CF Industries Holdings (CF) 10-K risk factor changes: FY2020 vs FY2019

Demand for nitrogen is affected by planted acreage, crop selection and fertilizer application rates, driven by population [removed: growth or] [added: growth, gross domestic product growth,] changes in dietary habits and non-food use of crops, such as production of ethanol and other biofuels among other things.

Supply is affected by available capacity and operating rates, raw material costs and availability, [added: energy prices,] government policies and global trade.

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

In 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 [removed: fertilizer.][added: fertilizer; while in 2018 and 2019, we experienced increases in the average selling price for our products.]

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

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

Most fertilizers [added: and related nitrogen products that we produce, such as industrial grade ammonium nitrate and DEF,] are global commodities, with little or no product differentiation, and customers make their purchasing decisions principally on the basis of delivered price and, to a lesser extent, customer service and product quality.

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

[added: If] Chinese [added: government policy, devaluation of the Chinese renminbi, the relaxation of Chinese environmental standards or decreases in Chinese] producers’ underlying costs such as the price of Chinese coal 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 2016 revocations of U.S. antidumping measures on solid urea and fertilizer grade ammonium nitrate from Russia [removed: has] [added: have] allowed for increases in imports from that country [added: into the United States] in recent years.

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

[removed: In April] [added: On October 9,] 2019, the European Commission (the Commission) [removed: published a regulation imposing provisional] [added: imposed definitive] anti-dumping duties on imports to the European Union of UAN manufactured in Russia, the Republic of Trinidad and Tobago and the United States.

[removed: On October 8, 2019, the Commission confirmed this duty] [added: The duties will remain] in [removed: a regulation imposing definitive measures, which became effective beginning October 9, 2019] [added: place] for an initial five-year period, after which the measures may be renewed by the Commission.

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

Ethanol production in the United States contributes significantly to corn demand, [added: representing approximately 35% of total U.S. corn demand,] due in part to federal legislation mandating use of renewable fuels.

[added: In addition, from time to time various foreign government and U.S. 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.

Nitrogen from the atmosphere and hydrogen from natural gas, coal [removed: or] [added: and] other carbon energy feedstocks, [added: or from the electrolysis of water,] are the fundamental building blocks of nitrogen fertilizers.

During [removed: 2019,] [added: 2020,] the daily closing price at the Henry Hub, the most heavily-traded natural gas pricing point in North America, reached a low of [removed: $1.82] [added: $1.34] per MMBtu on [added: September 22, 2020 and] three consecutive days in [removed: December 2019] [added: October] and a high of [removed: $4.12] [added: $3.08] per MMBtu on [removed: March 5, 2019.][added: October 27, 2020.]

During the three-year period ended December 31, [removed: 2019,] [added: 2020,] the daily closing price at the Henry Hub reached a low of [removed: $1.82] [added: $1.34] per MMBtu on [added: September 22, 2020 and] three consecutive days in [removed: December 2019] [added: October 2020] and a high of $6.88 per MMBtu on January 4, 2018.

During [removed: 2019,] [added: 2020,] the daily closing price at NBP reached a low of [removed: $2.36] [added: $1.04] per MMBtu on [removed: September 4, 2019] [added: May 22, 2020] and a high of [removed: $7.91] [added: $7.71] per MMBtu on [removed: January 17, 2019.][added: December 30, 2020.]

During the three-year period ended December 31, [removed: 2019,] [added: 2020,] the daily closing price at NBP reached a low of [removed: $2.36] [added: $1.04] per MMBtu on [removed: September 4, 2019] [added: May 22, 2020] and a high of $31.74 per MMBtu on March 2, 2018.

[removed: If high prices were to persist, especially during a period] [added: Each] of [removed: low fertilizer selling prices, it] [added: these consequences] could have a material adverse effect on our business, financial condition, results of operations [removed: and] [added: or] cash flows.

Increased demand for natural gas, particularly in the Gulf Coast Region, due to increased industrial demand and increased natural gas [removed: exports] [added: exports,] could result in increased natural gas prices.

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

In addition, we rely on railroad, [added: barge,] truck, [removed: pipeline, barge and] vessel [removed: companies,] [added: and pipeline companies] to coordinate and deliver finished products to our distribution system and to ship finished products to our customers.

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

We are subject to various [removed: self-retentions,] [added: self-insured retentions,] deductibles and limits under these insurance policies.

As a result of market conditions, our premiums, [removed: self-retentions] [added: self-insured retentions] and deductibles for certain insurance policies can increase substantially and, in some instances, certain insurance may become unavailable or available only for reduced amounts of coverage.

Over [removed: two] [added: three] hundred cases have been resolved pursuant to confidential settlements that have been or we expect will be fully funded by insurance.

As of December 31, [removed: 2019,] [added: 2020,] we had approximately $4.0 billion of total funded indebtedness, consisting primarily of secured and unsecured senior notes with varying maturity dates between 2021 and 2044, or approximately [removed: 41%] [added: 40%] of our total capitalization, and an additional $750 million of senior secured borrowing availability (reflecting no outstanding borrowings and no outstanding letters of credit) for general corporate purposes under our senior secured revolving credit agreement (as amended, the Revolving Credit Agreement).

[removed: | • |] [added: -] make it more difficult for us to pay or refinance our debts as they become due during adverse economic and industry conditions because any related decrease in revenues could cause us not to have sufficient cash flows from operations to make our scheduled debt payments; [removed: |]

[removed: | • |] [added: -] cause us to be less able to take advantage of significant business opportunities, such as acquisition opportunities, and to react to changes in market or industry conditions; [removed: |]

[removed: | • |] [added: -] cause us to use a portion of our cash flow from operations for debt service, reducing the availability of cash to fund working capital and capital expenditures, and other business activities; [removed: |]

[removed: | • |] [added: -] cause us to be more vulnerable to general adverse economic and industry conditions; [removed: |]

[removed: | • |] [added: -] expose us to the risk of increased interest rates because certain of our borrowings, including borrowings under our Revolving Credit Agreement, could be at variable rates of interest; [removed: |]

[removed: | • |] [added: -] make us more leveraged than some of our competitors, which could place us at a competitive disadvantage; [removed: |]

[removed: | • |] [added: -] restrict our ability to dispose of assets or otherwise restrict our use of funds from the disposal of assets; [removed: |]

[removed: | • |] [added: -] restrict our ability to pay dividends on our common stock or utilize excess cash to repurchase shares of our common stock; [removed: |]

[removed: | • |] [added: -] limit our ability to borrow additional monies in the future to fund working capital, capital expenditures and other general corporate purposes; and [removed: |]

Market Risks

Similarly, lower energy prices can spur increases in production in high cost regions, which would result in increased supply and pressure on selling prices.

In 2020, the average selling price for our products decreased 14% to $203 per ton compared to $235 per ton in 2019.

goals.

Other factors that drive the ethanol market include the prices of ethanol, gasoline and corn.

Lower gasoline prices and fewer aggregate miles, driven by increased automobile fuel efficiency or the continued expansion of electric

vehicles, may put pressure on ethanol prices that could result in reduced profitability and lower production for the ethanol industry.

For example, the United Kingdom is currently consulting with stakeholders and reviewing proposals to limit emissions from solid urea fertilizers, including a potential ban on urea fertilizers.

While CF Fertilisers UK Limited does not sell solid urea fertilizer in the United Kingdom, other jurisdictions may consider limits on fertilizer use, such as the European Union, which announced its Farm to Fork and Biodiversity Strategies.

Energy feedstock costs comprise a significant portion of the total production cost of nitrogen products and, relative to the industry’s marginal producers that set the global price of nitrogen, generally determine profitability for nitrogen producers.

In recent years, the cost of North American natural gas for the production of nitrogen fertilizers has been significantly lower than the energy costs of the industry’s marginal nitrogen producers.

If high natural gas prices were to persist in North America and significantly erode our favorable energy cost differentials relative to the marginal nitrogen producers, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.

If such reduced production, increased demand or changes in basis were to occur, or if other developments adversely impact the

and allow us to improve our production scheduling and planning and the utilization of our manufacturing and distribution assets.

Operational Risks

For example, our

These exposures may change over time as business practices evolve and economic conditions change.

Financial Risks

The next group of cases is expected to be set for trial after the Court resumes scheduling civil jury trials currently on hold because of the outbreak of coronavirus disease 2019 (COVID-19) pandemic.

related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies.

Environmental and Regulatory Risks

Beginning on January 1, 2021, our U.K. manufacturing plants became subject to the UK Emissions Trading Scheme (UK ETS).

At least initially, the UK ETS is expected to be similar to the EU ETS, although the UK government has stated that it intends to establish an emissions cap that is lower than what it would have been had the United Kingdom remained subject to the EU ETS.

No agreement has been reached as to whether the UK ETS will establish a linkage with the EU ETS or other national emission trading systems.

