CF Industries Holdings (CF) 10-K risk factor changes: FY2019 vs FY2018

[removed: In] [added: *In] addition to the other information contained in this Annual Report on Form 10-K, you should carefully consider the factors discussed below before deciding to invest in any of our securities.

These risks and [removed: uncertainties] [added: uncertainties, individually or in combination,] could materially and adversely affect our business, financial condition, results of operations and cash [removed: flows.][added: flows.*]

[removed: Our] [added: Our] business is cyclical, resulting in periods of industry oversupply during which our [added: business,] financial condition, results of operations and cash flows tend to be negatively [removed: affected.][added: affected.]

Demand also includes industrial uses of nitrogen, for example [removed: chemicals] [added: chemical] manufacturing and emissions reductants such as diesel exhaust fluid (DEF).

[removed: Fertilizer] [added: In the last several years, fertilizer] producers, including CF Holdings, have built new production facilities or expanded capacity of existing production assets, or announced plans to do so.

In recent years, global nitrogen fertilizer capacity has increased faster than global nitrogen fertilizer demand, creating a surplus of global nitrogen fertilizer [removed: capacity leading] [added: capacity, which led] to lower nitrogen fertilizer selling [removed: prices.][added: prices in 2016 and 2017.]

Additional production capacity is expected to come on line over the next 12 [removed: months, primarily] [added: months] outside of North America.

In [removed: recent years,] [added: 2016 and 2017,] our financial performance, credit ratings and the trading price for our common stock were negatively impacted by the lower selling prices resulting from the global oversupply of nitrogen fertilizer.

While the average selling price for our products has increased [removed: 11%] [added: 3%] in [removed: 2018] [added: 2019] to [removed: $229] [added: $235] per ton compared to [removed: $207] [added: $229] per ton in [removed: 2017,] [added: 2018,] the period of time that these oversupply conditions [removed: will] [added: can] persist and the degree to which they will impact our business, financial condition, results of operations and cash flows is uncertain.

[removed: Our] [added: Our] products are global commodities, and we face intense global competition from other fertilizer [removed: producers.][added: producers.]

Most fertilizers are global commodities, with little or no product differentiation, and customers make their purchasing decisions principally on the basis of delivered price [removed: and] [added: and,] to a lesser [removed: extent on] [added: extent,] customer service and product quality.

[removed: For example, in January 2018, our competitors Agrium Inc. and Potash Corporation of Saskatchewan Inc. completed their merger into the newly formed company Nutrien Ltd.] Some of our competitors have greater total resources and are less dependent on earnings from fertilizer sales, which make them less vulnerable to industry downturns and better positioned to pursue new expansion and development opportunities.

Furthermore, certain [removed: governments] [added: governments, in some cases] as owners of some of our [removed: competitors] [added: competitors,] may be willing to accept lower prices and profitability on their products [added: or subsidize production or consumption] in order to support domestic employment or other political or social goals.

[removed: CF] [added: CF] INDUSTRIES HOLDINGS, [removed: INC.][added: INC.]

[removed: government policy, devaluation of the] Chinese [removed: renminbi or decreases in Chinese] producers’ underlying costs such as the price of Chinese coal encourage increased production capacity utilization, any resulting export volume could adversely affect the balance between global supply and demand and may put downward pressure on global fertilizer prices, which could materially adversely affect our business, financial condition, results of operations and cash flows.

The [removed: result] [added: impact] of this [removed: inquiry, and its impact, if any,] [added: duty] on the international market for nitrogen products, [added: in the near and long term,] is uncertain.

[removed: A] [added: A] decline in agricultural production or limitations on the use of our products for agricultural purposes could materially adversely affect the demand for our [removed: products.][added: products.]

Conditions in the United States, [removed: Europe] [added: Europe, India, Brazil, China] and other global agricultural areas significantly impact our operating results.

Agricultural planted areas and production can be affected by a number of factors, including weather patterns and field conditions, current and projected grain inventories and prices, [added: crop disease and/or livestock disease,] demand for agricultural products and governmental policies regarding production of or trade in agricultural products.

While the current Renewable Fuel Standard [removed: (RFS)] encourages continued high levels of corn-based ethanol production, [removed: a continuing “food versus fuel” debate and other factors] [added: various interested parties] have [removed: resulted in calls] [added: called] to eliminate or reduce the renewable fuel mandate, or to eliminate or reduce corn-based ethanol as part of the renewable fuel mandate.

[removed: In addition, from time to time various state] legislatures have considered limitations on the use and application of chemical fertilizers due to concerns about the impact of these products on the environment.

[removed: Our] [added: Our] business is dependent on natural gas, the prices of which are subject to [removed: volatility.][added: volatility.]

[removed: Natural] [added: Our manufacturing processes utilize natural] gas [removed: is] [added: as] the principal raw material used [removed: to produce] [added: in our production of] nitrogen fertilizers.

[removed: Because most of our nitrogen fertilizer manufacturing facilities are located in the United States and Canada,] [added: As a result,] North American natural gas comprises a significant portion of the total production cost of our products.

During the three-year period ended December 31, [removed: 2018,] [added: 2019,] the daily closing price at the Henry Hub reached a low of [removed: $1.49] [added: $1.82] per MMBtu on three consecutive days in [removed: March 2016] [added: December 2019] and a high of $6.88 per MMBtu on January 4, 2018.

During [removed: 2018,] the [added: three-year period ended December 31, 2019, the] daily closing price at NBP reached a low of [removed: $6.60] [added: $2.36] per MMBtu on [removed: two consecutive days in January 2018] [added: September 4, 2019] and a high of $31.74 per MMBtu on March 2, 2018.

During [removed: the three-year period ended December 31, 2018,] [added: 2019,] the daily closing price at NBP reached a low of [removed: $2.80] [added: $2.36] per MMBtu on September [removed: 1, September 12 and September 14, 2016] [added: 4, 2019] and a high of [removed: $31.74] [added: $7.91] per MMBtu on [removed: March 2, 2018.][added: January 17, 2019.]

Future production of natural gas from shale formations could be reduced by regulatory changes that restrict drilling or hydraulic fracturing or increase its cost or by reduction in oil exploration and development prompted by lower oil prices [removed: and] resulting in production of less associated gas.

Certain of our [removed: plants] [added: operating facilities] are located near natural gas hubs that have experienced increased natural gas development and have favorable basis differences as compared to other North American hubs.

If such reduced production, increased demand or changes in basis were to occur, or if other developments adversely impact the supply/demand balance for natural gas in [removed: the United States] [added: North America] or elsewhere, natural gas prices could rise, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

[removed: Our] [added: Our] operations [removed: and those of our joint venture] are dependent upon raw materials provided by third parties, and any delay or interruption in the delivery of raw materials may adversely affect our [removed: business.][added: business.]

We [removed: and our joint venture] use natural gas and other raw materials in the manufacture of nitrogen products.

Our natural gas is transported by pipeline to our facilities [removed: and those of our joint venture] by third party transportation providers or through the use of facilities owned by third parties.

[removed: Our joint venture, Point Lisas Nitrogen Limited, has experienced natural gas curtailments as discussed in the risk factor below titled “We are exposed to risks associated with our joint venture.”] In addition, the transport of natural gas by pipeline is subject to additional risks, including delays or interruptions caused by capacity constraints, leaks or ruptures.

[removed: Our] [added: Our] transportation and distribution activities rely on third party providers and are subject to environmental, safety and regulatory oversight.

This exposes us to risks and uncertainties beyond our control that may adversely affect our operations and exposes us to additional [removed: liability.][added: liability.]

[removed: We] [added: In addition, we] rely on railroad, truck, pipeline, [removed: river] barge and [removed: ocean] vessel [removed: companies to transport raw materials to our manufacturing facilities,] [added: companies,] to coordinate and deliver finished products to our distribution system and to ship finished products to our customers.

These transportation operations, equipment and services are subject to various hazards, including adverse operating conditions on the inland waterway system, extreme weather conditions, system failures, work stoppages, [added: shutdowns,] delays, accidents such as spills and [removed: derailments] [added: derailments, vessel groundings] and other accidents and operating hazards.

[added: Also, certain] third party service providers, [removed: particularly] [added: such as] railroads, have experienced periodic service [removed: slowdowns] [added: delays or shutdowns] due to capacity constraints in their systems, operational and maintenance [removed: difficulties] [added: difficulties, weather or safety-related embargoes] and [added: delays, and] other events, which [added: could] impact the shipping [removed: times] of our [removed: products.][added: products and cause disruption in our supply chain.]

If shipping of our products is delayed or we are unable to obtain raw materials as a result of these transportation companies’ failure to operate properly, or if new and more stringent regulatory requirements [removed: are] [added: were] implemented affecting transportation operations or equipment, or if there [removed: are] [added: were] significant increases in the cost of these services or equipment, our revenues and cost of operations could be adversely affected.

If Chinese government policy, devaluation of the Chinese renminbi, the relaxation of Chinese environmental standards or decreases in

For example, the imposition of duties, tariffs or quotas in a region can directly impact product pricing in that region, which can lead to changes in global trade flows and impact the global supply and demand balance and pricing.

Market participants customarily move product between regions of the world, or adjust trade flows, in response to these factors.

North America, where we manufacture and sell most of our products, is one of the largest and most liquid nitrogen trading regions in the world.

As a result, other manufacturers, traders and other market participants can move nitrogen products to North America when there is uncertainty over the supply and demand balance in other regions or when duties, tariffs or quotas impact prices or trade flows in other regions.

As a result, duties, tariffs and quotas can lead to uncertainty in the global marketplace and impact the supply and demand balance in many regions, which could adversely affect our business, financial condition, results of operations and cash flows.

In April 2019, the European Commission (the Commission) published a regulation imposing provisional anti-dumping duties on imports to the European Union of UAN manufactured in Russia, the Republic of Trinidad and Tobago and the United States.

The regulation included a rate of 22.6% for the provisional anti-dumping duty applicable to imports of UAN manufactured in the United States.

In July 2019, the Commission announced its intention to impose definitive anti-dumping measures in the form of fixed duty rates.

