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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)  
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from                               to                              
Commission file number 001-32597
CF INDUSTRIES HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware20-2697511
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
2375 Waterview Drive60062
Northbrook, Illinois
 (Zip Code)
 (Address of principal executive offices)
(Registrant’s telephone number, including area code): (847) 405-2400

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
common stock, par value $0.01 per shareCFNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes     No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     No
182,782,174 shares of the registrant’s common stock, par value $0.01 per share, were outstanding at April 29, 2024.


CF INDUSTRIES HOLDINGS, INC.
TABLE OF CONTENTS



CF INDUSTRIES HOLDINGS, INC.
PART I—FINANCIAL INFORMATION
ITEM 1.    FINANCIAL STATEMENTS.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 Three months ended 
 March 31,
 20242023
 (in millions, except per share amounts)
Net sales $1,470 $2,012 
Cost of sales1,061 1,149 
Gross margin409 863 
Selling, general and administrative expenses88 74 
U.K. operations restructuring 2 
Acquisition and integration costs3 13 
Other operating—net17 (35)
Total other operating costs and expenses108 54 
Equity in earnings of operating affiliate2 17 
Operating earnings303 826 
Interest expense37 40 
Interest income(30)(30)
Other non-operating—net(4)(3)
Earnings before income taxes300 819 
Income tax provision62 169 
Net earnings238 650 
Less: Net earnings attributable to noncontrolling interest44 90 
Net earnings attributable to common stockholders$194 $560 
Net earnings per share attributable to common stockholders:
Basic$1.03 $2.86 
Diluted$1.03 $2.85 
Weighted-average common shares outstanding:  
Basic187.6 196.2 
Diluted188.1 196.9 
Dividends declared per common share$0.50 $0.40 
See accompanying Notes to Unaudited Consolidated Financial Statements.

1

CF INDUSTRIES HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 Three months ended 
 March 31,
 20242023
 (in millions)
Net earnings$238 $650 
Other comprehensive (loss) income:  
Foreign currency translation adjustment—net of taxes(16)7 
Defined benefit plans—net of taxes (1)
(16)6 
Comprehensive income222 656 
Less: Comprehensive income attributable to noncontrolling interest44 90 
Comprehensive income attributable to common stockholders$178 $566 
See accompanying Notes to Unaudited Consolidated Financial Statements.

2

CF INDUSTRIES HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 March 31, 
2024
December 31, 
2023
 (in millions, except share
and per share amounts)
Assets  
Current assets:  
Cash and cash equivalents$1,773 $2,032 
Accounts receivable—net535 505 
Inventories271 299 
Prepaid income taxes102 167 
Other current assets38 47 
Total current assets2,719 3,050 
Property, plant and equipment—net6,982 7,141 
Investment in affiliate29 26 
Goodwill2,495 2,495 
Intangible assets—net532 538 
Operating lease right-of-use assets240 259 
Other assets864 867 
Total assets$13,861 $14,376 
Liabilities and Equity  
Current liabilities:  
Accounts payable and accrued expenses$501 $520 
Income taxes payable 12 
Customer advances104 130 
Current operating lease liabilities77 96 
Other current liabilities8 42 
Total current liabilities690 800 
Long-term debt2,969 2,968 
Deferred income taxes985 999 
Operating lease liabilities171 168 
Supply contract liability747 754 
Other liabilities303 314 
Equity:  
Stockholders’ equity:  
Preferred stock—$0.01 par value, 50,000,000 shares authorized
  
Common stock—$0.01 par value, 500,000,000 shares authorized, 2024—188,905,959 shares issued and 2023—188,188,401 shares issued
2 2 
Paid-in capital1,403 1,389 
Retained earnings4,634 4,535 
Treasury stock—at cost, 2024—4,561,599 shares and 2023—0 shares
(374) 
Accumulated other comprehensive loss(225)(209)
Total stockholders’ equity5,440 5,717 
Noncontrolling interest2,556 2,656 
Total equity7,996 8,373 
Total liabilities and equity$13,861 $14,376 
See accompanying Notes to Unaudited Consolidated Financial Statements.
3

CF INDUSTRIES HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
 Common Stockholders
 $0.01 Par
Value
Common
Stock
Treasury
Stock
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Stockholders’ Equity
Noncontrolling
Interest
Total
Equity
 (in millions, except per share amounts)
Balance as of December 31, 2023$2 $ $1,389 $4,535 $(209)$5,717 $2,656 $8,373 
Net earnings   194  194 44 238 
Other comprehensive loss    (16)(16) (16)
Purchases of treasury stock (351)   (351) (351)
Acquisition of treasury stock under employee stock plans (23)   (23) (23)
Issuance of $0.01 par value common stock under employee stock plans
  1   1  1 
Stock-based compensation expense  13   13  13 
Dividends and dividend equivalents ($0.50 per share)
   (95) (95) (95)
Distribution declared to noncontrolling interest      (144)(144)
Balance as of March 31, 2024$2 $(374)$1,403 $4,634 $(225)$5,440 $2,556 $7,996 
Balance as of December 31, 2022$2 $ $1,412 $3,867 $(230)$5,051 $2,802 $7,853 
Net earnings   560  560 90 650 
Other comprehensive income    6 6  6 
Purchases of treasury stock (75)   (75) (75)
Acquisition of treasury stock under employee stock plans (22)   (22) (22)
Stock-based compensation expense  12   12  12 
Dividends and dividend equivalents ($0.40 per share)
   (79) (79) (79)
Distribution declared to noncontrolling interest      (255)(255)
Balance as of March 31, 2023$2 $(97)$1,424 $4,348 $(224)$5,453 $2,637 $8,090 
See accompanying Notes to Unaudited Consolidated Financial Statements.
4

