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FORM 10-Q
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(Mark One)
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2016
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the transition period from
to
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Commission file number 001-32597
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Delaware
(State or other jurisdiction of
incorporation or organization)
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20-2697511
(I.R.S. Employer
Identification No.)
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4 Parkway North, Suite 400
Deerfield, Illinois
(Address of principal executive offices)
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60015
(Zip Code)
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(847) 405-2400
(Registrant's telephone number, including area code)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Three months ended
June 30, |
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Six months ended
June 30, |
||||||||||||
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2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in millions, except per share amounts)
|
||||||||||||||
Net sales
|
$
|
1,134
|
|
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$
|
1,311
|
|
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$
|
2,138
|
|
|
$
|
2,265
|
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Cost of sales
|
607
|
|
|
625
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|
|
1,394
|
|
|
1,163
|
|
||||
Gross margin
|
527
|
|
|
686
|
|
|
744
|
|
|
1,102
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|
||||
Selling, general and administrative expenses
|
52
|
|
|
38
|
|
|
97
|
|
|
78
|
|
||||
Transaction costs
|
165
|
|
|
—
|
|
|
179
|
|
|
—
|
|
||||
Other operating—net
|
63
|
|
|
23
|
|
|
124
|
|
|
41
|
|
||||
Total other operating costs and expenses
|
280
|
|
|
61
|
|
|
400
|
|
|
119
|
|
||||
Equity in (losses) earnings of operating affiliates
|
(9
|
)
|
|
5
|
|
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(9
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)
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|
14
|
|
||||
Operating earnings
|
238
|
|
|
630
|
|
|
335
|
|
|
997
|
|
||||
Interest expense
|
61
|
|
|
29
|
|
|
99
|
|
|
63
|
|
||||
Interest income
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
||||
Other non-operating—net
|
—
|
|
|
—
|
|
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(2
|
)
|
|
—
|
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||||
Earnings before income taxes and equity in losses of non-operating affiliates
|
178
|
|
|
601
|
|
|
240
|
|
|
935
|
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||||
Income tax provision
|
95
|
|
|
200
|
|
|
110
|
|
|
313
|
|
||||
Equity in losses of non-operating affiliates—net of taxes
|
—
|
|
|
(36
|
)
|
|
—
|
|
|
(21
|
)
|
||||
Net earnings
|
83
|
|
|
365
|
|
|
130
|
|
|
601
|
|
||||
Less: Net earnings attributable to noncontrolling interests
|
36
|
|
|
13
|
|
|
57
|
|
|
18
|
|
||||
Net earnings attributable to common stockholders
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$
|
47
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|
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$
|
352
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|
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$
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73
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|
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$
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583
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|
Net earnings per share attributable to common stockholders:
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Basic
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$
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0.20
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$
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1.50
|
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$
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0.31
|
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$
|
2.45
|
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Diluted
|
$
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0.20
|
|
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$
|
1.49
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$
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0.31
|
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$
|
2.44
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
233.3
|
|
|
235.2
|
|
|
233.2
|
|
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237.4
|
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||||
Diluted
|
233.5
|
|
|
236.1
|
|
|
233.5
|
|
|
238.3
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||||
Dividends declared per common share
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$
|
0.30
|
|
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$
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0.30
|
|
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$
|
0.60
|
|
|
$
|
0.60
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
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2016
|
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2015
|
|
2016
|
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2015
|
||||||||
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(in millions)
|
||||||||||||||
Net earnings
|
$
|
83
|
|
|
$
|
365
|
|
|
$
|
130
|
|
|
$
|
601
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
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||||
Foreign currency translation adjustment—net of taxes
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(38
|
)
|
|
36
|
|
|
10
|
|
|
(50
|
)
|
||||
Defined benefit plans—net of taxes
|
(3
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
5
|
|
||||
|
(41
|
)
|
|
35
|
|
|
7
|
|
|
(45
|
)
|
||||
Comprehensive income
|
42
|
|
|
400
|
|
|
137
|
|
|
556
|
|
||||
Less: Comprehensive income attributable to noncontrolling interests
|
36
|
|
|
13
|
|
|
57
|
|
|
18
|
|
||||
Comprehensive income attributable to common stockholders
|
$
|
6
|
|
|
$
|
387
|
|
|
$
|
80
|
|
|
$
|
538
|
|
|
(Unaudited)
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|
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June 30,
2016 |
|
December 31,
2015 |
||||
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(in millions, except share
and per share amounts)
|
||||||
Assets
|
|
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Current assets:
|
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|
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Cash and cash equivalents
|
$
|
2,008
|
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$
|
286
|
|
Restricted cash
|
7
|
|
|
23
|
|
||
Accounts receivable—net
|
239
|
|
|
267
|
|
||
Inventories
|
231
|
|
|
321
|
|
||
Prepaid income taxes
|
855
|
|
|
185
|
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||
Other current assets
|
34
|
|
|
45
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||
Total current assets
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3,374
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1,127
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||
Property, plant and equipment—net
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9,413
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8,539
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||
Investments in affiliates
|
289
|
|
|
298
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|
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Goodwill
|
2,363
|
|
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2,390
|
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||
Other assets
|
323
|
|
|
329
|
|
||
Total assets
|
$
|
15,762
|
|
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$
|
12,683
|
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Liabilities and Equity
|
|
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Current liabilities:
|
|
|
|
|
|
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Accounts payable and accrued expenses
|
$
|
742
|
|
|
$
|
918
|
|
Income taxes payable
|
1
|
|
|
5
|
|
||
Customer advances
|
13
|
|
|
162
|
|
||
Other current liabilities
|
17
|
|
|
130
|
|
||
Total current liabilities
|
773
|
|
|
1,215
|
|
||
Long-term debt
|
5,540
|
|
|
5,537
|
|
||
Deferred income taxes
|
1,787
|
|
|
916
|
|
||
Other liabilities
|
497
|
|
|
628
|
|
||
Equity:
|
|
|
|
|
|
||
Stockholders' equity:
|
|
|
|
|
|
||
Preferred stock—$0.01 par value, 50,000,000 shares authorized
|
—
|
|
|
—
|
|
||
Common stock—$0.01 par value, 500,000,000 shares authorized, 2016—235,502,791 shares issued and 2015—235,493,395 shares issued
|
2
|
|
|
2
|
|
||
Paid-in capital
|
1,384
|
|
|
1,378
|
|
||
Retained earnings
|
2,991
|
|
|
3,058
|
|
||
Treasury stock—at cost, 2016—2,370,194 shares and 2015—2,411,839 shares
|
(150
|
)
|
|
(153
|
)
|
||
Accumulated other comprehensive loss
|
(243
|
)
|
|
(250
|
)
|
||
Total stockholders' equity
|
3,984
|
|
|
4,035
|
|
||
Noncontrolling interests
|
3,181
|
|
|
352
|
|
||
Total equity
|
7,165
|
|
|
4,387
|
|
||
Total liabilities and equity
|
$
|
15,762
|
|
|
$
|
12,683
|
|
|
Common Stockholders
|
|
|
|
|
||||||||||||||||||||||||||
|
$0.01 Par
Value
Common
Stock
|
|
Treasury
Stock
|
|
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Stockholders'
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||||||
|
(in millions, except per share amounts)
|
||||||||||||||||||||||||||||||
Balance as of December 31, 2014
|
$
|
2
|
|
|
$
|
(222
|
)
|
|
$
|
1,414
|
|
|
$
|
3,175
|
|
|
$
|
(160
|
)
|
|
$
|
4,209
|
|
|
$
|
363
|
|
|
$
|
4,572
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
583
|
|
|
—
|
|
|
583
|
|
|
18
|
|
|
601
|
|
||||||||
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment—net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
(50
|
)
|
|
—
|
|
|
(50
|
)
|
||||||||
Defined benefit plans—net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
538
|
|
|
18
|
|
|
556
|
|
||||||||
Purchases of treasury stock
|
—
|
|
|
(505
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(505
|
)
|
|
—
|
|
|
(505
|
)
|
||||||||
Retirement of treasury stock
|
—
|
|
|
597
|
|
|
(62
|
)
|
|
(535
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Acquisition of treasury stock under employee stock plans
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||||||
Issuance of $0.01 par value common stock under employee stock plans
|
—
|
|
|
1
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||||||
Excess tax benefit from stock-based compensation
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||
Cash dividends ($0.60 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(143
|
)
|
|
—
|
|
|
(143
|
)
|
|
—
|
|
|
(143
|
)
|
||||||||
Distributions declared to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21
|
)
|
|
(21
|
)
|
||||||||
Balance as of June 30, 2015
|
$
|
2
|
|
|
$
|
(129
|
)
|
|
$
|
1,368
|
|
|
$
|
3,080
|
|
|
$
|
(205
|
)
|
|
$
|
4,116
|
|
|
$
|
360
|
|
|
$
|
4,476
|
|
Balance as of December 31, 2015
|
$
|
2
|
|
|
$
|
(153
|
)
|
|
$
|
1,378
|
|
|
$
|
3,058
|
|
|
$
|
(250
|
)
|
|
$
|
4,035
|
|
|
$
|
352
|
|
|
$
|
4,387
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
73
|
|
|
57
|
|
|
130
|
|
||||||||
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment—net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||||||
Defined benefit plans—net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
||||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80
|
|
|
57
|
|
|
137
|
|
||||||||
Issuance of $0.01 par value common stock under employee stock plans
|
—
|
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||||||
Cash dividends ($0.60 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(140
|
)
|
|
—
|
|
|
(140
|
)
|
|
—
|
|
|
(140
|
)
|
||||||||
Issuance of noncontrolling interest in CF Industries Nitrogen, LLC (CFN)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,792
|
|
|
2,792
|
|
||||||||
Distributions declared to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
(20
|
)
|
||||||||
Balance as of June 30, 2016
|
$
|
2
|
|
|
$
|
(150
|
)
|
|
$
|
1,384
|
|
|
$
|
2,991
|
|
|
$
|
(243
|
)
|
|
$
|
3,984
|
|
|
$
|
3,181
|
|
|
$
|
7,165
|
|
|
Six months ended
June 30, |
||||||
|
2016
|
|
2015
|
||||
|
(in millions)
|
||||||
Operating Activities:
|
|
|
|
|
|
||
Net earnings
|
$
|
130
|
|
|
$
|
601
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
327
|
|
|
219
|
|
||
Deferred income taxes
|
875
|
|
|
(6
|
)
|
||
Stock-based compensation expense
|
9
|
|
|
8
|
|
||
Excess tax benefit from stock-based compensation
|
—
|
|
|
(2
|
)
|
||
Unrealized gain on derivatives
|
(189
|
)
|
|
(43
|
)
|
||
Loss on sale of equity method investments
|
—
|
|
|
43
|
|
||
Loss on disposal of property, plant and equipment
|
4
|
|
|
14
|
|
||
Undistributed losses (earnings) of affiliates—net of taxes
|
1
|
|
|
(16
|
)
|
||
Changes in:
|
|
|
|
|
|
||
Accounts receivable—net
|
24
|
|
|
(4
|
)
|
||
Inventories
|
81
|
|
|
(8
|
)
|
||
Accrued and prepaid income taxes
|
(673
|
)
|
|
30
|
|
||
Accounts payable and accrued expenses
|
(67
|
)
|
|
(33
|
)
|
||
Customer advances
|
(149
|
)
|
|
(308
|
)
|
||
Other—net
|
73
|
|
|
4
|
|
||
Net cash provided by operating activities
|
446
|
|
|
499
|
|
||
Investing Activities:
|
|
|
|
|
|
||
Additions to property, plant and equipment
|
(1,379
|
)
|
|
(1,032
|
)
|
||
Proceeds from sale of property, plant and equipment
|
2
|
|
|
8
|
|
||
Proceeds from sale of equity method investment
|
—
|
|
|
13
|
|
||
Withdrawals from restricted cash funds
|
16
|
|
|
32
|
|
||
Other—net
|
3
|
|
|
(22
|
)
|
||
Net cash used in investing activities
|
(1,358
|
)
|
|
(1,001
|
)
|
||
Financing Activities:
|
|
|
|
|
|
||
Proceeds from short-term borrowings
|
150
|
|
|
—
|
|
||
Payments of short-term borrowings
|
(150
|
)
|
|
—
|
|
||
Financing fees
|
(5
|
)
|
|
(2
|
)
|
||
Dividends paid on common stock
|
(140
|
)
|
|
(143
|
)
|
||
Issuance of noncontrolling interest in CFN
|
2,800
|
|
|
—
|
|
||
Distributions to noncontrolling interest
|
(20
|
)
|
|
(21
|
)
|
||
Purchases of treasury stock
|
—
|
|
|
(523
|
)
|
||
Issuances of common stock under employee stock plans
|
—
|
|
|
7
|
|
||
Excess tax benefit from stock-based compensation
|
—
|
|
|
2
|
|
||
Net cash provided by (used in) financing activities
|
2,635
|
|
|
(680
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(1
|
)
|
|
(5
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
1,722
|
|
|
(1,187
|
)
|
||
Cash and cash equivalents at beginning of period
|
286
|
|
|
1,997
|
|
||
Cash and cash equivalents at end of period
|
$
|
2,008
|
|
|
$
|
810
|
|
|
|
Original Valuation
|
|
Net Adjustments to Fair Value in 2015
|
|
Adjusted Valuation as of December 31, 2015
(1)
|
||||||
|
(in millions)
|
|||||||||||
Fair value of consideration transferred
|
$
|
570
|
|
|
$
|
—
|
|
|
$
|
570
|
|
|
Fair value of 50% of equity interest already held by the Company
|
570
|
|
|
—
|
|
|
570
|
|
||||
Total fair value
|
$
|
1,140
|
|
|
$
|
—
|
|
|
$
|
1,140
|
|
|
Assets acquired and liabilities assumed
|
|
|
|
|
|
|||||||
|
Current assets
|
$
|
165
|
|
|
$
|
1
|
|
|
$
|
166
|
|
|
Property, plant and equipment
|
898
|
|
|
—
|
|
|
898
|
|
|||
|
Goodwill
|
328
|
|
|
(8
|
)
|
|
320
|
|
|||
|
Other assets
|
140
|
|
|
(1
|
)
|
|
139
|
|
|||
|
Total assets acquired
|
1,531
|
|
|
(8
|
)
|
|
1,523
|
|
|||
|
|
|
|
|
|
|
||||||
|
Current liabilities
|
74
|
|
|
1
|
|
|
75
|
|
|||
|
Deferred income taxes
|
129
|
|
|
(9
|
)
|
|
120
|
|
|||
|
Other liabilities
|
188
|
|
|
—
|
|
|
188
|
|
|||
|
Total liabilities assumed
|
391
|
|
|
(8
|
)
|
|
383
|
|
|||
Total net assets acquired
|
$
|
1,140
|
|
|
$
|
—
|
|
|
$
|
1,140
|
|
|
|
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in millions, except per share amounts)
|
||||||||||||||
Net earnings attributable to common stockholders
|
$
|
47
|
|
|
$
|
352
|
|
|
$
|
73
|
|
|
$
|
583
|
|
Basic earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average common shares outstanding
|
233.3
|
|
|
235.2
|
|
|
233.2
|
|
|
237.4
|
|
||||
Net earnings attributable to common stockholders
|
$
|
0.20
|
|
|
$
|
1.50
|
|
|
$
|
0.31
|
|
|
$
|
2.45
|
|
Diluted earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average common shares outstanding
|
233.3
|
|
|
235.2
|
|
|
233.2
|
|
|
237.4
|
|
||||
Dilutive common shares—stock options
|
0.2
|
|
|
0.9
|
|
|
0.3
|
|
|
0.9
|
|
||||
Diluted weighted-average shares outstanding
|
233.5
|
|
|
236.1
|
|
|
233.5
|
|
|
238.3
|
|
||||
Net earnings attributable to common stockholders
|
$
|
0.20
|
|
|
$
|
1.49
|
|
|
$
|
0.31
|
|
|
$
|
2.44
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
|
(in millions)
|
||||||
Finished goods
|
$
|
197
|
|
|
$
|
286
|
|
Raw materials, spare parts and supplies
|
34
|
|
|
35
|
|
||
Total inventories
|
$
|
231
|
|
|
$
|
321
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
|
(in millions)
|
||||||
Land
|
$
|
66
|
|
|
$
|
68
|
|
Machinery and equipment
|
7,742
|
|
|
7,348
|
|
||
Buildings and improvements
|
339
|
|
|
271
|
|
||
Construction in progress
(1)
|
4,288
|
|
|
3,626
|
|
||
Property, plant and equipment
|
12,435
|
|
|
11,313
|
|
||
Less: Accumulated depreciation and amortization
|
3,022
|
|
|
2,774
|
|
||
Property, plant and equipment—net
|
$
|
9,413
|
|
|
$
|
8,539
|
|
(1)
|
As of
June 30, 2016
and
December 31, 2015
, we had construction in progress that was accrued but unpaid of
$383 million
and
$543 million
, respectively. These amounts included accruals related to our capacity expansion projects of
$343 million
and
$471 million
as of
June 30, 2016
and
December 31, 2015
, respectively.
