Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

You should read the following discussion and analysis in conjunction with our annual consolidated financial statements and related notes and our discussion and analysis of financial condition and results of operations that were included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission (SEC) on February 22, 2024, as well as Item 1. Financial Statements in Part I of this Quarterly Report on Form 10-Q. All references to “CF Holdings,” “we,” “us,” “our” and “the Company” refer to CF Industries Holdings, Inc. and its subsidiaries, except where the context makes clear that the reference is to CF Industries Holdings, Inc. only and not its subsidiaries. All references to “CF Industries” refer to CF Industries, Inc., a 100% owned subsidiary of CF Industries Holdings, Inc. References to tons refer to short tons, and references to tonnes refer to metric tons. Notes referenced in this discussion and analysis refer to the notes to our unaudited interim consolidated financial statements in Item 1. Financial Statements in Part I of this Quarterly Report on Form 10-Q. The following is an outline of the discussion and analysis included herein:

Overview of CF Holdings

*•*Market Conditions

*•*Financial Executive Summary

*•*Acquisition of Waggaman Ammonia Production Facility

*•*Items Affecting Comparability of Results

Consolidated Results of Operations

*•*Operating Results by Business Segment

Liquidity and Capital Resources
Critical Accounting Estimates

*•*Recent Accounting Pronouncements

Forward-Looking Statements

Overview of CF Holdings

Our Company

Our mission is to provide clean energy to feed and fuel the world sustainably. With our employees focused on safe and reliable operations, environmental stewardship, and disciplined capital and corporate management, we are on a path to decarbonize our ammonia production network – the world’s largest – to enable green and low-carbon hydrogen and nitrogen products for energy, fertilizer, emissions abatement, and other industrial activities. Our nitrogen manufacturing complexes in the United States, Canada and the United Kingdom, an extensive storage, transportation and distribution network in North America, and logistics capabilities enabling a global reach underpin our strategy to leverage our unique capabilities to accelerate the world’s transition to clean energy. Our principal customers are cooperatives, independent fertilizer distributors, traders, wholesalers and industrial users. Our core product is anhydrous ammonia (ammonia), which contains 82% nitrogen and 18% hydrogen. Products derived from ammonia that are most often used as nitrogen fertilizers include granular urea, urea ammonium nitrate solution (UAN) and ammonium nitrate (AN). AN is also used extensively by the commercial explosives industry as a component of explosives. Products derived from ammonia that are sold primarily to industrial customers include diesel exhaust fluid (DEF), urea liquor, nitric acid and aqua ammonia.

Our principal assets as of September 30, 2024 include:

six U.S. manufacturing facilities located in Donaldsonville, Louisiana (the largest ammonia production complex in the world); Sergeant Bluff, Iowa (our Port Neal complex); Yazoo City, Mississippi; Claremore, Oklahoma (our Verdigris complex); Woodward, Oklahoma; and Waggaman, Louisiana. The Waggaman facility is wholly owned by us, and the other five U.S. manufacturing facilities are wholly owned directly or indirectly by CF Industries Nitrogen, LLC (CFN), of which we own approximately 89% and CHS Inc. (CHS) owns the remainder (see Note 14—Noncontrolling Interest for additional information on our strategic venture with CHS);
two Canadian manufacturing facilities, located in Medicine Hat, Alberta (the largest ammonia production complex in Canada) and Courtright, Ontario;

*•*a United Kingdom manufacturing facility located in Billingham;

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an extensive system of terminals and associated transportation equipment located primarily in the Midwestern United States; and
a 50% interest in Point Lisas Nitrogen Limited (PLNL), an ammonia production joint venture located in the Republic of Trinidad and Tobago (Trinidad) that we account for under the equity method.

Our Strategy

At our core, CF Industries is a producer of ammonia. We use the Haber-Bosch process to fix atmospheric nitrogen with hydrogen from natural gas to produce anhydrous ammonia, whose chemical composition is NH3. We sell the ammonia itself or upgrade it to products such as granular urea, UAN and DEF. A majority of the ammonia and ammonia-derived products we manufacture are used as fertilizer, as the nitrogen content provides energy essential for crop growth. Other important uses of our products include emissions control.

Our strategy leverages our unique capabilities to accelerate the world’s transition to clean energy. We believe this strategy builds upon our leadership in ammonia production to capture emerging opportunities to produce ammonia with a lower carbon intensity than that of ammonia produced through traditional processes. These opportunities include traditional applications in agriculture to help reduce the carbon footprint of food production and the life cycle carbon intensity of ethanol production, enabling production of sustainable aviation fuel, among other purposes. These opportunities also include new growth opportunities from energy-intensive industries, such as power generation and marine shipping, as ammonia represents an efficient mechanism to both ship and store hydrogen, as well as a clean energy fuel source in its own right as ammonia does not contain or emit carbon when combusted. Our strategy also strengthens our existing business.

We execute our strategy across four dimensions:

decarbonizing our existing network to accelerate the availability of low-carbon ammonia and upgraded nitrogen products for traditional agricultural and industrial applications;
evaluating new low-carbon ammonia capacity growth to supply emerging opportunities from power generation and marine shipping, among others;
forging partnerships to accelerate our timeline, reducing risks and bridging gaps in areas where we do not have expertise; and
collaborating to build understanding of ammonia’s clean energy capability, safety track record and regulatory environment.

Decarbonization projects in our existing network include our green ammonia project at our Donaldsonville, Louisiana, complex. Green ammonia refers to ammonia produced with hydrogen sourced from an electrolysis process that produces no carbon dioxide emissions. Commissioning of our green hydrogen production facility, consisting of a 20-megawatt alkaline water electrolysis plant to produce hydrogen, continues. At full electrolyzer capacity, we will be able to produce approximately 20,000 tons of green ammonia per year. At the time of its startup, we believe that the Donaldsonville green ammonia project will represent North America’s first commercial-scale green ammonia capacity. Under proposed regulations, the hydrogen produced and used in our green ammonia production is expected to qualify for tax credits under Section 45V of the Internal Revenue Code.

We are also advancing decarbonization projects at our Donaldsonville and Yazoo City complexes that leverage carbon capture and sequestration (CCS) to enable the production of low-carbon ammonia. Low-carbon ammonia is ammonia produced by conventional processes but with approximately 60-98% of the process and flue gas carbon dioxide (CO2) generated by ammonia production and currently emitted to the atmosphere removed through CCS. CCS requires the construction of CO2 dehydration and compression units to enable CO2 captured from the ammonia production process to be transported and sequestered. Construction of the dehydration and compression unit at our Donaldsonville complex is in advanced stages, with an estimated total cost of approximately $200 million over the life of the project. Construction of the dehydration and compression unit at our Yazoo City complex is expected to cost approximately $100 million over the life of the project. For each facility we have contracted with ExxonMobil to transport and sequester the captured CO2 in permanent geologic storage. At Donaldsonville, CCS is expected to commence in 2025 and annually will capture up to approximately 2 million tonnes of CO2. At Yazoo City, CCS is expected to commence in 2028 and annually will capture up to approximately 500,000 tonnes of CO2. Each project is expected to qualify under Section 45Q of the Internal Revenue Code for tax credits per tonne of sequestered CO2.

We are also evaluating the construction of export-oriented greenfield low-carbon ammonia capacity at our Blue Point complex in Ascension Parish, Louisiana. This evaluation includes assessing ammonia production technology options that will

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meet the carbon intensity requirements of end users. In the fourth quarter of 2023, we completed a front-end engineering and design (FEED) study on a potential approximately 1.2 million tonne capacity greenfield steam methane reforming (SMR) ammonia facility with CCS technologies that would enable sequestration of process CO2 emissions. The FEED study estimated the cost of a project with these attributes to be in the range of $3 billion, with approximately $2.5 billion allocated to the ammonia facility and CCS technologies and approximately $500 million allocated to scalable common infrastructure for the Blue Point complex, such as ammonia storage and a vessel loading dock.

We, along with our partners, are also progressing two additional FEED studies focused on technologies that would further reduce the ammonia product’s carbon intensity. The first is assessing the cost and viability of integrating flue gas CO2 capture on a SMR ammonia facility. The second is evaluating autothermal reforming (ATR) ammonia production technology. We expect to obtain results from both FEED studies in the fourth quarter of 2024.

We have entered into joint development agreements (JDAs) with two potential partners, Mitsui & Co., Ltd. and JERA Co., Inc. The JDAs guide our evaluation of potential joint ventures to build a greenfield ammonia plant to supply low-carbon ammonia to developing energy markets and traditional ammonia markets where demand for low-carbon product is emerging.

In addition to discussions with existing customers who have interest in using low-carbon ammonia for traditional applications, we are engaged in advanced discussions regarding the supply of low-carbon ammonia for new applications. We are evaluating and are in various stages of discussions and agreements with other companies for long-term offtake and joint investment opportunities related to new applications of ammonia. These discussions continue to advance as we gain greater clarity regarding demand for low-carbon ammonia, including carbon intensity requirements, government incentives and regulatory developments.

Should a final investment decision (FID) be reached to construct greenfield low-carbon ammonia capacity at our Blue Point complex, construction and commissioning is expected to take approximately four years from FID.

Market Conditions

Nitrogen Selling Prices

Our nitrogen products are globally traded commodities with selling prices that fluctuate in response to global market conditions, changes in supply and demand, and other cost factors including domestic and local conditions. Intense global competition—reflected in import volumes and prices—strongly influences delivered prices for nitrogen fertilizers. In general, the prevailing global prices for nitrogen products must be at a level to incent the high-cost marginal producer to produce product at a breakeven or above price, or else they would cease production and leave a portion of global demand unsatisfied.

In the third quarter of 2024, the average selling price for our products was $286 per ton, an increase of 7% compared to $268 per ton in the third quarter of 2023, primarily reflecting a higher average selling price in our Ammonia segment. Higher average selling prices resulted in an increase in net sales of approximately $52 million in the third quarter of 2024 compared to the third quarter of 2023.

In the nine months ended September 30, 2024, the average selling price for our products was $311 per ton, or 13% lower compared to $356 per ton in the nine months ended September 30, 2023. This resulted in a decrease in net sales of approximately $680 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Nitrogen Sales Volume

Sales volume in the third quarter of 2024 was 4.8 million tons compared to 4.7 million tons in the third quarter of 2023, which resulted in an increase in net sales of approximately $45 million. Higher sales volume reflects an increase in sales volume as a result of the Waggaman acquisition on December 1, 2023, as further described below, partially offset by lower supply availability resulting from lower beginning inventory entering the third quarter of 2024.