CF INDUSTRIES HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Three months ended 
 March 31,
 20242023
 (in millions)
Operating Activities:  
Net earnings$238 $650 
Adjustments to reconcile net earnings to net cash provided by operating activities:  
Depreciation and amortization253 206 
Deferred income taxes(11)(26)
Stock-based compensation expense13 12 
Unrealized net gain on natural gas derivatives(33)(72)
Gain on sale of emission credits (35)
Loss on disposal of property, plant and equipment 5  
Undistributed earnings of affiliate—net of taxes(2)(7)
Changes in assets and liabilities:  
Accounts receivable—net(50)101 
Inventories20 39 
Accrued and prepaid income taxes61 153 
Accounts payable and accrued expenses(23)(135)
Customer advances(25)55 
Other—net(1)6 
Net cash provided by operating activities445 947 
Investing Activities:  
Additions to property, plant and equipment(98)(69)
Purchase of emission credits(2) 
Proceeds from sale of emission credits 35 
Net cash used in investing activities(100)(34)
Financing Activities:  
Dividends paid on common stock(97)(79)
Distributions to noncontrolling interest(144)(255)
Purchases of treasury stock(339)(54)
Proceeds from issuances of common stock under employee stock plans1  
Cash paid for shares withheld for taxes(23)(22)
Net cash used in financing activities(602)(410)
Effect of exchange rate changes on cash and cash equivalents(2)(1)
(Decrease) increase in cash and cash equivalents(259)502 
Cash and cash equivalents at beginning of period2,032 2,323 
Cash and cash equivalents at end of period$1,773 $2,825 

See accompanying Notes to Unaudited Consolidated Financial Statements.
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CF INDUSTRIES HOLDINGS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1.   Background and Basis of Presentation
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. Our nitrogen products that are upgraded from ammonia are granular urea, urea ammonium nitrate solution (UAN) and ammonium nitrate (AN). Our other nitrogen products include diesel exhaust fluid (DEF), urea liquor, nitric acid and aqua ammonia, which are sold primarily to our industrial customers.
All references to “CF Holdings,” “the Company,” “we,” “us” and “our” refer to CF Industries Holdings, Inc. and its subsidiaries, except where the context makes clear that the reference is 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.
The accompanying unaudited interim consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements for the year ended December 31, 2023, in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial reporting. In the opinion of management, these statements reflect all adjustments, consisting only of normal and recurring adjustments, that are necessary for the fair representation of the information for the periods presented. The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Operating results for any period presented apply to that period only and are not necessarily indicative of results for any future period.
The accompanying unaudited interim consolidated financial statements should be read in conjunction with our audited consolidated financial statements and related disclosures included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 22, 2024. The preparation of the unaudited interim consolidated financial statements requires us to make use of estimates and assumptions that may significantly affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the unaudited interim consolidated financial statements and the reported revenues and expenses for the periods presented. Such estimates and assumptions are used for, but are not limited to, net realizable value of inventories, environmental remediation liabilities, environmental and litigation contingencies, plant closure and asset retirement obligations, the cost of emission credits required to meet environmental regulations, the cost of customer incentives, the fair values utilized in the allocation of purchase price in an acquisition, useful lives of property and identifiable intangible assets, the evaluation of potential impairments of property, investments, identifiable intangible assets and goodwill, income tax reserves and the assessment of the realizability of deferred tax assets, the determination of the funded status and annual expense of defined benefit pension and other postretirement plans and the valuation of stock-based compensation awards granted to employees.
2.   New Accounting Standards
In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU is intended to improve reportable segment disclosures through enhanced disclosures about significant segment expenses. The guidance in this ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact that our adoption of this ASU will have on the disclosures in our consolidated financial statements.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU adds new guidance that further enhances income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact that our adoption of this ASU will have on the disclosures in our consolidated financial statements.
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CF INDUSTRIES HOLDINGS, INC.
3.   Revenue Recognition
We track our revenue by product and by geography. See Note 16—Segment Disclosures for the revenue of each of our reportable segments, which are Ammonia, Granular Urea, UAN, AN and Other. The following table summarizes our revenue by product and by geography (based on destination of our shipment) for the three months ended March 31, 2024 and 2023:
AmmoniaGranular UreaUANANOtherTotal
(in millions)
Three months ended March 31, 2024
North America$334 $403 $373 $48 $102 $1,260 
Europe and other68 4 52 66 20 210 
Total revenue$402 $407 $425 $114 $122 $1,470 
Three months ended March 31, 2023
North America$330 $575 $519 $74 $126 $1,624 
Europe and other94 36 148 85 25 388 
Total revenue$424 $611 $667 $159 $151 $2,012 