For imports of UAN manufactured in the United States, the fixed duty rate is €29.48 per metric ton (or €26.74 per ton).

On October 8, 2019, the Commission confirmed this duty in a regulation imposing definitive measures, which became effective beginning October 9, 2019 for an initial five-year period, after which the measures may be renewed by the Commission.

In addition, from time to time various state

CF INDUSTRIES HOLDINGS, INC.

Nitrogen from the atmosphere and hydrogen from natural gas, coal or other carbon energy feedstocks, are the fundamental building blocks of nitrogen fertilizers.

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

During 2019, the daily closing price at the Henry Hub, the most heavily-traded natural gas pricing point in North America, reached a low of $1.82 per MMBtu on three consecutive days in December 2019 and a high of $4.12 per MMBtu on March 5, 2019.

CF INDUSTRIES HOLDINGS, INC.

We rely on natural gas pipelines to transport raw materials to our manufacturing facilities.

For example, in September 2019, the portion of the Magellan Midstream Partners LP (Magellan) ammonia pipeline that connects to our Verdigris, Oklahoma complex was permanently shut down, resulting in the loss of future distribution of Verdigris ammonia production through this pipeline.

In addition, we expect that the portion of the Magellan ammonia pipeline that connects to our Port Neal, Iowa complex will permanently shut down in March 2020, which will result in the loss of future distribution of Port Neal ammonia production through this pipeline.

CF INDUSTRIES HOLDINGS, INC.

CF INDUSTRIES HOLDINGS, INC.

Negative changes in these ratings may result in more stringent covenants and higher interest rates under the terms of any new debt, and could cause vendors to shorten our payment terms, require us to pay in advance for materials or services, or provide letters of credit, security, or other credit enhancements in order to do business with us.

CF INDUSTRIES HOLDINGS, INC.

We are subject to risks relating to our information technology systems, and any technology disruption or cybersecurity incident could negatively affect our operations.

If we do not allocate and effectively manage the resources necessary to build and sustain the proper technology infrastructure, we could be subject to transaction errors, processing inefficiencies, the loss of customers, business disruptions, or the loss of or damage to our confidential business information due to a security breach.

In addition, our information technology systems may be damaged, disrupted or shut down due to attacks by computer hackers, computer viruses, employee error or malfeasance, power outages, hardware failures, telecommunication or utility failures, catastrophes or other unforeseen events, and in any such circumstances our system redundancy and other disaster recovery planning may be ineffective or inadequate.

Security breaches of our systems (or the systems of our customers, suppliers or other business partners) could result in the misappropriation, destruction or unauthorized disclosure of confidential information or personal data belonging to us or to our employees, business partners, customers or suppliers, and may subject us to legal liability.

As with most large systems, our information technology systems have in the past been, and in the future likely will be, subject to computer viruses, malicious codes, unauthorized access and other cyber attacks, and we expect the sophistication and frequency of such attacks to continue to increase.

To date, we are not aware of any significant impact on our operations or financial results from such attempts; however, unauthorized access could disrupt our business operations, result in the loss of assets, and have a material adverse effect on our business, financial condition, or results of operations.

Any of the attacks, breaches or other disruptions or damage described above could: interrupt our operations at one or more sites; delay production and shipments; result in the theft of our and our customers’ intellectual property and trade secrets; damage customer and business partner relationships and our reputation; result in legal claims and proceedings, liability and penalties under privacy or other laws, or increased costs for security and remediation; or raise concerns regarding our accounting for transactions.

Each of these consequences could adversely affect our business, reputation and our financial statements.

Our business involves the use, storage, and transmission of information about our employees, customers, and suppliers.

The protection of such information, as well as our proprietary information, is critical to us.

The regulatory environment surrounding information security and privacy is increasingly demanding, with the frequent imposition of new and constantly changing requirements.

We have established policies and procedures to help protect the security and privacy of this information.

Breaches of our security measures or the accidental loss, inadvertent disclosure, or unapproved dissemination of proprietary information or sensitive or confidential data about us or our employees, customers or suppliers, including the potential loss or disclosure of such information or data as a result of fraud, trickery, or other forms of deception, could expose us or our employees, customers, suppliers or other individuals affected to a risk of loss or misuse of this information, which could ultimately result in litigation and potential legal and financial liability.

These events could also damage our reputation or otherwise harm our business.

CF INDUSTRIES HOLDINGS, INC.

In addition, adverse weather events can not only cause loss of power at our facilities disrupting our operations, but also can impact the supply of natural gas and utilities and cause prices to rise.

Consolidation in the industry may increase the resources of several of our competitors.

If Chinese

For example, the European Union is currently conducting an antidumping inquiry of UAN producers in the United States, Trinidad and Tobago and Russia.

In addition, it is uncertain as to whether additional inquiries or other actions in the international market for nitrogen fertilizer, if any, would have an adverse impact on the international market for our products.

During 2018, the daily closing price at the Henry Hub, the most heavily-traded

natural gas pricing point in North America, reached a low of $2.48 per MMBtu on four consecutive days in February 2018 and a high of $6.88 per MMBtu on January 4, 2018.

Also, certain

The two-year statute of limitations expired on April 17, 2015.

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| • | restrict our investments in our subsidiaries, which could limit our ability to fund certain of our businesses; |

Our Revolving Credit Agreement and the terms of our outstanding indebtedness impose significant operating and financial restrictions on us and our subsidiaries, which may prevent us from capitalizing on business opportunities.

Our Revolving Credit Agreement imposes significant operating and financial restrictions on us.

These restrictions include covenants limiting our ability and the ability of our subsidiaries (other than certain excluded subsidiaries) to, among other things:

| • | incur additional indebtedness or guarantee indebtedness; |

| • | pay dividends on, repurchase or make distributions in respect of their capital stock or make other restricted payments; |

| • | make certain investments or acquisitions; |

| • | sell, transfer or otherwise convey certain assets; |

| • | create liens; |

| • | consolidate, merge, sell or otherwise dispose of all or substantially all of our and our restricted subsidiaries’ assets; and |

| • | prepay certain kinds of indebtedness. |

In addition, our Revolving Credit Agreement requires us to comply with consolidated interest coverage ratio, total debt to capital ratio, and consolidated secured leverage ratio maintenance covenants.

Certain of these restrictions could be suspended if and for so long as we satisfy certain investment grade corporate rating and consolidated leverage tests.

However, we cannot assure you that we will meet these tests or, if we do, that we will be able to maintain compliance with those conditions.

As a result of these restrictions and covenants under our existing indebtedness, including our senior secured notes, we are limited as to how we conduct our business and we may be unable to raise additional debt financing to compete effectively or to take advantage of new business opportunities.

The terms of any future indebtedness we may incur could include additional or more restrictive covenants.

We cannot assure you that we will be able to maintain compliance with the covenants under the terms of our indebtedness or, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend such covenants.

The terms of our existing indebtedness allow us to incur additional debt in the future, including additional secured and unsecured indebtedness.

The indentures governing our senior secured notes do not limit incurrence by us of additional unsecured indebtedness, and will permit us to incur additional secured indebtedness subject to certain restrictions.

Although our Revolving Credit Agreement contains restrictions on our ability to incur additional secured and unsecured indebtedness, these restrictions are subject to exceptions and qualifications, which allow us to incur additional secured and unsecured indebtedness in limited amounts.

Our credit ratings were downgraded in 2016 and rating agencies could further downgrade our credit ratings or issue adverse commentaries in the future, which could have a material adverse effect on our business, results of operations, financial condition and liquidity.

In particular, a weakening of our financial condition, including a significant increase in our leverage or decrease in our profitability or cash flows, could adversely affect our ability to obtain necessary funds, result in a credit rating downgrade or change in outlook, or otherwise increase our cost of borrowing.

Cyber security risks could result in disruptions in business operations and adverse operating results.

Business and supply chain disruptions, plant and utility outages and information technology system and network disruptions due to cyber attacks could seriously harm our operations and materially adversely affect our operating results.

Cyber security risks include attacks on information technology and infrastructure by hackers, damage or loss of information due to viruses, the unintended disclosure of confidential information, the misuse or loss of control over computer control systems, and breaches due to employee error.

Our exposure to cyber security risks includes exposure through third parties, including any cloud-based technologies, on whose systems we place significant reliance for the conduct of our business.

We routinely review and implement security procedures and measures in order to protect our systems and information from being vulnerable to evolving cyber attacks.

We believe these measures and procedures are appropriate.

However, we may not have the resources or technical sophistication to anticipate, prevent, or recover from rapidly evolving types of cyber attacks.

Compromises to our information and control systems could have severe financial and other business implications.

[removed: You] [added: *You] should read the following discussion and analysis in conjunction with the consolidated financial statements and related notes included in Item 8.

All references to “CF Industries” refer to CF Industries, Inc., a 100% owned subsidiary of CF Industries Holdings, Inc. References to tons refer to [removed: short-tons.][added: short tons.]

The following is an outline of the discussion and analysis included [removed: herein:][added: herein:*]

| • | [removed: Overview] [added: *Overview] of CF [removed: Holdings] [added: Holdings*] |

| • | [removed: Our Company] [added: *Our Company*] |

| [removed: •] [added: *•*] | [removed: Industry Factors] [added: *Industry Factors*] |

| • | [removed: Items] [added: *Items] Affecting Comparability of [removed: Results] [added: Results*] |

| • | [removed: Financial] [added: *Financial] Executive [removed: Summary] [added: Summary*] |

| • | [removed: Results] [added: *Results] of Consolidated [removed: Operations] [added: Operations*] |

[removed: | • | Year Ended December] [added: *Year Ended* *December] 31, [removed: 2018 Compared] [added: 2019* *Compared] to Year [removed: Ended December] [added: Ended* *December] 31, [removed: 2017 |][added: 2018*]

| [removed: •] | [removed: Year Ended December 31, 2017 Compared to Year Ended] [added: Year ended] December [removed: 31, 2016] [added: 31,] | [added: | | | | | | | | | | | | | | | | | | | | | | | |]

| [removed: •] [added: *•*] | [removed: Operating] [added: *Operating] Results by Business [removed: Segment] [added: Segment*] |

| • | [removed: Liquidity] [added: *Liquidity] and Capital [removed: Resources] [added: Resources*] |

| • | [removed: Off-Balance] [added: *Off-Balance] Sheet [removed: Arrangements] [added: Arrangements*] |

| • | [removed: Critical] [added: *Critical] Accounting Policies and [removed: Estimates] [added: Estimates*] |

| • | [removed: Recent] [added: *Recent] Accounting [removed: Pronouncements] [added: Pronouncements*] |

[removed: Overview] [added: Overview] of CF [removed: Holdings][added: Holdings]

[removed: Our Company][added: Our Company]

Our principal nitrogen fertilizer products are [removed: ammonia,] [added: anhydrous ammonia (ammonia),] granular urea, urea ammonium nitrate solution (UAN) and ammonium nitrate (AN).