Sales volume was approximately 14.2 million tons in both the nine months ended September 30, 2024 and 2023. An increase in sales volume as a result of the Waggaman acquisition on December 1, 2023, was largely offset by lower sales volume due primarily to (i) lower production excluding the impact of the Waggaman acquisition, due in part to the impact of production outages from a winter storm in the first quarter of 2024, and (ii) lower beginning inventory compared to the prior year period.

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In January 2024, a winter storm produced extremely cold temperatures that impacted our operations, including the temporary shut-down and lost production at certain of our plants. Due to the impact of plant downtime resulting from the adverse weather and additional plant maintenance activity in the first quarter of 2024, we purchased and resold approximately 62,000 tons of ammonia and 48,000 tons of granular urea at near breakeven margins in order to fulfill sales commitments. The plant downtime led to approximately $75 million of additional costs in the first quarter of 2024 for maintenance, repairs and certain unabsorbed fixed costs.

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

Natural Gas

Natural gas is the principal raw material used to produce our nitrogen products. Natural gas is both a chemical feedstock and a fuel used to produce nitrogen products. Natural gas is a significant cost component of our manufactured nitrogen products, representing approximately 27% and 40% of our production costs in the first nine months of 2024 and the year ended December 31, 2023, respectively. Most of our nitrogen manufacturing facilities are located in the United States and Canada. As a result, the price of natural gas in North America directly impacts a substantial portion of our operating expenses.

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


	Three Months Ended September 30,								Nine Months Ended September 30,
	2024		2023		2024 v. 2023				2024		2023		2024 v. 2023








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

In the third quarter of 2024, our cost of natural gas used for production, which includes the impact of realized natural gas derivatives, decreased 17% to $2.10 per MMBtu from $2.54 per MMBtu in the third quarter of 2023. This decrease in natural gas costs resulted in an increase in gross margin of $40 million, excluding the impact of the Waggaman acquisition, compared to the third quarter of 2023. In the first nine months of 2024, our cost of natural gas used for production, which includes the impact of realized natural gas derivatives, decreased 39% to $2.38 per MMBtu from $3.90 per MMBtu in the first nine months of 2023. This decrease in natural gas costs resulted in an increase in gross margin of $390 million, excluding the impact of the Waggaman acquisition, compared to the first nine months of 2023.

Natural Gas Market Factors

In the first quarter of 2024, warmer-than-normal average temperatures in North America drove lower heating demand for natural gas, in spite of a short-lived period of extremely cold temperatures in January 2024 that affected most of North America. North American natural gas supply remained strong through the quarter, with a decline in supply occurring near the end of the quarter as producers responded to a weaker price environment. In addition, although the higher cost for natural gas outside of North America incentivized liquefaction facilities in the United States to export domestic natural gas during the first quarter of 2024, an outage at the Freeport liquefied natural gas facility limited total gas exports, supporting domestic supply.

During the second quarter of 2024, there was a decline in natural gas supply as producers responded to a weaker price environment, limiting the domestic supply available to be injected into storage during the quarter. In addition, natural gas demand for power generation reached record levels in the second quarter of 2024 as higher-than-normal temperatures drove increased cooling demand.

In the third quarter of 2024, the decline in natural gas supply continued as producers curtailed production in response to low natural gas prices. Natural gas demand from the power generation sector set records despite increased solar and wind generation, as low natural gas prices increased demand for gas-fired power. Liquefied natural gas exports were steady through the quarter as delays on commissioning of new facilities and maintenance activities at existing plants held exports at levels reached during the second quarter of 2024. Natural gas in storage remained above historical levels despite continued below-average injections into storage during the quarter. At the end of the third quarter of 2024, storage levels in North America were 4% higher compared to one year ago and 6% higher than the five-year average.

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Financial Executive Summary

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

an increase in gross margin of $67 million, as described below;
a $40 million reduction in interest expense—net related to the Canada Revenue Agency Competent Authority Matter, which is described below under “Items Affecting Comparability of Results;” and
a pre-tax impairment of our equity method investment of $43 million in the third quarter of 2023 that did not recur in 2024, which is described below under “Items Affecting Comparability of Results.”

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

Gross margin increased by $67 million, or 18%, to $444 million for the three months ended September 30, 2024 compared to $377 million for the three months ended September 30, 2023. The increase in gross margin was due primarily to a 7% increase in average selling prices to $286 per ton in the third quarter of 2024 from $268 per ton in the third quarter of 2023, which increased gross margin by $52 million, and including the impact of the Waggaman acquisition, an increase in sales volume, which increased gross margin by $18 million. In addition, lower natural gas costs increased gross margin by $40 million, excluding the impact of the Waggaman acquisition. These factors that increased gross margin were partially offset by higher costs for maintenance activity.

Diluted net earnings per share attributable to common stockholders increased $0.70 per share, or 82%, to $1.55 per share in the third quarter of 2024 compared to $0.85 per share in the third quarter of 2023, due primarily to higher net earnings and lower weighted-average common shares outstanding as a result of shares repurchased under our share repurchase program. Diluted weighted-average common shares outstanding were 178.6 million shares for the three months ended September 30, 2024, a decrease of 7% compared to diluted weighted-average common shares outstanding of 192.9 million shares for the three months ended September 30, 2023.

Acquisition of Waggaman Ammonia Production Facility

In connection with the acquisition, we entered into a long-term ammonia offtake agreement providing for us to supply up to 200,000 tons of ammonia per year to IPL’s Dyno Nobel, Inc. subsidiary. Under the terms of the asset purchase agreement, $425 million of the purchase price of $1.675 billion, subject to adjustment, was allocated by the parties to the ammonia offtake agreement. We funded the balance of the initial purchase price on the acquisition date with $1.223 billion of cash on hand.

The consideration transferred on the acquisition date reflected an estimated net working capital adjustment and other adjustments to the purchase price, which was subject to further adjustment pursuant to the terms of the asset purchase agreement. The purchase price adjustments required under the asset purchase agreement were finalized in the second quarter of 2024, which resulted in a $2 million reduction in the purchase price with a corresponding reduction in goodwill. As a result, the final purchase price was $1.221 billion.

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

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Items Affecting Comparability of Results

For the three months ended September 30, 2024 and 2023, we reported net earnings attributable to common stockholders of $276 million and $164 million, respectively. For the nine months ended September 30, 2024 and 2023, we reported net earnings attributable to common stockholders of $890 million and $1.25 billion, respectively. In addition to the impact of market conditions and the acquisition of the Waggaman ammonia production facility discussed above, certain items affected the comparability of our financial results for the three and nine months ended September 30, 2024 and 2023. The following table and related discussion outline these items and their impact on the comparability of our financial results for these periods. The descriptions of items below that refer to amounts in the table refer to the pre-tax amounts unless otherwise noted.


	Three Months Ended September 30,								Nine Months Ended September 30,
	2024				2023				2024				2023
	Pre-Tax		After-Tax		Pre-Tax		After-Tax		Pre-Tax		After-Tax		Pre-Tax		After-Tax
	(in millions)

Unrealized net mark-to-market loss (gain) on natural gas derivatives(1)	$	1	$	1	$	7	$	5	$	(33)	$	(25)	$	(65)	$	(50)










Loss on foreign currency transactions, including intercompany loans(2)	1		1		7		5		2		2		5		4





U.K. operations restructuring	—		—		5		4		—		—		7		5


Acquisition and integration costs	—		—		11		9		4		3		27		21
Impairment of equity method investment in PLNL(3)	—		—		43		33		—		—		43		33


Canada Revenue Agency Competent Authority Matter:
Interest expense (income)—net(4)	(40)		(39)		—		—		(40)		(39)		—		—

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

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

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

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

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

Natural gas is the largest and most volatile single component of the manufacturing cost for our nitrogen-based products. At certain times, we have managed the risk of changes in natural gas prices through the use of derivative financial instruments. The derivatives that we use for this purpose are primarily natural gas fixed price swaps, basis swaps and options. We use natural gas derivatives as an economic hedge of natural gas price risk, but without the application of hedge accounting. This can result in volatility in reported earnings due to the unrealized mark-to-market adjustments that occur from changes in the value of the derivatives, which are reflected in cost of sales in our consolidated statements of operations. In the three months ended September 30, 2024 and 2023, we recognized unrealized net mark-to-market losses on natural gas derivatives of $1 million and $7 million, respectively. In the nine months ended September 30, 2024 and 2023, we recognized unrealized net mark-to-market gains on natural gas derivatives of $33 million and $65 million, respectively.

Loss on foreign currency transactions, including intercompany loans

In the three months ended September 30, 2024 and 2023, we recognized a loss on foreign currency transactions of $1 million and $7 million, respectively. In the nine months ended September 30, 2024 and 2023, we recognized a loss on foreign currency transactions of $2 million and $5 million, respectively. Loss on foreign currency transactions consists of foreign currency exchange rate impacts on foreign currency denominated transactions, including the impact of changes in foreign currency exchange rates on intercompany loans that are not permanently invested.

U.K. operations restructuring

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

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Acquisition and integration costs

On December 1, 2023, we acquired an ammonia production facility located in Waggaman, Louisiana, as described above under “Acquisition of Waggaman Ammonia Production Facility.” In the nine months ended September 30, 2024, we incurred $4 million of integration costs related to the Waggaman acquisition. In the three and nine months ended September 30, 2023, we incurred $9 million and $25 million, respectively, of acquisition-related costs related to the Waggaman acquisition. In addition, we incurred $2 million of integration costs in both the three and nine months ended September 30, 2023. These costs are included in acquisition and integration costs in our consolidated statements of operations.

Impairment of equity method investment in PLNL

PLNL, our joint venture in Trinidad, operates an ammonia plant that relies on natural gas supplied, under a gas sales contract (the NGC Contract), by The National Gas Company of Trinidad and Tobago Limited (NGC). The NGC Contract had an expiration date of September 2023. In the third quarter of 2023, PLNL entered into a new gas sales contract with NGC (the New NGC Contract), which is effective October 2023 through December 2025.

In the third quarter of 2023 and due to the terms of the New NGC Contract, we assessed our investment in PLNL for impairment and determined that the carrying value of our equity method investment in PLNL exceeded its fair value. As a result, we recorded an impairment of our equity method investment in PLNL of $43 million, which is reflected in equity in earnings (losses) of operating affiliate on our consolidated statements of operations for the three and nine months ended September 30, 2023.

