CF(CF) - 2024 Q4 - Annual Results

Financial Performance - For the full year 2024, CF Industries reported net earnings of $1.22 billion, or$6.74 per diluted share, compared to $1.53 billion, or$7.87 per diluted share in 2023[4]. - Adjusted EBITDA for 2024 was $2.28 billion, down from$2.76 billion in 2023, while EBITDA was $2.33 billion compared to$2.71 billion in the previous year[4]. - Net sales for 2024 were $5.94 billion, a decrease from$6.63 billion in 2023, with average selling prices lower due to reduced global energy costs[5]. - Net earnings attributable to common stockholders for the year ended December 31, 2024, were $1,218 million, a decrease of 20.1$1,525 million in 2023[25]. - Free cash flow for the year ended December 31, 2024, was $1,445 million, compared to$1,799 million in 2023, indicating a decrease of 20%[58]. - Operating earnings for the year ended December 31, 2024, were $1,746 million, down from$2,230 million in 2023, a decline of 22%[50]. - The company reported total adjustments affecting comparability of results for the three months ended December 31, 2024, amounting to $(20) million, compared to$36 million in 2023[67]. Sales and Production - Gross ammonia production for 2024 was approximately 9.8 million tons, an increase from 9.5 million tons in 2023, with expectations of around 10 million tons in 2025[3]. - Ammonia sales volume for 2024 increased to 4,085,000 tons, up from 3,546,000 tons in 2023, due to the acquisition of the Waggaman ammonia production facility[28]. - UAN sales volume for 2024 was 6,753,000 tons, slightly down from 6,852,000 tons in 2023, indicating stable demand[28]. - Sales volume by product tons for the year ended December 31, 2024, was 18,943,000 tons, down from 19,130,000 tons in 2023, a decrease of 1.0%[64]. Pricing and Costs - The average cost of natural gas in 2024 was $2.40 per MMBtu, significantly lower than$3.67 per MMBtu in 2023, contributing to reduced cost of sales[6]. - Average selling price per product ton for ammonia was $425 in 2024, down from$473 in 2023, reflecting lower global energy costs[27]. - Granular urea net sales for the year ended December 31, 2024, were $1,600 million, a decrease of 12.3$1,823 million in 2023[30]. - Adjusted gross margin for granular urea was $949 million for the year ended December 31, 2024, compared to$1,087 million in 2023, with an adjusted gross margin percentage of 59.3%[30]. - The company reported a decrease in average selling prices across segments due to lower global energy costs impacting market prices[31]. Margins - Gross margin for the year ended December 31, 2024, was $2,056 million, down 19.2$2,545 million in 2023, with a gross margin percentage of 34.6% compared to 38.4%[25]. - Adjusted gross margin for the year ended December 31, 2024, was $867 million, representing 51.7$1,094 million and 52.9% in 2023[33]. - Gross margin for the year ended December 31, 2024, was $609 million, down from$817 million in 2023, resulting in a gross margin percentage of 36.3% compared to 39.5%[33]. Shareholder Returns - CF Industries returned $1.9 billion to shareholders through share repurchases and dividends in 2024, repurchasing 18.8 million shares for$1.51 billion[1][11]. - The Board of Directors declared a quarterly dividend of $0.50 per common share, payable on February 28, 2025[41]. Future Outlook and Investments - Management expects the global nitrogen supply-demand balance to remain constructive in the near term, with global nitrogen demand growth projected at approximately 1.5$500-550 million, following $518 million in 2024[10]. - The company completed a FEED study for a new ATR ammonia production facility with carbon capture, estimating project costs at approximately$4.0 billion[17]. - The company is focused on developing low-carbon ammonia projects, which may involve significant risks and uncertainties related to market growth and regulatory requirements[49]. - CF Industries is focused on decarbonizing its ammonia production network to enable low-carbon hydrogen and nitrogen products[43]. Operational Updates - The commissioning of the 20-megawatt alkaline water electrolysis plant at the Donaldsonville Complex was suspended due to an issue, with plans to resume once resolved[19][20]. - The company plans to discuss its full year and fourth quarter 2024 results in a conference call on February 20, 2025[42]. Quarterly Performance - Net sales for the three months ended December 31, 2024, were $1,524 million, a decrease of 3.0$1,571 million in the same period of 2023[25]. - Gross margin increased to $524 million in Q4 2024, compared to$501 million in Q4 2023, reflecting improved operational efficiency[50]. - For the three months ended December 31, 2024, net earnings attributable to common stockholders were $328 million, compared to$274 million for the same period in 2023, representing a 19.7% increase[66]. - EBITDA for the three months ended December 31, 2024, was $582 million, compared to$556 million in 2023, indicating an increase of 4.7%[64].