•六家美國製造工廠，位於路易斯安那州唐納森維爾（世界上最大的氨生產綜合體）;愛荷華州中士布拉夫（我們的尼爾港綜合體）;密西西比州亞祖城;俄克拉荷馬州克萊爾莫爾（我們的Verdigris綜合體）;俄克拉荷馬州伍德沃德;和路易斯安那州沃加曼。Waggaman工廠由我們全資擁有，另外五家美國製造工廠由CF Industries Nirth，LLC（CFN）直接或間接全資擁有，我們擁有該公司約89%的股份，CHS Inc. (CHS)擁有其餘部分;
•兩個加拿大製造工廠，位於艾伯塔省梅迪申哈特（加拿大最大的氨生產工廠）和安大略省庫爾明斯特;
•位於Billingham的英國製造工廠;
•主要位於美國中西部的龐大碼頭系統和相關運輸設備;以及
•擁有Point Lisas Nathy Limited（PLNL）50%的權益，這是一家位於特立尼達和多巴哥（特立尼達）的氨生產合資企業，我們採用權益法覈算。
2015年7月，我們收購了之前並非我們擁有的CF Fertiliers UK Group Limited（原名GrowHow UK Group Limited）（CF Fertiliers UK）剩餘50%股權，CF Fertiliers UK成爲我們全資擁有。此次交易使CF Fertiliers UK位於英國因斯和英國比林漢姆的氮生產綜合體增加了我們的綜合製造能力。由於英國天然氣成本大幅上漲，我們於2022年關閉了因斯工廠，並於2023年停止了Billingham工廠的氨工廠的運營，該工廠於2022年9月閒置。從那時起，我們在Billingham工廠進口氨，升級爲AN和其他氮產品。
2023年12月1日，根據與DNLA和IPL達成的資產購買協議，我們從Dyno Nobel Louisiana Ammony，LLC（DNLA）收購了位於路易斯安那州沃加曼的氨生產設施，Dyno Nobel Louisiana Ammony，LLC（DNLA）是總部位於澳大利亞的Initec Pivot Limited（IPL）的美國子公司。該設施的除塵能力爲每年88萬噸氨。隨着2023年12月1日收購的完成，我們簽訂了一項長期氨收購協議，規定我們每年向IPL旗下的Dyno Nobel，Inc.供應最多200，000噸氨。子公司根據資產購買協議的條款，16.75億美元購買價格中的42500萬美元（可進行調整）由各方分配給氨承購協議。調整後，我們用12.21億美元的手頭現金爲最終收購價格的餘額提供了資金。
作物技術的發展，如固氮、將大氣中的氮轉化爲植物可以吸收的化合物或氮高效品種，或者傳統動物飼料或替代蛋白質的替代品的開發，也可能減少氮肥的使用，並對我們的產品的需求產生不利影響。新興應用技術或替代農業技術的廣泛採用可能會擾亂傳統的應用做法，影響化肥產品的使用量或類型以及應用的時間。此外，由於擔心氮肥產品的應用可能對環境造成負面影響，各國政府和美國州立法機構不時考慮對氮肥的使用和應用進行限制。例如，聯合王國從2024年開始實施一項保證計劃，在每年1月至3月期間限制不受保護或不受限制的尿素產品的使用。雖然CF Fertilisers UK Limited不在英國銷售固體尿素肥料，但其他司法管轄區一直並可能考慮對化肥使用的限制。此外，加拿大宣佈了到2030年將化肥排放量在2020年的基礎上減少30%的目標，並正在通過改善氮素管理和優化化肥使用來支持實施。這些或其他更嚴格的溫室氣體排放限制適用於農民，即我們氮肥的最終用戶，可能會減少對我們化肥產品的需求，因爲他們使用我們的產品會增加農場水平的排放。對我們氮肥產品需求的任何減少，包括由於技術發展或氮肥使用和應用的限制，都可能對我們的業務、財務狀況、經營業績和現金流產生重大不利影響。
我們可能會在合成氨生產過程中實施超出我們經驗基礎的技術，其設計和規模可能超過以前成功完成的技術。將這些技術應用於新應用程序可能會給我們的運營帶來非傳統的性能風險。例如，我們正在確定是否做出肯定的最終投資決定，在我們的Blue Point Complex開發一個使用自熱重整(ATR)和碳捕獲和封存(CCS)的低碳合成氨廠。雖然ATR目前被廣泛用於生產氫氣，但它們還沒有被廣泛用於氨生產，也沒有達到我們正在評估的規模。雖然在做出世界規模的合成氨廠的投資決策時需要進行大量的準備和努力，但由於ATR技術的引入以及CCS技術未能成功捕獲、交通和隔離CO，可能會出現新的運營挑戰2將抑制我們從這樣的設施生產、認證和銷售低碳氨的能力。
•六家美國製造工廠，位於路易斯安那州唐納森維爾（世界上最大的氨生產綜合體）;愛荷華州中士布拉夫（我們的尼爾港綜合體）;密西西比州亞祖城;俄克拉荷馬州克萊爾莫爾（我們的Verdigris綜合體）;俄克拉荷馬州伍德沃德;和路易斯安那州沃加曼。Waggaman工廠由我們全資擁有，另外五家美國製造工廠由CF Industries Nirth，LLC（CFN）直接或間接全資擁有，我們擁有該公司約89%的股份，CHS Inc. (CHS)擁有其餘部分（有關我們與CHS戰略企業的更多信息，請參閱註釋19-非控股權益）;
2023年12月1日，根據與DNLA和IPL達成的資產購買協議，我們從Dyno Nobel Louisiana Ammony，LLC（DNLA）收購了位於路易斯安那州沃加曼的氨生產設施，Dyno Nobel Louisiana Ammony，LLC（DNLA）是總部位於澳大利亞的Initec Pivot Limited（IPL）的美國子公司。該設施擁有年產氨88萬噸的鹼液生產能力。我們收購Waggaman工廠擴大了我們的氨製造和分銷能力。
2023年12月1日，根據與DNLA和IPL達成的資產購買協議，我們從Dyno Nobel Louisiana Ammony，LLC（DNLA）收購了位於路易斯安那州沃加曼的氨生產設施，Dyno Nobel Louisiana Ammony，LLC（DNLA）是總部位於澳大利亞的Initec Pivot Limited（IPL）的美國子公司。與此次收購有關，我們簽訂了一項長期氨承購協議，規定我們每年向IPL旗下的Dyno Nobel，Inc.供應最多200，000噸氨。子公司根據資產購買協議的條款，各方將16.75億美元購買價格中的42500萬美元（可進行調整）分配給氨承購協議。我們在收購日以12.23億美元的手頭現金爲初始收購價的餘額提供了資金。
In June 2022, we approved and announced our proposed plan to restructure our U.K. operations, including the planned permanent closure of our Ince facility and optimization of the remaining manufacturing operations at our Billingham facility. As a result, in the second quarter of 2022, we recorded an intangible asset impairment charge of $8 million related to trade names.
In the third quarter of 2022, the United Kingdom continued to experience extremely high and volatile natural gas prices. Given the increase in the price of natural gas in the United Kingdom and the lack of a corresponding increase in global nitrogen product market prices, in September 2022, we temporarily idled ammonia production at our Billingham complex. As a result, we concluded that an additional impairment test was triggered for the asset groups that comprise the continuing U.K. operations, which resulted in asset impairment charges of $87 million in our U.K. Ammonia and U.K. AN asset groups, of which $15 million related to intangible assets, consisting of $6 million related to customer relationships and $9 million related to trade names. As a result of these impairment charges, intangible assets related to our U.K. operations were fully written off. See Note 7—United Kingdom Operations Restructuring and Impairment Charges for additional information.
10. Equity Method Investment
We have a 50% ownership interest in PLNL, which operates an ammonia production facility in Trinidad. 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.
PLNL 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 (loss) of operating affiliate on our consolidated statement of operations for the year ended December 31, 2023. As of December 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 $90 million, $142 million and $259 million in 2024, 2023 and 2022, respectively.
11. Fair Value Measurements
Our cash and cash equivalents and other investments consist of the following:
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 December 31, 2024 and 2023 that are recognized at fair value on a recurring basis, and indicate the fair value hierarchy utilized to determine such fair value:
December 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
$
1,446
$
1,446
$
—
$
—
Nonqualified employee benefit trusts
17
17
—
—
Derivative assets
4
—
4
—
Derivative liabilities
(3)
—
(3)
—
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 trusts
17
17
—
—
Derivative assets
1
—
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 December 31, 2024 and 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 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 OTC 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 17—Derivative Financial Instruments for additional information.
Financial Instruments
The carrying amount and estimated fair value of our financial instruments are as follows:
December 31, 2024
December 31, 2023
Carrying Amount
Fair Value
Carrying Amount
Fair Value
(in millions)
Long-term debt
$
2,971
$
2,827
$
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 a recurring 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 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.
On December 1, 2023, we acquired the Waggaman ammonia production facility. See Note 6—Acquisition of Waggaman Ammonia Production Facility for information on the inputs utilized in the allocation of purchase price to the fair value of assets acquired and liabilities assumed.
In the third quarter of 2023, we determined the carrying value of our equity method investment in PLNL exceeded its fair value and recorded an impairment of our equity method investment in PLNL of $43 million. See Note 10—Equity Method Investment for additional information.
The components of earnings before income taxes and the components of our income tax provision are as follows:
Year ended December 31,
2024
2023
2022
(in millions)
Domestic
$
1,533
$
2,248
$
4,699
Non-U.S.
