UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR 4 Parkway North 60015 Deerfield, Illinois (Zip Code) (Address of principal executive offices) (Registrant's telephone number, including area code): (847) 405-2400 Securities registered pursuant to Section 12(b) of the Act: ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-32597 CF INDUSTRIES HOLDINGS, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or or ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-32597 CF INDUSTRIES HOLDINGS, INC. (Exact name of registrant as specified in its charter) (State or other jurisd ...

Table of Contents Title of each class Trading symbol(s) Name of each exchange on which registered common stock, par value $0.01 per share CF New York Stock Exchange UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K (Mark One) ☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ...

[PART I](index=4&type=section&id=PART%20I) [Item 1. Business](index=4&type=section&id=Item%201.%20Business) CF Industries Holdings, Inc. is a global leader in nitrogen products, committed to providing clean energy to feed and fuel the world - The company's mission is to provide clean energy to feed and fuel the world sustainably, with a strategic path to decarbonize its world-leading ammonia production network for green and blue hydrogen and nitrogen products[5](index=5&type=chunk) - The company's principal assets include nine nitrogen manufacturing facilities across the U.S., Canada, and the U.K., an extensive North American distribution system, and a 50% interest in an ammonia production joint venture in Trinidad and Tobago[6](index=6&type=chunk) - A strategic venture with CHS Inc. involves CHS holding an approximately **11% equity interest** in CFN, a subsidiary of CF Holdings, and a supply agreement for granular urea and UAN[7](index=7&type=chunk) Sales Volume and Net Sales (2019-2021) | Year | Sales Volume (million tons) | Net Sales (billion USD) | | :--- | :--- | :--- | | 2021 | 18.5 | $6.54 | | 2020 | 20.3 | $4.12 | | 2019 | 19.5 | $4.59 | [Our Commitment to a Clean Energy Economy](index=5&type=section&id=Our%20Commitment%20to%20a%20Clean%20Energy%20Economy) The company actively pursues a clean energy strategy by developing green and blue ammonia production projects - Announced an initial green ammonia project at the Donaldsonville complex, contracting with thyssenkrupp for a 20 MW alkaline water electrolysis plant to produce approximately **20,000 tons of green ammonia per year**, with construction expected to finish in 2023 at an estimated cost of **$100 million**[10](index=10&type=chunk) - The Board authorized projects to produce up to **1.25 million tons of blue ammonia annually** starting in 2024, involving CO2 dehydration and compression units at Donaldsonville (**$200 million cost**) and Yazoo City (**$85 million cost**) for carbon sequestration[11](index=11&type=chunk) - Signed a memorandum of understanding with Mitsui & Co., Inc. to jointly explore the development of blue ammonia projects in the United States, covering supply chain, CO2 transport, and marketing opportunities[11](index=11&type=chunk) [Our Products and Production](index=7&type=section&id=Our%20Products%20and%20Production) The company's product portfolio includes Ammonia, Granular Urea, and UAN, with varying sales and production volumes Net Sales by Product (in millions USD) | Product | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Ammonia | $1,787 | $1,020 | $1,113 | | Granular urea | $1,880 | $1,248 | $1,342 | | UAN | $1,788 | $1,063 | $1,270 | | AN | $510 | $455 | $506 | | Other | $573 | $338 | $359 | | **Total** | **$6,538** | **$4,124** | **$4,590** | Production Volume (in thousands of tons) | Product | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Ammonia (Gross) | 9,349 | 10,353 | 10,246 | | Granular urea | 4,123 | 5,001 | 4,941 | | UAN (32%) | 6,763 | 6,677 | 6,768 | | AN | 1,646 | 2,115 | 2,128 | [Raw Materials, Distribution, and Competition](index=9&type=section&id=Raw%20Materials%2C%20Distribution%2C%20and%20Competition) Natural gas is a key raw material, supported by an extensive distribution network in a competitive market - Natural gas is the principal raw material and primary fuel source, accounting for approximately **40% of total production costs in 2021**, with about **335 million MMBtus** consumed during the year[35](index=35&type=chunk)[36](index=36&type=chunk) - The company operates an extensive distribution network using a leased railcar fleet of