|
|
Six months ended
June 30, |
||||||
|
2016
|
|
2015
|
||||
|
(in millions)
|
||||||
Net capitalized turnaround costs:
|
|
|
|
|
|
||
Beginning balance
|
$
|
220
|
|
|
$
|
153
|
|
Additions
|
14
|
|
|
37
|
|
||
Depreciation
|
(42
|
)
|
|
(30
|
)
|
||
Effect of exchange rate changes
|
3
|
|
|
(1
|
)
|
||
Ending balance
|
$
|
195
|
|
|
$
|
159
|
|
|
Ammonia
|
|
Granular Urea
|
|
UAN
|
|
AN
|
|
Other
|
|
Total
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Balance as of December 31, 2015
|
$
|
587
|
|
|
$
|
828
|
|
|
$
|
576
|
|
|
$
|
324
|
|
|
$
|
75
|
|
|
$
|
2,390
|
|
Effect of exchange rate changes
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
(3
|
)
|
|
(27
|
)
|
||||||
Balance as of June 30, 2016
|
$
|
587
|
|
|
$
|
828
|
|
|
$
|
576
|
|
|
$
|
300
|
|
|
$
|
72
|
|
|
$
|
2,363
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Customer relationships
|
$
|
131
|
|
|
$
|
(21
|
)
|
|
$
|
110
|
|
|
$
|
140
|
|
|
$
|
(18
|
)
|
|
$
|
122
|
|
TerraCair brand
|
10
|
|
|
(10
|
)
|
|
—
|
|
|
10
|
|
|
(10
|
)
|
|
—
|
|
||||||
Trade names
|
31
|
|
|
(1
|
)
|
|
30
|
|
|
35
|
|
|
(1
|
)
|
|
34
|
|
||||||
Total intangible assets
|
$
|
172
|
|
|
$
|
(32
|
)
|
|
$
|
140
|
|
|
$
|
185
|
|
|
$
|
(29
|
)
|
|
$
|
156
|
|
|
Estimated
Amortization
Expense
|
||
|
(in millions)
|
||
Remainder of 2016
|
$
|
4
|
|
2017
|
8
|
|
|
2018
|
8
|
|
|
2019
|
8
|
|
|
2020
|
8
|
|
|
2021
|
8
|
|
|
June 30, 2016
|
||||||||||||||
|
Cost Basis
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Value
|
||||||||
|
(in millions)
|
||||||||||||||
Cash
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
112
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
U.S. and Canadian government obligations
|
1,873
|
|
|
—
|
|
|
—
|
|
|
1,873
|
|
||||
Other debt securities
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
||||
Total cash and cash equivalents
|
$
|
2,008
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,008
|
|
Restricted cash
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||
Nonqualified employee benefit trusts
|
18
|
|
|
1
|
|
|
—
|
|
|
19
|
|
|
December 31, 2015
|
||||||||||||||
|
Cost Basis
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Value
|
||||||||
|
(in millions)
|
||||||||||||||
Cash
|
$
|
71
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
71
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
U.S. and Canadian government obligations
|
190
|
|
|
—
|
|
|
—
|
|
|
190
|
|
||||
Other debt securities
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
||||
Total cash and cash equivalents
|
$
|
286
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
286
|
|
Restricted cash
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
||||
Nonqualified employee benefit trusts
|
18
|
|
|
1
|
|
|
—
|
|
|
19
|
|
|
June 30, 2016
|
||||||||||||||
|
Total Fair
Value
|
|
Quoted Prices
in Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
|
(in millions)
|
||||||||||||||
Cash equivalents
|
$
|
1,896
|
|
|
$
|
1,896
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
7
|
|
|
7
|
|
|
—
|
|
|
—
|
|
||||
Derivative assets
|
14
|
|
|
—
|
|
|
14
|
|
|
—
|
|
||||
Nonqualified employee benefit trusts
|
19
|
|
|
19
|
|
|
—
|
|
|
—
|
|
||||
Derivative liabilities
|
(36
|
)
|
|
—
|
|
|
(36
|
)
|
|
—
|
|
|
December 31, 2015
|
||||||||||||||
|
Total Fair
Value
|
|
Quoted Prices
in Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
|
(in millions)
|
||||||||||||||
Cash equivalents
|
$
|
215
|
|
|
$
|
215
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
23
|
|
|
23
|
|
|
—
|
|
|
—
|
|
||||
Nonqualified employee benefit trusts
|
19
|
|
|
19
|
|
|
—
|
|
|
—
|
|
||||
Derivative liabilities
|
(211
|
)
|
|
—
|
|
|
(211
|
)
|
|
—
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
Carrying
Amount
|
|
Fair Value
|
|
Carrying
Amount
|
|
Fair Value
|
||||||||
|
(in millions)
|
||||||||||||||
Long-term debt
|
$
|
5,540
|
|
|
$
|
5,751
|
|
|
$
|
5,537
|
|
|
$
|
5,456
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in millions)
|
||||||||||||||
Interest on borrowings
(1)
|
$
|
75
|
|
|
$
|
64
|
|
|
$
|
151
|
|
|
$
|
127
|
|
Fees on financing agreements
(1)(2)
|
32
|
|
|
3
|
|
|
36
|
|
|
4
|
|
||||
Interest on tax liabilities
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Interest capitalized
|
(46
|
)
|
|
(38
|
)
|
|
(89
|
)
|
|
(69
|
)
|
||||
Total interest expense
|
$
|
61
|
|
|
$
|
29
|
|
|
$
|
99
|
|
|
$
|
63
|
|
(1)
|
See Note
12—Financing Agreements
for additional information.
|
(2)
|
Fees on financing agreements for both the three and
six
months ended
June 30, 2016
includes
$28 million
of fees related to the termination of the tranche B commitment under the bridge credit agreement as a result of the termination of the Combination Agreement between CF Holdings and OCI. See Note
3—Acquisitions
for additional information.
|
|
Effective Interest Rate
|
|
June 30,
2016 |
|
December 31,
2015 |
||||||||||||
|
|
Principal Outstanding
|
|
Carrying Amount
(1)
|
|
Principal Outstanding
|
|
Carrying Amount
(1)(2)
|
|||||||||
|
|
|
(in millions)
|
||||||||||||||
Public Senior Notes:
|
|
|
|
|
|
|
|
|
|
||||||||
6.875% due 2018
|
7.344%
|
|
$
|
800
|
|
|
$
|
794
|
|
|
$
|
800
|
|
|
$
|
792
|
|
7.125% due 2020
|
7.529%
|
|
800
|
|
|
789
|
|
|
800
|
|
|
788
|
|
||||
3.450% due 2023
|
3.562%
|
|
750
|
|
|
745
|
|
|
750
|
|
|
745
|
|
||||
5.150% due 2034
|
5.279%
|
|
750
|
|
|
739
|
|
|
750
|
|
|
739
|
|
||||
4.950% due 2043
|
5.031%
|
|
750
|
|
|
741
|
|
|
750
|
|
|
741
|
|
||||
5.375% due 2044
|
5.465%
|
|
750
|
|
|
740
|
|
|
750
|
|
|
740
|
|
||||
Private Senior Notes:
|
|
|
|
|
|
|
|
|
|
||||||||
4.490% due 2022
|
4.626%
|
|
250
|
|
|
248
|
|
|
250
|
|
|
248
|
|
||||
4.930% due 2025
|
5.034%
|
|
500
|
|
|
496
|
|
|
500
|
|
|
496
|
|
||||
5.030% due 2027
|
5.121%
|
|
250
|
|
|
248
|
|
|
250
|
|
|
248
|
|
||||
Total long-term debt
|
|
|
$
|
5,600
|
|
|
$
|
5,540
|
|
|
$
|
5,600
|
|
|
$
|
5,537
|
|
(1)
|
Carrying amount is net of unamortized debt discount and deferred debt issuance costs. Total unamortized debt discount was
$7 million
as of both
June 30, 2016
and
December 31, 2015
, and total deferred debt issuance costs were
$53 million
and
$56 million
as of
June 30, 2016
and
December 31, 2015
, respectively.
|
(2)
|
In connection with our adoption of ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, carrying amounts as of December 31, 2015 have been retrospectively adjusted to include a direct deduction of deferred debt issuance costs of
$56 million
. Prior to the adoption, these costs were included in other assets on our consolidated balance sheets. See Note
2—New Accounting Standards
for additional information.
|
|
Unrealized gain (loss) recognized in income
|
||||||||
|
|
|
Three months ended
June 30, |
||||||
Location
|
|
2016
|
|
2015
|
|||||
|
|
|
(in millions)
|
||||||
Natural gas derivatives
|
Cost of sales
|
|
$
|
211
|
|
|
$
|
19
|
|
Foreign currency derivatives
|
Other operating—net
|
|
(4
|
)
|
|
15
|
|
||
Unrealized gains recognized in income
|
|
$
|
207
|
|
|
$
|
34
|
|
|
Gain (loss) in income
|
||||||
|
Three months ended
June 30, |
||||||
All Derivatives
|
2016
|
|
2015
|
||||
|
(in millions)
|
||||||
Unrealized net gains
|
$
|
207
|
|
|
$
|
34
|
|
Realized net losses
|
(59
|
)
|
|
(16
|
)
|
||
Net derivative gains
|
$
|
148
|
|
|
$
|
18
|
|
|
Unrealized gain (loss) recognized in income
|
||||||||
|
|
|
Six months ended
June 30, |
||||||
Location
|
|
2016
|
|
2015
|
|||||
|
|
|
(in millions)
|
||||||
Natural gas derivatives
|
Cost of sales
|
|
$
|
190
|
|
|
$
|
47
|
|
Foreign currency derivatives
|
Other operating—net
|
|
(1
|
)
|
|
3
|
|
||
Unrealized gains recognized in income
|
|
$
|
189
|
|
|
$
|
50
|
|
|
Gain (loss) in income
|
||||||
|
Six months ended
June 30, |
||||||
All Derivatives
|
2016
|
|
2015
|
||||
|
(in millions)
|
||||||
Unrealized net gains
|
$
|
189
|
|
|
$
|
50
|
|
Realized net losses
|
(115
|
)
|
|
(59
|
)
|
||
Net derivative gains (losses)
|
$
|
74
|
|
|
$
|
(9
|
)
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||||||
|
Balance Sheet
Location
|
|
June 30,
2016 |
|
December 31,
2015 |
|
Balance Sheet
Location
|
|
June 30,
2016 |
|
December 31,
2015 |
||||||||
|
|
|
(in millions)
|
|
|
|
(in millions)
|
||||||||||||
Foreign currency derivatives
|
Other current assets
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Other current liabilities
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
Foreign currency derivatives
|
Other assets
|
|
—
|
|
|
—
|
|
|
Other liabilities
|
|
—
|
|
|
—
|
|
||||
Natural gas derivatives
|
Other current assets
|
|
13
|
|
|
—
|
|
|
Other current liabilities
|
|
(16
|
)
|
|
(130
|
)
|
||||
Natural gas derivatives
|
Other assets
|
|
1
|
|
|
—
|
|
|
Other liabilities
|
|
(19
|
)
|
|
(81
|
)
|
||||
Total derivatives
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
|
|
$
|
(36
|
)
|
|
$
|
(211
|
)
|
Current / Noncurrent totals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Other current assets
|
|
$
|
13
|
|
|
$
|
—
|
|
|
Other current liabilities
|
|
$
|
(17
|
)
|
|
$
|
(130
|
)
|
|
Other assets
|
|
1
|
|
|
—
|
|
|
Other liabilities
|
|
(19
|
)
|
|
(81
|
)
|
||||
Total derivatives
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
|
|
$
|
(36
|
)
|
|
$
|
(211
|
)
|
|
Amounts
presented in
consolidated
balance
sheets
(1)
|
|
Gross amounts not offset in consolidated balance sheets
|
|
|
||||||||||
|
|
Financial
instruments
|
|
Cash
collateral
received
(pledged)
|
|
Net
amount
|
|||||||||
|
(in millions)
|
||||||||||||||
June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total derivative assets
|
$
|
14
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total derivative liabilities
|
36
|
|
|
14
|
|
|
—
|
|
|
22
|
|
||||
Net derivative liabilities
|
$
|
(22
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(22
|
)
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total derivative assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total derivative liabilities
|
211
|
|
|
—
|
|
|
—
|
|
|
211
|
|
||||
Net derivative liabilities
|
$
|
(211
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(211
|
)
|
(1)
|
We report the fair values of our derivative assets and liabilities on a gross basis on our consolidated balance sheets. As a result, the gross amounts recognized and net amounts presented are the same.