Canada Revenue Agency Competent Authority Matter

In the second half of 2022, as a result of the conclusion of arbitration proceedings and the settlement provisions between the United States and Canadian competent authorities related to tax years 2006-2011, we paid additional income taxes and related interest of $124 million and $100 million, respectively, to the Canada Revenue Agency (CRA) and Alberta Tax and Revenue Administration (Alberta TRA). In the third quarter of 2024, we were informed that the CRA granted us discretionary interest relief for certain tax years from 2006 through 2011. Based on current estimates and foreign currency exchange rates as of September 30, 2024, the interest relief from the CRA and Alberta TRA is estimated to be approximately $40 million, consisting of interest refunds of $37 million and related interest of $3 million. As a result, in the third quarter of 2024, we recognized $40 million of income consisting of a $37 million reduction in interest expense and $3 million of interest income.

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Consolidated Results of Operations

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


	Three Months Ended September 30,											Nine Months Ended September 30,
	2024			2023			2024 v. 2023					2024			2023			2024 v. 2023
	(dollars in millions, except per share and per MMBtu amounts)
Net sales	$	1,370		$	1,273		$	97		8	%	$	4,412		$	5,060		$	(648)		(13)	%
Cost of sales	926			896			30			3	%	2,880			3,016			(136)			(5)	%
Gross margin	444			377			67			18	%	1,532			2,044			(512)			(25)	%
Gross margin percentage	32.4		%	29.6		%	2.8		%			34.7		%	40.4		%	(5.7)		%
Selling, general and administrative expenses	78			68			10			15	%	242			213			29			14	%


U.K. operations restructuring	—			5			(5)			(100)	%	—			7			(7)			(100)	%
Acquisition and integration costs	—			11			(11)			(100)	%	4			27			(23)			(85)	%

Other operating—net	4			13			(9)			(69)	%	(18)			(19)			1			5	%
Total other operating costs and expenses	82			97			(15)			(15)	%	228			228			—			—	%

Equity in earnings (losses) of operating affiliate	2			(36)			38			N/M		1			(12)			13			N/M
Operating earnings	364			244			120			49	%	1,305			1,804			(499)			(28)	%
Interest expense	—			39			(39)			(100)	%	74			115			(41)			(36)	%
Interest income	(32)			(45)			13			29	%	(90)			(115)			25			22	%

Other non-operating—net	(4)			(3)			(1)			(33)	%	(8)			(8)			—			—	%
Earnings before income taxes	400			253			147			58	%	1,329			1,812			(483)			(27)	%
Income tax provision	59			23			36			157	%	244			326			(82)			(25)	%

Net earnings	341			230			111			48	%	1,085			1,486			(401)			(27)	%
Less: Net earnings attributable to noncontrolling interest	65			66			(1)			(2)	%	195			235			(40)			(17)	%
Net earnings attributable to common stockholders	$	276		$	164		$	112		68	%	$	890		$	1,251		$	(361)		(29)	%
Diluted net earnings per share attributable to common stockholders	$	1.55		$	0.85		$	0.70		82	%	$	4.86		$	6.42		$	(1.56)		(24)	%
Diluted weighted-average common shares outstanding	178.6			192.9			(14.3)			(7)	%	183.1			194.9			(11.8)			(6)	%
Dividends declared per common share	$	0.50		$	0.40		$	0.10		25	%	$	1.50		$	1.20		$	0.30		25	%
Natural gas supplemental data (per MMBtu)
Natural gas costs in cost of sales(1)	$	2.09		$	2.53		$	(0.44)		(17)	%	$	2.23		$	3.43		$	(1.20)		(35)	%
Realized derivatives loss in cost of sales(2)	0.01			0.01			—			—	%	0.15			0.47			(0.32)			(68)	%
Cost of natural gas used for production in cost of sales	$	2.10		$	2.54		$	(0.44)		(17)	%	$	2.38		$	3.90		$	(1.52)		(39)	%



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

Unrealized net mark-to-market loss (gain) on natural gas derivatives	$	1		$	7		$	(6)		(86)	%	$	(33)		$	(65)		$	32		49	%
Depreciation and amortization	$	229		$	213		$	16		8	%	$	704		$	640		$	64		10	%
Capital expenditures	$	139		$	147		$	(8)		(5)	%	$	321		$	311		$	10		3	%
Sales volume by product tons (000s)	4,797			4,745			52			1	%	14,196			14,218			(22)			—	%
Production volume by product tons (000s):
Ammonia(3)	2,433			2,238			195			9	%	7,183			6,971			212			3	%
Granular urea	1,167			1,081			86			8	%	3,381			3,414			(33)			(1)	%
UAN (32%)(4)	1,521			1,749			(228)			(13)	%	4,985			5,012			(27)			(1)	%
AN	364			416			(52)			(13)	%	1,038			1,104			(66)			(6)	%

CF INDUSTRIES HOLDINGS, INC.

N/M—Not Meaningful

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

(2)Includes realized gains and losses on natural gas derivatives settled during the period. Excludes unrealized mark-to-market gains and losses on natural gas derivatives.

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

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

Third Quarter of 2024 Compared to Third Quarter of 2023

Net Sales

Our total net sales increased $97 million, or 8%, to $1.37 billion in the third quarter of 2024 compared to $1.27 billion in the third quarter of 2023. The change in our net sales reflects (i) the impact of the Waggaman acquisition completed on December 1, 2023, which increased our net sales by $77 million, and (ii) a $20 million, or 2%, increase in our net sales excluding the impact of the Waggaman acquisition, due primarily to an increase in our average selling price.

Our average selling price increased 7% to $286 per ton in the third quarter of 2024 compared to $268 per ton in the third quarter of 2023, due to higher average selling prices across most of our segments. The impact of higher average selling prices was an increase in net sales of approximately $52 million for the third quarter of 2024 compared to the third quarter of 2023.

Our total sales volume was approximately 4.8 million product tons in the third quarter of 2024 compared to 4.7 million in the third quarter of 2023 as higher sales volume in our Ammonia and Granular Urea segments was partially offset by lower sales volume in our UAN, Other and AN segments. Higher sales volume in our Ammonia segment includes the impact of the Waggaman acquisition of 217,000 product tons.

Gross ammonia production for the three and nine months ended September 30, 2024 was 2.4 million tons and 7.2 million tons, respectively. We expect gross ammonia production for 2024 will be approximately 9.8 million tons.

Cost of Sales

Our total cost of sales increased $30 million, or 3%, to $926 million in the third quarter of 2024 from $896 million in the third quarter of 2023. The increase in our cost of sales was due primarily to the impact of the Waggaman acquisition, which increased our cost of sales by $50 million, and higher costs for maintenance activity, partially offset by lower costs for natural gas, including the impact of realized derivatives, which decreased cost of sales by $40 million, excluding the impact of the Waggaman acquisition, and lower sales volume, excluding the impact of the Waggaman acquisition, which decreased cost of sales by $20 million.

Cost of sales averaged $193 per ton in the third quarter of 2024 compared to $189 per ton in the third quarter of 2023. The increase was due primarily to higher costs for maintenance activity, partially offset by lower realized natural gas costs, including the impact of realized derivatives. Our cost of natural gas, including the impact of realized derivatives, decreased 17% to $2.10 per MMBtu in the third quarter of 2024 from $2.54 per MMBtu in the third quarter of 2023. The impact of the Waggaman acquisition on our cost of sales per ton was not material.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $78 million in the third quarter of 2024, a 15% increase from $68 million in the third quarter of 2023. The increase was due primarily to an increase in amortization expense resulting from the customer relationships recognized in conjunction with the Waggaman acquisition on December 1, 2023.

Acquisition and Integration Costs

Other Operating—Net

Other operating—net was $4 million of expense in the third quarter of 2024 compared to $13 million of expense in the third quarter of 2023. The $4 million of expense in the third quarter of 2024 consists primarily of costs related to FEED studies for our clean energy initiatives. The $13 million of expense in the third quarter of 2023 consists primarily of a loss on foreign currency transactions and costs related to FEED studies for our clean energy initiatives. See “Our Strategy,” above, for

CF INDUSTRIES HOLDINGS, INC.

additional information related to our clean energy initiatives.

Equity in Earnings (Losses) of Operating Affiliate

Equity in earnings (losses) of operating affiliate was $2 million of earnings in the third quarter of 2024 compared to $36 million of losses in the third quarter of 2023, which includes an impairment of our equity method investment in PLNL of $43 million. See “Items Affecting Comparability of Results—Impairment of equity method investment in PLNL,” above, for further discussion. Lower equity in earnings of operating affiliate in the third quarter of 2024 compared to the third quarter of 2023, excluding the impact from the impairment charge, primarily reflects a decrease in the operating results of PLNL as a result of higher natural gas costs and lower operating rates at PLNL due to lower availability of natural gas.

Interest Expense

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

Interest Income

Interest income was $32 million in the third quarter of 2024 compared to $45 million in the third quarter of 2023. The decrease of $13 million was due primarily to a decrease in interest income on short-term investments, partially offset by $3 million in interest income related to discretionary interest relief that is further described above under “Items Affecting Comparability of Results—Canada Revenue Agency Competent Authority Matter.”

Income Tax Provision

For the three months ended September 30, 2024, we recorded an income tax provision of $59 million on pre-tax income of $400 million, or an effective tax rate of 14.8%, compared to an income tax provision of $23 million on pre-tax income of $253 million, or an effective tax rate of 9.1%, for the three months ended September 30, 2023. For the three months ended September 30, 2024, our income tax provision includes a $9 million income tax benefit arising from the finalization of tax return filing positions. For the three months ended September 30, 2023, our income tax provision includes a $9 million income tax benefit arising from the finalization of tax return filing positions and adjustments to accrued withholding taxes as a result of changes reflected on our filed U.S. federal return. For the three months ended September 30, 2024 and 2023, these income tax benefits in relation to pre-tax income of $400 million and $253 million, respectively, contributed to a lower effective tax rate compared to the U.S. statutory rate of 21%.

Our effective tax rate is impacted by earnings attributable to the noncontrolling interest in CFN, as our consolidated income tax provision does not include a tax provision on the earnings attributable to the noncontrolling interest. Our effective tax rate for the three months ended September 30, 2024 of 14.8%, which is based on pre-tax income of $400 million, including $65 million of earnings attributable to the noncontrolling interest, would be 2.9 percentage points higher, or 17.7%, if based on pre-tax income exclusive of the earnings attributable to the noncontrolling interest of $65 million. Our effective tax rate for the three months ended September 30, 2023 of 9.1%, which is based on pre-tax income of $253 million, including $66 million of earnings attributable to the noncontrolling interest, would be 3.2 percentage points higher, or 12.3%, if based on pre-tax income exclusive of the $66 million of earnings attributable to the noncontrolling interest. See Note 14—Noncontrolling Interest for additional information.

