Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

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Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

CF Industries Holdings, Inc.:

We have audited the accompanying consolidated balance sheets of CF Industries Holdings, Inc. and subsidiaries (the Company) as of December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2015. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of CF Industries Holdings, Inc. and subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), CF Industries Holdings, Inc.'s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 25, 2016 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

(signed) KPMG LLP

Chicago, Illinois

February 25, 2016

CF INDUSTRIES HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS



	Year ended December 31,
	2015			2014			2013
	(in millions, except per share amounts)
Net sales	$	4,308.3		$	4,743.2		$	5,474.7
Cost of sales	2,761.2			2,964.7			2,954.5
Gross margin	1,547.1			1,778.5			2,520.2
Selling, general and administrative expenses	169.8			151.9			166.0
Transaction costs	56.9			—			—
Other operating—net	92.3			53.3			(15.8		)
Total other operating costs and expenses	319.0			205.2			150.2
Gain on sale of phosphate business	—			750.1			—
Equity in earnings of operating affiliates	(35.0		)	43.1			41.7
Operating earnings	1,193.1			2,366.5			2,411.7
Interest expense	133.2			178.2			152.2
Interest income	(1.6		)	(0.9		)	(4.7		)
Other non-operating—net	3.9			1.9			54.5
Earnings before income taxes and equity in earnings of non-operating affiliates	1,057.6			2,187.3			2,209.7
Income tax provision	395.8			773.0			686.5
Equity in earnings of non-operating affiliates—net of taxes	72.3			22.5			9.6
Net earnings	734.1			1,436.8			1,532.8
Less: Net earnings attributable to noncontrolling interest	34.2			46.5			68.2
Net earnings attributable to common stockholders	$	699.9		$	1,390.3		$	1,464.6
Net earnings per share attributable to common stockholders(1):
Basic	$	2.97		$	5.43		$	4.97
Diluted	$	2.96		$	5.42		$	4.95
Weighted-average common shares outstanding(1):
Basic	235.3			255.9			294.4
Diluted	236.1			256.7			296.0


(1)	Share and per share amounts have been retroactively restated for all prior periods presented to reflect the five-for-one split of the Company’s common stock effected in the form of a stock dividend that was distributed on June 17, 2015.

See Accompanying Notes to Consolidated Financial Statements.

CF INDUSTRIES HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME



	Year ended December 31,
	2015			2014			2013
	(in millions)
Net earnings	$	734.1		$	1,436.8		$	1,532.8
Other comprehensive income (loss):
Foreign currency translation adjustment—net of taxes	(157.3		)	(72.4		)	(30.2		)
Unrealized (loss) gain on hedging derivatives—net of taxes	—			(1.8		)	1.9
Unrealized gain on securities—net of taxes	0.2			0.2			1.0
Defined benefit plans—net of taxes	67.1			(43.2		)	33.6
	(90.0		)	(117.2		)	6.3
Comprehensive income	644.1			1,319.6			1,539.1
Less: Comprehensive income attributable to noncontrolling interest	34.2			46.5			67.5
Comprehensive income attributable to common stockholders	$	609.9		$	1,273.1		$	1,471.6

See Accompanying Notes to Consolidated Financial Statements.

CF INDUSTRIES HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS



	December 31,
	2015			2014
	(in millions, except share and per share amounts)
Assets
Current assets:
Cash and cash equivalents	$	286.0		$	1,996.6
Restricted cash	22.8			86.1
Accounts receivable—net	267.2			191.5
Inventories	321.2			202.9
Prepaid income taxes	184.6			34.8
Other current assets	45.3			18.6
Total current assets	1,127.1			2,530.5
Property, plant and equipment—net	8,539.0			5,525.8
Investments in and advances to affiliates	297.8			861.5
Goodwill	2,390.1			2,092.8
Other assets	384.9			243.6
Total assets	$	12,738.9		$	11,254.2
Liabilities and Equity
Current liabilities:
Accounts payable and accrued expenses	$	917.7		$	589.9
Income taxes payable	5.5			16.0
Customer advances	161.5			325.4
Other current liabilities	130.5			48.4
Total current liabilities	1,215.2			979.7
Long-term debt	5,592.7			4,592.5
Deferred income taxes	916.2			734.6
Other liabilities	627.6			374.9
Equity:
Stockholders' equity:
Preferred stock—$0.01 par value, 50,000,000 shares authorized	—			—
Common stock—$0.01 par value, 500,000,000 shares authorized, 2015—235,493,395 shares issued and 2014—245,904,140 shares issued(1)	2.4			2.5
Paid-in capital(1)	1,377.4			1,413.9
Retained earnings	3,057.9			3,175.3
Treasury stock—at cost, 2015—2,411,839 shares and 2014—4,231,090 shares(1)	(152.7		)	(222.2		)
Accumulated other comprehensive loss	(249.8		)	(159.8		)
Total stockholders' equity	4,035.2			4,209.7
Noncontrolling interest	352.0			362.8
Total equity	4,387.2			4,572.5
Total liabilities and equity	$	12,738.9		$	11,254.2


(1)	December 31, 2014 amounts have been retroactively restated to reflect the five-for-one split of the Company’s common stock effected in the form of a stock dividend that was distributed on June 17, 2015.

See Accompanying Notes to Consolidated Financial Statements.

CF INDUSTRIES HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF EQUITY



	Common Stockholders
	$0.01 Par Value Common Stock(1)			Treasury Stock(1)			Paid-In Capital(1)			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Stockholders' Equity			Noncontrolling Interest			Total Equity
	(in millions)
Balance as of December 31, 2012	$	3.1		$	(2.3	)	$	2,489.9		$	3,461.1		$	(49.6	)	$	5,902.2		$	380.0		$	6,282.2
Net earnings	—			—			—			1,464.6			—			1,464.6			68.2			1,532.8
Other comprehensive income:
Foreign currency translation adjustment—net of taxes	—			—			—			—			(29.5		)	(29.5		)	(0.7		)	(30.2		)
Unrealized net gain on hedging derivatives—net of taxes	—			—			—			—			1.9			1.9			—			1.9
Unrealized net gain on securities—net of taxes	—			—			—			—			1.0			1.0			—			1.0
Defined benefit plans—net of taxes	—			—			—			—			33.6			33.6			—			33.6
Comprehensive income																1,471.6			67.5			1,539.1
Acquisitions of noncontrolling interests in Canadian Fertilizers Limited (CFL)	—			—			(752.5		)	—			—			(752.5		)	(16.8		)	(769.3		)
Purchases of treasury stock	—			(1,449.3		)	—			—			—			(1,449.3		)	—			(1,449.3		)
Retirement of treasury stock	(0.3		)	1,247.8			(180.1		)	(1,067.4		)	—			—			—			—
Acquisition of treasury stock under employee stock plans	—			(3.2		)	—			—			—			(3.2		)	—			(3.2		)
Issuance of $0.01 par value common stock under employee stock plans	—			5.2			8.7			(3.6		)	—			10.3			—			10.3
Stock-based compensation expense	—			—			12.6			—			—			12.6			—			12.6
Excess tax benefit from stock-based compensation	—			—			13.5			—			—			13.5			—			13.5
Cash dividends ($0.44 per share)(1)	—			—			—			(129.1		)	—			(129.1		)	—			(129.1		)
Distributions declared to noncontrolling interest	—			—			—			—			—			—			(68.5		)	(68.5		)
Effect of exchange rates changes	—			—			—			—			—			—			0.1			0.1
Balance as of December 31, 2013	$	2.8		$	(201.8	)	$	1,592.1		$	3,725.6		$	(42.6	)	$	5,076.1		$	362.3		$	5,438.4
Net earnings	—			—			—			1,390.3			—			1,390.3			46.5			1,436.8
Other comprehensive income:
Foreign currency translation adjustment—net of taxes	—			—			—			—			(72.4		)	(72.4		)	—			(72.4		)
Unrealized net loss on hedging derivatives—net of taxes	—			—			—			—			(1.8		)	(1.8		)	—			(1.8		)
Unrealized net gain on securities—net of taxes	—			—			—			—			0.2			0.2			—			0.2
Defined benefit plans—net of taxes	—			—			—			—			(43.2		)	(43.2		)	—			(43.2		)
Comprehensive income																1,273.1			46.5			1,319.6
Purchases of treasury stock	—			(1,923.7		)	—			—			—			(1,923.7		)	—			(1,923.7		)
Retirement of treasury stock	(0.3		)	1,905.5			(220.3		)	(1,684.9		)	—			—			—			—
Acquisition of treasury stock under employee stock plans	—			(3.1		)	—			—			—			(3.1		)	—			(3.1		)
Issuance of $0.01 par value common stock under employee stock plans	—			0.9			16.7			—			—			17.6			—			17.6
Stock-based compensation expense	—			—			16.7			—			—			16.7			—			16.7
Excess tax benefit from stock-based compensation	—			—			8.7			—			—			8.7			—			8.7
Cash dividends ($1.00 per share)(1)	—			—			—			(255.7		)	—			(255.7		)	—			(255.7		)
Distributions declared to noncontrolling interest	—			—			—			—			—			—			(46.0		)	(46.0		)
Balance as of December 31, 2014	$	2.5		$	(222.2	)	$	1,413.9		$	3,175.3		$	(159.8	)	$	4,209.7		$	362.8		$	4,572.5
Net earnings	—			—			—			699.9			—			699.9			34.2			734.1
Other comprehensive income:
Foreign currency translation adjustment—net of taxes	—			—			—			—			(157.3		)	(157.3		)	—			(157.3		)
Unrealized net gain on securities—net of taxes	—			—			—			—			0.2			0.2			—			0.2
Defined benefit plans—net of taxes	—			—			—			—			67.1			67.1			—			67.1
Comprehensive income																609.9			34.2			644.1
Purchases of treasury stock	—			(527.2		)	—			—			—			(527.2		)	—			(527.2		)
Retirement of treasury stock	(0.1		)	597.1			(62.0		)	(535.0		)	—			—			—			—
Acquisition of treasury stock under employee stock plans	—			(1.3		)	—			—			—			(1.3		)	—			(1.3		)
Issuance of $0.01 par value common stock under employee stock plans	—			0.9			7.5			—			—			8.4			—			8.4
Stock-based compensation expense	—			—			16.5			—			—			16.5			—			16.5
Excess tax benefit from stock-based compensation	—			—			1.5			—			—			1.5			—			1.5
Cash dividends ($1.20 per share)	—			—			—			(282.3		)	—			(282.3		)	—			(282.3		)
Distributions declared to noncontrolling interest	—			—			—			—			—			—			(45.0		)	(45.0		)
Balance as of December 31, 2015	$	2.4		$	(152.7	)	$	1,377.4		$	3,057.9		$	(249.8	)	$	4,035.2		$	352.0		$	4,387.2


(1)	Amounts have been retroactively restated for all prior periods presented to reflect the five-for-one split of the Company’s common stock effected in the form of a stock dividend that was distributed on June 17, 2015.

See Accompanying Notes to Consolidated Financial Statements.

CF INDUSTRIES HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS



	Year ended December 31,
	2015			2014			2013
	(in millions)
Operating Activities:
Net earnings	$	734.1		$	1,436.8		$	1,532.8
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation, depletion and amortization	479.6			392.5			410.6
Deferred income taxes	77.9			18.5			(34.3		)
Stock-based compensation expense	16.8			16.6			12.6
Excess tax benefit from stock-based compensation	(1.5		)	(8.7		)	(13.5		)
Unrealized loss on derivatives	162.8			119.2			(59.3		)
Gain on remeasurement of CF Fertilisers UK investment	(94.4		)	—			—
Impairment of equity method investment in PLNL	61.9			—			—
Loss on sale of equity method investments	42.8			—			—
Gain on sale of phosphate business	—			(750.1		)	—
Loss on disposal of property, plant and equipment	21.4			3.7			5.6
Undistributed earnings of affiliates—net of taxes	(3.3		)	(11.5		)	(11.3		)
Changes in:
Accounts receivable—net	(4.8		)	36.1			0.4
Inventories	(71.0		)	63.8			(80.3		)
Accrued and prepaid income taxes	(147.8		)	(56.8		)	(153.4		)
Accounts payable and accrued expenses	41.7			(53.2		)	49.5
Customer advances	(163.9		)	204.8			(260.1		)
Other—net	51.4			(3.1		)	67.5
Net cash provided by operating activities	1,203.7			1,408.6			1,466.8
Investing Activities:
Additions to property, plant and equipment	(2,469.3		)	(1,808.5		)	(823.8		)
Proceeds from sale of property, plant and equipment	12.4			11.0			12.6
Proceeds from sale of equity method investment	12.8			—			—
Proceeds from sale of phosphate business	—			1,372.0			—
Purchase of CF Fertilisers UK, net of cash acquired	(551.6		)	—			—
Sales and maturities of short-term and auction rate securities	—			5.0			13.5
Canadian terminal acquisition	—			—			(72.5		)
Deposits to restricted cash funds	—			(505.0		)	(154.0		)
Withdrawals from restricted cash funds	63.3			573.0			—
Deposits to asset retirement obligation funds	—			—			(2.9		)
Other—net	(43.5		)	9.0			7.8
Net cash used in investing activities	(2,975.9		)	(343.5		)	(1,019.3		)
Financing Activities:
Proceeds from long-term borrowings	1,000.0			1,494.2			1,498.0
Proceeds from short-term borrowings	367.0			—			—
Payments of short-term borrowings	(367.0		)	—			—
Financing fees	(46.4		)	(16.0		)	(14.5		)
Purchases of treasury stock	(556.3		)	(1,934.9		)	(1,409.1		)
Acquisitions of noncontrolling interests in CFL	—			—			(918.7		)
Dividends paid on common stock	(282.3		)	(255.7		)	(129.1		)
Distributions to noncontrolling interest	(45.0		)	(46.0		)	(73.7		)
Issuances of common stock under employee stock plans	8.4			17.6			10.3
Excess tax benefit from stock-based compensation	1.5			8.7			13.5
Other—net	—			(43.0		)	43.0
Net cash provided by (used in) financing activities	79.9			(775.1		)	(980.3		)
Effect of exchange rate changes on cash and cash equivalents	(18.3		)	(4.2		)	(31.3		)
(Decrease) increase in cash and cash equivalents	(1,710.6		)	285.8			(564.1		)
Cash and cash equivalents at beginning of period	1,996.6			1,710.8			2,274.9
Cash and cash equivalents at end of period	$	286.0		$	1,996.6		$	1,710.8

See Accompanying Notes to Consolidated Financial Statements.

CF INDUSTRIES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Background and Basis of Presentation

We are one of the largest manufacturers and distributors of nitrogen fertilizer and other nitrogen products in the world. Our principal customers are cooperatives, independent fertilizer distributors, farmers and industrial users. Our principal nitrogen fertilizer products are ammonia, 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, and compound fertilizer products (NPKs), which are solid granular fertilizer products for which the nutrient content is a combination of nitrogen, phosphorus, and potassium. Our core market and distribution facilities are concentrated in the midwestern United States and other major agricultural areas of the United States, Canada and the United Kingdom. We also export nitrogen fertilizer products from our Donaldsonville, Louisiana; Yazoo City, Mississippi; and Billingham, United Kingdom manufacturing facilities.

All references to "CF Holdings," "the Company," "we," "us" and "our" refer to CF Industries Holdings, Inc. and its subsidiaries, except where the context makes clear that the reference is only to CF Industries Holdings, Inc. itself and not its subsidiaries. All references to "CF Industries" refer to CF Industries, Inc., a 100% owned subsidiary of CF Industries Holdings, Inc.

Our principal assets include:


•	six North American nitrogen fertilizer manufacturing facilities located in: Donaldsonville, Louisiana (the largest nitrogen fertilizer complex in North America); Medicine Hat, Alberta (the largest nitrogen fertilizer complex in Canada); Port Neal, Iowa; Courtright, Ontario; Yazoo City, Mississippi; and Woodward, Oklahoma;


•	two United Kingdom nitrogen manufacturing complexes located in Ince and Billingham that produce AN, ammonia and NPKs;


•	a 75.3% interest in Terra Nitrogen Company, L.P. (TNCLP), a publicly-traded limited partnership of which we are the sole general partner and the majority limited partner and which, through its subsidiary Terra Nitrogen, Limited Partnership (TNLP), operates a nitrogen fertilizer manufacturing facility in Verdigris, Oklahoma;


•	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 that we account for under the equity method.

Reclassifications and Changes in Presentation

During the fourth quarter of 2015, we adopted Accounting Standards Update (ASU) 2015-17, Balance Sheet Classification of Deferred Taxes (an update to Topic 740, Income Taxes) (ASU 2015-17) on a retrospective basis. As required by ASU 2015-17, all deferred tax assets and liabilities are classified as noncurrent in our consolidated balance sheets, which is a change from our historical presentation whereby certain of our deferred income taxes were classified as current assets and the remainder were classified as noncurrent deferred income tax liabilities. Upon adoption of ASU 2015-17, deferred income taxes of $84.0 million previously classified as current assets as of December 31, 2014, were reclassified as an offset to noncurrent deferred income taxes liabilities. See Note 3—New Accounting Standards and Note 10—Income Taxes, for additional information.

On May 15, 2015, we announced that our Board of Directors declared a five-for-one split of our common stock to be effected in the form of a stock dividend. On June 17, 2015, stockholders of record as of the close of business on June 1, 2015 (Record Date) received four additional shares of common stock for each share of common stock held on the Record Date. Shares reserved under the Company's equity and incentive plans were adjusted to reflect the stock split. All share and per share data has been retroactively restated to reflect the stock split, except for the number of authorized shares of common stock. Since the par value of the common stock remained at $0.01 per share, the recorded value for common stock has been retroactively restated to reflect the par value of total outstanding shares with a corresponding decrease to paid-in capital.

CF INDUSTRIES HOLDINGS, INC.

CF Fertilisers UK Acquisition

On July 31, 2015, we acquired the remaining 50% equity interest in CF Fertilisers UK Group Limited (formerly known as GrowHow UK Group Limited) (CF Fertilisers UK) not previously owned by us for total consideration of $570.4 million, and CF Fertilisers UK became a wholly-owned subsidiary. CF Fertilisers UK Limited (formerly known as GrowHow UK Limited), a wholly-owned subsidiary of CF Fertilisers UK, operates two nitrogen manufacturing complexes in the United Kingdom, in the cities of Ince and Billingham. We recorded a $94.4 million gain on the remeasurement to fair value of our initial 50% equity interest in CF Fertilisers UK that is included in equity in earnings of non-operating affiliates—net of taxes for the year ended December 31, 2015. The financial results of CF Fertilisers UK have been consolidated within our financial results since July 31, 2015. Prior to July 31, 2015, our initial 50% equity interest in CF Fertilisers UK was accounted for as an equity method investment, and the financial results of this investment were included in our consolidated statements of operations in equity in earnings of non-operating affiliates—net of taxes. See Note 4—Acquisitions and Divestitures, for additional information on the preliminary allocation of the total purchase price to the assets acquired and liabilities assumed in the CF Fertilisers UK acquisition.

New Segments

In the third quarter of 2015, we changed our reportable segment structure to separate AN from our Other segment as our AN products increased in significance as a result of the CF Fertilisers UK acquisition. Our reportable segment structure reflects how our chief operating decision maker (CODM), as defined under U.S. generally accepted accounting principles (GAAP), assesses the performance of our operating segments and makes decisions about resource allocation. Our reportable segments now consist of ammonia, granular urea, UAN, AN, Other, and phosphate. These segments are differentiated by products. Our management uses gross margin to evaluate segment performance and allocate resources. Historical financial results have been restated to reflect the new reportable segment structure on a comparable basis. See Note 21—Segment Disclosures for additional information and a description of our reportable segments.

Phosphate Business Disposition

Prior to March 17, 2014, we also manufactured and distributed phosphate fertilizer products. Our principal phosphate products were diammonium phosphate (DAP) and monoammonium phosphate (MAP). On March 17, 2014, we completed the sale of our phosphate mining and manufacturing business, which was located in Florida, to The Mosaic Company (Mosaic) for approximately $1.4 billion in cash. The transaction followed the terms of the definitive agreement executed in October 2013. The accounts receivable and accounts payable pertaining to the phosphate mining and manufacturing business and certain phosphate inventory held in distribution facilities were not sold to Mosaic in the transaction and were settled in the ordinary course.

Upon selling the phosphate business, we began to supply Mosaic with ammonia produced by our PLNL joint venture. The contract to supply ammonia to Mosaic from our PLNL joint venture represents the continuation of a supply practice that previously existed between our former phosphate mining and manufacturing business and other operations of the Company. Prior to March 17, 2014, PLNL sold ammonia to us for use in the phosphate business and the cost was included in our production costs in our phosphate segment. Subsequent to the sale of the phosphate business, we now sell the PLNL-sourced ammonia to Mosaic. The revenue from these sales to Mosaic and the costs to purchase the ammonia from PLNL are now included in our ammonia segment. Our 50% share of the operating results of our PLNL joint venture continues to be included in equity in earnings of operating affiliates in our consolidated statements of operations. Because of the significance of this continuing supply practice, in accordance with U.S. GAAP, the phosphate mining and manufacturing business is not reported as discontinued operations in our consolidated statements of operations. See Note 4—Acquisitions and Divestitures for additional information.

CF INDUSTRIES HOLDINGS, INC.

Summary of Significant Accounting Policies

Consolidation and Noncontrolling Interest

The consolidated financial statements of CF Holdings include the accounts of CF Industries and all majority-owned subsidiaries. All significant intercompany transactions and balances have been eliminated.

TNCLP is a master limited partnership that is consolidated in the financial statements of CF Holdings. TNCLP owns the nitrogen fertilizer manufacturing facility in Verdigris, Oklahoma. We own an aggregate 75.3% of TNCLP and outside investors own the remaining 24.7%. Partnership interests in TNCLP are traded on the New York Stock Exchange (NYSE). As a result, TNCLP files separate financial reports with the Securities and Exchange Commission (SEC). The outside investors' limited partnership interests in the partnership are included in noncontrolling interest in our consolidated financial statements. This noncontrolling interest represents the noncontrolling unitholders' interest in the partners' capital of TNCLP.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses for the periods presented. Significant estimates and assumptions are used for, but are not limited to, net realizable value of inventories, environmental remediation liabilities, environmental and litigation contingencies, the cost of customer incentives, useful lives of property and identifiable intangible assets, the assumptions used in the evaluation of potential impairments of property, investments, identifiable intangible assets and goodwill, income tax and valuation reserves, allowances for doubtful accounts receivable, the measurement of the fair values of investments for which markets are not active, assumptions used in the determination of the funded status and annual expense of defined benefit pension and other postretirement plans, the assumptions used to determine the relative fair values of our new reportable segments and the assumptions used in the valuation of stock-based compensation awards granted to employees.

Revenue Recognition

The basic criteria necessary for revenue recognition are: (1) evidence that a sales arrangement exists, (2) delivery of goods has occurred, (3) the seller's price to the buyer is fixed or determinable, and (4) collectability is reasonably assured. We recognize revenue when these criteria have been met and when title and risk of loss transfers to the customer, which can be at the plant gate, a distribution facility, a supplier location or a customer destination. Revenue from forward sales programs is recognized on the same basis as other sales (when title and risk of loss transfers to the customer) regardless of when the customer advances are received.

We offer certain incentives that typically involve rebates if a customer reaches a specified level of purchases. Customer incentives are accrued monthly and reported as a reduction in net sales. This process is intended to report sales at the ultimate net realized price and requires the use of estimates.

Shipping and handling fees billed to customers are reported in revenue. Shipping and handling costs incurred by us are included in cost of sales.

Cash and Cash Equivalents

Cash and cash equivalents include highly liquid investments that are readily convertible to known amounts of cash with original maturities of three months or less. The carrying value of cash and cash equivalents approximates fair value.

Investments

Short-term investments and noncurrent investments are accounted for primarily as available-for-sale securities reported at fair value with changes in fair value reported in other comprehensive income unless fair value is below amortized cost (i.e., the investment is impaired) and the impairment is deemed other-than-temporary, in which case, some or all of the decline in value would be charged to earnings. The carrying values of short-term investments approximate fair values because of the short maturities and the highly liquid nature of these investments.

CF INDUSTRIES HOLDINGS, INC.