|
|
Six months ended
June 30, |
||||||||||||||
|
2016
|
|
2015
|
||||||||||||
|
CFN
|
|
TNCLP
|
|
Total
|
|
TNCLP
|
||||||||
|
(in millions)
|
||||||||||||||
Noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
—
|
|
|
$
|
352
|
|
|
$
|
352
|
|
|
$
|
363
|
|
Issuance of noncontrolling interest in CFN
|
2,792
|
|
|
—
|
|
|
2,792
|
|
|
—
|
|
||||
Earnings attributable to noncontrolling interests
|
40
|
|
|
17
|
|
|
57
|
|
|
18
|
|
||||
Declaration of distributions payable
|
—
|
|
|
(20
|
)
|
|
(20
|
)
|
|
(21
|
)
|
||||
Ending balance
|
$
|
2,832
|
|
|
$
|
349
|
|
|
$
|
3,181
|
|
|
$
|
360
|
|
Distributions payable to noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Declaration of distributions payable
|
—
|
|
|
20
|
|
|
20
|
|
|
21
|
|
||||
Distributions to noncontrolling interest
|
—
|
|
|
(20
|
)
|
|
(20
|
)
|
|
(21
|
)
|
||||
Ending balance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Foreign
Currency
Translation
Adjustment
|
|
Unrealized
Gain (Loss)
on
Securities
|
|
Unrealized
Gain (Loss)
on
Derivatives
|
|
Defined
Benefit
Plans
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Balance as of December 31, 2014
|
$
|
(41
|
)
|
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
(125
|
)
|
|
$
|
(160
|
)
|
Loss arising during the period
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|||||
Reclassification to earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|||||
Effect of exchange rate changes and deferred taxes
|
(50
|
)
|
|
—
|
|
|
—
|
|
|
5
|
|
|
(45
|
)
|
|||||
Balance as of June 30, 2015
|
$
|
(91
|
)
|
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
(120
|
)
|
|
$
|
(205
|
)
|
Balance as of December 31, 2015
|
$
|
(198
|
)
|
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
(58
|
)
|
|
$
|
(250
|
)
|
Loss arising during the period
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|||||
Effect of exchange rate changes and deferred taxes
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||
Balance as of June 30, 2016
|
$
|
(188
|
)
|
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
(61
|
)
|
|
$
|
(243
|
)
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in millions)
|
||||||||||||||
Defined Benefit Plans
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of prior service (benefit) cost
(1)
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
Amortization of net loss
(1)
|
—
|
|
|
2
|
|
|
—
|
|
|
4
|
|
||||
Total before tax
|
—
|
|
|
1
|
|
|
—
|
|
|
3
|
|
||||
Tax effect
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Net of tax
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Total reclassifications for the period
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
2
|
|
(1)
|
These components are included in the computation of net periodic pension cost and were reclassified from accumulated other comprehensive income (loss) into cost of sales and selling, general and administrative expenses.
|
|
|
|
|
|
|
|
|
|
Ammonia
|
|
Granular
Urea (1) |
|
UAN
(1)
|
|
AN
(1)
|
|
Other
(1)
|
|
Consolidated
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Three months ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net sales
|
$
|
358
|
|
|
$
|
240
|
|
|
$
|
370
|
|
|
$
|
90
|
|
|
$
|
76
|
|
|
$
|
1,134
|
|
Cost of sales
|
152
|
|
|
118
|
|
|
197
|
|
|
90
|
|
|
50
|
|
|
607
|
|
||||||
Gross margin
|
$
|
206
|
|
|
$
|
122
|
|
|
$
|
173
|
|
|
$
|
—
|
|
|
$
|
26
|
|
|
527
|
|
|
Total other operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
280
|
|
|||||||
Equity in losses of operating affiliates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9
|
)
|
|||||||
Operating earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
238
|
|
||||||
Three months ended June 30, 2015
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net sales
|
$
|
599
|
|
|
$
|
211
|
|
|
$
|
407
|
|
|
$
|
48
|
|
|
$
|
46
|
|
|
$
|
1,311
|
|
Cost of sales
|
260
|
|
|
92
|
|
|
205
|
|
|
39
|
|
|
29
|
|
|
625
|
|
||||||
Gross margin
|
$
|
339
|
|
|
$
|
119
|
|
|
$
|
202
|
|
|
$
|
9
|
|
|
$
|
17
|
|
|
686
|
|
|
Total other operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
61
|
|
|||||||
Equity in earnings of operating affiliates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5
|
|
|||||||
Operating earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
630
|
|
|
Ammonia
|
|
Granular
Urea
(1)
|
|
UAN
(1)
|
|
AN
(1)
|
|
Other
(1)
|
|
Consolidated
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Six months ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net sales
|
$
|
625
|
|
|
$
|
475
|
|
|
$
|
679
|
|
|
$
|
215
|
|
|
$
|
144
|
|
|
$
|
2,138
|
|
Cost of sales
|
356
|
|
|
293
|
|
|
428
|
|
|
202
|
|
|
115
|
|
|
1,394
|
|
||||||
Gross margin
|
$
|
269
|
|
|
$
|
182
|
|
|
$
|
251
|
|
|
$
|
13
|
|
|
$
|
29
|
|
|
744
|
|
|
Total other operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
400
|
|
|||||||
Equity in losses of operating affiliates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9
|
)
|
|||||||
Operating earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
335
|
|
||||||
Six months ended June 30, 2015
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net sales
|
$
|
887
|
|
|
$
|
423
|
|
|
$
|
763
|
|
|
$
|
99
|
|
|
$
|
93
|
|
|
$
|
2,265
|
|
Cost of sales
|
428
|
|
|
192
|
|
|
402
|
|
|
82
|
|
|
59
|
|
|
1,163
|
|
||||||
Gross margin
|
$
|
459
|
|
|
$
|
231
|
|
|
$
|
361
|
|
|
$
|
17
|
|
|
$
|
34
|
|
|
1,102
|
|
|
Total other operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
119
|
|
|||||||
Equity in earnings of operating affiliates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14
|
|
|||||||
Operating earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
997
|
|
(1)
|
The cost of the products that are upgraded into other products is transferred at cost into the upgraded product results.
|
(2)
|
In the third quarter of 2015, we changed the composition of our reportable segments. Prior-year results have been recast to conform with the new presentation of reportable segments.
|
|
Three months ended June 30, 2016
|
||||||||||||||||||
|
Parent
|
|
CF Industries
|
|
Other
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
58
|
|
|
$
|
1,192
|
|
|
$
|
(116
|
)
|
|
$
|
1,134
|
|
Cost of sales
|
—
|
|
|
78
|
|
|
645
|
|
|
(116
|
)
|
|
607
|
|
|||||
Gross margin
|
—
|
|
|
(20
|
)
|
|
547
|
|
|
—
|
|
|
527
|
|
|||||
Selling, general and administrative expenses
|
1
|
|
|
3
|
|
|
48
|
|
|
—
|
|
|
52
|
|
|||||
Transaction costs
|
(56
|
)
|
|
—
|
|
|
221
|
|
|
—
|
|
|
165
|
|
|||||
Other operating—net
|
1
|
|
|
(1
|
)
|
|
63
|
|
|
—
|
|
|
63
|
|
|||||
Total other operating costs and expenses
|
(54
|
)
|
|
2
|
|
|
332
|
|
|
—
|
|
|
280
|
|
|||||
Equity in losses of operating affiliates
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
|||||
Operating earnings (losses)
|
54
|
|
|
(22
|
)
|
|
206
|
|
|
—
|
|
|
238
|
|
|||||
Interest expense
|
—
|
|
|
77
|
|
|
3
|
|
|
(19
|
)
|
|
61
|
|
|||||
Interest income
|
—
|
|
|
(13
|
)
|
|
(7
|
)
|
|
19
|
|
|
(1
|
)
|
|||||
Net earnings of wholly owned subsidiaries
|
(23
|
)
|
|
(63
|
)
|
|
—
|
|
|
86
|
|
|
—
|
|
|||||
Earnings before income taxes and equity in losses of non-operating affiliates
|
77
|
|
|
(23
|
)
|
|
210
|
|
|
(86
|
)
|
|
178
|
|
|||||
Income tax provision (benefit)
|
30
|
|
|
(46
|
)
|
|
111
|
|
|
—
|
|
|
95
|
|
|||||
Equity in losses of non-operating affiliates—net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net earnings
|
47
|
|
|
23
|
|
|
99
|
|
|
(86
|
)
|
|
83
|
|
|||||
Less: Net earnings attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
36
|
|
|||||
Net earnings attributable to common stockholders
|
$
|
47
|
|
|
$
|
23
|
|
|
$
|
63
|
|
|
$
|
(86
|
)
|
|
$
|
47
|
|
|
Three months ended June 30, 2016
|
||||||||||||||||||
|
Parent
|
|
CF Industries
|
|
Other
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net earnings
|
$
|
47
|
|
|
$
|
23
|
|
|
$
|
99
|
|
|
$
|
(86
|
)
|
|
$
|
83
|
|
Other comprehensive losses
|
(41
|
)
|
|
(41
|
)
|
|
(40
|
)
|
|
81
|
|
|
(41
|
)
|
|||||
Comprehensive income (losses)
|
6
|
|
|
(18
|
)
|
|
59
|
|
|
(5
|
)
|
|
42
|
|
|||||
Less: Comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
36
|
|
|||||
Comprehensive income (losses) attributable to common stockholders
|
$
|
6
|
|
|
$
|
(18
|
)
|
|
$
|
23
|
|
|
$
|
(5
|
)
|
|
$
|
6
|
|
|
Six months ended June 30, 2016
|
||||||||||||||||||
|
Parent
|
|
CF Industries
|
|
Other
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
203
|
|
|
$
|
2,229
|
|
|
$
|
(294
|
)
|
|
$
|
2,138
|
|
Cost of sales
|
—
|
|
|
126
|
|
|
1,562
|
|
|
(294
|
)
|
|
1,394
|
|
|||||
Gross margin
|
—
|
|
|
77
|
|
|
667
|
|
|
—
|
|
|
744
|
|
|||||
Selling, general and administrative expenses
|
2
|
|
|
4
|
|
|
91
|
|
|
—
|
|
|
97
|
|
|||||
Transaction costs
|
(46
|
)
|
|
—
|
|
|
225
|
|
|
—
|
|
|
179
|
|
|||||
Other operating—net
|
—
|
|
|
—
|
|
|
124
|
|
|
—
|
|
|
124
|
|
|||||
Total other operating costs and expenses
|
(44
|
)
|
|
4
|
|
|
440
|
|
|
—
|
|
|
400
|
|
|||||
Equity in losses of operating affiliates
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
|||||
Operating earnings
|
44
|
|
|
73
|
|
|
218
|
|
|
—
|
|
|
335
|
|
|||||
Interest expense
|
—
|
|
|
162
|
|
|
(21
|
)
|
|
(42
|
)
|
|
99
|
|
|||||
Interest income
|
—
|
|
|
(30
|
)
|
|
(14
|
)
|
|
42
|
|
|
(2
|
)
|
|||||
Net earnings of wholly owned subsidiaries
|
(55
|
)
|
|
(77
|
)
|
|
—
|
|
|
132
|
|
|
—
|
|
|||||
Other non-operating—net
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Earnings before income taxes and equity in losses of non-operating affiliates
|
99
|
|
|
18
|
|
|
255
|
|
|
(132
|
)
|
|
240
|
|
|||||
Income tax provision (benefit)
|
26
|
|
|
(37
|
)
|
|
121
|
|
|
—
|
|
|
110
|
|
|||||
Equity in losses of non-operating affiliates—net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net earnings
|
73
|
|
|
55
|
|
|
134
|
|
|
(132
|
)
|
|
130
|
|
|||||
Less: Net earnings attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
57
|
|
|
—
|
|
|
57
|
|
|||||
Net earnings attributable to common stockholders
|
$
|
73
|
|
|
$
|
55
|
|
|
$
|
77
|
|
|
$
|
(132
|
)
|
|
$
|
73
|
|
|
Six months ended June 30, 2016
|
||||||||||||||||||
|
Parent
|
|
CF Industries
|
|
Other
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net earnings
|
$
|
73
|
|
|
$
|
55
|
|
|
$
|
134
|
|
|
$
|
(132
|
)
|
|
$
|
130
|
|
Other comprehensive income
|
7
|
|
|
7
|
|
|
7
|
|
|
(14
|
)
|
|
7
|
|
|||||
Comprehensive income
|
80
|
|
|
62
|
|
|
141
|
|
|
(146
|
)
|
|
137
|
|
|||||
Less: Comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
57
|
|
|
—
|
|
|
57
|
|
|||||
Comprehensive income attributable to common stockholders
|
$
|
80
|
|
|
$
|
62
|
|
|
$
|
84
|
|
|
$
|
(146
|
)
|
|
$
|
80
|
|
|
Three months ended June 30, 2015
|
||||||||||||||||||
|
Parent
|
|
CF Industries
|
|
Other
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
111
|
|
|
$
|
1,393
|
|
|
$
|
(193
|
)
|
|
$
|
1,311
|
|
Cost of sales
|
—
|
|
|
111
|
|
|
707
|
|
|
(193
|
)
|
|
625
|
|
|||||
Gross margin
|
—
|
|
|
—
|
|
|
686
|
|
|
—
|
|
|
686
|
|
|||||
Selling, general and administrative expenses
|
1
|
|
|
1
|
|
|
36
|
|
|
—
|
|
|
38
|
|
|||||
Other operating—net
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
23
|
|
|||||
Total other operating costs and expenses
|
1
|
|
|
1
|
|
|
59
|
|
|
—
|
|
|
61
|
|
|||||
Equity in earnings of operating affiliates
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||
Operating (losses) earnings
|
(1
|
)
|
|
(1
|
)
|
|
632
|
|
|
—
|
|
|
630
|
|
|||||
Interest expense
|
—
|
|
|
66
|
|
|
(22
|
)
|
|
(15
|
)
|
|
29
|
|
|||||
Interest income
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
15
|
|
|
—
|
|
|||||