Net Earnings Attributable to Noncontrolling Interest

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

Diluted Net Earnings Per Share Attributable to Common Stockholders

Diluted net earnings per share attributable to common stockholders increased $0.70, or 82%, to $1.55 per share in the third quarter of 2024 from $0.85 per share in the third quarter of 2023. This increase was due primarily to an increase in gross margin, driven by higher average selling prices and lower costs for natural gas, a reduction in interest expense, and a pre-tax impairment of our equity method investment in the third quarter of 2023 that did not recur in 2024. These factors were partially offset by an increase in the income tax provision resulting from higher profitability. Additionally, diluted weighted-average common shares outstanding declined 7% from 192.9 million shares for the three months ended September 30, 2023 to 178.6 million shares for the three months ended September 30, 2024, due primarily to repurchases of common shares under our share repurchase program.

CF INDUSTRIES HOLDINGS, INC.

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

Net Sales

Our total net sales decreased $648 million, or 13%, to $4.41 billion in the first nine months of 2024 compared to $5.06 billion in the first nine months of 2023. The change in our net sales reflects (i) the impact of the Waggaman acquisition completed on December 1, 2023, which increased our net sales by $191 million, and (ii) a $839 million, or 17%, decline in our net sales excluding the impact of the Waggaman acquisition, due primarily to a decrease in average selling prices of approximately 13%.

Our average selling price was $311 per ton in the first nine months of 2024 compared to $356 per ton in the first nine months of 2023, due to lower average selling prices across all our segments, as lower global energy costs reduced the global market clearing price required to meet global demand. The impact of lower average selling prices was a decrease in net sales of approximately $680 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Our total sales volume was 14.2 million product tons in both the first nine months of 2024 and the first nine months of 2023, as lower sales volume in our UAN, Other and AN segments was partially offset by higher sales volume in our Ammonia segment driven by the impact of the Waggaman acquisition. Excluding the impact of the Waggaman acquisition, the impact of lower sales volume was a decrease in net sales of approximately $159 million.

Cost of Sales

Our total cost of sales decreased $136 million, or 5%, to $2.88 billion in the first nine months of 2024 from $3.02 billion in the first nine months of 2023. The decrease in our cost of sales primarily reflects lower costs for natural gas, including the impact of realized derivatives. The impact of lower natural gas costs decreased cost of sales by $390 million, excluding the impact of the Waggaman acquisition. The impact of lower natural gas costs was partially offset by higher costs for planned and unplanned maintenance and repair activities in the first nine months of 2024, including as a result of the adverse weather in January 2024, as discussed above under “Nitrogen Sales Volume,” and the impact of the Waggaman acquisition, which increased our cost of sales by $158 million.

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

Cost of sales averaged $203 per ton in the first nine months of 2024 compared to $212 per ton in the first nine months of 2023. Our cost of natural gas, including the impact of realized derivatives, decreased 39% to $2.38 per MMBtu in the first nine months of 2024 from $3.90 per MMBtu in the first nine months of 2023.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $29 million to $242 million in the first nine months of 2024 compared to $213 million in the first nine months of 2023. The increase was due primarily to an increase in amortization expense as a result of the customer relationships recognized in conjunction with the Waggaman acquisition on December 1, 2023, and an increase in costs related to certain corporate initiatives.

Acquisition and Integration Costs

Other Operating—Net

Other operating—net was $18 million of income in the first nine months of 2024 compared to $19 million of income in the first nine months of 2023. In both the first nine months of 2024 and 2023, the income recognized consists primarily of gains on sales of emission credits, partially offset by costs related to FEED studies for our clean energy initiatives. See “Our Strategy,” above, for additional information related to our clean energy initiatives.

CF INDUSTRIES HOLDINGS, INC.

Equity in Earnings (Losses) of Operating Affiliate

Equity in earnings (losses) of operating affiliate was $1 million of earnings in the first nine months of 2024 compared to $12 million of losses in the first nine months of 2023, which includes an impairment of our equity method investment in PLNL of $43 million. See “Items Affecting Comparability of Results—Impairment of equity method investment in PLNL,” above, for further discussion. Lower equity in earnings of operating affiliate in the first nine months of 2024 compared to the first nine months of 2023, excluding the impact from the impairment charge, primarily reflects a decrease in the operating results of PLNL as a result of a plant turnaround in the second quarter of 2024 at the PLNL facility in Trinidad, lower ammonia selling prices, higher natural gas costs and lower operating rates at PLNL due to lower availability of natural gas.

Interest Expense

Interest expense was $74 million in the first nine months of 2024 compared to $115 million in the first nine months of 2023. The decrease of $41 million was due primarily to a $37 million reduction in interest expense related to discretionary interest relief that is further described above under “Items Affecting Comparability of Results—Canada Revenue Agency Competent Authority Matter.”

Interest Income

Interest income was $90 million in the first nine months of 2024 compared to $115 million in the first nine months of 2023. The decrease of $25 million was due primarily to a decrease in interest income on short-term investments, partially offset by $3 million in interest income related to discretionary interest relief that is further described above under “Items Affecting Comparability of Results—Canada Revenue Agency Competent Authority Matter.”

Income Tax Provision

For the nine months ended September 30, 2024, we recorded an income tax provision of $244 million on pre-tax income of $1.33 billion, or an effective tax rate of 18.4%, compared to an income tax provision of $326 million on pre-tax income of $1.81 billion, or an effective tax rate of 18.0%, for the nine months ended September 30, 2023.

Our effective tax rate is impacted by earnings attributable to the noncontrolling interest in CFN, as our consolidated income tax provision does not include a tax provision on the earnings attributable to the noncontrolling interest. Our effective tax rate for the nine months ended September 30, 2024 of 18.4%, which is based on pre-tax income of $1.33 billion, including $195 million of earnings attributable to the noncontrolling interest, would be 3.1 percentage points higher, or 21.5%, if based on pre-tax income exclusive of the earnings attributable to the noncontrolling interest of $195 million. Our effective tax rate for the nine months ended September 30, 2023 of 18.0%, which is based on pre-tax income of $1.81 billion, including $235 million of earnings attributable to the noncontrolling interest, would be 2.7 percentage points higher, or 20.7%, if based on pre-tax income exclusive of the earnings attributable to the noncontrolling interest of $235 million.

Net Earnings Attributable to Noncontrolling Interest

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

Diluted Net Earnings Per Share Attributable to Common Stockholders

Diluted net earnings per share attributable to common stockholders decreased $1.56, or 24%, to $4.86 per share in the first nine months of 2024 from $6.42 per share in the first nine months of 2023. This decrease was due primarily to a decrease in gross margin, driven by lower average selling prices, partially offset by lower costs for natural gas. Lower gross margin was partially offset by a decrease in the income tax provision resulting from lower profitability and a decrease in net earnings attributable to noncontrolling interest. Additionally, diluted weighted-average common shares outstanding declined 6% from 194.9 million shares for the nine months ended September 30, 2023 to 183.1 million shares for the nine months ended September 30, 2024, due primarily to repurchases of common shares under our share repurchase programs.

CF INDUSTRIES HOLDINGS, INC.

Operating Results by Business Segment

Our reportable segments consist of Ammonia, Granular Urea, UAN, AN and Other. These segments are differentiated by products. Our management uses gross margin to evaluate segment performance and allocate resources. Total other operating costs and expenses (consisting primarily of selling, general and administrative expenses and other operating—net) and non-operating expenses (consisting primarily of interest and income taxes), are centrally managed and are not included in the measurement of segment profitability reviewed by management. The following table presents summary operating results by business segment:



	Ammonia			Granular Urea(1)			UAN(1)			AN(1)			Other(1)			Consolidated
	(dollars in millions)
Three months ended September 30, 2024
Net sales	$	353		$	388		$	406		$	106		$	117		$	1,370
Cost of sales	270			228			272			82			74			926
Gross margin	$	83		$	160		$	134		$	24		$	43		$	444
Gross margin percentage	23.5		%	41.2		%	33.0		%	22.6		%	36.8		%	32.4		%
Three months ended September 30, 2023
Net sales	$	235		$	360		$	435		$	114		$	129		$	1,273
Cost of sales	214			226			302			79			75			896
Gross margin	$	21		$	134		$	133		$	35		$	54		$	377
Gross margin percentage	8.9		%	37.2		%	30.6		%	30.7		%	41.9		%	29.6		%
Nine months ended September 30, 2024
Net sales	$	1,164		$	1,252		$	1,306		$	318		$	372		$	4,412
Cost of sales	869			711			813			262			225			2,880
Gross margin	$	295		$	541		$	493		$	56		$	147		$	1,532
Gross margin percentage	25.3		%	43.2		%	37.7		%	17.6		%	39.5		%	34.7		%
Nine months ended September 30, 2023
Net sales	$	1,184		$	1,431		$	1,650		$	377		$	418		$	5,060
Cost of sales	797			775			937			264			243			3,016
Gross margin	$	387		$	656		$	713		$	113		$	175		$	2,044
Gross margin percentage	32.7		%	45.8		%	43.2		%	30.0		%	41.9		%	40.4		%

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

CF INDUSTRIES HOLDINGS, INC.

Ammonia Segment

Our Ammonia segment produces anhydrous ammonia (ammonia), which is the base product that we manufacture, containing 82% nitrogen and 18% hydrogen. The results of our Ammonia segment consist of sales of ammonia to external customers for its nitrogen content as a fertilizer, in emissions control and in other industrial applications. In addition, we upgrade ammonia into other nitrogen products such as granular urea, UAN and AN.

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


	Three Months Ended September 30,											Nine Months Ended September 30,
	2024(1)			2023			2024 v. 2023					2024(1)			2023			2024 v. 2023
	(dollars in millions, except per ton amounts)
Net sales	$	353		$	235		$	118		50	%	$	1,164		$	1,184		$	(20)		(2)	%
Cost of sales	270			214			56			26	%	869			797			72			9	%
Gross margin	$	83		$	21		$	62		295	%	$	295		$	387		$	(92)		(24)	%
Gross margin percentage	23.5		%	8.9		%	14.6		%			25.3		%	32.7		%	(7.4)		%
Sales volume by product tons (000s)	948			764			184			24	%	2,845			2,469			376			15	%
Sales volume by nutrient tons (000s)(2)	778			627			151			24	%	2,333			2,025			308			15	%
Average selling price per product ton	$	372		$	308		$	64		21	%	$	409		$	480		$	(71)		(15)	%
Average selling price per nutrient ton(2)	$	454		$	375		$	79		21	%	$	499		$	585		$	(86)		(15)	%
Gross margin per product ton	$	88		$	27		$	61		226	%	$	104		$	157		$	(53)		(34)	%
Gross margin per nutrient ton(2)	$	107		$	33		$	74		224	%	$	126		$	191		$	(65)		(34)	%
Depreciation and amortization	$	55		$	39		$	16		41	%	$	176		$	117		$	59		50	%
Unrealized net mark-to-market loss (gain) on natural gas derivatives	$	—		$	2		$	(2)		(100)	%	$	(12)		$	(19)		$	7		37	%

(1)Includes the financial results of the Waggaman ammonia production facility, which we acquired on December 1, 2023. See “Acquisition of Waggaman Ammonia Production Facility” for additional information.