Restricted Cash

In connection with our capacity expansion projects, we granted a contractor a security interest in a restricted cash account. We maintain a cash balance in that account equal to the cancellation fees for procurement services and equipment that would arise if the projects were canceled. This restricted cash is not included in our cash and cash equivalents and is reported separately on our consolidated balance sheets. Contributions to the restricted cash account are reported on our consolidated statements of cash flows as investing activities.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded at face amounts less an allowance for doubtful accounts. The allowance is an estimate based on historical collection experience, current economic and market conditions, and a review of the current status of each customer's trade accounts receivable. A receivable is past due if payments have not been received within the agreed-upon invoice terms. Account balances are charged-off against the allowance when management determines that it is probable that the receivable will not be recovered.

Accounts receivable includes trade receivables and non-trade receivables.

Inventories

Inventories are reported at the lower of cost or market with cost determined on a first-in, first-out or average cost basis. Inventory includes the cost of materials, production labor and production overhead. Inventory at warehouses and terminals also includes distribution costs to move inventory to the distribution facilities. Market value is reviewed at least quarterly. Fixed production costs related to idle capacity are not included in the cost of inventory but are charged directly to cost of sales.

Investment in Unconsolidated Affiliate

The equity method of accounting is used for our investments in affiliates that we do not consolidate, but over which we have the ability to exercise significant influence. Our equity method investment for which the results are included in operating earnings consists of our 50% ownership interest in PLNL, which operates an ammonia production facility in the Republic of Trinidad and Tobago. Our share of the net earnings from this investment is reported as an element of earnings from operations because PLNL's operations provide additional production and are integrated with our supply chain and sales activities in the ammonia segment. See Note 8—Equity Method Investments for additional information.

Profits resulting from sales or purchases with our equity method investee are eliminated until realized by the investee or investor, respectively. Our investment in the affiliate is reviewed for impairment whenever events or circumstances indicate that the carrying value may not be recoverable. When circumstances indicate that the fair value of our investment in affiliate is less than its carrying value, and the reduction in value is other than temporary, the reduction in value is recognized immediately in earnings.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation and amortization are computed using the straight-line method or the units-of-production (UOP) method. Depreciable lives are as follows:



	Years
Mobile and office equipment	3 to 10
Production facilities and related assets	2 to 30
Land improvements	10 to 30
Buildings	10 to 40

We periodically review the depreciable lives assigned to our property, plant and equipment, as well as estimated production capacities used to develop UOP depreciation expense, and we change the estimates to reflect the results of those reviews.

CF INDUSTRIES HOLDINGS, INC.

Scheduled inspections, replacements and overhauls of plant machinery and equipment at our continuous process manufacturing facilities during a full plant shutdown are referred to as plant turnarounds. Plant turnarounds are accounted for under the deferral method, as opposed to the direct expense or built-in overhaul methods. Under the deferral method, expenditures related to turnarounds are capitalized in property, plant and equipment when incurred and amortized to production costs on a straight-line basis over the period benefited, which is until the next scheduled turnaround in up to five years. If the direct expense method were used, all turnaround costs would be expensed as incurred. Internal employee costs and overhead amounts are not considered turnaround costs and are not capitalized. Turnaround costs are classified as investing activities in the consolidated statements of cash flows. For additional information, see Note 6—Property, Plant and Equipment—Net.

Recoverability of Long-Lived Assets

We review property, plant and equipment and other long-lived assets in order to assess recoverability based on expected future undiscounted cash flows whenever events or circumstances indicate that the carrying value may not be recoverable. If the sum of the expected future net cash flows is less than the carrying value, an impairment loss is recognized. The impairment loss is measured as the amount by which the carrying value exceeds the fair value of the asset.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase price of an acquired entity over the amounts assigned to the assets acquired and liabilities assumed. Goodwill is not amortized, but is reviewed for impairment annually or more frequently if certain impairment conditions arise. We perform our annual goodwill impairment review in the fourth quarter of each year at the reporting unit level, which in our case, are the ammonia, granular urea, UAN, AN and Other segments. Our evaluation can begin with a qualitative assessment of the factors that could impact the significant inputs used to estimate fair value. If after performing the qualitative assessment, we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill, then no further testing is performed. However, if it is unclear based on the results of the qualitative test, we perform a quantitative test involving potentially two steps. The first step compares the fair value of a reporting unit with its carrying amount, including goodwill. We use an income-based valuation method, determining the present value of future cash flows, to estimate the fair value of a reporting unit. If the fair value of a reporting unit exceeds its positive carrying amount, goodwill of the reporting unit is considered not impaired, and the second step of the impairment test is unnecessary. The second step of the goodwill impairment test, if needed, compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. We recognize an impairment loss immediately to the extent the carrying value exceeds its implied fair value.

Our intangible assets are presented in other assets on the consolidated balance sheets. For additional information regarding our goodwill and other intangible assets, see Note 7—Goodwill and Other Intangible Assets.

Leases

Leases may be classified as either operating leases or capital leases. Assets acquired under capital leases, if any, would be depreciated on the same basis as property, plant and equipment. For operating leases, rental payments, including rent holidays, leasehold incentives, and scheduled rent increases are expensed on a straight-line basis. Leasehold improvements are amortized over the shorter of the depreciable lives of the corresponding fixed assets or the lease term including any applicable renewals.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those differences are projected to be recovered or settled. Realization of deferred tax assets is dependent on our ability to generate sufficient taxable income of an appropriate character in future periods. A valuation allowance is established if it is determined to be more likely than not that a deferred tax asset will not be realized. Significant judgment is applied in evaluating the need for and magnitude of appropriate valuation allowances against deferred tax assets. Interest and penalties related to unrecognized tax benefits are reported as interest expense and income tax expense, respectively.

A deferred income tax liability is recorded for income taxes that would result from the repatriation of the portion of the investment in the Company's non-U.S. subsidiaries and joint venture that are considered to not be permanently reinvested. No deferred income tax liability is recorded for the remainder of our investment in non-U.S. subsidiaries and joint venture, which we believe to be indefinitely reinvested.

CF INDUSTRIES HOLDINGS, INC.

Derivative Financial Instruments

Natural gas is the principal raw material used to produce nitrogen fertilizers. We manage the risk of changes in natural gas prices primarily through the use of derivative financial instruments. The derivative instruments that we use are primarily fixed price swaps and options traded in the over-the-counter (OTC) markets. The derivatives reference primarily NYMEX futures contract prices, which represent the basis for fair value at any given time. These derivatives are traded in months forward and settlements are scheduled to coincide with anticipated gas purchases during those future periods. In order to manage our exposure to changes in foreign currency exchange rates, we use foreign currency derivatives, primarily forward exchange contracts.

The accounting for the change in the fair value of a derivative instrument depends on whether the instrument has been designated as a hedging instrument and whether the instrument is effective as part of a hedging relationship. Changes in the fair value of derivatives not designated as hedging instruments and the ineffective portion of derivatives designated as cash flow hedges are recorded in the consolidated statements of operations as the changes occur. Changes in the fair value of derivatives designated as cash flow hedging instruments considered effective are recorded in accumulated other comprehensive income (AOCI) as the changes occur, and are reclassified into income or expense as the hedged item is recognized in earnings.

Derivative financial instruments are accounted for at fair value and recognized as current or noncurrent assets and liabilities on our consolidated balance sheets. The fair values of derivative instruments and any related cash collateral are reported on a gross basis rather than on a net basis.

Cash flows related to natural gas derivatives are reported as operating activities. Cash flows related to foreign currency derivatives are reported as investing activities since they hedge future payments for the construction of long-term assets.

We do not use derivatives for trading purposes and are not a party to any leveraged derivatives. For additional information, see Note 16—Derivative Financial Instruments.

Customer Advances

Customer advances represent cash received from customers following acceptance of orders under our forward sales programs. Such advances typically represent a significant portion of the contract's sales value and are generally collected by the time the product is shipped, thereby reducing or eliminating accounts receivable from customers upon shipment. Revenue is recognized when title and risk of loss transfers upon shipment or delivery of the product to customers.

Environmental

Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations are expensed. Expenditures that increase the capacity or extend the useful life of an asset, improve the safety or efficiency of the operations, or mitigate or prevent future environmental contamination are capitalized. Liabilities are recorded when it is probable that an obligation has been incurred and the costs can be reasonably estimated. Environmental liabilities are not discounted.

Stock-based Compensation

We grant stock-based compensation awards under our equity and incentive plans. The awards that have been granted to date are nonqualified stock options, restricted stock awards, restricted stock units and performance share units. The cost of employee services received in exchange for the awards is measured based on the fair value of the award on the grant date and is recognized as expense on a straight-line basis over the period during which the employee is required to provide the services. For additional information, see Note 19—Stock-Based Compensation.

Litigation

From time to time, we are subject to ordinary, routine legal proceedings related to the usual conduct of our business. We are also involved in proceedings regarding public utility and transportation rates, environmental matters, taxes and permits relating to the operations of our various plants and facilities. Accruals for such contingencies are recorded to the extent management concludes their occurrence is probable and the financial impact of an adverse outcome is reasonably estimable. Legal fees are recognized as incurred and are not included in accruals for contingencies. Disclosure for specific legal contingencies is provided if the likelihood of occurrence is at least reasonably possible and the exposure is considered material to the consolidated financial statements. In making determinations of likely outcomes of litigation matters, many factors are considered. These factors include, but are not limited to, past history, scientific and other evidence, and the specifics and status of each matter. If the assessment of various factors changes, the estimates may change. Predicting the outcome of claims and

CF INDUSTRIES HOLDINGS, INC.

litigation, and estimating related costs and exposure involves substantial uncertainties that could cause actual costs to vary materially from estimates and accruals.

Foreign Currency Translation

We translate the financial statements of our foreign subsidiaries with non-U.S. dollar functional currencies using period-end exchange rates for assets and liabilities and weighted-average exchange rates for each period for revenues and expenses. The resulting translation adjustments are recorded as a separate component of AOCI within stockholders' equity.

Foreign currency-denominated assets and liabilities are remeasured into U.S. dollars at exchange rates existing at the respective balance sheet dates. Gains and losses resulting from these foreign currency transactions are included in other operating—net on our consolidated statements of operations. Gains and losses resulting from intercompany foreign currency transactions that are of a long-term investment nature, if any, are reported in other comprehensive income.

Debt Issuance Costs

Costs associated with the issuance of debt are recorded as deferred charges and are amortized over the term of the related debt, in either current or noncurrent assets depending on the term. Debt issuance discounts are netted against the related debt and are amortized over the term of the debt using the effective interest method.

CF INDUSTRIES HOLDINGS, INC.

New Accounting Standards

Recently Adopted Pronouncements

In November 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-17, Balance Sheet Classification of Deferred Taxes (an update to Topic 740, Income Taxes). To simplify the presentation of deferred income taxes, the amendments in this ASU require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The ASU will be effective for financial statements issued for annual and interim periods beginning after December 15, 2016, and can be applied prospectively or retrospectively. Earlier application is permitted. We elected to early adopt this ASU retrospectively in the fourth quarter of 2015, which resulted in the reclassification of deferred income taxes of $84.0 million from current assets to an offset of the noncurrent deferred income taxes liability on our consolidated balance sheet as of December 31, 2014. See Note 10—Income Taxes.

In May 2015, the FASB issued ASU No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). The amendments in ASU No. 2015-07 remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. ASU No. 2015-07 is effective for fiscal years beginning after December 15, 2015 and requires retrospective application. Early application is permitted. We elected to early adopt this ASU in the fourth quarter of 2015. See Note 11—Pension and Other Postretirement Benefits for additional information.

Recently Issued Pronouncements

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory (an update to Topic 330, Inventory), effective for annual and interim periods beginning after December 15, 2016. ASU No. 2015-11 changes the inventory measurement principle for entities using the first-in, first out (FIFO) or average cost methods. For entities utilizing one of these methods, the inventory measurement principle will change from lower of cost or market to the lower of cost and net realizable value. We use the FIFO or average cost methods and are currently evaluating the impact of this ASU on our consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. This ASU requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The ASU requires retrospective application and represents a change in accounting principle. In August 2015, the FASB issued the related ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, which clarifies ASU No. 2015-03 and states that the SEC staff would not object to an entity deferring and presenting debt issuance costs related to a line-of-credit arrangement as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. These ASUs are effective for fiscal years beginning after December 15, 2015 and retrospective presentation is required. Upon adoption of the ASU in 2016, fees totaling $56.0 million as of December 31, 2015 related to the senior notes would be reclassified as a reduction to long-term debt. Fees related to the undrawn Bridge Credit Agreement and the Revolving Credit Agreement would remain classified as an asset. See Note 12—Financing Agreements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which supersedes the revenue recognition requirements in Accounting Standards Codification Topic 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments. Additionally, information concerning the costs to obtain and fulfill a contract, including assets to be recognized, is to be capitalized and disclosed. In July 2015, the FASB voted to defer the effective date of this ASU through the issuance of ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, to December 15, 2017 for interim and annual reporting periods beginning after that date. Early adoption of the standard as of December 15, 2016 (for interim and annual reporting periods beginning after that date) is permitted. We are currently evaluating the impact of the adoption of this ASU on our consolidated financial statements.

CF INDUSTRIES HOLDINGS, INC.

Acquisitions and Divestitures

CF Fertilisers UK Acquisition

On July 31, 2015, we acquired the remaining 50% equity interest in CF Fertilisers UK not previously owned by us for total consideration of $570.4 million, and CF Fertilisers UK became wholly owned by us. The purchase price was funded with cash on hand. We recorded a gain of $94.4 million on the remeasurement to fair value of our initial 50% equity interest in CF Fertilisers UK that is included in equity in earnings of non-operating affiliates—net of taxes for the year ended December 31, 2015. See Note 8—Equity Method Investments for additional information.

During 2015, the Company incurred direct transaction costs of $3.6 million for the acquisition of CF Fertilisers UK, which were expensed as incurred and included in transaction costs in our consolidated statements of operations.

The following table summarizes the preliminary allocation of the total fair value of CF Fertilisers UK to the assets acquired and liabilities assumed in its acquisition on July 31, 2015. The estimated fair value of the assets acquired and liabilities assumed is based on the estimated net realizable value for inventory, a replacement cost approach for property, plant and equipment and the income approach for intangible assets. Final determination of the fair values may result in further adjustments to the amounts presented below.



		Original Valuation		Net Adjustments to Fair Value(1)			Adjusted Valuation
(In millions)
Fair value of consideration transferred		$	570.4	$	—		$	570.4
Fair value of 50% of equity interest already held by the Company		570.4		—			570.4
Total fair value		$	1,140.8	$	—		$	1,140.8
Assets acquired and liabilities assumed
	Current assets	$	165.1	$	1.5		$	166.6
	Property, plant and equipment	898.1		(0.1		)	898.0
	Goodwill	328.4		(8.3		)	320.1
	Other assets	140.0		(1.2		)	138.8
	Total assets acquired	1,531.6		(8.1		)	1,523.5

	Current liabilities	73.6		0.5			74.1
	Deferred tax liabilities—noncurrent	128.8		(8.6		)	120.2
	Other liabilities	188.4		—			188.4
	Total liabilities assumed	390.8		(8.1		)	382.7
Total net assets acquired		$	1,140.8	$	—		$	1,140.8

(1) The purchase price related to the CF Fertilisers UK acquisition was initially allocated based on the information available at the acquisition date. During the fourth quarter of 2015, adjustments were made to the fair value of the assets acquired and liabilities assumed, which resulted in a corresponding $8.3 million decrease to goodwill.

Current assets acquired included cash of $18.8 million, accounts receivable of $72.6 million and inventory of $67.3 million. The acquired property, plant and equipment will be depreciated over a period consistent with our existing fixed assets depreciation policy.

The acquisition resulted in the recognition of $320.1 million of goodwill, which is not deductible for income tax purposes. Other assets acquired included intangible assets of $131.8 million. See Note 7—Goodwill and Other Intangible Assets, for additional information related to goodwill and the acquired intangibles.

The amount of sales and net earnings of CF Fertilisers UK since the acquisition date included in the consolidated statements of operations for the year ended December 31, 2015 was $208.4 million and $21.8 million, respectively.

CF INDUSTRIES HOLDINGS, INC.

The following unaudited summary information is presented on a pro forma consolidated basis as if the CF Fertilisers UK acquisition had occurred on January 1, 2014:



	Year ended December 31,
	2015		2014
	(in millions)
Net sales	$	4,676.9	$	5,407.8
Net earnings attributable to common stockholders	626.2		1,519.2

The pro forma amounts include transaction costs, amortization and depreciation expense based on the estimated fair value and useful lives of intangible and tangible assets, elimination of the equity in earnings of the initial 50% equity investment in CF Fertilisers UK and related tax effects. Because the pro forma amounts assume the acquisition of CF Fertilisers UK occurred on January 1, 2014, the $94.4 million gain on the remeasurement to fair value of our initial 50% equity interest in CF Fertilisers UK is reflected in pro forma net earnings for the year ended December 31, 2014. The pro forma results are not necessarily indicative of the combined results had the CF Fertilisers UK acquisition been completed on January 1, 2014.

Agreement to Combine with Certain of OCI N.V.’s Businesses

On August 6, 2015, we announced that we entered into a definitive agreement (as amended, the Combination Agreement), under which we will combine with the European, North American and global distribution businesses (collectively, the ENA Business) of OCI N.V. (OCI). OCI is a global producer and distributor of natural gas-based fertilizers and industrial chemicals based in the Netherlands. The combination transaction includes OCI’s nitrogen production facility in Geleen, Netherlands; its nitrogen production facility under construction in Wever, Iowa; its approximately 79.88% equity interest in an ammonia and methanol complex in Beaumont, Texas; and its global distribution business and the assumption of approximately $2 billion in net debt. The combination transaction also includes the purchase by CF Holdings or its designee of a 45% interest plus an option to acquire the remaining interest in OCI’s Natgasoline project in Texas, which upon completion in 2017 will be one of the world’s largest methanol facilities.

Under the terms of the Combination Agreement, CF Holdings will become a subsidiary of a new holding company (New CF) domiciled in the Netherlands. OCI will contribute the entities holding the ENA Business (other than the Natgasoline project) to New CF in exchange for ordinary shares of New CF (base share consideration), plus additional consideration of $700 million (subject to adjustment) to be paid in cash, ordinary shares of New CF or a mixture of cash and ordinary shares of New CF, as determined by CF Holdings in accordance with the terms of the Combination Agreement. The base share consideration will represent 25.6% of the ordinary shares of New CF that, upon consummation of the combination, subject to downward adjustment to account for the assumption by New CF, as contemplated by the Combination Agreement, of any of OCI’s 3.875% convertible bonds due 2018 that remain outstanding as of the closing date of the combination. The consideration for the 45% interest in Natgasoline is $517.5 million in cash. The actual ownership split of New CF upon completion of the combination as between former CF Holdings shareholders, on the one hand, and OCI and its shareholders, on the other hand, will be dependent on our share price at the time of closing, the amount of convertible bonds to be assumed by New CF at closing, the amount of adjustments to the amount of the additional consideration, and the mix of cash and New CF ordinary shares used to pay the additional consideration.

The transaction is expected to close in mid-2016, subject to the approval of shareholders of both CF Holdings and OCI, the receipt of certain regulatory approvals and other closing conditions. The consummation of the Natgasoline portion of the transaction is subject to conditions that are in addition to the conditions to which the consummation of the portion of the transaction involving the ENA Business other than the Natgasoline project is subject, and the consummation of the Natgasoline portion of the transaction is not a condition to consummation of the portion of the transaction involving the ENA Business other than the Natgasoline project. New CF will operate under a name to be determined by CF Holdings and be led by our existing management.

In conjunction with entering into the Combination Agreement, on August 6, 2015, CF Industries Holdings, Inc. obtained financing commitments from Morgan Stanley Senior Funding, Inc. and Goldman Sachs Bank USA to finance the transactions contemplated by the Combination Agreement and for general corporate purposes. The proceeds of such committed financing are available under a senior unsecured bridge term loan facility in an aggregate principal amount of up to $3.0 billion, subject to the terms and conditions set forth therein. See Note 12—Financing Agreements—Bridge Credit Agreement for additional information.

CF INDUSTRIES HOLDINGS, INC.

Sale of Equity Method Investments

During the second quarter of 2015, we sold our 50% ownership interest in an ammonia storage joint venture in Houston, Texas and our 50% ownership interest in KEYTRADE AG (Keytrade). See Note 8—Equity Method Investments for additional information.

Phosphate Disposition

On March 17, 2014, we sold our phosphate mining and manufacturing business to Mosaic pursuant to the terms of the definitive transaction agreement executed in October 2013, among the Company, CF Industries and Mosaic, for approximately $1.4 billion in cash. We recognized pre-tax and after-tax gains on the transaction of $750.1 million and $462.8 million, respectively. Under the terms of the definitive transaction agreement, the accounts receivable and accounts payable pertaining to the phosphate mining and manufacturing business and certain phosphate inventory held in distribution facilities were not sold to Mosaic in the transaction and were settled in the ordinary course.

The phosphate segment reflects the reported results of the phosphate business through March 17, 2014, plus the continuing sales of the phosphate inventory in the distribution network after March 17, 2014. The remaining phosphate inventory was sold in the second quarter of 2014; therefore, the phosphate segment does not have operating results subsequent to that quarter. However, the segment will continue to be included until the reporting of comparable period phosphate results ceases.

Net Earnings Per Share

Net earnings per share were computed as follows:



	Year ended December 31,
	2015		2014		2013
	(in millions, except per share amounts)
Net earnings attributable to common stockholders	$	699.9	$	1,390.3	$	1,464.6
Basic earnings per common share(1):
Weighted-average common shares outstanding	235.3		255.9		294.4
Net earnings attributable to common stockholders	$	2.97	$	5.43	$	4.97
Diluted earnings per common share(1):
Weighted-average common shares outstanding	235.3		255.9		294.4
Dilutive common shares—stock options	0.8		0.8		1.6
Diluted weighted-average shares outstanding	236.1		256.7		296.0
Net earnings attributable to common stockholders	$	2.96	$	5.42	$	4.95


(1)	Share and per share amounts have been retroactively restated for all prior periods presented to reflect the five-for-one split of the Company’s common stock effected in the form of a stock dividend that was distributed on June 17, 2015.

In the computation of diluted earnings per common share, potentially dilutive stock options are excluded if the effect of their inclusion is anti-dilutive. For the years ended December 31, 2015, 2014 and 2013, anti-dilutive stock options were insignificant.

CF INDUSTRIES HOLDINGS, INC.

Property, Plant and Equipment—Net

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



	December 31,
	2015		2014
	(in millions)
Land	$	68.1	$	48.4
Machinery and equipment	7,347.6		5,268.7
Buildings and improvements	270.9		160.7
Construction in progress(1)	3,626.6		2,559.0
	11,313.2		8,036.8
Less: Accumulated depreciation and amortization	2,774.2		2,511.0
	$	8,539.0	$	5,525.8


(1)	As of December 31, 2015 and 2014, we had construction in progress that was accrued but unpaid of $543.3 million and $279.0 million, respectively. These amounts included accruals related to our capacity expansion projects of $471.1 million and $244.3 million as of December 31, 2015 and 2014, respectively.

Depreciation, depletion and amortization related to property, plant and equipment was $444.4 million, $360.5 million and $373.9 million in 2015, 2014 and 2013, respectively.

Plant turnarounds—Scheduled inspections, replacements and overhauls of plant machinery and equipment at our continuous process manufacturing facilities during a full plant shutdown are referred to as plant turnarounds. The expenditures related to turnarounds are capitalized in property, plant and equipment when incurred. The following is a summary of plant turnaround activity:



	Year ended December 31,
	2015			2014			2013
	(in millions)
Net capitalized turnaround costs at beginning of the year	$	153.2		$	119.8		$	82.1
Additions	134.9			88.3			78.6
Depreciation	(65.4		)	(53.9		)	(40.8		)
Effect of exchange rate changes	(2.6		)	(1.0		)	(0.1		)
Net capitalized turnaround costs at end of the year	$	220.1		$	153.2		$	119.8

Scheduled replacements and overhauls of plant machinery and equipment include the dismantling, repair or replacement and installation of various components including piping, valves, motors, turbines, pumps, compressors, heat exchangers and the replacement of catalyst when a full plant shutdown occurs. Scheduled inspections are also conducted during full plant shutdowns, including required safety inspections which entail the disassembly of various components such as steam boilers, pressure vessels and other equipment requiring safety certifications. Internal employee costs and overhead amounts are not considered turnaround costs and are not capitalized.