Net earnings of wholly owned subsidiaries
|
(353
|
)
|
|
(386
|
)
|
|
—
|
|
|
739
|
|
|
—
|
|
|||||
Earnings before income taxes and equity in losses of non-operating affiliates
|
352
|
|
|
334
|
|
|
654
|
|
|
(739
|
)
|
|
601
|
|
|||||
Income tax (benefit) provision
|
—
|
|
|
(19
|
)
|
|
219
|
|
|
—
|
|
|
200
|
|
|||||
Equity in losses of non-operating affiliates—net of taxes
|
—
|
|
|
—
|
|
|
(36
|
)
|
|
—
|
|
|
(36
|
)
|
|||||
Net earnings
|
352
|
|
|
353
|
|
|
399
|
|
|
(739
|
)
|
|
365
|
|
|||||
Less: Net earnings attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|||||
Net earnings attributable to common stockholders
|
$
|
352
|
|
|
$
|
353
|
|
|
$
|
386
|
|
|
$
|
(739
|
)
|
|
$
|
352
|
|
|
Three months ended June 30, 2015
|
||||||||||||||||||
|
Parent
|
|
CF Industries
|
|
Other
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net earnings
|
$
|
352
|
|
|
$
|
353
|
|
|
$
|
399
|
|
|
$
|
(739
|
)
|
|
$
|
365
|
|
Other comprehensive income
|
35
|
|
|
34
|
|
|
36
|
|
|
(70
|
)
|
|
35
|
|
|||||
Comprehensive income
|
387
|
|
|
387
|
|
|
435
|
|
|
(809
|
)
|
|
400
|
|
|||||
Less: Comprehensive income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|||||
Comprehensive income attributable to common stockholders
|
$
|
387
|
|
|
$
|
387
|
|
|
$
|
422
|
|
|
$
|
(809
|
)
|
|
$
|
387
|
|
|
Six months ended June 30, 2015
|
||||||||||||||||||
|
Parent
|
|
CF Industries
|
|
Other
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
192
|
|
|
$
|
2,397
|
|
|
$
|
(324
|
)
|
|
$
|
2,265
|
|
Cost of sales
|
—
|
|
|
192
|
|
|
1,295
|
|
|
(324
|
)
|
|
1,163
|
|
|||||
Gross margin
|
—
|
|
|
—
|
|
|
1,102
|
|
|
—
|
|
|
1,102
|
|
|||||
Selling, general and administrative expenses
|
2
|
|
|
1
|
|
|
75
|
|
|
—
|
|
|
78
|
|
|||||
Other operating—net
|
—
|
|
|
(5
|
)
|
|
46
|
|
|
—
|
|
|
41
|
|
|||||
Total other operating costs and expenses
|
2
|
|
|
(4
|
)
|
|
121
|
|
|
—
|
|
|
119
|
|
|||||
Equity in earnings of operating affiliates
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
|||||
Operating (losses) earnings
|
(2
|
)
|
|
4
|
|
|
995
|
|
|
—
|
|
|
997
|
|
|||||
Interest expense
|
—
|
|
|
131
|
|
|
(53
|
)
|
|
(15
|
)
|
|
63
|
|
|||||
Interest income
|
—
|
|
|
(15
|
)
|
|
(1
|
)
|
|
15
|
|
|
(1
|
)
|
|||||
Net earnings of wholly owned subsidiaries
|
(584
|
)
|
|
(657
|
)
|
|
—
|
|
|
1,241
|
|
|
—
|
|
|||||
Earnings before income taxes and equity in losses of non-operating affiliates
|
582
|
|
|
545
|
|
|
1,049
|
|
|
(1,241
|
)
|
|
935
|
|
|||||
Income tax (benefit) provision
|
(1
|
)
|
|
(39
|
)
|
|
353
|
|
|
—
|
|
|
313
|
|
|||||
Equity in losses of non-operating affiliates—net of taxes
|
—
|
|
|
—
|
|
|
(21
|
)
|
|
—
|
|
|
(21
|
)
|
|||||
Net earnings
|
583
|
|
|
584
|
|
|
675
|
|
|
(1,241
|
)
|
|
601
|
|
|||||
Less: Net earnings attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
18
|
|
|||||
Net earnings attributable to common stockholders
|
$
|
583
|
|
|
$
|
584
|
|
|
$
|
657
|
|
|
$
|
(1,241
|
)
|
|
$
|
583
|
|
|
Six months ended June 30, 2015
|
||||||||||||||||||
|
Parent
|
|
CF Industries
|
|
Other
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net earnings
|
$
|
583
|
|
|
$
|
584
|
|
|
$
|
675
|
|
|
$
|
(1,241
|
)
|
|
$
|
601
|
|
Other comprehensive losses
|
(45
|
)
|
|
(46
|
)
|
|
(45
|
)
|
|
91
|
|
|
(45
|
)
|
|||||
Comprehensive income
|
538
|
|
|
538
|
|
|
630
|
|
|
(1,150
|
)
|
|
556
|
|
|||||
Less: Comprehensive income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
18
|
|
|||||
Comprehensive income attributable to common stockholders
|
$
|
538
|
|
|
$
|
538
|
|
|
$
|
612
|
|
|
$
|
(1,150
|
)
|
|
$
|
538
|
|
|
June 30, 2016
|
||||||||||||||||||
|
Parent
|
|
CF Industries
|
|
Other
Subsidiaries
|
|
Eliminations
and
Reclassifications
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
2,003
|
|
|
$
|
—
|
|
|
$
|
2,008
|
|
Restricted cash
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|||||
Accounts and notes receivable—net
|
—
|
|
|
1,314
|
|
|
1,494
|
|
|
(2,569
|
)
|
|
239
|
|
|||||
Inventories
|
—
|
|
|
—
|
|
|
231
|
|
|
—
|
|
|
231
|
|
|||||
Prepaid income taxes
|
—
|
|
|
—
|
|
|
855
|
|
|
—
|
|
|
855
|
|
|||||
Other current assets
|
—
|
|
|
—
|
|
|
34
|
|
|
—
|
|
|
34
|
|
|||||
Total current assets
|
3
|
|
|
1,316
|
|
|
4,624
|
|
|
(2,569
|
)
|
|
3,374
|
|
|||||
Property, plant and equipment—net
|
—
|
|
|
—
|
|
|
9,413
|
|
|
—
|
|
|
9,413
|
|
|||||
Investments in affiliates
|
4,225
|
|
|
9,664
|
|
|
289
|
|
|
(13,889
|
)
|
|
289
|
|
|||||
Due from affiliates
|
571
|
|
|
—
|
|
|
2
|
|
|
(573
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
—
|
|
|
2,363
|
|
|
—
|
|
|
2,363
|
|
|||||
Other assets
|
—
|
|
|
17
|
|
|
306
|
|
|
—
|
|
|
323
|
|
|||||
Total assets
|
$
|
4,799
|
|
|
$
|
10,997
|
|
|
$
|
16,997
|
|
|
$
|
(17,031
|
)
|
|
$
|
15,762
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts and notes payable and accrued expenses
|
$
|
815
|
|
|
$
|
523
|
|
|
$
|
1,973
|
|
|
$
|
(2,569
|
)
|
|
$
|
742
|
|
Income taxes payable
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Customer advances
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|||||
Other current liabilities
|
—
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
|||||
Total current liabilities
|
815
|
|
|
523
|
|
|
2,004
|
|
|
(2,569
|
)
|
|
773
|
|
|||||
Long-term debt
|
—
|
|
|
5,540
|
|
|
—
|
|
|
—
|
|
|
5,540
|
|
|||||
Deferred income taxes
|
—
|
|
|
71
|
|
|
1,716
|
|
|
—
|
|
|
1,787
|
|
|||||
Due to affiliates
|
—
|
|
|
573
|
|
|
—
|
|
|
(573
|
)
|
|
—
|
|
|||||
Other liabilities
|
—
|
|
|
65
|
|
|
432
|
|
|
—
|
|
|
497
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Preferred stock
|
—
|
|
|
—
|
|
|
16
|
|
|
(16
|
)
|
|
—
|
|
|||||
Common stock
|
2
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
2
|
|
|||||
Paid-in capital
|
1,384
|
|
|
(12
|
)
|
|
9,937
|
|
|
(9,925
|
)
|
|
1,384
|
|
|||||
Retained earnings
|
2,991
|
|
|
4,480
|
|
|
(47
|
)
|
|
(4,433
|
)
|
|
2,991
|
|
|||||
Treasury stock
|
(150
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(150
|
)
|
|||||
Accumulated other comprehensive loss
|
(243
|
)
|
|
(243
|
)
|
|
(243
|
)
|
|
486
|
|
|
(243
|
)
|
|||||
Total stockholders' equity
|
3,984
|
|
|
4,225
|
|
|
9,664
|
|
|
(13,889
|
)
|
|
3,984
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
3,181
|
|
|
—
|
|
|
3,181
|
|
|||||
Total equity
|
3,984
|
|
|
4,225
|
|
|
12,845
|
|
|
(13,889
|
)
|
|
7,165
|
|
|||||
Total liabilities and equity
|
$
|
4,799
|
|
|
$
|
10,997
|
|
|
$
|
16,997
|
|
|
$
|
(17,031
|
)
|
|
$
|
15,762
|
|
|
December 31, 2015
|
||||||||||||||||||
|
Parent
|
|
CF Industries
|
|
Other
Subsidiaries
|
|
Eliminations
and
Reclassifications
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
285
|
|
|
$
|
—
|
|
|
$
|
286
|
|
Restricted cash
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
23
|
|
|||||
Accounts and notes receivable—net
|
1
|
|
|
2,987
|
|
|
1,565
|
|
|
(4,286
|
)
|
|
267
|
|
|||||
Inventories
|
—
|
|
|
—
|
|
|
321
|
|
|
—
|
|
|
321
|
|
|||||
Prepaid income taxes
|
—
|
|
|
—
|
|
|
185
|
|
|
—
|
|
|
185
|
|
|||||
Other current assets
|
—
|
|
|
24
|
|
|
21
|
|
|
—
|
|
|
45
|
|
|||||
Total current assets
|
2
|
|
|
3,011
|
|
|
2,400
|
|
|
(4,286
|
)
|
|
1,127
|
|
|||||
Property, plant and equipment—net
|
—
|
|
|
—
|
|
|
8,539
|
|
|
—
|
|
|
8,539
|
|
|||||
Investments in affiliates
|
4,303
|
|
|
8,148
|
|
|
298
|
|
|
(12,451
|
)
|
|
298
|
|
|||||
Due from affiliates
|
571
|
|
|
—
|
|
|
2
|
|
|
(573
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
—
|
|
|
2,390
|
|
|
—
|
|
|
2,390
|
|
|||||
Other assets
|
—
|
|
|
19
|
|
|
310
|
|
|
—
|
|
|
329
|
|
|||||
Total assets
|
$
|
4,876
|
|
|
$
|
11,178
|
|
|
$
|
13,939
|
|
|
$
|
(17,310
|
)
|
|
$
|
12,683
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts and notes payable and accrued expenses
|
$
|
841
|
|
|
$
|
648
|
|
|
$
|
3,715
|
|
|
$
|
(4,286
|
)
|
|
$
|
918
|
|
Income taxes payable
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||
Customer advances
|
—
|
|
|
—
|
|
|
162
|
|
|
—
|
|
|
162
|
|
|||||
Other current liabilities
|
—
|
|
|
—
|
|
|
130
|
|
|
—
|
|
|
130
|
|
|||||
Total current liabilities
|
841
|
|
|
648
|
|
|
4,012
|
|
|
(4,286
|
)
|
|
1,215
|
|
|||||
Long-term debt
|
—
|
|
|
5,537
|
|
|
—
|
|
|
—
|
|
|
5,537
|
|
|||||
Deferred income taxes
|
—
|
|
|
52
|
|
|
864
|
|
|
—
|
|
|
916
|
|
|||||
Due to affiliates
|
—
|
|
|
573
|
|
|
—
|
|
|
(573
|
)
|
|
—
|
|
|||||
Other liabilities
|
—
|
|
|
66
|
|
|
562
|
|
|
—
|
|
|
628
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Preferred stock
|
—
|
|
|
—
|
|
|
17
|
|
|
(17
|
)
|
|
—
|
|
|||||
Common stock
|
2
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
2
|
|
|||||
Paid-in capital
|
1,378
|
|
|
(13
|
)
|
|
8,365
|
|
|
(8,352
|
)
|
|
1,378
|
|
|||||
Retained earnings
|
3,058
|
|
|
4,565
|
|
|
16
|
|
|
(4,581
|
)
|
|
3,058
|
|
|||||
Treasury stock
|
(153
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(153
|
)
|
|||||
Accumulated other comprehensive loss
|
(250
|
)
|
|
(250
|
)
|
|
(250
|
)
|
|
500
|
|
|
(250
|
)
|
|||||
Total stockholders' equity
|
4,035
|
|
|
4,302
|
|
|
8,149
|
|
|
(12,451
|
)
|
|
4,035
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
352
|
|
|
—
|
|
|
352
|
|
|||||
Total equity
|
4,035
|
|
|
4,302
|
|
|
8,501
|
|
|
(12,451
|
)
|
|
4,387
|
|
|||||
Total liabilities and equity
|
$
|
4,876
|
|
|
$
|
11,178
|
|
|
$
|
13,939
|
|
|
$
|
(17,310
|
)
|
|
$
|
12,683
|
|
|
Six months ended June 30, 2016
|
||||||||||||||||||
|
Parent
|
|
CF Industries
|
|
Other
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net earnings
|
$
|
73
|
|
|
$
|
55
|
|
|
$
|
134
|
|
|
$
|
(132
|
)
|
|
$
|
130
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization
|
—
|
|
|
5
|
|
|
322
|
|
|
—
|
|
|
327
|
|
|||||
Deferred income taxes
|
—
|
|
|
20
|
|
|
855
|
|
|
—
|
|
|
875
|
|
|||||
Stock-based compensation expense
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|||||
Unrealized gain on derivatives
|
—
|
|
|
—
|
|
|
(189
|
)
|
|
—
|
|
|
(189
|
)
|
|||||
Loss on disposal of property, plant and equipment
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||
Undistributed (earnings) loss of affiliates—net
|
(54
|
)
|
|
(78
|
)
|
|
1
|
|
|
132
|
|
|
1
|
|
|||||
Changes in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts and notes receivable—net
|
1
|
|
|
139
|
|
|
(68
|
)
|
|
(48
|
)
|
|
24
|
|
|||||
Inventories
|
—
|
|
|
—
|
|
|
81
|
|
|
—
|
|
|
81
|
|
|||||
Accrued and prepaid income taxes
|
—
|
|
|
—
|
|
|
(673
|
)
|
|
—
|
|
|
(673
|
)
|
|||||
Accounts and notes payable and accrued expenses
|
(9
|
)
|
|
(79
|
)
|
|
(27
|
)
|
|
48
|
|
|
(67
|
)
|
|||||
Customer advances
|
—
|
|
|
—
|
|
|
(149
|
)
|
|
—
|
|
|
(149
|
)
|
|||||
Other—net
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
73
|
|
|||||
Net cash provided by operating activities
|
20
|
|
|
62
|
|
|
364
|
|
|
—
|
|
|
446
|
|
|||||
Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Additions to property, plant and equipment
|
—
|
|
|
—
|
|
|
(1,379
|
)
|
|
—
|
|
|
(1,379
|
)
|
|||||
Proceeds from sale of property, plant and equipment
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
Withdrawals from restricted cash funds
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|||||
Other—net
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||
Net cash used in investing activities
|
—
|
|
|
—
|
|
|
(1,358
|
)
|
|
—
|
|
|
(1,358
|
)
|
|||||
Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Short-term debt—net
|
(18
|
)
|
|
(60
|
)
|
|
78
|
|
|
—
|
|
|
—
|
|
|||||
Financing fees
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Dividends paid on common stock
|
(140
|
)
|
|
(140
|
)
|
|
(140
|
)
|
|
280
|
|
|
(140
|
)
|
|||||
Dividends to/from affiliates
