CF Industries Holdings, Inc.

CF Industries Holdings, Inc. operates in the global nitrogen fertilizer and industrial nitrogen products industry, with its value chain consisting of manufacturing complexes in the United States, Canada and the United Kingdom, an extensive storage, transportation and distribution network in North America, and logistics capabilities enabling a global reach. The company's core product is anhydrous ammonia, which contains 82% nitrogen and 18% hydrogen, and products derived from ammonia that are most often used as nitrogen fertilizers include granular urea, urea ammonium nitrate solution (UAN) and ammonium nitrate (AN). The company is on a path to decarbonize its ammonia production network, which it describes as the world's largest, to enable low-carbon hydrogen and nitrogen products for energy, fertilizer, emissions abatement and other industrial activities.

The company's markets are global and intensely competitive, based primarily on delivered price and, to a lesser extent, on low-carbon attributes, reliability, customer service and product quality. Primary competitors with North American operations named in the filing include Nutrien Ltd., Koch Fertilizer LLC, LSB Industries, CVR Partners, LP and Yara International, and there is also significant competition from products sourced from other regions of the world, including some with lower natural gas or other feedstock costs which may include the benefit of government subsidies. The company's primary United Kingdom competition comes from imported products supplied by companies including Yara International, Origin Fertilisers, Ameropa and Thomas Bell & Sons Ltd. The company's combined production capacity of its eight North American manufacturing facilities represented approximately 40%, 41%, 44% and 19% of North American ammonia, granular urea, UAN and AN production capacity, respectively, as of December 31, 2025.

The company generates revenue through the sale of nitrogen products, which are global commodities or derived from global commodities, with customers making purchasing decisions principally on the basis of delivered price and, to a lesser extent, on low-carbon attributes, reliability, customer service and product quality. The company's principal customers are cooperatives, retailers, independent fertilizer distributors, traders, wholesalers and industrial users. The company offers customers the opportunity to purchase products on a forward basis at prices and delivery dates it proposes, with customers generally making an initial cash down payment at the time of order and paying the remaining portion of the contract sales value in advance of the shipment date, which improves liquidity by reducing working capital needs due to the upfront cash payments received from customers.

The company's reportable segments consist of Ammonia, Granular Urea, UAN, AN and Other, which are differentiated by products. The Ammonia segment produces anhydrous ammonia, which is the base product that the company manufactures, containing 82% nitrogen and 18% hydrogen, and its results consist of sales of ammonia to external customers for its nitrogen content as a fertilizer, in emissions control and in other industrial applications. The Granular Urea segment produces granular urea, which contains 46% nitrogen and is produced at the Donaldsonville, Port Neal and Medicine Hat complexes. The UAN segment produces urea ammonium nitrate solution, a liquid fertilizer product with a nitrogen content that typically ranges from 28% to 32%, produced by combining urea and ammonium nitrate at the Courtright, Donaldsonville, Port Neal, Verdigris, Woodward, and Yazoo City complexes. The AN segment produces ammonium nitrate, which has a nitrogen content between 29% and 35%, is produced by combining anhydrous ammonia and nitric acid, and is used as nitrogen fertilizer and extensively by the commercial explosives industry as a component of explosives, produced at the Yazoo City and Billingham complexes. The Other segment primarily includes diesel exhaust fluid (DEF), an aqueous urea solution typically made with 32.5% or 50% high-purity urea; urea liquor, a liquid product sold in concentrations of 40%, 50% and 70% high-purity urea as a chemical intermediate; and nitric acid, a nitrogen-based mineral acid used in the production of nitrate-based fertilizers, nylon precursors and other specialty chemicals.

For the year ended December 31, 2025, the Ammonia segment had net sales of $2,176 million ¹ and gross margin of $682 million ²; the Granular Urea segment had net sales of $1,781 million ³ and gross margin of $837 million ⁴; the UAN segment had net sales of $2,161 million ⁵ and gross margin of $921 million ⁶; the AN segment had net sales of $421 million ⁷ and gross margin of $79 million ⁸; and the Other segment had net sales of $545 million ⁹ and gross margin of $205 million ¹⁰. Gross margin was $2.72 billion ¹¹ for the year ended December 31, 2025.