CF INDUSTRIES HOLDINGS, INC.

Goodwill and Other Intangible Assets

The following table shows the carrying amount of goodwill by reportable segment as of December 31, 2015 and 2014:



	Ammonia			Granular Urea			UAN			AN			Other			Total
	(in millions)
Balance as of December 31, 2014	$	578.7		$	829.6		$	577.0		$	68.9		$	38.6		$	2,092.8
Acquisition of CF Fertilisers UK(1)	10.5			—			—			271.0			38.6			320.1
Effect of exchange rate changes	(1.9		)	(1.8		)	(1.3		)	(15.6		)	(2.2		)	(22.8		)
Balance as of December 31, 2015	$	587.3		$	827.8		$	575.7		$	324.3		$	75.0		$	2,390.1

(1) The acquisition on July 31, 2015 of the remaining 50% equity interest in CF Fertilisers UK not previously owned by us resulted in goodwill of $320.1 million. See Note 4—Acquisitions and Divestitures and Note 8—Equity Method Investments for additional information.

Amounts presented in the above table as of December 31, 2014 have been restated to reflect goodwill of $68.9 million that was allocated from the Other segment to the AN segment, the new reportable segment that was created in 2015. See Note 21—Segment Disclosures for further information. The fair value of each reporting unit exceeded its carrying value; thus, no impairment was recorded.

Our identifiable intangibles and carrying values are shown below and are presented in noncurrent other assets on our consolidated balance sheets.



	December 31, 2015							December 31, 2014
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
	(in millions)
Intangible assets:
Customer relationships	$	139.5	$	(17.9	)	$	121.6	$	50.0	$	(13.2	)	$	36.8
TerraCair brand	10.0		(10.0		)	—		10.0		(5.0		)	5.0
Trade names	34.8		(0.7		)	34.1		—		—			—
Total intangible assets	$	184.3	$	(28.6	)	$	155.7	$	60.0	$	(18.2	)	$	41.8

Included in the table above are definite-lived intangible assets of $131.8 million identified in connection with the July 31, 2015 acquisition of the remaining 50% equity interest in CF Fertilisers UK not previously owned by us. CF Fertilisers UK's intangible assets are being amortized over a remaining period of approximately 20 years.

Amortization expense of our identifiable intangibles was $10.4 million, $4.0 million and $3.8 million for the years ended December 31, 2015, 2014 and 2013, respectively. In early 2015, management approved a plan to discontinue the use of the TerraCair brand in the sale of DEF. Based on the discontinuation of the use of this brand, the related intangible assets were fully amortized during the first quarter of 2015.

Total estimated amortization expense for each of the five succeeding fiscal years is as follows:



	Estimated Amortization Expense
	(in millions)
2016	$	9.0
2017	9.0
2018	9.0
2019	9.0
2020	9.0

CF INDUSTRIES HOLDINGS, INC.

Equity Method Investments

In 2015, Company management approved certain plans to focus its portfolio of equity method investments, including the following actions, which are further described below.


•	In the second quarter of 2015, we sold our 50% ownership interest in an ammonia storage joint venture in Houston, Texas. See Operating Equity Method Investments, below.


•	On July 31, 2015, we acquired the remaining 50% equity interest in CF Fertilisers UK not previously owned by us. CF Fertilisers UK is now wholly owned by us. See Note 4—Acquisitions and Divestitures, and see Non-Operating Equity Method Investments, below.


•	In the second quarter of 2015, we sold our 50% ownership interest in KEYTRADE AG (Keytrade). See Non-Operating Equity Method Investments, below.

Equity method investments consist of the following:



	December 31,
	2015		2014
	(in millions)
Operating equity method investments	$	297.8	$	377.6
Non-operating equity method investments	—		483.9
Investments in and advances to affiliates	$	297.8	$	861.5

Operating Equity Method Investments

As of December 31, 2015, our remaining equity method investment was a 50% ownership interest in Point Lisas Nitrogen Limited (PLNL), which operates an ammonia production facility in the Republic of Trinidad and Tobago. We include our share of the net earnings from this equity method investment as an element of earnings from operations because PLNL provides additional production to our operations and is integrated with our other supply chain and sales activities in the ammonia segment.

Our equity in earnings of operating affiliates are summarized below:



	Year ended December 31,
	2015			2014		2013
	(in millions)
Equity in earnings of operating affiliates:
PLNL(1)	$	(36.2	)	$	37.6	$	34.6
Ammonia storage joint venture	1.2			5.5		7.1
Total equity in earnings of operating affiliates	$	(35.0	)	$	43.1	$	41.7

(1) Equity in earnings of operating affiliates in 2015 includes an impairment of our equity method investment in PLNL of $61.9 million. In the fourth quarter of 2015, we determined the carrying value of our equity method investment in PLNL exceeded fair value. This was primarily due to ongoing natural gas curtailments impacting the results of operations of PLNL and the current expectation that these curtailments will continue into the future. No impairment was recognized in 2014 or 2013 related to this investment.

The total carrying value of our equity method investment in PLNL as of December 31, 2015 was $218.0 million more than our share of PLNL's book value. The excess is primarily attributable to the purchase accounting impact of our acquisition of the investment in PLNL and reflects primarily the revaluation of property, plant and equipment, the value of an exclusive natural gas contract and goodwill. The increased basis for property, plant and equipment and the gas contract are being amortized over a remaining period of approximately 18 years and 3 years, respectively. Our equity in earnings of PLNL is different from our ownership interest in income reported by PLNL due to amortization and impairment of these basis differences.

We have transactions in the normal course of business with PLNL reflecting our obligation to purchase 50% of the ammonia produced by PLNL at current market prices. Our ammonia purchases from PLNL totaled $121.5 million, $141.1 million and $151.0 million in 2015, 2014 and 2013, respectively.

CF INDUSTRIES HOLDINGS, INC.

Non-Operating Equity Method Investments

On July 31, 2015, we acquired the remaining 50% equity interest in CF Fertilisers UK not previously owned by us for total consideration of $570.4 million, and CF Fertilisers UK became wholly owned by us. We recorded a gain of $94.4 million on the remeasurement to fair value of our initial 50% equity interest in CF Fertilisers UK. The earnings in CF Fertilisers UK have been permanently reinvested; therefore, the recognition of the $94.4 million gain on the remeasurement of the historical equity investment to fair value does not include the recognition of tax expense on the gain. See Note 4—Acquisitions and Divestitures for additional information.

During the second quarter of 2015, we sold our 50% ownership interest in Keytrade. As a result, our equity in earnings of non-operating affiliates includes our equity in earnings of Keytrade through the date of the sale.

Our equity in earnings of non-operating affiliates—net of taxes are summarized below:



	Year ended December 31,
	2015			2014		2013
	(in millions)
Equity in earnings of non-operating affiliates—net of taxes:
CF Fertilisers UK(1)	$	107.2		$	19.7	$	10.8
Keytrade(2)	(34.9		)	2.8		(1.2		)
Total equity in earnings of non-operating affiliates—net of taxes	$	72.3		$	22.5	$	9.6

(1) Equity in earnings of non-operating affiliates—net of taxes in 2015 includes our after-tax remeasurement gain of $94.4 million, and our equity in earnings of CF Fertilisers UK from January 1, 2015 through July 31, 2015, the acquisition date.

(2) Equity in earnings of non-operating affiliates—net of taxes in 2015 includes an after-tax loss of $29.2 million (pre-tax loss of $40.1 million) resulting from the sale of our interests in Keytrade in the second quarter of 2015 and our equity in earnings of Keytrade through the date of sale.

CF INDUSTRIES HOLDINGS, INC.

Fair Value Measurements

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



	December 31, 2015
	Cost Basis		Unrealized Gains		Unrealized Losses		Fair Value
	(in millions)
Cash	$	70.7	$	—	$	—	$	70.7
Cash equivalents:
U.S. and Canadian government obligations	190.3		—		—		190.3
Other debt securities	25.0		—		—		25.0
Total cash and cash equivalents	$	286.0	$	—	$	—	$	286.0
Restricted cash	22.8		—		—		22.8
Nonqualified employee benefit trusts	17.7		1.7		—		19.4



	December 31, 2014
	Cost Basis		Unrealized Gains		Unrealized Losses		Fair Value
	(in millions)
Cash	$	71.3	$	—	$	—	$	71.3
Cash equivalents:
U.S. and Canadian government obligations	1,916.3		—		—		1,916.3
Other debt securities	9.0		—		—		9.0
Total cash and cash equivalents	$	1,996.6	$	—	$	—	$	1,996.6
Restricted cash	86.1		—		—		86.1
Nonqualified employee benefit trusts	17.4		2.0		—		19.4

Under our short-term investment policy, we may invest our cash balances, either directly or through mutual funds, in several types of investment-grade securities, including notes and bonds issued by governmental entities or corporations. Securities issued by governmental entities include those issued directly by the Federal government; those issued by state, local or other governmental entities; and those guaranteed by entities affiliated with governmental entities.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present assets and liabilities included in our consolidated balance sheets as of December 31, 2015 and 2014 that are recognized at fair value on a recurring basis, and indicate the fair value hierarchy utilized to determine such fair value:



	December 31, 2015
	Total Fair Value			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Cash equivalents	$	215.3		$	215.3	$	—		$	—
Restricted cash	22.8			22.8		—			—
Derivative assets	0.6			—		0.6			—
Nonqualified employee benefit trusts	19.4			19.4		—			—
Derivative liabilities	(211.3		)	—		(211.3		)	—

CF INDUSTRIES HOLDINGS, INC.



	December 31, 2014
	Total Fair Value			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Cash equivalents	$	1,925.3		$	1,925.3	$	—		$	—
Restricted cash	86.1			86.1		—			—
Derivative assets	0.5			—		0.5			—
Nonqualified employee benefit trusts	19.4			19.4		—			—
Derivative liabilities	(48.4		)	—		(48.4		)	—

Cash Equivalents

As of December 31, 2015 and 2014, our cash equivalents consisted primarily of U.S. and Canadian government obligations and money market mutual funds that invest in U.S. government obligations and other investment-grade securities.

Restricted Cash

We maintain a cash account for which the use of the funds is restricted. The restricted cash account as of December 31, 2015 and 2014 was put in place to satisfy certain requirements included in our engineering and procurement services contract for our capacity expansion projects. Under the terms of this contract, we are required to grant an affiliate of ThyssenKrupp Industrial Solutions a security interest in a restricted cash account and maintain a cash balance in that account equal to the cancellation fees for procurement services and equipment that would arise if we were to cancel the projects.

Derivative Instruments

The derivative instruments that we use are primarily natural gas fixed priced swaps, natural gas options and foreign currency forward contracts traded in the OTC markets with multi-national commercial banks, other major financial institutions or large energy companies. The natural gas derivative contracts represent anticipated gas needs for future periods and settlements are scheduled to coincide with anticipated gas purchases during those future periods. The foreign currency derivative contracts held are for the exchange of a specified notional amount of currencies at specified future dates coinciding with anticipated foreign currency cash outflows associated with our Donaldsonville, Louisiana and Port Neal, Iowa capacity expansion projects. The natural gas derivative contracts settle using primarily NYMEX futures prices. To determine the fair value of these instruments, we use quoted market prices from NYMEX and standard pricing models with inputs derived from or corroborated by observable market data such as forward curves supplied by an industry-recognized independent third party. The currency derivatives are valued based on quoted market prices supplied by an industry-recognized independent third party. See Note 16—Derivative Financial Instruments, for additional information.

Nonqualified Employee Benefit Trusts

We maintain trusts associated with certain nonqualified supplemental pension plans. The investments are accounted for as available-for-sale securities. The fair values of the trust assets are based on daily quoted prices in an active market, which represents the net asset values of the shares held in the trusts. These trusts are included on our consolidated balance sheets in other assets.

CF INDUSTRIES HOLDINGS, INC.

Financial Instruments

The carrying amounts and estimated fair values of our financial instruments are as follows:



	December 31,
	2015				2014
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(in millions)
Long-term debt	$	5,592.7	$	5,455.8	$	4,592.5	$	4,969.3

The fair values of our long-term debt were based on either quoted prices for identical or similar liabilities in markets that are not active or valuation models in which all significant inputs and value drivers are observable and, as a result, they are classified as Level 2 inputs.

The carrying amounts of cash and cash equivalents, as well as instruments included in other current assets and other current liabilities that meet the definition of financial instruments, approximate fair values because of their short-term maturities.

Income Taxes

The components of earnings before income taxes and equity in earnings of non-operating affiliates are as follows:



	Year ended December 31,
	2015		2014		2013
	(in millions)
Domestic	$	1,030.4	$	2,073.2	$	2,155.4
Non-U.S.	27.2		114.1		54.3
	$	1,057.6	$	2,187.3	$	2,209.7

The components of the income tax provision are as follows:



	Year ended December 31,
	2015			2014			2013
	(in millions)
Current
Federal	$	258.1		$	645.2		$	641.5
Foreign	20.1			29.8			8.6
State	38.5			79.5			70.7
	316.7			754.5			720.8
Deferred
Federal	76.4			11.7			(6.5		)
Foreign	(13.3		)	(8.0		)	(6.7		)
State	16.0			14.8			(21.1		)
	79.1			18.5			(34.3		)
Income tax provision	$	395.8		$	773.0		$	686.5

CF INDUSTRIES HOLDINGS, INC.

Differences in the expected income tax provision based on statutory rates applied to earnings before income taxes and the income tax provision reflected in the consolidated statements of operations are summarized below:



	Year ended December 31,
	2015					2014					2013
	(in millions, except percentages)
Earnings before income taxes and equity in earnings of non-operating affiliates	$	1,057.6				$	2,187.3				$	2,209.7
Expected tax at U.S. statutory rate	370.2			35.0	%	765.6			35.0	%	773.4			35.0	%
State income taxes, net of federal	32.2			3.0	%	61.7			2.8	%	32.0			1.4	%
Net earnings attributable to noncontrolling interest	(12.0		)	(1.1	)%	(16.3		)	(0.8	)%	(23.9		)	(1.1	)%
U.S. manufacturing profits deduction	(16.8		)	(1.6	)%	(28.4		)	(1.3	)%	(47.0		)	(2.1	)%
Foreign tax rate differential	(17.5		)	(1.7	)%	(40.3		)	(1.8	)%	(46.9		)	(2.1	)%
U.S. tax on foreign earnings	(0.5		)	—	%	9.1			0.4	%	35.4			1.6	%
Depletion	—			—	%	(0.5		)	—	%	(24.2		)	(1.1	)%
Valuation allowance	16.1			1.5	%	17.7			0.8	%	26.8			1.2	%
Non-deductible capital costs	17.7			1.7	%	—			—	%	—			—	%
Federal tax settlement	—			—	%	—			—	%	(50.1		)	(2.2	)%
Other	6.4			0.6	%	4.4			0.2	%	11.0			0.5	%
Income tax at effective rate	$	395.8		37.4	%	$	773.0		35.3	%	$	686.5		31.1	%

The foreign tax rate differential is impacted by the inclusion of equity earnings from our equity method investment in PLNL, a foreign operating affiliate, which are included in pre-tax earnings on an after-tax basis and the tax effect of net operating losses of a foreign subsidiary of the Company for which a valuation allowance has been recorded. In the fourth quarter of 2015, we determined the carrying value of our equity method investment in PLNL exceeded fair value and recognized an impairment of our equity method investment in PLNL of $61.9 million, which is included in the equity in earnings of operating affiliates in 2015. Our income tax provision does not include a tax benefit for the impairment of the equity investment as it does not give rise to a tax deduction. See Note 8—Equity Method Investments for additional information.

Deferred tax assets and deferred tax liabilities are as follows:



	December 31,
	2015			2014
	(in millions)
Deferred tax assets:
Net operating loss carryforwards, principally in foreign jurisdictions	$	100.2		$	102.6
Retirement and other employee benefits	95.1			87.5
Unrealized loss on hedging derivatives	67.8			5.3
Intangible asset	60.2			84.8
Federal tax settlement	14.1			27.8
Other	111.2			102.4
	448.6			410.4
Valuation allowance	(109.2		)	(115.7		)
	339.4			294.7
Deferred tax liabilities:
Depreciation and amortization	(1,209.1		)	(979.7		)
Foreign earnings	(27.9		)	(34.0		)
Unrealized gain on hedging derivatives	(2.8		)	—
Other	(15.8		)	(15.6		)
	(1,255.6		)	(1,029.3		)
Net deferred tax liability	$	(916.2	)	$	(734.6	)

CF INDUSTRIES HOLDINGS, INC.

A foreign subsidiary of the Company has net operating loss carryforwards of $320.3 million that are indefinitely available in the foreign jurisdiction. As the future realization of these carryforwards is not anticipated, a valuation allowance of $93.6 million has been recorded. Of this amount, $14.5 million and $17.2 million were recorded as valuation allowances for the years ended December 31, 2015 and 2014, respectively.

We consider the earnings of certain of our Canadian operating subsidiaries to not be permanently reinvested and we recognize a deferred tax liability for the future repatriation of these earnings, as they are earned. As of December 31, 2015, we have recorded a deferred income tax liability of approximately $27 million, which reflects the additional U.S. and foreign income taxes that would be due upon the repatriation of the accumulated earnings of our non-U.S. subsidiaries that are considered to not be permanently reinvested. As of December 31, 2015, we have approximately $830 million of indefinitely reinvested earnings related to investment in other non-U.S. subsidiaries and a joint venture, for which a deferred tax liability has not been recognized. It is not practicable to estimate the amount of such taxes.

During the fourth quarter of 2015, we adopted ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes on a retrospective basis. All deferred tax assets and liabilities are classified as noncurrent deferred tax liabilities in our consolidated balance sheets. Upon adoption of ASU 2015-17, current deferred tax assets of $84.0 million as of December 31, 2014 were reclassified as an offset to noncurrent deferred tax liabilities.

We file federal, provincial, state and local income tax returns principally in the United States, Canada and the United Kingdom, as well as in certain other foreign jurisdictions. In general, filed tax returns remain subject to examination by United States tax jurisdictions for years 1999 and thereafter, by Canadian tax jurisdictions for years 2006 and thereafter, and by United Kingdom tax jurisdictions for years 2014 and thereafter.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:



	December 31,
	2015			2014
	(in millions)
Unrecognized tax benefits:
Beginning balance	$	135.8		$	103.7
Additions for tax positions taken during the current year	2.4			22.3
Additions for tax positions taken during prior years	17.4			18.3
Reductions related to lapsed statutes of limitations	(0.8		)	(8.5		)
Ending balance	$	154.8		$	135.8

Unrecognized tax benefits increased by $19.0 million and by $32.1 million for the years ended December 31, 2015 and 2014, respectively. Our effective tax rate would be affected by $112.0 million if these unrecognized tax benefits were to be recognized in the future.

Interest expense and penalties of $3.8 million, $4.0 million, and $13.6 million were recorded for the years ended December 31, 2015, 2014 and 2013, respectively. Amounts recognized in our consolidated balance sheets for accrued interest and penalties related to income taxes of $27.8 million and $24.6 million are included in other liabilities as of December 31, 2015 and 2014, respectively.

On December 18, 2015, the Protecting Americans from Tax Hikes (PATH) Act of 2015 was signed into law and applies to tax years 2015 through 2019. One of the provisions of the PATH Act permits companies to deduct 50% of their capital expenditures for federal income tax purposes in the year qualifying assets were placed into service. As a result of this provision, for the year ended December 31, 2015, we recorded a federal tax receivable of approximately $120 million that is expected to result in a tax refund and is included in prepaid income taxes on our consolidated balance sheet as of December 31, 2015. This receivable is primarily associated with the new urea plant and related offsites that were placed into service at our Donaldsonville, Louisiana complex during November of 2015.

CF INDUSTRIES HOLDINGS, INC.

During the third quarter of 2015, we acquired the remaining 50% equity interest in CF Fertilisers UK not previously owned by us and recognized a $94.4 million gain on the remeasurement to fair value of our initial 50% equity interest in CF Fertilisers UK. The earnings in CF Fertilisers UK have been permanently reinvested. Therefore, the recognition of the $94.4 million gain on the remeasurement of the historical equity investment does not include the recognition of tax expense on the gain. See Note 8—Equity Method Investments for additional information.

We recorded an income tax benefit of $11.9 million during the second quarter of 2015 for the pre-tax losses on the sale of equity method investments. The tax benefit related to the loss on the sale of our interests in Keytrade is included in equity in earnings of non-operating affiliates—net of taxes in our consolidated statements of operations. See Note 8—Equity Method Investments for additional information.

Prior to April 30, 2013, CFL operated like a cooperative for Canadian income tax purposes and distributed all of its earnings as patronage dividends to its customers, including CF Industries. The patronage dividends were deductible for Canadian income tax purposes for tax years preceding April 29, 2013. As a result of the August 2, 2012 definitive agreement we entered into with Glencore International plc to acquire their interests in CFL and our April 30, 2013 acquisition of those interests, CFL is no longer permitted to deduct the dividends it distributes to CF Industries. As a result, CFL has recorded an income tax provision in the years 2013 through 2015. See Note 15—Noncontrolling Interest for further information.

CF INDUSTRIES HOLDINGS, INC.

Pension and Other Postretirement Benefits

We maintain five funded pension plans—three in North America (one U.S. plan and two Canadian plans) and two in the United Kingdom (CF Fertilisers UK plans acquired by us as a result of our July 31, 2015 acquisition of the remaining 50% equity interest in CF Fertilisers UK not previously owned by us). One of our Canadian plans is closed to new employees and the two United Kingdom plans are closed to new employees and future accruals. We also provide group medical insurance benefits to certain retirees in North America. The specific medical benefits provided to retirees vary by group and location.

Our plan assets, benefit obligations, funded status and amounts recognized on the consolidated balance sheets for our North America and United Kingdom plans as of the December 31 measurement date are as follows:



	Pension Plans									Retiree Medical Plans
	North America						United Kingdom			North America
	December 31,						December 31,			December 31,
	2015			2014			2015			2015			2014
	(in millions)
Change in plan assets
Fair value of plan assets as of January 1	$	664.8		$	700.7		$	—		$	—		$	—
Acquisition of CF Fertilisers UK plans	—			—			442.5			—			—
Return on plan assets	2.7			83.4			(3.8		)	—			—
Employer contributions	19.0			20.4			8.7			4.3			4.9
Plan participant contributions	0.3			0.4			—			1.0			0.4
Benefit payments	(38.5		)	(128.7		)	(8.4		)	(5.3		)	(5.3		)
Foreign currency translation	(21.7		)	(11.4		)	(25.0		)	—			—
Fair value of plan assets as of December 31	626.6			664.8			414.0			—			—
Change in benefit obligation
Benefit obligation as of January 1	(787.8		)	(768.6		)	—			(62.4		)	(66.3		)
Acquisition of CF Fertilisers UK plans	—			—			(617.7		)	—			—
Curtailment gain (loss)	—			14.5			—			—			(2.0		)
Special termination benefits	—			(0.3		)	—			—			—
Service cost	(14.4		)	(13.3		)	—			(0.2		)	(0.1		)
Interest cost	(30.1		)	(34.7		)	(9.2		)	(2.1		)	(2.4		)
Benefit payments	38.5			128.7			8.4			5.3			5.3
Foreign currency translation	21.3			11.6			34.2			0.6			0.3
Plan amendment	—			—			—			—			7.0
Plan participant contributions	(0.3		)	(0.4		)	—			(1.0		)	(0.4		)
Change in assumptions and other	37.0			(125.3		)	21.6			4.2			(3.8		)
Benefit obligation as of December 31	(735.8		)	(787.8		)	(562.7		)	(55.6		)	(62.4		)
Funded status as of year end	$	(109.2	)	$	(123.0	)	$	(148.7	)	$	(55.6	)	$	(62.4	)

In the table above, the line titled "change in assumptions and other" for our pension plans primarily reflects the impact of changes in discount rates and the adoption of new mortality assumptions.

In March 2014, as a result of a reduction in plan participants due to the sale of our phosphate business, we recognized:


•	a curtailment gain for our U.S. pension plan, which resulted in a reduction of $14.5 million in our pension benefit obligation (PBO) and a corresponding increase in other comprehensive income;


•	a decrease of $7.0 million in our U.S. retiree medical benefit obligation due to a plan amendment, with a corresponding increase in other comprehensive income (included in "prior service cost" in the table below); and


•	a $2.0 million curtailment loss related to terminated vested participants in our U.S. retiree medical plan.