229
—
396
Earnings before income taxes
$
1,762
$
2,248
$
5,095
Current
Federal
$
312
$
271
$
702
Foreign
42
(26)
395
State
46
84
168
400
329
1,265
Deferred
Federal
(89)
108
(102)
Foreign
3
(5)
(18)
State
(29)
(22)
13
(115)
81
(107)
Income tax provision
$
285
$
410
$
1,158
Differences in the expected income tax provision based on statutory rates applied to earnings before income taxes and the income tax provision reflected in the consolidated statements of operations are summarized below.
Year ended December 31,
2024
2023
2022
(in millions, except percentages)
Earnings before income taxes
$
1,762
$
2,248
$
5,095
Expected tax provision at U.S. statutory rate of 21%
$
370
$
472
$
1,070
State income taxes, net of federal
8
44
143
Net earnings attributable to noncontrolling interest
(54)
(66)
(124)
Foreign tax rate differential
6
(1)
(9)
U.S. tax on foreign earnings
1
4
3
Foreign-derived intangible income deduction
(27)
(20)
(48)
Transfer pricing arbitration
—
—
69
Other
(19)
(23)
54
Income tax provision
$
285
$
410
$
1,158
Effective tax rate
16.2
%
18.3
%
22.7
%
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. As a result, earnings attributable to the noncontrolling interest of $259 million, $313 million and $591 million in 2024, 2023 and 2022, respectively, which are included in earnings before income taxes, impacted the effective tax rate in all three years. See Note 19—Noncontrolling Interest for additional information.
The foreign tax rate differential is impacted by the inclusion of equity earnings from our equity method investment in PLNL, a foreign operating affiliate, which are included in pre-tax earnings on an after-tax basis.
U.S. tax on foreign earnings is inclusive of the U.S. tax on our 50% ownership in PLNL, current year tax on GILTI, benefit from the GILTI Section 250 deduction and foreign tax credits, as well as adjustments to prior year amounts for these items.
In 2016, the Canada Revenue Agency (CRA) and Alberta Tax and Revenue Administration (Alberta TRA) issued Notices of Reassessment for tax years 2006 through 2009 to one of our Canadian subsidiaries asserting a disallowance of certain patronage deductions. We filed Notices of Objection with respect to the Notices of Reassessment with the CRA and Alberta TRA and posted letters of credit in lieu of paying the additional tax liability assessed. The letters of credit served as security until the matter was resolved, as discussed below. In 2018, the matter, including the related transfer pricing topic regarding the allocation of profits between Canada and the United States, was accepted for consideration under the bilateral settlement provisions of the U.S.-Canada tax treaty (the Treaty) by the United States and Canadian competent authorities, and included tax years 2006 through 2011. In the second quarter of 2021, the Company submitted the transfer pricing aspect of the matter into the arbitration process under the terms of the Treaty.
In February 2022, we were informed that a decision was reached by the arbitration panel for tax years 2006 through 2011. In March 2022, we received further details of the results of the arbitration proceedings and the settlement provisions between the United States and Canadian competent authorities, and we accepted the decision of the arbitration panel. Under the terms of the arbitration decision, additional income for tax years 2006 through 2011 was subject to tax in Canada, resulting in our having additional Canadian tax liability for those tax years of approximately $129 million.
As a result of the impact of these events on our Canadian and U.S. federal and state income taxes, we recognized an income tax provision of $78 million, reflecting the net impact of $129 million of accrued income taxes payable to Canada for tax years 2006 to 2011, partially offset by net income tax receivables of approximately $51 million in the United States, and we accrued net interest of $102 million, primarily reflecting the estimated interest payable to Canada. The $69 million in the effective tax rate table above excludes the state income tax liability of $9 million, which is included in the line “State income tax, net of federal.”
In the second half of 2022, this tax liability and the related interest was assessed and paid, resulting in total payments of $224 million, which also reflect the impact of changes in foreign currency exchange rates. As a result, the letters of credit we had posted in lieu of paying the additional tax liability assessed by the Notices of Reassessment were cancelled. Due primarily to the availability of additional foreign tax credits to offset in part the increased Canadian tax referenced above, we filed amended tax returns in the United States to request a refund of taxes paid.
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. In the fourth quarter of 2024, we received the CRA portion of the interest relief consisting of interest refunds of $21 million and related interest of $2 million. Based on current estimates and foreign currency exchange rates as of December 31, 2024, the interest relief from the Alberta TRA is estimated to be approximately $16 million, consisting of interest refunds of $15 million and related interest of $1 million. As a result, in our consolidated statement of operations for the year ended December 31, 2024, we recognized $39 million of income consisting of a $36 million reduction in interest expense and $3 million of interest income.
Deferred tax assets and deferred tax liabilities are as follows:
December 31,
2024
2023
(in millions)
Deferred tax assets:
Net operating loss and capital loss carryforwards, state
$
56
$
68
Net operating loss and capital loss carryforwards, foreign
49
116
Retirement and other employee benefits
2
14
Foreign tax credits
57
55
State tax credits
11
16
Operating lease liabilities
66
63
Other
34
38
275
370
Valuation allowance
(107)
(194)
168
176
Deferred tax liabilities:
Depreciation and amortization
(273)
(300)
Investments in partnerships
(659)
(780)
Operating lease right-of-use assets
(63)
(63)
Foreign earnings
(14)
(9)
Other
(30)
(23)
(1,039)
(1,175)
Net deferred tax liability
$
(871)
$
(999)
The Company does not have an indefinite reinvestment assertion in any of our foreign subsidiaries. As of December 31, 2024, we recorded a deferred tax liability of $14 million on the undistributed earnings of our Canadian subsidiaries. We have not provided for deferred taxes on the remainder of our undistributed earnings from our foreign subsidiaries because such earnings would not give rise to additional tax liabilities upon repatriation.
As of December 31, 2024, our net operating loss and capital loss carryforwards consist primarily of state net operating loss carryforwards of $56 million, of which $15 million will expire at various dates between 2036 and 2044 and the remaining $41 million can be carried forward indefinitely, and foreign capital loss carryforwards of $49 million, which can be carried forward indefinitely. Our foreign subsidiaries have operations that do not normally generate capital gains and have no practical plans to do so in the future. As a result, we have recorded a full valuation allowance against all foreign capital loss carryforwards.
As of December 31, 2024, we have state tax credit carryforwards resulting in a deferred tax asset of $11 million. The state tax credits have expiration dates generally ranging from 2039 to 2044.
In 2024, the net decrease in the valuation allowance is primarily attributable to a reduction of $83 million in a capital loss carryforward and the associated valuation allowance for one of our foreign subsidiaries in Canada. Additionally, based on income generated in the United Kingdom and the reversal of deferred tax assets, the remaining valuation allowance originally recorded in 2022 for one of our foreign subsidiaries in the United Kingdom was released in 2024, resulting in an $11 million decrease to the valuation allowance. Both of these decreases were partially offset by the impact of changes in foreign currency exchange rates.
In 2023, the net increase in the valuation allowance is primarily attributable to excess foreign tax credits associated with certain U.S. taxed foreign branch income and the impact of changes in foreign currency exchange rates, partially offset by the utilization of deferred tax assets of one of our foreign subsidiaries in the United Kingdom. The excess foreign tax credits carried forward, subject to U.S. foreign tax credit limitation rules, are not expected to be utilized prior to expiration and have a full valuation allowance of $55 million reflecting an increase of $11 million in 2023. Based on recent income generated in the United Kingdom, a portion of the deferred tax assets for which a full valuation allowance had been recorded in 2022 was
utilized in 2023, resulting in a $7 million decrease to the deferred tax assets and the valuation allowance of one of our foreign subsidiaries in the United Kingdom.
In 2022, the net increase in the valuation allowance is primarily attributable to excess foreign tax credits associated with certain U.S. taxed foreign branch income and the reversal of future deductible temporary differences of one of our foreign subsidiaries in the United Kingdom, partially offset by the impact of changes in foreign currency exchange rates. The excess foreign tax credits carried forward, subject to U.S. foreign tax credit limitation rules, are not expected to be utilized prior to expiration and have a full valuation allowance of $44 million reflecting an increase of $26 million in 2022. Based on recent losses generated in the United Kingdom, and projections for future income over the period for which the deferred tax assets will reverse, we believe it is more likely than not that the foreign subsidiary in the United Kingdom will not realize the deferred tax assets and therefore have recorded a full valuation allowance of $24 million. See Note 7—United Kingdom Operations Restructuring and Impairment Charges for additional detail.
Unrecognized Tax Benefits
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
December 31,
2024
2023
(in millions)
Unrecognized tax benefits:
Balance as of January 1
$
222
$
181
Additions for tax positions taken during the current year
1
5
Additions for tax positions taken during prior years
7
69
Reductions related to lapsed statutes of limitations
—
—
Reductions related to settlements with tax jurisdictions
—
(33)
Balance as of December 31
$
230
$
222
In 2024, we increased the amount of our unrecognized tax benefit by $8 million, which primarily relates to transfer pricing positions. As of December 31, 2024, we had $230 million of unrecognized tax benefits. The majority of our unrecognized tax benefits relate to transfer pricing positions, which have a corollary receivable for the other jurisdiction impacted by the transfer pricing relationship. Recognizing these unrecognized tax benefits would result in additional tax expense of $49 million in the future. These receivables are included in other assets on our consolidated balance sheet.
