Financial Performance - Q1 2025 net earnings were $312 million[8] - Q1 2025 adjusted EBITDA reached $644 million[9], driven by higher volumes and lower costs[15] - Last Twelve Months (LTM) adjusted EBITDA was $2.5 billion[10] - LTM free cash flow was $1.6 billion[10], with a 63% free cash flow to adjusted EBITDA conversion rate[10] - $530 million was returned to shareholders in Q1 2025 through share repurchases and dividends[14, 19] Capital Allocation and Shareholder Value - A new share repurchase authorization of $2 billion was approved, expiring in December 2029[14] - Approximately $630 million remains in the current $3 billion share repurchase authorization, expected to be completed by December 2025[10, 14, 21, 25] - Since 2022, $5 billion has been returned to shareholders[25] Operational and Strategic Highlights - Gross ammonia production in 2025 is expected to be approximately 10 million tons[14] - Final Investment Decision (FID) was announced for the Blue Point Joint Venture low-carbon ammonia production facility with partners JERA and Mitsui[14] - CF's estimated capital investment for the Blue Point JV is $2.15 billion ($1.6 billion for the production facility and $550 million for scalable infrastructure)[32]

Core Insights - CF Industries reported a revenue of $1.66 billion for the quarter ended March 2025, marking a 13.1% increase year-over-year and a surprise of +9.34% over the Zacks Consensus Estimate of $1.52 billion [1] - The earnings per share (EPS) for the quarter was $1.85, significantly higher than the $1.03 reported in the same quarter last year, resulting in an EPS surprise of +25.85% compared to the consensus estimate of $1.47 [1] Financial Performance Metrics - The average selling price per ton of Ammonia was $454, exceeding the five-analyst average estimate of $443.05 [4] - Total sales volume for UAN (urea ammonium nitrate) was 1,875 KTon, surpassing the five-analyst average estimate of 1,653.83 KTon [4] - Total product sales volume reached 5,004 KTon, compared to the five-analyst average estimate of 4,786.64 KTon [4] Net Sales Breakdown - Net Sales for Ammonia were reported at $520 million, significantly above the average estimate of $407.44 million, reflecting a year-over-year increase of +29.4% [4] - Net Sales for Granular Urea reached $439 million, slightly above the average estimate of $428.96 million, with a year-over-year change of +7.9% [4] - Net Sales for UAN (urea ammonium nitrate) were $470 million, exceeding the average estimate of $414.59 million, representing a year-over-year increase of +10.6% [4] - Net Sales for AN (ammonium nitrate) were $101 million, below the four-analyst average estimate of $113.40 million, indicating a year-over-year decline of -11.4% [4] - Net Sales for Other products were $133 million, slightly below the average estimate of $139.18 million, with a year-over-year change of +9% [4] Stock Performance - CF Industries' shares have returned +19.7% over the past month, outperforming the Zacks S&P 500 composite's +10.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Insights - CF Industries reported quarterly earnings of $1.85 per share, exceeding the Zacks Consensus Estimate of $1.47 per share, and showing an increase from $1.03 per share a year ago, representing an earnings surprise of 25.85% [1] - The company achieved revenues of $1.66 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 9.34% and up from $1.47 billion year-over-year [2] - CF Industries has consistently outperformed consensus EPS estimates over the last four quarters, achieving this four times [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.10 on revenues of $1.7 billion, and for the current fiscal year, it is $5.97 on revenues of $6.11 billion [7] - The estimate revisions trend for CF is currently mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Fertilizers industry, to which CF belongs, is currently ranked in the top 9% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) CF Industries reported strong Q1 2025 results, driven by operational excellence, strategic low-carbon initiatives, and significant capital returns to shareholders [First Quarter 2025 Performance Highlights](index=1&type=section&id=1.1%20First%20Quarter%202025%20Performance%20Highlights) CF Industries reported strong Q1 2025 results, driven by outstanding operations and a positive global nitrogen environment, marked by increased net earnings, adjusted EBITDA, substantial share repurchases, and a positive FID for the Blue Point low-carbon ammonia joint venture | Metric | Q1 2025 | Q1 2024 | | :-------------------------------- | :------ | :------ | | Net Earnings | $312 million | $194 million | | Diluted EPS | $1.85 | $1.03 | | EBITDA | $617 million | $488 million | | Adjusted EBITDA | $644 million | $459 million | - Repurchased **5.4 million shares** for **$434 million** during Q1 2025, and the Board authorized an additional **$2 billion** share repurchase program through 2029[5](index=5&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk) - Announced positive final investment decision (FID) for the Blue Point Complex low-carbon ammonia plant, forming a joint venture with JERA Co., Inc. and Mitsui & Co., Ltd[1](index=1&type=chunk)[4](index=4&type=chunk)[5](index=5&type=chunk) [CEO Commentary](index=1&type=section&id=1.2%20CEO%20Commentary) CEO Tony Will highlighted the team's strong Q1 2025 results, emphasizing safe operations and execution, and noted the company's position for creating long-term shareholder value through growth initiatives and substantial capital returns - CEO Tony Will stated that CF Industries delivered strong Q1 2025 results through safe operations and effective execution[3](index=3&type=chunk) - The company's operational performance and cost-advantaged network are expected to create