CF INDUSTRIES HOLDINGS, INC.

In August 2014, we communicated to certain terminated vested participants in our U.S. pension plan an option to receive a lump sum payment for their accrued benefits. For participants who elected this option, benefit payments of $90.8 million were made in December 2014 and we incurred a settlement charge of approximately $9.7 million, with a corresponding reduction in accumulated other comprehensive loss. Of the $9.7 million settlement charge, $8.7 million was reported in cost of sales and $1.0 million was reported in selling, general and administrative expenses. As a result, the PBO as of December 31, 2014 included a reduction of approximately $13.0 million (included in the line "change in assumptions and other" in the table above).

Amounts recognized on the consolidated balance sheets consist of the following:



	Pension Plans									Retiree Medical Plans
	North America						United Kingdom			North America
	December 31,						December 31,			December 31,
	2015			2014			2015			2015			2014
	(in millions)
Other assets	$	9.4		$	3.8		$	—		$	—		$	—
Accrued expenses	—			—			—			(5.0		)	(5.2		)
Other liabilities	(118.6		)	(126.8		)	(148.7		)	(50.6		)	(57.2		)
	$	(109.2	)	$	(123.0	)	$	(148.7	)	$	(55.6	)	$	(62.4	)

Pre-tax amounts recognized in accumulated other comprehensive loss consist of the following:



	Pension Plans							Retiree Medical Plans
	North America				United Kingdom			North America
	December 31,				December 31,			December 31,
	2015		2014		2015			2015			2014
	(in millions)
Prior service cost (benefit)	$	0.8	$	1.2	$	—		$	(4.7	)	$	(5.9	)
Net actuarial loss (gain)	87.9		107.9		(7.8		)	8.3			12.9
	$	88.7	$	109.1	$	(7.8	)	$	3.6		$	7.0

CF INDUSTRIES HOLDINGS, INC.

Net periodic benefit cost (income) and other amounts recognized in accumulated other comprehensive loss for the years ended December 31 included the following:



	Pension Plans												Retiree Medical Plans
	North America									United Kingdom			North America
	2015			2014			2013			2015			2015			2014			2013
	(in millions)
Service cost	$	14.4		$	13.3		$	17.8		$	—		$	0.2		$	0.1		$	0.3
Interest cost	30.1			34.7			32.8			9.2			2.1			2.4			2.4
Expected return on plan assets	(28.6		)	(35.9		)	(32.6		)	(9.5		)	—			—			—
Settlement charge	—			9.7			—			—			—			—			—
Special termination benefits	—			0.3			—			—			—			—			—
Curtailment loss	—			—			—			—			—			2.0			—
Amortization of prior service cost (benefit)	0.1			0.2			0.2			—			(1.2		)	(0.9		)	0.1
Amortization of actuarial loss	5.7			1.7			10.5			—			0.5			0.3			0.6
Net periodic benefit cost (income)	21.7			24.0			28.7			(0.3		)	1.6			3.9			3.4
Net actuarial (gain) loss	(11.2		)	77.9			(45.4		)	(8.2		)	(4.2		)	3.8			(0.9		)
Prior service cost	—			—			—			—			—			(7.0		)	—
Curtailment effects	—			(14.5		)	—			—			—			—			—
Settlement effects	—			(9.7		)	—			—			—			—			—
Amortization of prior service (cost) benefit	(0.1		)	(0.2		)	(0.2		)	—			1.2			0.9			(0.1		)
Amortization of actuarial loss	(5.7		)	(1.7		)	(10.5		)	—			(0.5		)	(0.3		)	(0.6		)
Total recognized in accumulated other comprehensive loss	(17.0		)	51.8			(56.1		)	(8.2		)	(3.5		)	(2.6		)	(1.6		)
Total recognized in net periodic benefit cost (income) and accumulated other comprehensive loss	$	4.7		$	75.8		$	(27.4	)	$	(8.5	)	$	(1.9	)	$	1.3		$	1.8

Amounts that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2016 are as follows:



	Pension Plans				Retiree Medical Plans
	North America		United Kingdom		North America
	(in millions)
Prior service cost (benefit)	$	0.1	$	—	$	(1.2	)
Net actuarial loss	0.9		—		—

CF INDUSTRIES HOLDINGS, INC.

The accumulated benefit obligation in aggregate for the defined benefit pension plans in North America was approximately $688.2 million and $727.6 million as of December 31, 2015 and December 31, 2014, respectively. The accumulated benefit obligation in aggregate for the defined benefit pension plans in the United Kingdom was approximately $562.7 million as of December 31, 2015.

The following table presents aggregated information for individual defined benefit pension plans with an accumulated benefit obligation in excess of plan assets as of December 31:



	North America						United Kingdom
	2015			2014			2015
	(in millions)
Accumulated benefit obligation	$	(585.9	)	$	(610.3	)	$	(562.7	)
Fair value of plan assets	505.7			536.0			414.0

The following table presents aggregated information for individual defined benefit pension plans with a projected benefit obligation in excess of plan assets as of December 31:



	North America						United Kingdom
	2015			2014			2015
	(in millions)
Projected benefit obligation	$	(679.1	)	$	(719.2	)	$	(562.7	)
Fair value of plan assets	560.6			592.4			414.0

Our pension funding policy in North America is to contribute amounts sufficient to meet minimum legal funding requirements plus discretionary amounts that we may deem to be appropriate. Actual contributions may vary from estimated amounts depending on changes in assumptions, actual returns on plan assets, changes in regulatory requirements and funding decisions.

In accordance with United Kingdom pension legislation, our United Kingdom pension funding policy is to contribute amounts sufficient to meet the funding level target agreed between the employer and the trustees of the United Kingdom plans. Actual contributions are usually agreed with the plan trustees in connection with each triennial valuation and may vary following each such review depending on changes in assumptions, actual returns on plan assets, changes in regulatory requirements and funding decisions.

Our consolidated pension funding contributions for 2016 are estimated to be approximately $19.2 million for North America plans and $20.6 million for United Kingdom plans.

The expected future benefit payments for our pension and retiree medical plans are as follows:



	Pension Plans				Retiree Medical Plans
	North America		United Kingdom		North America
	(in millions)
2016	$	39.7	$	20.3	$	5.0
2017	41.6		21.2		5.0
2018	43.1		22.0		4.9
2019	44.3		22.8		4.8
2020	45.3		24.3		4.7
2021-2025	241.1		131.2		17.2

CF INDUSTRIES HOLDINGS, INC.

The following assumptions were used in determining the benefit obligations and expense:



	Pension Plans								Retiree Medical Plans
	North America						United Kingdom		North America
	2015		2014		2013		2015		2015		2014		2013
Weighted-average discount rate—obligation	4.3	%	4.0	%	4.8	%	3.8	%	3.9	%	3.6	%	4.2	%
Weighted-average discount rate—expense	4.0	%	4.8	%	4.0	%	3.7	%	3.6	%	4.2	%	3.3	%
Weighted-average rate of increase in future compensation	4.3	%	4.3	%	3.9	%	n/a		n/a		n/a		n/a
Weighted-average expected long-term rate of return on assets—expense	4.8	%	5.5	%	5.1	%	5.4	%	n/a		n/a		n/a
Weighted-average retail price index—obligation	n/a		n/a		n/a		3.1	%	n/a		n/a		n/a
Weighted-average retail price index—expense	n/a		n/a		n/a		3.1	%	n/a		n/a		n/a

The discount rates for all plans are developed by plan using spot rates derived from a yield curve of high quality (AA rated or better) fixed income debt securities as of the year-end measurement date to calculate discounted cash flows (the projected benefit obligation) and solving for a single equivalent discount rate that produces the same projected benefit obligation. In determining our benefit obligation, we use the actuarial present value of the vested benefits to which each eligible employee is currently entitled, based on the employee’s expected date of separation or retirement.

The expected long-term rate of return on assets in our North America plans is based on analysis of historical rates of return achieved by equity and non-equity investments and current market characteristics, adjusted for estimated plan expenses and weighted by target asset allocation percentages. As of January 1, 2016, our weighted-average expected long-term rate of return on assets is 4.9%.

The expected long-term rate of return on assets in our United Kingdom plans is based on the expected long-term performance of the underlying investments, adjusted for investment managers' fees. As of January 1, 2016, our weighted-average expected long-term rate of return on assets is 5.2%.

The retail price index in the United Kingdom plans is developed using the Bank of England implied retail price inflation curve based on the difference between yields on fixed interest and index-linked gilts adjusted for an inflation risk premium.

For the measurement of the benefit obligation at December 31, 2015 for our primary (U.S.) retiree medical benefit plans, the assumed health care cost trend rates, for pre-65 retirees, start with a 7.25% increase in 2016, followed by a gradual decline in increases to 4.5% for 2024 and thereafter. For post-65 retirees, the assumed health care cost trend rates start with a 9.0% increase in 2016, followed by a gradual decline in increases to 4.5% for 2024 and thereafter.

For the measurement of the benefit obligation at December 31, 2014 for our primary (U.S.) retiree medical benefit plans, the assumed health care cost trend rates, for pre-65 retirees, start with a 7.25% increase in 2015, followed by a gradual decline in increases to 5.0% for 2024 and thereafter. For post-65 retirees, the assumed health care cost trend rates start with a 6.75% increase in 2015, followed by a gradual decline in increases to 5.0% for 2022 and thereafter.

A one-percentage point change in the assumed health care cost trend rate of our primary (U.S.) retiree medical benefit plans as of December 31, 2015 would have the following effects on our retiree medical benefit plans:



	One-Percentage-Point
	Increase		Decrease
	(in millions)
Effect on total service and interest cost for 2015	$	0.3	$	(0.2	)
Effect on benefit obligation as of December 31, 2015	6.0		(5.0		)

The objectives of the investment policies governing the pension plans are to administer the assets of the plans for the benefit of the participants in compliance with all laws and regulations, and to establish an asset mix that provides for diversification and considers the risk of various different asset classes with the purpose of generating favorable investment returns. The investment policies consider circumstances such as participant demographics, time horizon to retirement and liquidity needs, and provide guidelines for asset allocation, planning horizon, general portfolio issues and investment manager

CF INDUSTRIES HOLDINGS, INC.

evaluation criteria. The investment strategies for the plans, including target asset allocations and investment vehicles, are subject to change within the guidelines of the policies.

The target asset allocation for our U.S. pension plan is 80% non-equity and 20% equity, which has been determined based on analysis of actual historical rates of return and plan needs and circumstances. The equity investments are tailored to exceed the growth of the benefit obligation and are a combination of U.S. and non-U.S. total stock market index mutual funds. The non-equity investments consist primarily of investments in debt securities and money market instruments that are selected based on investment quality and duration to mitigate volatility of the funded status and annual required contributions. The non-equity investments have a duration profile that is similar to the benefit obligation in order to mitigate the impact of interest rate changes on the funded status. This investment strategy is achieved through the use of mutual funds and individual securities.

The target asset allocation for the CF Canadian plan is 60% non-equity and 40% equity, and for the Terra Canadian plan is 75% non-equity and 25% equity. The equity investments are passively managed portfolios that diversify assets across multiple securities, economic sectors and countries. The non-equity investments are high quality passively managed portfolios that diversify assets across economic sectors, countries and maturity spectrums. This investment strategy is achieved through the use of mutual funds.

The pension assets in the United Kingdom plans are each administered by a Board of Trustees consisting of employer nominated trustees, member nominated trustees and an independent trustee. Trustees may be appointed or removed by the Company, provided the Company fulfills its obligation to have at least one third of the Board of Trustees as member nominated. It is the responsibility of the trustees to ensure prudent management and investment of the assets in the plans. The trustees meet on a quarterly basis to review and discuss fund performance and other administrative matters.

The trustees’ investment objectives are to hold assets that will achieve returns in excess of expected returns used in the valuation of each plan’s liability without exposing the plans to unacceptable risk. This is accomplished through the asset allocation strategy of each plan. For both plans, if the asset allocation moves more than plus or minus 5% from the benchmark allocation, the trustees may decide to amend the asset allocation. At a minimum, the trustees review the investment strategy and every triennial actuarial valuation to ensure that the strategy remains consistent with its funding principles. The trustees may review the strategy more frequently if opportunities arise to reduce risk within the investments without jeopardizing the funding position.

Assets of the United Kingdom plans are invested in externally managed pooled funds. The target asset allocation for the United Kingdom Terra plan is 55% actively managed target return funds, 30% actively and passively managed bond and gilt funds and 15% actively managed property funds. The target asset allocation for the United Kingdom Kemira plan is 50% actively managed target return funds, 45% actively and passively managed bond and gilt funds and 5% in an actively managed property fund. The target return funds diversify assets across multiple asset classes (which may include, among others, traditional equities and bonds) and make use of derivatives. The bond and gilt funds generally invest in fixed income debt securities including government bonds, gilts, high yield and emerging market bonds, and investment grade corporate bonds and can make use of derivatives. The property funds are invested predominately in freehold and leasehold property. All of the funds are valued at net asset value (NAV) as determined by the fund manager based on the value of the underlying net assets of the fund. No adjustments have been made to NAV.

CF INDUSTRIES HOLDINGS, INC.

The fair values of our pension plan assets as of December 31, 2015 and 2014, by major asset class, are as follows:



	December 31, 2015
	North America
	Total Fair Value			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in millions)
Cash and cash equivalents(1)	$	32.3		$	32.3	$	—	$	—
Equity mutual funds
Index equity(2)	102.9			102.9		—		—
Fixed income
U.S. Treasury bonds and notes(3)	10.7			10.7		—		—
Corporate bonds and notes(4)	337.8			—		337.8		—
Government and agency securities(5)	21.7			—		21.7		—
Other(6)	1.8			—		1.8		—
Total assets at fair value by fair value levels	$	507.2		$	145.9	$	361.3	$	—
Assets measured at net asset value (NAV)
Equity pooled mutual funds(7)	38.8
Fixed income pooled mutual funds(8)	82.0
Total assets measured at NAV as a practical expedient(13)	120.8
Total assets at fair value	628.0
Accruals and payables—net	(1.4		)
Total assets	$	626.6



	December 31, 2015
	United Kingdom
	Total Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in millions)
Cash	$	3.0	$	3.0	$	—	$	—
Total assets at fair value by fair value levels	$	3.0	$	3.0	$	—	$	—
Assets measured at NAV
Pooled target return funds(9)	216.3
Fixed income
Pooled UK government index-linked securities(10)	26.0
Pooled global fixed income funds(11)	126.8
Pooled property funds(12)	41.9
Total assets measured at NAV as a practical expedient(13)	411.0
Total assets at fair value	414.0
Accruals and payables—net	—
Total assets	$	414.0

CF INDUSTRIES HOLDINGS, INC.



	December 31, 2014
	North America
	Total Fair Value			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in millions)
Cash and cash equivalents(1)	$	26.0		$	26.0	$	—	$	—
Equity mutual funds
Index equity(2)	102.8			102.8		—		—
Fixed income
U.S. Treasury bonds and notes(3)	4.9			4.9		—		—
Corporate bonds and notes(4)	375.9			—		375.9		—
Government and agency securities(5)	26.0			—		26.0		—
Other(6)	2.1			—		2.1		—
Total assets at fair value by fair value levels	$	537.7		$	133.7	$	404.0	$	—
Assets measured at NAV
Equity pooled mutual funds(7)	44.0
Fixed income pooled mutual funds(8)	86.9
Total assets measured at NAV as a practical expedient(13)	130.9
Total assets at fair value	668.6
Accruals and payables—net	(3.8		)
Total assets	$	664.8


(1)	Cash and cash equivalents are primarily short-term money market funds and short-term federal home loan discount notes.


(2)	The index equity funds are mutual funds that utilize a passively managed investment approach designed to track specific equity indices. They are valued at quoted market prices in an active market, which represent the net asset values of the shares held by the plan.


(3)	U.S. Treasury bonds and notes are valued based on quoted market prices in an active market and are classified as Level 1 investments.


(4)	Corporate bonds and notes, including private placement securities, are valued by institutional bond pricing services, which gather information from market sources and integrate credit information, observed market movements and sector news into their pricing applications and models.


(5)	Government and agency securities consist of municipal bonds that are valued by institutional bond pricing services, which gather information on current trading activity, market movements, trends, and specific data on specialty issues.


(6)	Other includes primarily mortgage-backed and asset-backed securities, which are valued through pricing models of reputable third party sources based on market data.


(7)	The equity pooled mutual funds consist of pooled funds that invest in common stock and other equity securities that are traded on U.S., Canadian, and foreign markets.


(8)	The fixed income pooled mutual funds invest in investment-grade corporate debt, various governmental debt obligations, and mortgage-backed securities with varying maturities.


(9)	Pooled target return funds invest in a broad array of asset classes and a range of diversifiers including the use of derivatives.


(10)	Pooled United Kingdom government index-linked funds invest primarily in United Kingdom government index-linked gilt securities.


(11)	Pooled global fixed income funds invest primarily in government bonds, investment grade corporate bonds, high yield and emerging market bonds and can make use of derivatives.

CF INDUSTRIES HOLDINGS, INC.


(12)	Pooled property funds invest primarily in freehold and leasehold property in the United Kingdom.


(13)	These funds are valued using NAV as a practical expedient. NAV is determined by the fund managers based on the value of the underlying net assets of the fund.

We have defined contribution plans covering substantially all employees in North America and the United Kingdom. In North America, depending on the specific provisions of each plan, qualified employees receive company contributions based on a percentage of base salary, matching of employee contributions up to specified limits, or a combination of both. Qualified employees in the United Kingdom receive company contributions based on a percentage of base salary that are greater than employee contributions up to specified limits. As of January 1, 2013, we adopted amendments to our U.S. qualified defined contribution plans to combine them into a single plan. In 2015, 2014 and 2013, we recognized expense related to company contributions to the defined contribution plans of $13.8 million, $12.3 million, and $13.1 million, respectively.

In addition to our qualified defined benefit pension plans, we also maintain certain nonqualified supplemental pension plans for highly compensated employees as defined under federal law. The amounts recognized in accrued expenses and other liabilities in our consolidated balance sheets for these plans were $2.5 million and $18.7 million as of December 31, 2015 and $2.5 million and $19.8 million as of December 31, 2014, respectively. We recognized expense for these plans of $1.9 million, $5.1 million and $2.0 million in 2015, 2014 and 2013, respectively. The expense recognized in 2014 includes a settlement charge of $3.4 million.

Financing Agreements

Revolving Credit Agreement

We have a senior unsecured revolving credit agreement (as amended, the Revolving Credit Agreement) providing for a revolving credit facility of up to $2.0 billion with a maturity of September 18, 2020. Borrowings under the Revolving Credit Agreement may be used for working capital and general corporate purposes. CF Industries is a borrower, and CF Industries and CF Holdings are guarantors, under the Revolving Credit Agreement. Following the date of the closing of the transactions contemplated by the Combination Agreement (the Combination Agreement Closing Date), New CF would be required to be a borrower and a guarantor under the Revolving Credit Agreement, at which time CF Industries would cease to be a borrower under the Revolving Credit Agreement. CF Industries or, following the Combination Agreement Closing Date, New CF, may designate as borrowers one or more wholly-owned subsidiaries that are organized in the United States or any state thereof, the District of Columbia, England and Wales or the Netherlands.

Borrowings under the Revolving Credit Agreement may be denominated in dollars, Canadian dollars, Euro and Sterling, and bear interest at a per annum rate equal to an applicable eurocurrency rate or base rate plus, in either case, a specified margin, and the borrowers 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’ (or, after the consummation of the transactions contemplated by the Combination Agreement on the Combination Agreement Closing Date, New CF’s) credit rating at the time.

Certain of CF Holdings’ U.S. subsidiaries, and, on and after the Combination Agreement Closing Date, certain of New CF’s and CF Holdings’ material wholly-owned U.S. and foreign subsidiaries, will be required to become guarantors of the obligations under the Revolving Credit Agreement if (i) such subsidiaries guarantee other debt for borrowed money (subject to specified exceptions) of CF Holdings, CF Industries or New CF in an aggregate principal amount in excess of $500 million or (ii) such subsidiaries are borrowers under, issuers of, or guarantors of specified debt obligations of CF Holdings, CF Industries or New CF, including debt under the Bridge Credit Agreement (as defined below).

The Revolving Credit Agreement contains customary representations and warranties and covenants for a financing of this type, including two financial maintenance covenants: (i) a requirement that the interest coverage ratio, as defined in the Revolving Credit Agreement, be maintained at a level of not less than 2.75 to 1.00 and (ii) a requirement that the total leverage ratio, as defined in the Revolving Credit Agreement, be maintained at a level of not greater than 3.75 to 1.00.

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. 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.

CF INDUSTRIES HOLDINGS, INC.

As of December 31, 2015, we had excess borrowing capacity under the Revolving Credit Agreement of $1,995.1 million (net of outstanding letters of credit of $4.9 million), and there were no borrowings outstanding as of December 31, 2015 or 2014. Maximum borrowings during the year ended December 31, 2015 were $367.0 million with a weighted-average annual interest rate of 1.47%. There were no borrowings during the years ended December 31, 2014 and 2013.

CF Fertilisers UK Credit Agreement

CF Fertilisers UK Group Limited as borrower and CF Fertilisers UK Limited as guarantor entered into a £40.0 million senior unsecured credit agreement, dated October 1, 2012 (the CF Fertilisers UK Credit Agreement), which provided for a revolving credit facility of up to £40.0 million with a maturity of five years. On December 8, 2015, the CF Fertilisers UK Credit Agreement was canceled. There were no borrowings outstanding under the CF Fertilisers UK Credit Agreement as of its cancellation or any time during the year ended December 31, 2015.

Senior Notes

Long-term debt presented on our consolidated balance sheets as of December 31, 2015 and 2014 consisted of the following unsecured senior notes:



	December 31,
	2015		2014
	(in millions)
Public Senior Notes:
6.875% due 2018	$	800.0	$	800.0
7.125% due 2020	800.0		800.0
3.450% due 2023	749.4		749.4
5.150% due 2034	746.3		746.2
4.950% due 2043	748.8		748.8
5.375% due 2044	748.2		748.1
Private Senior Notes:
4.490% due 2022	250.0		—
4.930% due 2025	500.0		—
5.030% due 2027	250.0		—
	5,592.7		4,592.5
Less: Current portion	—		—
Net long-term debt	$	5,592.7	$	4,592.5

Public Senior Notes

On April 23, 2010, CF Industries issued $800 million aggregate principal amount of 6.875% senior notes due May 1, 2018 and $800 million aggregate principal amount of 7.125% senior notes due May 1, 2020 (the 2018/2020 Public Senior Notes). Interest on the 2018/2020 Public Senior Notes is paid semiannually on May 1 and November 1 and the 2018/2020 Public Senior Notes are redeemable at our option, in whole at any time or in part from time to time, at specified make-whole redemption prices. As of December 31, 2015, the carrying value of the 2018/2020 Public Senior Notes was $1.60 billion and the fair value was approximately $1.78 billion.

On May 23, 2013, CF Industries issued $750 million aggregate principal amount of 3.450% senior notes due June 1, 2023 and $750 million aggregate principal amount of 4.950% senior notes due June 1, 2043 (the 2023/2043 Public Senior Notes). Interest on the 2023/2043 Public Senior Notes is paid semiannually on June 1 and December 1 and the 2023/2043 Public Senior Notes are redeemable at our option, in whole at any time or in part from time to time, at specified make-whole redemption prices. We received net proceeds from the issuance and sale of the 2023/2043 Public Senior Notes, after deducting underwriting discounts and offering expenses, of approximately $1.48 billion. As of December 31, 2015, the carrying value of the 2023/2043 Public Senior Notes was approximately $1.50 billion and the fair value was approximately $1.34 billion.

On March 11, 2014, CF Industries issued $750 million aggregate principal amount of 5.150% senior notes due March 15, 2034 and $750 million aggregate principal amount of 5.375% senior notes due March 15, 2044 (the 2034/2044 Public Senior

CF INDUSTRIES HOLDINGS, INC.

Notes). Interest on the 2034/2044 Public Senior Notes is paid semiannually on March 15 and September 15 and the 2034/2044 Public Senior Notes are redeemable at our option, in whole at any time or in part from time to time, at specified make-whole redemption prices. We received net proceeds of $1.48 billion from the issuance and sale of the 2034/2044 Public Senior Notes, after deducting underwriting discounts and offering expenses. As of December 31, 2015, the carrying value of the 2034/2044 Public Senior Notes was approximately $1.49 billion and the fair value was approximately $1.35 billion.