As of March 31, 2024 and December 31, 2023, we had $104 million and $130 million, respectively, in customer advances on our consolidated balance sheets. The revenue recognized during the three months ended March 31, 2024 and 2023 that was included in our customer advances at the beginning of each respective period amounted to approximately $110 million and $160 million, respectively.
We offer cash incentives to certain customers generally based on the volume of their purchases over the fertilizer year ending June 30. Our cash incentives do not provide an option to the customer for additional product. The balances of customer incentives accrued as of March 31, 2024 and December 31, 2023 were not material.
We have certain customer contracts with performance obligations where if the customer does not take the required amount of product specified in the contract, then the customer is required to make a payment to us, the amount of which payment may vary based upon the terms and conditions of the applicable contract. As of March 31, 2024, excluding contracts with original durations of less than one year, and based on the minimum product tonnage to be sold and current market price estimates, our remaining performance obligations under these contracts were approximately $2.1 billion. We expect to recognize approximately 23% of these performance obligations as revenue in the remainder of 2024, approximately 19% as revenue during 2025-2027, approximately 16% as revenue during 2028-2030, and the remainder as revenue thereafter. Subject to the terms and conditions of the applicable contracts, if these customers do not satisfy their purchase obligations under such contracts, the minimum amount that they would be required to pay to us under such contracts, in the aggregate, was approximately $1.3 billion as of March 31, 2024. Other than the performance obligations described above, any performance obligations with our customers that were unfulfilled or partially filled at December 31, 2023 will be satisfied in 2024.
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CF INDUSTRIES HOLDINGS, INC.
4.   Net Earnings Per Share
Net earnings per share were computed as follows:
 Three months ended 
 March 31,
 20242023
 (in millions, except per share amounts)
Net earnings attributable to common stockholders$194 $560 
Basic earnings per common share:  
Weighted-average common shares outstanding187.6 196.2 
Net earnings attributable to common stockholders$1.03 $2.86 
Diluted earnings per common share:  
Weighted-average common shares outstanding187.6 196.2 
Dilutive common shares—stock-based awards0.5 0.7 
Diluted weighted-average common shares outstanding188.1 196.9 
Net earnings attributable to common stockholders$1.03 $2.85 
Diluted earnings per common share is calculated using weighted-average common shares outstanding, including the dilutive effect of stock-based awards as determined under the treasury stock method. In the computation of diluted earnings per common share, potentially dilutive stock-based awards are excluded if the effect of their inclusion is anti-dilutive. Shares for anti-dilutive stock-based awards not included in the computation of diluted earnings per common share were zero in both the three months ended March 31, 2024 and 2023.
5.   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 is intended to expand our ammonia manufacturing and distribution capacity, including our ability to enable low-carbon ammonia production.
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 (the Supply Contract). Under the terms of the asset purchase agreement, $425 million of the purchase price of $1.675 billion, subject to adjustment, was allocated by the parties to the ammonia offtake agreement. We funded the balance of the purchase price with $1.223 billion of cash on hand.
The consideration transferred reflects an estimated net working capital adjustment and other adjustments to the purchase price, which is subject to further adjustment pursuant to the terms of the asset purchase agreement. We expect any further purchase price adjustments required under the asset purchase agreement will not be material and will be completed in the second quarter of 2024.
In the three months ended March 31, 2024 and 2023, we incurred $3 million of integration costs and $13 million of acquisition-related costs, respectively, related to the Waggaman acquisition, which are included in acquisition and integration costs in our consolidated statements of operations.
6.   Inventories
Inventories consist of the following:
 March 31, 
2024
December 31, 
2023
 (in millions)
Finished goods$226 $256 
Raw materials, spare parts and supplies45 43 
Total inventories$271 $299 
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CF INDUSTRIES HOLDINGS, INC.
7.   Property, Plant and Equipment—Net
Property, plant and equipment—net consists of the following:
 March 31, 
2024
December 31, 
2023
 (in millions)
Land$114 $114 
Machinery and equipment13,679 13,716 
Buildings and improvements1,015 1,020 
Construction in progress412 394 
Property, plant and equipment(1)
15,220 15,244 
Less: Accumulated depreciation and amortization8,238 8,103 
Property, plant and equipment—net$6,982 $7,141 
_______________________________________________________________________________
(1)As of March 31, 2024 and December 31, 2023, we had property, plant and equipment that was accrued but unpaid of approximately $72 million and $68 million, respectively. As of March 31, 2023 and December 31, 2022, we had property, plant and equipment that was accrued but unpaid of approximately $45 million and $53 million, respectively.
Depreciation and amortization related to property, plant and equipment was $252 million and $204 million for the three months ended March 31, 2024 and 2023, respectively.
Plant turnarounds—Scheduled inspections, replacements and overhauls of plant machinery and equipment at our continuous process manufacturing facilities during a full plant shutdown are referred to as plant turnarounds. The expenditures related to turnarounds are capitalized in property, plant and equipment when incurred.
Scheduled replacements and overhauls of plant machinery and equipment during a plant turnaround include the dismantling, repair or replacement and installation of various components including piping, valves, motors, turbines, pumps, compressors and heat exchangers and the replacement of catalysts when a full plant shutdown occurs. Scheduled inspections, including required safety inspections which entail the disassembly of various components such as steam boilers, pressure vessels and other equipment requiring safety certifications, are also conducted during full plant shutdowns. Internal employee costs and overhead amounts are not considered turnaround costs and are not capitalized.
The following is a summary of capitalized plant turnaround costs:
 Three months ended 
 March 31,
 20242023
 (in millions)
Net capitalized turnaround costs as of January 1$352 $312 
Additions24 7 
Depreciation(52)(31)
Effect of exchange rate changes and other(1) 
Net capitalized turnaround costs as of March 31
$323 $288 
8.   Equity Method Investment
We have a 50% ownership interest in Point Lisas Nitrogen Limited (PLNL), which operates an ammonia production facility in the Republic of Trinidad and Tobago. We include our share of the net earnings from this equity method investment as an element of earnings from operations because PLNL provides additional production to our operations and is integrated with our other supply chain and sales activities in the Ammonia segment.
As of March 31, 2024, the total carrying value of our equity method investment in PLNL was $29 million.
We have transactions in the normal course of business with PLNL reflecting our obligation to purchase 50% of the ammonia produced by PLNL at current market prices. Our ammonia purchases from PLNL totaled $30 million and $59 million for the three months ended March 31, 2024 and 2023, respectively.
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CF INDUSTRIES HOLDINGS, INC.
9.   Fair Value Measurements
Our cash and cash equivalents and other investments consist of the following:
 March 31, 2024
 Cost BasisUnrealized
Gains
Unrealized
Losses
Fair Value
 (in millions)
Cash$190 $— $— $190 
Cash equivalents:
U.S. and Canadian government obligations1,277   1,277 
Other debt securities306   306 
Total cash and cash equivalents$1,773 $ $ $1,773 
Nonqualified employee benefit trusts16 1  17 
 December 31, 2023
 Cost BasisUnrealized
Gains
Unrealized
Losses
Fair Value
 (in millions)
Cash$208 $— $— $208 
Cash equivalents:
U.S. and Canadian government obligations1,488   1,488 
Other debt securities336   336 
Total cash and cash equivalents$2,032 $ $ $2,032 
Nonqualified employee benefit trusts16 1  17 
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 and also in bank deposits. Securities issued by governmental entities include those issued directly by the U.S. and Canadian federal governments; those issued by state, local or other governmental entities; and those guaranteed by entities affiliated with governmental entities.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following tables present assets and liabilities included in our consolidated balance sheets as of March 31, 2024 and December 31, 2023 that are recognized at fair value on a recurring basis, and indicate the fair value hierarchy utilized to determine such fair value:
 March 31, 2024
 Total Fair
Value
Quoted Prices
in Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
 (in millions)
Cash equivalents$1,583 $1,583 $ $ 
Nonqualified employee benefit trusts17 17   
Derivative assets1  1  
Derivative liabilities(2) (2) 
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CF INDUSTRIES HOLDINGS, INC.
 December 31, 2023
 Total Fair
Value
Quoted Prices
in Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
 (in millions)
Cash equivalents$1,824 $1,824 $ $ 
Nonqualified employee benefit trusts17 17   
Derivative assets1  1  
Derivative liabilities(35) (35) 
Cash Equivalents
Cash equivalents include highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less. As of March 31, 2024 and December 31, 2023, our cash equivalents consisted primarily of U.S. and Canadian government obligations and money market mutual funds that invest in U.S. government obligations and other investment-grade securities.
Nonqualified Employee Benefit Trusts
We maintain trusts associated with certain nonqualified supplemental pension plans. The fair values of the trust assets are based on daily quoted prices in an active market, which represent the net asset values of the shares held in the trusts, and are included on our consolidated balance sheets in other assets. Debt securities are accounted for as available-for-sale securities, and changes in fair value are reported in other comprehensive income. Changes in the fair value of available-for-sale equity securities in the trust assets are recognized through earnings.
Derivative Instruments
The derivative instruments that we use are primarily natural gas fixed price swaps, basis swaps and options traded in the over-the-counter markets with multi-national commercial banks, other major financial institutions or large energy companies. The natural gas derivative contracts represent anticipated natural gas needs for future periods, and settlements are scheduled to coincide with anticipated natural gas purchases during those future periods. The natural gas derivative contracts settle using primarily a NYMEX futures price index. To determine the fair value of these instruments, we use quoted market prices from NYMEX and standard pricing models with inputs derived from or corroborated by observable market data such as forward curves supplied by an industry-recognized independent third party. See Note 13—Derivative Financial Instruments for additional information.
Financial Instruments
The carrying amount and estimated fair value of our financial instruments are as follows:
 March 31, 2024December 31, 2023
 Carrying
Amount
Fair ValueCarrying
Amount
Fair Value
 (in millions)
Long-term debt$2,969 $2,838 $2,968 $2,894 
The fair value of our long-term debt was based on quoted prices for identical or similar liabilities in markets that are not active or valuation models in which all significant inputs and value drivers are observable and, as a result, they are classified as Level 2 inputs.
The carrying amounts of cash and cash equivalents, as well as any instruments included in other current assets and other current liabilities that meet the definition of financial instruments, approximate fair values because of their short-term maturities.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
We also have assets and liabilities that may be measured at fair value on a nonrecurring basis; that is, the assets and liabilities are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment, when there is allocation of purchase price in an acquisition or when a new liability is being established that requires fair value measurement. These include long-lived assets, goodwill and other
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CF INDUSTRIES HOLDINGS, INC.
intangible assets and investments in unconsolidated subsidiaries, such as equity method investments, which may be written down to fair value as a result of impairment. The fair value measurements related to assets and liabilities measured at fair value on a nonrecurring basis rely primarily on Company-specific inputs. Since certain of the Company’s assumptions would involve inputs that are not observable, these fair values would reside within Level 3 of the fair value hierarchy.
10.   Income Taxes
For the three months ended March 31, 2024, we recorded an income tax provision of $62 million on pre-tax income of $300 million, or an effective tax rate of 20.7%, compared to an income tax provision of $169 million on pre-tax income of $819 million, or an effective tax rate of 20.6%, for the three months ended March 31, 2023.
Our effective tax rate for the three months ended March 31, 2024 of 20.7%, which is based on pre-tax income of $300 million, including $44 million of earnings attributable to the noncontrolling interest, would be 3.6 percentage points higher if based on pre-tax income exclusive of the $44 million of earnings attributable to the noncontrolling interest. Our effective tax rate for the three months ended March 31, 2023 of 20.6%, which is based on pre-tax income of $819 million, including $90 million of earnings attributable to the noncontrolling interest, would be 2.6 percentage points higher if based on pre-tax income exclusive of the $90 million of earnings attributable to the noncontrolling interest.
11.   Financing Agreements
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.
As of March 31, 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 March 31, 2024 or December 31, 2023, or during the three months ended March 31, 2024.
The Revolving Credit Agreement contains representations and warranties and affirmative and negative covenants, including a financial covenant. As of March 31, 2024, we were in compliance with all covenants under the Revolving Credit Agreement.
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 March 31, 2024, approximately $302 million of letters of credit were outstanding under this agreement.
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CF INDUSTRIES HOLDINGS, INC.
Senior Notes
Long-term debt presented on our consolidated balance sheets as of March 31, 2024 and December 31, 2023 consisted of the following debt securities issued by CF Industries:
 Effective Interest RateMarch 31, 2024December 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%750 744 750 744 
Total long-term debt$3,000 $2,969 $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 March 31, 2024 and December 31, 2023, respectively, and total deferred debt issuance costs were $25 million as of both March 31, 2024 and December 31, 2023. 
(2)Effective August 23, 2021, these notes are no longer secured, in accordance with the terms of the applicable indenture.
Under the indentures (including the applicable supplemental indentures) governing the 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 December 2026 (the 2026 Notes) identified in the table above, 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.
12.   Interest Expense
Details of interest expense are as follows:
 Three months ended 
 March 31,
 20242023
 (in millions)
Interest on borrowings(1)
$37 $37 
Fees on financing agreements(1)
2 2 
Interest on tax liabilities 2 
Interest capitalized(2)(1)
Total interest expense$37 $40 
_______________________________________________________________________________
(1)See Note 11—Financing Agreements for additional information.
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CF INDUSTRIES HOLDINGS, INC.
13.   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. The derivatives that we use to reduce our exposure to changes in prices for natural gas are primarily natural gas fixed price swaps, basis swaps and options traded in the over-the-counter markets. These natural gas derivatives settle using primarily a NYMEX futures price index, which represents the basis for fair value at any given time. We enter into natural gas derivative contracts with respect to natural gas to be consumed by us in the future, and settlements of those derivative contracts are scheduled to coincide with our anticipated purchases of natural gas used to manufacture nitrogen products during those future periods. We use natural gas derivatives as an economic hedge of natural gas price risk, but without the application of hedge accounting. As a result, changes in fair value of these contracts are recognized in earnings. As of March 31, 2024, we had natural gas derivative contracts covering certain periods through March 2025.
As of March 31, 2024, our open natural gas derivative contracts consisted of natural gas fixed price swaps and basis swaps for 8.0 million MMBtus of natural gas. As of December 31, 2023, we had open natural gas derivative contracts consisting of natural gas fixed price swaps, basis swaps and options for 49.0 million MMBtus of natural gas. For the three months ended March 31, 2024, we used derivatives to cover approximately 55% of our natural gas consumption.
The effect of derivatives in our consolidated statements of operations is shown in the table below.
 Gain (loss) recognized in income
  Three months ended 
 March 31,
Location20242023
  (in millions)
Unrealized net gains on natural gas derivativesCost of sales$33 $72 
Realized net losses on natural gas derivativesCost of sales(37)(118)
Net derivative losses $(4)$(46)