In 2023, we increased the amount of our unrecognized tax benefits by $74 million, which primarily relates to refunds claimed on the U.S. amended returns filed during the year, as discussed above under Canada Revenue Agency Competent Authority Matter. In addition, we reduced the amount of unrecognized tax benefits by $33 million, reflecting primarily the settlement of issues raised on state and Canadian income tax audits for various open tax years.
In 2022, we increased the amount of our unrecognized tax benefits by $154 million, which relates primarily to the Canada Revenue Agency Competent Authority Matter discussed above. As a result of the outcome of the arbitration decision, we evaluated our transfer pricing positions between Canada and the United States for open years 2012 and after. In order to mitigate the assessment of future Canadian interest on these Canadian transfer pricing positions, in the fourth quarter of 2022, we made payments to the Canadian taxing authorities of CAD $363 million (approximately $267 million), which were recorded as noncurrent income tax receivables and included in other assets on our consolidated balance sheet. For the amounts ultimately owed and paid to the Canadian tax authorities upon resolution of these tax years, we would seek refunds of related taxes paid in the United States.
We file federal, provincial, state and local income tax returns principally in the United States, Canada and the United Kingdom, as well as in certain other foreign jurisdictions. In general, filed tax returns remain subject to examination by United States tax jurisdictions for years 2017 and thereafter, by Canadian tax jurisdictions for years 2012 and thereafter, and by the United Kingdom for years 2022 and thereafter. As a result of uncertainties regarding tax audits and their possible outcomes, an estimate of the range of possible impacts to unrecognized tax benefits in the next twelve months cannot be made at this time.
Interest expense and penalties related to our unrecognized tax benefits of $8 million, $(4) million and $66 million were recorded for the years ended December 31, 2024, 2023 and 2022, respectively. Amounts recognized in our consolidated balance sheets for accrued interest and penalties related to our unrecognized tax benefits of $55 million and $51 million as of December 31, 2024 and 2023, respectively, are included in other liabilities.
We maintain five funded pension plans, consisting ofthree in North America (one U.S. plan and two Canadian plans) and two in the United Kingdom. Both U.K. pension plans are closed to new employees and future accruals. All of our North American plans are closed to new employees. As a result of plan amendments in the fourth quarter of 2022, as further described below, one of the Canadian plans ceased future accruals effective December 31, 2023, and the cash balance portion of the U.S. plan that provided benefits based on years of service and interest credits was closed to new employees effective December 31, 2022. We also provide group medical insurance benefits, which vary by group and location, to certain retirees in North America.
On July 15, 2022, we entered into an agreement with an insurance company to purchase a non-participating group annuity contract and transfer approximately $375 million of our primary U.S. defined benefit pension plan’s projected benefit obligation. The transaction closed on July 22, 2022 and was funded with plan assets. Under the transaction, the insurance company assumed responsibility for pension benefits and annuity administration for approximately 4,000 retirees or their beneficiaries. As a result of this transaction, in the third quarter of 2022, we remeasured the plan’s projected benefit obligation and plan assets and recognized a non-cash pre-tax pension settlement loss of $24 million, reflecting the unamortized net unrecognized postretirement benefit costs related to the settled obligations, with a corresponding offset to accumulated other comprehensive loss. In the fourth quarter of 2022, the final settlement of the non-participating group annuity contract resulted in a refund of $4 million, which decreased the settlement loss by $3 million to $21 million.
In the fourth quarter of 2022, we remeasured certain of our defined benefit pension plans due to plan amendments resulting from a revision to our North American retirement plan strategy, which, among other things, closed the cash balance portion of the U.S. plan that was previously open to new employees and established effective dates for each of the three North America plans to freeze future benefit accruals through the end of 2025. The plan curtailments resulted in a reduction in our benefit obligations of $20 million and curtailment gains of $4 million, which are reflected in other non-operating—net in our consolidated statement of operations.
Our plan assets, benefit obligations, funded status and amounts recognized on our consolidated balance sheets for our North America and United Kingdom plans as of the December 31 measurement date are as follows:
Pension Plans
Retiree Medical Plans
North America
United Kingdom
North America
December 31,
December 31,
December 31,
2024
2023
2024
2023
2024
2023
(in millions)
Change in plan assets
Fair value of plan assets as of January 1
$
313
$
273
$
360
$
320
$
—
$
—
Return on plan assets
10
29
(7)
19
—
—
Employer contributions
—
19
22
25
2
2
Benefit payments
(13)
(11)
(24)
(22)
(2)
(2)
Foreign currency translation
(11)
3
(6)
18
—
—
Fair value of plan assets as of December 31
299
313
345
360
—
—
Change in benefit obligation
Benefit obligation as of January 1
(292)
(274)
(367)
(347)
(20)
(23)
Service cost
(5)
(5)
—
—
—
—
Interest cost
(13)
(13)
(16)
(16)
(1)
(1)
Benefit payments
13
11
24
22
2
2
Foreign currency translation
9
(3)
5
(19)
—
—
Change in assumptions and other
10
(8)
37
(7)
—
2
Benefit obligation as of December 31
(278)
(292)
(317)
(367)
(19)
(20)
Funded status as of December 31
$
21
$
21
$
28
$
(7)
$
(19)
$
(20)
For our North America pension plans, the line titled “change in assumptions and other” for 2024 primarily reflects the impact of gains due to the increase in discount rates, partially offset by the increase in the interest crediting rate for the cash balance portion of the U.S. plan and, for 2023, primarily reflects losses due to the decrease in discount rates.
For our United Kingdom pension plans, the line titled “change in assumptions and other” for 2024 primarily reflects gains due to the increase in discount rates and, for 2023, primarily reflects losses due to the decrease in discount rates and increase in the inflation rate assumptions, partially offset by the change in mortality assumptions.
Amounts recognized on the consolidated balance sheets consist of the following:
Pension Plans
Retiree Medical Plans
North America
United Kingdom
North America
December 31,
December 31,
December 31,
2024
2023
2024
2023
2024
2023
(in millions)
Other assets
$
21
$
23
$
28
$
—
$
—
$
—
Accounts payable and accrued expenses
—
—
—
—
(2)
(2)
Other liabilities
—
(2)
—
(7)
(17)
(18)
$
21
$
21
$
28
$
(7)
$
(19)
$
(20)
Pre-tax amounts recognized in accumulated other comprehensive loss consist of the following:
Net periodic benefit cost (income) and other amounts recognized in other comprehensive (income) loss for the years ended December 31 included the following:
Pension Plans
Retiree Medical Plans
North America
United Kingdom
North America
2024
2023
2022
2024
2023
2022
2024
2023
2022
(in millions)
Service cost
$
5
$
5
$
16
$
—
$
—
$
—
$
—
$
—
$
—
Interest cost
13
13
19
16
16
10
1
1
1
Expected return on plan assets
(16)
(15)
(22)
(28)
(25)
(14)
—
—
—
Settlement loss
—
—
21
—
—
—
—
—
—
Curtailment gains
—
—
(4)
—
—
—
—
—
—
Amortization of prior service cost
—
—
1
—
—
—
—
—
—
Amortization of actuarial loss (gain)
—
—
—
—
—
2
—
(1)
—
Net periodic benefit cost (income)
2
3
31
(12)
(9)
(2)
1
—
1
Net actuarial (gain) loss
(4)
(6)
(2)
(1)
14
(22)
1
(2)
(8)
Settlement loss
—
—
(21)
—
—
—
—
—
—
Curtailment effects
—
—
(20)
—
—
—
—
—
—
Curtailment gains
—
—
4
—
—
—
—
—
—
Amortization of prior service cost
—
—
(1)
—
—
—
—
—
—
Amortization of actuarial (loss) gain
—
—
—
—
—
(2)
—
1
—
Total recognized in other comprehensive (income) loss
(4)
(6)
(40)
(1)
14
(24)
1
(1)
(8)
Total recognized in net periodic benefit cost (income) and other comprehensive (income) loss
$
(2)
$
(3)
$
(9)
$
(13)
$
5
$
(26)
$
2
$
(1)
$
(7)
Service cost is recognized in cost of sales and selling, general and administrative expenses, and the other components of net periodic benefit cost are recognized in other non-operating—net in our consolidated statements of operations.
The accumulated benefit obligation (ABO) in aggregate for the defined benefit pension plans in North America was approximately $277 million and $290 million as of December 31, 2024 and 2023, respectively. The ABO in aggregate for the defined benefit pension plans in the United Kingdom was approximately $317 million and $367 million as of December 31, 2024 and 2023, respectively.
The following table presents aggregated information for those individual defined benefit pension plans that have an ABO in excess of plan assets as of December 31, which excludes all five of the defined benefit pension plans in 2024, and for 2023, excludes all three of the North America defined benefit pension plans, as each had plan assets in excess of its ABO:
North America
United Kingdom
2024
2023
2024
2023
(in millions)
Accumulated benefit obligation
$
—
$
—
$
—
$
(367)
Fair value of plan assets
—
—
—
360
The following table presents aggregated information for those individual defined benefit pension plans that have a projected benefit obligation (PBO) in excess of plan assets as of December 31, which excludes all five of the defined benefit pension plans in 2024, and for 2023, excludes two North America defined benefit pension plans as each had plan assets in excess of its PBO:
Our pension funding policy in North America is to contribute amounts sufficient to meet minimum legal funding requirements plus discretionary amounts that we may deem to be appropriate. Actual contributions may vary from estimated amounts depending on changes in assumptions, actual returns on plan assets, changes in regulatory requirements and funding decisions.