Under the indentures (including the applicable supplemental indentures) governing the 2018/2020 Public Senior Notes, the 2023/2043 Public Senior Notes and the 2034/2044 Public Senior Notes (collectively, the Public Senior Notes), each series of the Public Senior Notes is guaranteed by CF Holdings. The indentures governing the Public Senior Notes contain customary events of default and covenants that limit, among other things, the ability of CF Holdings and its subsidiaries, including CF Industries, to incur liens on certain properties to secure debt.

If a Change of Control occurs together with a Ratings Downgrade (as both terms are defined under the indentures governing the Public Senior Notes), CF Industries would be required to offer to repurchase each series of Public Senior Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest. In addition, in the event that a subsidiary of ours, other than CF Industries, becomes a borrower or a guarantor under the Revolving Credit Agreement (or any renewal, replacement or refinancing thereof), such subsidiary would be required to become a guarantor of the Public Senior Notes, provided that such requirement will no longer apply with respect to the 2023/2043 Public Senior Notes and 2034/2044 Public Senior Notes following the repayment of the 2018/2020 Public Senior Notes or the subsidiaries of ours, other than CF Industries, otherwise becoming no longer subject to such a requirement to guarantee the 2018/2020 Public Senior Notes.

Private Senior Notes

On September 24, 2015, CF Industries issued in a private placement $250.0 million aggregate principal amount of 4.49% senior notes due October 15, 2022, $500.0 million aggregate principal amount of 4.93% senior notes due October 15, 2025 and $250.0 million aggregate principal amount of 5.03% senior notes due October 15, 2027 (the Private Senior Notes). CF Industries received proceeds of $1.0 billion from the issuance and sale of the Private Senior Notes. The Private Senior Notes are governed by the terms of a note purchase agreement (as amended, the Note Purchase Agreement) and are guaranteed by the Company. Interest on the Private Senior Notes is payable semiannually on April 15 and October 15.

CF Industries may prepay at any time all, or from time to time any part of, any series of the Private Senior Notes, in an amount not less than 5% of the aggregate principal amount of such series of the Private Senior Notes then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid plus a make-whole amount determined as specified in the Note Purchase Agreement. In the event of a Change in Control (as defined in the Note Purchase Agreement), each holder of the Private Senior Notes may require CF Industries to prepay the entire unpaid principal amount of the Private Senior Notes held by such holder at a price equal to 100% of the principal amount of such Private Senior Notes together with accrued and unpaid interest thereon, but without any make-whole amount or other premium.

All obligations under the Note Purchase Agreement are unsecured. On and after the Combination Agreement Closing Date, New CF would be required to guarantee the obligations under the Note Purchase Agreement. In addition, certain of the Company’s U.S. subsidiaries, and, on and after the Combination Agreement Closing Date, certain of New CF’s and the Company’s material wholly-owned U.S. and foreign subsidiaries, will be required to become guarantors of the obligations under the Note Purchase Agreement if (i) such subsidiaries guarantee other debt for borrowed money (subject to specified exceptions) of the Company, CF Industries or New CF in an aggregate principal amount in excess of $500 million or (ii) such subsidiaries are borrowers under, issuers of, or guarantors of specified debt obligations of the Company, CF Industries or New CF.

The Note Purchase Agreement contains customary representations and warranties and covenants for a financing of this type, including two financial maintenance covenants: (i) a requirement that the interest coverage ratio (as defined in the Note Purchase Agreement) be maintained at a level of not less than 2.75 to 1.00 and (ii) a requirement that the total leverage ratio (as defined in the Note Purchase Agreement) be maintained at a level of not greater than 3.75 to 1.00.

The Note Purchase 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, make-whole amounts, or interest; inaccuracy of representations and warranties in any material respect; and failure to comply with specified covenants. Upon the occurrence and during the continuance of an event of default under the Note Purchase Agreement and after any applicable cure period, subject to specified exceptions, the holder or holders of more than 50% in principal amount of the Private Senior Notes outstanding may declare all the Private Senior Notes then outstanding due and payable.

CF INDUSTRIES HOLDINGS, INC.

As of December 31, 2015, the carrying value of the Private Senior Notes was $1.0 billion and the fair value was approximately $0.99 billion.

Bridge Credit Agreement

On September 18, 2015, in connection with CF Holdings’ proposed combination with the ENA Business of OCI (see Note 4—Acquisitions and Divestitures for additional information), CF Holdings, as a guarantor, and CF Industries, as the tranche A borrower, entered into a senior unsecured 364-Day Bridge Credit Agreement (as amended, the Bridge Credit Agreement). On the tranche B closing date, as defined in the Bridge Credit Agreement, New CF would become a party to the Bridge Credit Agreement as the tranche B borrower. The tranche B closing date would occur upon the satisfaction of specified conditions, including the occurrence of the closing under the Combination Agreement.

The Bridge Credit Agreement (1) provided for a single borrowing of a tranche A bridge loan of up to $1.0 billion that would have been used by CF Industries first to reduce amounts outstanding, if any, under the Revolving Credit Agreement and then for general corporate purposes; and (2) provides for a single borrowing of a tranche B bridge loan of up to $3.0 billion that may be used by New CF to pay the cash portion, if any, of the purchase price for specified equity interests to be acquired pursuant to the Combination Agreement; to consummate the refinancing of specified debt in connection with the transactions contemplated by the Combination Agreement; to pay fees and expenses in connection with the transactions contemplated by the Bridge Credit Agreement and the Combination Agreement; and in an amount of up to $1.3 billion for general corporate purposes.

The obligations of the lenders to fund the tranche A bridge loan under the Bridge Credit Agreement automatically terminated on September 24, 2015 in connection with the issuance of the Private Senior Notes. The obligations of the lenders to fund the tranche B bridge loan under the Bridge Credit Agreement are subject to customary limited conditionality and expire on August 6, 2016 (or no later than November 6, 2016, if extended pursuant to the terms thereof), or earlier as provided in the Bridge Credit Agreement. The tranche B bridge loan would mature on the date that is 364 days after the initial funding of such loan.

The Bridge Credit Agreement is voluntarily prepayable from time to time without premium or penalty and is mandatorily prepayable with, and the commitments thereunder will automatically be reduced by, the net cash proceeds from specified issuances of equity interests of CF Holdings and its subsidiaries and, on and after the Combination Agreement Closing Date, New CF and its subsidiaries, specified issuances or incurrences of debt by such persons and the net cash proceeds (including casualty insurance proceeds and condemnation awards) from specified dispositions of assets of such persons, with specified exceptions, including a right to reinvest such proceeds or awards in assets used or useful in the business of such persons and their subsidiaries. Commitments under the Bridge Credit Agreement will also be reduced by the amount of commitments under certain designated term loan facilities and by the amount of any specified debt as to which, on or prior to the tranche B closing date, arrangements have been made to permit such debt to remain outstanding in accordance with its terms or permanent repayment or termination has been effected by OCI and its affiliates.

Borrowings under the Bridge Credit Agreement will be denominated in dollars and bear interest at a per annum rate equal to an applicable LIBOR rate or base rate plus, in either case, a specified margin that depends on CF Holdings’ (or, after the consummation of the transactions contemplated by the Combination Agreement on the Combination Agreement Closing Date, New CF’s) credit rating at the time and that will increase by a specified amount every 90 days commencing with the 90th day after the date of the initial funding of the tranche B bridge loan through the date that is 270 days after the date of such initial funding. CF Industries is required to pay an undrawn commitment fee equal to 0.15% of the undrawn portion of the commitments under the Bridge Credit Agreement. CF Industries and New CF will also be required to pay duration fees ranging from 0.50% to 1.00% at specified intervals following the funding of the tranche B bridge loan.

Currently, CF Holdings and CF Industries are the only guarantors of the obligations under the Bridge Credit Agreement. Certain of CF Holdings’ U.S. subsidiaries, and, on and after the Combination Agreement Closing Date, certain of New CF’s and CF Holdings’ material wholly-owned U.S. and foreign subsidiaries, will be required to become guarantors of the obligations under the Bridge Credit Agreement if (i) such subsidiaries guarantee other debt for borrowed money (subject to specified exceptions) of CF Holdings, CF Industries or New CF in an aggregate principal amount in excess of $500 million or (ii) such subsidiaries are borrowers under, issuers of, or guarantors of specified debt obligations of CF Holdings, CF Industries or New CF, including debt under the Revolving Credit Agreement.

The representations, warranties, events of default and covenants contained in the Bridge Credit Agreement are substantially similar to those contained in the Revolving Credit Agreement.

CF INDUSTRIES HOLDINGS, INC.

Interest Expense

Details of interest expense are as follows:



	Year ended December 31,
	2015			2014			2013
	(in millions)
Interest on borrowings(1)	$	267.4		$	238.3		$	150.6
Fees on financing agreements(1)(2)	16.8			10.6			15.4
Interest on tax liabilities	3.5			3.5			12.9
Interest capitalized	(154.5		)	(74.2		)	(26.7		)
Interest expense	$	133.2		$	178.2		$	152.2


(1)	See Note 12—Financing Agreements for additional information.


(2)	Fees on financing agreements for the year ended December 31, 2015 includes $5.9 million of accelerated amortization of deferred fees related to the termination in September 2015 of the tranche A commitment under the Bridge Credit Agreement.

Other Operating—Net

Details of other operating—net are as follows:



	Year ended December 31,
	2015			2014			2013
	(in millions)
Loss on disposal of property, plant and equipment—net	$	21.4		$	3.7		$	5.6
Expansion project costs	51.3			30.7			10.8
Loss (gain) on foreign currency derivatives	21.6			38.4			(20.8		)
Gain on foreign currency transactions	(7.5		)	(14.9		)	(13.5		)
Closed facilities costs	—			0.8			4.0
Other	5.5			(5.4		)	(1.9		)
Other operating loss (income)—net	$	92.3		$	53.3		$	(15.8	)

Expansion project costs that did not qualify for capitalization include amounts related to administrative and consulting services for our capacity expansion projects in Port Neal, Iowa and Donaldsonville, Louisiana.

CF INDUSTRIES HOLDINGS, INC.

Noncontrolling Interest

Terra Nitrogen Company, L.P. (TNCLP)

TNCLP is a master limited partnership (MLP) that owns a nitrogen fertilizer manufacturing facility in Verdigris, Oklahoma. We own an aggregate 75.3% of TNCLP through general and limited partnership interests. Outside investors own the remaining 24.7% of the limited partnership. For financial reporting purposes, the assets, liabilities and earnings of the partnership are consolidated into our financial statements. The outside investors' limited partnership interests in the partnership are recorded in noncontrolling interest in our consolidated financial statements. The noncontrolling interest represents the noncontrolling unitholders' interest in the earnings and equity of TNCLP. An affiliate of CF Industries is required to purchase all of TNCLP's fertilizer products at market prices as defined in the Amendment to the General and Administrative Services and Product Offtake Agreement, dated September 28, 2010.

TNCLP makes cash distributions to the general and limited partners based on formulas defined within its Agreement of Limited Partnership. Cash available for distribution is defined in the agreement generally as all cash receipts less all cash disbursements, less certain reserves (including reserves for future operating and capital needs) established as the general partner determines in its reasonable discretion to be necessary or appropriate. Changes in working capital affect available cash, as increases in the amount of cash invested in working capital items (such as increases in inventory and decreases in accounts payable) reduce available cash, while declines in the amount of cash invested in working capital items increase available cash. Cash distributions to the limited partners and general partner vary depending on the extent to which the cumulative distributions exceed certain target threshold levels set forth in the Agreement of Limited Partnership.

In each of the applicable quarters of 2015, 2014 and 2013, the minimum quarterly distributions were satisfied, which entitled us, as the general partner, to receive increased distributions on our general partner interests as provided for in the Agreement of Limited Partnership. The earnings attributed to our general partner interest in excess of the threshold levels for the years ended December 31, 2015, 2014 and 2013 were $116.4 million, $139.4 million and $200.6 million, respectively.

As of December 31, 2015, Terra Nitrogen GP Inc. (TNGP), the general partner of TNCLP (and an indirect wholly-owned subsidiary of CF Industries), and its affiliates owned 75.3% of TNCLP's outstanding units. When not more than 25% of TNCLP's issued and outstanding units are held by non-affiliates of TNGP, TNCLP, at TNGP's sole discretion, may call, or assign to TNGP or its affiliates, TNCLP's right to acquire all such outstanding units held by non-affiliated persons. If TNGP elects to acquire all outstanding units, TNCLP is required to give at least 30 but not more than 60 days' notice of TNCLP's decision to purchase the outstanding units. The purchase price per unit will be the greater of (1) the average of the previous 20 trading days' closing prices as of the date five days before the purchase is announced or (2) the highest price paid by TNGP or any of its affiliates for any unit within the 90 days preceding the date the purchase is announced.

Canadian Fertilizers Limited (CFL)

CFL owns a nitrogen fertilizer complex in Medicine Hat, Alberta, Canada, which until April 30, 2013, supplied fertilizer products to CF Industries and Viterra Inc. (Viterra). The Medicine Hat complex is the largest nitrogen fertilizer complex in Canada, with two world-scale ammonia plants, a world-scale granular urea plant and on-site storage facilities for both ammonia and urea.

Prior to April 30, 2013, CF Industries owned 49% of the voting common shares and 66% of the non-voting preferred shares of CFL and purchased 66% of the production of CFL. Also prior to April 30, 2013, Viterra held 34% of the equity ownership of CFL, and had the right to purchase up to the remaining 34% of CFL's production. Both CF Industries and Viterra were entitled to receive distributions of net earnings of CFL based upon their respective purchases from CFL. The remaining 17% of the voting common shares were owned by GROWMARK, Inc. and La Coop fédérée. CFL was a variable interest entity that was consolidated in our financial statements.

In 2012, we entered into agreements to acquire the noncontrolling interests in CFL for C$0.9 billion, which included 34% of CFL's common and preferred shares owned by Viterra, the product purchase agreement between CFL and Viterra and the CFL common shares held by GROWMARK, Inc. and La Coop fédérée. In April 2013, we completed the acquisitions. Since CFL was previously a consolidated variable interest entity, the purchase price was recognized as follows: a $0.8 billion reduction in paid-in capital; a $0.1 billion deferred tax asset; and the removal of the CFL noncontrolling interest because CFL became a wholly-owned subsidiary.

CF INDUSTRIES HOLDINGS, INC.

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



	Year ended December 31,
	2015			2014			2013
	TNCLP			TNCLP			CFL			TNCLP			Total
	(in millions)
Noncontrolling interest:
Beginning balance	$	362.8		$	362.3		$	17.4		$	362.6		$	380.0
Earnings attributable to noncontrolling interest	34.2			46.5			2.3			65.9			68.2
Declaration of distributions payable	(45.0		)	(46.0		)	(2.3		)	(66.2		)	(68.5		)
Acquisitions of noncontrolling interests in CFL	—			—			(16.8		)	—			(16.8		)
Effect of exchange rate changes	—			—			(0.6		)	—			(0.6		)
Ending balance	$	352.0		$	362.8		$	—		$	362.3		$	362.3
Distributions payable to noncontrolling interest:
Beginning balance	$	—		$	—		$	5.3		$	—		$	5.3
Declaration of distributions payable	45.0			46.0			2.3			66.2			68.5
Distributions to noncontrolling interest	(45.0		)	(46.0		)	(7.5		)	(66.2		)	(73.7		)
Effect of exchange rate changes	—			—			(0.1		)	—			(0.1		)
Ending balance	$	—		$	—		$	—		$	—		$	—

Proposed Internal Revenue Service Regulation Impacting Master Limited Partnerships

Currently, no federal income taxes are paid by TNCLP due to its MLP status. Partnerships are generally not subject to federal income tax, although publicly-traded partnerships (such as TNCLP) are treated as corporations for federal income tax purposes (and therefore are subject to federal income tax), unless at least 90% of the partnership's gross income is "qualifying income" as defined in Section 7704 of the Internal Revenue Code of 1986, as amended (the Code), and the partnership is not required to register as an investment company under the Investment Company Act of 1940. Any change in the tax treatment of income from fertilizer-related activities as qualifying income could cause TNCLP to be treated as a corporation for federal income tax purposes. If TNCLP were taxed as a corporation, under current law, due to its current ownership interest, CF Industries would qualify for a partial dividends received deduction on the dividends received from TNCLP. Therefore, we would not expect a change in the tax treatment of TNCLP to have a material impact on the consolidated financial condition or results of operations of CF Holdings.

On May 6, 2015, the Internal Revenue Service (IRS) published proposed regulations on the types of income and activities which constitute or generate qualifying income of a MLP. The proposed regulations would have the effect of limiting the types of income and activities which qualify under the MLP rules, subject to certain transition provisions. The proposed regulations include as activities that generate qualifying income processing or refining and transportation activities with respect to any mineral or natural resource (including fertilizer), but reserve on specific proposals regarding fertilizer-related activities. We continue to monitor these IRS regulatory activities.

CF INDUSTRIES HOLDINGS, INC.

Derivative Financial Instruments

We use derivative financial instruments to reduce our exposure to changes in commodity prices and foreign currency exchange rates.

Commodity Price Risk Management

Natural gas is the largest and most volatile component of the manufacturing cost for nitrogen-based products. We manage the risk of changes in natural gas prices primarily through the use of derivative financial instruments covering periods through the end of 2018. The derivatives that we use are primarily fixed price swaps and options traded in the OTC markets. These natural gas derivatives settle using primarily a NYMEX futures price index, which represents the basis for fair value at any given time. We entered into natural gas derivative contracts with respect to natural gas to be consumed by us in the future, and settlements of those derivative contracts are scheduled to coincide with our anticipated purchases of natural gas used to manufacture nitrogen products during those future periods. We use natural gas derivatives as an economic hedge of natural gas price risk, but without the application of hedge accounting. As a result, changes in fair value of these contracts are recognized in earnings.

As of December 31, 2015 and 2014, we had open natural gas derivative contracts for 431.5 million MMBtus and 58.7 million MMBtus, respectively. For the year ended December 31, 2015, we used derivatives to cover approximately 64% of our natural gas consumption.

Foreign Currency Exchange Rates

In the fourth quarter of 2012, our Board of Directors authorized a project to construct new ammonia and urea/UAN plants at our Donaldsonville, Louisiana complex and new ammonia and urea plants at our Port Neal, Iowa complex. A portion of the capacity expansion project costs are euro-denominated. In order to manage our exposure to changes in the euro to U.S. dollar currency exchange rates, we have hedged our projected euro-denominated payments through the third quarter of 2016 using foreign currency forward contracts.

As of December 31, 2015 and 2014, the notional amount of our open foreign currency derivatives was €89.0 million and €209.0 million, respectively. None of these open foreign currency derivatives were designated as hedging instruments for accounting purposes.

During the year ended December 31, 2014, we reclassified a pre-tax gain of $2.8 million from accumulated other comprehensive income (AOCI) to income as a result of the discontinuance of certain foreign currency derivatives, which were originally designated as cash flow hedges. No reclassification from AOCI to income occurred in 2015 or 2013. As of December 31, 2015 and December 31, 2014, AOCI includes $7.4 million of pre-tax gains related to the foreign currency derivatives that were originally designated as cash flow hedges. The hedges were de-designated as of December 31, 2013, and the remaining balance in AOCI will be reclassified into income over the depreciable lives of the property, plant and equipment associated with the capacity expansion projects. We expect that the amounts to be reclassified within the next twelve months will be insignificant. See Note 18—Stockholders' Equity, for further information.

The effect of derivatives in our consolidated statements of operations is shown in the tables below:



	Gain (loss) recognized in OCI						Gain (loss) reclassified from AOCI into income
	Year ended December 31,							Year ended December 31,
Derivatives designated as cash flow hedges	2015		2014		2013		Location	2015		2014		2013
	(in millions)							(in millions)
Foreign exchange contracts	$	—	$	—	$	3.0	Other operating—net	$	—	$	2.8	$	—



	Gain (loss) recognized in income
		Year ended December 31,
	Location	2015		2014		2013
		(in millions)
Foreign exchange contracts	Other operating—net(1)	$	—	$	—	$	(1.8	)


(1)	For foreign exchange contracts designated as cash flow hedges, the amount reported as loss recognized in income in 2013 represents the amount excluded from hedge effectiveness.

CF INDUSTRIES HOLDINGS, INC.



	Unrealized gain (loss) recognized in income
		Year ended December 31,
Derivatives not designated as hedges	Location	2015			2014			2013
		(in millions)
Natural gas derivatives	Cost of sales	$	(176.3	)	$	(79.5	)	$	52.9
Foreign exchange contracts	Other operating—net	22.4			(43.6		)	14.8
Unrealized (losses) gains recognized in income		$	(153.9	)	$	(123.1	)	$	67.7



	Gain (loss) in income
	Year ended December 31,
All Derivatives	2015			2014			2013
	(in millions)
Unrealized (losses) gains
Derivatives not designated as hedges	$	(153.9	)	$	(123.1	)	$	67.7
Cash flow hedge ineffectiveness	—			—			(1.8		)
Total unrealized (losses) gains	(153.9		)	(123.1		)	65.9
Realized (losses) gains	(114.2		)	64.2			1.8
Net derivative (losses) gains	$	(268.1	)	$	(58.9	)	$	67.7

The fair values of derivatives on our consolidated balance sheets are shown below. As of December 31, 2015 and 2014, none of our derivative instruments were designated as hedging instruments. For additional information on derivative fair values, see Note 9—Fair Value Measurements.



	Asset Derivatives							Liability Derivatives
	Balance Sheet Location		December 31,					Balance Sheet Location	December 31,
		2015			2014			2015			2014
			(in millions)						(in millions)
Foreign exchange contracts	Other current assets		$	0.5		$	—	Other current liabilities	$	(0.6	)	$	(22.4	)
Foreign exchange contracts	Other assets		—			—		Other liabilities	—			—
Natural gas derivatives	Other current assets		0.1			0.5		Other current liabilities	(129.9		)	(26.0		)
Natural gas derivatives	Other assets		—			—		Other liabilities	(80.8		)	—
Total derivatives			$	0.6		$	0.5		$	(211.3	)	$	(48.4	)
Current / Noncurrent totals
	Other current assets		$	0.6		$	0.5	Other current liabilities	$	(130.5	)	$	(48.4	)
	Other assets		—			—		Other liabilities	(80.8		)	—
Total derivatives			$	0.6		$	0.5		$	(211.3	)	$	(48.4	)

The counterparties to our derivative contracts are multinational commercial banks, major financial institutions and large energy companies. Our derivatives are executed with several counterparties, generally under International Swaps and Derivatives Association (ISDA) agreements. The ISDA agreements are master netting arrangements commonly used for OTC derivatives that mitigate exposure to counterparty credit risk, in part, by creating contractual rights of netting and setoff, the specifics of which vary from agreement to agreement. These rights are described further below:


•	Settlement netting generally allows us and our counterparties to net, into a single net payable or receivable, ordinary settlement obligations arising between us under the ISDA agreement on the same day, in the same currency, for the same types of derivative instruments, and through the same pairing of offices.

CF INDUSTRIES HOLDINGS, INC.

•

Close-out netting rights are provided in the event of a default or other termination event (as defined in the ISDA agreements), including bankruptcy. Depending on the cause of early termination, the non-defaulting party may elect to terminate all or some transactions outstanding under the ISDA agreement. The values of all terminated transactions and certain other payments under the ISDA agreement are netted, resulting in a single net close-out amount payable to or by the non-defaulting party. Termination values may be determined using a mark-to-market approach or based on a party's good faith estimate of its loss. If the final net close-out amount is payable by the non-defaulting party, that party's obligation to make the payment may be conditioned on factors such as the termination of all derivative transactions between the parties or payment in full of all of the defaulting party's obligations to the non-defaulting party, in each case regardless of whether arising under the ISDA agreement or otherwise.

•

Setoff rights are provided by certain of our ISDA agreements and generally allow a non-defaulting party to elect to set off, against the final net close-out payment, other matured and contingent amounts payable between us and our counterparties under the ISDA agreement or otherwise. Typically, these setoff rights arise upon the early termination of all transactions outstanding under an ISDA agreement following a default or specified termination event.