Our Medicine Hat Nitrogen Complex, in Alberta, Canada, and our Courtright Nitrogen Complex, in Ontario, Canada, are subject to provincial or federal laws that impose a price on excess GHG emissions.

Each of these laws establishes carbon dioxide equivalent (CO2e) emissions standards applicable to our facilities in terms of emissions per unit of production, with the provincial laws and the federal law using different formulas for establishing these intensity limits and changes in these limits over time.

The Canadian federal government has announced that it intends to increase the price of excess emissions of CO2e from CAD $40 per ton in 2021 and CAD $50 per ton in 2022, by CAD $15 per ton each year beginning in 2023, with the price of excess CO2e emissions reaching CAD $170 per ton by 2030.

The Paris Agreement is intended to provide a framework pursuant to which the parties to the agreement will attempt to hold the increase in global average temperatures to below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5ºC above pre-industrial levels.

Each signatory is required to develop its own national plan to attain this objective.

Increasing concern over the impacts of climate change is driving the signatories to establish ever more ambitious GHG reduction targets.

In December 2020, the United Kingdom announced a target to reduce GHG emission 68% from 1990 levels by 2030.

The EU has announced a new target to reduce its GHG emission 55% below 1990 levels by 2030.

This will require the United States to submit its own national plan for reducing GHG emissions.

Executive Orders issued by the Biden administration, including in particular an executive order issued on January 27, 2021 focusing on climate change, evidence the Administration’s intent to undertake numerous initiatives in an effort to reduce GHG emissions, including promoting renewable energy development, limiting or prohibiting new oil and gas leases on federal lands, and in general, making climate change considerations a critical component of federal policy.

In addition, to the extent that GHG

Strategic Risks

The market for green and low-carbon ammonia may be slow to develop, may not develop to the size expected or may not develop at all.

Moreover, we may not be successful in the development and implementation of our green and low-carbon ammonia projects in a timely or economic manner, or at all, due to a number of factors, many of which are beyond our control.

The market for green and low-carbon ammonia is developing and evolving, may not develop to the size or at the rate we expect, and is dependent in part on the developing market for green and low-carbon hydrogen.

These markets are heavily influenced by federal, state and local government laws, regulations and policies concerning carbon emissions and clean energy in the United States and abroad.

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

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.

In addition, from time to time various state

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.

The next group of cases was reset for trial beginning on September 14, 2020.

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We have certain net operating loss and capital loss carryforwards (collectively, the Tax Loss Carryforwards) that are available to reduce taxable income and thereby, reduce cash taxes.

As a result of the effective usage of certain of these Tax Loss Carryforwards to offset current cash taxes payable, there are no U.S. federal Tax Loss Carryforwards remaining as of December 31, 2019.

As a result, we expect an increase in cash taxes in 2020, before taking into account income tax refunds related to the settlement of the Terra Industries Inc. amended tax returns.

On December 22, 2017, the President of the United States signed into law the Tax Cut and Jobs Act of 2017 (the “Tax Act” or “Tax Reform”).

The Tax Act significantly changes how the U.S. taxes corporations.

The Tax Act requires complex computations to be performed that were not previously required in U.S. tax law, significant judgments to be made in interpretation of the provisions of the Tax Act, significant estimates in these calculations, and the preparation and analysis of information not previously relevant or regularly produced.

The U.S. Treasury Department, the IRS, and other standard-setting bodies are in the process of issuing guidance on how the provisions of the Tax Act will be applied or otherwise administered that could be different from the interpretation currently reflected in our financial statements or tax returns.

Some of this guidance could be retroactive back to the effective date of the Tax Act.

As new or amended guidance is issued with respect to the Tax Act, we may need to record adjustments to amounts previously recorded for taxes and such adjustments could have a material impact on our provision for income taxes in the period in which such adjustments are made.

In addition, foreign governments may enact tax laws in response to the Tax Act that could result in further changes to global taxation and materially affect our financial position and results of operations.

In

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

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

For a discussion and analysis of the year ended December 31, [removed: 2017,] [added: 2019 compared to December 31, 2018,] you should read Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations in our [removed: 2018] [added: 2019] Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February [removed: 22, 2019.][added: 24, 2020.]

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

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

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

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

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

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

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

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

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

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

[removed: Our] [added: We operate nitrogen] manufacturing [removed: network is] [added: complexes in the United States, Canada and the United Kingdom, which are] among the most [added: cost-advantaged,] efficient and [removed: cost-advantaged] [added: flexible] in the world, [removed: as our facilities in Canada] and [removed: the United States have access to low-cost] [added: an extensive storage, transportation and distribution network in] North [removed: American natural gas.][added: America.]

Our principal customers are cooperatives, independent fertilizer distributors, traders, [removed: wholesalers, farmers] [added: wholesalers] and industrial users.

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

Our principal assets as of December 31, [removed: 2019] [added: 2020] include:

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

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

[removed: | • |] [added: -] two United Kingdom nitrogen manufacturing facilities, located in Billingham and Ince; [removed: |]

[removed: | • |] [added: -] an extensive system of terminals and associated transportation equipment located primarily in the Midwestern United States; and [removed: |]

[removed: | • |] [added: -] 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. [removed: |]

The average selling price for our products for [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] was [removed: $235] [added: $203] per ton and [removed: $229] [added: $235] per ton, respectively.

The [removed: increase] [added: decrease] in average selling prices of [removed: 3%] [added: 14%] in [removed: 2019] [added: 2020] from [removed: 2018 increased] [added: 2019 decreased] net sales by [removed: $62] [added: $665] million.

Sales volume for our products in [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] is shown in the table below.

| | [added: | | 2020 | | | | | | | | | | | |] 2019 | | | | | | | [removed: 2018] | | | | | [added: 2018] | | [removed: 2017] | | | | | | [added: |]

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

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

| Ammonia | [removed: 3,516] | | [added: 3,767] | [added: | | | | |] $ | [removed: 1,113] [added: 1,020] | | | [removed: 3,135] | | [added: 3,516] | [added: | | | | |] $ | [removed: 1,028] [added: 1,113] | | | [removed: 4,105] | | [added: 3,135] | [added: | | | | |] $ | [removed: 1,209] [added: 1,028] | |

| Granular urea | [added: | | 5,148 | | | | | | 1,248 | | | | | |] 4,849 | | | [removed: 1,342] | | | [added: 1,342] | [removed: 4,898] | | | [removed: 1,322] | | [added: 4,898] | | [removed: 4,357] | | | [removed: 971] | [added: 1,322] | | [added: |]

| UAN | [added: | | 6,843 | | | | | | 1,063 | | | | | |] 6,807 | | | [removed: 1,270] | | | [added: 1,270] | [removed: 7,042] | | | [removed: 1,234] | | [added: 7,042] | | [removed: 7,093] | | | [removed: 1,134] | [added: 1,234] | | [added: |]

| AN | [added: | | 2,216 | | | | | | 455 | | | | | |] 2,109 | | | [removed: 506] | | | [added: 506] | [removed: 2,002] | | | [removed: 460] | | [added: 2,002] | | [removed: 2,353] | | | [removed: 497] | [added: 460] | | [added: |]

| Other | [added: | | 2,322 | | | | | | 338 | | | | | |] 2,257 | | | [removed: 359] | | | [added: 359] | [removed: 2,252] | | | [removed: 385] | | [added: 2,252] | | [removed: 2,044] | | | [removed: 319] | [added: 385] | | [added: |]

| Total | [removed: 19,538] | | [added: 20,296] | [added: | | | | |] $ | [removed: 4,590] [added: 4,124] | | | [removed: 19,329] | | [added: 19,538] | [added: | | | | |] $ | [removed: 4,429] [added: 4,590] | | | [removed: 19,952] | | [added: 19,329] | [added: | | | | |] $ | [removed: 4,130] [added: 4,429] | |

The increase in total sales volume [removed: in 2019 from 2018] was due primarily to the impact of increased supply resulting from both higher inventory levels entering [removed: 2019] [added: 2020] and higher production in [removed: 2019.][added: 2020.]

Natural gas is the principal raw material used to produce nitrogen [removed: fertilizers.][added: products.]

Natural gas is a significant cost component of manufactured nitrogen products, representing approximately [removed: 35%] [added: one-third] of our production costs.

The [removed: average] daily market price at the Henry Hub, the most heavily-traded natural gas pricing point in North America, [removed: was $2.51 per MMBtu for 2019 compared to $3.12 per MMBtu for 2018, a decrease of 20%.][added: fluctuated throughout 2020.]

The average daily market price at NBP was [removed: $4.44] [added: $3.20] per MMBtu for [removed: 2019] [added: 2020] compared to [removed: $8.07] [added: $4.44] per MMBtu for [removed: 2018,] [added: 2019,] a decrease of [removed: 45%.][added: 28%.]