In accordance with United Kingdom pension legislation, our United Kingdom pension funding policy is to contribute amounts sufficient to meet the funding level target agreed between the employer and the trustees of the United Kingdom plans. Actual contributions are usually agreed with the plan trustees in connection with each triennial valuation and may vary following each such review depending on changes in assumptions, actual returns on plan assets, changes in regulatory requirements and funding decisions.
We currently estimate that our consolidated pension funding cash contributions for 2025 will be approximately $1 million for our North American plans and, as agreed with the plans’ trustees, $5 million for our United Kingdom plans.
The expected future benefit payments for our pension and retiree medical plans are as follows:
Pension Plans
Retiree Medical Plans
North America
United Kingdom
North America
(in millions)
2025
$
14
$
25
$
2
2026
15
25
2
2027
16
26
2
2028
16
27
2
2029
17
27
2
2030-2034
92
148
7
The following assumptions were used in determining the benefit obligations and expense:
The discount rates for all plans are developed by plan using spot rates derived from a hypothetical yield curve of high quality (AA rated or better) fixed income debt securities as of the year-end measurement date to calculate discounted cash flows (the projected benefit obligation) and solving for a single equivalent discount rate that produces the same projected benefit obligation. In determining our benefit obligation, we use the actuarial present value of the vested benefits to which each eligible employee is currently entitled, based on the employee’s expected date of separation or retirement.
The cash balance interest crediting rate for the U.S. plan is based on the greater of 10-year Treasuries or 3.0%.
For our North America plans, the expected long-term rate of return on assets is based on analysis of historical rates of return achieved by equity and non-equity investments and current market characteristics, adjusted for estimated plan expenses and weighted by target asset allocation percentages. As of January 1, 2025, our weighted-average expected long-term rate of
return on assets for our North America plans is 5.1%, which will be used in determining net periodic benefit cost for our North America plans for 2025.
For our United Kingdom plans, the expected long-term rate of return on assets is based on the expected long-term performance of the underlying investments, adjusted for investment managers’ fees and estimated plan expenses. As of January 1, 2025, our weighted-average expected long-term rate of return on assets for our United Kingdom plans is 6.1%, which will be used in determining net periodic benefit cost for our United Kingdom plans for 2025.
The retail price index for our United Kingdom plans is developed using a U.K. Government Gilt Prices Only retail price inflation curve, which is based on the difference between yields on fixed interest government bonds and index-linked government bonds.
For the measurement of the benefit obligation at December 31, 2024 for our primary (U.S.) retiree medical benefit plans, the assumed health care cost trend rates, for pre-age 65 retirees, start with an 8.4% increase in 2025, followed by a gradual decline in increases to 4.5% for 2034 and thereafter. For post-age 65 retirees, the assumed health care cost trend rates start with a 9.8% increase in 2025, followed by a gradual decline in increases to 4.5% for 2034 and thereafter. For the measurement of the benefit obligation at December 31, 2023 for our primary (U.S.) retiree medical benefit plans, the assumed health care cost trend rates, for pre-age 65 retirees, started with an 8.0% increase in 2024, followed by a gradual decline in increases to 4.5% for 2033 and thereafter. For post-age 65 retirees, the assumed health care cost trend rates started with an 8.4% increase in 2024, followed by a gradual decline in increases to 4.5% for 2033 and thereafter.
The objectives of the investment policies governing the pension plans are to administer the assets of the plans for the benefit of the participants in compliance with all laws and regulations, and to establish an asset mix that provides for diversification and considers the risk of various different asset classes with the purpose of generating favorable investment returns. The investment policies consider circumstances such as participant demographics, time horizon to retirement and liquidity needs, and provide guidelines for asset allocation, planning horizon, general portfolio issues and investment manager evaluation criteria. The investment strategies for the plans, including target asset allocations and investment vehicles, are subject to change within the guidelines of the policies.
The target asset allocation for our U.S. pension plan is 80% non-equity and 20% equity, which has been determined based on analysis of actual historical rates of return and plan needs and circumstances. The equity investments are tailored to exceed the growth of the benefit obligation and are a combination of U.S. and non-U.S. total stock market index mutual funds. The non-equity investments consist primarily of investments in debt securities and money market instruments that are selected based on investment quality and duration to mitigate volatility of the funded status and annual required contributions. The non-equity investments have a duration profile that is similar to the benefit obligation in order to mitigate the impact of interest rate changes on the funded status. This investment strategy is achieved through the use of mutual funds and individual securities.
The target asset allocation for both of the Canadian plans is 100% non-equity. This investment strategy is achieved through the use of individual securities. The investments consist primarily of investments in debt securities that are selected based on investment quality and duration to mitigate volatility of the funded status and annual required contributions. The investments have a duration profile that is similar to the benefit obligation in order to mitigate the impact of interest rate changes on the funded status.
The pension assets in the United Kingdom plans are each administered by a Board of Trustees consisting of employer-nominated trustees, member-nominated trustees and an independent trustee, with a requirement that member-nominated trustees represent at least one-third of each Board of Trustees. It is the responsibility of the trustees to ensure prudent management and investment of the assets in the plans. The trustees meet on a quarterly basis to review and discuss fund performance and other administrative matters. The trustees’ investment objectives are to hold assets that generate returns sufficient to cover prudently each plan’s liability without exposing the plans to unacceptable risk. This is accomplished through the asset allocation strategy of each plan. For both plans, if the asset allocation moves more than plus or minus 5% from the target allocation, the plans’ appointed investment manager would amend the asset allocation. The trustees formally review the investment strategy on an annual basis which includes taking account of the latest actuarial data, such as changes to member experience. A full review is also completed of the investment strategy at every triennial actuarial valuation to ensure that the strategy remains consistent with its funding principles. The trustees may review the strategy more frequently if opportunities arise to reduce risk within the investments without jeopardizing the funding position.
Assets of the United Kingdom plans are invested in pooled funds managed by the appointed investment manager. The assets are allocated between a growth portfolio and a matching portfolio. The growth portfolio seeks a return premium on investments across multiple asset classes. Growth portfolio funds may include, among others, traditional equities and bonds, growth fixed income, and hedged funds, and may use derivatives. The matching portfolio seeks to align asset changes with
changes in liabilities due to interest rates and inflation expectations. Matching portfolio funds are composed of corporate bonds, U.K. gilts and liability-driven investment funds and generally invest in fixed income debt securities including government bonds, gilts, gilt repurchase agreements, swaps and investment grade corporate bonds and may use derivatives. The target asset allocation for one of the United Kingdom plans was reduced to 25% from 46% in the growth portfolio and increased to 75% from 54% in the matching portfolio. The target asset allocation for the other United Kingdom plan was reduced to 30% from 57% in the growth portfolio and increased to 70% from 43% in the matching portfolio. The change in the target asset allocations reflected the reduction in the funding deficits. In 2024, the legacy holding in an actively managed property fund was fully redeemed and invested back into the plan’s portfolio.
The fair values of our pension plan assets as of December 31, 2024 and 2023, by major asset class, are as follows:
North America
December 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 and cash equivalents(1)
$
2
$
1
$
1
$
—
Equity mutual funds
Index equity(2)
41
41
—
—
Fixed income
U.S. Treasury bonds and notes(3)
14
14
—
—
Fixed income mutual funds(4)
42
42
—
—
Corporate bonds and notes(5)
100
—
100
—
Government and agency securities(6)
90
—
90
—
Other(7)
10
—
10
—
Total assets at fair value by fair value levels
$
299
$
98
$
201
$
—
Accruals and payables—net
—
Total assets
$
299
United Kingdom
December 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 and cash funds(8)
$
2
$
1
$
1
$
—
Pooled equity funds(9)
14
—
14
—
Pooled diversified funds(10)
31
—
31
—
Debt funds
Pooled U.K. government fixed and index-linked securities funds(11)
78
—
78
—
Pooled global debt funds(12)
124
—
124
—
Pooled liability-driven investment funds(13)
52
—
52
—
Total assets at fair value by fair value levels
$
301
$
1
$
300
$
—
Funds measured at NAV as a practical expedient(14)
(1)Cash and cash equivalents are primarily short-term money market funds.
(2)The index equity funds are mutual funds that utilize a passively managed investment approach designed to track specific equity indices. They are valued at quoted market prices in an active market, which represent the net asset values (NAVs) of the shares held by the plan.
(3)U.S. Treasury bonds and notes are valued based on quoted market prices in an active market.
(4)The fixed income mutual funds invest primarily in high-quality longer duration fixed income securities, which include bonds, debt securities and other similar instruments. The funds are priced based on a daily published NAV.
(5)Corporate bonds and notes, including private placement securities, are valued by institutional bond pricing services, which gather information from market sources and integrate credit information, observed market movements and sector news into their pricing applications and models.
(6)Government and agency securities consist of U.S. municipal bonds and Canadian provincial bonds that are valued by institutional bond pricing services, which gather information on current trading activity, market movements, trends, and specific data on specialty issues.
(7)Other includes primarily mortgage-backed, asset-backed securities and U.S. Treasury strips. Mortgage-backed and asset-backed securities are valued by institutional pricing services, which gather information from market sources and integrate credit information, observed market movements and sector news into their pricing applications and models. U.S. Treasury strips are valued using stripped interest and stripped principal yield curves based on data obtained from various dealer contacts and live data sources.
(8)Cash and cash funds as of December 31, 2024 includes a cash fund that invests primarily in short-dated money market instruments.