Most of our ISDA agreements contain credit-risk-related contingent features such as cross default provisions and credit support requirements. In the event of certain defaults or a credit ratings downgrade, our counterparty may request early termination and net settlement of certain derivative trades or may require us to collateralize derivatives in a net liability position. As of December 31, 2015 and 2014, the aggregate fair value of the derivative instruments with credit-risk-related contingent features in net liability positions was $211.3 million and $47.1 million, respectively, which also approximates the fair value of the maximum amount of additional collateral that would need to be posted or assets needed to settle the obligations if the credit-risk-related contingent features were triggered at the reporting dates. At both December 31, 2015 and 2014, we had no cash collateral on deposit with counterparties for derivative contracts. 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.

The following table presents amounts relevant to offsetting of our derivative assets and liabilities as of December 31, 2015 and 2014:



	Amounts presented in consolidated balance sheets(1)			Gross amounts not offset in consolidated balance sheets
		Financial instruments			Cash collateral received (pledged)		Net amount
	(in millions)
December 31, 2015
Total derivative assets	$	0.6		$	0.6	$	—	$	—
Total derivative liabilities	211.3			0.6		—		210.7
Net derivative liabilities	$	(210.7	)	$	—	$	—	$	(210.7	)
December 31, 2014
Total derivative assets	$	0.5		$	0.5	$	—	$	—
Total derivative liabilities	48.4			0.5		—		47.9
Net derivative liabilities	$	(47.9	)	$	—	$	—	$	(47.9	)


(1)	We report the fair values of our derivative assets and liabilities on a gross basis on our consolidated balance sheets. As a result, the gross amounts recognized and net amounts presented are the same.

We do not believe the contractually allowed netting, close-out netting or setoff of amounts owed to, or due from, the counterparties to our ISDA agreements would have a material effect on our financial position.

CF INDUSTRIES HOLDINGS, INC.

Supplemental Balance Sheet Data

Accounts Receivable—Net

Accounts receivable—net consist of the following:



	December 31,
	2015		2014
	(in millions)
Trade	$	210.2	$	185.7
Other	57.0		5.8
	$	267.2	$	191.5

Trade accounts receivable is net of an allowance for doubtful accounts of $2.9 million and $0.4 million as of December 31, 2015 and 2014, respectively.

Inventories

Inventories consist of the following:



	December 31,
	2015		2014
	(in millions)
Finished goods	$	286.1	$	179.5
Raw materials, spare parts and supplies	35.1		23.4
	$	321.2	$	202.9

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following:



	December 31,
	2015		2014
	(in millions)
Accounts payable	$	96.6	$	65.8
Capacity expansion project costs	416.3		195.3
Accrued natural gas costs	70.0		96.9
Payroll and employee-related costs	48.8		47.3
Accrued interest	60.0		46.9
Accrued share repurchase	—		29.1
Other	226.0		108.6
	$	917.7	$	589.9

Capacity expansion project costs include the capital expenditures invested in the capacity expansion projects.

Payroll and employee-related costs include accrued salaries and wages, vacation, incentive plans and payroll taxes.

Accrued interest includes interest payable on our outstanding unsecured senior notes. For further details, see Note 12—Financing Agreements.

Other includes accrued utilities, property taxes, sales incentives and other credits, accrued litigation settlement costs, accrued transaction costs, maintenance and professional services.

CF INDUSTRIES HOLDINGS, INC.

Other Current Liabilities

Other current liabilities consist of unrealized losses on derivatives amounting to $130.5 million and $48.4 million as of December 31, 2015 and 2014, respectively. For further details, see Note 16—Derivative Financial Instruments.

Other Liabilities

Other liabilities consist of the following:



	December 31,
	2015		2014
	(in millions)
Benefit plans and deferred compensation	$	343.4	$	209.8
Tax-related liabilities	117.9		95.8
Unrealized losses on derivatives	80.8		—
Capacity expansion project costs	54.8		49.0
Environmental and related costs	6.6		3.6
Other	24.1		16.7
	$	627.6	$	374.9

Benefit plans and deferred compensation include liabilities for pensions, retiree medical benefits, and the noncurrent portion of incentive plans (see Note 11—Pension and Other Postretirement Benefits).

Capacity expansion project costs consist of amounts due to contractors that will be paid upon completion of the project in accordance with the related contract terms.

CF INDUSTRIES HOLDINGS, INC.

Stockholders' Equity

Common Stock

Our Board of Directors has authorized certain programs to repurchase shares of our common stock. Each of these programs is consistent in that repurchases may be made from time to time in the open market, through privately-negotiated transactions, through block transactions or otherwise. The manner, timing and amount of repurchases are determined by our management based on the evaluation of market conditions, stock price and other factors.

In the third quarter of 2012, our Board of Directors authorized a program to repurchase up to $3.0 billion of the common stock of CF Holdings through December 31, 2016 (the 2012 Program). The repurchases under the 2012 Program were completed in the second quarter of 2014. On August 6, 2014, our Board of Directors authorized a program to repurchase up to $1.0 billion of the common stock of CF Holdings through December 31, 2016 (the 2014 Program).

The number of shares in the share repurchases and changes in common shares outstanding tables below has been retroactively restated for all prior periods presented to reflect the five-for-one split of the Company’s common stock effected in the form of a stock dividend that was distributed on June 17, 2015. See Note 1—Background and Basis of Presentation for further information.

The following table summarizes the share repurchases under the 2014 Program and the 2012 Program.



	2014 Program			2012 Program
	Shares	Amounts		Shares	Amounts
	(in millions)
Shares repurchased in 2013	—	$	—	36.7	$	1,449.3
Shares repurchased in 2014:
First quarter	—	$	—	16.0	$	793.9
Second quarter	—	—		15.4	756.8
Third quarter	—	—		—	—
Fourth quarter	7.0	372.8		—	—
Total shares repurchased in 2014	7.0	372.8		31.4	1,550.7
Shares repurchased as of December 31, 2014	7.0	$	372.8	68.1	$	3,000.0
Shares repurchased in 2015:
First quarter	4.1	$	236.6
Second quarter	4.5	268.1
Third quarter	0.3	22.5
Fourth quarter	—	—
Total shares repurchased in 2015	8.9	527.2
Shares repurchased as of December 31, 2015	15.9	$	900.0

As of December 31, 2015 and 2014, the amount of shares repurchased that was accrued but unpaid was zero and $29.1 million, respectively.

During 2015 and 2014, we retired 10.7 million shares and 38.6 million shares of repurchased stock, respectively. As of December 31, 2015 and 2014, we held in treasury approximately 2.4 million and 4.2 million shares of repurchased stock, respectively.

CF INDUSTRIES HOLDINGS, INC.

Changes in common shares outstanding are as follows:



	Year ended December 31,
	2015		2014		2013
Beginning balance	241,673,050		279,240,970		314,753,440
Exercise of stock options	274,705		942,560		1,131,515
Issuance of restricted stock(1)	40,673		20,875		150,370
Forfeitures of restricted stock	—		(65,680	)	(7,850	)
Purchase of treasury shares(2)	(8,906,872	)	(38,465,675	)	(36,786,505	)
Ending balance	233,081,556		241,673,050		279,240,970


(1)	Includes shares issued from treasury.


(2)	Includes shares withheld to pay employee tax obligations upon the vesting of restricted stock.

Stockholder Rights Plan

As of December 31, 2014, we had a stockholder rights plan intended to deter coercive or partial offers which may not provide fair value to all stockholders and to enhance our ability to represent all of our stockholders and thereby maximize stockholder value. The terms of the rights were set forth in a Rights Agreement dated as of July 21, 2005 and amended as of August 31, 2010 and March 16, 2015 between us and Computershare Inc., as successor rights agent. The rights expired on March 31, 2015 without having been exercised.

CF INDUSTRIES HOLDINGS, INC.

Preferred Stock

We are authorized to issue 50 million shares of $0.01 par value preferred stock, of which 500,000 have been designated Series A Junior Participating Preferred Stock. Our amended and restated certificate of incorporation authorizes our Board of Directors, without any further stockholder action or approval, to issue these shares in one or more classes or series, and (other than in the case of the Series A Junior Participating Preferred Stock, the terms of which are set forth in our amended and restated certificate of incorporation) to fix the rights, preferences and privileges of the shares of each wholly unissued class or series and any of its qualifications, limitations or restrictions. The 500,000 authorized shares of Series A Junior Participating Preferred Stock had been reserved for issuance upon the exercise of rights under the Rights Plan. The rights expired on March 31, 2015 without having been exercised. No shares of preferred stock have been issued.

Accumulated Other Comprehensive Income (Loss)

Changes to accumulated other comprehensive income (loss) and the impact on other comprehensive loss are as follows:



	Foreign Currency Translation Adjustment			Unrealized Gain (Loss) on Securities			Unrealized Gain (Loss) on Derivatives			Defined Benefit Plans			Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance as of December 31, 2012	$	61.4		$	(0.4	)	$	4.6		$	(115.2	)	$	(49.6	)
Unrealized gain	—			2.1			3.0			—			5.1
Reclassification to earnings	—			(0.6		)	—			12.2			11.6
Gain arising during the period	—			—			—			46.2			46.2
Effect of exchange rate changes and deferred taxes	(29.5		)	(0.5		)	(1.1		)	(24.8		)	(55.9		)
Balance as of December 31, 2013	31.9			0.6			6.5			(81.6		)	(42.6		)
Unrealized gain	—			0.7			—			—			0.7
Reclassification to earnings	—			(0.4		)	(2.8		)	33.1			29.9
Loss arising during the period	—			—			—			(106.2		)	(106.2		)
Effect of exchange rate changes and deferred taxes	(72.4		)	(0.1		)	1.0			29.9			(41.6		)
Balance as of December 31, 2014	(40.5		)	0.8			4.7			(124.8		)	(159.8		)
Unrealized loss	—			(0.2		)	—			—			(0.2		)
Reclassification to earnings	—			0.9			—			5.9			6.8
Impact of CF Fertilisers UK acquisition	9.0			—			—			38.2			47.2
Gain arising during the period	—			—			—			23.7			23.7
Effect of exchange rate changes and deferred taxes	(166.3		)	(0.5		)	—			(0.7		)	(167.5		)
Balance as of December 31, 2015	$	(197.8	)	$	1.0		$	4.7		$	(57.7	)	$	(249.8	)

CF INDUSTRIES HOLDINGS, INC.

Reclassifications out of AOCI to the consolidated statements of operations for the years ended December 31, 2015. 2014 and 2013 were as follows:



	Year ended December 31,
	2015			2014			2013
	(in millions)
Foreign Currency Translation Adjustment
CF Fertilisers UK equity method investment remeasurement(1)	$	9.0		$	—		$	—
Total before tax	9.0			—			—
Tax effect	—			—			—
Net of tax	$	9.0		$	—		$	—
Unrealized Gain (Loss) on Securities
Available-for-sale securities(2)	$	0.9		$	(0.4	)	$	(0.6	)
Total before tax	0.9			(0.4		)	(0.6		)
Tax effect	(0.5		)	0.1			0.2
Net of tax	$	0.4		$	(0.3	)	$	(0.4	)
Unrealized Gain (Loss) on Derivatives
Reclassification of de-designated hedges(3)	$	—		$	(2.8	)	$	—
Total before tax	—			(2.8		)	—
Tax effect	—			1.0			—
Net of tax	$	—		$	(1.8	)	$	—
Defined Benefit Plans
CF Fertilisers UK equity method investment remeasurement(1)	$	38.2		$	—		$	—
Amortization of prior service cost(4)	(1.0		)	(0.4		)	0.3
Amortization of net loss(4)	6.9			33.5			11.9
Total before tax	44.1			33.1			12.2
Tax effect	(2.1		)	(12.1		)	(4.3		)
Net of tax	$	42.0		$	21.0		$	7.9
Total reclassifications for the period	$	51.4		$	18.9		$	7.5


(1)	Represents the amount that was reclassified from AOCI into equity in earnings of non-operating affiliates—net of taxes as a result of the remeasurement to fair value of our initial 50% equity interest in CF Fertilisers UK.


(2)	Represents the balance that was reclassified into interest income.


(3)	Represents the portion of de-designated cash flow hedges that were reclassified into income as a result of the discontinuance of certain cash flow hedges.


(4)	These components are included in the computation of net periodic pension cost and were reclassified from AOCI into cost of sales and selling, general and administrative expenses.

CF INDUSTRIES HOLDINGS, INC.

Stock-Based Compensation

2014 Equity and Incentive Plan

On May 14, 2014, our shareholders approved the CF Industries Holdings, Inc. 2014 Equity and Incentive Plan (the Plan) which replaced the CF Industries Holdings, Inc. 2009 Equity and Incentive Plan. Under the Plan, we may grant incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards (payable in cash or stock) and other stock-based awards to our officers, employees, consultants and independent contractors (including non-employee directors). The purpose of the Plan is to provide an incentive for our employees, officers, consultants and non-employee directors that is aligned with the interests of our stockholders.

Five-for-One Stock Split

On June 17, 2015, stockholders of record as of the close of business on June 1, 2015 (Record Date) received four additional shares of common stock for each share of common stock held on the Record Date in the form of a stock dividend (five-for-one stock split). Share and per share amounts have been retroactively restated to reflect the five-for-one stock split. Shares reserved under the Company's equity and incentive plans were adjusted to reflect the five-for-one stock split.

Share Reserve and Individual Award Limits

The maximum number of shares reserved for the grant of awards under the Plan is the sum of (i) 13.9 million and (ii) the number of shares subject to outstanding awards under our predecessor plans to the extent such awards terminate or expire without delivery of shares. For purposes of determining the number of shares of stock available for grant under the Plan, each option or stock appreciation right is counted against the reserve as one share. Each share of stock granted, other than an option or a stock appreciation right, is counted against the reserve as 1.61 shares. If any outstanding award expires or is settled in cash, any unissued shares subject to the award are again available for grant under the Plan. Shares tendered in payment of the exercise price of an option and shares withheld by the Company or otherwise received by the Company to satisfy tax withholding obligations are not available for future grant under the Plan. As of December 31, 2015, we had 13.1 million shares available for future awards under the Plan. The Plan provides that no more than 5.0 million underlying shares may be granted to a participant in any one calendar year.

Stock Options

Under the Plan and our predecessor plans, we granted to plan participants nonqualified stock options to purchase shares of our common stock. The exercise price of these options is equal to the market price of our common stock on the date of grant. The contractual life of each option is ten years and generally one-third of the options vest on each of the first three anniversaries of the date of grant.

The fair value of each stock option award is estimated using the Black-Scholes option valuation model. Key assumptions used and resulting grant date fair values are shown in the following table.



	2015	2014	2013
Weighted-average assumptions:
Expected volatility	31%	33%	35%
Expected term of stock options	4.3 Years	4.3 Years	4.4 Years
Risk-free interest rate	1.5%	1.3%	1.4%
Expected dividend yield	1.9%	1.6%	0.8%
Weighted-average grant date fair value(1)	$13.99	$12.77	$10.76


(1)	The grant date fair values used to calculate the weighted-average grant date fair value have been retroactively restated for all prior periods presented to reflect the five-for-one stock split.

The expected volatility of our stock options is based on the combination of the historical volatility of our common stock and implied volatilities of exchange traded options on our common stock. The expected term of options is estimated based on our historical exercise experience, post-vesting employment termination behavior and the contractual term. The risk-free interest rate is based on the U.S. Treasury Strip yield curve in effect at the time of grant for the expected term of the options.

CF INDUSTRIES HOLDINGS, INC.

A summary of stock option activity during the year ended December 31, 2015 is presented below:



	Shares(1)		Weighted- Average Exercise Price(1)
Outstanding as of December 31, 2014(1)	3,185,165		$	35.92
Granted	784,928		61.98
Exercised	(274,705	)	30.60
Forfeited	(41,070	)	47.72
Outstanding as of December 31, 2015	3,654,318		41.79
Exercisable as of December 31, 2015	2,110,615		32.38


(1)	Shares and per share amounts have been retroactively restated for all prior periods presented to reflect the five-for-one stock split.

Selected amounts pertaining to stock option exercises are as follows:



	2015		2014		2013
	(in millions)
Cash received from stock option exercises	$	8.4	$	17.6	$	10.3
Actual tax benefit realized from stock option exercises	$	1.9	$	10.2	$	11.9
Pre-tax intrinsic value of stock options exercised	$	8.4	$	31.1	$	38.6

The following table summarizes information about stock options outstanding and exercisable as of December 31, 2015:



	Options Outstanding						Options Exercisable
Range of Exercise Prices	Shares	Weighted- Average Remaining Contractual Term (years)	Weighted- Average Exercise Price		Aggregate Intrinsic Value(1) (in millions)		Shares	Weighted- Average Remaining Contractual Term (years)	Weighted- Average Exercise Price		Aggregate Intrinsic Value(1) (in millions)
$ 3.30 - $ 4.00	5,000	0.3	$	3.35	$	0.2	5,000	0.3	$	3.35	$	0.2
$ 4.01 - $20.00	582,680	3.9	14.67		15.2		582,680	3.9	14.67		15.2
$20.01 - $62.25	3,066,638	7.7	47.00		6.0		1,522,935	6.7	39.26		5.4
	3,654,318	7.1	41.79		$	21.4	2,110,615	5.9	32.38		$	20.8


(1)	The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $40.81 on December 31, 2015, which would have been received by the option holders had all option holders exercised their options as of that date.

Restricted Stock Awards, Restricted Stock Units and Performance Share Units

The fair value of a restricted stock award (RSA) or an award of restricted stock units (RSU) is equal to the number of shares subject to the award multiplied by the closing market price of our common stock on the date of grant. We estimated the fair value of each performance share unit (PSU) on the date of grant using a Monte Carlo simulation. Awards granted to key employees vest three years from the date of grant. The vesting of PSUs is also subject to the attainment of applicable performance goals during the performance period. The RSAs awarded to non-management members of our Board of Directors vest the earlier of one year from the date of the grant or the date of the next annual stockholder meeting. During the vesting period, the holders of the RSAs are entitled to dividends and voting rights. During the vesting period, the holders of the RSUs are paid dividend equivalents in cash to the extent the Company pays cash dividends. PSUs accrue dividend equivalents to the extent the Company pays cash dividends on our common stock during the performance vesting period. Upon vesting of the PSUs, holders are paid the accrued dividend equivalents based on the shares of common stock, if any, delivered in settlement of PSUs. Holders of RSUs and PSUs are not entitled to voting rights unless and until the awards have vested.

CF INDUSTRIES HOLDINGS, INC.

A summary of restricted stock activity during the year ended December 31, 2015 is presented below:



	Restricted Stock Awards				Restricted Stock Units				Performance Share Units
	Shares(1)		Weighted- Average Grant-Date Fair Value(1)		Shares(1)		Weighted- Average Grant-Date Fair Value(1)		Shares(1)		Weighted-Average Grant-Date Fair Value(1)
Outstanding as of December 31, 2014(1)	152,355		$	39.76	40,850		$	51.16	26,275		$	77.65
Granted	18,843		61.54		34,073		61.60		21,940		91.13
Restrictions lapsed (vested)	(86,280	)	42.82		—		—		—		—
Forfeited	—		—		(400	)	62.25		(275	)	91.13
Outstanding as of December 31, 2015	84,918		51.34		74,523		55.87		47,940		83.74


(1)	Shares and per share amounts have been retroactively restated for all prior periods presented to reflect the five-for-one stock split.

After adjusting for the five-for-one stock split, the 2015 and 2014 weighted-average grant date fair value for RSAs was $61.54 and $49.76, for RSUs was $61.60 and $51.16, and for PSUs was $91.13 and $77.65, respectively. The 2013 weighted-average grant date fair value of RSAs was $37.88, adjusted for the five-for-one stock split. No RSUs or PSUs were granted in 2013.

Selected amounts pertaining to restricted stock awards that vested are as follows:



	Year ended December 31,
	2015		2014		2013
	(in millions)
Actual tax benefit realized from restricted stock vested	$	1.2	$	3.0	$	3.4
Fair value of restricted stock vested	$	5.3	$	8.6	$	10.0

Compensation Cost

Compensation cost is recorded primarily in selling, general and administrative expenses. The following table summarizes stock-based compensation costs and related income tax benefits.



	Year ended December 31,
	2015			2014			2013
	(in millions)
Stock-based compensation expense(1)(2)	$	16.5		$	16.8		$	12.6
Income tax benefit	(6.0		)	(6.1		)	(4.6		)
Stock-based compensation expense, net of income taxes	$	10.5		$	10.7		$	8.0


(1)	In 2014, includes incremental compensation expense of $2.2 million related to the modification of 299,950 stock options and 80,495 RSAs, adjusted for the five-for-one stock split.

(2)

In addition to stock-based compensation expense associated with the Plan and predecessor plans, TNCLP also recognizes stock-based compensation expense for phantom units provided to non-employee directors of TNGP. The expense (income) resulting from these market-based liability awards amounted to $0.3 million, $(0.1) million and zero for the years ended December 31, 2015, 2014 and 2013, respectively, and is included in stock-based compensation expense reported in our consolidated statements of operations and consolidated statements of cash flows.

As of December 31, 2015, pre-tax unrecognized compensation cost, net of estimated forfeitures, was $11.1 million for stock options, which will be recognized over a weighted-average period of 1.7 years, $3.0 million for RSAs and RSUs, which will be recognized over a weighted-average period of 1.4 years, and $1.9 million for PSUs, which will be recognized over 1.8 years.

An excess tax benefit is generated when the realized tax benefit from the vesting of RSAs, or a stock option exercise, exceeds the previously recognized deferred tax asset. Excess tax benefits are required to be reported as a financing cash inflow rather than a reduction of taxes paid. The excess tax benefits in 2015, 2014 and 2013 totaled $1.5 million, $8.7 million and $13.5 million, respectively.

CF INDUSTRIES HOLDINGS, INC.

Contingencies

Litigation

West Fertilizer Co.

On April 17, 2013, there was a fire and explosion at the West Fertilizer Co. fertilizer storage and distribution facility in West, Texas. According to published reports, 15 people were killed and approximately 200 people were injured in the incident, and the fire and explosion damaged or destroyed a number of homes and buildings around the facility. Various subsidiaries of CF Industries Holdings, Inc. (the CF Entities) have been named as defendants along with other companies in lawsuits filed in 2013, 2014 and 2015 in the District Court of McLennan County, Texas by the City of West, individual residents of the County and other parties seeking recovery for damages allegedly sustained as a result of the explosion. The cases have been consolidated for discovery and pretrial proceedings in the District Court of McLennan County under the caption "In re: West Explosion Cases." The two-year statute of limitations expired on April 17, 2015. As of that date, over 400 plaintiffs had filed claims, including at least 9 entities, 325 individuals, and 80 insurance companies. Plaintiffs allege various theories of negligence, strict liability, and breach of warranty under Texas law. Although we do not own or operate the facility or directly sell our products to West Fertilizer Co., products that the CF Entities have manufactured and sold to others have been delivered to the facility and may have been stored at the West facility at the time of the incident.

The Court granted in part and denied in part the CF Entities' Motions for Summary Judgment in August 2015. Thirty-four cases, including the three cases scheduled to begin trial on October 12, 2015 and some of the ten cases scheduled to begin trial on February 1, 2016, were resolved pursuant to confidential settlements fully funded by insurance. The remaining cases are in various stages of discovery and pre-trial proceedings. These cases will be set for trial in the upcoming months at the discretion of the Court. We believe we have strong legal and factual defenses and intend to continue defending the CF Entities vigorously in the pending lawsuits.

Other Litigation

From time to time, we are subject to ordinary, routine legal proceedings related to the usual conduct of our business, including proceedings regarding public utility and transportation rates, environmental matters, taxes and permits relating to the operations of our various plants and facilities. Based on the information available as of the date of this filing, we believe that the ultimate outcome of these routine matters will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Environmental

Louisiana Environmental Matters

Clean Air Act—Section 185 Fee

Our Donaldsonville nitrogen complex is located in a five-parish region near Baton Rouge, Louisiana that, as of 2005, was designated as being in "severe" nonattainment with respect to the national ambient air quality standard (NAAQS) for ozone (the 1-hour ozone standard) pursuant to the Federal Clean Air Act (the Act). Section 185 of the Act requires states, in their state implementation plans, to levy a fee (Section 185 fee) on major stationary sources (such as the Donaldsonville complex) located in a severe nonattainment area that did not meet the 1-hour ozone standard by November 30, 2005. The fee was to be assessed for each calendar year (beginning in 2006) until the area achieved compliance with the ozone NAAQS.

