.500% due December 2026 (2) 4.783% 750 746 750 744 Total long-term debt $ 3,000 $ 2,971 $ 3,000 $ 2,968 _______________________________________________________________________________ (1) Carrying amount is net of unamortized debt discount and deferred debt issuance costs.
UAN, a liquid fertilizer product with a nitrogen content that typically ranges from 28% to 32%, is produced by combining urea and ammonium nitrate. UAN is produced at our Courtright, Donaldsonville, Port Neal, Verdigris, Woodward, and Yazoo City complexes.
UAN Segment Our UAN segment produces urea ammonium nitrate solution (UAN). UAN, a liquid fertilizer product with a nitrogen content that typically ranges from 28% to 32%, is produced by combining urea and ammonium nitrate. UAN is produced at our Courtright, Donaldsonville, Port Neal, Verdigris, Woodward, and Yazoo City complexes.
As of December 31, 2023 and 2022, the aggregate fair value of the derivative instruments with credit-risk-related contingent features in net liability positions was $34 million and $73 million, respectively, which also approximates the fair value of the assets that may be needed to settle the obligations if the credit-risk-related contingent features were triggered at the reporting dates.
As of December 31, 2024 and 2023, the aggregate fair value of the derivative instruments with credit-risk-related contingent features in net liability positions was zero and $34 million, respectively, which also approximates the fair value of the assets that may be needed to settle the obligations if the credit-risk-related contingent features were triggered at the reporting dates.
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 December 31, 2023 and 2022, we had $130 million and $229 million, respectively, in customer advances on our consolidated balance sheets.
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 December 31, 2024 and 2023, we had $118 million and $130 million, respectively, in customer advances on our consolidated balance sheets.
If NGC does not make sufficient quantities of natural gas available to PLNL at prices that permit profitable operations, PLNL may cease operating its facility and we would write off the remaining investment in PLNL. The carrying value of our equity method investment in PLNL at December 31, 2023 was $26 million.
If NGC does not make sufficient quantities of natural gas available to PLNL at prices that permit profitable operations, PLNL may cease operating its facility and we would write off the remaining investment in PLNL. The carrying value of our equity method investment in PLNL at December 31, 2024 was $29 million.
Under the terms of the asset purchase agreement, $425 million of the purchase price of $1.675 billion, subject to adjustment, was allocated by the parties to the ammonia offtake agreement. We funded the balance of the purchase price with $1.223 billion of cash on hand.
Under the terms of the asset purchase agreement, $425 million of the purchase price of $1.675 billion, subject to adjustment, was allocated by the parties to the ammonia offtake agreement. We funded the balance of the initial purchase price on the acquisition date with $1.223 billion of cash on hand.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Annual Report on Form 10-K filed with the SEC on February 23, 2023. Net Sales Our net sales are derived primarily from the sale of nitrogen products and are determined by the quantities of nitrogen products we sell and the selling prices we realize.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Annual Report on Form 10-K filed with the SEC on February 22, 2024. Net Sales Our net sales are derived primarily from the sale of nitrogen products and are determined by the quantities of nitrogen products we sell and the selling prices we realize.
Under each indenture governing the Public Senior Notes, in the case of an event of default arising from one of the specified events of bankruptcy or insolvency, the applicable Public Senior Notes would become due and payable immediately, and, in the case of any other event of default (other than an event of default related to CF Industries’ and CF Holdings’ reporting obligations), the trustee or the holders of at least 25% in aggregate principal amount of the applicable Public Senior Notes then outstanding may declare all of such Public Senior Notes to be due and payable immediately.
Under the indenture governing the 2026 Notes, in the case of an event of default arising from one of the specified events of bankruptcy or insolvency, the 2026 Notes would become due and payable immediately, and, in the case of any other event of default (other than an event of default related to CF Industries’ and CF Holdings’ reporting obligations), the trustee or the holders of at least 25% in aggregate principal amount of the 2026 Notes then outstanding may declare all of such notes to be due and payable immediately.