Natural gas costs in cost of sales, including the impact of realized natural gas derivatives, was [removed: $2.74] [added: $2.24] per MMBtu in [removed: 2019, a 13%] [added: 2020, an 18%] decrease from [removed: $3.16] [added: $2.74] per MMBtu in [removed: 2018,] [added: 2019,] which resulted in an increase in gross margin of approximately [removed: $153] [added: $195] million.

[removed: During] [added: In addition to] the [removed: years ended December 31, 2019 and 2018,] [added: impact of market conditions discussed above,] certain items impacted our financial [removed: results.][added: results during the years ended December 31, 2020 and 2019.]

*•Our Commitment to a Clean Energy Economy*

*•Market Conditions and Current Developments*

*•Subsequent Event*

We are a leading global manufacturer of hydrogen and nitrogen products for clean energy, fertilizer, emissions abatement, and other industrial applications.

Our 3,000 employees focus on safe and reliable operations, environmental stewardship and disciplined capital and corporate management, driving our strategy to leverage our unique capabilities to accelerate the world’s transition to clean energy.

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

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

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

Our Commitment to a Clean Energy Economy

In October 2020, we announced that we are taking significant steps to support a global hydrogen and clean fuel economy, through the production of green and low-carbon ammonia.

Since ammonia is one of the most efficient ways to transport and store hydrogen and is also a fuel in its own right, we believe that the Company, as the world’s largest producer of ammonia, with an unparalleled manufacturing and distribution network and deep technical expertise, is uniquely positioned to fulfill anticipated demand for hydrogen and ammonia from green and low-carbon sources.

Our strategy is to leverage our unique capabilities to accelerate the world’s transition to clean energy.

Our approach will focus on green ammonia production, which refers to ammonia produced through a carbon-free process, and low-carbon ammonia, which relates to ammonia produced by conventional processes but with CO2 removed through carbon capture and sequestration (CCS) and other certified carbon abatement projects.

We have announced an initial green ammonia project at our flagship Donaldsonville nitrogen complex to produce approximately 20,000 tons per year of green ammonia.

Additionally, we are developing CCS and other carbon abatement projects across our production facilities that will enable us to produce low-carbon ammonia.

Market Conditions and Current Developments

*COVID-19 Pandemic*

In March 2020, the World Health Organization characterized the outbreak of coronavirus disease 2019 (COVID-19) as a pandemic.

Since that time, efforts to slow the spread of COVID-19 have intensified.

A number of countries, as well as certain states and cities within the United States, have continued to enact temporary closures of businesses, to issue shelter in place or quarantine orders, and to take other restrictive measures in response to the pandemic.

Due to the use of fertilizer products in crop production to support the global food supply chain, our business operations were designated as part of the critical infrastructure by the United States and as essential businesses in the United Kingdom and Canada, with corresponding designations for those states and provinces in which we operate that issued restrictive orders.

As a result, our manufacturing complexes continued to operate during 2020 and have continued to operate through the date of this report.

Our production of ammonia, the basic building block for our products, was 10.4 million tons in 2020 compared to 10.2 million tons in 2019.

Through the date of this filing, we have continued to ship products by all modes of transportation to our customers, and we have not experienced any significant delays in marine, rail or truck transportation services due to the pandemic.

In 2020, we did not experience a meaningful impact in customer demand as a result of the COVID-19 pandemic.

Our total volume of products shipped in 2020 of 20.3 million tons was 4% higher compared to 19.5 million tons in 2019.

In response to the pandemic, we instituted safety precautions early in 2020 to protect the health and well-being of all of our employees, including the manufacturing workforce who operate our nitrogen complexes and distribution facilities.

These safety measures included installing thermal temperature checks at each of our sites for all personnel, including contractors, who arrive at our sites, adjusting schedules to support social distancing, including changes to loading and shipping procedures, maintaining a close contact log for employees, self-quarantine logs, requiring face coverings on site, restricting visitor access, and implementing enhanced cleaning protocols and travel restrictions for employees.

We also paid approximately $19 million of bonuses to our operational workforce under a special COVID-19 bonus program, which concluded in June 2020.

In addition, since mid-March 2020, the majority of our non-operational personnel at our sites who work in administrative and operational support functions have worked remotely in order to maintain social distancing following governmental guidelines.

These administrative and operational support functions have operated effectively during this period, meeting our commitments to our customers and continuing to manage our business without interruption.

We have not furloughed any employees or instituted any reductions in pay or benefits or other significant cost containment measures due to the pandemic.

We participate in a global market, which includes a global supply chain and customer base.

The long-term effects of the COVID-19 pandemic are unclear and could adversely affect our business in the future.

We have operated our business in a remote working environment and could continue to do so for an extended duration, if necessary.

However, if the pandemic were to impact a large portion of our workforce in any one location, we might need to idle that facility temporarily or transfer other employees from other network sites, which could have an impact on our business operations, profitability and cash flow.

The impact of the COVID-19 pandemic is fluid and continues to evolve.

As a result, we cannot predict the extent to which our business, results of operations, financial condition or liquidity may be impacted by the pandemic in the future.

There was strong demand for fertilizer in 2020 as we shipped 20.3 million tons of product compared to 19.5 million tons in 2019, which increased net sales by $199 million.

Our sales volumes in 2020 were higher across all of our major products compared to 2019.

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| • | *Off-Balance Sheet Arrangements* |

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We are a leading global fertilizer and chemical company.

Our 3,000 employees operate world-class manufacturing complexes in Canada, the United Kingdom and the United States.

We serve our customers in North America through our production, storage, transportation and distribution network.

We also reach a global customer base with exports from our Donaldsonville, Louisiana, 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 from a joint venture ammonia facility in the Republic of Trinidad and Tobago in which we own a 50 percent interest.

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CF INDUSTRIES HOLDINGS, INC.

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

Our net sales, cash flows and estimates of future cash flows related to nitrogen-based [removed: fertilizers] [added: products] are sensitive to changes in [removed: fertilizer] [added: selling] prices as well as changes in the prices of natural gas and other raw materials unless these costs have been fixed or hedged.

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: $21, $15] [added: $22, $14] and $15, respectively.

Natural gas is the largest and most volatile component of the manufacturing cost for nitrogen-based [removed: fertilizers.][added: products.]

[removed: We manage] [added: At certain times, we have managed] the risk of changes in natural gas prices [removed: primarily with] [added: through] the use of derivative financial instruments.

The derivative instruments that we [added: may] use [added: for this purpose] are primarily natural gas fixed price swaps, basis swaps and options.

As of December 31, [removed: 2019,] [added: 2020,] we had natural gas fixed price [removed: swaps, basis] swaps and [removed: options] [added: basis swaps] covering certain periods through March [removed: 2020.][added: 2022.]

As of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] we had open derivative contracts for [removed: 41.1] [added: 34.1] million MMBtus and [removed: 6.6] [added: 41.1] million MMBtus, respectively.

A $1.00 per MMBtu increase in the forward curve prices of natural gas at December 31, [removed: 2019] [added: 2020] would result in a favorable change in the fair value of these derivative positions of [removed: $17] [added: $18] million, and a $1.00 per MMBtu decrease in the forward curve prices of natural gas would change their fair value unfavorably by [removed: $19] [added: $18] million.

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

As of December 31, [removed: 2019,] [added: 2020,] the carrying value and fair value of our senior notes was approximately $3.96 billion and [removed: $4.29] [added: $4.73] billion, respectively.

Borrowings under [removed: our revolving credit agreement] [added: the 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: our revolving credit agreement] [added: the Revolving Credit Agreement] as of December 31, [removed: 2019 or 2018, or during 2019] [added: 2020] or [removed: 2018.][added: 2019.]

Maximum borrowings under the Revolving Credit Agreement during 2020 were $500 million.

The weighted-average annual interest rate of borrowings under the Revolving Credit Agreement during 2020 was 2.05%.

There were no borrowings under the Prior Credit Agreement or the Revolving Credit Agreement during 2019.

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

[removed: Our] [added: We operate nitrogen] manufacturing [removed: network is] [added: complexes in the United States, Canada and the United Kingdom, which are] among the most [added: cost-advantaged,] efficient and [removed: cost-advantaged] [added: flexible] in the world, [removed: as our facilities in Canada] and [removed: the United States have access to low-cost] [added: an extensive storage, transportation and distribution network in] North [removed: American natural gas.][added: America.]

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

Our other nitrogen products include diesel exhaust fluid (DEF), urea liquor, nitric acid and aqua ammonia, which are sold primarily to our industrial customers, and compound fertilizer products (NPKs), which are solid granular fertilizer products for which the nutrient content is a combination of nitrogen, [removed: phosphorus,] [added: phosphorus] and potassium.