We also reach a global customer base with exports from our Donaldsonville, Louisiana, [removed: plant,] [added: facility,] the world’s largest and most flexible nitrogen complex.

Additionally, we move product to international destinations from our Verdigris, Oklahoma, facility, our Yazoo City, Mississippi, facility, and our Billingham and Ince facilities in the United Kingdom, and [added: from] a joint venture ammonia facility in the Republic of Trinidad and Tobago in which we own a 50 percent interest.

Our principal assets [added: as of December 31, 2019] include:

| • | five U.S. nitrogen [removed: fertilizer] manufacturing facilities, located in Donaldsonville, Louisiana (the largest nitrogen [removed: fertilizer] complex in the world); Port Neal, Iowa; Yazoo City, Mississippi; Verdigris, Oklahoma; and Woodward, Oklahoma. These facilities are [added: wholly] owned directly or indirectly by CF Industries Nitrogen, LLC (CFN), of which we own approximately 89% and CHS Inc. (CHS) owns the remainder. See Note 17—Noncontrolling Interests for additional information on our strategic venture with CHS; |

| • | two Canadian nitrogen [removed: fertilizer] manufacturing facilities, located in Medicine Hat, Alberta (the largest nitrogen [removed: fertilizer] complex in Canada) and Courtright, Ontario; |

[removed: CF] [added: CF] INDUSTRIES HOLDINGS, [removed: INC.][added: INC.]

Our nitrogen [removed: fertilizer] manufacturing facility in Verdigris, Oklahoma, is owned and operated by Terra Nitrogen, Limited Partnership (TNLP).

[added: On April 2, 2018,] TNGP completed its purchase of the TNCLP Public Units [removed: on April 2, 2018] (the Purchase) for an aggregate cash purchase price of $388 million.

[removed: Industry Factors][added: Industry Factors]

[removed: Global] [added: *Global] Supply and Demand [removed: Factors][added: Factors*]

The selling prices of our products fluctuate in response to global market conditions, changes in supply and demand and [removed: different] cost factors.

[removed: Global] [added: *Global] Trade in [removed: Fertilizer][added: Fertilizer*]

Producers of nitrogen-based fertilizers located in the Middle East, the Republic of Trinidad and Tobago, [removed: Venezuela,] North [removed: Africa, Russia] [added: Africa] and [removed: China] [added: Russia] have been major exporters to North America in recent years.

[removed: Farmers’ Economics][added: *Farmers’ Economics*]

[removed: Items] [added: Items] Affecting Comparability of [removed: Results][added: Results]

[removed: Nitrogen Fertilizer Selling Prices][added: *Selling Prices*]

In addition, [added: plant] outages impacted the [added: global] nitrogen supply and demand balance.

These factors collectively drove global nitrogen prices higher [removed: throughout] [added: in the second half of] 2018.

The average selling price for our products for [removed: 2018, 2017] [added: 2019] and [removed: 2016] [added: 2018] was [removed: $229 per ton, $207] [added: $235] per ton and [removed: $217] [added: $229] per ton, respectively.

The increase in average selling prices of [removed: 11%] [added: 3%] in [removed: 2018] [added: 2019] from [removed: 2017] [added: 2018] increased net sales by [removed: $520] [added: $62] million.

[removed: Sales Volume][added: *Sales Volume*]

For a discussion and analysis of the year ended December 31, 2017, you should read Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2018 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 22, 2019.

Our manufacturing network is among the most efficient and cost-advantaged in the world, as our facilities in Canada and the United States have access to low-cost North American natural gas.

As a result, the North American nitrogen fertilizer market is dependent on imports to balance supply and demand.

CF INDUSTRIES HOLDINGS, INC.

Upon entering the first quarter of 2019, our average selling prices were higher than the first quarter of 2018, driven by the continued impact of a tighter global nitrogen supply and demand balance experienced throughout late 2018.

During the first half of 2019, our average selling prices for all fertilizer products remained strong due to the limited supply of fertilizer as high water levels and flooding impacted shipping and logistics on the U.S. inland rivers and limited access for imports.

As we entered the third quarter of 2019, the fertilizer application season extended due to the late planting, resulting in continued in-season prompt sales, which favorably impacted our third quarter selling prices.

However, as the third quarter continued, lower global energy prices resulted in higher nitrogen industry operating rates, which increased global fertilizer supply.

This factor, in conjunction with the seasonally slow third quarter period, led to weakness in selling prices as the third quarter ended, which continued throughout the fourth quarter of 2019.

In addition to low selling prices, the fourth quarter of 2019 experienced cold and wet weather, which limited fall ammonia application.

These factors collectively led to lower nitrogen prices in the fourth quarter.

Persistent cold and wet weather across most of North America early in 2019 delayed spring planting activity and fertilizer applications.

In addition, high water levels impacted shipping and logistics on the U.S. inland rivers and delayed certain barge shipments, which caused delays in certain customers taking delivery of fertilizer and other customers delaying purchases.

As a result, the spring application season extended into the third quarter of 2019 with some shipments that would typically occur in the second quarter being delayed into the third quarter.

Additionally, planned maintenance activity at our plants reduced production levels in the third quarter of 2019, reducing inventory availability.

In the fourth quarter, shipping activity increased and full year sales volume for 2019 was 19.5 million tons, 1% higher than the 19.3 million tons in 2018.

CF INDUSTRIES HOLDINGS, INC.

We use natural gas both as a chemical feedstock and as a fuel to produce nitrogen products.

Natural gas is a significant cost component of manufactured nitrogen products, representing approximately 35% of our production costs.

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

As a result, the price of natural gas in North America directly impacts a substantial portion of our operating expenses.

Due to increases in natural gas production resulting from the rise in production from shale gas formations, natural gas prices in North America have declined over the last decade, but are subject to volatility.

The average daily market price at the Henry Hub, the most heavily-traded natural gas pricing point in North America, was $2.51 per MMBtu for 2019 compared to $3.12 per MMBtu for 2018, a decrease of 20%.

The average daily market price at NBP was $4.44 per MMBtu for 2019 compared to $8.07 per MMBtu for 2018, a decrease of 45%.

The price of natural gas in the United Kingdom has declined as a result of increased production and availability of liquefied natural gas in the global market due to higher gas exports from exporting nations, including the United States.

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| | 2019 | | | | | | | 2018 | | | | | |

| Gain on sale of Pine Bend facility(3) | (45 | | ) | (34 | | ) | | — | | | — | | |

| Settlement of Terra Industries Inc. amended tax returns(4) | (5 | | ) | (14 | | ) | | — | | | — | | |

| Louisiana incentive tax credit(5) | — | | | (30 | | ) | | — | | | — | | |

| PLNL withholding tax charge(6) | 16 | | | 16 | | | | — | | | — | | |

| (4) | Included in interest income and income tax provision (benefit) in our consolidated statement of operations. |

CF INDUSTRIES HOLDINGS, INC.

*Gain on sale of Pine Bend facility*

During the first quarter of 2019, we entered into an agreement to sell our Pine Bend dry bulk storage and logistics facility in Minnesota.

In April of 2019, we completed the sale, received proceeds of $55 million and recognized a pre-tax gain of $45 million.

The gain is reflected in other operating—net in our consolidated statement of operations.

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We funded the Purchase with cash on hand.

Upon completion of the Purchase, CF Holdings owned, through its subsidiaries, 100 percent of the general and limited partnership interests of TNCLP.

Strong demand, high capacity utilization and increasing operating margins as a result of higher global nitrogen fertilizer prices stimulated global investment in nitrogen production facilities, which resulted in an increase in global nitrogen fertilizer production capacity.

At times, global nitrogen fertilizer capacity increased faster than global nitrogen fertilizer demand, creating a surplus of global nitrogen capacity in the market, and leading to lower nitrogen fertilizer selling prices.

These lower natural gas costs contributed to announcements of several nitrogen fertilizer capacity expansion projects in North America, including our capacity expansion projects in Donaldsonville, Louisiana and Port Neal, Iowa, which

were completed in December 2016.

Through most of 2016, nitrogen pricing at the U.S. Gulf declined, often trading below parity with other international pricing points due to the combination of new global nitrogen production capacity that came on line in 2016, continued imports from various exporting regions and decreased North American buyer interest as a result of greater global nitrogen supply availability.

Seasonal decreases in agricultural demand combined with delayed customer purchasing activity resulted in multi-year lows in nitrogen fertilizer selling prices in the second half of 2016.

In 2017, the significant price fluctuations we experienced continued and were symptoms of a market in transition as new capacity came on line and global trade flows began to adjust.

The decline in average selling prices in 2017 from 2016 reduced net sales by $293 million.

In the first quarter of 2018, drought conditions in the Southern Plains along with wet and cold temperatures throughout much of the Midwestern United States and the United Kingdom delayed the spring application season and impacted sales volume.

This delay in the spring application season resulted in high inventory levels both entering and through much of the second quarter as volume typically shipped in the first quarter was instead shipped in the second quarter of 2018.

After the delayed spring application season, through the first nine months of 2018, sales volume for our products was essentially unchanged compared to the first nine months of 2017.