Natural Gas Natural gas is the principal raw material used to produce our nitrogen products. We use natural gas both as a chemical feedstock and as a fuel to produce ammonia, granular urea, UAN, AN and other products. Expenditures on natural gas are a significant portion of our production costs, representing approximately 40% of our total production costs in 2023.
Natural Gas Natural gas is the principal raw material used to produce our nitrogen products. We use natural gas both as a chemical feedstock and as a fuel to produce ammonia, granular urea, UAN, AN and other products. Expenditures on natural gas are a significant portion of our production costs, representing approximately 28% of our total production costs in 2024.
Other Operating—Net Other operating—net includes administrative costs that do not relate directly to our central operations. Costs included in “other operating costs” can include foreign currency transaction gains and losses, unrealized gains and losses on foreign currency derivatives, litigation expenses, gains and losses on the disposal of fixed assets and FEED study costs related to our clean energy initiatives.
Other Operating—Net Other operating—net includes administrative costs that do not relate directly to our central operations and can include foreign currency transaction gains and losses, unrealized gains and losses on foreign currency derivatives, litigation expenses, gains and losses on the disposal of fixed assets and FEED study costs related to our clean energy initiatives.
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 its use for 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.
At both December 31, 2023 and 2022, we had no cash collateral on deposit with counterparties for derivative contracts.
At both December 31, 2024 and 2023, we had no cash collateral on deposit with counterparties for derivative contracts.
Recent Accounting Pronouncements See Note 3—New Accounting Standards for a discussion of recent accounting pronouncements. 60 Table of Contents CF INDUSTRIES HOLDINGS, INC.
Recent Accounting Pronouncements See Note 3—New Accounting Standards for a discussion of recent accounting pronouncements. 55 Table of Contents CF INDUSTRIES HOLDINGS, INC.
Capital Spending 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 $499 million in 2023 compared to $453 million in 2022.
Capital Spending 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 $518 million in 2024 compared to $499 million in 2023.
Nutrient tons represent the tons of nitrogen within the product tons. Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Net Sales.
Nutrient tons represent the tons of nitrogen within the product tons. Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Net Sales.
Under the indenture governing the 2026 Notes, in the case of an event of default arising from one of the specified events of bankruptcy or insolvency, the 2026 Notes would become due and payable immediately, and, in the case of any other event of default (other than an event of default related to CF Industries’ and CF Holdings’ reporting obligations), the trustee or the holders of at least 25% in aggregate principal amount of the 2026 Notes then outstanding may declare all of such notes to be due and payable immediately. 54 Table of Contents CF INDUSTRIES HOLDINGS, INC.
Under each indenture governing the Public Senior Notes, in the case of an event of default arising from one of the specified events of bankruptcy or insolvency, the applicable Public Senior Notes would become due and payable immediately, and, in the case of any other event of default (other than an event of default related to CF Industries’ and CF Holdings’ reporting obligations), the trustee or the holders of at least 25% in aggregate principal amount of the applicable Public Senior Notes then outstanding may declare all of such Public Senior Notes to be due and payable immediately. 50 Table of Contents 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 2023, we incurred $39 million of acquisition and integration costs related to the Waggaman acquisition.
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 2024, we incurred approximately $4 million of integration costs related to the Waggaman acquisition.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Annual Report on Form 10-K filed with the SEC on February 23, 2023. 44 Table of Contents CF INDUSTRIES HOLDINGS, INC. Ammonia Segment Our Ammonia segment produces anhydrous ammonia (ammonia), which is the base product that we manufacture, containing 82% nitrogen and 18% hydrogen.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Annual Report on Form 10-K filed with the SEC on February 22, 2024. 41 Table of Contents CF INDUSTRIES HOLDINGS, INC. Ammonia Segment Our Ammonia segment produces anhydrous ammonia (ammonia), which is the base product that we manufacture, containing 82% nitrogen and 18% hydrogen.