Our principal assets as of December 31, [removed: 2019] [added: 2020] include:

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

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

[removed: | • |] [added: -] two United Kingdom nitrogen manufacturing facilities, located in Billingham and Ince; [removed: |]

[removed: | • |] [added: -] an extensive system of terminals and associated transportation equipment located primarily in the Midwestern United States; and [removed: |]

[removed: | • |] [added: -] 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. [removed: |]

[removed: Our] [added: Prior to April 2, 2018, Terra Nitrogen, Limited Partnership, which owns and operates our] nitrogen manufacturing facility in Verdigris, Oklahoma, [removed: is owned and operated by] [added: was a subsidiary of] Terra [removed: Nitrogen, Limited Partnership (TNLP).][added: Nitrogen Company, L.P. (TNCLP).]

[removed: Prior to April 2, 2018, TNLP was a subsidiary of Terra Nitrogen Company, L.P. (TNCLP), which] [added: TNCLP] was a publicly traded limited partnership of which we were the sole general partner and the majority limited partner, and in which we owned an approximate 75.3% interest.

In 2018, we announced [removed: that] [added: that,] in accordance with the terms of TNCLP’s First Amended and Restated Agreement of Limited Partnership (as amended by Amendment No. 1 to the First Amended and Restated Agreement of Limited Partnership, the TNCLP Agreement of Limited Partnership), Terra Nitrogen GP Inc. (TNGP), the sole general partner of TNCLP and an indirect wholly owned subsidiary of CF Holdings, elected to exercise its right to purchase all of the 4,612,562 publicly traded common units of TNCLP (the TNCLP Public Units).

In [added: late 2015 and] 2016, we completed [removed: our] [added: certain] capacity expansion projects at Donaldsonville, Louisiana and Port Neal, Iowa.

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

[removed: On February 1, 2016,] CHS also [removed: began receiving] [added: receives] deliveries pursuant to a supply agreement under which CHS has the right to purchase annually from CFN up to approximately 1.1 million tons of granular urea and 580,000 tons of UAN at market prices.

[removed: On] [added: In] July [removed: 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 million, and CF Fertilisers UK became wholly owned by us.

For the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017,] [added: 2018,] we sold [removed: 19.5] [added: 20.3] million, [removed: 19.3] [added: 19.5] million and [removed: 20.0] [added: 19.3] million product tons generating net sales of [removed: $4.59] [added: $4.12] billion, [removed: $4.43] [added: $4.59] billion and [removed: $4.13] [added: $4.43] billion, respectively.

Copies of our Corporate Governance Guidelines, Code of Corporate Conduct and charters for the Audit Committee, Compensation and Management Development Committee, [removed: and] Corporate Governance and Nominating [added: Committee, and Environmental Sustainability and Community] Committee of our Board of Directors (the Board) are also available on our Internet website.

[removed: We will provide electronic or paper copies of] these documents free of charge upon request.

| | [added: | | 2020 | | | | | | | | | | | |] 2019 | | | | | | | [removed: 2018] | | | | | [added: 2018] | | [removed: 2017] | | | | | | [added: |]

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

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

| Products | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | |]

| Ammonia | [removed: 3,516] | | [added: 3,767] | [added: | | | | |] $ | [removed: 1,113] [added: 1,020] | | | [removed: 3,135] | | [added: 3,516] | [added: | | | | |] $ | [removed: 1,028] [added: 1,113] | | | [removed: 4,105] | | [added: 3,135] | [added: | | | | |] $ | [removed: 1,209] [added: 1,028] | |

| Granular urea | [added: | | 5,148 | | | | | | 1,248 | | | | | |] 4,849 | | | [removed: 1,342] | | | [added: 1,342] | [removed: 4,898] | | | [removed: 1,322] | | [added: 4,898] | | [removed: 4,357] | | | [removed: 971] | [added: 1,322] | | [added: |]

| UAN | [added: | | 6,843 | | | | | | 1,063 | | | | | |] 6,807 | | | [removed: 1,270] | | | [added: 1,270] | [removed: 7,042] | | | [removed: 1,234] | | [added: 7,042] | | [removed: 7,093] | | | [removed: 1,134] | [added: 1,234] | | [added: |]

| AN | [added: | | 2,216 | | | | | | 455 | | | | | |] 2,109 | | | [removed: 506] | | | [added: 506] | [removed: 2,002] | | | [removed: 460] | | [added: 2,002] | | [removed: 2,353] | | | [removed: 497] | [added: 460] | | [added: |]

| Other(1) | [added: | | 2,322 | | | | | | 338 | | | | | |] 2,257 | | | [removed: 359] | | | [added: 359] | [removed: 2,252] | | | [removed: 385] | | [added: 2,252] | | [removed: 2,044] | | | [removed: 319] | [added: 385] | | [added: |]

| Total | [removed: 19,538] | | [added: 20,296] | [added: | | | | |] $ | [removed: 4,590] [added: 4,124] | | | [removed: 19,329] | | [added: 19,538] | [added: | | | | |] $ | [removed: 4,429] [added: 4,590] | | | [removed: 19,952] | | [added: 19,329] | [added: | | | | |] $ | [removed: 4,130] [added: 4,429] | |

[removed: | (1) | Other] [added: (1)Other] segment products include DEF, urea liquor, nitric acid, aqua ammonia and NPKs. [removed: |]

Gross margin was [removed: $1,174] [added: $801] million, [removed: $917] [added: $1,174] million and [removed: $434] [added: $917] million for the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017,] [added: 2018,] respectively.

We own and operate seven nitrogen [removed: fertilizer] manufacturing facilities in North America, including five nitrogen [removed: fertilizer] manufacturing facilities in the United States, and two in Canada.

As of December 31, [removed: 2019,] [added: 2020,] the combined production capacity of these seven facilities represented approximately [removed: 39%,] [added: 37%,] 42%, 44% and 19% of North American ammonia, granular urea, UAN and AN production capacity, respectively.

Each of our nitrogen [removed: fertilizer] manufacturing facilities in North America has on-site storage to provide [removed: flexibility to manage the flow of outbound shipments without impacting production.]

The following table shows the production capacities as of December 31, [removed: 2019] [added: 2020] at each of our nitrogen manufacturing facilities:

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

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

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

| Donaldsonville, Louisiana(7) | [added: | |] 4,335 | | | [added: | | |] 1,390 | | | [added: | | |] 3,255 | | | [added: | | |] 2,635 | | | [added: | | |] — | | | [added: | | |] 445 | | [added: |]

We are a leading global manufacturer of hydrogen and nitrogen products for clean energy, fertilizer, emissions abatement, and other industrial applications.

Our 3,000 employees focus on safe and reliable operations, environmental stewardship and disciplined capital and corporate management, driving our strategy to leverage our unique capabilities to accelerate the world’s transition to clean energy.

Our principal customers are cooperatives, independent fertilizer distributors, traders, wholesalers and industrial users.

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

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

We have a strategic venture with CHS under which CHS owns an equity interest in CFN, a subsidiary of CF Holdings, which represents approximately 11% of the membership interests of CFN.

We will provide electronic or paper copies of

Our Commitment to a Clean Energy Economy

In October 2020, we announced that we are taking significant steps to support a global hydrogen and clean fuel economy, through the production of green and low-carbon ammonia.

Since ammonia is one of the most efficient ways to transport and store hydrogen and is also a fuel in its own right, we believe that the Company, as the world’s largest producer of ammonia, with an unparalleled manufacturing and distribution network and deep technical expertise, is uniquely positioned to fulfill anticipated demand for hydrogen and ammonia from green and low-carbon sources.

Our strategy is to leverage our unique capabilities to accelerate the world’s transition to clean energy.

Our approach will focus on green ammonia production, which refers to ammonia produced through a carbon-free process, and low-carbon ammonia, which relates to ammonia produced by conventional processes but with CO2 removed through carbon capture and sequestration (CCS) and other certified carbon abatement projects.

We have announced an initial green ammonia project at our flagship Donaldsonville nitrogen complex to produce approximately 20,000 tons per year of green ammonia.

Additionally, we are developing CCS and other carbon abatement projects across our production facilities that will enable us to produce low-carbon ammonia.

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flexibility to manage the flow of outbound shipments without impacting production.

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(2)Gross ammonia capacity includes ammonia used to produce upgraded products.

Urea liquor and DEF production capacities are included in Other.

Production of DEF can be increased by reducing urea and/or UAN production.

(7)The Donaldsonville facility capacities present an estimated production mix.

The facility is also capable of producing up to 1.2 million product tons of 32.5% DEF.

(9)The Yazoo City facility’s production capacity depends on product mix.

UAN production can be increased to 450,000 tons by reducing the production of AN to 900,000 tons.

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In addition, to support safe and reliable operations at our continuous process manufacturing facilities, we conduct scheduled inspections, replacements and overhauls of our plant machinery and equipment, which are referred to as turnarounds.

A further description of turnaround activities is included in Note 6—Property, Plant and Equipment—Net to our consolidated financial statements included in Item 8 of this report.

Beginning on January 1, 2021, our U.K. manufacturing plants became subject to the UK Emissions Trading Scheme (UK ETS).

At least initially, the UK ETS is expected to be similar to the EU ETS, although the U.K. government has stated that it intends to establish an emissions cap that is lower than what it would have been had the United Kingdom remained subject to the EU ETS.