(2)Ammonia represents 82% nitrogen content. Nutrient tons represent the tons of nitrogen within the product tons.

Third Quarter of 2024 Compared to Third Quarter of 2023

Net Sales. Net sales in our Ammonia segment increased by $118 million, or 50%, to $353 million in the third quarter of 2024 from $235 million in the third quarter of 2023. The increase in our net sales reflects a 21% increase in average selling prices and a 24% increase in sales volume, including the impact of the Waggaman acquisition completed on December 1, 2023. Average selling prices increased to $372 per ton in the third quarter of 2024 compared to $308 per ton in the third quarter of 2023. The increase in our average selling price was due primarily to lower global supply availability due in part to lower natural gas availability in Trinidad and Egypt.

Ammonia sales volume in the third quarter of 2024 was approximately 948,000 tons, an increase of 184,000 tons, or 24%, compared to the third quarter of 2023. The increase in sales volume was due primarily to the impact of the Waggaman acquisition completed on December 1, 2023, which increased our ammonia sales volume in the third quarter of 2024 by approximately 217,000 tons. The impact of the Waggaman acquisition was partially offset by lower supply availability resulting from lower beginning inventory entering the third quarter of 2024.

Cost of Sales. Cost of sales in our Ammonia segment averaged $284 per ton in the third quarter of 2024, a 1% increase from $281 per ton in the third quarter of 2023. The increase was due primarily to higher costs for maintenance activity, partially offset by lower realized natural gas costs, including the impact of realized derivatives. The impact of the Waggaman acquisition on our cost of sales per ton in our Ammonia segment was not material.

Gross Margin. Gross margin in our Ammonia segment increased by $62 million to $83 million in the third quarter of 2024 from $21 million in the third quarter of 2023, and our gross margin percentage was 23.5% in the third quarter of 2024 compared to 8.9% in the third quarter of 2023. The increase in gross margin was due primarily to a 21% increase in average selling prices, which increased gross margin by $56 million, the impact of the Waggaman acquisition, which increased gross margin by $27 million, and a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $17 million. These factors that increased gross margin were partially offset by a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $37 million, and, excluding the impact of the

CF INDUSTRIES HOLDINGS, INC.

Waggaman acquisition completed on December 1, 2023, a decrease in sales volume, which decreased gross margin by $3 million. Gross margin also includes the impact of a $2 million unrealized net mark-to-market loss on natural gas derivatives in the third quarter of 2023.

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

Net Sales. Net sales in our Ammonia segment decreased by $20 million, or 2%, to $1.16 billion in the nine months ended September 30, 2024 from $1.18 billion in the nine months ended September 30, 2023. The decrease in our net sales reflects a 15% decrease in average selling prices, partially offset by a 15% increase in sales volume, including the impact of the Waggaman acquisition completed on December 1, 2023. Average selling prices decreased to $409 per ton in the nine months ended September 30, 2024 compared to $480 per ton in the nine months ended September 30, 2023 as lower global energy costs reduced the global market clearing price required to meet global demand.

In January 2024, a winter storm produced extremely cold temperatures that impacted our operations, including the temporary shut-down of certain of our plants. As a result of the adverse weather, we incurred additional maintenance costs in the first quarter of 2024. Due to the impact of plant downtime resulting from the adverse weather and additional plant maintenance activity in the first quarter of 2024, we purchased and resold approximately 62,000 tons of ammonia at near breakeven margins in order to fulfill sales commitments.

Ammonia sales volume in the nine months ended September 30, 2024 was 2.8 million tons, an increase of 15% compared to 2.5 million tons in the nine months ended September 30, 2023. The increase in sales volume reflects the impact of the Waggaman acquisition completed on December 1, 2023, which increased our ammonia sales volume in the nine months ended September 30, 2024 by approximately 500,000 tons, and approximately 62,000 tons of ammonia purchased and resold as described above, partially offset by lower supply availability resulting from lower beginning inventory, and, due to unfavorable weather, lower spring ammonia applications in North America compared to the nine months ended September 30, 2023.

Cost of Sales. Cost of sales in our Ammonia segment averaged $305 per ton in the nine months ended September 30, 2024, a 6% decrease from $323 per ton in the nine months ended September 30, 2023. The decrease was due primarily to lower realized natural gas costs, including the impact of realized derivatives, partially offset by higher costs for maintenance, repairs and certain unabsorbed fixed costs as a result of plant downtime, including the impact of the adverse weather in January 2024 as discussed above. The impact of the Waggaman acquisition on our cost of sales per ton in our Ammonia segment was not material.

Gross Margin. Gross margin in our Ammonia segment decreased by $92 million, or 24%, to $295 million in the nine months ended September 30, 2024 from $387 million in the nine months ended September 30, 2023, and our gross margin percentage was 25.3% in the nine months ended September 30, 2024 compared to 32.7% in the nine months ended September 30, 2023. The decrease in gross margin was due primarily to a 15% decrease in average selling prices, which decreased gross margin by $164 million, a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $100 million, and, excluding the impact of the Waggaman acquisition, a decrease in sales volume, which decreased gross margin by $20 million. These factors that decreased gross margin were partially offset by the impact of a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $166 million, and the impact of the Waggaman acquisition, which increased gross margin by $33 million. Gross margin also includes the impact of a $12 million unrealized net mark-to-market gain on natural gas derivatives in the nine months ended September 30, 2024 compared to a $19 million gain in the nine months ended September 30, 2023.

CF INDUSTRIES HOLDINGS, INC.

Granular Urea Segment

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

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


	Three Months Ended September 30,											Nine Months Ended September 30,
	2024			2023			2024 v. 2023					2024			2023			2024 v. 2023
	(dollars in millions, except per ton amounts)
Net sales	$	388		$	360		$	28		8	%	$	1,252		$	1,431		$	(179)		(13)	%
Cost of sales	228			226			2			1	%	711			775			(64)			(8)	%
Gross margin	$	160		$	134		$	26		19	%	$	541		$	656		$	(115)		(18)	%
Gross margin percentage	41.2		%	37.2		%	4.0		%			43.2		%	45.8		%	(2.6)		%
Sales volume by product tons (000s)	1,177			1,062			115			11	%	3,520			3,532			(12)			—	%
Sales volume by nutrient tons (000s)(1)	541			488			53			11	%	1,619			1,625			(6)			—	%
Average selling price per product ton	$	330		$	339		$	(9)		(3)	%	$	356		$	405		$	(49)		(12)	%
Average selling price per nutrient ton(1)	$	717		$	738		$	(21)		(3)	%	$	773		$	881		$	(108)		(12)	%
Gross margin per product ton	$	136		$	126		$	10		8	%	$	154		$	186		$	(32)		(17)	%
Gross margin per nutrient ton(1)	$	296		$	275		$	21		8	%	$	334		$	404		$	(70)		(17)	%
Depreciation and amortization	$	73		$	66		$	7		11	%	$	218		$	216		$	2		1	%
Unrealized net mark-to-market loss (gain) on natural gas derivatives	$	—		$	2		$	(2)		(100)	%	$	(9)		$	(18)		$	9		50	%

(1)Granular urea represents 46% nitrogen content. Nutrient tons represent the tons of nitrogen within the product tons.

Third Quarter of 2024 Compared to Third Quarter of 2023

Net Sales. Net sales in our Granular Urea segment increased $28 million, or 8%, to $388 million in the third quarter of 2024 from $360 million in the third quarter of 2023 due primarily to an 11% increase in sales volume, partially offset by a 3% decrease in average selling prices. Sales volume was higher due primarily to a production mix that favored granular urea production in the third quarter of 2024 compared to the third quarter of 2023. Average selling prices decreased to $330 per ton in the third quarter of 2024 compared to $339 per ton in the third quarter of 2023 as lower global energy costs reduced the global market clearing price required to meet global demand.

Cost of Sales. Cost of sales in our Granular Urea segment averaged $194 per ton in the third quarter of 2024, a decrease of 9% from $213 per ton in the third quarter of 2023. The decrease was due primarily to lower realized natural gas costs, including the impact of realized derivatives.

Gross Margin. Gross margin in our Granular Urea segment increased by $26 million, or 19%, to $160 million in the third quarter of 2024 from $134 million in the third quarter of 2023, and our gross margin percentage was 41.2% in the third quarter of 2024 compared to 37.2% in the third quarter of 2023. The increase in gross margin was due primarily to an 11% increase in sales volume, which increased gross margin by $22 million, a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $15 million, and a net decrease in manufacturing, maintenance and other costs, which increased gross margin by $1 million. These factors that increased gross margin were partially offset by 3% decrease in average selling prices, which decreased gross margin by $14 million. Gross margin also includes the impact of a $2 million unrealized net mark-to-market loss on natural gas derivatives in the third quarter of 2023.

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

Net Sales. Net sales in our Granular Urea segment decreased $179 million, or 13%, to $1.25 billion in the nine months ended September 30, 2024 from $1.43 billion in the nine months ended September 30, 2023 due primarily to a 12% decrease in average selling prices. Average selling prices decreased to $356 per ton in the nine months ended September 30, 2024 compared to $405 per ton in the nine months ended September 30, 2023 as lower global energy costs reduced the global market clearing price required to meet global demand. Sales volume was 3.5 million tons in both the nine months ended September 30, 2024 and 2023. Lower sales volume in the first quarter of 2024, which was due primarily to a reduction in ammonia available

CF INDUSTRIES HOLDINGS, INC.

for upgrade and lower supply availability from the impact of severe weather that caused urea plant outages, was largely offset by higher sales volume in the second and third quarters of 2024 due primarily to a production mix that favored granular urea production. Sales volume in the nine months ended September 30, 2024 includes the impact of approximately 48,000 tons of granular urea purchased and resold in the first quarter of 2024 due to the impact of the severe weather described above.