The fair values of derivatives on our consolidated balance sheets are shown below. As of March 31, 2024 and December 31, 2023, none of our derivative instruments were designated as hedging instruments. See Note 9—Fair Value Measurements for additional information on derivative fair values.
Asset DerivativesLiability Derivatives
 Balance Sheet LocationMarch 31, 
2024
December 31, 2023Balance Sheet
Location
March 31, 
2024
December 31, 2023
  (in millions) (in millions)
Natural gas derivativesOther current assets$1 $1 Other current liabilities$(2)$(35)
Most of our International Swaps and Derivatives Association (ISDA) agreements contain credit-risk-related contingent features such as cross default provisions. In the event of certain defaults or termination events, our counterparties may request early termination and net settlement of certain derivative trades or, under certain ISDA agreements, may require us to collateralize derivatives in a net liability position. As of March 31, 2024 and December 31, 2023, the aggregate fair value of the derivative instruments with credit-risk-related contingent features in net liability positions was $1 million and $34 million, respectively, which also approximates the fair value of the assets that may be needed to settle the obligations if the credit-risk-related contingent features were triggered at the reporting dates. The credit support documents executed in connection with certain of our ISDA agreements generally provide us and our counterparties the right to set off collateral against amounts owing under the ISDA agreements upon the occurrence of a default or a specified termination event. As of March 31, 2024 and December 31, 2023, we had no cash collateral on deposit with counterparties for derivative contracts.
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CF INDUSTRIES HOLDINGS, INC.
The following table presents amounts relevant to offsetting of our derivative assets and liabilities as of March 31, 2024 and December 31, 2023:
 