(9)Pooled equity funds invest in a broad array of global equity, equity-related securities, a range of diversifiers and may use derivatives for efficient portfolio management. The funds are valued at NAV as determined by the fund managers based on the value of the underlying net assets of the fund.
(10)Pooled diversified funds invest in a broad array of asset classes and a range of diversifiers including the use of derivatives. The funds are valued at NAV as determined by the fund managers based on the value of the underlying net assets of the fund.
(11)Pooled U.K. government fixed and index-linked securities funds invest primarily in Sterling denominated fixed income and inflation-linked fixed income securities issued or guaranteed by the U.K. government and may use derivatives for efficient portfolio management. The funds are valued at NAV as determined by the fund managers based on the value of the underlying net assets of the fund.
(12)Pooled global debt funds invest in a broad array of debt securities from corporate and government bonds to emerging markets and high-yield fixed and floating rate securities of varying maturities and may use derivatives for efficient portfolio management. The funds are valued at NAV as determined by the fund managers based on the value of the underlying net assets of the fund.
(13)Pooled liability-driven investment funds primarily invest, either through a sub-fund or directly, in gilt repurchase agreements, physical U.K. government gilts, other inflation-linked fixed income securities, and derivatives to provide exposure to interest rates and inflation, thus hedging these elements of risk associated with pension liabilities. The funds are valued at NAV as determined by the fund managers based on the value of the underlying net assets of the fund.
(14)Funds measured at NAV as a practical expedient include funds of funds with return strategies with exposure to varying asset classes and credit strategies, as well as alternative investment strategies not precluding multi-asset credit strategies, global macro strategies, commodities, fixed income, equities and currency, and funds that invest primarily in freehold and leasehold property in the United Kingdom. The funds are valued using NAV as determined by the fund managers based on the value of the underlying assets of the fund.
(15)Short-term investments are primarily U.S. and Canadian treasury bills with original maturities longer than three months but less than a year.
(16)The equity pooled mutual funds consist of pooled funds that invest in common stock and other equity securities that are traded on U.S., Canadian, and foreign markets.
We have defined contribution plans covering substantially all employees in North America and the United Kingdom. Depending on the specific provisions of each plan, qualified employees receive company contributions based on a percentage of base salary or base salary and incentive pay, matching of employee contributions up to specified limits, or a combination of both. In 2024, 2023 and 2022, we recognized expense related to our contributions to the defined contribution plans of $37 million, $34 million and $19 million, respectively.
In addition to our qualified defined benefit pension plans, we also maintain certain nonqualified supplemental pension plans for highly compensated employees as defined under federal law. The amounts recognized in accrued expenses and other liabilities in our consolidated balance sheets for these plans were $1 million and $9 million, respectively, as of December 31, 2024, and $1 million and $10 million, respectively, as of December 31, 2023. We recognized expense for these plans of $1 million in each of the years ended December 31, 2024, 2023 and 2022.
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 depend on CF Holdings’ credit rating at the time.
As of December 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. As of December 31, 2024 and 2023, and during the years then ended, there were no borrowings outstanding under the Revolving Credit Agreement.
The Revolving Credit Agreement contains representations and warranties and affirmative and negative covenants, including a financial covenant. As of December 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 December 31, 2024, approximately $324 million of letters of credit were outstanding under this agreement.
Senior Notes
Long-term debt presented on our consolidated balance sheets as of December 31, 2024 and 2023 consisted of the following debt securities issued by CF Industries:
(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 December 31, 2024 and 2023, respectively, and total deferred debt issuance costs were $23 million and $25 million as of December 31, 2024 and 2023, respectively.
(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.
On April 21, 2022, we redeemed in full all of the $500 million outstanding principal amount of the 3.450% senior notes due June 2023 (the 2023 Notes) in accordance with the optional redemption provisions in the indenture governing the 2023 Notes. The total aggregate redemption price paid in connection with the April 2022 redemption of the 2023 Notes, which was funded with cash on hand, was $513 million, including accrued interest. As a result, we recognized a loss on debt extinguishment of $8 million, consisting primarily of the premium paid on the redemption of the $500 million principal amount of the 2023 Notes prior to their scheduled maturity.
(1)See Note 14—Financing Agreements for additional information.
(2)Interest on tax liabilities for the year ended December 31, 2024 primarily relates to discretionary interest relief granted from the CRA and the Alberta TRA. Interest on tax liabilities for the year ended December 31, 2022 consists primarily of interest accrued on reserves for unrecognized tax benefits related to Canadian transfer pricing. See Note 12—Income Taxes for additional information.
(1)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 were not permanently invested.
(2)Unrealized gain on embedded derivative consists of a reduction in the fair value of an embedded derivative liability related to the terms of our strategic venture with CHS.
(3)Other primarily includes the front-end engineering and design study costs related to our clean energy initiatives and gains on the recovery of certain precious metals used in the manufacturing process.
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 OTC markets. These natural gas derivatives settle using primarily a NYMEX futures price index, which represents the basis for fair value at any given time. We 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 December 31, 2024, we had natural gas derivative contracts covering certain periods through March 2025.
As of December 31, 2024, our open natural gas derivative contracts consisted of natural gas fixed price swaps and basis swaps for 16.0 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 year ended December 31, 2024, we used derivatives to cover approximately 15% 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
Year ended December 31,
Location
2024
2023
2022
(in millions)
Natural gas derivatives
Unrealized net gains (losses)
Cost of sales
$
35
$
39
$
(41)
Realized net (losses) gains
Cost of sales
(40)
(139)
10
Net derivative losses
$
(5)
$
(100)
$
(31)
The fair values of derivatives on our consolidated balance sheets are shown below. As of December 31, 2024 and 2023, none of our derivative instruments were designated as hedging instruments. See Note 11—Fair Value Measurements for additional information on derivative fair values.
Asset Derivatives
Liability Derivatives
Balance Sheet Location
December 31,
Balance Sheet Location
December 31,
2024
2023
2024
2023
(in millions)
(in millions)
Natural gas derivatives
Other current assets
$
4
$
1
Other current liabilities
$
(3)
$
(35)
The counterparties to our derivative contracts are multinational commercial banks, major financial institutions and large energy companies. Our derivative contracts are executed with several counterparties under International Swaps and Derivatives Association (ISDA) agreements. The ISDA agreements are master netting arrangements commonly used for OTC derivatives that mitigate exposure to counterparty credit risk, in part, by creating contractual rights of netting and setoff, the specifics of which vary from agreement to agreement. These rights are described further below:
•Settlement netting generally allows us and our counterparties to net, into a single net payable or receivable, ordinary settlement obligations arising between us and our counterparties under the ISDA agreement on the same day, in the same currency, for the same types of derivative instruments, and through the same pairing of offices.
•Close-out netting rights are provided in the event of a default or other termination event (as defined in the ISDA agreements), including bankruptcy. Depending on the cause of early termination, the non-defaulting party may elect to terminate all or some transactions outstanding under the ISDA agreement. The values of all terminated transactions and certain other payments under the ISDA agreement are netted, resulting in a single net close-out amount payable to or by the non-defaulting party.
•Setoff rights are provided by certain of our ISDA agreements and generally allow a non-defaulting party to elect to set off, against the final net close-out payment, other matured and contingent amounts payable between us and our
counterparties under the ISDA agreement or otherwise. Typically, these setoff rights arise upon the early termination of all transactions outstanding under an ISDA agreement following a default or specified termination event.
Most of our ISDA agreements contain credit-risk-related contingent features such as cross default provisions. 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 December 31, 2024 and 2023, the aggregate fair value of the derivative instruments with credit-risk-related contingent features in net liability positions was zero 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 December 31, 2024 and 2023, we had no cash collateral on deposit with counterparties for derivative contracts.
The following table presents amounts relevant to offsetting of our derivative assets and liabilities as of December 31, 2024 and 2023:
Amounts presented in consolidated
balance sheets(1)
Gross amounts not offset in consolidated balance sheets
(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.
Tax-related assets include long-term receivables related to U.S. and Canadian transfer pricing and the related interest, and certain payments to Canadian taxing authorities. See Note 12—Income Taxes for additional information.
Other includes pension plans in a net asset funded status. See Note 13—Pension and Other Postretirement Benefits for additional information.
Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consist of the following:
(1)As of December 31, 2024 and 2023, accrued capital expenditures totaled $101 million and $68 million, respectively, of which $42 million and $20 million, respectively, are included within accounts payable in the table above.
Payroll and employee-related costs include accrued salaries and wages, vacation, benefits, incentive plans and payroll taxes.
Accrued interest includes interest payable on our outstanding senior notes. See Note 14—Financing Agreements and Note 15—Interest Expense for additional information.
Other includes accrued utilities, property and other taxes, sales incentives and other credits, accrued litigation settlement costs, and accrued maintenance and professional services.
As of December 31, 2024, other current liabilities of $9 million consist primarily of $3 million of unrealized loss on natural gas derivatives and $4 million for asset retirement obligations.
As of December 31, 2023, other current liabilities of $42 million consist primarily of $35 million of unrealized loss on natural gas derivatives and $6 million for asset retirement obligations.
See Note 17—Derivative Financial Instruments and Note 24—Asset Retirement Obligations for additional information.
Other Liabilities
Other liabilities consist of the following:
December 31,
2024
2023
(in millions)
Benefit plans and deferred compensation
$
40
$
50
Tax-related liabilities
245
247
Unrealized loss on embedded derivative
—
1
Other
16
16
Other liabilities
$
301
$
314
Benefit plans and deferred compensation include liabilities for pensions, retiree medical benefits, and the noncurrent portion of incentive plans. See Note 13—Pension and Other Postretirement Benefits for additional information.