Cost of Sales. Cost of sales in our Granular Urea segment averaged $202 per ton in the nine months ended September 30, 2024, an 8% decrease from $219 per ton in the nine months ended September 30, 2023. The decrease was due primarily to lower realized natural gas costs, including the impact of realized derivatives, partially offset by higher costs associated with maintenance activity in the nine months ended September 30, 2024.

Gross Margin. Gross margin in our Granular Urea segment decreased by $115 million, or 18%, to $541 million in the nine months ended September 30, 2024 from $656 million in the nine months ended September 30, 2023, and our gross margin percentage was 43.2% in the nine months ended September 30, 2024 compared to 45.8% in the nine months ended September 30, 2023. The decrease in gross margin was due primarily to a 12% decrease in average selling prices, which decreased gross margin by $151 million, a decrease in sales volume, which decreased gross margin by $17 million, and a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $32 million. These factors that decreased gross margin were partially offset by a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $94 million. Gross margin also includes the impact of a $9 million unrealized net mark-to-market gain on natural gas derivatives in the nine months ended September 30, 2024 compared to an $18 million gain in the nine months ended September 30, 2023.

UAN Segment

Our UAN segment produces urea ammonium nitrate solution (UAN). UAN, a liquid fertilizer product with a nitrogen content that typically ranges from 28% to 32%, is produced by combining urea and ammonium nitrate. UAN is produced at our Courtright, Donaldsonville, Port Neal, Verdigris, Woodward, and Yazoo City complexes.

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


	Three Months Ended September 30,											Nine Months Ended September 30,
	2024			2023			2024 v. 2023					2024			2023			2024 v. 2023
	(dollars in millions, except per ton amounts)
Net sales	$	406		$	435		$	(29)		(7)	%	$	1,306		$	1,650		$	(344)		(21)	%
Cost of sales	272			302			(30)			(10)	%	813			937			(124)			(13)	%
Gross margin	$	134		$	133		$	1		1	%	$	493		$	713		$	(220)		(31)	%
Gross margin percentage	33.0		%	30.6		%	2.4		%			37.7		%	43.2		%	(5.5)		%
Sales volume by product tons (000s)	1,799			1,954			(155)			(8)	%	5,158			5,425			(267)			(5)	%
Sales volume by nutrient tons (000s)(1)	570			616			(46)			(7)	%	1,632			1,710			(78)			(5)	%
Average selling price per product ton	$	226		$	223		$	3		1	%	$	253		$	304		$	(51)		(17)	%
Average selling price per nutrient ton(1)	$	712		$	706		$	6		1	%	$	800		$	965		$	(165)		(17)	%
Gross margin per product ton	$	74		$	68		$	6		9	%	$	96		$	131		$	(35)		(27)	%
Gross margin per nutrient ton(1)	$	235		$	216		$	19		9	%	$	302		$	417		$	(115)		(28)	%
Depreciation and amortization	$	69		$	78		$	(9)		(12)	%	$	206		$	214		$	(8)		(4)	%
Unrealized net mark-to-market loss (gain) on natural gas derivatives	$	1		$	3		$	(2)		(67)	%	$	(9)		$	(18)		$	9		50	%

(1)UAN represents between 28% and 32% of nitrogen content, depending on the concentration specified by the customer. Nutrient tons represent the tons of nitrogen within the product tons.

Third Quarter of 2024 Compared to Third Quarter of 2023

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

CF INDUSTRIES HOLDINGS, INC.

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

Gross Margin. Gross margin in our UAN segment increased by $1 million, or 1%, to $134 million in the third quarter of 2024 from $133 million in the third quarter of 2023, and our gross margin percentage was 33.0% in the third quarter of 2024 compared to 30.6% in the third quarter of 2023. The increase in gross margin was due primarily to a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $7 million, a 1% increase in average selling prices, which increased gross margin by $5 million, and a net decrease in manufacturing, maintenance and other costs, which increased gross margin by $2 million. These factors that increased gross margin were offset by an 8% decrease in sales volume, which decreased gross margin by $15 million. Gross margin also includes the impact of a $1 million unrealized net mark-to-market loss on natural gas derivatives in the third quarter of 2024 compared to a $3 million loss in the third quarter of 2023.

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

Net Sales. Net sales in our UAN segment decreased $344 million, or 21%, to $1.31 billion in the nine months ended September 30, 2024 from $1.65 billion in the nine months ended September 30, 2023 due primarily to a 17% decrease in average selling prices and a 5% decrease in sales volume. Average selling prices decreased to $253 per ton in the nine months ended September 30, 2024 compared to $304 per ton in the nine months ended September 30, 2023 as lower global energy costs reduced the global market clearing price required to meet global demand. Sales volume was lower due primarily to lower supply availability resulting from lower beginning inventory entering 2024.

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

Gross Margin. Gross margin in our UAN segment decreased by $220 million, or 31%, to $493 million in the nine months ended September 30, 2024 from $713 million in the nine months ended September 30, 2023, and our gross margin percentage was 37.7% in the nine months ended September 30, 2024 compared to 43.2% in the nine months ended September 30, 2023. The decrease in gross margin was due primarily to a 17% decrease in average selling prices, which decreased gross margin by $273 million, a 5% decrease in sales volume, which decreased gross margin by $37 million, and a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $1 million. These factors that decreased gross margin were partially offset by a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $100 million. Gross margin also includes the impact of a $9 million unrealized net mark-to-market gain on natural gas derivatives in the nine months ended September 30, 2024 compared to an $18 million gain in the nine months ended September 30, 2023.

CF INDUSTRIES HOLDINGS, INC.

AN Segment

Our AN segment produces ammonium nitrate (AN). AN, which has a nitrogen content between 29% and 35%, is produced by combining anhydrous ammonia and nitric acid. AN is used as nitrogen fertilizer and is also used extensively by the commercial explosives industry as a component of explosives. AN is produced at our Yazoo City and Billingham complexes.

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


	Three Months Ended September 30,											Nine Months Ended September 30,
	2024			2023			2024 v. 2023					2024			2023			2024 v. 2023
	(dollars in millions, except per ton amounts)
Net sales	$	106		$	114		$	(8)		(7)	%	$	318		$	377		$	(59)		(16)	%
Cost of sales	82			79			3			4	%	262			264			(2)			(1)	%
Gross margin	$	24		$	35		$	(11)		(31)	%	$	56		$	113		$	(57)		(50)	%
Gross margin percentage	22.6		%	30.7		%	(8.1)		%			17.6		%	30.0		%	(12.4)		%
Sales volume by product tons (000s)	377			414			(37)			(9)	%	1,107			1,157			(50)			(4)	%
Sales volume by nutrient tons (000s)(1)	129			141			(12)			(9)	%	379			396			(17)			(4)	%
Average selling price per product ton	$	281		$	275		$	6		2	%	$	287		$	326		$	(39)		(12)	%
Average selling price per nutrient ton(1)	$	822		$	809		$	13		2	%	$	839		$	952		$	(113)		(12)	%
Gross margin per product ton	$	64		$	85		$	(21)		(25)	%	$	51		$	98		$	(47)		(48)	%
Gross margin per nutrient ton(1)	$	186		$	248		$	(62)		(25)	%	$	148		$	285		$	(137)		(48)	%
Depreciation and amortization	$	10		$	13		$	(3)		(23)	%	$	30		$	36		$	(6)		(17)	%
Unrealized net mark-to-market gain on natural gas derivatives	$	—		$	—		$	—		—	%	$	(1)		$	(3)		$	2		67	%

(1)AN represents between 29% and 35% of nitrogen content. Nutrient tons represent the tons of nitrogen within the product tons.

Third Quarter of 2024 Compared to Third Quarter of 2023

Net Sales. Net sales in our AN segment decreased $8 million, or 7%, to $106 million in the third quarter of 2024 from $114 million in the third quarter of 2023 due to a 9% decrease in sales volume, partially offset by a 2% increase in average selling prices. Sales volume declined due primarily to lower supply availability resulting from lower production in the third quarter of 2024. Average selling prices were $281 per ton in the third quarter of 2024 compared to $275 per ton in the third quarter of 2023.

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

Gross Margin. Gross margin in our AN segment decreased $11 million, or 31%, to $24 million in third quarter of 2024 from $35 million in the third quarter of 2023, and our gross margin percentage was 22.6% in the third quarter of 2024 compared to 30.7% in the third quarter of 2023. The factors that decreased gross margin were a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $10 million, and a 9% decrease in sales volume, which decreased gross margin by $4 million. These factors that decreased gross margin were partially offset by a 2% increase in average selling prices, which increased gross margin by $2 million, and a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $1 million.

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

Net Sales. Net sales in our AN segment decreased $59 million, or 16%, to $318 million in the nine months ended September 30, 2024 from $377 million in the nine months ended September 30, 2023 due to a 12% decrease in average selling prices and a 4% decrease in sales volume. Average selling prices decreased to $287 per ton in the nine months ended September 30, 2024 compared to $326 per ton in the nine months ended September 30, 2023 as lower global energy costs reduced the global market clearing price required to meet global demand.

CF INDUSTRIES HOLDINGS, INC.

Cost of Sales. Cost of sales in our AN segment averaged $236 per ton in the nine months ended September 30, 2024, a 4% increase from $228 per ton in the nine months ended September 30, 2023. The increase was due primarily to higher costs for maintenance activity in North America, which was partially offset by the impact of lower realized natural gas costs, including the impact of realized derivatives, and, for our United Kingdom operations, a lower cost per ton for purchased ammonia used for upgrading into AN.

Gross Margin. Gross margin in our AN segment decreased $57 million, or 50%, to $56 million in the nine months ended September 30, 2024 from $113 million in the nine months ended September 30, 2023, and our gross margin percentage was 17.6% in the nine months ended September 30, 2024 compared to 30.0% in the nine months ended September 30, 2023. The decrease in gross margin was due primarily to a 12% decrease in average selling prices, which decreased gross margin by $65 million and a 4% decrease in sales volume, which decreased gross margin by $10 million. These factors that decreased gross margin were partially offset by a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $11 million, and a net decrease in manufacturing, maintenance and other costs, which increased gross margin by $9 million. Gross margin also includes the impact of a $1 million unrealized net mark-to-market gain on natural gas derivatives in the nine months ended September 30, 2024 compared to a $3 million gain in the nine months ended September 30, 2023.

Other Segment

Our Other segment primarily includes the following products:

diesel exhaust fluid (DEF), an aqueous urea solution typically made with 32.5% or 50% high-purity urea and the remainder deionized water;
urea liquor, a liquid product that we sell in concentrations of 40%, 50% and 70% high-purity urea as a chemical intermediate; and
nitric acid, a nitrogen-based mineral acid that is used in the production of nitrate-based fertilizers, nylon precursors and other specialty chemicals.