Amounts presented in consolidated
balance sheets(1)
Gross amounts not offset in consolidated balance sheets
 Financial
instruments
Cash collateral received (pledged)Net
amount
 (in millions)
March 31, 2024    
Total derivative assets$1 $ $ $1 
Total derivative liabilities(2)  (2)
Net derivative liabilities$(1)$ $ $(1)
December 31, 2023
Total derivative assets$1 $ $ $1 
Total derivative liabilities(35)  (35)
Net derivative liabilities$(34)$ $ $(34)
_______________________________________________________________________________
(1)We report the fair values of our derivative assets and liabilities on a gross basis on our consolidated balance sheets. As a result, the gross amounts recognized and net amounts presented are the same.
We do not believe the contractually allowed netting, close-out netting or setoff of amounts owed to, or due from, the counterparties to our ISDA agreements would have a material effect on our financial position.
14.   Noncontrolling Interest
We have a strategic venture with CHS Inc. (CHS) under which CHS owns an equity interest in CFN, a subsidiary of CF Holdings, which represents approximately 11% of the membership interests of CFN. We own the remaining membership interests. Under the terms of CFN’s limited liability company agreement, each member’s interest will reflect, over time, the impact of the profitability of CFN, any member contributions made to CFN and withdrawals and distributions received from CFN. For financial reporting purposes, the assets, liabilities and earnings of the strategic venture are consolidated into our financial statements. CHS’ interest in the strategic venture is recorded in noncontrolling interest in our consolidated financial statements.
A reconciliation of the beginning and ending balances of noncontrolling interest and distributions payable to the noncontrolling interest in our consolidated balance sheets is provided below.
20242023
 (in millions)
Noncontrolling interest:
Balance as of January 1$2,656 $2,802 
Earnings attributable to noncontrolling interest44 90 
Declaration of distributions payable(144)(255)
Balance as of March 31$2,556 $2,637 
Distributions payable to noncontrolling interest:
Balance as of January 1$ $ 
Declaration of distributions payable144 255 
Distributions to noncontrolling interest(144)(255)
Balance as of March 31$ $ 
CHS also receives deliveries pursuant to a supply agreement under which CHS has the right to purchase annually from CFN up to approximately 1.1 million tons of granular urea and 580,000 tons of UAN at market prices. As a result of its equity interest in CFN, CHS is entitled to semi-annual cash distributions from CFN. We are also entitled to semi-annual cash distributions from CFN. The amounts of distributions from CFN to us and CHS are based generally on the profitability of CFN and determined based on the volume of granular urea and UAN sold by CFN to us and CHS pursuant to supply agreements, less a formula driven amount based primarily on the cost of natural gas used to produce the granular urea and UAN, and adjusted for the allocation of items such as operational efficiencies and overhead amounts.
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CF INDUSTRIES HOLDINGS, INC.
15.   Stockholders’ Equity
Common Stock
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.
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:
First quarter $ 
Second quarter0.8 50 
Third quarter1.9 150 
Fourth quarter2.9 225 
Total shares repurchased in 20235.6 425 
Shares repurchased in 2024:
First quarter4.3 347 
Total shares repurchased in 20244.3 347 
Shares repurchased as of March 31, 2024
9.9 $772 
______________________________________________________________________________
(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 three months ended March 31, 2024, we repurchased approximately 4.3 million shares under the 2022 Share Repurchase Program for $347 million, of which $14 million was accrued and unpaid as of March 31, 2024. In the three months ended March 31, 2023, we repurchased approximately 1.1 million shares under the 2021 Share Repurchase Program for $75 million, of which $21 million was accrued and unpaid as of March 31, 2023.
Accumulated Other Comprehensive Loss
Changes to accumulated other comprehensive loss and the impact on other comprehensive income (loss) are as follows:
 Foreign
Currency
Translation
Adjustment
Unrealized
Gain on
Derivatives
Defined
Benefit
Plans
Accumulated
Other
Comprehensive
Income (Loss)
 (in millions)
Balance as of December 31, 2023$(146)$3 $(66)$(209)
Effect of exchange rate changes and deferred taxes(16)  (16)
Balance as of March 31, 2024$(162)$3 $(66)$(225)
Balance as of December 31, 2022$(179)$3 $(54)$(230)
Effect of exchange rate changes and deferred taxes7  (1)6 
Balance as of March 31, 2023$(172)$3 $(55)$(224)
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CF INDUSTRIES HOLDINGS, INC.
16.   Segment Disclosures
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. Segment data for sales, cost of sales and gross margin for the three months ended March 31, 2024 and 2023 are presented in the table below.
Ammonia
Granular Urea(1)
UAN(1)
AN(1)
Other(1)
Consolidated
(in millions)
Three months ended March 31, 2024
Net sales$402 $407 $425 $114 $122 $1,470 
Cost of sales337 253 282 105 84 1,061 
Gross margin$65 $154 $143 $9 $38 409 
Total other operating costs and expenses108 
Equity in earnings of operating affiliate2 
Operating earnings$303 
Three months ended March 31, 2023
Net sales$424 $611 $667 $159 $151 $2,012 
Cost of sales280 327 346 104 92 1,149 
Gross margin$144 $284 $321 $55 $59 863 
Total other operating costs and expenses54 
Equity in earnings of operating affiliate17 
Operating earnings$826 
_______________________________________________________________________________
(1)The cost of the products that are upgraded into other products is transferred at cost into the upgraded product results.