Tax-related liabilities include reserves for unrecognized tax benefits and the related interest. See Note 12—Income Taxes for additional information.
19. Noncontrolling Interest
A reconciliation of the beginning and ending balances of noncontrolling interest and distributions payable to the noncontrolling interest on our consolidated balance sheets is provided below.
Year ended December 31,
2024
2023
2022
(in millions)
Noncontrolling interest:
Balance as of January 1
$
2,656
$
2,802
$
2,830
Earnings attributable to noncontrolling interest
259
313
591
Declaration of distributions payable
(308)
(459)
(619)
Balance as of December 31
$
2,607
$
2,656
$
2,802
Distributions payable to noncontrolling interest:
Balance as of January 1
$
—
$
—
$
—
Declaration of distributions payable
308
459
619
Distributions to noncontrolling interest
(308)
(459)
(619)
Balance as of December 31
$
—
$
—
$
—
We have a strategic venture with CHS under which CHS owns an equity interest in CFN, a subsidiary of CF Holdings, which represents approximately 11% of the membership interests of CFN. We 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. 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.
On January 31, 2025, the CFN Board of Managers approved semi-annual distribution payments for the distribution period ended December 31, 2024, in accordance with CFN’s limited liability company agreement. On January 31, 2025, CFN distributed $129 million to CHS for the distribution period ended December 31, 2024.
20. Stockholders’ Equity
Common Stock
Our Board of Directors (the Board) has authorized certain programs to repurchase shares of our common stock. These programs have generally permitted repurchases to 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.
On November 3, 2021, 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).
The following table summarizes the share repurchases under the 2022 Share Repurchase Program.
(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 2024, we repurchased approximately 18.8 million shares under the 2022 Share Repurchase Program for approximately $1.51 billion, of which $10 million was accrued and unpaid as of December 31, 2024. In 2023, we completed the 2021 Share Repurchase Program with the repurchase of approximately 2.3 million shares for $155 million, and we repurchased approximately 5.6 million shares under the 2022 Share Repurchase Program for $425 million.
The shares we repurchase are held as treasury stock. If the Board authorizes us to retire the shares, they are returned to the status of authorized but unissued shares. As part of the retirements, we reduce our treasury stock, paid-in capital and retained earnings balances. In 2024, we retired 18.7 million shares of repurchased stock. In 2023, we retired 8.1 million shares of repurchased stock, including shares repurchased under the 2021 Share Repurchase Program and the 2022 Share Repurchase Program. We held 354,264 shares of treasury stock as of December 31, 2024 and no shares of treasury stock as of December 31, 2023.
(2)Consists of shares repurchased under share repurchase programs and shares withheld to pay employee tax obligations upon the vesting of restricted stock or the exercise of stock options.
Preferred Stock
CF Holdings is authorized to issue 50 million shares of $0.01 par value preferred stock. Our Third Amended and Restated Certificate of Incorporation authorizes the Board, without any further stockholder action or approval, to issue these shares in one or more classes or series, and (except in the case of our Series A Junior Participating Preferred Stock, 500,000 shares of which are authorized and the terms of which were specified in the original certificate of incorporation of CF Holdings) to fix the rights, preferences and privileges of the shares of each wholly unissued class or series and any of its qualifications, limitations or restrictions. The Series A Junior Participating Preferred Stock had been established in CF Holdings’ original certificate of incorporation in connection with our former stockholder rights plan that expired in 2015. No shares of preferred stock have been issued.
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 (Loss) on Derivatives
Defined Benefit Plans
Accumulated Other Comprehensive Loss
(in millions)
Balance as of December 31, 2021
$
(141)
$
4
$
(120)
$
(257)
Gain arising during the period
—
—
55
55
Reclassification to earnings(1):
Settlement loss
—
—
21
21
Curtailment gains
—
—
(4)
(4)
Other
—
(1)
4
3
Effect of exchange rate changes and deferred taxes
(38)
—
(10)
(48)
Balance as of December 31, 2022
$
(179)
$
3
$
(54)
$
(230)
Loss arising during the period
—
—
(6)
(6)
Reclassification to earnings(1)
—
—
(1)
(1)
Effect of exchange rate changes and deferred taxes
33
—
(5)
28
Balance as of December 31, 2023
$
(146)
$
3
$
(66)
$
(209)
Gain arising during the period
—
—
4
4
Effect of exchange rate changes and deferred taxes
In May 2022, our shareholders approved the CF Industries Holdings, Inc. 2022 Equity and Incentive Plan (the 2022 Equity and Incentive Plan), including 2.5 million new shares of the Company’s common stock available for grant thereunder as part of our pay-for-performance compensation program, which we use to provide incentives that are aligned with the interests of our shareholders. The 2022 Equity and Incentive Plan replaced the CF Industries Holdings, Inc. 2014 Equity and Incentive Plan (the 2014 Equity and Incentive Plan) and permits grants of stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards, which in each case may be conditioned on performance criteria, to employees and certain consultants of the Company and its subsidiaries and non-employee directors of the Company.
Share Reserve and Individual Award Limits
The maximum number of shares reserved for the grant of awards under the 2022 Equity and Incentive Plan is the sum of (i) 2.5 million shares, plus (ii) the number of shares that remain available for new grants under the 2014 Equity and Incentive Plan when the 2022 Equity and Incentive Plan was approved by shareholders, plus (iii) the number of shares subject to stock options granted under the 2014 Equity and Incentive Plan or the CF Industries Holdings, Inc. 2009 Equity and Incentive Plan that were outstanding when the 2022 Equity and Incentive Plan was approved by shareholders, but only to the extent such awards terminate or expire without the delivery of shares, plus (iv) 1.61 times the number of shares subject to restricted stock or restricted stock unit awards (including performance restricted stock unit awards) granted under the 2014 Equity and Incentive Plan that were outstanding when the 2022 Equity and Incentive Plan was approved by shareholders, but only to the extent such awards terminate or expire without the delivery of shares. In no event will the number of shares available for issuance under the 2022 Equity and Incentive Plan exceed 10,615,515 shares. Shares issued with respect to all awards granted under the 2022 Equity and Incentive Plan are counted against the share reserve on a one-for-one basis. The shares subject to any outstanding award under the 2022 Equity and Incentive Plan will be available for subsequent award and issuance under the 2022 Equity and Incentive Plan to the extent those awards subsequently expire, are forfeited or cancelled, or terminate for any reason prior to issuance of the shares subject to those awards. In addition, shares tendered or withheld in payment of the exercise price of an award and shares withheld by the Company to satisfy tax withholding obligations related to an award will be available for subsequent award under the 2022 Equity and Incentive Plan. As of December 31, 2024, we had approximately 6.6 million shares available for future awards under the 2022 Equity and Incentive Plan. The 2022 Equity and Incentive Plan provides that no more than 5.0 million shares may be issued pursuant to the exercise of incentive stock options, subject to adjustment upon certain capitalization events.
Restricted Stock Awards, Restricted Stock Units and Performance Restricted Stock Units
The fair value of a restricted stock award (RSA) or a restricted stock unit (RSU) is equal to the number of shares subject to the award multiplied by the closing market price of our common stock on the date of grant. We estimated the fair value of each performance restricted stock unit (PSU) on the date of grant using a Monte Carlo simulation. Generally, RSUs vest in three equal annual installments following the date of grant. PSUs are granted to key employees and generally vest three years from the date of grant subject to the attainment of applicable performance goals during the performance period. The RSAs awarded to non-management members of the Board vest the earlier of one year from the date of the grant or the date of the next annual stockholder meeting. During the vesting period, the holders of the RSAs are entitled to dividends and voting rights. During the vesting period, the holders of the RSUs are paid dividend equivalents in cash to the extent we pay cash dividends. PSUs accrue dividend equivalents to the extent we pay cash dividends on our common stock during the performance and vesting periods. Upon vesting of the PSUs, holders are paid the cash equivalent of the dividends paid during the performance and vesting periods based on the shares of common stock, if any, delivered in settlement of PSUs. Holders of RSUs and PSUs are not entitled to voting rights unless and until the awards have vested.
(1)For performance restricted stock units, the shares represent the performance restricted stock units granted in 2021, for which the three-year performance period ended December 31, 2023.
The 2024, 2023 and 2022 weighted-average grant-date fair value for RSAs was $79.59, $74.79 and $95.59, for RSUs was $80.45, $81.44 and $71.68, and for PSUs was $86.76, $93.61 and $81.38, respectively.
The actual tax benefit realized from restricted stock vested in each of the years ended December 31, 2024, 2023 and 2022 was $14 million, $13 million and $14 million, respectively. The fair value of restricted stock vested was $62 million, $55 million and $60 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Stock Options
Under the 2014 Equity and Incentive Plan and our other predecessor plans, we granted to plan participants nonqualified stock options to purchase shares of our common stock. The exercise price of these options was equal to the market price of our common stock on the date of grant. The contractual life of each option was ten years and generally one-third of the options vested on each of the first three anniversaries of the date of grant. No stock option awards were granted under the 2014 Equity and Incentive Plan or our other predecessor plans after 2017, and no stock option awards have been granted under the 2022 Equity and Incentive Plan.