Our principal assets as of December 31, 2023 include: • six U.S. nitrogen manufacturing facilities, located in Donaldsonville, Louisiana (the largest nitrogen complex in the world); Sergeant Bluff, Iowa (our Port Neal complex); Yazoo City, Mississippi; Claremore, Oklahoma (our Verdigris complex); Woodward, Oklahoma; and Waggaman, Louisiana.
Our principal assets as of December 31, 2024 include: • six U.S. manufacturing facilities, located in Donaldsonville, Louisiana (the largest ammonia production complex in the world); Sergeant Bluff, Iowa (our Port Neal complex); Yazoo City, Mississippi; Claremore, Oklahoma (our Verdigris complex); Woodward, Oklahoma; and Waggaman, Louisiana.
Capitalized interest relating to the construction of major capital projects reduces interest expense as the interest is capitalized and amortized over the estimated useful lives of the related assets. Interest expense was $150 million in 2023 compared to $344 million in 2022.
Capitalized interest relating to the construction of major capital projects reduces interest expense as the interest is capitalized and amortized over the estimated useful lives of the related assets. Interest expense was $121 million in 2024 compared to $150 million in 2023.
As of December 31, 2023, we recorded a deferred tax liability of $9 million on the undistributed earnings of our Canadian subsidiaries for which the Company does not have an indefinite reinvestment assertion.
As of December 31, 2024, we recorded a deferred tax liability of $14 million on the undistributed earnings of our Canadian subsidiaries for which the Company does not have an indefinite reinvestment assertion.
Other operating—net was $31 million of income in 2023 compared to $10 million of expense in 2022. The income in 2023 consists primarily of gains on sales of emission credits, partially offset by FEED study costs for our clean energy initiatives. See “Our Strategy,” above, for additional information related to our clean energy initiatives.
Other operating—net was $10 million of income in 2024 compared to $31 million of income in 2023. In both 2024 and 2023, the income recognized consists primarily of gains on sales of emission credits, partially offset by FEED study costs for our clean energy initiatives. See “Our Strategy,” above, for additional information related to our clean energy initiatives.
Global Supply and Demand Factors Our products are globally traded commodities and are subject to price competition. The customers for our products make their purchasing decisions principally on the basis of delivered price and, to a lesser extent, on reliability, customer service and product quality.
Global Supply and Demand Factors Our products are global commodities or derived from global commodities and are subject to price competition. The customers for our products make their purchasing decisions principally on the basis of delivered price and, to a lesser extent, on reliability, customer service and product quality.
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. 50 Table of Contents CF INDUSTRIES HOLDINGS, INC.
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.
The December 31, 2023 PBO was computed based on a weighted-average discount rate of 4.8% for our North America plans and 4.6% for our United Kingdom plans, which were based on yields for high-quality (AA rated or better) fixed income debt securities that match the timing and amounts of expected benefit payments as of the measurement date of December 31, 2023.
The December 31, 2024 PBO was computed based on a weighted-average discount rate of 5.2% for our North America plans and 5.5% for our United Kingdom plans, which were based on yields for high-quality (AA rated or better) fixed income debt securities that match the timing and amounts of expected benefit payments as of the measurement date of December 31, 2024.
Our average selling price was $347 per ton in 2023 compared to $610 per ton in 2022, a decrease of 43%, due to lower average selling prices across all of our segments, as lower global energy costs reduced the global market clearing price required to meet global demand.
Our average selling price was $313 per ton in 2024 compared to $347 per ton in 2023, a decrease of 10%, due to lower average selling prices across all of our segments, as lower global energy costs reduced the global market clearing price required to meet global demand.
These delays generally subject the customer to potential charges for storage or may be grounds for termination of the contract by us. Such a delay in scheduled shipment or termination of a forward sales contract due to a customer’s inability or unwillingness to perform may negatively impact our reported sales.