long-term shareholder value[3](index=3&type=chunk) - Commitment to investing in attractive growth initiatives, such as the Blue Point joint venture, and returning substantial capital to shareholders[3](index=3&type=chunk) [Strategic Developments](index=1&type=section&id=Strategic%20Developments) CF Industries is advancing key low-carbon initiatives, including a major ammonia joint venture, multiple carbon capture projects, and an N2O abatement project, to enhance sustainability and reduce emissions [Blue Point Joint Venture for Low-Carbon Ammonia](index=1&type=section&id=2.1%20Blue%20Point%20Joint%20Venture%20for%20Low-Carbon%20Ammonia) CF Industries formed a joint venture with JERA and Mitsui to construct and operate the world's largest low-carbon ammonia production facility at its Blue Point Complex, utilizing ATR with carbon capture and sequestration, with production anticipated to begin in 2029 - Joint venture formed with JERA (**35% ownership**) and Mitsui (**25% ownership**) for low-carbon ammonia production, with CF Industries holding **40% ownership**[4](index=4&type=chunk) - The facility at Blue Point Complex will be an autothermal reforming (ATR) ammonia production facility with CO2 dehydration and compression, estimated to cost approximately **$4 billion**[4](index=4&type=chunk) - Expected annual nameplate capacity of approximately **1.4 million metric tons**, making it the largest ammonia production facility globally, with production starting in **2029**[4](index=4&type=chunk) - CF Industries will invest approximately **$550 million** for common facilities and receive ongoing compensation for services, while 1PointFive will transport and sequester **2.3 million metric tons of CO2 annually**[6](index=6&type=chunk)[7](index=7&type=chunk) [Carbon Capture and Sequestration Projects](index=4&type=section&id=2.2%20Carbon%20Capture%20and%20Sequestration%20Projects) CF Industries is advancing multiple carbon capture and sequestration (CCS) projects to reduce emissions and qualify for tax credits, with projects at Donaldsonville and Yazoo City Complexes aiming to capture significant amounts of CO2 for permanent storage [Donaldsonville Complex CCS Project](index=4&type=section&id=2.2.1%20Donaldsonville%20Complex%20CCS%20Project) The Donaldsonville Complex CCS project is in advanced stages, with commissioning in progress for a unit to capture up to 2 million metric tons of CO2 annually for storage by ExxonMobil, expected to start in 2025 and qualify for Section 45Q tax credits - Construction of a dehydration and compression unit at Donaldsonville Complex is in advanced stages, with commissioning in progress[22](index=22&type=chunk) - The unit will enable up to **2 million metric tons annually** of captured process CO2 to be transported and stored by ExxonMobil, with start-up expected in **2025**[22](index=22&type=chunk) - The project is expected to qualify for tax credits under Section 45Q of the Internal Revenue Code[22](index=22&type=chunk) [Yazoo City Complex CCS Project](index=4&type=section&id=2.2.2%20Yazoo%20City%20Complex%20CCS%20Project) CF Industries signed an agreement with ExxonMobil for the Yazoo City Complex CCS project, involving a **$100 million** investment for a CO2 dehydration and compression unit to capture up to **500,000 metric tons of CO2 annually**, with start-up expected in **2028** and eligibility for Section 45Q tax credits - Signed a definitive commercial agreement with ExxonMobil in July 2024 for transport and sequestration of up to **500,000 metric tons of CO2 annually** from Yazoo City Complex[23](index=23&type=chunk) - CF Industries will invest approximately **$100 million** to build a CO2 dehydration and compression unit at the Yazoo City Complex[23](index=23&type=chunk) - Start-up of the Yazoo City project is expected in **2028**, and it is also expected to qualify for Section 45Q tax credits[23](index=23&type=chunk) [Verdigris Complex N2O Abatement Project & Low Carbon Fertilizer Alliance](index=4&type=section&id=2.3%20Verdigris%20Complex%20N2O%20Abatement%20Project%20%26%20Low%20Carbon%20Fertilizer%20Alliance) CF Industries, as a founding member of the Low Carbon Fertilizer Alliance, is implementing a nitric acid plant emissions abatement project at its Verdigris Complex, aiming to reduce CO2-equivalent emissions by approximately **600,000 metric tons annually** starting in **2025** - CF Industries is a founding manufacturing member of the Low Carbon Fertilizer Alliance, managed by 3Degrees, to reduce emissions in agricultural supply chains[24](index=24&type=chunk) - The Alliance provides funding for emissions reduction initiatives, including a new nitric acid plant emissions abatement project at the Verdigris, Oklahoma, manufacturing facility[25](index=25&type=chunk) - This project is expected to reduce CO2-equivalent emissions from the Verdigris facility by approximately **600,000 metric tons annually**, beginning in **2025**[25](index=25&type=chunk) [Operational Overview](index=2&type=section&id=Operational%20Overview) CF Industries maintained a strong safety record and significantly increased gross ammonia production in Q1 2025, projecting approximately **10 million tons** for the full year [Safety Performance](index=2&type=section&id=3.1%20Safety%20Performance) As of March 31, 2025, CF Industries maintained a strong safety record with a **12-month rolling average recordable incident rate of 0.34 incidents per 200,000 work hours** - **12-month rolling average recordable incident rate was 0.34 incidents per 200,000 work hours** as of March 31, 2025[7](index=7&type=chunk) [Production Volumes](index=2&type=section&id=3.2%20Production%20Volumes) Gross ammonia production significantly increased in Q1 2025 compared to Q1 2024 due to fewer outages, with the company projecting full-year 2025 