|
140
|
|
|
140
|
|
|
—
|
|
|
(280
|
)
|
|
—
|
|
|||||
Issuance of noncontrolling interest in CFN
|
—
|
|
|
—
|
|
|
2,800
|
|
|
—
|
|
|
2,800
|
|
|||||
Distributions to noncontrolling interest
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
(20
|
)
|
|||||
Net cash (used in) provided by financing activities
|
(18
|
)
|
|
(60
|
)
|
|
2,713
|
|
|
—
|
|
|
2,635
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Increase in cash and cash equivalents
|
2
|
|
|
2
|
|
|
1,718
|
|
|
—
|
|
|
1,722
|
|
|||||
Cash and cash equivalents at beginning of period
|
1
|
|
|
—
|
|
|
285
|
|
|
—
|
|
|
286
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
2,003
|
|
|
$
|
—
|
|
|
$
|
2,008
|
|
|
Six months ended June 30, 2015
|
||||||||||||||||||
|
Parent
|
|
CF Industries
|
|
Other
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net earnings
|
$
|
583
|
|
|
$
|
584
|
|
|
$
|
675
|
|
|
$
|
(1,241
|
)
|
|
$
|
601
|
|
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization
|
—
|
|
|
3
|
|
|
216
|
|
|
—
|
|
|
219
|
|
|||||
Deferred income taxes
|
—
|
|
|
20
|
|
|
(26
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Stock-based compensation expense
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|||||
Excess tax benefit from stock-based compensation
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Unrealized gain on derivatives
|
—
|
|
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
(43
|
)
|
|||||
Loss on sale of equity method investments
|
—
|
|
|
—
|
|
|
43
|
|
|
—
|
|
|
43
|
|
|||||
Loss on disposal of property, plant and equipment
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
|||||
Undistributed (earnings) loss of affiliates—net
|
(584
|
)
|
|
(657
|
)
|
|
(16
|
)
|
|
1,241
|
|
|
(16
|
)
|
|||||
Due to/from affiliates—net
|
2
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||||
Changes in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts and notes receivable—net
|
—
|
|
|
(65
|
)
|
|
(82
|
)
|
|
143
|
|
|
(4
|
)
|
|||||
Inventories
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|||||
Accrued and prepaid income taxes
|
(1
|
)
|
|
(10
|
)
|
|
41
|
|
|
—
|
|
|
30
|
|
|||||
Accounts and notes payable and accrued expenses
|
—
|
|
|
76
|
|
|
34
|
|
|
(143
|
)
|
|
(33
|
)
|
|||||
Customer advances
|
—
|
|
|
—
|
|
|
(308
|
)
|
|
—
|
|
|
(308
|
)
|
|||||
Other—net
|
—
|
|
|
1
|
|
|
3
|
|
|
—
|
|
|
4
|
|
|||||
Net cash provided by (used in) operating activities
|
6
|
|
|
(48
|
)
|
|
541
|
|
|
—
|
|
|
499
|
|
|||||
Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Additions to property, plant and equipment
|
—
|
|
|
—
|
|
|
(1,032
|
)
|
|
—
|
|
|
(1,032
|
)
|
|||||
Proceeds from sale of property, plant and equipment
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|||||
Proceeds from sale of equity method investment
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|||||
Withdrawals from restricted cash funds
|
—
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
32
|
|
|||||
Other—net
|
—
|
|
|
(1
|
)
|
|
(22
|
)
|
|
1
|
|
|
(22
|
)
|
|||||
Net cash used in investing activities
|
—
|
|
|
(1
|
)
|
|
(1,001
|
)
|
|
1
|
|
|
(1,001
|
)
|
|||||
Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Short-term debt—net
|
508
|
|
|
(50
|
)
|
|
(458
|
)
|
|
—
|
|
|
—
|
|
|||||
Financing fees
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Dividends paid on common stock
|
(143
|
)
|
|
(143
|
)
|
|
(142
|
)
|
|
285
|
|
|
(143
|
)
|
|||||
Dividends to/from affiliates
|
143
|
|
|
142
|
|
|
—
|
|
|
(285
|
)
|
|
—
|
|
|||||
Distributions to noncontrolling interest
|
—
|
|
|
—
|
|
|
(21
|
)
|
|
—
|
|
|
(21
|
)
|
|||||
Purchases of treasury stock
|
(523
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(523
|
)
|
|||||
Issuances of common stock under employee stock plans
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Excess tax benefit from stock-based compensation
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Other—net
|
—
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||||
Net cash used in financing activities
|
(6
|
)
|
|
(53
|
)
|
|
(620
|
)
|
|
(1
|
)
|
|
(680
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Decrease in cash and cash equivalents
|
—
|
|
|
(102
|
)
|
|
(1,085
|
)
|
|
—
|
|
|
(1,187
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
—
|
|
|
106
|
|
|
1,891
|
|
|
—
|
|
|
1,997
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
806
|
|
|
$
|
—
|
|
|
$
|
810
|
|
•
|
Overview of CF Holdings
|
•
|
Our Company
|
•
|
Items Affecting Comparability of Results
|
•
|
Financial Executive Summary
|
•
|
Results of Consolidated Operations
|
•
|
Second
Quarter of
2016
Compared to
Second
Quarter of
2015
|
•
|
Six Months Ended June 30, 2016
Compared to
Six Months Ended June 30, 2015
|
•
|
Operating Results by Business Segment
|
•
|
Liquidity and Capital Resources
|
•
|
Off-Balance Sheet Arrangements
|
•
|
Critical Accounting Policies and Estimates
|
•
|
Recent Accounting Pronouncements
|
•
|
Forward-Looking Statements
|
▪
|
Nitrogen Fertilizer Market Conditions
|
▪
|
CF Fertilisers UK Acquisition
|
▪
|
Termination of Agreement to Combine with Certain of OCI N.V.’s Businesses
|
▪
|
Strategic Venture with CHS
|
▪
|
Capacity Expansion Projects
|
|
CF Holdings Reportable Segments
|
|
|
||||||||||||
CF Fertilisers UK
|
Ammonia
|
|
AN
|
|
Other
|
|
Consolidated
|
||||||||
|
(in millions, except percentages)
|
||||||||||||||
Three months ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|||||
Sales volume by product tons (000s)
|
27
|
|
|
221
|
|
|
212
|
|
|
460
|
|
||||
Net sales
|
$
|
7
|
|
|
$
|
49
|
|
|
$
|
38
|
|
|
$
|
94
|
|
Cost of sales
|
6
|
|
|
48
|
|
|
36
|
|
|
90
|
|
||||
Gross margin
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
4
|
|
Gross margin percentage
|
14.3
|
%
|
|
2.0
|
%
|
|
5.3
|
%
|
|
4.3
|
%
|
||||
Six months ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|||||
Sales volume by product tons (000s)
|
83
|
|
|
557
|
|
|
411
|
|
|
1,051
|
|
||||
Net sales
|
$
|
22
|
|
|
$
|
132
|
|
|
$
|
73
|
|
|
$
|
227
|
|
Cost of sales
|
19
|
|
|
120
|
|
|
71
|
|
|
210
|
|
||||
Gross margin
|
$
|
3
|
|
|
$
|
12
|
|
|
$
|
2
|
|
|
$
|
17
|
|
Gross margin percentage
|
13.6
|
%
|
|
9.1
|
%
|
|
2.7
|
%
|
|
7.5
|
%
|
•
|
We reported net earnings attributable to common stockholders of
$47 million
in the
second
quarter of
2016
compared to net earnings of
$352 million
in the same quarter of
2015
, a
decrease
of
$305 million
, or
87%
.
|
•
|
Diluted net earnings per share attributable to common stockholders
decrease
d
$1.29
, or
87%
, to
$0.20
per share in the
second
quarter of
2016
from
$1.49
per share in the
second
quarter of
2015
. This
decrease
is due to lower net earnings partly offset by the
lower
diluted weighted-average shares outstanding in the
second
quarter of
2016
as compared to the prior year quarter. Diluted weighted-average shares outstanding
decreased
1%
between the
second
quarter of
2015
and the
second
quarter of
2016
due to our share repurchase activity in 2015.
|
•
|
During the
second
quarter of
2016
, we experienced
lower
net earnings compared to the
second
quarter of
2015
due primarily to
lower
gross margin and higher transaction costs, including the
$150 million
termination fee paid to OCI.
|
•
|
Our total gross margin
declined
by
$159 million
, or
23%
, to
$527 million
in the
second
quarter of
2016
from
$686 million
in the
second
quarter of
2015
. The impact of the CF Fertilisers UK acquisition increased gross margin in the current quarter by
$4 million
, or
1%
. The remaining
decrease
in gross margin of
$163 million
, or
24%
, was due primarily to lower average selling prices, the effect of which was partially offset by the impact of mark-to-market gains on natural gas derivatives and increased sales volume:
|
▪
|
Average selling prices, primarily UAN, ammonia, and granular urea,
decrease
d by
30%
, which reduced gross margin by $363 million.
|
▪
|
Unrealized net mark-to-market
gain
s on natural gas derivatives increased gross margin by
$192 million
as the
second
quarter of
2016
included a
$211 million
gain
and the
second
quarter of
2015
included a
$19 million
gain
.
|
▪
|
Sales volume, primarily granular urea and UAN,
increase
d by
13%
, which increased gross margin by $37 million.
|
•
|
Our
second
quarter
2016
results included
$38 million
of losses on foreign currency transactions primarily related to unrealized losses on foreign currency denominated intercompany debt not permanently invested (
$48 million
after tax),
$211 million
of unrealized net mark-to-market
gain
s (
$133 million
after tax) on natural gas derivatives,
$165 million
of transaction costs (
$84 million
after tax),
$19 million
of expenses (
$12 million
after tax) related to our capacity expansion projects in Donaldsonville, Louisiana and Port Neal, Iowa that did not qualify for capitalization, amortization of the financing fees related to the terminated bridge credit agreement of
$28 million
(
$18 million
after tax), and
$2 million
of realized and unrealized net
loss
es (
$1 million
after tax) on foreign currency derivatives related to our capacity expansion projects. Net earnings attributable to common stockholders of
$352 million
for the
second
quarter of
2015
included
$43 million
of losses (
$31 million
after tax) as a result of the sale of equity method investments,
$6 million
of
loss
es on foreign currency transactions (
$4 million
after tax),
$19 million
of unrealized net mark-to-market
gain
s (
$12 million
after tax) on natural gas derivatives,
$4 million
of realized and unrealized net
gain
s (
$2 million
after tax) on foreign currency derivatives related to our capacity expansion projects and
$12 million
of expenses (
$7 million
after tax) related to our capacity expansion projects that did not qualify for capitalization.
|
•
|
Our total net sales
decreased
$177 million
, or
14%
, in the
second
quarter of
2016
compared to the
second
quarter of
2015
including the acquisition of CF Fertilisers UK, which increased net sales by
$94 million
, or
7%
. The remaining
decline
in our net sales of
$271 million
, or
21%
, was due to a
30%
decrease
in average selling prices partially offset by a
13%
increase
in sales volume.
|
•
|
Net cash provided by operating activities during the first
six
months of
2016
was
$446 million
as compared to
$499 million
in the first
six
months of
2015
. The
$53 million
decrease
resulted from lower net earnings during the first
six
months of
2016
and working capital changes. The working capital changes include lower amounts paid for income taxes and higher tax refunds received in 2016 compared to the same period of 2015. Favorable changes in working capital also occurred as we entered 2016 with a lower level of customer advances than 2015 due to customers’ hesitancy to enter into prepaid contracts in a declining fertilizer price environment. As a result, a greater proportion of sales was paid in the 2016 spring season as compared to the prior year period. Additionally there was a reduction in inventory and accounts receivable levels during the first six months of 2016 as compared to an increase in both during the first six months of 2015.
|
•
|
Net cash used in investing activities was
$1.36 billion
in the first
six
months of
2016
as compared to net cash used in investing activities of
$1.00 billion
in the first
six
months of
2015
. The $
357 million
increase is due to the increase in capital expenditures primarily related to the capacity expansion projects in Donaldsonville, Louisiana and Port Neal, Iowa. During the first
six
months of
2016
, capital expenditures totaled
$1.38 billion
compared to
$1.03 billion
in the first
six
months of
2015
.