No agreement has been reached as to whether the UK ETS will establish a linkage with the EU ETS or other national emission trading systems.

In December 2020, the Canadian federal government announced that it intended to increase the price of excess emissions of CO2e by CAD $15 per ton for each year beginning in 2023, with the price of excess CO2e emissions reaching CAD $170 per ton by 2030.

Oral argument on the appeal of these decisions was heard by the Supreme Court of Canada in September 2020.

Except for registration and recordkeeping provisions, the EPS has not yet gone into effect in Ontario and facilities in Ontario are subject to the federal OBPS.

However, in September 2020, ECCC announced that the Ontario EPS met the federal government’s minimum stringency benchmark requirements, and the federal carbon pricing system will no longer apply in Ontario at a date to be set in consultation between ECCC and the Ontario government.

The Alberta government has announced that it will increase the levy for excess emissions of CO2e from CAD $30 per ton in 2020 by CAD $10 per year, up to CAD $50 per ton in 2022, to match the price of carbon established in the OBPS.

Other than

Each signatory is required to develop its own national plan to attain this objective.

We are a leading global fertilizer and chemical company.

Our 3,000 employees operate world-class manufacturing complexes in Canada, the United Kingdom and the United States.

We serve our customers in North America through our production, storage, transportation and distribution network.

We also reach a global customer base with exports from our Donaldsonville, Louisiana, 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 a joint venture ammonia facility in the Republic of Trinidad and Tobago in which we own a 50 percent interest.

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

These plants increased our overall

At our Donaldsonville complex, the ammonia plant was placed in service in the fourth quarter of 2016, the UAN plant was placed in service in the first quarter of 2016 and the granular urea plant was placed in service in the fourth quarter of 2015.

At our Port Neal, Iowa complex, both the ammonia and granular urea plants were placed in service in the fourth quarter of 2016.

We commenced a strategic venture with CHS on February 1, 2016, at which time CHS made a capital contribution of $2.8 billion to CFN in exchange for membership interests in CFN, which represented approximately 11% of the total membership interests of CFN.

In July 2015, we acquired the remaining 50% equity interest in CF Fertilisers UK not previously owned by us for total consideration of $570 million, and CF Fertilisers UK became wholly owned by us.

In 2016, we completed capacity expansion projects at Donaldsonville, Louisiana and Port Neal, Iowa which increased our production capacity by approximately 25% for a total capital cost of $5.2 billion.

In 2018, we announced that TNGP elected to exercise its right to purchase the TNCLP Public Units.

TNGP completed the Purchase on April 2, 2018, for an aggregate cash purchase price of $388 million.

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Over [removed: two] [added: three] hundred cases have been resolved pursuant to confidential settlements that have been or we expect will be fully funded by insurance.

The Company cannot provide a range of reasonably possible loss due to the [removed: lack of damages discovery for many of the remaining claims and the] uncertain nature of this litigation, including uncertainties around the potential allocation of responsibility by a jury to other defendants or responsible third parties.

Business—Environmental, Health and [removed: Safety] [added: Safety—CERCLA/Remediation Matters] and Note 20—Contingencies to our consolidated financial statements included in Item 8 of this report.

The next group of cases is expected to be set for trial after the Court resumes scheduling civil jury trials currently on hold because of the coronavirus disease 2019 (COVID-19) pandemic.

The next group of cases was reset for trial beginning on September 14, 2020.

Florida Environmental Matter

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).

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 matter and we agreed to indemnify Mosaic with respect to losses arising out of the matter 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 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

CF INDUSTRIES HOLDINGS, INC.

sale of the phosphate mining and manufacturing business in March 2014.

We and Mosaic have separately had continued discussions with the EPA subsequent to our sale of the phosphate mining and manufacturing business with respect to this matter.

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.

The settlement will not have a material impact on our consolidated financial position, results of operations or cash flows.

Other Environmental Matters

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

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

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

For the fiscal year [removed: ended December] [added: ended December] 31, [removed: 2019][added: 2020]

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

| For the transition period from to | | | | [added: | | | | | | | |]

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

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

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

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

| Deerfield, | | [added: | | | |] Illinois | | | | | [added: | | | | | | | | | |] (Zip Code) | [added: | |]

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

[removed: (847)] [added: (847)] 405-2400

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

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

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

The aggregate market value of the registrant’s common stock held by non-affiliates as of June [removed: 28, 2019] [added: 30, 2020] (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: $10,166,447,335.][added: $5,984,082,631.]

[removed: 216,171,177] [added: 214,159,740] shares of the registrant’s common stock, par value $0.01 per share, were outstanding as of January [removed: 31, 2020.][added: 29, 2021.]

Portions of the registrant’s definitive proxy statement for its [removed: 2020] [added: 2021] 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: 2019] [added: 2020] 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.

| | [added: | |] [Item [removed: 1.](#sB5C34DB3DAE45942AB84FFFD26120136)] [added: 1.](#i78d6fe538eee477580bfaa53696caf60_16)] | [removed: [Business](#sB5C34DB3DAE45942AB84FFFD26120136)] | [removed: [1](#sB5C34DB3DAE45942AB84FFFD26120136)] | [added: [Business](#i78d6fe538eee477580bfaa53696caf60_16) | | | [1](#i78d6fe538eee477580bfaa53696caf60_16) | | |]

| | [added: | |] [Item [removed: 1A.](#s80A6A74891D750F099532D8DB9AF1923)] [added: 1A.](#i78d6fe538eee477580bfaa53696caf60_19)] | [added: | |] [Risk [removed: Factors](#s80A6A74891D750F099532D8DB9AF1923)] [added: Factors](#i78d6fe538eee477580bfaa53696caf60_19)] | [removed: [11](#s80A6A74891D750F099532D8DB9AF1923)] | [added: | [12](#i78d6fe538eee477580bfaa53696caf60_19) | | |]

| | [added: | |] [Item [removed: 1B.](#s31BAD05D91EC55F0B2DA82EEE199418B)] [added: 1B.](#i78d6fe538eee477580bfaa53696caf60_22)] | [added: | |] [Unresolved Staff [removed: Comments](#s31BAD05D91EC55F0B2DA82EEE199418B)] [added: Comments](#i78d6fe538eee477580bfaa53696caf60_22)] | [removed: [27](#s31BAD05D91EC55F0B2DA82EEE199418B)] | [added: | [28](#i78d6fe538eee477580bfaa53696caf60_22) | | |]

| | [added: | |] [Item [removed: 2.](#s4DD59D604F5D507D99A7263FF35E828B)] [added: 2.](#i78d6fe538eee477580bfaa53696caf60_25)] | [removed: [Properties](#s4DD59D604F5D507D99A7263FF35E828B)] | [removed: [27](#s4DD59D604F5D507D99A7263FF35E828B)] | [added: [Properties](#i78d6fe538eee477580bfaa53696caf60_25) | | | [28](#i78d6fe538eee477580bfaa53696caf60_25) | | |]

| | [added: | |] [Item [removed: 3.](#sBC1C4EDF0C5754E698BBCCEC2374677D)] [added: 3.](#i78d6fe538eee477580bfaa53696caf60_28)] | [added: | |] [Legal [removed: Proceedings](#sBC1C4EDF0C5754E698BBCCEC2374677D)] [added: Proceedings](#i78d6fe538eee477580bfaa53696caf60_28)] | [removed: [27](#sBC1C4EDF0C5754E698BBCCEC2374677D)] | [added: | [28](#i78d6fe538eee477580bfaa53696caf60_28) | | |]

| | [added: | |] [Item [removed: 4.](#sDEC484F60707513E8B72FB5C01846255)] [added: 4.](#i78d6fe538eee477580bfaa53696caf60_31)] | [added: | |] [Mine Safety [removed: Disclosures](#sDEC484F60707513E8B72FB5C01846255)] [added: Disclosures](#i78d6fe538eee477580bfaa53696caf60_31)] | [removed: [28](#sDEC484F60707513E8B72FB5C01846255)] | [added: | [28](#i78d6fe538eee477580bfaa53696caf60_31) | | |]

| | [added: | |] [Item [removed: 5.](#sC1E351281086579C88DD58DCCD3CCB05)] [added: 5.](#i78d6fe538eee477580bfaa53696caf60_37)] | [added: | |] [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#sC1E351281086579C88DD58DCCD3CCB05)] [added: Securities](#i78d6fe538eee477580bfaa53696caf60_37)] | [removed: [29](#sC1E351281086579C88DD58DCCD3CCB05)] | [added: | [29](#i78d6fe538eee477580bfaa53696caf60_37) | | |]