In the fourth quarter of 2018, our sales volume declined 11% compared to the prior year fourth quarter, due primarily to the impact of unfavorable weather conditions in the Northern Plains and the Midwestern United States, which limited fall fertilizer applications of ammonia and the impact of lower ammonia and AN production due to plant turnaround and maintenance activity.

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

The decrease in sales volume in 2018 from 2017 was due primarily to the impact in the fourth quarter of 2018 of unfavorable weather conditions in the Northern Plains and the Midwestern United States.

In addition, the volume decline reflects lower ammonia and AN production, primarily in the fourth quarter of 2018, as a result of plant turnaround and maintenance activity.

The decline in sales volume decreased net sales by $221 million in 2018.

| Costs related to the acquisition of TNCLP Public Units(4) | 2 | | | 1 | | | | — | | | — | | | | — | | | — | | |

| Equity method investments: | | | | | | | | | | | | | | | | | | | | |

| Equity method investment tax contingency accrual(6) | — | | | — | | | | 7 | | | 7 | | | | — | | | — | | |

| Gain on sale of equity method investment(6) | — | | | — | | | | (14 | | ) | (9 | | ) | | — | | | — | | |

| Impairment of equity method investment in PLNL(6) | — | | | — | | | | — | | | — | | | | 134 | | | 134 | | |

| Debt and revolver amendment fees(8) | — | | | — | | | | — | | | — | | | | 18 | | | 11 | | |

| Capacity expansion project expenses(3) | — | | | — | | | | — | | | — | | | | 73 | | | 46 | | |

| Start-up costs - Donaldsonville / Port Neal expansion plants(2) | — | | | — | | | | — | | | — | | | | 52 | | | 32 | | |

| Transaction costs and termination of agreement with OCI: | | | | | | | | | | | | | | | | | | | | |

| Transaction costs | — | | | — | | | | — | | | — | | | | 179 | | | 96 | | |

| Financing costs related to bridge loan commitment fee(9) | — | | | — | | | | — | | | — | | | | 28 | | | 18 | | |

| Total Impact of Significant Items | $ | (37 | ) | $ | (16 | ) | | $ | 132 | | $ | (398 | ) | | $ | 533 | | $ | 412 | |

| (8) | Included primarily in interest expense in our consolidated statements of operations. |

| (9) | Included in interest expense in our consolidated statements of operations. |

Acquisition of the TNCLP Public Units

In 2018, we incurred $2 million of costs for various legal services associated with the acquisition of the publicly traded common units of TNCLP.

These costs are reflected in selling, general and administrative expenses in our consolidated statement of operations.

Beginning in the second quarter of 2018, as a result of the April 2, 2018 acquisition of the TNCLP Public Units, there are no longer earnings attributable to noncontrolling interests in TNCLP.

Equity method investments

[removed: Commodity Prices][added: *Commodity Prices*]

A $1.00 per MMBtu change in the price of natural gas would change the cost to produce a ton of ammonia, granular urea, UAN (32%) and AN by approximately $33, [removed: $22, $16] [added: $21, $15] and [removed: $16,] [added: $15,] respectively.

The derivative instruments that we use are primarily natural gas fixed price swaps, [removed: natural gas] basis swaps and [removed: natural gas] options.

As of December 31, [removed: 2018,] [added: 2019,] we had natural gas [added: fixed price swaps,] basis swaps [added: and options] covering certain periods through March [removed: 2019.][added: 2020.]

As of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] we had open derivative contracts for [removed: 6.6] [added: 41.1] million MMBtus and [removed: 35.9] [added: 6.6] million MMBtus, respectively.

A $1.00 per MMBtu increase in the forward curve prices of natural gas at December 31, [removed: 2018] [added: 2019] would result in a favorable change in the fair value of these derivative positions of [removed: $7] [added: $17] million, and a $1.00 per MMBtu decrease in the forward curve prices of natural gas would change their fair value unfavorably by [removed: $7] [added: $19] million.

[removed: Interest Rates][added: *Interest Rates*]

As of December 31, [removed: 2018,] [added: 2019,] we had [removed: seven] [added: six] series of senior notes totaling [removed: $4.75] [added: $4.00] billion of principal outstanding with maturity dates of [removed: May 1, 2020,] December 1, 2021, June 1, 2023, December 1, 2026, March 15, 2034, June 1, 2043 and March 15, 2044.

As of December 31, [removed: 2018,] [added: 2019,] the carrying value and fair value of our senior notes was approximately [removed: $4.70] [added: $3.96] billion and [removed: $4.27] [added: $4.29] billion, respectively.

Borrowings under [removed: the Revolving Credit Agreement] [added: our revolving credit agreement] bear current market rates of interest and we are subject to interest rate risk on such borrowings.

There were no borrowings outstanding under [removed: the Revolving Credit Agreement] [added: our revolving credit agreement] as of December 31, [removed: 2018] [added: 2019] or [removed: December 31, 2017,] [added: 2018,] or during [removed: 2018] [added: 2019] or [removed: 2017.][added: 2018.]

[removed: Foreign] [added: *Foreign] Currency Exchange [removed: Rates][added: Rates*]

[removed: CF] [added: CF] INDUSTRIES HOLDINGS, [removed: INC.][added: INC.]

[removed: Our Company][added: Our Company]

[removed: All] [added: *All] references to “CF Holdings,” “we,” “us,” “our” and “the Company,” 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.

Financial Statements and Supplementary [removed: Data—Notes] [added: Data*—*Notes] to Consolidated Financial [removed: Statements.][added: Statements.*]

Our principal nitrogen fertilizer products are [removed: ammonia,] [added: anhydrous ammonia (ammonia),] granular urea, urea ammonium nitrate solution (UAN) and ammonium nitrate (AN).

We also reach a global customer base with exports from our Donaldsonville, Louisiana, [removed: plant,] [added: facility,] the world’s largest and most flexible nitrogen complex.

Our principal assets [added: as of December 31, 2019] include:

| • | five U.S. nitrogen [removed: fertilizer] manufacturing facilities, located in Donaldsonville, Louisiana (the largest nitrogen [removed: fertilizer] complex in the world); Port Neal, Iowa; Yazoo City, Mississippi; Verdigris, Oklahoma; and Woodward, Oklahoma. These facilities are [added: wholly] owned directly or indirectly by CF Industries Nitrogen, LLC (CFN), of which we own approximately 89% and CHS Inc. (CHS) owns the remainder. See Note 17—Noncontrolling Interests for additional information on our strategic venture with CHS; |

| • | two Canadian nitrogen [removed: fertilizer] manufacturing facilities, located in Medicine Hat, Alberta (the largest nitrogen [removed: fertilizer] complex in Canada) and Courtright, Ontario; |

Our nitrogen [removed: fertilizer] manufacturing facility in Verdigris, Oklahoma, is owned and operated by Terra Nitrogen, Limited Partnership (TNLP).

[added: On April, 2, 2018,] TNGP completed its purchase of the TNCLP Public Units [removed: on April 2, 2018] (the [removed: Purchase),] [added: Purchase)] for an aggregate cash purchase price of $388 million.

[removed: These plants increased our overall] production capacity by approximately 25%, improved our product mix flexibility at Donaldsonville, and improved our ability to [added: serve upper-Midwest urea customers from our Port Neal location.]

[removed: CF] [added: CF] INDUSTRIES HOLDINGS, [removed: INC.][added: INC.]

For the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] we sold [removed: 19.3] [added: 19.5] million, [removed: 20.0] [added: 19.3] million and [removed: 17.0] [added: 20.0] million product tons generating net sales of [removed: $4.43] [added: $4.59] billion, [removed: $4.13] [added: $4.43] billion and [removed: $3.69] [added: $4.13] billion, respectively.

[added: Our Internet website address is *www.cfindustries.com.*] Information made available on our website does not constitute part of this Annual Report on Form 10-K.

We make available free of charge on or through our Internet website, [removed: www.cfindustries.com,] [added: *www.cfindustries.com*,] all of our reports on Forms 10-K, 10-Q and 8-K and all amendments to those reports as soon as reasonably practicable after such material is filed electronically with, or furnished to, the Securities and Exchange Commission (SEC).

The SEC also maintains a website at [removed: www.sec.gov] [added: *www.sec.gov*] that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

[removed: Company History][added: Company History]

In March 2014, we [removed: completed the sale of] [added: exited] our phosphate mining and manufacturing business, which was located in Florida, [added: through a sale] to [added: The] Mosaic [removed: Inc.] [added: Company] for approximately $1.4 billion in cash.

[removed: Product] [added: Product] Tons and Nutrient [removed: Tons][added: Tons]

[removed: Reportable Segments][added: Reportable Segments]

[removed: Our Products][added: *Our Products*]

Our primary nitrogen [removed: fertilizer] products are ammonia, granular urea, UAN and AN.