gross ammonia production to reach approximately **10 million tons** | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :-------------------- | :------ | :------ | :----------- | | Gross Ammonia Production | 2.6 million tons | 2.1 million tons | +0.5 million tons (+23.8%) | - The increase in ammonia production was due to significantly fewer production outages compared to the prior year, which experienced severe cold weather and other operational events[8](index=8&type=chunk) - Company expects gross ammonia production for the full year 2025 to be approximately **10 million tons**[8](index=8&type=chunk) [Financial Performance Overview](index=2&type=section&id=Financial%20Performance%20Overview) CF Industries reported strong Q1 2025 financial results with increased net sales and profitability, alongside active capital management through share repurchases and dividend payments [Consolidated Financial Results](index=2&type=section&id=4.1%20Consolidated%20Financial%20Results) CF Industries reported strong Q1 2025 financial performance, with significant year-over-year increases in net earnings, EBITDA, and adjusted EBITDA, driven by higher average selling prices and increased sales volumes | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | | Net sales | $1,663 million | $1,470 million | +$193 million (+13.1%) | | Gross margin | $572 million | $409 million | +$163 million (+39.9%) | | Gross margin percentage | 34.4% | 27.8% | +6.6 percentage points | | Net earnings attributable to common stockholders | $312 million | $194 million | +$118 million (+60.8%) | | Net earnings per diluted share | $1.85 | $1.03 | +$0.82 (+79.6%) | | EBITDA | $617 million | $488 million | +$129 million (+26.4%) | | Adjusted EBITDA | $644 million | $459 million | +$185 million (+40.3%) | | Sales volume by product tons (000s) | 5,004 | 4,524 | +480 (+10.6%) | [Net Sales and Cost of Sales Analysis](index=2&type=section&id=4.2%20Net%20Sales%20and%20Cost%20of%20Sales%20Analysis) Net sales increased in Q1 2025 due to higher average selling prices and greater sales volumes, while cost of sales remained similar year-over-year, with higher natural gas costs offset by reduced maintenance expenses - Net sales increased to **$1.66 billion** in Q1 2025 from **$1.47 billion** in Q1 2024[10](index=10&type=chunk) - Higher global energy costs led to increased average selling prices for most major products[10](index=10&type=chunk) - Sales volumes for most major products were higher due to greater supply availability from increased production[10](index=10&type=chunk) - Cost of sales was similar to Q1 2024, with higher realized natural gas costs (**$3.68/MMBtu** in Q1 2025 vs. **$3.19/MMBtu** in Q1 2024) offset by lower maintenance costs[11](index=11&type=chunk)[12](index=12&type=chunk)[28](index=28&type=chunk) [Capital Management](index=2&type=section&id=4.3%20Capital%20Management) CF Industries is consolidating the Blue Point joint venture, impacting capital expenditure projections, and continued its share repurchase program with **$434 million** bought back in Q1 2025, authorizing a new **$2 billion** program, alongside an estimated **$71 million** distribution to CHS Inc [Capital Expenditures](index=2&type=section&id=4.3.1%20Capital%20Expenditures) Capital expenditures increased to **$132 million** in Q1 2025, with full-year 2025 projections of **$800-$900 million**, including **$300-$400 million** for the Blue Point joint venture | Metric | Q1 2025 | Q1 2024 | | :------------------ | :------ | :------ | | Capital Expenditures | $132 million | $98 million | - Full-year 2025 capital expenditures are projected to be approximately **$800-$900 million**, including **$300-$400 million** related to the Blue Point joint venture[15](index=15&type=chunk) - Excluding the portion funded by Blue Point joint venture partners, projected capital expenditures for 2025 are approximately **$650 million**[15](index=15&type=chunk) [Share Repurchase Programs](index=3&type=section&id=4.3.2%20Share%20Repurchase%20Programs) CF Industries repurchased **5.4 million shares** for **$434 million** in Q1 2025, with **$630 million** remaining on the current **$3 billion** program, and authorized an additional **$2 billion** program through 2029 - Repurchased **5.4 million shares** for **$434 million** during Q1 2025[5](index=5&type=chunk)[16](index=16&type=chunk) - Since Q2 2023, the company has repurchased **29.8 million shares** for approximately **$2.37 billion** under its current **$3 billion** program, with **$630 million** remaining[16](index=16&type=chunk) - Board authorized an additional **$2 billion** share repurchase program on May 6, 2025, effective through December 2029, commencing after the current program[5](index=5&type=chunk)[17](index=17&type=chunk) [CHS Inc. Distribution](index=3&type=section&id=4.3.3%20CHS%20Inc.%20Distribution) An estimated partnership distribution of approximately **$71 million** was earned by CHS Inc. for Q1 2025 - Estimated partnership distribution earned by CHS Inc. for Q1 2025 is approximately **$71 million**[18](index=18&type=chunk) [Dividend Payment](index=11&type=section&id=4.4%20Dividend%20Payment) CF Industries' Board of Directors declared a quarterly dividend of **$0.50 per common share**, payable on May 30, 2025, to stockholders of record as of May 15, 2025 - Quarterly dividend of **$0.50 per common share** declared on April 29, 2025[42](index=42&type=chunk) - Dividend payable on May 30, 2025, to stockholders of record as of May 15, 2025[42](index=42&type=chunk) [Nitrogen Market Outlook](index=3&type=section&id=Nitrogen%20Market%20Outlook) The nitrogen market is expected to remain constructive in the near term due to strong demand and constrained supply, with persistent energy cost differentials supporting North American producers and a