CF(US:CF)2025-08-07 17:49PART I Item 1. Financial Statements (unaudited) This section presents the unaudited consolidated financial statements for the quarterly and six-month periods ended June 30, 2025, and 2024, covering operations, balance sheets, cash flows, and detailed notes Consolidated Statements of Operations The company's net sales increased to $1.89 billion for the three months ended June 30, 2025, up from $1.57 billion in the same period of 2024, while net earnings attributable to common stockholders decreased slightly to $386 million Consolidated Statements of Operations Highlights (in millions, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $1,890 | $1,572 | $3,553 | $3,042 | | Gross margin | $755 | $679 | $1,327 | $1,088 | | Operating earnings | $648 | $638 | $1,103 | $941 | | Net earnings attributable to common stockholders | $386 | $420 | $698 | $614 | | Diluted EPS | $2.37 | $2.30 | $4.20 | $3.31 | Consolidated Balance Sheets As of June 30, 2025, total assets stood at $13.75 billion, with cash and cash equivalents increasing to $1.69 billion, and total equity growing to $7.82 billion primarily due to noncontrolling interests Consolidated Balance Sheet Highlights (in millions) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,686 | $1,614 | | Total current assets | $2,676 | $2,520 | | Total assets | $13,750 | $13,466 | | Long-term debt | $2,973 | $2,971 | | Total liabilities | $5,929 | $5,874 | | Total stockholders' equity | $4,963 | $4,985 | | Noncontrolling interests | $2,858 | $2,607 | | Total equity | $7,821 | $7,592 | Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash provided by operating activities increased to $1.15 billion, while net cash used in investing activities rose significantly to $368 million due to higher capital expenditures Consolidated Cash Flow Summary (in millions) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,149 | $920 | | Net cash used in investing activities | $(368) | $(134) | | Net cash used in financing activities | $(733) | $(998) | | Increase (decrease) in cash | $72 | $(213) | Notes to Unaudited Consolidated Financial Statements The notes provide detailed disclosures on accounting policies and financial statement line items, including revenue breakdowns, the Blue Point joint venture, and share repurchase activity Revenue by Geography (in millions) | Region | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | North America | $1,686 | $1,366 | $3,059 | $2,626 | | Europe and other | $204 | $206 | $494 | $416 | | Total revenue | $1,890 | $1,572 | $3,553 | $3,042 | - A long-term supply contract liability of $709 million related to the Waggaman acquisition is being amortized into net sales over 25 years33 - In Q1 2025, the company sold its Ince, U.K. facility and recognized a loss of $23 million41 - On April 8, 2025, the company formed the Blue Point joint venture with JERA and Mitsui for low-carbon ammonia production. CF Holdings holds a 40% interest but consolidates the entity as the primary beneficiary (VIE)6770 - In H1 2025, the company repurchased 8.2 million shares for $636 million under its 2022 Share Repurchase Program84 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's performance, strategy focused on decarbonization and clean energy, market conditions, consolidated and segment results, liquidity, and capital plans Overview of CF Holdings and Strategy CF Industries outlines its mission to provide clean energy and its strategy to decarbonize its ammonia production network through initiatives like the Donaldsonville CCS project and the Blue Point joint venture - The company's strategy is to leverage its ammonia production leadership to accelerate the transition to clean energy by decarbonizing its existing network and building new low-carbon capacity100103 - The Donaldsonville CCS project was completed in July 2025 for approximately $200 million, enabling the production of up to 1.9 million tons of low-carbon ammonia annually101 - The Blue Point joint venture will construct a low-carbon ammonia facility with an estimated cost of $3.7 billion, with production expected to begin in 2029. CF will also invest approximately $550 million in supporting infrastructure107109 Market Conditions and Financial Summary Market conditions in Q2 2025 were characterized by higher nitrogen selling prices, driven by increased global energy costs and supply disruptions, leading to an 11% increase in gross margin despite sharply rising natural gas costs Key Market Drivers (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Average Selling Price (per ton) | $376 | $322 | +$54 | +17% | | Sales Volume (million tons) | 5.0 | 4.9 | +0.1 | +2% | | Henry Hub Gas Price (per MMBtu) | $3.16 | $2.04 | +$1.12 | +55% | | Company Cost of Gas (per MMBtu) | $3.36 | $1.90 | +$1.46 | +77% | - Q2 2025 gross margin increased by $76 million (11%) to $755 million, as a $270 million benefit from higher selling prices was partially offset by a $136 million increase in natural gas costs131 Consolidated Results of Operations Analysis For Q2 2025, net sales grew 20% to $1.89 billion driven by higher selling prices, while cost of sales increased 27% due to rising natural gas costs, leading to an 8% decrease in net earnings attributable to common stockholders - Q2 2025 net sales increased by $318 million (20%) year-over-year, driven by higher average selling prices (+$270 million) and sales volume (+$48 million)144145146 - Q2 2025 cost of sales increased by $242 million (27%), primarily due to a $136 million increase in natural gas costs147 - For the six months ended June 30, 2025, net sales increased by $511 million (17%) and cost of sales increased by $272 million (14%), leading to a $239 million (22%) increase in gross margin142 Operating Results by Business Segment Analysis In Q2 2025, most segments experienced increased gross margins due to higher selling prices offsetting rising natural gas costs, with Granular Urea and UAN gross margins rising 23% and 25% respectively, while Ammonia's gross margin slightly decreased Gross Margin by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | Change | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Ammonia | $136 | $147 | -7% | $322 | $212 | +52% | | Granular Urea | $279 | $227 | +23% | $452 | $381 | +19% | | UAN | $270 | $216 | +25% | $412 | $359 | +15% | | AN | $25 | $23 | +9% | $41 | $32 | +28% | | Other | $45 | $66 | -32% | $100 | $104 | -4% | | Consolidated | $755 | $679 | +11% | $1,327 | $1,088 | +22% | Liquidity and Capital Resources Analysis The company maintained a strong liquidity position with $1.69 billion in cash as of June 30, 2025, continued its capital return program with $636 million in share repurchases, and projects full-year 2025 capital expenditures between $800-$900 million - Cash and cash equivalents stood at $1.69 billion as of June 30, 2025, including $264 million related to the consolidated Blue Point joint venture231 - Consolidated capital expenditures for 2025 are forecasted to be between $800 million and $900 million, which includes $300 million to $400 million for the Blue Point JV239 - In the first six months of 2025, the company repurchased 8.2 million shares for $636 million. A new $2 billion share repurchase program was authorized in May 2025244245 Item 3. Quantitative and Qualitative Disclosures About Market Risk This section refers to the company's Annual Report on Form 10-K for detailed market risk information and notes the company held natural gas derivative contracts for 13.6 million MMBtus as of June 30, 2025 - As of June 30, 2025, the company had natural gas derivative contracts for 13.6 million MMBtus to hedge against price volatility269 Item 4. Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting identified despite the implementation of a new system - The principal executive and financial officers concluded that the company's disclosure controls and procedures were effective as of the end of the period270 - A new procurement and plant asset management system was implemented in Q2 2025, but no other changes materially affected internal controls over financial reporting271 PART II Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section provides a detailed monthly breakdown of the company's share repurchases during the second quarter of 2025, totaling approximately 2.7 million shares Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 2,562,542 | $73.27 | | May 2025 | 93,878 | $79.43 | | June 2025 | 72,925 | $95.01 | | Total | 2,729,345 | $74.06 | Item 5. Other Information The company reports that no director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025 Item 6. Exhibits This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including officer certifications and financial data formatted in Inline XBRL