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


	Three Months Ended September 30,											Nine Months Ended September 30,
	2024			2023			2024 v. 2023					2024			2023			2024 v. 2023
	(dollars in millions, except per ton amounts)
Net sales	$	117		$	129		$	(12)		(9)	%	$	372		$	418		$	(46)		(11)	%
Cost of sales	74			75			(1)			(1)	%	225			243			(18)			(7)	%
Gross margin	$	43		$	54		$	(11)		(20)	%	$	147		$	175		$	(28)		(16)	%
Gross margin percentage	36.8		%	41.9		%	(5.1)		%			39.5		%	41.9		%	(2.4)		%
Sales volume by product tons (000s)	496			551			(55)			(10)	%	1,566			1,635			(69)			(4)	%
Sales volume by nutrient tons (000s)(1)	97			108			(11)			(10)	%	305			321			(16)			(5)	%
Average selling price per product ton	$	236		$	234		$	2		1	%	$	238		$	256		$	(18)		(7)	%
Average selling price per nutrient ton(1)	$	1,206		$	1,194		$	12		1	%	$	1,220		$	1,302		$	(82)		(6)	%
Gross margin per product ton	$	87		$	98		$	(11)		(11)	%	$	94		$	107		$	(13)		(12)	%
Gross margin per nutrient ton(1)	$	443		$	500		$	(57)		(11)	%	$	482		$	545		$	(63)		(12)	%
Depreciation and amortization	$	15		$	15		$	—		—	%	$	48		$	48		$	—		—	%
Unrealized net mark-to-market gain on natural gas derivatives	$	—		$	—		$	—		—	%	$	(2)		$	(7)		$	5		71	%

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

Third Quarter of 2024 Compared to Third Quarter of 2023

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

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

CF INDUSTRIES HOLDINGS, INC.

Gross Margin. Gross margin in our Other segment decreased by $11 million, or 20%, to $43 million in the third quarter of 2024 from $54 million in the third quarter of 2023, and our gross margin percentage was 36.8% in the third quarter of 2024 compared to 41.9% in the third quarter of 2023. The decrease in gross margin was due primarily to a 10% decrease in sales volume, which decreased gross margin by $9 million and a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $5 million. These factors that decreased gross margin were partially offset by a 1% increase in average selling prices, which increased gross margin by $3 million.

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

Net Sales. Net sales in our Other segment decreased by $46 million, or 11%, to $372 million in the nine months ended September 30, 2024 from $418 million in the nine months ended September 30, 2023 due to a 7% decrease in average selling prices and a 4% decrease in sales volume. The decrease in average selling prices was due primarily to lower global energy costs reducing the global market clearing price required to meet global demand. The decrease in sales volume was due primarily to lower DEF sales volume, partially offset by higher nitric acid sales volume.

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

Gross Margin. Gross margin in our Other segment decreased by $28 million, or 16%, to $147 million in the nine months ended September 30, 2024 from $175 million in the nine months ended September 30, 2023, and our gross margin percentage was 39.5% in the nine months ended September 30, 2024 compared to 41.9% in the nine months ended September 30, 2023. The decrease in gross margin was due primarily to a 7% decrease in average selling prices, which decreased gross margin by $27 million and a 4% decrease in sales volume, which decreased gross margin by $15 million. These factors that decreased gross margin were partially offset by a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $19 million. Gross margin also includes the impact of a $2 million unrealized net mark-to-market gain on natural gas derivatives in the nine months ended September 30, 2024 compared to a $7 million gain in the nine months ended September 30, 2023.

Liquidity and Capital Resources

Our primary uses of cash are generally for operating costs, working capital, capital expenditures, debt service, investments, taxes, share repurchases, and dividends. Our working capital requirements are affected by several factors, including demand for our products, selling prices, raw material costs, freight costs and seasonal factors inherent in the business. We may also utilize our cash to fund acquisitions. In addition, we may from time to time seek to retire or purchase our outstanding debt through cash purchases, in open market or privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Generally, our primary source of cash is cash from operations, which includes cash generated by customer advances. We may also from time to time access the capital markets or engage in borrowings under our revolving credit agreement.

As of September 30, 2024, our cash and cash equivalents balance was $1.88 billion, a decrease of $155 million from $2.03 billion at December 31, 2023. The decrease in cash and cash equivalents primarily reflects cash used for share repurchases, capital expenditures, distributions to the noncontrolling interest, and the payment of dividends, partially offset by cash generated by operations, as described below under “Cash Flows.” At September 30, 2024, we were in compliance with all applicable covenant requirements under our revolving credit agreement and senior notes, and unused borrowing capacity under our revolving credit agreement was $750 million.

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

Cash Equivalents

Cash equivalents include highly liquid investments that are readily convertible to known amounts of cash with original maturities of three months or less. Under our short-term investment policy, we may invest our cash balances, either directly or through mutual funds, in several types of investment-grade securities, including notes and bonds issued by governmental entities or corporations. Securities issued by governmental entities include those issued directly by the U.S. and Canadian

CF INDUSTRIES HOLDINGS, INC.

federal governments; those issued by state, local or other governmental entities; and those guaranteed by entities affiliated with governmental entities.

Capital Spending

We make capital expenditures to sustain our asset base, increase our capacity or capabilities, improve plant efficiency, comply with various environmental, health and safety requirements, and invest in our clean energy strategy. Capital expenditures totaled $321 million in the first nine months of 2024 compared to $311 million in the first nine months of 2023.

We currently anticipate that capital expenditures for the full year 2024 will be approximately $525 million. Planned capital expenditures are generally subject to change due to delays in regulatory approvals or permitting, unanticipated increases in cost, changes in scope and completion time, performance of third parties, delays in the receipt of equipment, adverse weather, defects in materials and workmanship, labor or material shortages, transportation constraints, acceleration or delays in the timing of the work and other unforeseen difficulties. Any of these changes in planned capital expenditures, individually or in the aggregate, could have a material impact on our results of operations and cash flows.

Acquisition of Waggaman Ammonia Production Facility

On December 1, 2023, we acquired an ammonia production facility located in Waggaman, Louisiana from Dyno Nobel Louisiana Ammonia, LLC (DNLA), a U.S. subsidiary of Australia-based Incitec Pivot Limited (IPL), pursuant to an asset purchase agreement with DNLA and IPL. The facility has a nameplate production capacity of 880,000 tons of ammonia annually. Our acquisition of the Waggaman facility expanded our ammonia manufacturing and distribution capacity, including our ability to enable low-carbon ammonia production.

The financial results of the Waggaman facility are included in our consolidated statement of operations and in our Ammonia segment from the acquisition date of December 1, 2023. See Note 5—Acquisition of Waggaman Ammonia Production Facility for additional information.

Share Repurchase Programs

On November 3, 2021, our Board of Directors (the Board) authorized the repurchase of up to $1.5 billion of CF Holdings common stock through December 31, 2024 (the 2021 Share Repurchase Program). The 2021 Share Repurchase Program was completed in the second quarter of 2023. On November 2, 2022, the Board authorized the repurchase of up to $3 billion of CF Holdings common stock commencing upon completion of the 2021 Share Repurchase Program and effective through December 31, 2025 (the 2022 Share Repurchase Program). Repurchases under our share repurchase programs may be made from time to time in the open market, through privately negotiated transactions, through block transactions, through accelerated share repurchase programs, or otherwise. The manner, timing and amount of repurchases will be determined by our management based on the evaluation of market conditions, stock price, and other factors.

CF INDUSTRIES HOLDINGS, INC.

The following table summarizes the share repurchases under the 2022 Share Repurchase Program.


	2022 Share Repurchase Program
	Shares	Amounts(1)
	(in millions)








Shares repurchased in 2023:

Second quarter	0.8	$	50
Third quarter	1.9	150
Fourth quarter	2.9	225
Total shares repurchased in 2023	5.6	425

Shares repurchased in 2024:
First quarter	4.3	347
Second quarter	4.0	305
Third quarter	6.1	476

Total shares repurchased in 2024	14.4	1,128
Shares repurchased as of September 30, 2024	20.0	$	1,553

(1)As defined in the 2022 Share Repurchase Program, amounts reflect the price paid for the shares of common stock repurchased, excluding commissions paid to brokers and excise taxes.

In the nine months ended September 30, 2024, we repurchased approximately 14.4 million shares under the 2022 Share Repurchase Program for $1.13 billion. In the nine months ended September 30, 2024, we retired approximately 8.5 million shares of repurchased stock, and we held approximately 6.1 million shares of treasury stock as of September 30, 2024.

In the second quarter of 2023, we completed the 2021 Share Repurchase Program with the repurchase of approximately 2.3 million shares for $155 million. In the nine months ended September 30, 2023, we repurchased approximately 2.7 million shares under the 2022 Share Repurchase Program for $200 million, and we retired approximately 3.3 million shares of repurchased stock.

Canada Revenue Agency Competent Authority Matter

In connection with the matter described above under “Items Affecting Comparability of Results—Canada Revenue Agency Competent Authority Matter,” in the third quarter of 2024, we were informed that the CRA granted us discretionary interest relief for certain tax years from 2006 through 2011. Based on current estimates and foreign currency exchange rates as of September 30, 2024, the interest relief from the CRA and Alberta TRA is estimated to be approximately $40 million, consisting of interest refunds of $37 million and related interest of $3 million. As a result, in the third quarter of 2024, we recognized a $37 million reduction in interest expense and $3 million of interest income in our consolidated statement of operations. We expect to receive the interest refunds in late 2024 or 2025.

Debt

Revolving Credit Agreement

We have a senior unsecured revolving credit agreement (the Revolving Credit Agreement), which provides for a revolving credit facility of up to $750 million with a maturity of October 26, 2028 and includes a letter of credit sub-limit of $125 million. Borrowings under the Revolving Credit Agreement may be used for working capital, capital expenditures, acquisitions, share repurchases and other general corporate purposes. CF Industries is the lead borrower, and CF Holdings is the sole guarantor, under the Revolving Credit Agreement.

Borrowings under the Revolving Credit Agreement can be denominated in U.S. dollars, Canadian dollars, euros and British pounds. Borrowings in U.S. dollars bear interest at a per annum rate equal to, at our option, an applicable adjusted term Secured Overnight Financing Rate or base rate plus, in either case, a specified margin. We are required to pay an undrawn commitment fee on the undrawn portion of the commitments under the Revolving Credit Agreement and customary letter of credit fees. The specified margin and the amount of the commitment fee depended on CF Holdings’ credit rating at the time. The Revolving Credit Agreement contains representations and warranties and affirmative and negative covenants, including a financial covenant.