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CF INDUSTRIES HOLDINGS, INC.
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. Our nitrogen products that are upgraded from ammonia are granular urea, urea ammonium nitrate solution (UAN) and ammonium nitrate (AN). Our other nitrogen products include diesel exhaust fluid (DEF), urea liquor, nitric acid and aqua ammonia, which are sold primarily to our industrial customers.
Our principal assets as of March 31, 2024 include:
six U.S. nitrogen manufacturing facilities located in Donaldsonville, Louisiana (the largest nitrogen complex in the world); Sergeant Bluff, Iowa (our Port Neal complex); Yazoo City, Mississippi; Claremore, Oklahoma (our Verdigris complex); Woodward, Oklahoma; and Waggaman, Louisiana. The Waggaman facility is wholly owned by us, and the other five U.S. nitrogen manufacturing facilities are wholly owned directly or indirectly by CF Industries Nitrogen, LLC (CFN), of which we own approximately 89% and CHS Inc. (CHS) owns the remainder (see Note 14—Noncontrolling Interest for additional information on our strategic venture with CHS);
two Canadian nitrogen manufacturing facilities, located in Medicine Hat, Alberta (the largest nitrogen complex in Canada) and Courtright, Ontario;
a United Kingdom nitrogen manufacturing facility located in Billingham;
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CF INDUSTRIES HOLDINGS, INC.
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
Our strategy is to leverage our unique capabilities to accelerate the world’s transition to clean energy. We believe this strategy builds upon the Company’s leadership in ammonia production to capture emerging opportunities available to ammonia produced with a lower carbon intensity than that of ammonia produced through traditional processes. These opportunities include traditional applications in agriculture to help reduce the carbon footprint of food production and the life cycle carbon intensity of ethanol production, enabling its use for sustainable aviation fuel, among other purposes. They also include new applications, such as power generation and marine shipping, that would use the hydrogen component of the ammonia molecule for clean energy given that ammonia does not contain or emit carbon when combusted.
We execute our strategy across four dimensions: decarbonizing our existing network to accelerate the availability of low-carbon ammonia; evaluating new low-carbon ammonia capacity growth; forging partnerships to accelerate our timeline, reduce risks and bridge gaps in areas where we do not have expertise; and collaborating to build understanding of ammonia’s clean energy capability, safety track record and regulatory environment.
Decarbonization projects in our existing network include our green ammonia project at our Donaldsonville, Louisiana complex. Green ammonia refers to ammonia produced with hydrogen sourced through an electrolysis process that produces no carbon emissions. In April 2021, we signed an engineering and procurement contract with thyssenkrupp to supply a 20 MW alkaline water electrolysis plant to produce green hydrogen at our Donaldsonville complex. We will integrate the green hydrogen generated by the electrolysis plant into existing ammonia synthesis loops to enable the production of approximately 20,000 tons per year of green ammonia. The green hydrogen production facility is mechanically complete, and commissioning activities are nearing completion. We believe that the Donaldsonville green ammonia project will be the largest of its kind in North America at the time of its startup.
Decarbonization projects in our existing network also include the production of low-carbon ammonia. Low-carbon ammonia is ammonia produced by conventional processes but with approximately 60-98% of the process and flue gas CO2 generated by ammonia production removed through carbon capture and sequestration (CCS). We are executing a project at our Donaldsonville complex that will enable us to produce a significant volume of low-carbon ammonia. At an estimated cost of $200 million, we are constructing a CO2 dehydration and compression facility to enable CCS at the facility. Engineering activities for the construction of the dehydration and compression unit continue to advance: all major equipment for the facility has been procured, fabrication of the CO2 compressors is proceeding and construction of the cooling tower required for the unit has begun. Once the dehydration and compression unit is in service and sequestration is initiated, we expect that the Donaldsonville complex will have the capacity to dehydrate and compress up to 2 million tons per year of process CO2, thereby converting a portion of our existing ammonia production to low-carbon ammonia. In October 2022, we announced that we had entered into a definitive CO2 offtake agreement with ExxonMobil to transport and permanently sequester the CO2 from Donaldsonville. Start-up for the project is planned for 2025. Under current regulations, the project would be expected to qualify for tax credits under Section 45Q of the Internal Revenue Code, which provides a credit per tonne of CO2 sequestered.
Alongside these projects, we are also evaluating the construction of greenfield low-carbon ammonia capacity in Louisiana. In the fourth quarter of 2023, we and Mitsui & Co., Ltd. (Mitsui) completed a front-end engineering and design (FEED) study on a potential greenfield steam methane reforming (SMR) ammonia facility with CCS technologies. The FEED study estimates the cost of a project with these attributes to be in the range of $3 billion, with approximately $2.5 billion allocated to the ammonia facility and CCS technologies and approximately $500 million allocated to scalable common infrastructure for the site, such as ammonia storage and vessel loading docks.
We and Mitsui are targeting the second half of 2024 for the final investment decision on the proposed greenfield low-carbon ammonia facility. Should the companies agree to move forward, the ammonia facility would be constructed at our new Blue Point complex. We own the land for the complex, which is located on the west bank of the Mississippi river in Ascension Parish, Louisiana. Construction and commissioning of a new world-scale ammonia plant typically takes approximately four years from the time construction begins.
We and our partners are progressing two additional FEED studies focused on technologies that would further reduce the carbon intensity of the proposed low-carbon ammonia facility, namely a FEED study evaluating autothermal reforming (ATR) ammonia production technology and a FEED study assessing the cost and viability of adding flue gas capture to the greenfield SMR ammonia facility. We expect to obtain results from both FEED studies in the second half of 2024.
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CF INDUSTRIES HOLDINGS, INC.
In addition to ongoing discussions with existing customers who have interest in forthcoming availability of low-carbon ammonia for traditional applications, we are engaged in advanced discussions regarding the supply of low-carbon ammonia for new applications. In the first quarter of 2023, we signed a memorandum of understanding (MOU) with JERA Co., Inc. (JERA), Japan’s largest energy generator. The execution of the MOU was the result of a supplier comparison and evaluation process for the procurement of clean ammonia that JERA initiated in February 2022 for the world’s first commercial scale ammonia co-firing operations that JERA is developing. On April 17, 2024, we and JERA announced a joint development agreement (JDA) to jointly assess a greenfield production facility at our Blue Point complex, which includes the supply of low-carbon ammonia to JERA’s co-firing project. The JDA will guide JERA and our evaluation of a joint venture agreement to build an approximately 1.4 million tonne capacity low-carbon ammonia plant. The parties are contemplating JERA owning a 48% stake in the project as well as an agreement to procure more than 500,000 tonnes of low-carbon ammonia annually to meet demand for low-carbon fuels in Japan. We and JERA aim to reach a final investment decision on the proposed project within a year for commencing production in 2028.
We are also evaluating and in various stages of developing discussions and agreements with other companies for clean ammonia long-term offtake opportunities related to new applications of ammonia.
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 first quarter of 2024, the average selling price for our products was $325 per ton, a decrease of 27% compared to $444 per ton in the first quarter of 2023, reflecting lower average selling prices across all our segments, which resulted in a decrease in net sales of approximately $567 million in the first quarter of 2024 compared to the first quarter of 2023. Average selling prices for all our major products were lower in the first quarter of 2024 than in the first quarter of 2023, as lower global energy costs reduced the global market clearing price required to meet global demand.
Nitrogen Sales Volume
Sales volume in the first quarter of 2024 was 4.52 million tons compared to 4.54 million tons in the first quarter of 2023. Lower sales volume reflects the impact of lower production in the first quarter of 2024 as a result of an increase in maintenance activity due in part to a winter storm early in the quarter, partially offset by an increase in sales volume as a result of the Waggaman acquisition.
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 and lost production in the first quarter. Gross ammonia production for the first three months of 2024 was 2.1 million tons, a 9% decrease from the 2.4 million tons in the first three months of 2023, due primarily to maintenance activity resulting from the adverse weather in January as well as an increase in non-weather-related maintenance activity, including turnarounds, compared to the first quarter of 2023.
Due to the impact of plant downtime resulting from the adverse weather and additional plant maintenance activity in the first quarter of 2024 that limited production, we purchased and sold 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.
Additionally, the Waggaman acquisition, which we completed on December 1, 2023, increased our ammonia sales volume in the first quarter of 2024 by approximately 122,000 tons.
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 32% and 40%, respectively, of our production costs in the first three months of 2024 and the year ended December 31, 2023. 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.
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CF INDUSTRIES HOLDINGS, INC.
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 March 31,
20242023
2024 v. 2023
Average daily market price of natural gas Henry Hub (Louisiana) (per MMBtu)$2.43 $2.68 $(0.25)(9)%
In the first quarter of 2024, our cost of natural gas used for production, which includes the impact of realized natural gas derivatives, decreased 52% to $3.19 per MMBtu from $6.62 per MMBtu in the first quarter of 2023. This decrease in natural gas costs resulted in an increase in gross margin of $269 million compared to the first quarter of 2023.
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 the 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. As a result, North American gas withdrawals from storage during the first quarter of 2024 were lower than normal, leading to 23% higher storage levels as of March 31, 2024, compared to one year ago and 39% higher than the five-year average.