These delays generally subject the customer to potential charges for storage or may be grounds for termination of the contract by us. Such a delay in scheduled shipment or termination of a forward sales contract due to a customer’s inability or unwillingness to perform may negatively impact our reported sales. 51 Table of Contents CF INDUSTRIES HOLDINGS, INC.
The credit support documents executed in connection with certain of our ISDA agreements generally provide us and our counterparties the right to set off collateral against amounts owing under the ISDA agreements upon the occurrence of a default or a specified termination event. Defined Benefit Pension Plans We contributed $44 million to our pension plans in 2023.
The credit support documents executed in connection with certain of our ISDA agreements generally provide us and our counterparties the right to set off collateral against amounts owing under the ISDA agreements upon the occurrence of a default or a specified termination event. Defined Benefit Pension Plans We made cash contributions of $22 million to our pension plans in 2024.
Gross margin also includes the impact of an $11 million unrealized net mark-to-market gain on natural gas derivatives in 2023 compared to a $14 million loss in 2022. 47 Table of Contents CF INDUSTRIES HOLDINGS, INC. AN Segment Our AN segment produces ammonium nitrate (AN).
Gross margin also includes the impact of a $10 million unrealized net mark-to-market gain on natural gas derivatives in 2024 compared to an $11 million gain in 2023. 44 Table of Contents CF INDUSTRIES HOLDINGS, INC. AN Segment Our AN segment produces ammonium nitrate (AN).
Cost of sales in our UAN segment averaged $173 per ton in 2023, a 21% decrease from $219 per ton in 2022, due primarily to the impact of lower realized natural gas costs, including the impact of realized derivatives. Gross Margin.
Cost of sales in our UAN segment averaged $158 per ton in 2024, a 9% decrease from $173 per ton in 2023, due primarily to the impact of lower realized natural gas costs, including the impact of realized derivatives. Gross Margin.
Acquisition of Waggaman Ammonia Production Facility On December 1, 2023, we acquired an ammonia production facility located in Waggaman, Louisiana from Dyno Nobel Louisiana Ammonia, LLC (DNLA), a U.S. subsidiary of Australia-based Incitec Pivot Limited (IPL), pursuant to an asset purchase agreement with DNLA and IPL. The facility has a nameplate capacity of 880,000 tons of ammonia annually.
Acquisition of Waggaman Ammonia Production Facility On December 1, 2023, we acquired an ammonia production facility located in Waggaman, Louisiana from Dyno Nobel Louisiana Ammonia, LLC (DNLA), a U.S. subsidiary of Australia-based Incitec Pivot Limited (IPL), pursuant to an asset purchase agreement with DNLA and IPL.
We have not provided for deferred taxes on the remainder of undistributed earnings from our foreign subsidiaries because such earnings would not give rise to additional tax liabilities upon repatriation or are considered to be indefinitely reinvested.
We have not provided for deferred taxes on the remainder of undistributed earnings from our foreign subsidiaries because such earnings would not give rise to additional tax liabilities upon repatriation.
The joint venture experienced past curtailments in the supply of natural gas from NGC, which reduced the ammonia production at PLNL. The prior gas sales contract had an expiration date of September 2023.
The joint venture is accounted for under the equity method. The joint venture experienced past curtailments in the supply of natural gas from NGC, which reduced the ammonia production at PLNL. The prior gas sales contract had an expiration date of September 2023.
As a result of these factors, natural gas prices have a significant impact on our operating expenses and can thus affect our liquidity. Natural gas costs in our cost of sales, including the impact of realized natural gas derivatives, decreased 49% to $3.67 per MMBtu in 2023 from $7.18 per MMBtu in 2022.