Our historical sales of nitrogen [removed: fertilizer] products are shown in the following table.

| | [removed: 2018] [added: 2019] | | | | | | | [removed: 2017] [added: 2018] | | | | | | | [removed: 2016] [added: 2017] | | | | | |

| | [removed: Sales] [added: Sales] Volume [removed: (tons)] [added: (tons)] | | | [removed: Net Sales] [added: Net Sales] | | | | [removed: Sales] [added: Sales] Volume [removed: (tons)] [added: (tons)] | | | [removed: Net Sales] [added: Net Sales] | | | | [removed: Sales] [added: Sales] Volume [removed: (tons)] [added: (tons)] | | | [removed: Net Sales] [added: Net Sales] | | |

| | [removed: (tons] [added: (tons] in thousands; dollars in [removed: millions)] [added: millions)] | | | | | | | | | | | | | | | | | | | |

| Ammonia | [removed: 3,135] [added: 3,516] | | | $ | [removed: 1,028] [added: 1,113] | | | [removed: 4,105] [added: 3,135] | | | $ | [removed: 1,209] [added: 1,028] | | | [removed: 2,874] [added: 4,105] | | | $ | [removed: 981] [added: 1,209] | |

| Granular urea | [removed: 4,898] [added: 4,849] | | | [removed: 1,322] [added: 1,342] | | | | [removed: 4,357] [added: 4,898] | | | [removed: 971] [added: 1,322] | | | | [removed: 3,597] [added: 4,357] | | | [removed: 831] [added: 971] | | |

| UAN | [removed: 7,042] [added: 6,807] | | | [removed: 1,234] [added: 1,270] | | | | [removed: 7,093] [added: 7,042] | | | [removed: 1,134] [added: 1,234] | | | | [removed: 6,681] [added: 7,093] | | | [removed: 1,196] [added: 1,134] | | |

| AN | [removed: 2,002] [added: 2,109] | | | [removed: 460] [added: 506] | | | | [removed: 2,353] [added: 2,002] | | | [removed: 497] [added: 460] | | | | [removed: 2,151] [added: 2,353] | | | [removed: 411] [added: 497] | | |

| Other(1) | [removed: 2,252] [added: 2,257] | | | [removed: 385] [added: 359] | | | | [removed: 2,044] [added: 2,252] | | | [removed: 319] [added: 385] | | | | [removed: 1,654] [added: 2,044] | | | [removed: 266] [added: 319] | | |

| Total | [removed: 19,329] [added: 19,538] | | | $ | [removed: 4,429] [added: 4,590] | | | [removed: 19,952] [added: 19,329] | | | $ | [removed: 4,130] [added: 4,429] | | | [removed: 16,957] [added: 19,952] | | | $ | [removed: 3,685] [added: 4,130] | |

Gross margin was [removed: $917] [added: $1,174] million, [removed: $434] [added: $917] million and [removed: $843] [added: $434] million for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] respectively.

We own and operate seven nitrogen fertilizer manufacturing facilities in North America, including five nitrogen fertilizer manufacturing facilities in the United States, [removed: one in Medicine Hat, Alberta, Canada] and [removed: one] [added: two] in [removed: Courtright, Ontario,] Canada.

As of December 31, [removed: 2018,] [added: 2019,] the combined production capacity of these seven facilities represented approximately [removed: 41%,] [added: 39%,] 42%, 44% and 19% of North American ammonia, granular urea, UAN and AN production capacity, respectively.

We also operate two United Kingdom nitrogen manufacturing facilities [removed: located in Billingham and Ince] that produce ammonia, AN and NPKs and serve primarily the British agricultural and industrial markets.

The following table shows the production capacities as of December 31, [removed: 2018] [added: 2019] at each of our nitrogen manufacturing facilities:

| | [removed: Average] [added: Average] Annual [removed: Capacity(1)] [added: Capacity(1)] | | | | | | | | | | | | | | | | |

| | [removed: Gross Ammonia(2)] [added: Gross Ammonia(2)] | | | [removed: Net Ammonia(2)] [added: Net Ammonia(2)] | | | [removed: UAN(3)] [added: UAN(3)] | | | [removed: Urea(4)] [added: Urea(4)] | | | [removed: AN(5)] [added: AN(5)] | | | [removed: Other(6)] [added: Other(6)] | |

| | [removed: (tons] [added: (tons] in [removed: thousands)] [added: thousands)] | | | | | | | | | | | | | | | | |

Our manufacturing network is among the most efficient and cost-advantaged in the world, as our facilities in Canada and the United States have access to low-cost North American natural gas.

These plants increased our overall

We were founded in 1946 as Central Farmers Fertilizer Company, and were owned by a group of regional agriculture cooperatives for the first 59 years of our existence.

Central Farmers became CF Industries in 1970.

Originally established as a fertilizer brokerage company, we expanded owning and operating fertilizer manufacturing and distribution facilities in the early 1950s with a principal objective of assured supply for our owners.

At various times in our history, we manufactured and/or distributed nitrogen, phosphate and potash fertilizers.

At the time of the IPO, our assets consisted of one wholly owned nitrogen manufacturing facility in Louisiana, United States; a joint venture nitrogen manufacturing facility in Alberta, Canada, of which we owned 66 percent; a phosphate mining and manufacturing operation in Florida, United States; and distribution facilities throughout North America.

CF INDUSTRIES HOLDINGS, INC.

As a result, our company became focused solely on nitrogen manufacturing and distribution.

CF INDUSTRIES HOLDINGS, INC.

CF INDUSTRIES HOLDINGS, INC.

The Donaldsonville facility is the world’s largest and most flexible nitrogen complex.

CF INDUSTRIES HOLDINGS, INC.

In September 2019, the portion of the Magellan ammonia pipeline that connects to our Verdigris, Oklahoma complex was permanently shut down, resulting in the loss of future distribution of Verdigris ammonia production through this pipeline.

In addition, we expect that the portion of the Magellan ammonia pipeline that connects to our Port Neal, Iowa complex will permanently shut down in March 2020, which will result in the loss of future distribution of Port Neal ammonia production through this pipeline.

CF INDUSTRIES HOLDINGS, INC.

| Leased(2)(3) | 6 | | | 124 | | | 2 | | | 32 | | | 32 | | | 415 | | | — | | | — | |

| Total In-Market | 28 | | | 904 | | | 2 | | | 32 | | | 40 | | | 629 | | | — | | | — | |

| (2) | In April 2019, we sold our Pine Bend dry bulk storage and logistics facility in Minnesota, which had provided 200 thousand tons of granular urea storage. The portion we lease back is included in the leased granular urea storage tons. |

| | |

| --- | --- |

We have a strategic venture with CHS and they have a minority equity interest in CFN.

See Note 17—Noncontrolling Interests for additional information on our strategic venture with CHS.

CF INDUSTRIES HOLDINGS, INC.

The EU has announced changes to the EU ETS to increase the pace of emissions cuts beginning in 2021.

Notwithstanding the exit of the United Kingdom from the European Union (Brexit) on January 31, 2020, facilities in the United Kingdom will remain subject to the EU ETS at least through the end of 2020.

Although there is uncertainty about the GHG regulations that will apply thereafter, a framework similar to the EU ETS is a likely outcome.

In June 2019, the ECCC finalized the emission

CF INDUSTRIES HOLDINGS, INC.

limits for carbon dioxide equivalent (CO2e) emissions from nitrogen fertilizer products.

These emission limits are based on 95% of the average emissions intensity for the production of such products from all Canadian nitrogen fertilizer plants, reflecting that such products are deemed to be energy-intensive and trade-exposed and thus subject to a less stringent emissions reduction requirement.

The Saskatchewan Court of Appeal (in May 2019) and the Ontario Court of Appeal (in June 2019) each held that the Greenhouse Pollution Pricing Act was validly enacted under the Canadian constitution.

Ontario and Saskatchewan both appealed these decisions to the Supreme Court of Canada and oral arguments are scheduled for March 2020.

In June 2019, Alberta filed a legal challenge to the constitutionality of the statute, notwithstanding that the question will be resolved by the pending Supreme Court appeals.

In July 2019, the new Ontario government enacted a new GHG regulation, called the Emissions Performance Standards program (EPS), that sets CO2e emissions limits for nitrogen products based on a production weighted sectoral average.

For facilities whose carbon emissions exceed the applicable limits compliance options include the purchase emissions performance units for a fee of $20 per ton of excess CO2e for calendar year 2020, which fee will rise by $10 per ton each year through 2023.

Except for registration and recordkeeping provisions, the EPS will not go into effect until the federal government determines that the regulation satisfies the federal stringency requirements, at which time the EPS would replace the OPBS in Ontario.

In 2019, the Alberta government passed the Technology Innovation and Emission Reduction Implementation Act (TIER), which will replace the CCIR and go into effect on January 1, 2020.

The TIER requires large emitting facilities (other than electricity producers, which are subject to a different standard) to comply with the least stringent of a “facility-specific” benchmark of 90% of historical GHG emissions intensity from a three-year baseline, which intensity limit will be reduced by 1% a year beginning in 2021, or a benchmark reflecting the emissions intensity of the top 10% of facilities for a given sector.

The compliance options under the TIER are similar to the compliance options under the CCIR.

serve upper-Midwest urea customers from our Port Neal location.

These new facilities allow us to benefit from the cost advantages of North American natural gas.

Our Internet website address is www.cfindustries.com.

We were founded in 1946 as a fertilizer brokerage operation by a group of regional agricultural cooperatives.

During the 1960s, we expanded our distribution capabilities and diversified into fertilizer manufacturing through the acquisition of several existing plants and facilities.

During the 1970s and again during the 1990s, we expanded our production and distribution capabilities significantly, spending approximately $1 billion in each of these decades.

The Donaldsonville nitrogen fertilizer complex is the world’s largest nitrogen fertilizer production facility.

As part of our capacity expansion projects, a new Donaldsonville urea plant became operational during the fourth quarter of 2015.

A new UAN plant was placed in service in the first quarter of 2016, and a new ammonia plant was placed in service in the fourth quarter of 2016.

As part of our capacity expansion projects, a new ammonia plant and a new urea plant were placed in service in the fourth quarter of 2016.

Three of our nitrogen production facilities also have access to pipelines for the transportation of ammonia.

| Leased(2) | 5 | | | 178 | | | 1 | | | 7 | | | 24 | | | 320 | | | — | | | — | |

| Total In-Market | 27 | | | 958 | | | 2 | | | 207 | | | 32 | | | 534 | | | — | | | — | |

In addition, Yara BASF started up a new North American nitrogen fertilizer production facility in April 2018.

The United Kingdom is a party to the Kyoto Protocol.

As a result of agreements reached during a conference in Durban, South Africa in 2011, the Kyoto Protocol will continue in force for a second commitment period, which will expire by 2020.

However, the continued applicability of the EU ETS in the United Kingdom is uncertain due to the potential exit of the United Kingdom from the European Union (Brexit).

Canada withdrew from further participation in the Kyoto Protocol in December 2011, but is a party to the Paris Agreement.

The Department of the Environment is currently proposing that the benchmark for nitrogen fertilizer plants be set at 90% of the average performance of Canadian fertilizer plants.

The federal government intends to finalize the OBPS in the first half of 2019 and then retroactively apply it to January 2019 in impacted provinces.