Prior to the imposition of Section 185 fees, the Environmental Protection Agency (EPA) adopted a new ozone standard (the 8-hour ozone standard) and rescinded the 1-hour ozone standard. The Baton Rouge area was designated as a "moderate" nonattainment area with respect to the 8-hour ozone standard. However, because Section 185 fees had never been assessed prior to the rescission of the 1-hour ozone standard (rescinded prior to the November 30, 2005 ozone attainment deadline), the EPA concluded in a 2004 rulemaking implementing the 8-hour ozone standard that the Act did not require states to assess Section 185 fees. As a result, Section 185 fees were not assessed against us and other companies located in the Baton Rouge area.

In 2006, the federal D.C. Circuit Court of Appeals rejected the EPA's position and held that Section 185 fees were controls that must be maintained and fees should have been assessed under the Act. In January 2008, the U.S. Supreme Court declined to accept the case for review, making the appellate court's decision final.

CF INDUSTRIES HOLDINGS, INC.

In July 2011, the EPA approved a revision to Louisiana's air pollution program that eliminated the requirement for Baton Rouge area companies to pay Section 185 fees, based on Baton Rouge's ultimate attainment of the 1-hour standard through permanent and enforceable emissions reductions. EPA's approval of the Louisiana air program revision became effective on August 8, 2011. However, a recent decision by the federal D.C. Circuit Court of Appeals struck down a similar, but perhaps distinguishable, EPA guidance document regarding alternatives to Section 185 fees. At this time, the viability of EPA's approval of Louisiana's elimination of Section 185 fees is uncertain. Regardless of the approach ultimately adopted by the EPA, we expect that it is likely to be challenged by the environmental community, the states, and/or affected industries. Therefore, the costs associated with compliance with the Act cannot be determined at this time, and we cannot reasonably estimate the impact on our consolidated financial position, results of operations or cash flows.

Furthermore, the area has seen significant reductions in ozone levels, attributable to federal and state regulations and community involvement. Ozone design values computed for the Baton Rouge nonattainment area suggest the area has achieved attainment with the 2008 8-hour ozone standard. On August 27, 2015, EPA proposed reclassifying the Baton Rouge nonattainment area for ozone as in attainment with the 2008 ozone standard based on 2012-2014 data. EPA has not yet finalized this reclassification. However, on October 26, 2015, EPA published a more stringent national ambient air quality standard for ozone that could cause Baton Rouge to again be classified as a nonattainment area.

Clean Air Act Information Request

On February 26, 2009, we received a letter from the EPA under Section 114 of the Act requesting information and copies of records relating to compliance with New Source Review and New Source Performance Standards at our Donaldsonville facility. We have completed the submittal of all requested information. There has been no further contact from the EPA regarding this matter.

Florida Environmental Matters

On March 17, 2014, we completed the sale of our phosphate mining and manufacturing business, which was located in Florida, to Mosaic. See Note 4—Acquisitions and Divestitures for additional information. Pursuant to the terms of the definitive agreement executed in October 2013, Mosaic has assumed the following environmental matters and we have agreed to indemnify Mosaic with respect to losses arising out of the matters below, subject to a maximum indemnification cap and the other terms of the definitive agreement.

Clean Air Act Notice of Violation

We received a Notice of Violation (NOV) from the EPA by letter dated June 16, 2010, alleging that we violated the Prevention of Significant Deterioration (PSD) Clean Air Act regulations relating to certain projects undertaken at the former Plant City, Florida facility's sulfuric acid plants. This NOV further alleges that the actions that are the basis for the alleged PSD violations also resulted in violations of Title V air operating permit regulations. Finally, the NOV alleges that we failed to comply with certain compliance dates established by hazardous air pollutant regulations for phosphoric acid manufacturing plants and phosphate fertilizer production plants. We had several meetings with the EPA with respect to this matter prior to our sale of the phosphate mining and manufacturing business in March 2014. We do not know at this time if this matter will be settled prior to initiation of formal legal action.

We cannot estimate the potential penalties, fines or other expenditures, if any, that may result from the Clean Air Act NOV and, therefore, we cannot determine if the ultimate outcome of this matter will have a material impact on our consolidated financial position, results of operations or cash flows.

EPCRA/CERCLA Notice of Violation

By letter dated July 6, 2010, the EPA issued a NOV to us alleging violations of Section 313 of the Emergency Planning and Community Right-to-Know Act (EPCRA) in connection with the former Plant City facility. EPCRA requires annual reports to be submitted with respect to the use of certain toxic chemicals. The NOV also included an allegation that we violated Section 304 of EPCRA and Section 103 of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) by failing to file a timely notification relating to the release of hydrogen fluoride above applicable reportable quantities. We do not know at this time if this matter will be settled prior to initiation of formal legal action.

We do not expect that penalties or fines, if any, that may arise out of the EPCRA/CERCLA matter will have a material impact on our consolidated financial position, results of operations or cash flows.

CF INDUSTRIES HOLDINGS, INC.

Other

CERCLA/Remediation Matters

From time to time, we receive notices from governmental agencies or third parties alleging that we are a potentially responsible party at certain cleanup sites under CERCLA or other environmental cleanup laws. In 2011, we received a notice from the Idaho Department of Environmental Quality (IDEQ) that alleged that we were a potentially responsible party for the cleanup of a former phosphate mine site we owned in the late 1950s and early 1960s located in Georgetown Canyon, Idaho. The current owner of the property and a former mining contractor received similar notices for the site. In 2014, we and the current property owner entered into a Consent Order with IDEQ and the U.S. Forest Service to conduct a remedial investigation and feasibility study of the site. In 2015, we and several other parties received a notice that the U.S. Department of the Interior and other trustees intend to undertake a natural resource damage assessment for a group of former phosphate mines in southeast Idaho, including the former Georgetown Canyon mine. We are not able to estimate at this time our potential liability, if any, with respect to the cleanup of the site or a possible claim for natural resource damages. However, based on currently available information, we do not expect that any remedial or financial obligations to which we may be subject involving this or other cleanup sites will have a material adverse effect on our business, financial condition, results of operations or cash flows.

CF INDUSTRIES HOLDINGS, INC.

Segment Disclosures

On July 31, 2015, we acquired the remaining 50% equity interest in CF Fertilisers UK not previously owned by us. See Note 4—Acquisitions and Divestitures and Note 8—Equity Method Investments for additional information. CF Fertilisers UK has nitrogen manufacturing complexes located in Ince, United Kingdom, and Billingham, United Kingdom. The Ince complex produces ammonia, AN and NPKs while the Billingham complex produces ammonia and AN. Our reportable segment structure reflects how our CODM, as defined under U.S. GAAP, assesses the performance of our operating segments and makes decisions about resource allocation. In the third quarter of 2015, we changed our reportable segment structure to separate AN from our Other segment as our AN products increased in significance as a result of the CF Fertilisers UK acquisition. Our reportable segments now consist of ammonia, granular urea, UAN, AN, Other, and phosphate. These segments are differentiated by products. Historical financial results have been restated to reflect the new reportable segment structure on a comparable basis.

We sold our phosphate mining and manufacturing business on March 17, 2014. See Note 4—Acquisitions and Divestitures for additional information. The phosphate segment reflects the reported results of the phosphate business through March 17, 2014, plus the continuing sales of the phosphate inventory in the distribution network after March 17, 2014. The remaining phosphate inventory was sold in the second quarter of 2014; therefore, the phosphate segment does not have operating results subsequent to that quarter. The phosphate segment will continue to be included until the reporting of comparable period phosphate results ceases.

Upon selling the phosphate business, we began to supply Mosaic with ammonia produced by our PLNL joint venture. The contract to supply ammonia to Mosaic from our PLNL joint venture represents the continuation of a supply practice that previously existed between our former phosphate mining and manufacturing business and other operations of the Company. Prior to March 17, 2014, PLNL sold ammonia to us for use in the phosphate business and the cost was included in our production costs in our phosphate segment. Subsequent to the sale of the phosphate business, we now sell the PLNL-sourced ammonia to Mosaic. The revenue from these sales to Mosaic and costs to purchase the ammonia from PLNL are now included in our ammonia segment. Our 50% share of the operating results of our PLNL joint venture continues to be included in our equity in earnings of operating affiliates in our consolidated statements of operations. Because of the significance of this continuing supply practice, in accordance with U.S. GAAP, the phosphate mining and manufacturing business is not reported as discontinued operations in our consolidated statements of operations.

Our management uses gross margin to evaluate segment performance and allocate resources. Total other operating costs and expenses (consisting of selling, general and administrative expenses and other operating—net) and non-operating expenses (interest and income taxes) are centrally managed and are not included in the measurement of segment profitability reviewed by management.

Our assets, with the exception of goodwill, are not monitored by or reported to our CODM by segment; therefore, we do not present total assets by segment. Goodwill by segment is presented in Note 7—Goodwill and Other Intangible Assets.

The following is a description of our six reportable segments:

•

Our ammonia segment produces anhydrous ammonia (ammonia), which is our most concentrated nitrogen fertilizer product as it contains 82% nitrogen. The results of our ammonia segment consist of sales of ammonia to external customers. In addition, ammonia is the “basic” nitrogen product that we upgrade into other nitrogen products such as granular urea, UAN and AN. We produce ammonia at all of our nitrogen manufacturing complexes.


•	Our granular urea segment produces granular urea, which contains 46% nitrogen. Produced from ammonia and carbon dioxide, it has the highest nitrogen content of any of our solid nitrogen fertilizers. Granular urea is produced at our Courtright, Ontario; Donaldsonville, Louisiana; and Medicine Hat, Alberta nitrogen complexes.


•	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 nitrogen complexes in Courtright, Ontario; Donaldsonville, Louisiana; Port Neal, Iowa; Verdigris, Oklahoma; Woodward, Oklahoma; and Yazoo City, Mississippi.


•	Our AN segment produces ammonium nitrate (AN). AN is a nitrogen-based product with a nitrogen content between 29% and 35%. AN is used as nitrogen fertilizer and is also used by industrial customers for commercial explosives and blasting systems. AN is produced at our nitrogen complexes in Yazoo City, Mississippi and Ince and Billingham, United Kingdom.

CF INDUSTRIES HOLDINGS, INC.

•

Our Other segment primarily includes diesel exhaust fluid (DEF), urea liquor, nitric acid and compound fertilizer products (NPKs). DEF is an aqueous urea solution typically made with 32.5% high-purity urea and 67.5% deionized water. Urea liquor is a liquid product that we sell in concentrations of 40%, 50% and 70% urea as a chemical intermediate. Nitric acid is a nitrogen-based product with a nitrogen content of 22.2%. NPKs are solid granular fertilizer products for which the nutrient content is a combination of nitrogen, phosphorus and potassium.


•	Our phosphate segment principal products were diammonium phosphate (DAP) and monoammonium phosphate (MAP). Starting with the third quarter of 2014, the phosphate segment ceased to have reported results as we completed the sale of our phosphate mining and manufacturing business in the first quarter of 2014 and the remaining phosphate inventory was completely sold during the second quarter of 2014.

Segment data for sales, cost of sales and gross margin for 2015, 2014 and 2013 are presented in the tables below.



	Ammonia		Granular Urea(1)		UAN(1)		AN(1)		Other(1)		Phosphate		Consolidated
	(in millions)
Year ended December 31, 2015
Net sales	$	1,523.1	$	788.0	$	1,479.7	$	294.0	$	223.5	$	—	$	4,308.3
Cost of sales	883.7		469.5		954.5		290.8		162.7		—		2,761.2
Gross margin	$	639.4	$	318.5	$	525.2	$	3.2	$	60.8	$	—	1,547.1
Total other operating costs and expenses													319.0
Equity in earnings of operating affiliates													(35.0		)
Operating earnings													$	1,193.1
Year ended December 31, 2014
Net sales	$	1,576.3	$	914.5	$	1,669.8	$	242.7	$	171.5	$	168.4	$	4,743.2
Cost of sales	983.2		516.6		997.4		189.1		120.1		158.3		2,964.7
Gross margin	$	593.1	$	397.9	$	672.4	$	53.6	$	51.4	$	10.1	1,778.5
Total other operating costs and expenses													205.2
Gain on sale of phosphate business													750.1
Equity in earnings of operating affiliates													43.1
Operating earnings													$	2,366.5
Year ended December 31, 2013
Net sales	$	1,437.9	$	924.6	$	1,935.1	$	215.1	$	165.1	$	796.9	$	5,474.7
Cost of sales	656.5		410.1		895.6		155.9		114.4		722.0		2,954.5
Gross margin	$	781.4	$	514.5	$	1,039.5	$	59.2	$	50.7	$	74.9	2,520.2
Total other operating costs and expenses													150.2
Equity in earnings of operating affiliates													41.7
Operating earnings													$	2,411.7


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



	Ammonia		Granular Urea		UAN		AN		Other		Phosphate(1)		Corporate		Consolidated
	(in millions)
Depreciation, depletion and amortization
Year ended December 31, 2015	$	95.4	$	50.5	$	191.6	$	65.6	$	35.2	$	—	$	41.3	$	479.6
Year ended December 31, 2014	$	69.0	$	37.5	$	179.3	$	46.5	$	20.4	$	—	$	39.8	$	392.5
Year ended December 31, 2013	$	58.2	$	37.4	$	172.6	$	41.0	$	19.2	$	42.3	$	39.9	$	410.6


(1)	The assets and liabilities of our phosphate business were classified as held for sale as of December 31, 2013; therefore, no depreciation, depletion or amortization was recorded in 2014 for the related property, plant and equipment.

CF INDUSTRIES HOLDINGS, INC.

Enterprise-wide data by geographic region is as follows:



	Year ended December 31,
	2015		2014		2013
	(in millions)
Sales by geographic region (based on destination of shipments):
United States	$	3,484.9	$	3,994.0	$	4,497.8
Foreign:
Canada	490.0		543.8		508.5
Other foreign	333.4		205.4		468.4
Total foreign	823.4		749.2		976.9
Consolidated	$	4,308.3	$	4,743.2	$	5,474.7



	December 31,
	2015		2014		2013
	(in millions)
Property, plant and equipment—net by geographic region:
United States	$	7,201.5	$	4,987.0	$	3,528.8
Foreign:
Canada	497.3		538.8		572.9
United Kingdom	840.2		—		—
Total foreign	1,337.5		538.8		572.9
Consolidated	$	8,539.0	$	5,525.8	$	4,101.7

Our principal customers are cooperatives, independent fertilizer distributors and industrial users. None of our customers accounted for more than ten percent of our consolidated sales in 2015, 2014 or 2013.

Supplemental Cash Flow Information

The following provides additional information relating to cash flow activities:



	Year ended December 31,
	2015			2014			2013
	(in millions)
Cash paid during the year for
Interest—net of interest capitalized	$	99.8		$	141.2		$	135.3
Income taxes—net of refunds	435.1			781.2			847.4

Supplemental disclosure of noncash investing and financing activities:
Change in capitalized expenditures in accounts payable and accrued expenses	258.5			71.6			134.4
Change in capitalized expenditures in other liabilities	5.8			(21.5		)	70.5
Change in accrued share repurchases	(29.1		)	(11.2		)	40.3

CF INDUSTRIES HOLDINGS, INC.

Asset Retirement Obligations

Asset retirement obligations (AROs) are legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development or normal operation of such assets. AROs are initially recognized as incurred when sufficient information exists to estimate fair value. We have AROs at our nitrogen fertilizer manufacturing complexes and at our distribution and storage facilities that are conditional upon cessation of operations. These AROs include certain decommissioning activities as well as the removal and disposal of certain chemicals, waste materials, structures, equipment, vessels, piping and storage tanks. Also included are reclamation of land and the closure of certain effluent ponds. A liability has not been recorded for these conditional AROs. The most recent estimate of the aggregate cost of these AROs expressed in 2015 dollars is $66.4 million. We have not recorded a liability for these conditional AROs as of December 31, 2015 because we do not believe there is currently a reasonable basis for estimating a date or range of dates of cessation of operations at our nitrogen fertilizer manufacturing facilities or our distribution and storage facilities, which is necessary in order to estimate fair value. In reaching this conclusion, we considered the historical performance of each complex or facility and have taken into account factors such as planned maintenance, asset replacements and upgrades of plant and equipment, which if conducted as in the past, can extend the physical lives of our nitrogen manufacturing facilities and our distribution and storage facilities indefinitely. We also considered the possibility of changes in technology, risk of obsolescence, and availability of raw materials in arriving at our conclusion.

Leases

We have operating leases for certain property and equipment under various noncancelable agreements, the most significant of which are rail car leases and barge tow charters for the distribution of fertilizer. The rail car leases currently have minimum terms ranging from one to eleven years and the barge charter commitments range from approximately two to seven years. We also have terminal and warehouse storage agreements for our distribution system, some of which contain minimum throughput requirements. The storage agreements contain minimum terms generally ranging from one to five years and commonly contain automatic annual renewal provisions thereafter unless canceled by either party.

Future minimum payments under noncancelable operating leases with initial or remaining noncancelable lease terms in excess of one year as of December 31, 2015 are shown below.



	Operating Lease Payments
	(in millions)
2016	$	82.2
2017	87.9
2018	70.8
2019	58.3
2020	46.3
Thereafter	115.6
	$	461.1

Total rent expense for cancelable and noncancelable operating leases was $99.6 million for 2015, $92.9 million for 2014 and $98.9 million for 2013.

CF INDUSTRIES HOLDINGS, INC.

Quarterly Data—Unaudited

The following tables present the unaudited quarterly results of operations for the eight quarters ended December 31, 2015. This quarterly information has been prepared on the same basis as the consolidated financial statements and, in the opinion of management, reflects all adjustments necessary for the fair representation of the information for the periods presented. This data should be read in conjunction with the audited consolidated financial statements and related disclosures. Operating results for any quarter apply to that quarter only and are not necessarily indicative of results for any future period.



	Three months ended,
	March 31			June 30			September 30			December 31			Full Year
	(in millions, except per share amounts)
2015
Net sales	$	953.6		$	1,311.5		$	927.4		$	1,115.8		$	4,308.3
Gross margin	415.8			685.9			165.0			280.4			1,547.1
Unrealized gains (losses) on natural gas derivatives(1)	28.7			18.4			(125.9		)	(97.5		)	(176.3		)
Net earnings attributable to common stockholders(2)	230.6			351.9			90.9			26.5			699.9
Net earnings per share attributable to common stockholders(2)(3)
Basic(4)	0.96			1.50			0.39			0.11			2.97
Diluted(4)	0.96			1.49			0.39			0.11			2.96
2014
Net sales	$	1,132.6		$	1,472.7		$	921.4		$	1,216.5		$	4,743.2
Gross margin	442.8			590.3			301.1			444.3			1,778.5
Unrealized (losses) gains on natural gas derivatives(1)	(22.6		)	(28.6		)	12.1			(40.4		)	(79.5		)
Net earnings attributable to common stockholders(5)	708.5			312.6			130.9			238.3			1,390.3
Net earnings per share attributable to common stockholders(3)(5)
Basic(4)	2.59			1.22			0.53			0.97			5.43
Diluted(4)	2.58			1.22			0.52			0.96			5.42


(1)	Amounts represent pre-tax unrealized gains (losses) on natural gas derivatives included in gross margin. See Note 16—Derivative Financial Instruments, for additional information.

(2)

For the three months ended June 30, 2015, net earnings attributable to common stockholders includes an after-tax loss of $29.2 million (pre-tax loss of $40.1 million) resulting from the sale of our interests in Keytrade that is included in equity in earnings of operating affiliates, and net earnings per share attributable to common stockholders, basic and diluted, include the per share impact of $0.12. See Note 4—Acquisitions and Divestitures and Note 8—Equity Method Investments, for additional information.

For the three months ended September 30, 2015, net earnings attributable to common stockholders includes an after-tax gain of $94.4 million on the remeasurement to fair value of our initial 50% equity interest in CF Fertilisers UK that is included in equity in earnings of non-operating affiliates—net of taxes, and net earnings per share attributable to common stockholders, basic and diluted, include the per share impact of $0.40. See Note 4—Acquisitions and Divestitures and Note 8—Equity Method Investments, for additional information.

For the three months ended December 31, 2015, net earnings attributable to common stockholders includes an after-tax impairment charge of $61.9 million on our equity method investment in PLNL that is included in equity in earnings of operating affiliates, and net earnings per share attributable to common stockholders, basic and diluted, include the per share impact of $0.26. See Note 4—Acquisitions and Divestitures and Note 8—Equity Method Investments, for additional information.


(3)	Per share amounts have been retroactively restated for all prior periods presented to reflect the five-for-one split of the Company’s common stock effected in the form of a stock dividend that was distributed on June 17, 2015.


(4)	The sum of the four quarters is not necessarily the same as the total for the year.

(5)

For the three months ended March 31, 2014, net earnings attributable to common stockholders includes an after-tax gain of $461.0 million from the sale of the phosphate business, and net earnings per share attributable to common stockholders, basic and diluted, include the per share impact of $1.68. During the fourth quarter of 2014, the purchase price was finalized which increased the after-tax gain to $462.8 million for the year ended December 31, 2014, which also increased the per share impact on net earnings attributable to common stockholders, basic and diluted, to $1.80. See Note 4—Acquisitions and Divestitures, for additional information.

CF INDUSTRIES HOLDINGS, INC.

Condensed Consolidating Financial Statements

The following condensed consolidating financial information is presented in accordance with SEC Regulation S-X Rule 3-10, Financial statements of guarantors and issuers of guaranteed securities registered or being registered, and relates to the Public Senior Notes issued by CF Industries, Inc. (CF Industries), a 100% owned subsidiary of CF Industries Holdings, Inc. (Parent), described in Note 12—Financing Agreements, and the full and unconditional guarantee of the Public Senior Notes by Parent and to debt securities of CF Industries, and the full and unconditional guarantee thereof by Parent, that may be offered and sold from time to time under registration statements that have been or may be filed by Parent and CF Industries with the SEC. In the event that a subsidiary of Parent, other than CF Industries, becomes a borrower or a guarantor under the Revolving Credit Agreement (or any renewal, replacement or refinancing thereof), such subsidiary would be required to become a guarantor of the Public Senior Notes, provided that such requirement will no longer apply with respect to the Public Senior Notes due in 2023, 2034, 2043 and 2044 following the repayment of the Public Senior Notes due in 2018 and 2020 or the subsidiaries of Parent, other than CF Industries, otherwise becoming no longer subject to such a requirement to guarantee the Public Senior Notes due in 2018 and 2020. As of December 31, 2015, none of such subsidiaries of Parent was, or was required to be, a guarantor of the Public Senior Notes. For purposes of the presentation of condensed consolidating financial information, the subsidiaries of Parent other than CF Industries are referred to as the Other Subsidiaries.

Presented below are condensed consolidating statements of operations and statements of cash flows for Parent, CF Industries and the Other Subsidiaries for the years ended December 31, 2015, 2014 and 2013 and condensed consolidating balance sheets for Parent, CF Industries and the Other Subsidiaries as of December 31, 2015 and 2014. The condensed consolidating financial information presented below is not necessarily indicative of the financial position, results of operations, comprehensive income or cash flows of Parent, CF Industries or the Other Subsidiaries on a stand-alone basis.

In these condensed consolidating financial statements, investments in subsidiaries are presented under the equity method, in which our investments are recorded at cost and adjusted for our ownership share of a subsidiary's cumulative results of operations, distributions and other equity changes, and the eliminating entries reflect primarily intercompany transactions such as sales, accounts receivable and accounts payable and the elimination of equity investments and earnings of subsidiaries.

CF INDUSTRIES HOLDINGS, INC.