As a result of these factors, natural gas prices have a significant impact on our operating expenses and can thus affect our liquidity. Natural gas costs in our cost of sales, including the impact of realized natural gas derivatives, decreased 35% to $2.40 per MMBtu in 2024 from $3.67 per MMBtu in 2023.
For a discussion and analysis of our operating results by business segment for the year ended December 31, 2022 compared to the year ended December 31, 2021, see Item 7.
The following is a discussion and analysis of our operating results by business segment for the year ended December 31, 2024 compared to the year ended December 31, 2023. For a discussion and analysis of our operating results by business segment for the year ended December 31, 2023 compared to the year ended December 31, 2022, see Item 7.
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. As of December 31, 2022, our open natural gas derivative contracts consisted of natural gas fixed price swaps, basis swaps and options for 66.3 million MMBtus.
As of December 31, 2024, our open natural gas derivative contracts consisted of natural gas fixed price swaps and basis swaps for 16.0 million MMBtus. 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.
We are required to pay an undrawn commitment fee on the undrawn portion of the commitments under the New Revolving Credit Agreement and customary letter of credit fees. The specified margin and the amount of the commitment fee depend on CF Holdings’ credit rating at the time. 52 Table of Contents CF INDUSTRIES HOLDINGS, INC.
We are required to pay an undrawn commitment fee on the undrawn portion of the commitments under the Revolving Credit Agreement and customary letter of credit fees. The specified margin and the amount of the commitment fee depend on CF Holdings’ credit rating at the time.
Distributions on Noncontrolling Interest in CFN The CFN Board of Managers approved semi-annual distribution payments for the years ended December 31, 2023, 2022 and 2021, in accordance with CFN’s limited liability company agreement, as follows: Approved and paid Distribution Period Distribution Amount (in millions) First quarter of 2024 Six months ended December 31, 2023 $ 144 Third quarter of 2023 Six months ended June 30, 2023 204 First quarter of 2023 Six months ended December 31, 2022 255 Third quarter of 2022 Six months ended June 30, 2022 372 First quarter of 2022 Six months ended December 31, 2021 247 Third quarter of 2021 Six months ended June 30, 2021 130 Cash Flows Net cash provided by operating activities in 2023 was $2.76 billion, a decrease of $1.10 billion compared to $3.86 billion in 2022.
Distributions to Noncontrolling Interest in CFN The CFN Board of Managers approved semi-annual distribution payments for the years ended December 31, 2024, 2023 and 2022, in accordance with CFN’s limited liability company agreement, as follows: Approved and paid Distribution Period Distribution Amount (in millions) First quarter of 2025 Six months ended December 31, 2024 $ 129 Third quarter of 2024 Six months ended June 30, 2024 164 First quarter of 2024 Six months ended December 31, 2023 144 Third quarter of 2023 Six months ended June 30, 2023 204 First quarter of 2023 Six months ended December 31, 2022 255 Third quarter of 2022 Six months ended June 30, 2022 372 Cash Flows Net cash provided by operating activities in 2024 was $2.27 billion, a decrease of $486 million compared to $2.76 billion in 2023.
Intense global competition—reflected in import volumes and prices—strongly influences delivered prices for nitrogen fertilizers. 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 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.
Capital expenditures in 2024 are estimated to be in the range of $550 million.
Capital expenditures in 2025 are estimated to be in the range of $500 million to $550 million.
In connection with the acquisition, we entered into a long-term ammonia offtake agreement providing for us to supply up to 200,000 tons of ammonia per year to IPL’s Dyno Nobel, Inc. subsidiary.
Our acquisition of the Waggaman facility expanded our ammonia manufacturing and distribution capacity. In connection with the acquisition, we entered into a long-term ammonia offtake agreement providing for us to supply up to 200,000 tons of ammonia per year to IPL’s Dyno Nobel, Inc. subsidiary.
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 40% and 50%, respectively, of our production costs in 2023 and 2022.
Natural Gas 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%, respectively, of our production costs in 2024 and 2023.