However, the government of Alberta has not determined whether it will agree to increase the effective price of carbon beyond the current price of $30 per ton of excess CO2e.

The United States is not a party to the Kyoto Protocol, but is a party to the Paris Agreement.

In the interim, it is unclear if the United States will comply with its commitments under the Paris Agreement.

There has been no indication to date that the United States’ announced withdrawal is causing other countries to also consider withdrawing from the Paris Agreement.

As of December 31, 2018, we employed approximately 2,900 full-time and 100 part-time employees.

[removed: Litigation][added: Litigation]

[removed: West] [added: West] Fertilizer [removed: Co.][added: Co.]

The next group of cases was reset for trial beginning on [removed: July 23, 2019.][added: September 14, 2020.]

[removed: Environmental][added: Environmental]

[removed: Florida] [added: Florida] Environmental [removed: Matters][added: Matter]

On March 17, 2014, we completed the sale of our phosphate mining and manufacturing business, which was located in Florida, to [removed: Mosaic.][added: The Mosaic Company (Mosaic).]

Pursuant to the terms of the definitive agreement executed in October 2013 among CF Industries Holdings, Inc., CF Industries and Mosaic, Mosaic assumed the following environmental [removed: matters] [added: matter] and we agreed to indemnify Mosaic with respect to losses arising out of the [removed: matters] [added: matter] below, subject to a maximum indemnification cap and the other terms of the definitive agreement.

[removed: Clean] [added: *Clean] Air Act Notice of [removed: Violation][added: Violation*]

[removed: CF] [added: CF] INDUSTRIES HOLDINGS, [removed: INC.][added: INC.]

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

[removed: Other] [added: Other] Environmental [removed: Matters][added: Matters]

We have reached a settlement in principle with the EPA to resolve the Plant City Clean Air Act matter, pending the final execution and filing of a stipulation of settlement.

The settlement will require us to pay civil penalties to the United States, but will not include any required injunctive relief or other corrective actions.

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 CERCLA by failing to file a timely notification relating to the release of hydrogen fluoride above applicable reportable quantities.

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] DC [removed: 20549][added: 20549]

| [removed: FORM 10-K] [added: FORM] | [added: 10-K |]

| [removed: (Mark One)] [added: (Mark One)] | | [added: | |]

| [removed: ý] [added: ☒] | [removed: ANNUAL] [added: | ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF [removed: THE SECURITIES] [added: THE SECURITIES] EXCHANGE ACT OF [removed: 1934] [added: 1934] | [added: |]

[removed: | For] [added: For] the fiscal year [removed: ended December] [added: ended December] 31, [removed: 2018 | |][added: 2019]

| [removed: o] [added: ☐] | [removed: TRANSITION] [added: | TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] | [added: |]

[removed: Commission] [added: Commission] file [removed: number 001-32597][added: number 001-32597]

[removed: CF] [added: CF] INDUSTRIES HOLDINGS, [removed: INC.][added: INC.]

| [removed: Delaware] [added: Delaware] | | [removed: 20-2697511] | [added: | | | | 20-2697511 |]

| (State or other jurisdiction of incorporation or organization) | | [added: | | | | |] (I.R.S. Employer Identification No.) |

| [removed: 4] [added: 4] Parkway North, Suite [removed: 400, Deerfield, Illinois] [added: 400] | | [removed: 60015] | [added: | | | | 60015 |]

| (Address of principal executive offices) | | [removed: (Zip Code)] | [added: | | | | |]

[removed: | Registrant’s] [added: (Registrant’s] telephone number, including area [removed: code (847) 405-2400 | | |][added: code)]

[removed: |] Securities registered pursuant to Section 12(b) of the Act: [removed: | | |]

| Title of each class | | [added: Trading symbol(s) | |] Name of each exchange on which registered |

| common stock, par value $0.01 per share | | [added: CF | |] New York Stock Exchange |

Securities registered pursuant to section 12(g) of the Act: [removed: None][added: None]

Yes [removed: ý] [added: ☒] No [removed: o][added: ☐]

Yes [removed: o] [added: ☐] No [removed: ý][added: ☒]

| Large accelerated filer [removed: ý] | [added: ☒] | Accelerated filer [removed: o] | [added: ☐] | Non-accelerated filer [removed: o] | [added: ☐] | Smaller reporting company [removed: o] | [added: ☐] | Emerging growth company [removed: o] | [added: ☐ |]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the [added: Exchange] Act).

The aggregate market value of the registrant’s common stock held by non-affiliates as of June [removed: 29, 2018] [added: 28, 2019] (the last business day of the registrant’s most recently completed second fiscal quarter), computed by reference to the closing sale price of the registrant’s common stock, was [removed: $10,318,413,880.][added: $10,166,447,335.]

[removed: 222,890,557] [added: 216,171,177] shares of the registrant’s common stock, par value $0.01 per share, were outstanding as of January 31, [removed: 2019.][added: 2020.]

[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: REFERENCE]

Portions of the registrant’s definitive proxy statement for its [removed: 2019] [added: 2020] annual meeting of stockholders (Proxy Statement) are incorporated by reference into Part III of this Annual Report on Form 10-K.

The Proxy Statement will be filed with the Securities and Exchange Commission, pursuant to Regulation 14A, not later than 120 days after the end of the [removed: 2018] [added: 2019] fiscal year, or, if the registrant does not file the Proxy Statement within such 120-day period, the registrant will amend this Annual Report on Form 10-K to include the information required under Part III hereof not later than the end of such 120-day period.

[removed: TABLE] [added: TABLE] OF [removed: CONTENTS][added: CONTENTS]

[removed: | [PART I](#s53A3FE9125B75D96BEEF93AB112E757D) | | | |][added: PART I]

| | [Item [removed: 1.](#sBE942EE08DEF556FA0A2C6229E4E2283)] [added: 1.](#sB5C34DB3DAE45942AB84FFFD26120136)] | [removed: [Business](#sBE942EE08DEF556FA0A2C6229E4E2283)] [added: [Business](#sB5C34DB3DAE45942AB84FFFD26120136)] | [removed: [1](#sBE942EE08DEF556FA0A2C6229E4E2283)] [added: [1](#sB5C34DB3DAE45942AB84FFFD26120136)] |

| | [Item [removed: 1A.](#s462477F3F0E95DC793193419C5FCF598)] [added: 1A.](#s80A6A74891D750F099532D8DB9AF1923)] | [Risk [removed: Factors](#s462477F3F0E95DC793193419C5FCF598)] [added: Factors](#s80A6A74891D750F099532D8DB9AF1923)] | [removed: [11](#s462477F3F0E95DC793193419C5FCF598)] [added: [11](#s80A6A74891D750F099532D8DB9AF1923)] |

| | [Item [removed: 1B.](#s08D0275E1D1A57E39429DF23C6A7F6E8)] [added: 1B.](#s31BAD05D91EC55F0B2DA82EEE199418B)] | [Unresolved Staff [removed: Comments](#s08D0275E1D1A57E39429DF23C6A7F6E8)] [added: Comments](#s31BAD05D91EC55F0B2DA82EEE199418B)] | [removed: [27](#s08D0275E1D1A57E39429DF23C6A7F6E8)] [added: [27](#s31BAD05D91EC55F0B2DA82EEE199418B)] |

| | [Item [removed: 2.](#s1047AB892545525C8E58295B942601EF)] [added: 2.](#s4DD59D604F5D507D99A7263FF35E828B)] | [removed: [Properties](#s1047AB892545525C8E58295B942601EF)] [added: [Properties](#s4DD59D604F5D507D99A7263FF35E828B)] | [removed: [27](#s1047AB892545525C8E58295B942601EF)] [added: [27](#s4DD59D604F5D507D99A7263FF35E828B)] |

| | [Item [removed: 3.](#s3FB1A1BD53EA5D99A198CCE4FF67402F)] [added: 3.](#sBC1C4EDF0C5754E698BBCCEC2374677D)] | [Legal [removed: Proceedings](#s3FB1A1BD53EA5D99A198CCE4FF67402F)] [added: Proceedings](#sBC1C4EDF0C5754E698BBCCEC2374677D)] | [removed: [27](#s3FB1A1BD53EA5D99A198CCE4FF67402F)] [added: [27](#sBC1C4EDF0C5754E698BBCCEC2374677D)] |

| | [Item [removed: 4.](#sF4FBF609C4495ECB880B9705CAC99B4A)] [added: 4.](#sDEC484F60707513E8B72FB5C01846255)] | [Mine Safety [removed: Disclosures](#sF4FBF609C4495ECB880B9705CAC99B4A)] [added: Disclosures](#sDEC484F60707513E8B72FB5C01846255)] | [removed: [28](#sF4FBF609C4495ECB880B9705CAC99B4A)] [added: [28](#sDEC484F60707513E8B72FB5C01846255)] |

| | [Item [removed: 5.](#s4EE37AE7BD8E5AB6BA578053B72DA89D)] [added: 5.](#sC1E351281086579C88DD58DCCD3CCB05)] | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s4EE37AE7BD8E5AB6BA578053B72DA89D)] [added: Securities](#sC1E351281086579C88DD58DCCD3CCB05)] | [removed: [29](#s4EE37AE7BD8E5AB6BA578053B72DA89D)] [added: [29](#sC1E351281086579C88DD58DCCD3CCB05)] |

| | [Item [removed: 6.](#sC00E94C219FD546B9F6D4E0FB7DBC848)] [added: 6.](#sABF9F4EADF7655D3B99BCF006165B531)] | [Selected Financial [removed: Data](#sC00E94C219FD546B9F6D4E0FB7DBC848)] [added: Data](#sABF9F4EADF7655D3B99BCF006165B531)] | [removed: [30](#sC00E94C219FD546B9F6D4E0FB7DBC848)] [added: [30](#sABF9F4EADF7655D3B99BCF006165B531)] |

| | [Item [removed: 7.](#s1B1D714C550054CE90A2CBA56D94775B)] [added: 7.](#s3F4F634AA57A5C008829B5105F12F542)] | [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s1B1D714C550054CE90A2CBA56D94775B)] [added: Operations](#s3F4F634AA57A5C008829B5105F12F542)] | [removed: [32](#s1B1D714C550054CE90A2CBA56D94775B)] [added: [32](#s3F4F634AA57A5C008829B5105F12F542)] |

| | [Item [removed: 7A.](#sEF0DE45F2C4C5EDCA69BA878D139803F)] [added: 7A.](#s186B12E459265CC090A274A3936BD96E)] | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#sEF0DE45F2C4C5EDCA69BA878D139803F)] [added: Risk](#s186B12E459265CC090A274A3936BD96E)] | [removed: [66](#sEF0DE45F2C4C5EDCA69BA878D139803F)] [added: [62](#s186B12E459265CC090A274A3936BD96E)] |

| | | | |

| --- | --- | --- | --- |

| | | | |

| OR | | | |

| For the transition period from to | | | |

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | |

| | | | | | | | |

| Deerfield, | | Illinois | | | | | (Zip Code) |

(847) 405-2400

| | | | | |

| --- | --- | --- | --- | --- |

| | | | | |

Yes ☒ No ☐

Yes ☒ No ☐

| | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | |

Yes ☐ No ☒

CF INDUSTRIES HOLDINGS, INC.

| | | | |

| --- | --- | --- | --- |

| | | | |

| [PART II](#s0AD0524975D6531A9A2ADEC9D18CA629) | | | |

| [PART IV](#s9730E66B478656F0A5C3767C0396A131) | | | |

CF INDUSTRIES HOLDINGS, INC.