| | [added: | |] [Item [removed: 7.](#s3F4F634AA57A5C008829B5105F12F542)] [added: 7.](#i78d6fe538eee477580bfaa53696caf60_43)] | [added: | |] [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s3F4F634AA57A5C008829B5105F12F542)] [added: Operations](#i78d6fe538eee477580bfaa53696caf60_43)] | [removed: [32](#s3F4F634AA57A5C008829B5105F12F542)] | [added: | [30](#i78d6fe538eee477580bfaa53696caf60_43) | | |]

| | [added: | |] [Item [removed: 7A.](#s186B12E459265CC090A274A3936BD96E)] [added: 7A.](#i78d6fe538eee477580bfaa53696caf60_79)] | [added: | |] [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s186B12E459265CC090A274A3936BD96E)] [added: Risk](#i78d6fe538eee477580bfaa53696caf60_79)] | [removed: [62](#s186B12E459265CC090A274A3936BD96E)] | [added: | [59](#i78d6fe538eee477580bfaa53696caf60_79) | | |]

| | [added: | |] [Item [removed: 8.](#sC071858051F058B0B75A1979EA08325D)] [added: 8.](#i78d6fe538eee477580bfaa53696caf60_82)] | [added: | |] [Financial Statements and Supplementary [removed: Data](#sC071858051F058B0B75A1979EA08325D)] [added: Data](#i78d6fe538eee477580bfaa53696caf60_82)] | [removed: [63](#sC071858051F058B0B75A1979EA08325D)] | [added: | [60](#i78d6fe538eee477580bfaa53696caf60_82) | | |]

| | | [added: | | | |] [Report of Independent Registered Public Accounting [removed: Firm](#s3B3E0BBAB7635992B6F819F2CBF4B3E8)] [added: Firm](#i78d6fe538eee477580bfaa53696caf60_85)] | [removed: [63](#s3B3E0BBAB7635992B6F819F2CBF4B3E8)] | [added: | [60](#i78d6fe538eee477580bfaa53696caf60_85) | | |]

| | | [added: | | | |] [Consolidated Statements of [removed: Operations](#s00DF7266BC1952088F83C205F810D82D)] [added: Operations](#i78d6fe538eee477580bfaa53696caf60_88)] | [removed: [65](#s00DF7266BC1952088F83C205F810D82D)] | [added: | [62](#i78d6fe538eee477580bfaa53696caf60_88) | | |]

| | | [added: | | | |] [Consolidated Statements of Comprehensive [removed: Income](#s56B7F0C1ACD15FBEA4A38DC86B41AB72)] [added: Income](#i78d6fe538eee477580bfaa53696caf60_91)] | [removed: [66](#s56B7F0C1ACD15FBEA4A38DC86B41AB72)] | [added: | [63](#i78d6fe538eee477580bfaa53696caf60_91) | | |]

| | | [added: | | | |] [Consolidated Balance [removed: Sheets](#s5AAA1C30ECBB5E48BE1A4399ACAD1B21)] [added: Sheets](#i78d6fe538eee477580bfaa53696caf60_94)] | [removed: [67](#s5AAA1C30ECBB5E48BE1A4399ACAD1B21)] | [added: | [64](#i78d6fe538eee477580bfaa53696caf60_94) | | |]

| | | [added: | | | |] [Consolidated Statements of [removed: Equity](#sE423392102D2505E9E56785749C4990A)] [added: Equity](#i78d6fe538eee477580bfaa53696caf60_100)] | [removed: [68](#sE423392102D2505E9E56785749C4990A)] | [added: | [65](#i78d6fe538eee477580bfaa53696caf60_100) | | |]

| | | [added: | | | |] [Consolidated Statements of Cash [removed: Flows](#sDD91E6D98609504482946BFD686F9273)] [added: Flows](#i78d6fe538eee477580bfaa53696caf60_106)] | [removed: [69](#sDD91E6D98609504482946BFD686F9273)] | [added: | [66](#i78d6fe538eee477580bfaa53696caf60_106) | | |]

| | | [added: | | | |] [Notes to Consolidated Financial [removed: Statements](#sFEE45E83CA9A5FE096D5EC6FBA7B4AD5)] [added: Statements](#i78d6fe538eee477580bfaa53696caf60_109)] | [removed: [70](#sFEE45E83CA9A5FE096D5EC6FBA7B4AD5)] | [added: | [67](#i78d6fe538eee477580bfaa53696caf60_109) | | |]

| | [added: | |] [Item [removed: 9.](#s29B17E054FB15351A18A82D5E5F99986)] [added: 9.](#i78d6fe538eee477580bfaa53696caf60_214)] | [added: | |] [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s29B17E054FB15351A18A82D5E5F99986)] [added: Disclosure](#i78d6fe538eee477580bfaa53696caf60_214)] | [removed: [127](#s29B17E054FB15351A18A82D5E5F99986)] | [added: | [112](#i78d6fe538eee477580bfaa53696caf60_214) | | |]

| | [added: | |] [Item [removed: 9A.](#s8EA202C18AE751CABA71441BABD3E4E4)] [added: 9A.](#i78d6fe538eee477580bfaa53696caf60_217)] | [added: | |] [Controls and [removed: Procedures](#s8EA202C18AE751CABA71441BABD3E4E4)] [added: Procedures](#i78d6fe538eee477580bfaa53696caf60_217)] | [removed: [127](#s0F33CE091DE659B798070970F6D1A748)] | [added: | [112](#i78d6fe538eee477580bfaa53696caf60_217) | | |]

| | [added: | |] [Item [removed: 9B.](#s97F8154E4BEA544888F50554DA9F4E9E)] [added: 9B.](#i78d6fe538eee477580bfaa53696caf60_223)] | [added: | |] [Other [removed: Information](#s97F8154E4BEA544888F50554DA9F4E9E)] [added: Information](#i78d6fe538eee477580bfaa53696caf60_223)] | [removed: [129](#s97F8154E4BEA544888F50554DA9F4E9E)] | [added: | [114](#i78d6fe538eee477580bfaa53696caf60_223) | | |]

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

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| [PART I](#i78d6fe538eee477580bfaa53696caf60_13) | | | | | | | | | | | |

| [PART II](#i78d6fe538eee477580bfaa53696caf60_34) | | | | | | | | | | | |

| | | | [Item 6.](#i78d6fe538eee477580bfaa53696caf60_40) | | | [\[Reserved\]](#i78d6fe538eee477580bfaa53696caf60_40) | | | [29](#i78d6fe538eee477580bfaa53696caf60_40) | | |

| [PART IV](#i78d6fe538eee477580bfaa53696caf60_244) | | | | | | | | | | | |

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| [PART I](#sC52B158C702558C2A5F58F85C04FA961) | | | |

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

| | [Item 6.](#sABF9F4EADF7655D3B99BCF006165B531) | [Selected Financial Data](#sABF9F4EADF7655D3B99BCF006165B531) | [30](#sABF9F4EADF7655D3B99BCF006165B531) |

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

Our common stock is traded on the New York Stock Exchange under the symbol “CF.” As of February [removed: 18, 2020,] [added: 16, 2021,] there were [removed: 689] [added: 682] stockholders of record.

The following table sets forth [removed: stock repurchases] [added: share repurchases, on a trade date basis,] for each of the three months of the quarter ended December 31, [removed: 2019:][added: 2020:]

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

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

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

[removed: | (3) | Includes 4,893] [added: (1)Represents] shares withheld to pay employee tax obligations upon the [added: lapse of restrictions on restricted stock units and the] exercise of nonqualified stock options. [removed: |]

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| October 1, 2020 - October 31, 2020 | | | 5,059 | | | | | | $ | 31.33 | | | | | — | | | | | | $ | 563,407 | |

| November 1, 2020 - November 30, 2020 | | | — | | | | | | — | | | | | | — | | | | | | 563,407 | | |

| December 1, 2020 - December 31, 2020 | | | 70,392 | | | | | | 39.54 | | | | | | — | | | | | | 563,407 | | |

| Total | | | 75,451 | | | | | | $ | 38.99 | | | | | — | | | | | | | | |

This share repurchase program is discussed in Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Share Repurchase Program and in Note 18—Stockholders’ Equity, in the notes to the consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data.

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| 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 | | | | | |

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

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CF INDUSTRIES HOLDINGS, INC.

The following selected historical financial data as of December 31, 2019 and 2018 and for the years ended December 31, 2019, 2018 and 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, 2017, 2016 and 2015 and for the years ended December 31, 2016 and 2015 have been derived from our consolidated financial statements that are not included in this document.

The selected historical financial data should be read in conjunction with the information contained in Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8.

Financial Statements and Supplementary Data.