Diluted net earnings per share attributable to common stockholders decreased $8.51 per share, to $7.87 per share in 2023 compared to $16.38 per share in 2022 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.
Diluted net earnings per share attributable to common stockholders decreased $1.13 per share, to $6.74 per share in 2024 compared to $7.87 per share in 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.
Gross margin also includes the impact of an $11 million unrealized net mark-to-market gain on natural gas derivatives in 2023 compared to a $13 million loss in 2022. 45 Table of Contents CF INDUSTRIES HOLDINGS, INC. Granular Urea Segment Our Granular Urea segment produces granular urea, which contains 46% nitrogen.
Gross margin also includes the impact of a $13 million unrealized net mark-to-market gain on natural gas derivatives in 2024 compared to an $11 million gain in 2023. Granular Urea Segment Our Granular Urea segment produces granular urea, which contains 46% nitrogen.
Net cash used in investing activities was $1.68 billion in 2023 compared to $440 million in 2022, or an increase of $1.24 billion. The increase was due primarily to the consideration paid of $1.223 billion for the Waggaman acquisition. See “Acquisition of Waggaman Ammonia Production Facility,” above for additional information.
Net cash used in investing activities was $469 million in 2024 compared to $1.68 billion in 2023, or a decrease of $1.21 billion. The decrease was due primarily to the consideration paid of $1.223 billion for the Waggaman acquisition in 2023. See “Acquisition of Waggaman Ammonia Production Facility,” above for additional information.
Additionally, diluted weighted-average common shares outstanding declined 5% from 204.2 million shares for 2022 to 193.8 million shares for 2023, due primarily to repurchases of common shares under our share repurchase programs. 43 Table of Contents CF INDUSTRIES HOLDINGS, INC.
Additionally, diluted weighted-average common shares outstanding declined 7% from 193.8 million shares for 2023 to 180.7 million shares for 2024, due primarily to repurchases of common shares under our share repurchase programs. 40 Table of Contents CF INDUSTRIES HOLDINGS, INC.
We adjust our income tax provision in the period in which these changes occur. As of December 31, 2023, we have recorded a reserve for unrecognized tax benefits, including penalties and interest, of $273 million. 59 Table of Contents CF INDUSTRIES HOLDINGS, INC. We also engage in a significant amount of cross border transactions.
We adjust our income tax provision in the period in which these changes occur. As of December 31, 2024, we have recorded a reserve for unrecognized tax benefits, including penalties and interest, of $285 million. We also engage in a significant amount of cross border transactions.
Share Repurchase Programs On November 3, 2021, the Board authorized the repurchase of up to $1.5 billion of CF Holdings common stock through December 31, 2024 (the 2021 Share Repurchase Program).
Share Repurchase Programs On November 3, 2021, our Board of Directors (the Board) authorized the repurchase of up to $1.5 billion of CF Holdings common stock through December 31, 2024 (the 2021 Share Repurchase Program). The 2021 Share Repurchase Program was completed in the second quarter of 2023.
(2) Includes realized gains and losses on natural gas derivatives settled during the period. Excludes unrealized mark-to-market gains and losses on natural gas derivatives. (3) Gross ammonia production, including amounts subsequently upgraded on-site into granular urea, UAN, or AN.
(2) Includes realized gains and losses on natural gas derivatives settled during the period. Excludes unrealized mark-to-market gains and losses on natural gas derivatives. (3) Gross ammonia production, including amounts subsequently upgraded on-site into granular urea, UAN, or AN. (4) UAN product tons assume a 32% nitrogen content basis for production volume.
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 produced at our Yazoo City and Billingham complexes.
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 extensively by the commercial explosives industry as a component of explosives. AN is produced at our Yazoo City and Billingham complexes.
Average selling prices decreased to $256 per ton in 2023 compared to $379 per ton in 2022 as lower global energy costs reduced the global market clearing price required to meet global demand. The increase in sales volume was due primarily to higher DEF sales volume. Cost of Sales.