tightening global balance longer term [Near-Term Outlook](index=3&type=section&id=5.1%20Near-Term%20Outlook) Global nitrogen pricing was supported in Q1 2025 by strong demand, constrained supply, and China's export restrictions, with management expecting a constructive supply-demand balance driven by strong corn demand, low global inventories, and challenging European production economics - Global nitrogen pricing supported by positive global demand, constrained supply (Iran natural gas shortages), and China's urea export restrictions[19](index=19&type=chunk) - North America expects strong nitrogen demand due to favorable corn returns and higher planted corn acres (**95.3 million acres** in 2025)[19](index=19&type=chunk) - Brazil is projected to remain the largest urea import region, exceeding **8 million metric tons**, while India is expected to have higher urea import requirements due to lower domestic production and inventories[19](index=19&type=chunk) - Europe's ammonia operating rates and domestic nitrogen output are expected to remain below historical averages, and China's urea export controls are anticipated to continue until at least after its domestic spring application season[19](index=19&type=chunk) [Medium-Term Outlook](index=4&type=section&id=5.2%20Medium-Term%20Outlook) Significant energy cost differentials between North American producers and high-cost producers in Europe and Asia are expected to persist in the medium term, supporting strong margin opportunities for low-cost North American nitrogen producers - Significant energy cost differentials between North American producers and high-cost producers in Europe and Asia are expected to persist[20](index=20&type=chunk) - The global nitrogen cost structure will remain supportive of strong margin opportunities for low-cost North American producers[20](index=20&type=chunk) [Longer-Term Outlook](index=4&type=section&id=5.3%20Longer-Term%20Outlook) Management anticipates a tightening global nitrogen supply-demand balance in the longer term, as capacity growth is not keeping pace with expected demand growth (**1.5% annually**), coupled with production constraints in Europe, Egypt, Trinidad, and Iran - Global nitrogen supply-demand balance is expected to tighten over the next four years[21](index=21&type=chunk) - Global nitrogen capacity growth is not projected to keep pace with expected demand growth of approximately **1.5% per year** for traditional applications and new clean energy demand[21](index=21&type=chunk) - Global production is expected to remain constrained by poor margins for European ammonia producers and natural gas availability issues in Egypt, Trinidad, and Iran[21](index=21&type=chunk) [Segment Performance](index=6&type=section&id=Segment%20Performance) CF Industries' segments showed varied performance in Q1 2025, with Ammonia, Granular Urea, and Other segments reporting increased net sales and gross margins, while UAN and AN segments experienced mixed results [Ammonia Segment](index=6&type=section&id=6.1%20Ammonia%20Segment) The Ammonia segment saw significant improvements in Q1 2025, with net sales and gross margin increasing substantially year-over-year, driven by higher sales volumes and increased average selling prices, partially offset by higher natural gas costs | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | | Net sales | $520 million | $402 million | +$118 million (+29.4%) | | Gross margin | $186 million | $65 million | +$121 million (+186.2%) | | Gross margin percentage | 35.8% | 16.2% | +19.6 percentage points | | Sales volume by product tons (000s) | 1,146 | 918 | +228 (+24.8%) | | Average selling price per product ton | $454 | $438 | +$16 (+3.7%) | | Adjusted gross margin | $235 million | $125 million | +$110 million (+88.0%) | | Adjusted gross margin per product ton | $205 | $136 | +$69 (+50.7%) | - Ammonia sales volume increased primarily due to greater supply availability from higher gross ammonia production[30](index=30&type=chunk) - Ammonia average selling prices increased due to higher global energy costs raising the global market clearing price[30](index=30&type=chunk) - Adjusted gross margin per ton increased due to lower maintenance costs and higher average selling prices, partially offset by higher realized natural gas costs[30](index=30&type=chunk) [Granular Urea Segment](index=7&type=section&id=6.2%20Granular%20Urea%20Segment) The Granular Urea segment experienced increased net sales and gross margin in Q1 2025, driven by higher average selling prices influenced by global energy costs, despite similar sales volumes and higher realized natural gas costs | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | | Net sales | $439 million | $407 million | +$32 million (+7.9%) | | Gross margin | $173 million | $154 million | +$19 million (+12.3%) | | Gross margin percentage | 39.4% | 37.8% | +1.6 percentage points | | Sales volume by product tons (000s) | 1,125 | 1,092 | +33 (+3.0%) | | Average selling price per product ton | $390 | $373 | +$17 (+4.6%) | | Adjusted gross margin | $244 million | $214 million | +$30 million (+14.0%) | | Adjusted gross margin per product ton | $217 | $196 | +$21 (+10.7%) | - Granular urea sales volumes for 2025 were similar to 2024[33](index=33&type=chunk) - Average selling prices increased due to higher global energy costs[33](index=33&type=chunk) - Adjusted gross margin per ton increased primarily due to higher average selling prices, partially offset by higher realized natural gas costs[33](index=33&type=chunk) [UAN Segment](index=8&type=section&id=6.3%20UAN%20Segment) The UAN segment saw increased net sales and sales volumes in Q1 2025, but experienced a slight decrease in gross margin and average selling prices, with lower average selling prices and higher natural gas costs contributing