10-K 1 cf-12312018x10k.htm 10-K

| |

| --- |

| OR | |

| | | |

| --- | --- | --- |

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| [PART II](#s5C6C9296FA8E5C89ABCC97DA04556B08) | | | |

| [PART IV](#s23D84B5FDE46513A8B0AAA36AE8AC2E5) | | | |

[removed: CF] [added: CF] INDUSTRIES HOLDINGS, [removed: INC.][added: INC.]

[removed: PART II][added: PART II]

Our common stock is traded on the New York Stock Exchange under the symbol [removed: “CF”.][added: “CF.” As of February 18, 2020, there were 689 stockholders of record.]

The following table sets forth stock repurchases for each of the three months of the quarter ended December 31, [removed: 2018:][added: 2019:]

| | [removed: Issuer] [added: Issuer] Purchases of Equity [removed: Securities] [added: Securities] | | | | | | | | | | | | |

| [removed: Period] [added: Period] | [removed: Total] [added: Total] number of shares (or units) [removed: purchased] [added: purchased] | | | [removed: Average] [added: Average] price paid per share (or [removed: unit) (1)] [added: unit)(1)] | | | | [removed: Total] [added: Total] number of shares (or units) purchased as part of publicly announced plans or [removed: programs(2)] [added: programs(2)] | | | [removed: Maximum] [added: Maximum] number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs (in [removed: thousands)(2)] [added: thousands)(2)] | | |

| (1) | Average price paid per share of CF [removed: Holdings] [added: Industries Holdings, Inc. (CF Holdings)] common stock repurchased under the [removed: 2018] [added: 2019] Share Repurchase Program, as defined below, is the execution price, excluding commissions paid to brokers. |

| (2) | On [removed: August 1, 2018,] [added: February 13, 2019,] our Board of Directors authorized management to repurchase CF [removed: Industries Holdings, Inc. (CF Holdings)] [added: Holdings] common stock for a total expenditure of up to [removed: $500 million] [added: $1 billion] through [removed: June 30, 2020] [added: December 31, 2021] (the [removed: 2018] [added: 2019] Share Repurchase Program). [removed: We announced the 2018] [added: The 2019] Share Repurchase Program [added: was announced] on [removed: August 1, 2018,] [added: February 13, 2019] and [removed: we completed the 2018 Share Repurchase Program in the fourth quarter of 2018. The 2018 Share Repurchase Program] is discussed in Note 18—Stockholders’ Equity, in the notes to the consolidated financial statements included in Item 8. Financial Statements and Supplementary Data. |

| (3) | Includes [removed: 819] [added: 4,893] shares withheld to pay employee tax obligations upon the [removed: lapse] [added: exercise] of [removed: restrictions on restricted] [added: nonqualified] stock [removed: units.] [added: options.] |

[removed: CF] [added: CF] INDUSTRIES HOLDINGS, [removed: INC.][added: INC.]

| October 1, 2019 - October 31, 2019 | 485,819 | | (3) | $ | 47.82 | | | 480,926 | | | $ | 727,407 | |

| November 1, 2019 - November 30, 2019 | 1,389,798 | | | 46.05 | | | | 1,389,798 | | | 663,407 | | |

| December 1, 2019 - December 31, 2019 | — | | | — | | | | — | | | 663,407 | | |

| Total | 1,875,617 | | | $ | 46.51 | | | 1,870,724 | | | | | |

As of February 14, 2019, there were 715 stockholders of record.

| | | | | | | | | | | | | | |

| October 1, 2018 - October 31, 2018 | 1,120,819 | | (3) | $ | 49.73 | | | 1,120,000 | | | $ | 353,178 | |

| November 1, 2018 - November 30, 2018 | 3,632,912 | | (4) | 46.78 | | | | 3,586,618 | | | 185,653 | | |

| December 1, 2018 - December 31, 2018 | 4,409,484 | | | 42.10 | | | | 4,409,484 | | | — | | |

| Total | 9,163,215 | | | $ | 44.89 | | | 9,116,102 | | | | | |

| | |

| --- | --- |

| (4) | Includes 46,294 shares withheld to pay employee tax obligations upon the exercise of nonqualified stock options. |

The following selected historical financial data as of December 31, [removed: 2018] [added: 2019] and [removed: 2017] [added: 2018] and for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016] [added: 2017] have been derived from our audited consolidated financial statements and related notes included elsewhere in this document.

The following selected historical financial data as of December 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] and for the years ended December 31, [removed: 2015] [added: 2016] and [removed: 2014] [added: 2015] have been derived from our consolidated financial statements that are not included in this document.

| | [removed: Year] [added: Year] ended December [removed: 31,] [added: 31,] | | | | | | | | | | | | | | | | | | |

| | [removed: 2018] [added: 2019] | | | | [removed: 2017(1)] [added: 2018] | | | | [removed: 2016(1)] [added: 2017] | | | | [removed: 2015(1)(2)] [added: 2016] | | | | [removed: 2014(1)(3)] [added: 2015(1)] | | |

| | [removed: (in] [added: (in] millions, except per share [removed: amounts)] [added: amounts)] | | | | | | | | | | | | | | | | | | |

| [removed: Statement] [added: Statement] of Operations [removed: Data:] [added: Data:] | | | | | | | | | | | | | | | | | | | |

| Net sales | $ | [removed: 4,429] [added: 4,590] | | | $ | [removed: 4,130] [added: 4,429] | | | $ | [removed: 3,685] [added: 4,130] | | | $ | [removed: 4,308] [added: 3,685] | | | $ | [removed: 4,743] [added: 4,308] | |

| Cost of sales | [removed: 3,512] [added: 3,416] | | | | [removed: 3,696] [added: 3,512] | | | | [removed: 2,842] [added: 3,696] | | | | [removed: 2,752] [added: 2,842] | | | | [removed: 2,953] [added: 2,752] | | |

| Gross margin | [removed: 917] [added: 1,174] | | | | [removed: 434] [added: 917] | | | | [removed: 843] [added: 434] | | | | [removed: 1,556] [added: 843] | | | | [removed: 1,790] [added: 1,556] | | |

| Selling, general and administrative expenses | [removed: 214] [added: 239] | | | | [removed: 191] [added: 214] | | | | [removed: 173] [added: 191] | | | | [removed: 169] [added: 173] | | | | [removed: 147] [added: 169] | | |

| Transaction costs | — | | | | — | | | | [removed: 179] [added: —] | | | | [removed: 57] [added: 179] | | | | [removed: —] [added: 57] | | |

| Other operating—net | [removed: (27] [added: (73] | | ) | | [removed: 18] [added: (27] | | [added: )] | | [removed: 208] [added: 18] | | | | [removed: 92] [added: 208] | | | | [removed: 51] [added: 92] | | |

| Total other operating costs and expenses | [removed: 187] [added: 166] | | | | [removed: 209] [added: 187] | | | | [removed: 560] [added: 209] | | | | [removed: 318] [added: 560] | | | | [removed: 198] [added: 318] | | |

| Equity in [removed: earnings] (losses) [added: earnings] of operating affiliates | [added: (5 | | ) | |] 36 | | | | 9 | | | | (145 | | ) | | (35 | | ) | [removed: | 43 | | |]

| Operating earnings | [removed: 766] [added: 1,003] | | | | [removed: 234] [added: 766] | | | | [removed: 138] [added: 234] | | | | [removed: 1,203] [added: 138] | | | | [removed: 2,385] [added: 1,203] | | |

| Interest expense—net | [removed: 228] [added: 217] | | | | [removed: 303] [added: 228] | | | | [removed: 195] [added: 303] | | | | [removed: 131] [added: 195] | | | | [removed: 177] [added: 131] | | |

| Loss on debt extinguishment | [removed: —] [added: 21] | | | | [removed: 53] [added: —] | | | | [removed: 167] [added: 53] | | | | [removed: —] [added: 167] | | | | — | | |

| Other non-operating—net | [removed: (9] [added: (7] | | ) | | [removed: 3] [added: (9] | | [added: )] | | [removed: 2] [added: 3] | | | | [removed: 14] [added: 2] | | | | [removed: 21] [added: 14] | | |

| Earnings (loss) before income taxes and equity in earnings of non-operating affiliates | [added: 772 | | | |] 547 | | | | (125 | | ) | | (226 | | ) | | 1,058 | | | [removed: | 2,187 | | |]

| Income tax provision (benefit) | [added: 126 | | | |] 119 | | | | (575 | | ) | | (68 | | ) | | 396 | | | [removed: | 773 | | |]