|
•
|
Net cash provided by financing activities was
$2.64 billion
in the first
six
months of
2016
compared to net cash used in financing activities of
$680 million
in the same period of
2015
. In the first
six
months of
2016
, CHS purchased a minority equity interest in CFN, a subsidiary of CF Holdings, for $
2.8 billion
. No share repurchases were made during the first
six
months of
2016
compared to
8.6 million
shares repurchased for
$523 million
in cash during the first
six
months of
2015
. Dividends paid on common stock were
$140 million
and
$143 million
in the first
six
months of
2016
and
2015
, respectively.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016 v. 2015
|
|
2016
|
|
2015
|
|
2016 v. 2015
|
||||||||||||||||||
|
(in millions, except as noted)
|
|
(in millions, except as noted)
|
||||||||||||||||||||||||||
Net sales
|
$
|
1,134
|
|
|
$
|
1,311
|
|
|
$
|
(177
|
)
|
|
(14
|
)%
|
|
$
|
2,138
|
|
|
$
|
2,265
|
|
|
$
|
(127
|
)
|
|
(6
|
)%
|
Cost of sales (COS)
|
607
|
|
|
625
|
|
|
(18
|
)
|
|
(3
|
)%
|
|
1,394
|
|
|
1,163
|
|
|
231
|
|
|
20
|
%
|
||||||
Gross margin
|
527
|
|
|
686
|
|
|
(159
|
)
|
|
(23
|
)%
|
|
744
|
|
|
1,102
|
|
|
(358
|
)
|
|
(32
|
)%
|
||||||
Gross margin percentage
|
46.5
|
%
|
|
52.3
|
%
|
|
(5.8
|
)%
|
|
|
|
34.8
|
%
|
|
48.6
|
%
|
|
(13.8
|
)%
|
|
|
||||||||
Selling, general and administrative expenses
|
52
|
|
|
38
|
|
|
14
|
|
|
37
|
%
|
|
97
|
|
|
78
|
|
|
19
|
|
|
24
|
%
|
||||||
Transaction costs
|
165
|
|
|
—
|
|
|
165
|
|
|
N/M
|
|
|
179
|
|
|
—
|
|
|
179
|
|
|
N/M
|
|
||||||
Other operating—net
|
63
|
|
|
23
|
|
|
40
|
|
|
174
|
%
|
|
124
|
|
|
41
|
|
|
83
|
|
|
202
|
%
|
||||||
Total other operating costs and expenses
|
280
|
|
|
61
|
|
|
219
|
|
|
N/M
|
|
|
400
|
|
|
119
|
|
|
281
|
|
|
236
|
%
|
||||||
Equity in (losses) earnings of operating affiliates
|
(9
|
)
|
|
5
|
|
|
(14
|
)
|
|
N/M
|
|
|
(9
|
)
|
|
14
|
|
|
(23
|
)
|
|
(164
|
)%
|
||||||
Operating earnings
|
238
|
|
|
630
|
|
|
(392
|
)
|
|
(62
|
)%
|
|
335
|
|
|
997
|
|
|
(662
|
)
|
|
(66
|
)%
|
||||||
Interest expense—net
|
60
|
|
|
29
|
|
|
31
|
|
|
107
|
%
|
|
97
|
|
|
62
|
|
|
35
|
|
|
56
|
%
|
||||||
Other non-operating—net
|
—
|
|
|
—
|
|
|
—
|
|
|
N/M
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
N/M
|
|
||||||
Earnings before income taxes and equity in losses of non-operating affiliates
|
178
|
|
|
601
|
|
|
(423
|
)
|
|
(70
|
)%
|
|
240
|
|
|
935
|
|
|
(695
|
)
|
|
(74
|
)%
|
||||||
Income tax provision
|
95
|
|
|
200
|
|
|
(105
|
)
|
|
(53
|
)%
|
|
110
|
|
|
313
|
|
|
(203
|
)
|
|
(65
|
)%
|
||||||
Equity in losses of non-operating affiliates—net of taxes
|
—
|
|
|
(36
|
)
|
|
36
|
|
|
(100
|
)%
|
|
—
|
|
|
(21
|
)
|
|
21
|
|
|
(100
|
)%
|
||||||
Net earnings
|
83
|
|
|
365
|
|
|
(282
|
)
|
|
(77
|
)%
|
|
130
|
|
|
601
|
|
|
(471
|
)
|
|
(78
|
)%
|
||||||
Less: Net earnings attributable to noncontrolling interests
|
36
|
|
|
13
|
|
|
23
|
|
|
177
|
%
|
|
57
|
|
|
18
|
|
|
39
|
|
|
217
|
%
|
||||||
Net earnings attributable to common stockholders
|
$
|
47
|
|
|
$
|
352
|
|
|
$
|
(305
|
)
|
|
(87
|
)%
|
|
$
|
73
|
|
|
$
|
583
|
|
|
$
|
(510
|
)
|
|
(87
|
)%
|
Diluted net earnings per share attributable to common stockholders
|
$
|
0.20
|
|
|
$
|
1.49
|
|
|
$
|
(1.29
|
)
|
|
(87
|
)%
|
|
$
|
0.31
|
|
|
$
|
2.44
|
|
|
$
|
(2.13
|
)
|
|
(87
|
)%
|
Diluted weighted-average common shares outstanding
|
233.5
|
|
|
236.1
|
|
|
(2.6
|
)
|
|
(1
|
)%
|
|
233.5
|
|
|
238.3
|
|
|
(4.8
|
)
|
|
(2
|
)%
|
||||||
Dividends declared per common share
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
0.60
|
|
|
$
|
0.60
|
|
|
$
|
—
|
|
|
—
|
%
|
Supplemental Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Natural gas costs in COS (per MMBtu)
(1)
|
$
|
2.10
|
|
|
$
|
2.79
|
|
|
$
|
(0.69
|
)
|
|
(25
|
)%
|
|
$
|
2.29
|
|
|
$
|
3.10
|
|
|
$
|
(0.81
|
)
|
|
(26
|
)%
|
Realized derivatives loss in COS (per MMBtu)
(2)
|
0.75
|
|
|
0.07
|
|
|
0.68
|
|
|
N/M
|
|
|
0.77
|
|
|
0.31
|
|
|
0.46
|
|
|
148
|
%
|
||||||
Cost of natural gas in COS (per MMBtu)
|
$
|
2.85
|
|
|
$
|
2.86
|
|
|
$
|
(0.01
|
)
|
|
—
|
%
|
|
$
|
3.06
|
|
|
$
|
3.41
|
|
|
$
|
(0.35
|
)
|
|
(10
|
)%
|
Average daily market price of natural gas (per MMBtu) Henry Hub (Louisiana)
|
$
|
2.10
|
|
|
$
|
2.72
|
|
|
$
|
(0.62
|
)
|
|
(23
|
)%
|
|
$
|
2.04
|
|
|
$
|
2.80
|
|
|
$
|
(0.76
|
)
|
|
(27
|
)%
|
Average daily market price of natural gas (per MMBtu) National Balancing Point (UK)
|
$
|
4.50
|
|
|
$
|
6.85
|
|
|
$
|
(2.35
|
)
|
|
(34
|
)%
|
|
$
|
4.43
|
|
|
$
|
7.06
|
|
|
$
|
(2.63
|
)
|
|
(37
|
)%
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
|
$
|
(211
|
)
|
|
$
|
(19
|
)
|
|
$
|
(192
|
)
|
|
N/M
|
|
|
$
|
(190
|
)
|
|
$
|
(47
|
)
|
|
$
|
(143
|
)
|
|
N/M
|
|
Capital expenditures
|
$
|
703
|
|
|
$
|
587
|
|
|
$
|
116
|
|
|
20
|
%
|
|
$
|
1,379
|
|
|
$
|
1,032
|
|
|
$
|
347
|
|
|
34
|
%
|
Production volume by product tons (000s):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Ammonia
(3)
|
1,991
|
|
|
1,843
|
|
|
148
|
|
|
8
|
%
|
|
3,994
|
|
|
3,660
|
|
|
334
|
|
|
9
|
%
|
||||||
Granular urea
|
808
|
|
|
593
|
|
|
215
|
|
|
36
|
%
|
|
1,627
|
|
|
1,218
|
|
|
409
|
|
|
34
|
%
|
||||||
UAN (32%)
|
1,771
|
|
|
1,484
|
|
|
287
|
|
|
19
|
%
|
|
3,289
|
|
|
2,914
|
|
|
375
|
|
|
13
|
%
|
||||||
AN
|
386
|
|
|
202
|
|
|
184
|
|
|
91
|
%
|
|
817
|
|
|
431
|
|
|
386
|
|
|
90
|
%
|
(1)
|
Includes the cost of natural gas that is included in cost of sales during the period under the first-in, first-out (FIFO) inventory cost method.
|
(2)
|
Includes realized gains and losses on natural gas derivatives settled during the period. Excludes unrealized mark-to-market gains and losses on natural gas derivatives.
|
(3)
|
Gross ammonia production, including amounts subsequently upgraded on-site into granular urea, UAN, or AN.
|
•
|
Average selling prices, primarily UAN, ammonia, and granular urea,
decrease
d by
30%
, which reduced gross margin by $363 million.
|
•
|
Unrealized net mark-to-market
gain
s on natural gas derivatives increased gross margin by
$192 million
as the
second
quarter of
2016
included a
$211 million
gain
and the
second
quarter of
2015
included a
$19 million
gain
.
|
•
|
Sales volume, primarily granular urea and UAN,
increase
d by
13%
, which increased gross margin by $37 million.
|
•
|
Average selling prices, primarily for ammonia, UAN and granular urea,
decrease
d by
27%
, which reduced gross margin by
$663 million
.
|
•
|
Unrealized net mark-to-market
gain
s on natural gas derivatives increased gross margin by
$143 million
as the
six months ended June 30, 2016
included a
$190 million
gain
and the
first six months of 2015
included a
$47 million
gain
.
|
•
|
Sales volume, primarily granular urea and UAN,
increase
d by
16%
, which increased gross margin by
$145 million
.
|
•
|
Lower physical natural gas costs in the
six months ended June 30, 2016
, partially offset by the impact of natural gas derivatives that settled in the period, increased gross margin by
$49 million
as compared to the
first six months of 2015
.
|
|
Ammonia
|
|
Granular
Urea
(1)
|
|
UAN
(1)
|
|
AN
(1)
|
|
Other
(1)
|
|
Consolidated
|
||||||||||||
|
(in millions, except percentages)
|
||||||||||||||||||||||
Three months ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net sales
|
$
|
358
|
|
|
$
|
240
|
|
|
$
|
370
|
|
|
$
|
90
|
|
|
$
|
76
|
|
|
$
|
1,134
|
|
Cost of sales
|
152
|
|
|
118
|
|
|
197
|
|
|
90
|
|
|
50
|
|
|
607
|
|
||||||
Gross margin
|
$
|
206
|
|
|
$
|
122
|
|
|
$
|
173
|
|
|
$
|
—
|
|
|
$
|
26
|
|
|
$
|
527
|
|
Gross margin percentage
|
57.5
|
%
|
|
50.8
|
%
|
|
46.8
|
%
|
|
—
|
%
|
|
34.2
|
%
|
|
46.5
|
%
|
||||||
Three months ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net sales
|
$
|
599
|
|
|
$
|
211
|
|
|
$
|
407
|
|
|
$
|
48
|
|
|
$
|
46
|
|
|
$
|
1,311
|
|
Cost of sales
|
260
|
|
|
92
|
|
|
205
|
|
|
39
|
|
|
29
|
|
|
625
|
|
||||||
Gross margin
|
$
|
339
|
|
|
$
|
119
|
|
|
$
|
202
|
|
|
$
|
9
|
|
|
$
|
17
|
|
|
$
|
686
|
|
Gross margin percentage
|
56.6
|
%
|
|
56.2
|
%
|
|
49.7
|
%
|
|
18.8
|
%
|
|
37.0
|
%
|
|
52.3
|
%
|
||||||
Six months ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net sales
|
$
|
625
|
|
|
$
|
475
|
|
|
$
|
679
|
|
|
$
|
215
|
|
|
$
|
144
|
|
|
$
|
2,138
|
|
Cost of sales
|
356
|
|
|
293
|
|
|
428
|
|
|
202
|
|
|
115
|
|
|
1,394
|
|
||||||
Gross margin
|
$
|
269
|
|
|
$
|
182
|
|
|
$
|
251
|
|
|
$
|
13
|
|
|
$
|
29
|
|
|
$
|
744
|
|
Gross margin percentage
|
43.0
|
%
|
|
38.3
|
%
|
|
37.0
|
%
|
|
6.0
|
%
|
|
20.1
|
%
|
|
34.8
|
%
|
||||||
Six months ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net sales
|
$
|
887
|
|
|
$
|
423
|
|
|
$
|
763
|
|
|
$
|
99
|
|
|
$
|
93
|
|
|
$
|
2,265
|
|
Cost of sales
|
428
|
|
|
192
|
|
|
402
|
|
|
82
|
|
|
59
|
|
|
1,163
|
|
||||||
Gross margin
|
$
|
459
|
|
|
$
|
231
|
|
|
$
|
361
|
|
|
$
|
17
|
|
|
$
|
34
|
|
|
$
|
1,102
|
|
Gross margin percentage
|
51.8
|
%
|
|
54.5
|
%
|
|
47.3
|
%
|
|
17.2
|
%
|
|
36.6
|
%
|
|
48.6
|
%
|
(1)
|
The cost of products that are upgraded into other products is transferred at cost into the upgraded product results.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016 v. 2015
|
|
2016
|
|
2015
|
|
2016 v. 2015
|
||||||||||||||||||
|
(in millions, except as noted)
|
|
(in millions, except as noted)
|
||||||||||||||||||||||||||
Net sales
|
$
|
358
|
|
|
$
|
599
|
|
|
$
|
(241
|
)
|
|
(40
|
)%
|
|
$
|
625
|
|
|
$
|
887
|
|
|
$
|
(262
|
)
|
|
(30
|
)%
|
Cost of sales
|
152
|
|
|
260
|
|
|
(108
|
)
|
|
(42
|
)%
|
|
356
|
|
|
428
|
|
|
(72
|
)
|
|
(17
|
)%
|
||||||
Gross margin
|
$
|
206
|
|
|
$
|
339
|
|
|
$
|
(133
|
)
|
|
(39
|
)%
|
|
$
|
269
|
|
|
$
|
459
|
|
|
$
|
(190
|
)
|
|
(41
|
)%
|
Gross margin percentage
|
57.5
|
%
|
|
56.6
|
%
|
|