CF INDUSTRIES HOLDINGS, INC.

As of September 30, 2024, we had unused borrowing capacity under the Revolving Credit Agreement of $750 million and no outstanding letters of credit under the Revolving Credit Agreement. There were no borrowings outstanding under the Revolving Credit Agreement as of September 30, 2024 or December 31, 2023, or during the nine months ended September 30, 2024.

Letters of Credit Under Bilateral Agreement

We are party to a bilateral agreement providing for the issuance of up to $425 million of letters of credit. As of September 30, 2024, approximately $344 million of letters of credit were outstanding under this agreement.

Senior Notes

Long-term debt presented on our consolidated balance sheets as of September 30, 2024 and December 31, 2023 consisted of the following debt securities issued by CF Industries:


	Effective Interest Rate		September 30, 2024						December 31, 2023
		Principal			Carrying Amount(1)			Principal			Carrying Amount(1)
			(in millions)
Public Senior Notes:



5.150% due March 2034	5.293%		$	750		$	742		$	750		$	741
4.950% due June 2043	5.040%		750			742			750			742
5.375% due March 2044	5.478%		750			741			750			741
Senior Secured Notes:

4.500% due December 2026(2)	4.783%		750			745			750			744
Total long-term debt			$	3,000		$	2,970		$	3,000		$	2,968

(1)Carrying amount is net of unamortized debt discount and deferred debt issuance costs. Total unamortized debt discount was $6 million and $7 million as of September 30, 2024 and December 31, 2023, respectively, and total deferred debt issuance costs were $24 million and $25 million as of September 30, 2024 and December 31, 2023, respectively.

(2)Effective August 23, 2021, these notes are no longer secured, in accordance with the terms of the applicable indenture.

Under the terms of the indentures (including the applicable supplemental indentures) governing our senior notes due 2034, 2043 and 2044 identified in the table above (the Public Senior Notes), each series of Public Senior Notes is guaranteed by CF Holdings. Under the terms of the indenture governing the 4.500% senior secured notes due 2026 (the 2026 Notes), the 2026 Notes are guaranteed by CF Holdings.

Interest on the Public Senior Notes and the 2026 Notes is payable semiannually, and the Public Senior Notes and the 2026 Notes are redeemable at our option, in whole at any time or in part from time to time, at specified make-whole redemption prices.

Forward Sales and Customer Advances

We offer our customers the opportunity to purchase products from us on a forward basis at prices and on delivery dates we propose. Therefore, our reported fertilizer selling prices and margins may differ from market spot prices and margins available at the time of shipment.

Customer advances, which typically represent a portion of the contract’s value, are received shortly after the contract is executed, with any remaining unpaid amount generally being collected by the time control transfers to the customer, thereby reducing or eliminating the accounts receivable related to such sales. Any cash payments received in advance from customers in connection with forward sales contracts are reflected on our consolidated balance sheets as a current liability until control transfers and revenue is recognized. As of September 30, 2024 and December 31, 2023, we had $348 million and $130 million, respectively, in customer advances on our consolidated balance sheets.

While customer advances are generally a significant source of liquidity, the level of forward sales contracts is affected by many factors, including current market conditions, our customers’ outlook of future market fundamentals and seasonality. During periods of declining prices, customers tend to delay purchasing fertilizer in anticipation that prices in the future will be lower than the current prices. If the level of sales under our forward sales programs were to decrease in the future, our cash received from customer advances would likely decrease and our accounts receivable balances would likely increase.

CF INDUSTRIES HOLDINGS, INC.

Additionally, borrowing under the Revolving Credit Agreement could become necessary. Due to the volatility inherent in our business and changing customer expectations, we cannot estimate the amount of future forward sales activity.

Under our forward sales programs, a customer may delay delivery of an order due to weather conditions or other factors. These delays generally subject the customer to potential charges for storage or may be grounds for termination of the contract by us. Such a delay in scheduled shipment or termination of a forward sales contract due to a customer’s inability or unwillingness to perform may negatively impact our reported sales.

Derivative Financial Instruments

We use derivative financial instruments to reduce our exposure to changes in prices for natural gas that will be purchased in the future. Natural gas is the largest and most volatile component of our manufacturing cost for nitrogen-based products. From time to time, we may also use derivative financial instruments to reduce our exposure to changes in foreign currency exchange rates. Volatility in reported quarterly earnings can result from the unrealized mark-to-market adjustments in the value of the derivatives. As of September 30, 2024, our open natural gas derivative contracts consisted of natural gas basis swaps for 17.5 million MMBtus of natural gas. As of December 31, 2023, our open natural gas derivative contracts consisted of natural gas fixed price swaps, basis swaps and options for 49.0 million MMBtus of natural gas.

Defined Benefit Pension Plans

We contributed $22 million to our pension plans in the nine months ended September 30, 2024. Over the remainder of 2024, we expect to contribute approximately $1 million to our pension plans, which would result in our making total contributions of approximately $23 million to our pension plans for the full year 2024. In addition, as of September 30, 2024, we expect to contribute to our U.K. pension plans a total of approximately £18 million (or $24 million) for the three-year period from 2025 to 2027, as currently agreed with the plans’ trustees.

Distributions to Noncontrolling Interest in CFN

On January 31, 2024, CFN distributed approximately $144 million to CHS for the distribution period ended December 31, 2023. On July 31, 2024, the CFN Board of Managers approved semi-annual distribution payments for the distribution period ended June 30, 2024 in accordance with CFN’s limited liability company agreement, and CFN distributed approximately $164 million to CHS for this distribution period. The estimate of the partnership distribution earned by CHS, but not yet declared, for the third quarter of 2024 is approximately $65 million.

Cash Flows

Net cash provided by operating activities during the first nine months of 2024 was $1.85 billion, a decrease of $426 million, compared to $2.28 billion in the first nine months of 2023. The decrease in cash flow from operations was due primarily to lower net earnings and changes in net working capital. Net earnings for the first nine months of 2024 was $1.09 billion compared to $1.49 billion for the first nine months of 2023, a decrease of $401 million. The decrease in net earnings was due primarily to a decrease in gross margin, driven by lower average selling prices, partially offset by lower natural gas costs. During the first nine months of 2024, net changes in working capital contributed $64 million less toward net cash from operations, than in the first nine months of 2023. These changes primarily occurred in accounts receivable and inventories, partially offset by changes in accounts payable, accrued expenses and customer advances.

Net cash used in investing activities was $273 million in the first nine months of 2024 compared to $271 million in the first nine months of 2023. Capital expenditures totaled $321 million during the first nine months of 2024 compared to $311 million in the first nine months of 2023. Proceeds from the sale of emission credits was $47 million in the first nine months of 2024 compared to $39 million in the first nine months of 2023.

Net cash used in financing activities was $1.74 billion in the first nine months of 2024 compared to $1.07 billion in the first nine months of 2023. The increase was due primarily to an increase in share repurchases and dividends paid, partially offset by a decrease in distributions to noncontrolling interest. In the first nine months of 2024, we paid $1.13 billion for share repurchases compared to $355 million paid for share repurchases in the first nine months of 2023. In the first nine months of 2024, dividends paid on common stock was $278 million compared to $235 million in the first nine months of 2023. The increase in dividends paid on common stock reflects quarterly dividends of $0.50 per common share declared and paid in the first three quarters of 2024, compared to quarterly dividends of $0.40 per common share that were declared and paid in the first three quarters of 2023. In the first nine months of 2024, distributions to the noncontrolling interest were $308 million compared to $459 million in the first nine months of 2023.

CF INDUSTRIES HOLDINGS, INC.

Critical Accounting Estimates

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

Recent Accounting Pronouncements

See Note 2—New Accounting Standards for a discussion of recent accounting pronouncements.

Forward-Looking Statements

From time to time, in this Quarterly Report on Form 10-Q as well as in other written reports and oral statements, we make forward-looking statements that are not statements of historical fact and may involve a number of risks and uncertainties. These statements relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our prospects, future developments and business strategies. We have used the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” or “would” and similar terms and phrases, including references to assumptions, to identify forward-looking statements in this document. These forward-looking statements are made based on currently available competitive, financial and economic data, our current expectations, estimates, forecasts and projections about the industries and markets in which we operate and management’s beliefs and assumptions concerning future events affecting us. These statements are not guarantees of future performance and are subject to risks, uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Therefore, our actual results may differ materially from what is expressed in or implied by any forward-looking statements. We want to caution you not to place undue reliance on any forward-looking statements. We do not undertake any responsibility to release publicly any revisions to these forward-looking statements to take into account events or circumstances that occur after the date of this document. Additionally, we do not undertake any responsibility to provide updates regarding the occurrence of any unanticipated events which may cause actual results to differ from those expressed or implied by the forward-looking statements contained in this document.

Important factors that could cause actual results to differ materially from our expectations are disclosed under “Risk Factors” in Item 1A in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 22, 2024. Such factors include, among others:

the cyclical nature of our business and the impact of global supply and demand on our selling prices;
the global commodity nature of our nitrogen products, the conditions in the international market for nitrogen products, and the intense global competition from other producers;
conditions in the United States, Europe and other agricultural areas, including the influence of governmental policies and technological developments on the demand for our fertilizer products;
the volatility of natural gas prices in North America and the United Kingdom;
weather conditions and the impact of adverse weather events;
the seasonality of the fertilizer business;
the impact of changing market conditions on our forward sales programs;
difficulties in securing the supply and delivery of raw materials or utilities, increases in their costs or delays or interruptions in their delivery;
reliance on third party providers of transportation services and equipment;
our reliance on a limited number of key facilities;
risks associated with cybersecurity;
acts of terrorism and regulations to combat terrorism;
risks associated with international operations;
the significant risks and hazards involved in producing and handling our products against which we may not be fully insured;
our ability to manage our indebtedness and any additional indebtedness that may be incurred;
our ability to maintain compliance with covenants under our revolving credit agreement and the agreements governing our indebtedness;
downgrades of our credit ratings;
risks associated with changes in tax laws and disagreements with taxing authorities;
risks involving derivatives and the effectiveness of our risk management and hedging activities;
potential liabilities and expenditures related to environmental, health and safety laws and regulations and permitting requirements;
regulatory restrictions and requirements related to greenhouse gas emissions;

CF INDUSTRIES HOLDINGS, INC.

the development and growth of the market for green and low-carbon (blue) ammonia and the risks and uncertainties relating to the development and implementation of our green and low-carbon ammonia projects; and
risks associated with expansions of our business, including unanticipated adverse consequences and the significant resources that could be required.

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