Average selling prices decreased to $239 per ton in 2024 compared to $256 per ton in 2023 as lower global energy costs reduced 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.
The amounts involved may be material. Generally, our primary source of cash is cash from operations, which includes cash generated by customer advances. We may also from time to time access the capital markets or engage in borrowings under our revolving credit agreement. On December 1, 2023, we acquired an ammonia production facility located in Waggaman, Louisiana.
The amounts involved may be material. Generally, our primary source of cash is cash from operations, which includes cash generated by customer advances. We may also from time to time access the capital markets or engage in borrowings under our revolving credit agreement.
Under the terms of the asset purchase agreement, $425 million of the purchase price of $1.675 billion, subject to adjustment, was allocated by the parties to the ammonia offtake agreement. We funded the balance of the purchase price with $1.223 billion of cash on hand.
Under the terms of the asset purchase agreement, $425 million of the purchase price of $1.675 billion, subject to adjustment, was allocated by the parties to the ammonia offtake agreement. We funded the balance of the initial purchase price on the acquisition date with $1.223 billion of cash on hand. 47 Table of Contents CF INDUSTRIES HOLDINGS, INC.
We control our credit risk through the use of multiple counterparties that are multinational commercial banks, other major financial institutions or large energy companies, and the use of International Swaps and Derivatives Association (ISDA) master netting arrangements.
For derivatives that are in net asset positions, we are exposed to credit loss from nonperformance by the counterparties. We control our credit risk through the use of multiple counterparties that are multinational commercial banks, other major financial institutions or large energy companies, and the use of International Swaps and Derivatives Association (ISDA) master netting arrangements.
GAAP in order to assess recoverability. Factors that we must estimate when performing impairment tests include production and sales volumes, selling prices, raw material costs, operating rates, operating expenses, inflation, discount rates, exchange rates, tax rates, capital spending and the impact that future market dynamics and geopolitical events could have on these factors.
Factors that we must estimate when performing impairment tests include production and sales volumes, selling prices, raw material costs, operating rates, operating expenses, inflation, discount rates, exchange rates, tax rates, capital spending and the impact that future market dynamics and geopolitical events could have on these factors. Judgment is involved in estimating each of these factors, which include inherent uncertainties.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeBorrowings under the New Revolving Credit Agreement bear current market rates of interest, and we are subject to interest rate risk on such borrowings. As of and during the years ended December 31, 2023 and 2022, there were no borrowings outstanding under either the Prior Revolving Credit Agreement or the New Revolving Credit Agreement.
Biggest changeAs of and during the years ended December 31, 2024 and 2023, there were no borrowings outstanding under the Revolving Credit Agreement. Foreign Currency Exchange Rates We are directly exposed to changes in the value of the Canadian dollar, the British pound and the euro.
From time to time, we may purchase nitrogen products on the open market to augment or replace production at our facilities. Interest Rates As of December 31, 2023, we had four series of senior notes totaling $3.00 billion of principal outstanding with maturity dates of December 1, 2026, March 15, 2034, June 1, 2043 and March 15, 2044.
In addition, from time to time, we may purchase nitrogen products on the open market to augment or replace production at our facilities. Interest Rates As of December 31, 2024, we had four series of senior notes totaling $3.00 billion of principal outstanding with maturity dates of December 1, 2026, March 15, 2034, June 1, 2043 and March 15, 2044.
A $1.00 per MMBtu change in the price of natural gas would change the cost to produce a ton of ammonia, granular urea, UAN (32%) and AN by approximately $32, $22, $14 and $15, respectively. Natural gas is the largest and most volatile component of the manufacturing cost for nitrogen-based products.