0.9
|
%
|
|
|
|
43.0
|
%
|
|
51.8
|
%
|
|
(8.8
|
)%
|
|
|
||||||||
Sales volume by product tons (000s)
|
870
|
|
|
1,060
|
|
|
(190
|
)
|
|
(18
|
)%
|
|
1,607
|
|
|
1,591
|
|
|
16
|
|
|
1
|
%
|
||||||
Sales volume by nutrient tons (000s)
(1)
|
713
|
|
|
870
|
|
|
(157
|
)
|
|
(18
|
)%
|
|
1,318
|
|
|
1,305
|
|
|
13
|
|
|
1
|
%
|
||||||
Average selling price per product ton
|
$
|
411
|
|
|
$
|
565
|
|
|
$
|
(154
|
)
|
|
(27
|
)%
|
|
$
|
389
|
|
|
$
|
557
|
|
|
$
|
(168
|
)
|
|
(30
|
)%
|
Average selling price per nutrient ton
(1)
|
$
|
502
|
|
|
$
|
689
|
|
|
$
|
(187
|
)
|
|
(27
|
)%
|
|
$
|
474
|
|
|
$
|
679
|
|
|
$
|
(205
|
)
|
|
(30
|
)%
|
Gross margin per product ton
|
$
|
237
|
|
|
$
|
320
|
|
|
$
|
(83
|
)
|
|
(26
|
)%
|
|
$
|
167
|
|
|
$
|
288
|
|
|
$
|
(121
|
)
|
|
(42
|
)%
|
Gross margin per nutrient ton
(1)
|
$
|
289
|
|
|
$
|
390
|
|
|
$
|
(101
|
)
|
|
(26
|
)%
|
|
$
|
204
|
|
|
$
|
352
|
|
|
$
|
(148
|
)
|
|
(42
|
)%
|
Depreciation and amortization
|
$
|
19
|
|
|
$
|
21
|
|
|
$
|
(2
|
)
|
|
(10
|
)%
|
|
$
|
40
|
|
|
$
|
43
|
|
|
$
|
(3
|
)
|
|
(7
|
)%
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
|
$
|
(69
|
)
|
|
$
|
(4
|
)
|
|
$
|
(65
|
)
|
|
N/M
|
|
|
$
|
(62
|
)
|
|
$
|
(11
|
)
|
|
$
|
(51
|
)
|
|
N/M
|
|
(1)
|
Ammonia represents 82% nitrogen content. Nutrient tons represent the equivalent tons of nitrogen within the product tons.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016 v. 2015
|
|
2016
|
|
2015
|
|
2016 v. 2015
|
||||||||||||||||||
|
(in millions, except as noted)
|
|
(in millions, except as noted)
|
||||||||||||||||||||||||||
Net sales
|
$
|
240
|
|
|
$
|
211
|
|
|
$
|
29
|
|
|
14
|
%
|
|
$
|
475
|
|
|
$
|
423
|
|
|
$
|
52
|
|
|
12
|
%
|
Cost of sales
|
118
|
|
|
92
|
|
|
26
|
|
|
28
|
%
|
|
293
|
|
|
192
|
|
|
101
|
|
|
53
|
%
|
||||||
Gross margin
|
$
|
122
|
|
|
$
|
119
|
|
|
$
|
3
|
|
|
3
|
%
|
|
$
|
182
|
|
|
$
|
231
|
|
|
$
|
(49
|
)
|
|
(21
|
)%
|
Gross margin percentage
|
50.8
|
%
|
|
56.2
|
%
|
|
(5.4
|
)%
|
|
|
|
38.3
|
%
|
|
54.5
|
%
|
|
(16.2
|
)%
|
|
|
||||||||
Sales volume by product tons (000s)
|
972
|
|
|
600
|
|
|
372
|
|
|
62
|
%
|
|
1,891
|
|
|
1,216
|
|
|
675
|
|
|
56
|
%
|
||||||
Sales volume by nutrient tons (000s)
(1)
|
447
|
|
|
276
|
|
|
171
|
|
|
62
|
%
|
|
870
|
|
|
559
|
|
|
311
|
|
|
56
|
%
|
||||||
Average selling price per product ton
|
$
|
247
|
|
|
$
|
352
|
|
|
$
|
(105
|
)
|
|
(30
|
)%
|
|
$
|
251
|
|
|
$
|
348
|
|
|
$
|
(97
|
)
|
|
(28
|
)%
|
Average selling price per nutrient ton
(1)
|
$
|
537
|
|
|
$
|
764
|
|
|
$
|
(227
|
)
|
|
(30
|
)%
|
|
$
|
546
|
|
|
$
|
757
|
|
|
$
|
(211
|
)
|
|
(28
|
)%
|
Gross margin per product ton
|
$
|
126
|
|
|
$
|
198
|
|
|
$
|
(72
|
)
|
|
(36
|
)%
|
|
$
|
96
|
|
|
$
|
190
|
|
|
$
|
(94
|
)
|
|
(49
|
)%
|
Gross margin per nutrient ton
(1)
|
$
|
273
|
|
|
$
|
430
|
|
|
$
|
(157
|
)
|
|
(37
|
)%
|
|
$
|
209
|
|
|
$
|
413
|
|
|
$
|
(204
|
)
|
|
(49
|
)%
|
Depreciation and amortization
|
$
|
25
|
|
|
$
|
10
|
|
|
$
|
15
|
|
|
150
|
%
|
|
$
|
50
|
|
|
$
|
20
|
|
|
$
|
30
|
|
|
150
|
%
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
|
$
|
(55
|
)
|
|
$
|
(5
|
)
|
|
$
|
(50
|
)
|
|
N/M
|
|
|
$
|
(49
|
)
|
|
$
|
(12
|
)
|
|
$
|
(37
|
)
|
|
N/M
|
|
(1)
|
Granular urea represents 46% nitrogen content. Nutrient tons represent the tons of nitrogen within the product tons.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016 v. 2015
|
|
2016
|
|
2015
|
|
2016 v. 2015
|
||||||||||||||||||
|
(in millions, except as noted)
|
|
(in millions, except as noted)
|
||||||||||||||||||||||||||
Net sales
|
$
|
370
|
|
|
$
|
407
|
|
|
$
|
(37
|
)
|
|
(9
|
)%
|
|
$
|
679
|
|
|
$
|
763
|
|
|
$
|
(84
|
)
|
|
(11
|
)%
|
Cost of sales
|
197
|
|
|
205
|
|
|
(8
|
)
|
|
(4
|
)%
|
|
428
|
|
|
402
|
|
|
26
|
|
|
6
|
%
|
||||||
Gross margin
|
$
|
173
|
|
|
$
|
202
|
|
|
$
|
(29
|
)
|
|
(14
|
)%
|
|
$
|
251
|
|
|
$
|
361
|
|
|
$
|
(110
|
)
|
|
(30
|
)%
|
Gross margin percentage
|
46.8
|
%
|
|
49.7
|
%
|
|
(2.9
|
)%
|
|
|
|
37.0
|
%
|
|
47.3
|
%
|
|
(10.3
|
)%
|
|
|
||||||||
Sales volume by product tons (000s)
|
1,832
|
|
|
1,504
|
|
|
328
|
|
|
22
|
%
|
|
3,284
|
|
|
2,821
|
|
|
463
|
|
|
16
|
%
|
||||||
Sales volume by nutrient tons (000s)
(1)
|
577
|
|
|
475
|
|
|
102
|
|
|
21
|
%
|
|
1,034
|
|
|
889
|
|
|
145
|
|
|
16
|
%
|
||||||
Average selling price per product ton
|
$
|
202
|
|
|
$
|
271
|
|
|
$
|
(69
|
)
|
|
(25
|
)%
|
|
$
|
207
|
|
|
$
|
271
|
|
|
$
|
(64
|
)
|
|
(24
|
)%
|
Average selling price per nutrient ton
(1)
|
$
|
641
|
|
|
$
|
858
|
|
|
$
|
(217
|
)
|
|
(25
|
)%
|
|
$
|
657
|
|
|
$
|
858
|
|
|
$
|
(201
|
)
|
|
(23
|
)%
|
Gross margin per product ton
|
$
|
94
|
|
|
$
|
135
|
|
|
$
|
(41
|
)
|
|
(30
|
)%
|
|
$
|
76
|
|
|
$
|
128
|
|
|
$
|
(52
|
)
|
|
(41
|
)%
|
Gross margin per nutrient ton
(1)
|
$
|
300
|
|
|
$
|
427
|
|
|
$
|
(127
|
)
|
|
(30
|
)%
|
|
$
|
243
|
|
|
$
|
406
|
|
|
$
|
(163
|
)
|
|
(40
|
)%
|
Depreciation and amortization
|
$
|
59
|
|
|
$
|
46
|
|
|
$
|
13
|
|
|
28
|
%
|
|
$
|
117
|
|
|
$
|
97
|
|
|
$
|
20
|
|
|
21
|
%
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
|
$
|
(65
|
)
|
|
$
|
(8
|
)
|
|
$
|
(57
|
)
|
|
N/M
|
|
|
$
|
(59
|
)
|
|
$
|
(20
|
)
|
|
$
|
(39
|
)
|
|
195
|
%
|
(1)
|
UAN represents between 28% and 32% of nitrogen content, depending on the concentration specified by the customer. Nutrient tons represent the tons of nitrogen within the product tons.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016 v. 2015
|
|
2016
|
|
2015
|
|
2016 v. 2015
|
||||||||||||||||||
|
(in millions, except as noted)
|
|
(in millions, except as noted)
|
||||||||||||||||||||||||||
Net sales
|
$
|
90
|
|
|
$
|
48
|
|
|
$
|
42
|
|
|
88
|
%
|
|
$
|
215
|
|
|
$
|
99
|
|
|
$
|
116
|
|
|
117
|
%
|
Cost of sales
|
90
|
|
|
39
|
|
|
51
|
|
|
131
|
%
|
|
202
|
|
|
82
|
|
|
120
|
|
|
146
|
%
|
||||||
Gross margin
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
(9
|
)
|
|
(100
|
)%
|
|
$
|
13
|
|
|
$
|
17
|
|
|
$
|
(4
|
)
|
|
(24
|
)%
|
Gross margin percentage
|
—
|
%
|
|
18.8
|
%
|
|
(18.8
|
)%
|
|
|
|
6.0
|
%
|
|
17.2
|
%
|
|
(11.2
|
)%
|
|
|
||||||||
Sales volume by product tons (000s)
|
453
|
|
|
224
|
|
|
229
|
|
|
102
|
%
|
|
1,011
|
|
|
448
|
|
|
563
|
|
|
126
|
%
|
||||||
Sales volume by nutrient tons (000s)
(1)
|
154
|
|
|
77
|
|
|
77
|
|
|
100
|
%
|
|
342
|
|
|
154
|
|
|
188
|
|
|
122
|
%
|
||||||
Average selling price per product ton
|
$
|
199
|
|
|
$
|
214
|
|
|
$
|
(15
|
)
|
|
(7
|
)%
|
|
$
|
213
|
|
|
$
|
221
|
|
|
$
|
(8
|
)
|
|
(4
|
)%
|
Average selling price per nutrient ton
(1)
|
$
|
584
|
|
|
$
|
623
|
|
|
$
|
(39
|
)
|
|
(6
|
)%
|
|
$
|
629
|
|
|
$
|
643
|
|
|
$
|
(14
|
)
|
|
(2
|
)%
|
Gross margin per product ton
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
(40
|
)
|
|
(100
|
)%
|
|
$
|
13
|
|
|
$
|
38
|
|
|
$
|
(25
|
)
|
|
(66
|
)%
|
Gross margin per nutrient ton
(1)
|
$
|
—
|
|
|
$
|
117
|
|
|
$
|
(117
|
)
|
|
(100
|
)%
|
|
$
|
38
|
|
|
$
|
110
|
|
|
$
|
(72
|
)
|
|
(65
|
)%
|
Depreciation and amortization
|
$
|
28
|
|
|
$
|
12
|
|
|
$
|
16
|
|
|
133
|
%
|
|
$
|
50
|
|
|
$
|
24
|
|
|
$
|
26
|
|
|
108
|
%
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
|
$
|
(9
|
)
|
|
$
|
(2
|
)
|
|
$
|
(7
|
)
|
|
N/M
|
|
|
$
|
(8
|
)
|
|
$
|
(4
|
)
|
|
$
|
(4
|
)
|
|
100
|
%
|
(1)
|
Nutrient tons represent the tons of nitrogen within the product tons.
|
•
|
Diesel exhaust fluid (DEF) is an aqueous urea solution typically made with 32.5% high-purity urea and 67.5% deionized water.
|
•
|
Urea liquor is a liquid product that we sell in concentrations of 40%, 50% and 70% urea as a chemical intermediate.
|
•
|
Nitric acid is a nitrogen-based product with a nitrogen content of 22.2%.
|
•
|
Compound fertilizer products (NPKs) are solid granular fertilizer products for which the nutrient content is a combination of nitrogen, phosphorus and potassium.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016 v. 2015
|
|
2016
|
|
2015
|
|
2016 v. 2015
|
||||||||||||||||||
|
(in millions, except as noted)
|
|
(in millions, except as noted)
|
||||||||||||||||||||||||||
Net sales
|
$
|
76
|
|
|
$
|
46
|
|
|
$
|
30
|
|
|
65
|
%
|
|
$
|
144
|
|
|
$
|
93
|
|
|
$
|
51
|
|
|
55
|
%
|
Cost of sales
|
50
|
|
|
29
|
|
|
21
|
|
|
72
|
%
|
|
115
|
|
|
59
|
|
|
56
|
|
|
95
|
%
|
||||||
Gross margin
|
$
|
26
|
|
|
$
|
17
|
|
|
$
|
9
|
|
|
53
|
%
|
|
$
|
29
|
|
|
$
|
34
|
|
|
$
|
(5
|
)
|
|
(15
|
)%
|
Gross margin percentage
|
34.2
|
%
|
|
37.0
|
%
|
|
(2.8
|
)%
|
|
|
|
20.1
|
%
|
|
36.6
|
%
|
|
(16.5
|
)%
|
|
|
||||||||
Sales volume by product tons (000s)
|
430
|
|
|
223
|
|
|
207
|
|
|
93
|
%
|
|
815
|
|
|
447
|
|
|
368
|
|
|
82
|
%
|
||||||
Sales volume by nutrient tons (000s)
(1)
|
84
|
|
|
45
|
|
|
39
|
|
|
87
|
%
|
|
157
|
|
|
88
|
|
|
69
|
|
|
78
|
%
|
||||||
Average selling price per product ton
|
$
|
177
|
|
|
$
|
206
|
|
|
$
|
(29
|
)
|
|
(14
|
)%
|
|
$
|
177
|
|
|
$
|
208
|
|
|
$
|
(31
|
)
|
|
(15
|
)%
|
Average selling price per nutrient ton
(1)
|
$
|
905
|
|
|
$
|
1,022
|
|
|
$
|
(117
|
)
|
|
(11
|
)%
|
|
$
|
917
|
|
|
$
|
1,057
|
|
|
$
|
(140
|
)
|
|
(13
|
)%
|
Gross margin per product ton
|
$
|
60
|
|
|
$
|
76
|
|
|
$
|
(16
|
)
|
|
(21
|
)%
|
|
$
|
36
|
|
|
$
|
76
|
|
|
$
|
(40
|
)
|
|
(53
|
)%
|
Gross margin per nutrient ton
(1)
|
$
|
310
|
|
|
$
|
378
|
|
|
$
|
(68
|
)
|
|
(18
|
)%
|
|
$
|
185
|
|
|
$
|
386
|
|
|
$
|
(201
|
)
|
|
(52
|
)%
|
Depreciation and amortization
|
$
|
12
|
|
|
$
|
4
|
|
|
$
|
8
|
|
|
200
|
%
|
|
$
|
22
|
|
|
$
|
15
|
|
|
$
|
7
|
|
|
47
|
%
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
|
$
|
(13
|
)
|
|
$
|
—
|
|
|
$
|
(13
|
)
|
|
—
|
%
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
(12
|
)
|
|
—
|
%
|
(1)
|
Nutrient tons represent the tons of nitrogen within the product tons.