| Equity in earnings of non-operating affiliates—net of taxes | — | | | | — | | | | — | | | | [removed: 72] [added: —] | | | | [removed: 23] [added: 72] | | |

| Net earnings (loss) | [added: 646 | | | |] 428 | | | | 450 | | | | (158 | | ) | | 734 | | | [removed: | 1,437 | | |]

| Less: Net earnings attributable to noncontrolling interests | [removed: 138] [added: 153] | | | | [removed: 92] [added: 138] | | | | [removed: 119] [added: 92] | | | | [removed: 34] [added: 119] | | | | [removed: 47] [added: 34] | | |

| Net earnings (loss) attributable to common stockholders | $ | [removed: 290] [added: 493] | | | $ | [removed: 358] [added: 290] | | | $ | [removed: (277] [added: 358] | [removed: )] | | $ | [removed: 700] [added: (277] | [added: )] | | $ | [removed: 1,390] [added: 700] | |

| Cash dividends declared per common share | $ | 1.20 | | | $ | 1.20 | | | $ | 1.20 | | | $ | 1.20 | | | $ | [removed: 1.00] [added: 1.20] | |

| [removed: Share] [added: Share] and per share [removed: data:] [added: data:] | | | | | | | | | | | | | | | | | | | |

| Basic | $ | [removed: 1.25] [added: 2.24] | | | $ | [removed: 1.53] [added: 1.25] | | | $ | [removed: (1.19] [added: 1.53] | [removed: )] | | $ | [removed: 2.97] [added: (1.19] | [added: )] | | $ | [removed: 5.43] [added: 2.97] | |

| Diluted | [added: 2.23 | | | |] 1.24 | | | | 1.53 | | | | (1.19 | | ) | | 2.96 | | | [removed: | 5.42 | | |]

| Basic | [removed: 232.6] [added: 220.2] | | | | [removed: 233.5] [added: 232.6] | | | | [removed: 233.1] [added: 233.5] | | | | [removed: 235.3] [added: 233.1] | | | | [removed: 255.9] [added: 235.3] | | |

| Diluted | [removed: 233.8] [added: 221.6] | | | | [removed: 233.9] [added: 233.8] | | | | [removed: 233.1] [added: 233.9] | | | | [removed: 236.1] [added: 233.1] | | | | [removed: 256.7] [added: 236.1] | | |

| [removed: Other] [added: Other] Financial [removed: Data:] [added: Data:] | | | | | | | | | | | | | | | | | | | |

| Depreciation and amortization | $ | [removed: 888] [added: 875] | | | $ | [removed: 883] [added: 888] | | | $ | [removed: 678] [added: 883] | | | $ | [removed: 480] [added: 678] | | | $ | [removed: 393] [added: 480] | |

| Capital expenditures | [removed: 422] [added: 404] | | | | [removed: 473] [added: 422] | | | | [removed: 2,211] [added: 473] | | | | [removed: 2,469] [added: 2,211] | | | | [removed: 1,809] [added: 2,469] | | |

[removed: CF] [added: CF] INDUSTRIES HOLDINGS, [removed: INC.][added: INC.]

| | [removed: December 31,] [added: December 31,] | | | | | | | | | | | | | | | | | | |

| | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015(2)] [added: 2016] | | | | [removed: 2014] [added: 2015(1)] | | |

| | [removed: (in millions)] [added: (in millions)] | | | | | | | | | | | | | | | | | | |

| [removed: Balance] [added: Balance] Sheet [removed: Data:] [added: Data:] | | | | | | | | | | | | | | | | | | | |

| Cash and cash equivalents | $ | [removed: 682] [added: 287] | | | $ | [removed: 835] [added: 682] | | | $ | [removed: 1,164] [added: 835] | | | $ | [removed: 286] [added: 1,164] | | | $ | [removed: 1,997] [added: 286] | |

| Total assets | [removed: 12,661] [added: 12,172] | | | | [removed: 13,463] [added: 12,661] | | | | [removed: 15,131] [added: 13,463] | | | | [removed: 12,683] [added: 15,131] | | | | [removed: 11,200] [added: 12,683] | | |

CF INDUSTRIES HOLDINGS, INC.

| Gain on sale of phosphate business | — | | | | — | | | | — | | | | — | | | | 750 | | |

| | |

| --- | --- |

| (1) | As a result of our adoption of Accounting Standards Update (ASU) No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost on January 1, 2018, cost of sales, selling, general and administrative expenses and other non-operating—net were adjusted for the years ended December 31, 2017, 2016, 2015 and 2014 and other operating—net was adjusted for the year ended December 31, 2014. See Note 3—New Accounting Standards for additional information. |

| (3) | On March 17, 2014, we completed the sale of our phosphate mining and manufacturing business. The selected historical financial data includes the 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. The results of the phosphate mining and manufacturing business are not reported as discontinued operations in our consolidated statements of operations. |

[removed: Report] [added: Report] of Independent Registered Public Accounting [removed: Firm][added: Firm]

[removed: To the] [added: The] Stockholders and Board of Directors

[removed: Opinion] [added: Opinion] on the Consolidated Financial [removed: Statements][added: Statements]

We have audited the accompanying consolidated balance sheets of CF Industries Holdings, Inc. and subsidiaries (the [removed: “Company”)] [added: Company)] as of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] the related consolidated statements of operations, comprehensive [removed: income (loss),] [added: income,] equity, and cash flows for each of the years in the three-year period ended December 31, [removed: 2018,] [added: 2019,] and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] and the results of [removed: its] [added: their] operations and [removed: its] [added: their] cash flows for each of the years in the three‑year period ended December 31, [removed: 2018,] [added: 2019,] 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) [removed: (“PCAOB”),] [added: (PCAOB),] the Company’s internal control over financial reporting as of December 31, [removed: 2018,] [added: 2019,] based on criteria established in [removed: Internal] [added: *Internal] Control - Integrated Framework [removed: (2013)] [added: (2013)*] issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February [removed: 22, 2019] [added: 24, 2020] expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

[removed: Basis] [added: Basis] for [removed: Opinion][added: Opinion]

[removed: CF] [added: CF] INDUSTRIES HOLDINGS, [removed: INC.][added: INC.]

[removed: CONSOLIDATED] [added: CONSOLIDATED] STATEMENTS OF [removed: OPERATIONS][added: OPERATIONS]

| | [removed: Year] [added: Year] ended December [removed: 31,] [added: 31,] | | | | | | | | | | |

| | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | |

| | [removed: (in] [added: (in] millions, except per share [removed: amounts)] [added: amounts)] | | | | | | | | | | |

| Net sales | $ | [removed: 4,429] [added: 4,590] | | | $ | [removed: 4,130] [added: 4,429] | | | $ | [removed: 3,685] [added: 4,130] | |

| Cost of sales | [removed: 3,512] [added: 3,416] | | | | [removed: 3,696] [added: 3,512] | | | | [removed: 2,842] [added: 3,696] | | |

| Gross margin | [removed: 917] [added: 1,174] | | | | [removed: 434] [added: 917] | | | | [removed: 843] [added: 434] | | |

| Selling, general and administrative expenses | [removed: 214] [added: 239] | | | | [removed: 191] [added: 214] | | | | [removed: 173] [added: 191] | | |

| Other operating—net | [removed: (27] [added: (73] | | ) | | [removed: 18] [added: (27] | | [added: )] | | [removed: 208] [added: 18] | | |

| Total other operating costs and expenses | [removed: 187] [added: 166] | | | | [removed: 209] [added: 187] | | | | [removed: 560] [added: 209] | | |

| Equity in [removed: earnings] (loss) [added: earnings] of operating affiliates | [removed: 36] [added: (5] | | [added: )] | | [removed: 9] [added: 36] | | | | [removed: (145] [added: 9] | | [removed: )] |

| Operating earnings | [removed: 766] [added: 1,003] | | | | [removed: 234] [added: 766] | | | | [removed: 138] [added: 234] | | |

| Interest expense | [removed: 241] [added: 237] | | | | [removed: 315] [added: 241] | | | | [removed: 200] [added: 315] | | |

| Interest income | [removed: (13] [added: (20] | | ) | | [removed: (12] [added: (13] | | ) | | [removed: (5] [added: (12] | | ) |

| Loss on debt extinguishment | [removed: —] [added: 21] | | | | [removed: 53] [added: —] | | | | [removed: 167] [added: 53] | | |

| Other non-operating—net | [removed: (9] [added: (7] | | ) | | [removed: 3] [added: (9] | | [added: )] | | [removed: 2] [added: 3] | | |

| Earnings (loss) before income taxes | [removed: 547] [added: 772] | | | | [removed: (125] [added: 547] | | [removed: )] | | [removed: (226] [added: (125] | | ) |

| Income tax provision (benefit) | [removed: 119] [added: 126] | | | | [removed: (575] [added: 119] | | [removed: )] | | [removed: (68] [added: (575] | | ) |

| Net earnings [removed: (loss)] | [removed: 428] [added: 646] | | | | [removed: 450] [added: 428] | | | | [removed: (158] [added: 450] | | [removed: )] |

| Less: Net earnings attributable to noncontrolling interests | [added: — | | | | — | | | |] 138 | | | | [removed: 92] [added: —] | | | | [removed: 119] [added: 138] | | |

| Net earnings [removed: (loss)] attributable to common stockholders | $ | [removed: 290] [added: 493] | | | $ | [removed: 358] [added: 290] | | | $ | [removed: (277] [added: 358] | [removed: )] |

| Net earnings [removed: (loss)] per share attributable to common stockholders: | | | | | | | | | | | |

| Basic | $ | [removed: 1.25] [added: 2.24] | | | $ | [removed: 1.53] [added: 1.25] | | | $ | [removed: (1.19] [added: 1.53] | [removed: )] |

| Diluted | $ | [removed: 1.24] [added: 2.23] | | | $ | [removed: 1.53] [added: 1.24] | | | $ | [removed: (1.19] [added: 1.53] | [removed: )] |

| Basic | [removed: 232.6] [added: 220.2] | | | | [removed: 233.5] [added: 232.6] | | | | [removed: 233.1] [added: 233.5] | | |