to a decrease in adjusted gross margin per ton | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | | Net sales | $470 million | $425 million | +$45 million (+10.6%) | | Gross margin | $142 million | $143 million | -$1 million (-0.7%) | | Gross margin percentage | 30.2% | 33.6% | -3.4 percentage points | | Sales volume by product tons (000s) | 1,875 | 1,611 | +264 (+16.4%) | | Average selling price per product ton | $251 | $264 | -$13 (-4.9%) | | Adjusted gross margin | $216 million | $202 million | +$14 million (+6.9%) | | Adjusted gross margin per product ton | $115 | $125 | -$10 (-8.0%) | - UAN sales volumes were higher due to greater supply availability from increased UAN production[35](index=35&type=chunk) - Average selling prices decreased due to the timing of sales, primarily concluded in a lower-priced environment in Q4 2024[35](index=35&type=chunk) - Adjusted gross margin per ton decreased primarily due to lower average selling prices and higher realized natural gas costs[35](index=35&type=chunk) [AN Segment](index=9&type=section&id=6.4%20AN%20Segment) The AN segment experienced a decrease in net sales and sales volumes in Q1 2025 due to lower supply availability, but gross margin and average selling prices increased, leading to an improved adjusted gross margin per ton, partially offset by higher natural gas costs | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | | Net sales | $101 million | $114 million | -$13 million (-11.4%) | | Gross margin | $16 million | $9 million | +$7 million (+77.8%) | | Gross margin percentage | 15.8% | 7.9% | +7.9 percentage points | | Sales volume by product tons (000s) | 328 | 390 | -62 (-15.9%) | | Average selling price per product ton | $308 | $292 | +$16 (+5.5%) | | Adjusted gross margin | $24 million | $21 million | +$3 million (+14.3%) | | Adjusted gross margin per product ton | $73 | $54 | +$19 (+35.2%) | - AN sales volumes were lower primarily due to lower supply availability from reduced production and lower starting inventory[38](index=38&type=chunk) - Average selling prices increased due to higher global energy costs[38](index=38&type=chunk) - Adjusted gross margin per ton increased primarily due to higher average selling prices, partially offset by higher realized natural gas costs[38](index=38&type=chunk) [Other Segment](index=10&type=section&id=6.5%20Other%20Segment) The Other segment, including products like diesel exhaust fluid (DEF) and nitric acid, reported increased net sales and gross margin in Q1 2025. Similar sales volumes combined with higher average selling prices, influenced by global energy costs, drove an increase in adjusted gross margin per ton, despite higher natural gas costs | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | | Net sales | $133 million | $122 million | +$11 million (+9.0%) | | Gross margin | $55 million | $38 million | +$17 million (+44.7%) | | Gross margin percentage | 41.4% | 31.1% | +10.3 percentage points | | Sales volume by product tons (000s) | 530 | 513 | +17 (+3.3%) | | Average selling price per product ton | $251 | $238 | +$13 (+5.5%) | | Adjusted gross margin | $68 million | $57 million | +$11 million (+19.3%) | | Adjusted gross margin per product ton | $128 | $111 | +$17 (+15.3%) | - Other sales volumes for 2025 were similar to 2024[41](index=41&type=chunk) - Average selling prices increased due to higher global energy costs[41](index=41&type=chunk) - Adjusted gross margin per ton increased primarily due to higher average selling prices, partially offset by higher realized natural gas costs[41](index=41&type=chunk) [Financial Statements & Non-GAAP Reconciliations](index=13&type=section&id=Financial%20Statements%20%26%20Non-GAAP%20Reconciliations) This section presents CF Industries' consolidated financial statements, including statements of operations, balance sheets, and cash flows, along with reconciliations of non-GAAP financial measures and details on items affecting comparability [Consolidated Statements of Operations](index=13&type=section&id=7.1%20Consolidated%20Statements%20of%20Operations) The consolidated statements of operations show a significant increase in net earnings attributable to common stockholders for Q1 2025 compared to Q1 2024, driven by higher net sales and gross margin, despite increased total other operating costs and expenses | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | | :------------------------------------ | :-------------------- | :-------------------- | | Net sales | $1,663 | $1,470 | | Cost of sales | $1,091 | $1,061 | | Gross margin | $572 | $409 | | Operating earnings | $455 | $303 | | Earnings before income taxes | $437 | $300 | | Net earnings | $351 | $238 | | Net earnings attributable to common stockholders | $312 | $194 | | Diluted EPS | $1.85 | $1.03 | - Total other operating costs and expenses increased to **$121 million** in Q1 2025 from **$108 million** in Q1 2024, primarily due to U.K. operations restructuring costs of **$23 million**[52](index=52&type=chunk) [Condensed Consolidated Balance Sheets](index=14&type=section&id=7.2%20Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheet shows a slight decrease in total assets from December 31, 2024, to March 31, 2025, primarily due to a reduction in cash and cash equivalents, with total liabilities increasing mainly from customer advances, and total equity decreasing | Metric | March 31, 2025 (in millions) | December 31, 2024 (in millions) | | :-------------------------------- | :--------------------------- | :------------------------------ | | Cash and cash equivalents | $1,406 | $1,614 | | Total current assets | $2,433 | $2,520 | | Total assets | $13,308 | $13,466 | | Total current liabilities | $939 | $818 | | Long-term debt | $2,972 | $2,971 | | Total liabilities and equity | $13,308 | $13,466 | | Total