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| | Year ended December 31, | | | | | | | | | | | | | | | | | | |

| | 2019 | | | | 2018 | | | | 2017 | | | | 2016 | | | | 2015(1) | | |

| | (in millions, except per share amounts) | | | | | | | | | | | | | | | | | | |

| Statement of Operations Data: | | | | | | | | | | | | | | | | | | | |

| Net sales | $ | 4,590 | | | $ | 4,429 | | | $ | 4,130 | | | $ | 3,685 | | | $ | 4,308 | |

| Cost of sales | 3,416 | | | | 3,512 | | | | 3,696 | | | | 2,842 | | | | 2,752 | | |

| Gross margin | 1,174 | | | | 917 | | | | 434 | | | | 843 | | | | 1,556 | | |

| Selling, general and administrative expenses | 239 | | | | 214 | | | | 191 | | | | 173 | | | | 169 | | |

| Transaction costs | — | | | | — | | | | — | | | | 179 | | | | 57 | | |

| Other operating—net | (73 | | ) | | (27 | | ) | | 18 | | | | 208 | | | | 92 | | |

| Total other operating costs and expenses | 166 | | | | 187 | | | | 209 | | | | 560 | | | | 318 | | |

| Equity in (losses) earnings of operating affiliates | (5 | | ) | | 36 | | | | 9 | | | | (145 | | ) | | (35 | | ) |

| Operating earnings | 1,003 | | | | 766 | | | | 234 | | | | 138 | | | | 1,203 | | |

| Interest expense—net | 217 | | | | 228 | | | | 303 | | | | 195 | | | | 131 | | |

| Loss on debt extinguishment | 21 | | | | — | | | | 53 | | | | 167 | | | | — | | |

| Other non-operating—net | (7 | | ) | | (9 | | ) | | 3 | | | | 2 | | | | 14 | | |

| Earnings (loss) before income taxes and equity in earnings of non-operating affiliates | 772 | | | | 547 | | | | (125 | | ) | | (226 | | ) | | 1,058 | | |

| Income tax provision (benefit) | 126 | | | | 119 | | | | (575 | | ) | | (68 | | ) | | 396 | | |

| Equity in earnings of non-operating affiliates—net of taxes | — | | | | — | | | | — | | | | — | | | | 72 | | |

| Net earnings (loss) | 646 | | | | 428 | | | | 450 | | | | (158 | | ) | | 734 | | |

| Less: Net earnings attributable to noncontrolling interests | 153 | | | | 138 | | | | 92 | | | | 119 | | | | 34 | | |

| Net earnings (loss) attributable to common stockholders | $ | 493 | | | $ | 290 | | | $ | 358 | | | $ | (277 | ) | | $ | 700 | |

| Cash dividends declared per common share | $ | 1.20 | | | $ | 1.20 | | | $ | 1.20 | | | $ | 1.20 | | | $ | 1.20 | |

| Share and per share data: | | | | | | | | | | | | | | | | | | | |

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

| Basic | $ | 2.24 | | | $ | 1.25 | | | $ | 1.53 | | | $ | (1.19 | ) | | $ | 2.97 | |

| Diluted | 2.23 | | | | 1.24 | | | | 1.53 | | | | (1.19 | | ) | | 2.96 | | |

| Weighted-average common shares outstanding: | | | | | | | | | | | | | | | | | | | |

| Basic | 220.2 | | | | 232.6 | | | | 233.5 | | | | 233.1 | | | | 235.3 | | |

| Diluted | 221.6 | | | | 233.8 | | | | 233.9 | | | | 233.1 | | | | 236.1 | | |

| Other Financial Data: | | | | | | | | | | | | | | | | | | | |

| Depreciation and amortization | $ | 875 | | | $ | 888 | | | $ | 883 | | | $ | 678 | | | $ | 480 | |

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

We have audited the accompanying consolidated balance sheets of CF Industries Holdings, Inc. and subsidiaries (the Company) as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] 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, [removed: 2019,] [added: 2020,] 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: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the results of [removed: their] [added: its] operations and [removed: their] [added: its] cash flows for each of the years in the three‑year period ended December 31, [removed: 2019,] [added: 2020,] 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) (PCAOB), the Company’s internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in *Internal [removed: Control - Integrated] [added: Control* *–* *Integrated] Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 24, [removed: 2020] [added: 2021] expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

As discussed in Note 3 to the consolidated financial statements, the Company [removed: has] changed its method of accounting for Leases as of January 1, 2019 due to the adoption of Accounting Standards Update [added: No.] 2016-02, [removed: Leases (Topic 842).][added: *Leases* *(Topic 842)*.]

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex [removed: judgment.][added: judgments.]

As discussed in Note 11 to the consolidated financial statements, the Company’s projected benefit obligation (PBO) associated with its pension plans established in North America and the United Kingdom were [removed: $839] [added: $884] million and [removed: $597] [added: $643] million as of December 31, [removed: 2019,] [added: 2020,] respectively.

The Company’s PBO represents an actuarially determined estimate of the present value of the future benefit payments [added: attributed to past service] under its pension plans to the beneficiaries of those plans.

Determining the PBO requires the Company to make assumptions, including [added: the] selection of a discount rate for both the North American and United Kingdom plans and an adjusted retail price index (RPI) for the United Kingdom plans.

The selected discount rate and RPI are then applied to these future benefit payments in determining the present value of those obligations as of December 31, [removed: 2019.][added: 2020.]

Specialized skills [removed: and knowledge] were needed to evaluate the assumptions regarding the discount rates utilized in the measurement of the PBO for both the North American and United Kingdom plans and the adjusted RPI utilized in the measurement of the PBO [removed: in regards to] [added: for] the [added: Company’s] United Kingdom plans.

The [added: following are the] primary procedures we performed to address this critical audit [removed: matter included the following.][added: matter.]

We [added: evaluated the design and] tested [added: the operating effectiveness of] certain internal controls over the Company’s [removed: PBO] [added: pension accounting] process, including controls related to the determination of discount rates and adjusted RPI assumptions utilized in determining the Company’s [removed: PBO.][added: PBO for both the North American and United Kingdom pension plans.]

[removed: In addition, these] [added: We involved] actuarial professionals [added: with specialized skills and knowledge, who] evaluated the Company’s PBO by evaluating the Company’s actuary reports.

[removed: | – | developed] [added: –developed] an understanding and assessed the methods used by the Company’s actuaries to develop the discount rates and adjusted [removed: RPI; |][added: RPI]

[removed: | – | evaluated] [added: –evaluated] the [removed: sources] [added: relevance and reliability] of information used by the Company’s actuaries in the development of the discount rates and the adjusted [removed: RPI; |][added: RPI]

[removed: | – | evaluated] [added: –evaluated] the North American discount rates’ period over period change using market trends based on published yield curves and [removed: indices; |][added: indices]

[removed: | – | evaluated] [added: –recalculated] the Company’s [removed: independently computed] single equivalent discount rate using the PBO cash flows and the Company’s [removed: actuary’s] [added: actuaries’] proprietary yield curve for the North American discount [removed: rates; |][added: rates]

[removed: | – |] [added: –independently] developed a single equivalent discount rate using [removed: benefit obligation] [added: the PBO] cash flows and [added: publicly] available yield curves for the North American pension plans, and compared that to the Company’s selected discount rates for North [removed: America; |][added: America]

[removed: | – | developed credit risk adjusted] [added: –developed] discount rates using publicly available yield curves for the United Kingdom, adjusted for the assessment of the timing of payments expected to be made to beneficiaries under the Company’s pension plans, and compared those to the Company’s selected discount rates for the United [removed: Kingdom; |][added: Kingdom]

[removed: | – | developed] [added: –developed] an inflationary factor using published [removed: RPI projections] [added: spot rate projection] based on the assessment of the timing of payments expected to be made to beneficiaries under the Company’s pension plans within the United Kingdom, and compared that to the Company’s adjusted RPI. [removed: |]

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

| | [removed: 2019] | | [added: 2020] | | [removed: 2018] | | | | [removed: 2017] [added: 2019] | | | [added: | | | 2018 | | |]

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

| Net sales | [added: | |] $ | [removed: 4,590] [added: 4,124] | | | [added: | |] $ | [removed: 4,429] [added: 4,590] | | | [added: | |] $ | [removed: 4,130] [added: 4,429] | |

| Cost of sales | [removed: 3,416] | | [added: 3,323] | | [removed: 3,512] | | | | [removed: 3,696] [added: 3,416] | | | [added: | | | 3,512 | | |]

| Gross margin | [removed: 1,174] | | [added: 801] | | [removed: 917] | | | | [removed: 434] [added: 1,174] | | | [added: | | | 917 | | |]

| Selling, general and administrative expenses | [removed: 239] | | [added: 206] | | [removed: 214] | | | | [removed: 191] [added: 239] | | | [added: | | | 214 | | |]

| Other operating—net | [removed: (73] | | [removed: )] [added: (17)] | | [removed: (27] | | [removed: )] | | [removed: 18] [added: (73)] | | | [added: | | | (27) | | |]

| Total other operating costs and expenses | [removed: 166] | | [added: 189] | | [removed: 187] | | | | [removed: 209] [added: 166] | | | [added: | | | 187 | | |]

| Equity in [removed: (loss)] earnings [added: (loss)] of operating [removed: affiliates] [added: affiliate] | [removed: (5] | | [removed: )] [added: 11] | | [removed: 36] | | | | [removed: 9] [added: (5)] | | | [added: | | | 36 | | |]

| Operating earnings | [removed: 1,003] | | [added: 623] | | [removed: 766] | | | | [removed: 234] [added: 1,003] | | | [added: | | | 766 | | |]

| Interest expense | [removed: 237] | | [added: 179] | | [removed: 241] | | | | [removed: 315] [added: 237] | | | [added: | | | 241 | | |]

| Interest income | [removed: (20] | | [removed: )] [added: (18)] | | [removed: (13] | | [removed: )] | | [removed: (12] [added: (20)] | | [removed: )] | [added: | | | (13) | | |]