Financial Executive Summary
We reported net earnings attributable to common stockholders of $194 million for the three months ended March 31, 2024 compared to $560 million for the three months ended March 31, 2023, a decrease in net earnings of $366 million. The decrease in net earnings for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily reflects a decrease in gross margin, partially offset by a lower income tax provision in the first quarter of 2024 as compared to the first quarter of 2023.
Gross margin decreased by $454 million to $409 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The decrease in gross margin was due primarily to a 27% decrease in average selling prices to $325 per ton in the first quarter of 2024 from $444 per ton in the first quarter of 2023, which decreased gross margin by $567 million. The impact of lower selling prices was partially offset by lower natural gas costs, which increased gross margin by $269 million. The lower gross margin was partially offset by a decrease of $107 million in the income tax provision due primarily to lower pre-tax earnings in the first quarter of 2024 compared to the first quarter of 2023 and a decrease of $46 million in net earnings attributable to noncontrolling interest.
Diluted net earnings per share attributable to common stockholders decreased $1.82 per share, to $1.03 per share, in the first quarter of 2024 compared to $2.85 per share in the first quarter of 2023, due primarily to lower net earnings, partially offset by lower weighted-average common shares outstanding as a result of shares repurchased under our share repurchase programs.
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.
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 purchase price with $1.223 billion of cash on hand.
The consideration transferred reflects an estimated net working capital adjustment and other adjustments to the purchase price, which is subject to further adjustment pursuant to the terms of the asset purchase agreement. We expect any further purchase price adjustments required under the asset purchase agreement will not be material and will be completed in the second quarter of 2024.
In connection with recording the acquisition, we recognized, among other items, goodwill, intangible assets and a supply contract liability.
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CF INDUSTRIES HOLDINGS, INC.
Items Affecting Comparability of Results
For the three months ended March 31, 2024 and 2023, we reported net earnings attributable to common stockholders of $194 million and $560 million, 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 months ended March 31, 2024 and 2023. The following table and related discussion outline these items and their impact on the comparability of our financial results for these periods. The descriptions of items below that refer to amounts in the table refer to the pre-tax amounts unless otherwise noted.
Three Months Ended March 31,
20242023
Pre-TaxAfter-TaxPre-TaxAfter-Tax
(in millions)
Unrealized net mark-to-market gain on natural gas derivatives(1)
$(33)$(26)$(72)$(55)
Loss (gain) on foreign currency transactions, including intercompany loans(2)
(1)(1)
U.K. operations restructuring— — 
Acquisition and integration costs13 10