equity | $7,297 | $7,592 | - Customer advances significantly increased from **$118 million** at December 31, 2024, to **$241 million** at March 31, 2025[54](index=54&type=chunk) [Consolidated Statements of Cash Flows](index=15&type=section&id=7.3%20Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows indicate an increase in net cash provided by operating activities in Q1 2025, but higher net cash used in financing activities, primarily due to increased treasury stock purchases, resulted in a larger decrease in cash and cash equivalents for the quarter | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | | :------------------------------------ | :-------------------- | :-------------------- | | Net cash provided by operating activities | $586 | $445 | | Net cash used in investing activities | ($126) | ($100) | | Net cash used in financing activities | ($671) | ($602) | | Decrease in cash and cash equivalents | ($208) | ($259) | | Cash and cash equivalents at end of period | $1,406 | $1,773 | - Purchases of treasury stock increased to **$444 million** in Q1 2025 from **$339 million** in Q1 2024[56](index=56&type=chunk) - Changes in assets and liabilities, particularly accounts receivable and customer advances, significantly impacted operating cash flow[56](index=56&type=chunk) [Non-GAAP Financial Measures Reconciliations](index=16&type=section&id=7.4%20Non-GAAP%20Financial%20Measures%20Reconciliations) CF Industries provides reconciliations for non-GAAP financial measures like Free Cash Flow, EBITDA, and Adjusted EBITDA, which management uses to assess performance and financial strength, offering additional insights beyond GAAP results for year-over-year comparisons [Free Cash Flow Reconciliation](index=16&type=section&id=7.4.1%20Free%20Cash%20Flow%20Reconciliation) Free cash flow increased by **$188 million** year-over-year for the trailing twelve months ended March 31, 2025, as detailed in the reconciliation | Metric | TTM March 31, 2025 (in millions) | TTM March 31, 2024 (in millions) | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net cash provided by operating activities | $2,412 | $2,255 | | Capital expenditures | ($552) | ($528) | | Distributions to noncontrolling interest | ($293) | ($348) | | Free cash flow | $1,567 | $1,379 | - Free cash flow increased by **$188 million** year-over-year for the trailing twelve months ended March 31, 2025[59](index=59&type=chunk) [EBITDA and Adjusted EBITDA Reconciliation](index=17&type=section&id=7.4.2%20EBITDA%20and%20Adjusted%20EBITDA%20Reconciliation) Adjusted EBITDA increased by **$185 million (40.3%)** in Q1 2025 compared to Q1 2024, reflecting strong operational performance, with adjustments including an unrealized net mark-to-market loss on natural gas derivatives and a loss on the sale of the Ince facility | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | | :-------------------------------- | :-------------------- | :-------------------- | | Net earnings attributable to common stockholders | $312 | $194 | | EBITDA | $617 | $488 | | Adjusted EBITDA | $644 | $459 | | Adjusted EBITDA per ton | $128.70 | $101.46 | - Adjusted EBITDA increased by **$185 million (40.3%)** in Q1 2025 compared to Q1 2024, reflecting strong operational performance[64](index=64&type=chunk) - Adjustments to EBITDA in Q1 2025 included a **$2 million** unrealized net mark-to-market loss on natural gas derivatives and a **$23 million** loss on the sale of the Ince facility[64](index=64&type=chunk) [Items Affecting Comparability of Results](index=18&type=section&id=7.5%20Items%20Affecting%20Comparability%20of%20Results) Certain items impacted the comparability of financial results between Q1 2025 and Q1 2024, including unrealized mark-to-market losses/gains on natural gas derivatives, foreign currency transaction losses, and a **$23 million** loss on the sale of the Ince facility in Q1 2025 | Item | Q1 2025 Pre-Tax (in millions) | Q1 2025 After-Tax (in millions) | Q1 2024 Pre-Tax (in millions) | Q1 2024 After-Tax (in millions) | | :------------------------------------------ | :---------------------------- | :------------------------------ | :---------------------------- | :------------------------------ | | Unrealized net mark-to-market loss (gain) on natural gas derivatives | $2 | $1 | ($33) | ($26) | | Loss on foreign currency transactions | $2 | $1 | $1 | $1 | | Loss on sale of Ince facility | $23 | $21 | — | — | | Integration costs | — | — | $3 | $2 | - The loss on the sale of the Ince facility, totaling **$23 million** pre-tax, was a new item affecting comparability in Q1 2025[67](index=67&type=chunk) [Additional Information](index=11&type=section&id=Additional%20Information) This section provides an overview of CF Industries, clarifies the use of non-GAAP financial measures, includes a safe harbor statement regarding forward-looking information, and lists contact details [About CF Industries](index=11&type=section&id=8.1%20About%20CF%20Industries) CF Industries Holdings, Inc. is a global manufacturer of hydrogen and nitrogen products, committed to providing clean energy to feed and fuel the world sustainably, focusing on safe operations, environmental stewardship, and decarbonizing its ammonia production network - CF Industries' mission is to provide clean energy to feed and fuel the world sustainably[44](index=44&type=chunk) - The company is decarbonizing its ammonia production network to enable low-carbon hydrogen and nitrogen products for energy, fertilizer, emissions abatement, and other industrial activities[44](index=44&type=chunk) - Operates manufacturing complexes in the U.S., Canada, and the U.K., with an extensive North American storage, transportation, and distribution network[44](index=44&type=chunk) [Note Regarding Non-GAAP Financial