Condensed Consolidating Statement of Operations



	Year ended December 31, 2015
	Parent			CF Industries			Other Subsidiaries			Eliminations			Consolidated
	(in millions)
Net sales	$	—		$	462.2		$	4,542.8		$	(696.7	)	$	4,308.3
Cost of sales	—			361.6			3,096.3			(696.7		)	2,761.2
Gross margin	—			100.6			1,446.5			—			1,547.1
Selling, general and administrative expenses	4.4			7.7			157.7			—			169.8
Transaction costs	45.8			—			11.1			—			56.9
Other operating—net	—			(8.5		)	100.8			—			92.3
Total other operating costs and expenses	50.2			(0.8		)	269.6			—			319.0
Equity in earnings of operating affiliates	—			—			(35.0		)	—			(35.0		)
Operating (losses) earnings	(50.2		)	101.4			1,141.9			—			1,193.1
Interest expense	—			285.1			(81.7		)	(70.2		)	133.2
Interest income	—			(69.0		)	(2.8		)	70.2			(1.6		)
Net earnings of wholly-owned subsidiaries	(731.2		)	(801.5		)	—			1,532.7			—
Other non-operating—net	(0.1		)	—			4.0			—			3.9
Earnings before income taxes and equity in earnings of non-operating affiliates	681.1			686.8			1,222.4			(1,532.7		)	1,057.6
Income tax (benefit) provision	(18.8		)	(44.3		)	458.9			—			395.8
Equity in earnings of non-operating affiliates—net of taxes	—			—			72.3			—			72.3
Net earnings	699.9			731.1			835.8			(1,532.7		)	734.1
Less: Net earnings attributable to noncontrolling interest	—			—			34.2			—			34.2
Net earnings attributable to common stockholders	$	699.9		$	731.1		$	801.6		$	(1,532.7	)	$	699.9

Condensed Consolidating Statement of Comprehensive Income



	Year ended December 31, 2015
	Parent			CF Industries			Other Subsidiaries			Eliminations			Consolidated
	(in millions)
Net earnings	$	699.9		$	731.1		$	835.8		$	(1,532.7	)	$	734.1
Other comprehensive income (losses)	(90.0		)	(90.0		)	(89.5		)	179.5			(90.0		)
Comprehensive income	609.9			641.1			746.3			(1,353.2		)	644.1
Less: Comprehensive income attributable to noncontrolling interest	—			—			34.2			—			34.2
Comprehensive income attributable to common stockholders	$	609.9		$	641.1		$	712.1		$	(1,353.2	)	$	609.9

CF INDUSTRIES HOLDINGS, INC.

Condensed Consolidating Statement of Operations



	Year ended December 31, 2014
	Parent			CF Industries			Other Subsidiaries			Eliminations			Consolidated
	(in millions)
Net sales	$	—		$	712.2		$	5,073.4		$	(1,042.4	)	$	4,743.2
Cost of sales	—			528.6			3,478.5			(1,042.4		)	2,964.7
Gross margin	—			183.6			1,594.9			—			1,778.5
Selling, general and administrative expenses	2.8			13.5			135.6			—			151.9
Other operating—net	—			(5.0		)	58.3			—			53.3
Total other operating costs and expenses	2.8			8.5			193.9			—			205.2
Gain on sale of phosphate business	—			764.5			(14.4		)	—			750.1
Equity in earnings of operating affiliates	—			—			43.1			—			43.1
Operating (losses) earnings	(2.8		)	939.6			1,429.7			—			2,366.5
Interest expense	—			246.9			(68.5		)	(0.2		)	178.2
Interest income	—			(0.2		)	(0.9		)	0.2			(0.9		)
Net earnings of wholly-owned subsidiaries	(1,392.0		)	(969.2		)	—			2,361.2			—
Other non-operating—net	(0.1		)	—			2.0			—			1.9
Earnings before income taxes and equity in (losses) earnings of non-operating affiliates	1,389.3			1,662.1			1,497.1			(2,361.2		)	2,187.3
Income tax (benefit) provision	(1.0		)	270.0			504.0			—			773.0
Equity in (losses) earnings of non-operating affiliates—net of taxes	—			(0.1		)	22.6			—			22.5
Net earnings	1,390.3			1,392.0			1,015.7			(2,361.2		)	1,436.8
Less: Net earnings attributable to noncontrolling interest	—			—			46.5			—			46.5
Net earnings attributable to common stockholders	$	1,390.3		$	1,392.0		$	969.2		$	(2,361.2	)	$	1,390.3

Condensed Consolidating Statement of Comprehensive Income



	Year ended December 31, 2014
	Parent			CF Industries			Other Subsidiaries			Eliminations			Consolidated
	(in millions)
Net earnings	$	1,390.3		$	1,392.0		$	1,015.7		$	(2,361.2	)	$	1,436.8
Other comprehensive income (losses)	(117.2		)	(117.2		)	(117.2		)	234.4			(117.2		)
Comprehensive income	1,273.1			1,274.8			898.5			(2,126.8		)	1,319.6
Less: Comprehensive income attributable to noncontrolling interest	—			—			46.5			—			46.5
Comprehensive income attributable to common stockholders	$	1,273.1		$	1,274.8		$	852.0		$	(2,126.8	)	$	1,273.1

CF INDUSTRIES HOLDINGS, INC.

Condensed Consolidating Statement of Operations



	Year ended December 31, 2013
	Parent			CF Industries			Other Subsidiaries			Eliminations			Consolidated
	(in millions)
Net sales	$	—		$	1,105.8		$	5,767.5		$	(1,398.6	)	$	5,474.7
Cost of sales	—			886.0			3,463.0			(1,394.5		)	2,954.5
Gross margin	—			219.8			2,304.5			(4.1		)	2,520.2
Selling, general and administrative expenses	2.7			11.8			151.5			—			166.0
Other operating—net	—			7.6			(23.4		)	—			(15.8		)
Total other operating costs and expenses	2.7			19.4			128.1			—			150.2
Equity in earnings of operating affiliates	—			—			41.7			—			41.7
Operating (losses) earnings	(2.7		)	200.4			2,218.1			(4.1		)	2,411.7
Interest expense	—			155.1			(1.8		)	(1.1		)	152.2
Interest income	—			(0.9		)	(4.9		)	1.1			(4.7		)
Net earnings of wholly-owned subsidiaries	(1,466.4		)	(1,423.0		)	—			2,889.4			—
Other non-operating—net	—			(0.4		)	54.9			—			54.5
Earnings before income taxes and equity in (losses) earnings of non-operating affiliates	1,463.7			1,469.6			2,169.9			(2,893.5		)	2,209.7
Income tax (benefit) provision	(0.9		)	3.0			684.4			—			686.5
Equity in (losses) earnings of non-operating affiliates—net of taxes	—			(0.2		)	9.8			—			9.6
Net earnings	1,464.6			1,466.4			1,495.3			(2,893.5		)	1,532.8
Less: Net earnings attributable to noncontrolling interest	—			—			72.3			(4.1		)	68.2
Net earnings attributable to common stockholders	$	1,464.6		$	1,466.4		$	1,423.0		$	(2,889.4	)	$	1,464.6

Condensed Consolidating Statement of Comprehensive Income



	Year ended December 31, 2013
	Parent		CF Industries		Other Subsidiaries			Eliminations			Consolidated
	(in millions)
Net earnings	$	1,464.6	$	1,466.4	$	1,495.3		$	(2,893.5	)	$	1,532.8
Other comprehensive income (losses)	7.0		7.0		(40.1		)	32.4			6.3
Comprehensive income	1,471.6		1,473.4		1,455.2			(2,861.1		)	1,539.1
Less: Comprehensive income attributable to noncontrolling interest	—		—		72.3			(4.8		)	67.5
Comprehensive income attributable to common stockholders	$	1,471.6	$	1,473.4	$	1,382.9		$	(2,856.3	)	$	1,471.6

CF INDUSTRIES HOLDINGS, INC.

Condensed Consolidating Balance Sheet



	December 31, 2015
	Parent			CF Industries			Other Subsidiaries			Eliminations and Reclassifications			Consolidated
	(in millions)
Assets
Current assets:
Cash and cash equivalents	$	1.3		$	0.2		$	284.5		$	—		$	286.0
Restricted cash	—			—			22.8			—			22.8
Accounts and notes receivable—net	0.9			2,987.3			1,565.0			(4,286.0		)	267.2
Inventories	—			—			321.2			—			321.2
Prepaid income taxes	—			—			184.6			—			184.6
Other current assets	—			23.7			21.6			—			45.3
Total current assets	2.2			3,011.2			2,399.7			(4,286.0		)	1,127.1
Property, plant and equipment—net	—			—			8,539.0			—			8,539.0
Investments in and advances to affiliates	4,302.9			8,148.4			297.8			(12,451.3		)	297.8
Due from affiliates	570.7			—			2.2			(572.9		)	—
Goodwill	—			—			2,390.1			—			2,390.1
Other assets	—			74.5			310.4			—			384.9
Total assets	$	4,875.8		$	11,234.1		$	13,939.2		$	(17,310.2	)	$	12,738.9
Liabilities and Equity
Current liabilities:
Accounts and notes payable and accrued expenses	$	840.7		$	648.1		$	3,714.9		$	(4,286.0	)	$	917.7
Income taxes payable	—			—			5.5			—			5.5
Customer advances	—			—			161.5			—			161.5
Other current liabilities	—			—			130.5			—			130.5
Total current liabilities	840.7			648.1			4,012.4			(4,286.0		)	1,215.2
Long-term debt	—			5,592.7			—			—			5,592.7
Deferred income taxes	—			51.8			864.4			—			916.2
Due to affiliates	—			572.9			—			(572.9		)	—
Other liabilities	—			65.8			561.8			—			627.6
Equity:
Stockholders' equity:
Preferred stock	—			—			16.4			(16.4		)	—
Common stock	2.4			—			1.1			(1.1		)	2.4
Paid-in capital	1,377.5			(12.6		)	8,364.9			(8,352.4		)	1,377.4
Retained earnings	3,057.7			4,565.2			15.9			(4,580.9		)	3,057.9
Treasury stock	(152.7		)	—			—			—			(152.7		)
Accumulated other comprehensive income (loss)	(249.8		)	(249.8		)	(249.7		)	499.5			(249.8		)
Total stockholders' equity	4,035.1			4,302.8			8,148.6			(12,451.3		)	4,035.2
Noncontrolling interest	—			—			352.0			—			352.0
Total equity	4,035.1			4,302.8			8,500.6			(12,451.3		)	4,387.2
Total liabilities and equity	$	4,875.8		$	11,234.1		$	13,939.2		$	(17,310.2	)	$	12,738.9

CF INDUSTRIES HOLDINGS, INC.

Condensed Consolidating Balance Sheet



	December 31, 2014
	Parent			CF Industries			Other Subsidiaries			Eliminations and Reclassifications			Consolidated
	(in millions)
Assets
Current assets:
Cash and cash equivalents	$	—		$	105.7		$	1,890.9		$	—		$	1,996.6
Restricted cash	—			—			86.1			—			86.1
Accounts and notes receivable—net	—			2,286.5			651.9			(2,746.9		)	191.5
Inventories	—			—			202.9			—			202.9
Prepaid income taxes	1.9			—			34.8			(1.9		)	34.8
Other current assets	—			—			18.6			—			18.6
Total current assets	1.9			2,392.2			2,885.2			(2,748.8		)	2,530.5
Property, plant and equipment—net	—			—			5,525.8			—			5,525.8
Investments in and advances to affiliates	6,212.5			9,208.7			861.5			(15,421.2		)	861.5
Due from affiliates	570.7			—			1.7			(572.4		)	—
Goodwill	—			—			2,092.8			—			2,092.8
Other assets	—			65.1			178.5			—			243.6
Total assets	$	6,785.1		$	11,666.0		$	11,545.5		$	(18,742.4	)	$	11,254.2
Liabilities and Equity
Current liabilities:
Accounts and notes payable and accrued expenses	$	2,575.4		$	207.7		$	553.8		$	(2,747.0	)	$	589.9
Income taxes payable	—			10.8			7.1			(1.9		)	16.0
Customer advances	—			—			325.4			—			325.4
Other current liabilities	—			—			48.4			—			48.4
Total current liabilities	2,575.4			218.5			934.7			(2,748.9		)	979.7
Long-term debt	—			4,592.5			—			—			4,592.5
Deferred income taxes	—			34.8			699.8			—			734.6
Due to affiliates	—			572.4			—			(572.4		)	—
Other liabilities	—			35.3			339.6			—			374.9
Equity:
Stockholders' equity:
Preferred stock	—			—			16.4			(16.4		)	—
Common stock(1)	2.5			—			1.1			(1.1		)	2.5
Paid-in capital(1)	1,413.9			(12.6		)	8,283.5			(8,270.9		)	1,413.9
Retained earnings	3,175.3			6,384.9			1,067.8			(7,452.7		)	3,175.3
Treasury stock(1)	(222.2		)	—			—			—			(222.2		)
Accumulated other comprehensive income (loss)	(159.8		)	(159.8		)	(160.2		)	320.0			(159.8		)
Total stockholders' equity	4,209.7			6,212.5			9,208.6			(15,421.1		)	4,209.7
Noncontrolling interest	—			—			362.8			—			362.8
Total equity	4,209.7			6,212.5			9,571.4			(15,421.1		)	4,572.5
Total liabilities and equity	$	6,785.1		$	11,666.0		$	11,545.5		$	(18,742.4	)	$	11,254.2

(1)December 31, 2014 amounts have been retroactively restated to reflect the five-for-one split of the Company’s common stock effected in the form of a stock dividend that was distributed on June 17, 2015.

CF INDUSTRIES HOLDINGS, INC.

Condensed Consolidating Statement of Cash Flows



	Year ended December 31, 2015
	Parent			CF Industries			Other Subsidiaries			Eliminations			Consolidated
	(in millions)
Operating Activities:
Net earnings	$	699.9		$	731.1		$	835.8		$	(1,532.7	)	$	734.1
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:
Depreciation and amortization	—			13.7			465.9			—			479.6
Deferred income taxes	—			17.2			60.7			—			77.9
Stock-based compensation expense	16.5			—			0.3			—			16.8
Excess tax benefit from stock-based compensation	(1.5		)	—			—			—			(1.5		)
Unrealized loss on derivatives	—			—			162.8			—			162.8
Gain on remeasurement of CF Fertilisers UK investment	—			—			(94.4		)	—			(94.4		)
Impairment of equity method investment in PLNL	—			—			61.9			—			61.9
Loss on sale of equity method investments	—			—			42.8			—			42.8
Loss on disposal of property, plant and equipment	—			—			21.4			—			21.4
Undistributed (earnings) loss of affiliates—net	(731.2		)	(801.4		)	(3.4		)	1,532.7			(3.3		)
Due to/from affiliates—net	1.6			0.5			(2.1		)	—			—
Changes in:
Accounts and notes receivable—net	(0.9		)	0.2			97.3			(101.4		)	(4.8		)
Inventories	—			—			(71.0		)	—			(71.0		)
Accrued and prepaid income taxes	1.9			(10.8		)	(138.9		)	—			(147.8		)
Accounts and notes payable and accrued expenses	7.7			(42.6		)	(24.8		)	101.4			41.7
Customer advances	—			—			(163.9		)	—			(163.9		)
Other—net	—			30.7			20.7			—			51.4
Net cash (used in) provided by operating activities	(6.0		)	(61.4		)	1,271.1			—			1,203.7
Investing Activities:
Additions to property, plant and equipment	—			—			(2,469.3		)	—			(2,469.3		)
Proceeds from sale of property, plant and equipment	—			—			12.4			—			12.4
Proceeds from sale of equity method investment	—			—			12.8			—			12.8
Purchase of CF Fertilisers UK, net of cash acquired	—			—			(551.6		)	—			(551.6		)
Withdrawals from restricted cash funds	—			—			63.3			—			63.3
Other—net	—			(81.5		)	(43.5		)	81.5			(43.5		)
Net cash (used in) provided by investing activities	—			(81.5		)	(2,975.9		)	81.5			(2,975.9		)
Financing Activities:
Proceeds from long-term borrowings	—			1,000.0			—			—			1,000.0
Short-term debt—net	553.6			(916.2		)	362.6			—			—
Financing fees	—			(46.4		)	—			—			(46.4		)
Purchases of treasury stock	(556.3		)	—			—			—			(556.3		)
Dividends paid on common stock	(282.3		)	(282.4		)	(282.4		)	564.8			(282.3		)
Distributions to noncontrolling interest	—			—			(45.0		)	—			(45.0		)
Issuances of common stock under employee stock plans	8.4			—			—			—			8.4
Excess tax benefit from stock-based compensation	1.5			—			—			—			1.5
Dividends to/from affiliates	282.4			282.4			—			(564.8		)	—
Other—net	—			—			81.5			(81.5		)	—
Net cash provided by (used in) financing activities	7.3			37.4			116.7			(81.5		)	79.9
Effect of exchange rate changes on cash and cash equivalents	—			—			(18.3		)	—			(18.3		)
Increase (decrease) in cash and cash equivalents	1.3			(105.5		)	(1,606.4		)	—			(1,710.6		)
Cash and cash equivalents at beginning of period	—			105.7			1,890.9			—			1,996.6
Cash and cash equivalents at end of period	$	1.3		$	0.2		$	284.5		$	—		$	286.0

CF INDUSTRIES HOLDINGS, INC.

Condensed Consolidating Statement of Cash Flows



	Year ended December 31, 2014
	Parent			CF Industries			Other Subsidiaries			Eliminations			Consolidated
	(in millions)
Operating Activities:
Net earnings	$	1,390.3		$	1,392.0		$	1,015.7		$	(2,361.2	)	$	1,436.8
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization	—			6.8			385.7			—			392.5
Deferred income taxes	—			136.0			(117.5		)	—			18.5
Stock-based compensation expense	16.6			—			—			—			16.6
Excess tax benefit from stock-based compensation	(8.7		)	—			—			—			(8.7		)
Unrealized loss on derivatives	—			—			119.2			—			119.2
Gain on sale of phosphate business	—			(764.5		)	14.4			—			(750.1		)
Loss on disposal of property, plant and equipment	—			—			3.7			—			3.7
Undistributed loss (earnings) of affiliates—net	(1,391.9		)	(969.2		)	(11.6		)	2,361.2			(11.5		)
Due to/from affiliates—net	8.8			1.7			(10.5		)	—			—
Changes in:
Accounts and notes receivable—net	—			(285.3		)	658.2			(336.8		)	36.1
Inventories	—			4.3			59.5			—			63.8
Accrued and prepaid income taxes	(1.0		)	(18.3		)	(37.5		)	—			(56.8		)
Accounts and notes payable and accrued expenses	(3.3		)	376.8			(763.5		)	336.8			(53.2		)
Customer advances	—			—			204.8			—			204.8
Other—net	—			5.4			(8.5		)	—			(3.1		)
Net cash provided by (used in) operating activities	10.8			(114.3		)	1,512.1			—			1,408.6
Investing Activities:
Additions to property, plant and equipment	—			(18.3		)	(1,790.2		)	—			(1,808.5		)
Proceeds from sale of property, plant and equipment	—			—			11.0			—			11.0
Proceeds from sale of phosphate business	—			911.5			460.5			—			1,372.0
Sales and maturities of short-term and auction rate securities	—			5.0			—			—			5.0
Deposits to restricted cash funds	—			—			(505.0		)	—			(505.0		)
Withdrawals from restricted cash funds	—			—			573.0			—			573.0
Other—net	—			—			9.0			—			9.0
Net cash provided by (used in) investing activities	—			898.2			(1,241.7		)	—			(343.5		)
Financing Activities:
Proceeds from long-term borrowings	—			1,494.2			—			—			1,494.2
Short-term debt—net	1,897.7			(2,176.0		)	278.3			—			—
Financing fees	—			(16.0		)	—			—			(16.0		)
Purchases of treasury stock	(1,934.9		)	—			—			—			(1,934.9		)
Dividends paid on common stock	(255.7		)	(255.7		)	(255.9		)	511.6			(255.7		)
Distributions to noncontrolling interest	—			—			(46.0		)	—			(46.0		)
Issuances of common stock under employee stock plans	17.6			—			—			—			17.6
Excess tax benefit from stock-based compensation	8.7			—			—			—			8.7
Dividends to/from affiliates	255.7			255.9			—			(511.6		)	—
Other—net	—			(1.0		)	(42.0		)	—			(43.0		)
Net cash used in financing activities	(10.9		)	(698.6		)	(65.6		)	—			(775.1		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(4.2		)	—			(4.2		)
(Decrease) increase in cash and cash equivalents	(0.1		)	85.3			200.6			—			285.8
Cash and cash equivalents at beginning of period	0.1			20.4			1,690.3			—			1,710.8
Cash and cash equivalents at end of period	$	—		$	105.7		$	1,890.9		$	—		$	1,996.6

CF INDUSTRIES HOLDINGS, INC.

Condensed Consolidating Statement of Cash Flows



	Year ended December 31, 2013
	Parent			CF Industries			Other Subsidiaries			Eliminations			Consolidated
	(in millions)
Operating Activities:
Net earnings	$	1,464.6		$	1,466.4		$	1,495.3		$	(2,893.5	)	$	1,532.8
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation, depletion and amortization	—			47.8			362.8			—			410.6
Deferred income taxes	—			(21.3		)	(13.0		)	—			(34.3		)
Stock-based compensation expense	12.6			—			—			—			12.6
Excess tax benefit from stock-based compensation	(13.5		)	—			—			—			(13.5		)
Unrealized gain on derivatives	—			—			(59.3		)	—			(59.3		)
Loss on disposal of property, plant and equipment	—			—			5.6			—			5.6
Undistributed loss (earnings) of affiliates—net	(1,466.4		)	(1,427.0		)	(11.4		)	2,893.5			(11.3		)
Due to / from affiliates—net	13.5			—			(13.5		)	—			—
Changes in:
Accounts and notes receivable—net	—			(220.8		)	(293.4		)	514.6			0.4
Inventories	—			(11.8		)	(68.5		)	—			(80.3		)
Accrued and prepaid income taxes	(0.9		)	23.6			(176.1		)	—			(153.4		)
Accounts and notes payable and accrued expenses	(2.8		)	305.4			261.5			(514.6		)	49.5
Customer advances	—			—			(260.1		)	—			(260.1		)
Other—net	—			3.9			63.6			—			67.5
Net cash provided by operating activities	7.1			166.2			1,293.5			—			1,466.8
Investing Activities:
Additions to property, plant and equipment	—			(58.9		)	(764.9		)	—			(823.8		)
Proceeds from sale of property, plant and equipment	—			—			12.6			—			12.6
Sales and maturities of short-term and auction rate securities	—			13.5			—			—			13.5
Canadian terminal acquisition	—			—			(72.5		)	—			(72.5		)
Deposits to restricted cash funds	—			—			(154.0		)	—			(154.0		)
Deposits to asset retirement obligation funds	—			(2.9		)	—			—			(2.9		)
Other—net	—			—			7.8			—			7.8
Net cash used in investing activities	—			(48.3		)	(971.0		)	—			(1,019.3		)
Financing Activities:
Proceeds from long-term borrowings	—			1,498.0			—			—			1,498.0
Financing fees	—			(14.5		)	—			—			(14.5		)
Dividends paid on common stock	(129.1		)	(859.0		)	(129.0		)	988.0			(129.1		)
Dividends to/from affiliates	859.0			129.0			—			(988.0		)	—
Distributions to/from noncontrolling interest	—			14.3			(88.0		)	—			(73.7		)
Purchases of treasury stock	(1,409.1		)	—			—			—			(1,409.1		)
Acquisitions of noncontrolling interests in CFL	—			(364.9		)	(553.8		)	—			(918.7		)
Issuances of common stock under employee stock plans	10.3			—			—			—			10.3
Excess tax benefit from stock-based compensation	13.5			—			—			—			13.5
Other—net	648.4			(941.2		)	335.8			—			43.0
Net cash used in financing activities	(7.0		)	(538.3		)	(435.0		)	—			(980.3		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(31.3		)	—			(31.3		)
Increase (decrease) in cash and cash equivalents	0.1			(420.4		)	(143.8		)	—			(564.1		)
Cash and cash equivalents at beginning of period	—			440.8			1,834.1			—			2,274.9
Cash and cash equivalents at end of period	$	0.1		$	20.4		$	1,690.3		$	—		$	1,710.8

CF INDUSTRIES HOLDINGS, INC.

Subsequent Event (Unaudited)

On August 12, 2015, we announced that we agreed to enter into a strategic venture with CHS Inc. (CHS). The strategic venture commenced on February 1, 2016, at which time CHS purchased a minority equity interest in CF Industries Nitrogen, LLC (CFN), a subsidiary of CF Holdings, for $2.8 billion. CHS also began receiving deliveries from us pursuant to a supply agreement under which CHS has the right to purchase annually from us up to approximately 1.1 million tons of granular urea and 580,000 tons of UAN at market prices. CHS is entitled to semi-annual profit distributions from CFN as a result of its minority equity interest in CFN based generally on the volume of granular urea and UAN purchased by CHS pursuant to the supply agreement.

CF INDUSTRIES HOLDINGS, INC.

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