approximately **5,000 cars**, a fleet of **ten tow boats and twenty-eight river barges**, and access to the **2,000-mile Nustar ammonia pipeline**[39](index=39&type=chunk)[40](index=40&type=chunk) - CHS was the largest customer in 2021, accounting for approximately **14% of consolidated net sales**, facing primary North American competitors like Nutrien Ltd. and Koch Fertilizer LLC, and foreign producers[41](index=41&type=chunk) [Environmental, Health and Safety](index=11&type=section&id=Environmental%2C%20Health%20and%20Safety) The company adheres to extensive EHS regulations, with significant capital expenditures and evolving GHG compliance - Environmental, health and safety capital expenditures totaled approximately **$31 million in 2021**, with an estimated **$63 million projected for 2022**[47](index=47&type=chunk) - The company is subject to greenhouse gas (GHG) regulations in the UK (UK ETS), Canada (federal OBPS and provincial programs), and the U.S. (EPA reporting rules), with regulations becoming more stringent under the Paris Agreement[50](index=50&type=chunk)[51](index=51&type=chunk)[54](index=54&type=chunk) - The company is involved in a remedial investigation and feasibility study for a former phosphate mine site in Georgetown Canyon, Idaho, under a Consent Order with the IDEQ and U.S. Forest Service[48](index=48&type=chunk) [Human Capital Resources](index=13&type=section&id=Human%20Capital%20Resources) The company employs approximately 3,000 people, prioritizing diversity, inclusion, and a strong safety culture - Employed approximately **3,000 people** at year-end 2021, with **67% in the U.S.**, **19% in the U.K.**, and **14% in Canada**, and approximately **15% of the workforce** covered by a collective bargaining agreement[57](index=57&type=chunk) - The company exceeded its diversity goal, with approximately **38% of senior leadership roles** held by females and persons of color as of December 31, 2021[58](index=58&type=chunk) - Maintained a strong safety record with a 12-month rolling average employee recordable incident rate (RIR) of **0.32 incidents per 200,000 work hours** as of December 31, 2021[59](index=59&type=chunk) [Item 1A. Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces diverse risks including market volatility, raw material price fluctuations, financial leverage, and strategic uncertainties - **Market Risk:** The business is cyclical and subject to periods of industry oversupply, which negatively affects selling prices and profitability, with average selling prices increasing **74% in 2021** after decreasing **14% in 2020**[64](index=64&type=chunk)[67](index=67&type=chunk) - **Raw Material Risk:** The business is highly dependent on natural gas, with prices being volatile, as seen in 2021 when the Henry Hub price ranged from **$2.36 to $23.61 per MMBtu** and the UK NBP price ranged from **$5.58 to $60.10 per MMBtu**[79](index=79&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) - **Financial Risk:** The company has substantial indebtedness of approximately **$3.5 billion** as of December 31, 2021, which could impact cash flow, limit business opportunities, and increase vulnerability to adverse economic conditions[122](index=122&type=chunk) - **Strategic Risk:** The development of the market for green and blue (low-carbon) ammonia is uncertain and may be slow to materialize, depending on factors like renewable energy capacity, technology evolution, and government policies, which are largely beyond the company's control[148](index=148&type=chunk)[150](index=150&type=chunk) [Item 1B. Unresolved Staff Comments](index=31&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - None[164](index=164&type=chunk) [Item 2. Properties](index=31&type=section&id=Item%202.%20Properties) Information regarding the company's facilities and properties is detailed in Item 1 of this report - Information regarding facilities and properties is included in Item 1. Business[164](index=164&type=chunk) [Item 3. Legal Proceedings](index=31&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in litigation related to the 2013 West Fertilizer Co. explosion, with most claims settled - The company is a defendant in lawsuits related to the 2013 West Fertilizer Co. explosion, with nearly all wrongful death and personal injury claims resolved via confidential settlements expected to be fully funded by insurance[165](index=165&type=chunk) - Remaining subrogation and statutory indemnification claims total approximately **$37 million**, before prejudgment interest, with trials expected in 2022[165](index=165&type=chunk) [Item 4. Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[166](index=166&type=chunk) [PART II](index=32&type=section&id=PART%20II) [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=32&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NYSE, with significant share repurchases in Q4 2021 and a new program authorized Share Repurchases for Q4 2021 | Period | Total Shares Purchased | Average Price Paid per Share ($) | Total Shares Purchased under Program | | :--- | :--- | :--- | :--- | | Oct 2021 | 7,717 | 60.56 | — | | Nov 2021 | 656,695 | 64.32 | 652,352 | | Dec 2021 | 6,816,628 | 65.85 | 6,816,416 | | **Total** | **7,481,040** | **65.71** | **7,468,768** | - On November 3, 2021, the Board of Directors authorized a new share repurchase program for up to **$1.5 billion of common stock**, effective from January 1, 2022, through December 31, 2024[170](index=170&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net earnings significantly increased in 2021 due to higher selling prices, despite an impairment charge and volume decrease Financial Highlights 2021 vs. 2020 | Metric | 2021 | 2020 | Change | | :--- | :--- | :--- | :--- | | Net Earnings Attributable to Common Stockholders | $917 million | $317 million | +189% | | Diluted EPS | $4.24 | $1.47 | +$2.77 | | Gross Margin | $2.39 billion | $801 million | +$1.59 billion | - The average selling price for products increased **74% to $353 per ton** in 2021 from **$203 per ton** in 2020, increasing gross margin by approximately **$2.76 billion**[182](index=182&type=chunk)[205](index=205&type=chunk) - The company recognized total impairment charges of **$521 million** in 2021 related to its UK operations due to a severe energy crisis, which reduced net earnings by an after-tax amount of **$463 million**, or **$2.14 per diluted share**[195](index=195&type=chunk)[206](index=206&type=chunk) - The cost of natural gas used for production increased **88% to $4.21 per MMBtu** in 2021, reducing gross margin by **$663 million**[192](index=192&type=chunk)[205](index=205&type=chunk) [Consolidated Results of Operations](index=43&type=section&id=Consolidated%20Results%20of%20Operations) Net sales surged 59% in 2021 due to higher selling prices, significantly boosting gross margin and operating earnings Consolidated Results of Operations (in millions, except per share data) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Net sales | $6,538 | $4,124 | | Gross margin | $2,387 | $801 | | Operating earnings | $1,729 | $623 | | Net earnings attributable to common stockholders | $917 | $317 | | Diluted net earnings per share | $4.24 | $1.47 | - Net sales increased by **$2.41 billion (59%)** in 2021, primarily due to a **74% increase in average selling prices**, partially offset by a **9% decrease in sales volume**[225](index=225&type=chunk) - Cost of sales increased by **$828 million (25%)** due to higher natural gas costs (**$663 million**), increased manufacturing and maintenance costs (**$494 million**), and purchased products (**$71 million**), partially offset by a **$112 million gain** from the net settlement of natural gas contracts during Winter Storm Uri[227](index=227&type=chunk)[228](index=228&type=chunk) [Operating Results by Business Segment](index=47&type=section&id=Operating%20Results%20by%20Business%20Segment) All segments benefited from higher selling prices in 2021, with significant gross margin increases across most product lines Gross Margin by Segment (in millions USD) | Segment | 2021 | 2020 | | :--- | :--- | :--- | | Ammonia | $625 | $170 | | Granular Urea | $888 | $401 | | UAN | $669 | $114 | | AN | $35 | $65 | | Other | $170 | $51 | | **Total** | **$2,387** | **$801** | - The Ammonia segment's gross margin increased by **$455 million**, driven by an **84% increase in average selling prices** and a **$112 million gain** on the net settlement of natural gas contracts[248](index=248&type=chunk) - The AN segment's gross margin decreased by **$30 million**, as a **45% increase in selling prices** was more than offset by higher natural gas costs, increased manufacturing costs, and a **22% decrease in sales volume** due to idled UK operations[266](index=266&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity significantly strengthened in 2021, driven by strong operating cash flow and strategic capital allocation Cash Flow Summary (in millions USD) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,873 | $1,231 | | Net cash used in investing activities | ($466) | ($299) | | Net cash used in financing activities | ($1,463) | ($542) | - Cash and cash equivalents increased to **$1.63 billion** at December 31, 2021, from **$683 million** at the end of 2020[275](index=275&type=chunk) - The company redeemed **$500 million in debt** during 2021, including the full redemption of the 2021 Notes and a partial redemption of the 2023 Notes[274](index=274&type=chunk) - Capital expenditures in 2022 are estimated to be in the range of **$500 to $550 million**, including spending on green and blue ammonia projects[283](index=283&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from commodity prices, interest rates, and foreign currency exchange rates - A **$1.00 per MMBtu** change in the price of natural gas would alter the cost to produce a ton of ammonia by approximately **$33**, granular urea by **$22**, UAN by **$14**, and AN by **$16**[346](index=346&type=chunk) - As of December 31, 2021, the company had open derivative contracts for **60.0 million MMBtus of natural gas**, where a hypothetical **$1.00 per MMBtu** change in forward prices would alter the fair value of these positions by **$35 million**[348](index=348&type=chunk) - The company's **$3.50 billion of senior notes** have fixed interest rates, mitigating exposure to interest rate fluctuations on existing long-term debt[348](index=348&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=66&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements and the independent auditor's report [Report of Independent Registered Public Accounting Firm](index=66&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) KPMG LLP issued an unqualified opinion on the financial statements and internal controls, highlighting key audit matters - The auditor, KPMG LLP, issued an unqualified opinion on the consolidated financial statements and the effectiveness of the company's internal control over financial reporting as of December 31, 2021[351](index=351&type=chunk)[352](index=352&type=chunk) - Critical Audit Matters highlighted were the evaluation of the measurement of projected benefit obligations for pension plans and the impairment analysis of UK goodwill and long-lived assets[357](index=357&type=chunk)[360](index=360&type=chunk) [Consolidated Financial Statements](index=69&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements provide a detailed overview of the company's financial performance and position Key Financial Statement Data (as of or for the year ended Dec 31, 2021) | Metric | Amount (in millions USD) | | :--- | :--- | | **Statement of Operations:** | | | Net Sales | $6,538 | | Gross Margin | $2,387 | | Net Earnings Attributable to Common Stockholders | $917 | | **Balance Sheet:** | | | Total Assets | $12,375 | | Total Liabilities | $6,339 | | Total Stockholders' Equity | $3,206 | | **Cash Flow Statement:** | | | Net Cash from Operating Activities | $2,873 | [Notes to Consolidated Financial Statements](index=74&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on accounting policies, financial data, and significant events impacting the company - **Note 6:** The UK energy crisis led to impairment charges of **$521 million** in 2021, comprising **$236 million** for long-lived and intangible assets and **$285 million** for goodwill[427](index=427&type=chunk) - **Note 13:** As of Dec 31, 2021, total long-term debt was **$3.5 billion**, and during the year, the company redeemed **$250 million** of its 2021 Notes and **$250 million** of its 2023 Notes[530](index=530&type=chunk)[533](index=533&type=chunk)[534](index=534&type=chunk) - **Note 19:** The company repurchased **8.6 million shares for $540 million** in 2021 under its 2019 Share Repurchase Program, with a new **$1.5 billion program** authorized for 2022-2024[566](index=566&type=chunk)[568](index=568&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=118&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting and financial disclosure - None[612](index=612&type=chunk) [Item 9A. Controls and Procedures](index=118&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2021 - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[613](index=613&type=chunk) - Based on an assessment using the COSO 2013 framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2021[614](index=614&type=chunk) [PART III](index=120&type=section&id=PART%20III) [Item 10. Directors, Executive Officers and Corporate