A summary of stock option activity during the year ended December 31, 2024 is presented below:
Shares
Weighted- Average Exercise Price
Outstanding as of December 31, 2023
122,930
$
36.36
Exercised
(46,285)
39.16
Outstanding as of December 31, 2024
76,645
34.67
Exercisable as of December 31, 2024
76,645
34.67
Weighted- Average Remaining Contractual Term (years)
(1)The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $85.32 as of December 31, 2024, which would have been received by the option holders had all option holders exercised their options as of that date.
Selected amounts pertaining to stock option exercises are as follows:
Year ended December 31,
2024
2023
2022
(in millions)
Cash received from stock option exercises
$
2
$
2
$
106
Actual tax benefit realized from stock option exercises
—
—
23
Pre-tax intrinsic value of stock options exercised
2
1
100
Compensation Cost
Compensation cost is recorded primarily in selling, general and administrative expenses. The following table summarizes stock-based compensation costs and related income tax benefits:
Year ended December 31,
2024
2023
2022
(in millions)
Stock-based compensation expense
$
36
$
37
$
41
Income tax benefit
(8)
(9)
(9)
Stock-based compensation expense, net of income taxes
$
28
$
28
$
32
As of December 31, 2024, pre-tax unrecognized compensation cost was $22 million for RSAs and RSUs, which will be recognized over a weighted-average period of 1.8 years, and $3 million for PSUs, which will be recognized over a weighted-average period of 1.6 years.
Excess tax benefits realized from the vesting of restricted stock or stock option exercises are recognized as an income tax benefit in our consolidated statements of operations and are required to be reported as an operating cash inflow rather than a reduction of taxes paid. The excess tax benefits realized in 2024, 2023 and 2022 were $8 million, $19 million and $96 million, respectively.
22. Segment Disclosures
Our reportable segments consist of Ammonia, Granular Urea, UAN, AN and Other. These segments are differentiated by products. Our chief operating decision maker (CODM) is our President and Chief Executive Officer, who uses gross margin to evaluate segment performance and allocate resources. The CODM meets periodically with other members of senior management to analyze segment performance, including comparing actual results to projected results, with consideration to the costs incurred to produce and deliver the product. In addition, our CODM uses gross margin by reportable segment to make key operating decisions, such as the determination of capital expenditures and the allocation of operating budgets, to help guide strategic decisions to align with company-wide goals. 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 the CODM. The ammonia and other products that are upgraded into Granular Urea, UAN, AN and Other products are transferred at cost into the results of those products.
Our assets, with the exception of goodwill, are not monitored by or reported to our CODM by segment; therefore, we do not present total assets by segment. Goodwill by segment is presented in Note 9—Goodwill and Other Intangible Assets.
Segment data for gross margin, including sales and cost of sales, which also includes significant expenses, for the years ended December 31, 2024, 2023 and 2022 are presented in the tables below.
(1)Ammonia segment results include the operating results of our Waggaman facility from the acquisition date of December 1, 2023.
(2)Natural gas costs include the impact of realized gains and losses on natural gas derivatives settled during the period.
(3)For the years ended December 31, 2024, 2023 and 2022, depreciation and amortization does not include $34 million, $13 million and $15 million, respectively, of depreciation and amortization allocated to Corporate, which includes amortization of definite-lived intangible assets. For the years ended December 31, 2024 and 2023, depreciation and amortization does not include $30 million and $3 million, respectively, related to amortization of the supply contract liability, which is recognized in net sales. See Note 6—Acquisition of Waggaman Ammonia Production Facility and Note 9—Goodwill and Other Intangible Assets for additional information.
(4)Distribution and storage costs consist of the cost of freight required to transport finished products from our manufacturing facilities to our distribution facilities and the costs to operate our network of distribution facilities in North America.
(5)Freight costs consist of the costs incurred by us to deliver products from one of our plants or distribution facilities to the customer. Freight costs are generally charged to the customer and included in net sales. In situations when control of the product transfers upon loading and the customer requests that we arrange delivery of the product, the amount of freight included in net sales is considered freight revenue. See Note 4—Revenue Recognition for additional information.
(6)Other segment items is primarily comprised of payroll, services, materials and supplies, and utilities at our manufacturing facilities.
(7)Other consists of all other products not included in our Ammonia, Granular Urea, UAN, or AN segments. All other products primarily include DEF, urea liquor, nitric acid and aqua ammonia.
(8)Total other operating costs and expenses for the year ended December 31, 2022 include $258 million of asset impairment and restructuring charges related to our U.K. operations. See Note 7—United Kingdom Operations Restructuring and Impairment Charges for additional information.
(9)Equity in loss of operating affiliate for the year ended December 31, 2023 includes an impairment of our equity method investment in PLNL of $43 million. See Note 10—Equity Method Investment for additional information.
Enterprise-wide data by geographic region is as follows:
Year ended December 31,
2024
2023
2022
(in millions)
Sales by geographic region (based on destination of shipments):
United States
$
4,419
$
4,856
$
8,212
Foreign:
Canada
534
607
849
North America, excluding U.S. and Canada
72
75
149
United Kingdom
327
346
642
Other foreign
584
747
1,334
Total foreign
1,517
1,775
2,974
Consolidated
$
5,936
$
6,631
$
11,186
December 31,
2024
2023
2022
(in millions)
Property, plant and equipment—net by geographic region:
United States
$
6,172
$
6,538
$
5,812
Foreign:
Canada
426
466
506
United Kingdom
137
137
119
Total foreign
563
603
625
Consolidated
$
6,735
$
7,141
$
6,437
Our principal customers are cooperatives, retailers, independent fertilizer distributors, traders, wholesalers and industrial users. In 2024, 2023 and 2022, CHS accounted for approximately 12%, 13% and 13% of our consolidated net sales, respectively. See Note 19—Noncontrolling Interest for additional information.
The following provides additional information relating to cash flow activities:
Year ended December 31,
2024
2023
2022
(in millions)
Cash paid during the year for
Interest—net of interest capitalized
$
118
$
145
$
257
Income taxes—net of refunds
410
373
1,776
Supplemental disclosure of noncash investing and financing activities:
Change in capitalized expenditures in accounts payable and accrued expenses
$
33
$
15
$
18
Change in accrued share repurchases, including accrued excise taxes
19
5
(1)
Interest—net of interest capitalized for the year ended December 31, 2024 includes a reduction of approximately $21 million reflecting interest relief received from the CRA related to tax years 2006 through 2011. Interest—net of interest capitalized for the year ended December 31, 2022 includes interest paid to Canadian taxing authorities of approximately $100 million related to tax years 2006 through 2011. See Note 12—Income Taxes—“Canada Revenue Agency Competent Authority Matter”for additional information.
Income taxes—net of refunds for the year ended December 31, 2022 includes certain payments of CAD $363 million (approximately $267 million) to Canadian taxing authorities, which are reflected in the line “Other—net” within operating activities in our consolidated statement of cash flows. These payments were made in order to mitigate the assessment of future Canadian interest on transfer pricing positions. See Note 12—Income Taxes—“Unrecognized Tax Benefits” for additional information.
24. Asset Retirement Obligations
Asset retirement obligations (AROs) are legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development or normal operation of such assets. AROs are initially recognized as incurred when sufficient information exists to estimate fair value. We have AROs at our nitrogen manufacturing complexes and at our distribution and storage facilities that are conditional upon cessation of operations. These AROs include certain decommissioning activities as well as the removal and disposal of certain chemicals, waste materials, structures, equipment, vessels, piping and storage tanks. Also included are reclamation of land and the closure of certain effluent ponds and/or waste storage areas. The most recent estimate of the aggregate cost of conditional AROs for our complexes and facilities, expressed in 2024 dollars, is approximately $139 million, which excludes recorded AROs discussed below.
We have not recorded a liability for these conditional AROs as of December 31, 2024, because we do not believe there is currently a reasonable basis for estimating a date or range of dates of cessation of operations at our nitrogen manufacturing facilities or our distribution and storage facilities, which is necessary in order to estimate fair value. In reaching this conclusion, we considered the historical performance of each complex or facility and considered factors such as planned maintenance, asset replacements and upgrades of plant and equipment, which if conducted as in the past, can extend the physical lives of our nitrogen manufacturing facilities and our distribution and storage facilities indefinitely. We also considered the possibility of changes in technology, risk of obsolescence, and availability of raw materials in arriving at our conclusion.
We have recorded AROs for certain assets for which a fair value can be estimated. As of December 31, 2024, AROs recorded in other current liabilities and other liabilities in our consolidated balance sheet was approximately $5 million.
We have operating leases for certain property and equipment under various noncancelable agreements, the most significant of which are rail car leases and barge tow charters for the distribution of our products. The rail car leases currently have minimum terms ranging from one to eleven years and the barge tow charter commitments range from one to six years. Our rail car leases and barge tow charters commonly contain provisions for automatic renewal that can extend the lease term unless cancelled by either party. We also have operating leases for terminal and warehouse storage for our distribution system, some of which contain minimum throughput requirements. The storage agreements contain minimum terms generally ranging from one to four years and commonly contain provisions for automatic renewal thereafter unless cancelled by either party. The renewal provisions for our rail car leases, barge tow charters and terminal and warehouse storage agreements are not reasonably certain to be exercised.