Measures](index=11&type=section&id=8.2%20Note%20Regarding%20Non-GAAP%20Financial%20Measures) CF Industries utilizes non-GAAP financial measures like EBITDA, adjusted EBITDA, and free cash flow to provide additional meaningful information on performance and financial strength, serving as supplemental tools for year-over-year comparisons with provided reconciliations - Non-GAAP measures (EBITDA, adjusted EBITDA, free cash flow, adjusted gross margin) provide additional meaningful information on performance and financial strength[45](index=45&type=chunk) - Management uses these measures as supplemental financial tools for year-over-year performance comparison[45](index=45&type=chunk) - Reconciliations to the most directly comparable GAAP measures are provided within the release[45](index=45&type=chunk) [Safe Harbor Statement](index=11&type=section&id=8.3%20Safe%20Harbor%20Statement) The Safe Harbor Statement clarifies that the communication contains forward-looking statements subject to various assumptions, risks, and uncertainties that could cause actual results to differ materially, including project completion, funding, market cyclicality, commodity prices, regulatory changes, and technological performance - All statements other than historical facts are forward-looking and subject to assumptions, risks, and uncertainties beyond the company's control[46](index=46&type=chunk)[47](index=47&type=chunk) - Important factors that could cause actual results to differ include project completion, funding needs, market cyclicality, global competition, natural gas price volatility, and regulatory changes[47](index=47&type=chunk) - The company disclaims any obligation to update or revise forward-looking statements, except as required by law[48](index=48&type=chunk) [Contact Information](index=12&type=section&id=8.4%20Contact%20Information) Contact information for media and investor relations is provided for inquiries regarding CF Industries Holdings, Inc - Media contact: Chris Close, Senior Director, Corporate Communications (**847-405-2542**, cclose@cfindustries.com)[49](index=49&type=chunk)[50](index=50&type=chunk) - Investor contact: Darla Rivera, Director, Investor Relations (**847-405-2045**, darla.rivera@cfindustries.com)[49](index=49&type=chunk)[50](index=50&type=chunk)

Core Viewpoint - CF Industries is expected to report a quarterly earnings per share (EPS) of $1.47, marking a 42.7% increase year-over-year, with revenues projected at $1.52 billion, reflecting a 3.5% increase compared to the same period last year [1] Earnings Projections - Over the past 30 days, the consensus EPS estimate has been revised downward by 7.8%, indicating a reassessment by analysts [2] - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3] Key Metrics Estimates - The consensus estimate for 'Net Sales - Ammonia' is $407.44 million, showing a year-over-year increase of 1.4% [4] - 'Net Sales - Granular Urea' is expected to be $428.96 million, reflecting a 5.4% increase year-over-year [5] - 'Net Sales - UAN (urea ammonium nitrate)' is projected at $414.59 million, indicating a decrease of 2.5% year-over-year [5] - 'Net Sales - AN (ammonium nitrate)' is estimated to reach $113.40 million, showing a slight decline of 0.5% from the prior-year quarter [5] Sales Volume and Pricing - The estimated 'Average selling price per product ton - Ammonia' is $443.05, compared to $438 in the previous year [6] - 'Sales volume by product - UAN' is expected to be 1,653.83 KTon, up from 1,611 KTon year-over-year [6] - 'Sales volume by product - Granular Urea' is projected at 1,128.25 KTon, an increase from 1,092 KTon in the prior year [6] - 'Sales volume by product - Ammonia' is forecasted to be 914.12 KTon, slightly down from 918 KTon year-over-year [7] - Total 'Tons of product sold' is expected to reach 4,786.64 KTon, up from 4,524 KTon in the same quarter last year [7] Average Selling Prices - The average selling price per product ton for 'UAN' is estimated at $248.76, down from $264 in the previous year [8] - The average selling price for 'Granular Urea' is projected to be $380.58, compared to $373 year-over-year [8] - The average selling price for 'AN' is expected to be $282.22, down from $292 in the same quarter last year [9] Stock Performance - Over the past month, CF shares have increased by 10.3%, outperforming the Zacks S&P 500 composite, which recorded a return of 0.4% [9]

Company Overview - CF Industries is expected to report quarterly earnings of $1.47 per share, reflecting a year-over-year increase of +42.7% [3] - Revenues are anticipated to reach $1.52 billion, which is a 3.5% increase from the same quarter last year [3] Earnings Expectations - The consensus EPS estimate has been revised down by 7.83% over the last 30 days, indicating a bearish sentiment among analysts [4] - The Most Accurate Estimate for CF is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -2.17% [10] Historical Performance - In the last reported quarter, CF Industries exceeded the expected earnings of $1.49 per share by delivering $1.89, resulting in a surprise of +26.85% [12] - Over the past four quarters, CF has beaten consensus EPS estimates three times [13] Industry Context - Another player in the fertilizers industry, Mosaic, is expected to report earnings of $0.39 per share, indicating a year-over-year decline of -40% [17] - Mosaic's revenues are projected to be $2.67 billion, down 0.5% from the previous year [17] - Mosaic has an Earnings ESP of 15.82%, suggesting a likelihood of beating the consensus EPS estimate [18]