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

| Other non-operating—net | [removed: (7] | | [removed: )] [added: (1)] | | [removed: (9] | | [removed: )] | | [removed: 3] [added: (7)] | | | [added: | | | (9) | | |]

| Earnings [removed: (loss)] before income taxes | [removed: 772] | | [added: 463] | | [removed: 547] | | | | [removed: (125] [added: 772] | | [removed: )] | [added: | | | 547 | | |]

| Income tax provision [removed: (benefit)] | [removed: 126] | | [added: 31] | | [removed: 119] | | | | [removed: (575] [added: 126] | | [removed: )] | [added: | | | 119 | | |]

| Net earnings | [removed: 646] | | [added: 432] | | [removed: 428] | | | | [removed: 450] [added: 646] | | | [added: | | | 428 | | |]

| Less: Net earnings attributable to noncontrolling interests | [removed: 153] | | [added: 115] | | [removed: 138] | | | | [removed: 92] [added: 153] | | | [added: | | | 138 | | |]

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| Net earnings | | | — | | | | | | — | | | | | | — | | | | | | 317 | | | | | | — | | | | | | 317 | | | | | | 115 | | | | | | 432 | | |

| Retirement of treasury stock | | | — | | | | | | 107 | | | | | | (17) | | | | | | (90) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |

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| Balance as of December 31, 2020 | | | $ | 2 | | | | | $ | (4) | | | | | $ | 1,317 | | | | | $ | 1,927 | | | | | $ | (320) | | | | | $ | 2,922 | | | | | $ | 2,681 | | | | | $ | 5,603 | |

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CF INDUSTRIES HOLDINGS, INC.

We involved actuarial professionals with specialized skills and knowledge, who assisted in assessing the Company’s actuaries’ objectivity and actuarial expertise, as well as participating in risk assessment procedures related to the determination of discount rates and RPI.

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After completion of these procedures, we evaluated the overall sufficiency of audit evidence over the measurement of the projected benefit obligation.

February 24, 2020

CF INDUSTRIES HOLDINGS, INC.

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CF INDUSTRIES HOLDINGS, INC.

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| | 5 | | | | (97 | | ) | | 135 | | |

CF INDUSTRIES HOLDINGS, INC.

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CF INDUSTRIES HOLDINGS, INC.

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| Balance as of December 31, 2016 | $ | 2 | | | $ | (1 | ) | | $ | 1,380 | | | $ | 2,365 | | | $ | (398 | ) | | $ | 3,348 | | | $ | 3,144 | | | $ | 6,492 | |

| Net earnings | — | | | | — | | | | — | | | | 358 | | | | — | | | | 358 | | | | 92 | | | | 450 | | |

CF INDUSTRIES HOLDINGS, INC.

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| Proceeds from sale of equity method investment | — | | | | — | | | | 16 | | |

| Proceeds from sale of auction rate securities | — | | | | — | | | | 9 | | |

CF INDUSTRIES HOLDINGS, INC.

1.

We are a leading global fertilizer and chemical company.

Under the supervision and with the participation of our senior management, including our principal executive officer and principal financial officer, we assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] using the criteria set forth in the *Internal Control—Integrated Framework* issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

Based on this assessment, management has concluded that our internal control over financial reporting is effective as of December 31, [removed: 2019.][added: 2020.]

KPMG LLP, the independent registered public accounting firm that audited the Company’s consolidated financial statements, has issued an attestation report on the Company’s internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] which appears on the following page.

(c) *Changes in Internal Control over Financial Reporting.* There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, [removed: 2019] [added: 2020] that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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

We have audited CF Industries Holdings, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in *Internal [removed: Control - Integrated] [added: Control* *–* *Integrated] Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in *Internal [removed: Control - Integrated] [added: Control* *–* *Integrated] Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] 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, [removed: 2019,] [added: 2020,] and the related notes (collectively, the consolidated financial statements), and our report dated February 24, [removed: 2020] [added: 2021] expressed an unqualified opinion on those consolidated financial statements.

February 24, 2021

February 24, 2020

The Code of Corporate Conduct is posted on our Internet website, [removed: www.cfindustries.com.][added: *www.cfindustries.com*.]

Hagge, [added: Javed Ahmed,] John D.

White [removed: currently serve] [added: served] as the members of the Compensation and Management Development Committee of the Board.

During the last completed fiscal year, Stephen J.

Stephen J.

Equity Compensation Plan Information as [removed: of December] [added: of December] 31, [removed: 2019][added: 2020]

| Plan category | [added: | |] Number of securities to be issued upon exercise of outstanding options, warrants and rights(1) | | | [added: | | |] Weighted-average exercise price of outstanding options, warrants and rights(2) | | | | [added: | |] Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column)(3) | | [added: |]

| Equity compensation plans [added: not] approved by security holders | [removed: 6,986,666] | | [added: —] | [removed: $] | [removed: 39.88] | | | [removed: 7,193,474] | [added: —] | [added: | | | | | — | | |]

| Equity compensation plans [removed: not] approved by security holders | [removed: —] | | [added: 6,741,928] | [removed: —] | | | | [removed: —] | [added: $] | [added: 40.41 | | | | | 6,028,074 | | |]

[removed: before a performance share unit is determined to be granted, the number of performance share units reported as] outstanding as of December 31, [removed: 2019 under] [added: 2020 in] “Note [removed: 19—Stock-Based] [added: 19—Stock-based] Compensation” reflects [removed: two-thirds] [added: all] of the 2018 [removed: performance share units] [added: PSUs awarded, but only two-thirds of the 2019 PSUs] awarded and one-third of the [removed: 2019 performance share units] [added: 2020 PSUs] awarded.

[removed: | (2) | Restricted stock units] [added: (2)RSUs] and [removed: performance share units] [added: PSUs] are not reflected in the weighted exercise price as these awards do not have an exercise price. [removed: |]

[removed: | (3) | Under] [added: (3)Under] the 2014 Equity and Incentive Plan, the number of shares available for issuance will be reduced (i) by one share for each share issued pursuant to options and stock appreciation rights and (ii) by 1.61 shares for each share of stock issued pursuant to [removed: restricted stock units] [added: RSUs] and [removed: performance share units. |][added: PSUs.]

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| Total | | | 6,741,928 | | | | | | $ | 40.41 | | | | | 6,028,074 | | |

(1)Includes 4,569,041 shares issuable pursuant to outstanding nonqualified stock options, 614,094 shares issuable pursuant to restricted stock units (RSUs) and 1,558,793 shares issuable pursuant to performance restricted stock units (PSUs) under our 2014 Equity and Incentive Plan and our 2009 Equity Incentive Plan.

PSUs are subject to attainment of the applicable performance goals during the three-year performance period and are reflected at their maximum potential payout.

The PSUs shown in the table above reflect the full amount awarded to plan participants in 2018, 2019 and 2020.

The three-year performance periods for the PSUs awarded in 2018, 2019 and 2020 are in each case composed of three one-year periods with performance goals set annually.

Because accounting rules require performance goals to be set before a PSU is determined for accounting purposes to have been granted, the number of PSUs reported as

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| Total | 6,986,666 | | | $ | 39.88 | | | 7,193,474 | |

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| (1) | Includes 5,059,892 shares issuable pursuant to outstanding nonqualified stock options, 693,960 shares issuable pursuant to restricted stock units and 1,232,814 shares issuable pursuant to performance share units under our 2014 Equity and Incentive Plan and our 2009 Equity Incentive Plan. Performance share units are subject to attainment of the applicable performance goals during the three-year performance period and are reflected at their maximum potential payout. The performance share units shown in the table above reflect the full amount awarded to plan participants in 2017, 2018 and 2019. The performance share units awarded in 2018 and 2019 are composed of three one-year periods with performance goals set annually. Because accounting rules require performance goals to be set |

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Information appearing in the Proxy Statement under the headings “Proposal [removed: 3:] [added: 4:] Ratification of Selection of Independent Auditor for [removed: 2020—Audit] [added: 2021—Audit] and Non-Audit Fees” and “Proposal [removed: 3:] [added: 4:] Ratification of Selection of Independent Auditor for [removed: 2020—Pre-Approval] [added: 2021—Pre-Approval] of Audit and Non-Audit Services” is incorporated herein by reference.