CF(CF) - 2024 Q4 - Annual Report

Financial Performance - Total net sales decreased by $695 million, or 10%, to$ 5.94 billion in 2024 compared to $6.63 billion in 2023, primarily due to a$ 944 million, or 14%, decline in net sales excluding the impact of the Waggaman acquisition [250]. - Net earnings in 2024 were $1.48 billion, a decrease of$ 361 million compared to $1.84 billion in 2023 [352]. - Net earnings attributable to common stockholders for 2024 were$ 1.218 billion, a decrease of 20.1% compared to $1.525 billion in 2023 [396]. - Comprehensive income attributable to common stockholders for 2024 was$ 1.147 billion, a decrease of 26% from $1.546 billion in 2023 [399]. - Net cash provided by operating activities in 2024 was$ 2.27 billion, a decrease of $486 million compared to$ 2.76 billion in 2023 [352]. Sales and Volume - Total sales volume was 18.9 million product tons in 2024, a 1% decrease from 19.1 million product tons in 2023, with the Waggaman acquisition contributing an additional 644,000 tons [252]. - Net sales in the Ammonia segment increased by $57 million, or 3%, to$ 1.74 billion in 2024 from $1.68 billion in 2023, driven by a 15% increase in sales volume [280]. - Ammonia sales volume reached 4.1 million tons in 2024, a 15% increase compared to 3.5 million tons in 2023, influenced by the Waggaman acquisition and additional purchases [282]. - Granular Urea segment net sales decreased by$ 223 million, or 12%, to $1.60 billion in 2024 compared to$ 1.82 billion in 2023, primarily due to an 11% decrease in average selling prices [285]. - UAN segment net sales decreased by $390 million, or 19%, to$ 1.68 billion in 2024 compared to $2.07 billion in 2023, driven by a 13% decrease in average selling prices and a 6% decrease in sales volume [292]. Pricing and Costs - Average selling price decreased by 10% to$ 313 per ton in 2024 from $347 per ton in 2023, resulting in a decrease in net sales of approximately$ 716 million [251]. - Average selling price per product ton decreased by 10% to $425 in 2024 from$ 473 in 2023, reflecting lower global energy costs [280]. - Cost of sales averaged $204 per ton in 2024, a 5% decrease from$ 214 per ton in 2023, with natural gas costs decreasing by 35% to $2.40 per MMBtu [258]. - Gross margin for 2024 was$ 2.056 billion, down 19.2% from $2.545 billion in 2023 [396]. - Gross margin in the Granular Urea segment decreased by$ 139 million, or 17%, to $674 million in 2024, with a gross margin percentage of 42.1% compared to 44.6% in 2023 [287]. Expenses - Selling, general and administrative expenses increased by$ 31 million to $320 million in 2024, primarily due to increased amortization expenses related to the Waggaman acquisition [260]. - Interest expense decreased by$ 29 million to $121 million in 2024, mainly due to a reduction in interest on tax liabilities [268]. - The company reported depreciation and amortization expenses of$ 925 million in 2024, compared to $869 million in 2023, an increase of about 6.4% [406]. Cash Flow and Investments - Cash and cash equivalents balance as of December 31, 2024, was$ 1.61 billion, a decrease of $418 million from$ 2.03 billion at December 31, 2023 [306]. - Net cash used in investing activities was $469 million in 2024, a decrease of$ 1.21 billion compared to $1.68 billion in 2023 [353]. - The company purchased treasury stock amounting to$ 1,509 million in 2024, compared to $580 million in 2023, indicating a significant increase in stock repurchase activity [406]. Debt and Financing - The total long-term debt as of December 31, 2024, was$ 3 billion, with various senior notes and secured notes issued [331]. - The company has a senior unsecured revolving credit agreement providing for a revolving credit facility of up to $750 million, maturing on October 26, 2028 [324]. - As of December 31, 2024, the company had unused borrowing capacity of$ 750 million under the revolving credit agreement and no outstanding letters of credit [329]. Natural Gas and Derivatives - Natural gas costs decreased by 35% to $2.40 per MMBtu in 2024 from$ 3.67 per MMBtu in 2023, representing approximately 28% of total production costs [343]. - The company manages natural gas price risk primarily through derivative financial instruments, including fixed price swaps and options [434]. - Unrealized net mark-to-market gains on natural gas derivatives were $35 million in 2024 and$ 39 million in 2023, impacting cost of sales [346]. Acquisitions and Facilities - The acquisition of the Waggaman ammonia production facility was completed for a final purchase price of $1.221 billion, with a long-term ammonia offtake agreement to supply up to 200,000 tons of ammonia per year [312][313]. - The Waggaman facility's financial results were included in the Ammonia segment from December 1, 2023, contributing to increased sales volume and gross margin [280]. Other Financial Metrics - Total assets decreased from$ 14,376 million in 2023 to $13,466 million in 2024, a decline of approximately 6.3% [402]. - Total stockholders' equity decreased from$ 8,373 million in 2023 to $7,592 million in 2024, a decline of approximately 9.3% [402]. - The company declared cash dividends of$ 2.00 per share in 2024, up from $1.60 per share in 2023 [404].