A $1.00 per MMBtu change in the price of natural gas would change the cost to produce a ton of ammonia, granular urea, UAN (assuming a 32% nitrogen content) and AN by approximately $33, $22, $14 and $16, respectively. Natural gas is the largest and most volatile component of the manufacturing cost for nitrogen-based products.
A $1.00 per MMBtu increase in the forward curve prices of natural gas at December 31, 2023 would result in a favorable change in the fair value of these derivative positions of approximately $48 million, and a $1.00 per MMBtu decrease in the forward curve prices of natural gas would change their fair value unfavorably by approximately $49 million.
A $1.00 per MMBtu increase in the forward curve prices of natural gas at December 31, 2024 would result in a favorable change in the fair value of these derivative positions of approximately $14 million, and a $1.00 per MMBtu decrease in the forward curve prices of natural gas would change their fair value unfavorably by approximately $14 million.
As of December 31, 2023, we had natural gas derivative contracts covering certain periods through March 2024. As of December 31, 2023 and 2022, we had open natural gas derivative contracts for 49.0 million MMBtus and 66.3 million MMBtus, respectively.
As of December 31, 2024, we had natural gas derivative contracts covering certain periods through March 2025. As of December 31, 2024 and 2023, we had open natural gas derivative contracts for 16.0 million MMBtus and 49.0 million MMBtus, respectively.
Commodity Prices Our gross margin, cash flows and estimates of future cash flows related to nitrogen-based products are sensitive not only to selling prices of our products, but also to changes in market prices of natural gas and other raw materials except to the extent the prices we pay for those inputs have been fixed or hedged.
Commodity Prices Our gross margin, cash flows and estimates of future cash flows related to nitrogen-based products are sensitive not only to selling prices of our products, but also to changes in market prices of natural gas and other raw materials.
The senior notes have fixed interest rates. As of December 31, 2023, the carrying value and fair value of our senior notes was approximately $2.97 billion and $2.89 billion, respectively. Borrowings under the Prior Revolving Credit Agreement bore current market rates of interest, and we were subject to interest rate risk on such borrowings.
The senior notes have fixed interest rates. As of December 31, 2024, the carrying value and fair value of our senior notes was approximately $2.97 billion and $2.83 billion, respectively. Our primary exposure to interest rate risk results from borrowings under the Revolving Credit Agreement, if any, which bear current market rates of interest plus a specified margin.
Foreign Currency Exchange Rates We are directly exposed to changes in the value of the Canadian dollar, the British pound and the euro. We generally do not maintain any exchange rate derivatives or hedges related to these currencies. 61 Table of Contents CF INDUSTRIES HOLDINGS, INC.
We generally do not maintain any exchange rate derivatives or hedges related to these currencies, but we may from time to time use foreign currency derivatives (primarily forward exchange contracts) to mitigate foreign currency exchange rate risk. 56 Table of Contents CF INDUSTRIES HOLDINGS, INC.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. We are exposed to the impact of changes in commodity prices, interest rates and foreign currency exchange rates.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Our business operations give rise to market risk exposure due to changes in commodity prices, interest rates and foreign currency exchange rates. To manage such risks, we may, from time to time, utilize derivatives that enable us to mitigate the adverse effects of financial market risk.
Removed
At certain times, we have managed the risk of changes in natural gas prices through the use of derivative financial instruments. The derivative instruments that we may use for this purpose are primarily natural gas fixed price swaps, basis swaps and options.
Added
Our use of derivatives 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 to which we do not apply hedge accounting.
Added
To the extent that our derivative positions lose value, our counterparties may request early termination and net settlement of certain derivative trades or, under certain ISDA agreements, may require us to collateralize derivatives in a net liability position, adversely affecting our liquidity.
Added
From time to time, we utilize natural gas derivatives to hedge our financial exposure to the price volatility of natural gas, the principal raw material we use in the production of nitrogen-based products. We may use natural gas futures, swaps and option contracts traded in over-the-counter markets or on exchanges.

Other CF 10-K year-over-year comparisons