The components of lease costs were as follows:
Year ended December 31,
2024
2023
2022
(in millions)
Operating lease cost
$
112
$
113
$
103
Short-term lease cost
40
30
48
Variable lease cost
5
4
6
Total lease cost
$
157
$
147
$
157
Supplemental cash flow information related to leases was as follows:
Year ended December 31,
2024
2023
2022
(in millions)
Operating cash flows - cash paid for amounts included in the measurement of operating lease liabilities
$
98
$
107
$
100
Right-of-use (ROU) assets obtained in exchange for operating lease obligations
107
103
106
Supplemental balance sheet information related to leases was as follows:
December 31,
2024
2023
(in millions)
Operating lease ROU assets
$
266
$
259
Current operating lease liabilities
$
86
$
96
Operating lease liabilities
189
168
Total operating lease liabilities
$
275
$
264
Other information related to leases was as follows:
December 31,
2024
2023
Operating leases
Weighted-average remaining lease term
5 years
5 years
Weighted-average discount rate
5.0
%
4.7
%
As of December 31, 2024, we have entered into four additional leases that have not yet commenced, with future minimum lease payments totaling $37 million with minimum terms ranging from five to seven years.
The following table reconciles the undiscounted cash flows for our operating leases to the operating lease liabilities recorded on our consolidated balance sheet as of December 31, 2024:
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
(a) Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s principal executive officer and principal financial officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this report. Based on such evaluation, the Company’s principal executive officer and principal financial officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective in (i) ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
(b) Management’s Report on Internal Control over Financial Reporting.
Management’s Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company. Under the supervision and with the participation of our senior management, including our principal executive officer and principal financial officer, we assessed the effectiveness of our internal control over financial reporting as of December 31, 2024, using the criteria set forth in the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Based on this assessment, management has concluded that our internal control over financial reporting is effective as of December 31, 2024. KPMG LLP, the independent registered public accounting firm that audited the Company’s consolidated financial statements, has issued an attestation report on the Company’s internal control over financial reporting as of December 31, 2024, which appears on the following page.
(c) Changes in Internal Control over Financial Reporting. There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
While there was no impact on the Company’s internal control over financial reporting during the quarter ended December 31, 2024, beginning in the second quarter of 2025, the Company is implementing a new procurement and plant asset management system. As a result, related changes in its internal control over financial reporting are expected due to the implementation.
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
CF Industries Holdings, Inc.:
Opinion on Internal Control Over Financial Reporting
We have audited CF Industries Holdings, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements), and our report dated February 20, 2025 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
During the quarter ended December 31, 2024, there were no Rule 10b5-1 trading arrangements (as defined in Item 408(a) of Regulation S-K) or non-Rule 10b5-1 trading arrangements (as defined in Item 408(c) of Regulation S-K) adopted or terminated by any director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of CF Industries Holdings, Inc.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Information appearing in the Proxy Statement under the headings “Proposal 1: Election of Directors—Director Nominees”; “Proposal 1: Election of Directors—Director Nominee Biographies”; “Executive Officers”; “Corporate Governance—Committees of the Board—Audit Committee”; and, if required, “Delinquent Section 16(a) Reports” is incorporated herein by reference.
We have adopted a Code of Corporate Conduct that applies to our employees, directors and officers, including our principal executive officer, principal financial officer and principal accounting officer. The Code of Corporate Conduct is posted on our corporate website, www.cfindustries.com. We will provide an electronic or paper copy of this document free of charge upon request. In the event of any amendments to, or waivers from, a provision of the Code of Corporate Conduct affecting the chief executive officer, chief financial officer, controller or persons performing similar functions, we intend to promptly post on our corporate website a description of the amendment or waiver as required under applicable SEC rules.
We have adopted a Policy on Insider Trading applicable to our directors, officers, employees and certain other persons and entities (collectively, “covered persons”) that we believe is reasonably designed to promote compliance with insider trading laws, rules, and regulations and any applicable listing standard. Among other things, our insider trading policy prohibits covered persons who are aware of any material nonpublic information about the Company from, directly or indirectly through family members or other persons or entities as described in the policy, (i) transacting in Company securities, except as provided for therein or (ii) recommending the purchase or sale of any Company securities. A copy of our Policy on Insider Trading is filed as Exhibit 19 with this Annual Report on Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION.
During the last completed fiscal year, John W. Eaves, Javed Ahmed, Stephen J. Hagge, Anne P. Noonan and Michael J. Toelle served as the members of the Compensation and Management Development Committee of the Board.
Information appearing under the following headings of the Proxy Statement is incorporated herein by reference: “Compensation Discussion and Analysis,” “Compensation Discussion and Analysis—Compensation Discussion and Analysis: In Detail—Other Compensation Governance Practices and Considerations—Compensation and Benefits Risk Analysis,” “Compensation Committee Report,” “Executive Compensation” and “Corporate Governance—Director Compensation.”
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Information appearing under the following headings of the Proxy Statement is incorporated herein by reference: “Common Stock Ownership—Common Stock Ownership of Certain Beneficial Owners” and “Common Stock Ownership—Common Stock Ownership of Directors and Management.”
We currently issue stock-based compensation under the CF Industries Holdings, Inc. 2022 Equity and Incentive Plan (the 2022 Equity and Incentive Plan) which permits grants of stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards, which in each case may be conditioned on performance criteria, to employees and certain consultants of the Company and its subsidiaries and non-employee directors of the Company.
Equity Compensation Plan Information as of December 31, 2024
Plan category
Number of securities to be issued upon exercise of outstanding options, warrants and rights(1)
Weighted-average exercise price of outstanding options, warrants and rights(2)
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column)(3)
Equity compensation plans approved by security holders
1,573,148
$
34.67
6,579,925
Equity compensation plans not approved by security holders
(1)Includes 76,645 shares issuable pursuant to outstanding nonqualified stock options, 471,657 shares issuable pursuant to restricted stock units (RSUs) and 1,024,846 shares issuable pursuant to performance restricted stock units (PSUs) under the 2022 Equity and Incentive Plan, the CF Industries Holdings, Inc. 2014 Equity and Incentive Plan (the 2014 Equity and Incentive Plan) and the CF Industries Holdings, Inc. 2009 Equity Incentive Plan. PSUs are subject to attainment of the applicable performance goals during the three-year performance period and are reflected at their maximum potential payout. The PSUs included in this table reflect the full amount awarded to plan participants in 2022, 2023 and 2024. The three-year performance periods for the PSUs awarded in 2022, 2023 and 2024 are in each case composed of three one-year periods with performance goals set annually. Because accounting rules require performance goals to be set before a PSU is determined for accounting purposes to have been granted, the number of PSUs reported as outstanding as of December 31, 2024 in Note 21—Stock-based Compensation reflects all of the PSUs awarded in 2022, but only two-thirds of the PSUs awarded in 2023 and one-third of the PSUs awarded in 2024.
(2)RSUs and PSUs are not reflected in the weighted-average exercise price as these awards do not have an exercise price.
(3)Under the 2022 Equity and Incentive Plan, upon the grant of an award, the number of shares available for issuance is reduced by one share for each share subject to or issued in respect of such awards. Under the 2022 Equity and Incentive Plan, shares withheld for taxes on awards are added to the number of shares available for issuance. If any restricted stock units (including any performance restricted stock units) granted under the 2014 Equity and Incentive Plan terminates or expires without delivery of shares, the number of shares available for issuance under the 2022 Equity and Incentive Plan is increased by 1.61 shares for each share that had been subject to such restricted stock unit at the time of such termination or expiration.
See Note 21—Stock-based Compensation for additional information on the 2022 Equity and Incentive Plan.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Information appearing in the Proxy Statement under the headings “Corporate Governance—Director Independence” and “Policy Regarding Related Person Transactions” is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Information appearing in the Proxy Statement under the headings “Proposal 3: Ratification of Selection of Independent Registered Public Accounting Firm for 2025—Audit and Non-Audit Fees” and “Proposal 3: Ratification of Selection of Independent Registered Public Accounting Firm for 2025—Pre-Approval of Audit and Non-Audit Services” is incorporated herein by reference.
Financial statement schedules are omitted because they are not applicable or the required information is included in the consolidated financial statements or notes thereto.
(2)
Exhibits
A list of exhibits filed with this Annual Report on Form 10-K (or incorporated by reference to exhibits previously filed or furnished) is provided in the Exhibit Index on page 114 of this report.
The following financial information from CF Industries Holdings, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, formatted in Inline XBRL (eXtensible Business Reporting Language): (1) Consolidated Statements of Operations, (2) Consolidated Statements of Comprehensive Income, (3) Consolidated Balance Sheets, (4) Consolidated Statements of Equity, (5) Consolidated Statements of Cash Flows and (6) Notes to Consolidated Financial Statements
104
Cover Page Interactive Data File (embed within the Inline XBRL document and included in Exhibit 101)
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CF INDUSTRIES HOLDINGS, INC.
Date:
February 20, 2025
By:
/s/ W. ANTHONY WILL
W. Anthony Will
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title(s)
Date
/s/ W. ANTHONY WILL
President and Chief Executive Officer, Director (Principal Executive Officer)
February 20, 2025
W. Anthony Will
/s/ GREGORY D. CAMERON
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
February 20, 2025
Gregory D. Cameron
/s/ RICHARD A. HOKER
Vice President and Corporate Controller (Principal Accounting Officer)
February 20, 2025
Richard A. Hoker
/s/ STEPHEN J. HAGGE
Chairman of the Board of Directors
February 20, 2025
Stephen J. Hagge
/s/ JAVED AHMED
Director
February 20, 2025
Javed Ahmed
/s/ ROBERT C. ARZBAECHER
Director
February 20, 2025
Robert C. Arzbaecher
/s/ CHRISTOPHER D. BOHN
Executive Vice President and Chief Operating Officer, Director