Governance](index=120&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2022 proxy statement - Required information is incorporated by reference from the company's 2022 Proxy Statement[623](index=623&type=chunk) [Item 11. Executive Compensation](index=120&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive and director compensation is incorporated by reference from the 2022 proxy statement - Required information is incorporated by reference from the company's 2022 Proxy Statement[625](index=625&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=120&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership and equity compensation plans is incorporated by reference from the 2022 proxy statement Equity Compensation Plan Information as of December 31, 2021 | Plan Category | Securities to be Issued Upon Exercise | Weighted-Average Exercise Price ($) | Securities Remaining for Future Issuance | | :--- | :--- | :--- | :--- | | Approved by security holders | 4,897,075 | 42.48 | 5,037,620 | | Not approved by security holders | — | — | — | | **Total** | **4,897,075** | **$42.48** | **5,037,620** | [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=121&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related person transactions and director independence is incorporated by reference from the 2022 proxy statement - Required information is incorporated by reference from the company's 2022 Proxy Statement[629](index=629&type=chunk) [Item 14. Principal Accountant Fees and Services](index=121&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the 2022 proxy statement - Required information is incorporated by reference from the company's 2022 Proxy Statement[629](index=629&type=chunk) [PART IV](index=121&type=section&id=PART%20IV) [Item 15. Exhibits and Financial Statement Schedules](index=121&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements and exhibits filed as part of the Annual Report on Form 10-K - The financial statements are included in Part II, Item 8. An Exhibit Index is provided on page 119 of the report[630](index=630&type=chunk) [Item 16. Form 10-K Summary](index=121&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has not provided a summary for its Form 10-K - None[631](index=631&type=chunk)

PART I. Financial Information [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) The company reported a Q3 2021 net loss of $185 million due to a $495 million impairment, despite strong sales growth and cash flow [Consolidated Statements of Operations](index=3&type=section&id=Consolidated%20Statements%20of%20Operations) Q3 2021 net loss of $185 million was driven by $495 million impairment charges, despite increased net sales Consolidated Statements of Operations Highlights (in millions, except per share data) | Financial Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $1,362 | $847 | $3,998 | $3,022 | | **Gross margin** | $440 | $83 | $1,232 | $621 | | **Goodwill impairment** | $259 | $— | $259 | $— | | **Long-lived and intangible asset impairment** | $236 | $— | $236 | $— | | **Operating (loss) earnings** | $(97) | $40 | $600 | $467 | | **Net (loss) earnings attributable to common stockholders** | $(185) | $(28) | $212 | $230 | | **Diluted (loss) earnings per share** | $(0.86) | $(0.13) | $0.98 | $1.07 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to **$11.77 billion** by September 30, 2021, with stable stockholders' equity Consolidated Balance Sheet Highlights (in millions) | Account | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total current assets** | $1,814 | $1,367 | | Cash and cash equivalents | $757 | $683 | | **Total assets** | $11,766 | $12,023 | | **Total current liabilities** | $1,015 | $906 | | Long-term debt, net of current maturities | $3,465 | $3,712 | | **Total liabilities** | $6,152 | $6,420 | | **Total stockholders' equity** | $2,938 | $2,922 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations significantly increased to **$1.39 billion** for the nine months ended September 30, 2021 Consolidated Cash Flow Highlights (Nine Months Ended Sep 30, in millions) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $1,393 | $941 | | **Net cash used in investing activities** | $(383) | $(201) | | **Net cash used in financing activities** | $(936) | $(473) | | **Increase in cash and cash equivalents** | $74 | $266 | | **Cash and cash equivalents at end of period** | $757 | $553 | [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes detail significant events, including a $495 million impairment