Core Viewpoint - CF Industries Holdings, Inc. is experiencing gains due to higher nitrogen fertilizer demand and lower natural gas costs, despite facing challenges from soft nitrogen prices [1] Group 1: Demand Factors - Global demand for nitrogen fertilizers is rising, driven by significant agricultural needs and recovering industrial demand post-pandemic [2] - High corn planting acres and low nitrogen inventories in North America are expected to boost nitrogen demand [4] - Brazil's demand for urea is anticipated to remain strong due to increased corn planting, while India's demand is driven by low inventory levels [4] Group 2: Supply and Pricing Dynamics - The global supply-demand balance for nitrogen fertilizers is expected to remain positive, with inventories below normal and production challenges in Europe [3] - CF Industries is facing headwinds from weak nitrogen prices due to increased global supply and lower energy costs, impacting sales and margins [8] Group 3: Cost Structure - The company benefits from lower natural gas prices, with costs decreasing from $3.01 per MMBtu in the previous year to $2.43 per MMBtu in the fourth quarter [5] - The average natural gas cost for 2024 is projected to decline to $2.4 per MMBtu from $3.67 per MMBtu a year ago, contributing to reduced cost of sales [5][7]

Core Viewpoint - CF Industries, JERA, and Mitsui have formed a joint venture to develop a low-carbon ammonia production facility, marking a significant advancement in the low-carbon ammonia value chain to meet global demand [1][4]. Group 1: Joint Venture Structure and Investment - The joint venture will have CF Industries holding a 40% stake, JERA 35%, and Mitsui 25% [2]. - The facility will be built at CF Industries' Blue Point Complex in Louisiana, with an estimated construction cost of $4 billion, funded according to ownership shares [2]. - CF Industries plans to invest approximately $550 million in scalable infrastructure at the site, which includes storage and loading systems [3]. Group 2: Production Capacity and Timeline - Once completed, the plant will have an annual nameplate capacity of about 1.4 million metric tons, making it the largest ammonia production facility globally by nameplate capacity [3]. - Production is expected to commence in 2029 [3]. Group 3: Market Context and Demand - The joint venture aims to create a reliable and cost-effective low-carbon ammonia value chain to address the anticipated strong global demand for low-carbon ammonia in various applications [4]. - CF Industries expects a positive global supply-demand balance due to below-normal inventories and challenging production economics for marginal producers in Europe [6]. Group 4: Agricultural Insights - CF anticipates higher average U.S. corn returns compared to soybeans, driven by rising corn prices and lower yield predictions for 2024, which will likely boost nitrogen demand [7]. - Nitrogen imports to Brazil are expected to remain high in 2025 due to anticipated corn plantings and minimal domestic nitrogen output [7]. - Urea inventory in India is projected to be low due to strong domestic demand and lower-than-targeted domestic output [7].

Core Viewpoint - 1PointFive, a subsidiary of Occidental, has signed a 25-year offtake agreement to capture approximately 2.3 million metric tons of CO2 per year from CF Industries' Bluepoint low-carbon ammonia production facility in Louisiana, with the CO2 to be stored at 1PointFive's Pelican Sequestration Hub [1][2][4] Group 1: Agreement Details - The agreement involves the transportation and geological storage of CO2 captured from the Bluepoint facility, which is a collaboration with CF Industries and its partners JERA Co., Inc. and Mitsui & Co., Inc. [1][4] - The Pelican Sequestration Hub has received a final investment decision and is progressing through the development process [1][3] Group 2: Industry Impact - The agreement highlights the potential for large-scale investments in low-carbon products and assists hard-to-decarbonize sectors in managing their emissions [2][3] - Sequestration technology enhances the value of natural gas, allowing for the production of ammonia with significantly lower carbon intensity when CO2 emissions are captured during manufacturing [2] Group 3: Company Expertise - 1PointFive's collaboration with CF Industries is seen as a validation of its expertise in managing carbon dioxide and its role as a commercial sequestration partner [3] - The Pelican hub will include infrastructure for safely and economically sequestering industrial emissions in geological formations over a mile underground, leveraging Occidental's extensive experience in CO2 management [3]

Core Viewpoint - CF Industries Holdings, Inc. is expected to benefit from increased nitrogen fertilizer demand and lower natural gas costs, despite facing challenges from soft nitrogen prices [1]. Group 1: Demand Factors - The company is experiencing rising global demand for nitrogen fertilizers, driven by significant agricultural needs and recovering industrial demand post-pandemic [5]. - High levels of corn planted acres and low nitrogen channel inventories in North America are anticipated to drive nitrogen demand [5]. - In Brazil, strong demand for urea is expected due to increased corn planting, while India is projected to see high demand driven by low inventory levels [7]. Group 2: Supply and Pricing Dynamics - CF anticipates a positive global supply-demand balance, with inventories considered below normal and production challenges for marginal producers in Europe [6]. - The company has noted that its average selling prices in 2024 were lower than in 2023 due to increased global supply and lower energy costs, which have pressured nitrogen prices [9]. Group 3: Cost Factors - The company has benefited from lower natural gas prices, with the average cost falling from $3.01 per MMBtu in the previous year to $2.43 per MMBtu in the fourth quarter [8]. - The decline in natural gas costs has led to a reduction in the company's cost of sales, with expectations for continued benefits into 2025 [8].