|
|
Effective Interest Rate
|
|
June 30,
2016 |
|
December 31,
2015 |
||||||||||||
|
|
Principal Outstanding
|
|
Carrying Amount
(1)
|
|
Principal Outstanding
|
|
Carrying Amount
(1)(2)
|
|||||||||
|
|
|
(in millions)
|
||||||||||||||
Public Senior Notes:
|
|
|
|
|
|
|
|
|
|
||||||||
6.875% due 2018
|
7.344%
|
|
$
|
800
|
|
|
$
|
794
|
|
|
$
|
800
|
|
|
$
|
792
|
|
7.125% due 2020
|
7.529%
|
|
800
|
|
|
789
|
|
|
800
|
|
|
788
|
|
||||
3.450% due 2023
|
3.562%
|
|
750
|
|
|
745
|
|
|
750
|
|
|
745
|
|
||||
5.150% due 2034
|
5.279%
|
|
750
|
|
|
739
|
|
|
750
|
|
|
739
|
|
||||
4.950% due 2043
|
5.031%
|
|
750
|
|
|
741
|
|
|
750
|
|
|
741
|
|
||||
5.375% due 2044
|
5.465%
|
|
750
|
|
|
740
|
|
|
750
|
|
|
740
|
|
||||
Private Senior Notes:
|
|
|
|
|
|
|
|
|
|
||||||||
4.490% due 2022
|
4.626%
|
|
250
|
|
|
248
|
|
|
250
|
|
|
248
|
|
||||
4.930% due 2025
|
5.034%
|
|
500
|
|
|
496
|
|
|
500
|
|
|
496
|
|
||||
5.030% due 2027
|
5.121%
|
|
250
|
|
|
248
|
|
|
250
|
|
|
248
|
|
||||
Total long-term debt
|
|
|
$
|
5,600
|
|
|
$
|
5,540
|
|
|
$
|
5,600
|
|
|
$
|
5,537
|
|
(1)
|
Carrying amount is net of unamortized debt discount and deferred debt issuance costs. Total unamortized debt discount was
$7 million
as of both
June 30, 2016
and
December 31, 2015
, and total deferred debt issuance costs were
$53 million
and
$56 million
as of
June 30, 2016
and
December 31, 2015
, respectively.
|
(2)
|
In connection with our adoption of ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, carrying amounts as of December 31, 2015 have been retrospectively adjusted to include a direct deduction of deferred debt issuance costs of $56 million. Prior to the adoption, these costs were included in other assets on our consolidated balance sheets. See Note
2—New Accounting Standards
to our unaudited interim consolidated financial statements included in Part I, Item 1 of this report for additional information.
|
|
Remainder of 2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
After 2020
|
|
Total
|
||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||
Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Long-term debt
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
800
|
|
|
$
|
—
|
|
|
$
|
800
|
|
|
$
|
4,000
|
|
|
$
|
5,600
|
|
Interest payments on long-term debt
(1)
|
153
|
|
|
305
|
|
|
278
|
|
|
250
|
|
|
221
|
|
|
2,603
|
|
|
3,810
|
|
|||||||
Other Obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating leases
|
43
|
|
|
90
|
|
|
76
|
|
|
60
|
|
|
48
|
|
|
120
|
|
|
437
|
|
|||||||
Equipment purchases and plant improvements
|
120
|
|
|
48
|
|
|
6
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
179
|
|
|||||||
Capacity expansion projects
(2)
|
465
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
465
|
|
|||||||
Transportation
(3)
|
31
|
|
|
11
|
|
|
8
|
|
|
7
|
|
|
3
|
|
|
—
|
|
|
60
|
|
|||||||
Purchase obligations
(4)(5)
|
461
|
|
|
493
|
|
|
305
|
|
|
229
|
|
|
232
|
|
|
249
|
|
|
1,969
|
|
|||||||
Contributions to pension plans
(6)
|
28
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|||||||
Net operating loss settlement
(7)
|
11
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|||||||
Total
(8)(9)
|
$
|
1,312
|
|
|
$
|
958
|
|
|
$
|
1,473
|
|
|
$
|
551
|
|
|
$
|
1,304
|
|
|
$
|
6,972
|
|
|
$
|
12,570
|
|
(1)
|
Based on debt balances, before discounts and offering expenses, and on interest rates as of
June 30, 2016
.
|
(2)
|
Represents contractual obligations related to the Donaldsonville, Louisiana and Port Neal, Iowa capacity expansion projects which are expected to be completed by the end of 2016. Contractual commitments do not include any amounts related to our foreign currency derivatives. For further information, see our previous discussion under Capacity Expansion Projects and Restricted Cash in the Liquidity and Capital Resources section.
|
(3)
|
Includes anticipated expenditures under certain contracts to transport finished products to and from our facilities. The majority of these arrangements allow for reductions in usage based on our actual operating rates. Amounts are based on projected normal operating rates and contracted or current spot prices, where applicable, as of
June 30, 2016
, and actual operating rates and prices may differ.
|
(4)
|
Includes minimum commitments to purchase natural gas based on prevailing market-based forward prices at
June 30, 2016
. Purchase obligations do not include any amounts related to our natural gas derivatives.
|
(5)
|
Includes a commitment to purchase ammonia from PLNL at market-based prices under an agreement that expires in 2018. The annual commitment based on market prices at
June 30, 2016
is $87 million with a total remaining commitment of $195 million.
|
(6)
|
Represents the contributions we expect to make to our pension plans during the remainder of
2016
. Our pension funding policy is to contribute amounts sufficient to meet minimum legal funding requirements plus discretionary amounts that we may deem to be appropriate.
|
(7)
|
Represents the amounts we expect to pay to our pre-IPO owners in conjunction with the amended Net Operating Loss Agreement and the 2013 settlement with the Internal Revenue Service.
|
(8)
|
Excludes $181 million of unrecognized tax benefits due to the uncertainty in the timing of potential tax payments.
|
(9)
|
Excludes $10 million of environmental remediation liabilities.
|
•
|
the volatility of natural gas prices in North America and Europe;
|
•
|
the cyclical nature of our business and the agricultural sector;
|
•
|
the global commodity nature of our fertilizer products, the impact of global supply and demand on our selling prices, and the intense global competition from other fertilizer producers;
|
•
|
conditions in the U.S. and European agricultural industry;
|
•
|
difficulties in securing the supply and delivery of raw materials, increases in their costs or delays or interruptions in their delivery;
|
•
|
reliance on third party providers of transportation services and equipment;
|
•
|
the significant risks and hazards involved in producing and handling our products against which we may not be fully insured;
|
•
|
risks associated with cyber security;
|
•
|
weather conditions;
|
•
|
our ability to complete our production capacity expansion projects on schedule as planned, on budget or at all;
|
•
|
risks associated with expansions of our business, including unanticipated adverse consequences and the significant resources that could be required;
|
•
|
potential liabilities and expenditures related to environmental, health and safety laws and regulations and permitting requirements;
|
•
|
future regulatory restrictions and requirements related to greenhouse gas emissions;
|
•
|
the seasonality of the fertilizer business;
|
•
|
the impact of changing market conditions on our forward sales programs;
|
•
|
risks involving derivatives and the effectiveness of our risk measurement and hedging activities;
|
•
|
our reliance on a limited number of key facilities;
|
•
|
risks associated with the operation or management of the CHS strategic venture, risks and uncertainties relating to the market prices of the fertilizer products that are the subject of our supply agreement with CHS over the life of the supply agreement, and the risk that any challenges related to the CHS strategic venture will harm our other business relationships;
|
•
|
risks associated with our PLNL joint venture;
|
•
|
acts of terrorism and regulations to combat terrorism;
|
•
|
risks associated with international operations;
|
•
|
losses on our investments in securities;
|
•
|
deterioration of global market and economic conditions; and
|
•
|
our ability to manage our indebtedness.
|
|
|
|
|
|
|
|
|
|
|
CF Industries Holdings, Inc.
|
|
|
Date: August 4, 2016
|
By:
|
/s/ W. ANTHONY WILL
|
|
|
|
W. Anthony Will
President and Chief Executive Officer
(Principal Executive Officer)
|
|
Date: August 4, 2016
|
By:
|
/s/ DENNIS P. KELLEHER
|
|
|
|
Dennis P. Kelleher
Senior Vice President and Chief Financial Officer (Principal Financial Officer)
|
Exhibit No.
|
Description
|
|
10.1
|
|
Termination Agreement, dated as of May 22, 2016, by and among CF Industries Holdings, Inc., OCI N.V. and certain other parties named therein (incorporated by reference to Exhibit 10.1 to CF Industries Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on May 23, 2016, File No. 001-32597)
|
10.2
|
|
Amendment No. 2 to the Third Amended and Restated Revolving Credit Agreement, dated as of July 29, 2016, among CF Industries Holdings, Inc., CF Industries, Inc., the lenders party thereto, the issuing banks party thereto, and Morgan Stanley Senior Funding, Inc., as Administrative Agent (incorporated by reference to Exhibit 10.1 to CF Industries Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on August 4, 2016, File No. 001-32597)
|
10.3
|
|
Amendment to the CF Industries Holdings, Inc. 2009 Equity and Incentive Plan, dated as of July 21, 2016
|
10.4
|
|
Amendment to the CF Industries Holdings, Inc. 2014 Equity and Incentive Plan, dated as of July 21, 2016
|
10.5
|
|
Form of Equity Award Amendment Letter Agreement, dated as of July 21, 2016
|
10.6
|
|
Form of Non-Qualified Stock Option Award Agreement
|
10.7
|
|
Form of Restricted Stock Unit Award Agreement
|
10.8
|
|
Form of Performance Restricted Stock Unit Award Agreement
|
31.1
|
|
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
|
|
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1
|
|
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2
|
|
Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101
|
|
The following financial information from CF Industries Holdings, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, formatted in XBRL (eXtensible Business Reporting Language): (1) Consolidated Statements of Operations, (2) Consolidated Statements of Comprehensive Income, (3) Consolidated Balance Sheets, (4) Consolidated Statements of Equity, (5) Consolidated Statements of Cash Flows, and (6) the Notes to Unaudited Consolidated Financial Statements
|
Name:
|
Douglas C. Barnard
|
Name:
|
Douglas C. Barnard
|
Award Date
|
Award Type
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Award Date:
|
|
|
|
|
|
|
|
|
|
|
1.
|
NOTICE OF STOCK OPTION GRANT
|
2.
|
AGREEMENT
|
a.
|
Grant of Option
.
|
b.
|
Exercise of Option
.
|
c.
|
Withholding
.
|
d.
|
Non-Transferability of Option
.
|
e.
|
Term of Option/Termination of Employment or Service
.
|
f.
|
Entire Agreement; Governing Law
.
|
g.
|
No Guarantee of Continued Service.
|
|
|
|
OPTIONEE
|
|
CF INDUSTRIES HOLDINGS, INC.
|
|
|
|
|
|
|
Signature
|
|
By: Wendy S. Jablow
|
|
|
Title: Sr. Vice President, Human Resources
|
|
|
|
GRANTEE
|
|
CF INDUSTRIES HOLDINGS, INC.
|
|
|
|
|
|
|
<first_name> <last_name>
|
|
By: Wendy S. Jablow
|
<address_1>
<city>, <state> <zip>
|
|
Title: Sr. Vice President, Human Resources
|
GRANTEE
|
|
CF INDUSTRIES HOLDINGS, INC.
|
|
|
|
<first_name> <last_name>
|
|
By: Wendy S. Jablow
|
<address_1>
<city>, <state> <zip>
|
|
Title: Sr. Vice President, Human Resources
|
1.
|
The initial performance measurement shall be based on the Total Shareholder Return (or “TSR”) with respect to a share of Stock as compared to the Total Shareholder Return of the S&P 500, in each case over the three year period commencing on January 1 of the year in which the Grant Date occurs (the “Performance Period”). The companies constituting the Standard & Poor’s 500 Index (the “Index”) as of the beginning of the Performance Period will be compared with the companies in the Index at the end of such Performance Period and only those companies that are in the Index at both times will be included in the S&P 500 for purposes of the comparison. The chart below shows the portion of the total number of Performance Restricted Stock Units that will vest based on the Total Shareholder Return measurement:
|
Level
|
Company TSR Relative to TSR of S&P 500
|
PSUs to vest (% of target payout for Award)
|
Threshold
|
25th Percentile
|
50%
|
Target
|
50th Percentile
|
100%
|
Maximum
|
75th Percentile or better
|
200%
|
2.
|
The number of Performance Restricted Stock Units which vest based on the initial TSR calculation shall then be adjusted based upon the Company’s TSR, ranked against the TSR achieved by the members of the TSR Comparator Group identified below, in accordance with the following:
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of CF Industries Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
August 4, 2016
|
|
/s/ W. ANTHONY WILL
|
|
|
|
W. Anthony Will
President and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of CF Industries Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
August 4, 2016
|
|
/s/ DENNIS P. KELLEHER
|
|
|
|
Dennis P. Kelleher
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ W. ANTHONY WILL
|
|
|
W. Anthony Will
President and Chief Executive Officer,
(Principal Executive Officer)
|
|
|
Date:
|
August 4, 2016
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ DENNIS P. KELLEHER
|
|
|
Dennis P. Kelleher
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
|
Date:
|
August 4, 2016
|
|