charge in Q3 2021 due to the UK energy crisis, debt reduction, and a new $1.5 billion share repurchase program - The company recognized impairment charges of **$495 million** in Q3 2021, consisting of a **$259 million** goodwill impairment and **$236 million** in long-lived and intangible asset impairments, due to the UK energy crisis and a substantial increase in natural gas prices[37](index=37&type=chunk)[350](index=350&type=chunk) - Due to Winter Storm Uri in February 2021, the company net settled certain natural gas contracts, resulting in a recognized gain of **$112 million**, which was included in cost of sales[100](index=100&type=chunk)[413](index=413&type=chunk) - The company redeemed **$250 million** of its 3.400% senior secured notes in March 2021 and **$250 million** of its 3.450% senior notes in September 2021, resulting in a total loss on debt extinguishment of **$19 million** for the nine-month period[94](index=94&type=chunk)[95](index=95&type=chunk) - Subsequent to the quarter end, on November 3, 2021, the Board authorized a new share repurchase program for up to **$1.5 billion** of common stock, effective from January 1, 2022, through December 31, 2024[122](index=122&type=chunk)[435](index=435&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes increased net sales and gross margin to higher selling prices, despite lower volumes and a $495 million UK impairment charge, while pursuing a clean energy strategy and maintaining strong liquidity [Overview of CF Holdings](index=30&type=section&id=Overview%20of%20CF%20Holdings) CF Holdings, a leading nitrogen producer, saw Q3 2021 average selling prices increase by 101% year-over-year, despite a 20% decrease in sales volume and a $495 million impairment from the UK energy crisis - The company is advancing its clean energy strategy by developing green and blue ammonia projects, including a **20,000-ton-per-year** green ammonia project at its Donaldsonville complex, expected to be North America's largest of its kind upon completion in **2023**[128](index=128&type=chunk)[441](index=441&type=chunk) Q3 2021 vs Q3 2020 Performance Drivers | Metric | Q3 2021 | Q3 2020 | Change | | :--- | :--- | :--- | :--- | | Average Selling Price/ton | $360 | $179 | +101% | | Sales Volume (million tons) | 3.8 | 4.7 | -20% | | Henry Hub Natural Gas Price/MMBtu | $4.27 | $1.95 | +119% | | NBP (UK) Natural Gas Price/MMBtu | $15.98 | $2.69 | +494% | - The UK energy crisis led to the halt of operations at the Ince and Billingham facilities in September 2021, resulting in a **$495 million** impairment charge (**$259 million** goodwill, **$236 million** long-lived assets)[144](index=144&type=chunk)[457](index=457&type=chunk) [Consolidated Results of Operations](index=40&type=section&id=Consolidated%20Results%20of%20Operations) Q3 2021 net sales rose 61% to $1.36 billion, but a net loss of $185 million was recorded due to a $495 million UK impairment charge, while nine-month net sales grew 32% to $4.00 billion Q3 2021 vs Q3 2020 Results (in millions) | Metric | Q3 2021 | Q3 2020 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,362 | $847 | +61% | | Gross Margin | $440 | $83 | +430% | | Operating (Loss) Earnings | $(97) | $40 | N/M | | Net (Loss) Attributable to Common Stockholders | $(185) | $(28) | N/M | Nine Months 2021 vs 2020 Results (in millions) | Metric | Nine Months 2021 | Nine Months 2020 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $3,998 | $3,022 | +32% | | Gross Margin | $1,232 | $621 | +98% | | Operating Earnings | $600 | $467 | +28% | | Net Earnings Attributable to Common Stockholders | $212 | $230 | -8% | [Operating Results by Business Segment](index=46&type=section&id=Operating%20Results%20by%20Business%20Segment) In Q3 2021, all segments experienced significantly higher selling prices, leading to substantial gross margin increases in Ammonia, Granular Urea, and UAN, but the AN segment recorded a gross margin loss due to soaring UK natural gas costs and production halts Q3 2021 Gross Margin by Segment | Segment | Gross Margin (in millions) | Gross Margin % | | :--- | :--- | :--- | | Ammonia | $82 | 23.8% | | Granular Urea | $186 | 48.2% | | UAN | $157 | 40.3% | | AN | $(4) | (3.4)% | | Other | $19 | 15.3% | | **Consolidated** | **$440** | **32.3%** | - The Ammonia segment's gross margin turned positive to **$82 million** from a loss of **$9 million** in Q3 2020, driven by a **140%** increase in average selling prices[209](index=209&type=chunk) - The AN segment's gross margin fell to a loss of **$4 million** from a **$13 million** profit in Q3 2020, primarily due to a **71%** increase in cost of sales per ton driven by UK natural gas prices and production halts[236](index=236&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity remains robust with cash increasing to $757 million and $1.39 billion in operating cash flow for the first nine months of 2021, supporting debt reduction and shareholder returns - Net cash provided by operating activities increased by **$452 million** to **$1,393 million** for the first nine months of 2021 compared to the same period in 2020, mainly due to higher net earnings[276](index=276&type=chunk)[589](index=589&type=chunk) - During the first nine months of 2021, the company used **$518 million** to redeem long-term debt and **$50 million** to repurchase common stock[278](index=278&type=chunk)[591](index=591&type=chunk) - As of September 30, 2021, the company had **$757 million** in cash and cash equivalents and **$750 million** in unused borrowing capacity under its Revolving Credit Agreement[249](index=249&type=chunk)[562](index=562&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=64&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to market risks from commodity prices, particularly natural gas, and uses derivatives to hedge price risk, while fixed-rate debt mitigates interest rate exposure - A **$1.00 per MMBtu** change in the price of natural gas would alter the cost to produce a ton of ammonia by approximately **$33**[295](index=295&type=chunk)[608](index=608&type=chunk) - As of September 30, 2021, the company had open natural gas derivative contracts for **20.7 million MMBtus** covering periods through March 2022[296](index=296&type=chunk)[609](index=609&type=chunk) - The company's **$3.50 billion** in senior notes have fixed interest rates, minimizing exposure to interest rate fluctuations on its long-term debt[297](index=297&type=chunk)[610](index=610&type=chunk) [Controls and Procedures](index=65&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2021, with no material changes to internal control over financial reporting during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[300](index=300&type=chunk)[613](index=613&type=chunk) - There were no changes in the company's internal control over financial reporting during the quarter ended September 30, 2021, that have materially affected, or are reasonably likely to materially affect, internal controls[301](index=301&type=chunk)[614](index=614&type=chunk) PART II. Other Information [Legal Proceedings](index=65&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in litigation related to the 2013 West Fertilizer Co. explosion, with remaining claims totaling approximately $37 million, which are expected to be fully indemnified by insurance - The company continues to face legal proceedings from the 2013 West Fertilizer Co. explosion, with remaining claims totaling approximately **$37 million**[302](index=302&type=chunk)[615](index=615&type=chunk) - Management expects any potential loss from the West Fertilizer Co. litigation to be fully covered by insurance and does not anticipate a material adverse effect on the company's financial condition[302](index=302&type=chunk)[615](index=615&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=66&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2021, the company repurchased 1,098,900 shares at an average price of $46.84, with approximately $513.4 million remaining under the 2019 Share Repurchase Program Share Repurchases for Q3 2021 | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Program | | :--- | :--- | :--- | :--- | | July 2021 | 6,558 | $52.40 | — | | August 2021 | 23,363 | $47.07 | — | | September 2021 | 1,068,979 | $46.80 | 1,067,879 | | **Total** | **1,098,900** | **$46.84** | **1,067,879** | - At the end of Q3 2021, approximately **$513.4 million** remained authorized for repurchase under the 2019 Share Repurchase Program, which expires on December 31, 2021[305](index=305&type=chunk)[618](index=618&type=chunk) [Exhibits](index=66&type=section&id=Item%206.%20Exhibits) This section provides a list of exhibits filed with the Quarterly Report on Form 10-Q, including CEO and CFO certifications and financial data formatted in Inline XBRL - The report includes required certifications from the Principal Executive Officer and Principal Financial Officer pursuant to the Sarbanes-Oxley Act of 2002[307](index=307&type=chunk)[309](index=309&type=chunk)