In July 2025, the company completed a significant decarbonization project at its Donaldsonville, Louisiana, complex for a total cost of approximately $200 million ¹² to enable the production of low-carbon ammonia, with the dehydration and compression unit enabling the transportation and permanent geological sequestration of up to 2 million metric tons of CO2 annually ¹³. On April 8, 2025 ¹⁴, the company formed the Blue Point joint venture with JERA Co., Inc. and Mitsui & Co., Ltd. to construct a low-carbon ammonia production facility at its Blue Point complex, with the company holding 40% ownership ¹⁵, JERA holding 35% ownership ¹⁶, and Mitsui holding 25% ownership ¹⁷; the estimated cost of the facility is approximately $3.7 billion ¹⁸. During the year ended December 31, 2025, the company, JERA and Mitsui made capital contributions of $195 million ¹⁹, $170 million ²⁰ and $121 million ²¹, respectively, to the Blue Point joint venture. In November 2025, the company experienced an incident in the AN upgrade area at its Yazoo City complex that required it to temporarily idle all production at the site, and management does not expect production to resume until the fourth quarter of 2026 at the earliest ²²; as a result, the company recorded an impairment of certain fixed assets within its North American AN asset group of $25 million ²³. In December 2025, the company made the decision to not make the incremental investment to the electrolyzer project at its Donaldsonville complex and recognized an impairment charge of $51 million ²⁴. On November 26, 2025 ²⁵, the company issued $1 billion ²⁶ aggregate principal amount of 5.300% senior notes due 2035, and on December 26, 2025 ²⁷, used approximately $756 million ²⁸ of the net proceeds for the prepayment in full of the outstanding $750 million ²⁹ aggregate principal amount of the 4.500% senior secured notes due 2026, recognizing a loss on debt extinguishment of $6 million ³⁰. In 2025, the company repurchased 13.2 million shares ³¹ for $1.06 billion ³² under the 2022 Share Repurchase Program and repurchased 3.4 million shares ³³ for $278 million ³⁴ under the 2025 Share Repurchase Program.

Total net sales for the year ended December 31, 2025 were $7.08 billion ³⁵, compared to $5.94 billion ³⁶ for the year ended December 31, 2024, an increase of 19% ³⁷. Net earnings attributable to common stockholders were $1.46 billion ³⁸ for 2025 compared to $1.22 billion ³⁹ for 2024, an increase of 19% ⁴⁰. Diluted net earnings per share attributable to common stockholders was $8.97 ⁴¹ for 2025 compared to $6.74 ⁴² for 2024. Gross margin increased by $668 million ⁴³, or 32% ⁴⁴, to $2.72 billion ⁴⁵ for 2025 compared to $2.06 billion ⁴⁶ for 2024. Net cash provided by operating activities was $2.75 billion ⁴⁷ for 2025 compared to $2.27 billion ⁴⁸ for 2024.

The company's primary growth vector is its clean energy strategy, centered on decarbonizing its existing network and constructing a greenfield low-carbon ammonia plant at its Blue Point complex. At the Donaldsonville complex, the completed decarbonization project enables the capacity to produce up to approximately 1.9 million tons of low-carbon ammonia annually ⁴⁹. Construction of the dehydration and compression unit at the Yazoo City complex is expected to cost approximately $100 million ⁵⁰, with CCS expected to commence in 2028 ⁵¹, and annually is expected to enable the transportation and sequestration of up to approximately 500,000 metric tons of CO2 ⁵². The Blue Point joint venture's low-carbon ammonia production facility is designed with an annual nameplate capacity of approximately 1.4 million metric tons (approximately 1.5 million tons) ⁵³ and is expected to capture greater than 95% of the CO2 generated from its production of ammonia ⁵⁴, with the facility expected to capture, compress and dehydrate approximately 2.3 million metric tons of CO2 annually ⁵⁵. Construction of the ammonia production facility is expected to begin in 2026 ⁵⁶, with low-carbon ammonia production expected to begin in 2029 ⁵⁷. The company expects continued demand growth for low-carbon ammonia and upgraded products into Europe as customers seek to reduce the additional costs imposed by the European Union's regulations, including the carbon border adjustment mechanism. In 2025, the company completed its first sales of low-carbon ammonia at a premium to traditional ammonia consumers in Europe and Africa.

The company's growth vector also includes new applications for low-carbon ammonia, confirmed through its joint venture partners JERA and Mitsui, who have committed low-carbon ammonia volumes from the Blue Point joint venture for power generation and steel production, among other uses, which represent new applications for the company's products. In December 2025 ⁵⁸, both JERA and Mitsui were certified as a Supplier of Low-Carbon Hydrogen and its Derivatives by Japan's Ministry of Economy, Trade and Industry under the "Support Focusing on the Price Gap" scheme established in accordance with the Hydrogen Society Promotion Act. The company continues to engage in discussions with existing and potential customers for long-term offtake and/or potential joint investments related to new and traditional applications for low-carbon ammonia.

The filing does not contain explicit margin trajectory or cost structure evolution targets with exact figures.

The company currently anticipates that its consolidated capital expenditures for 2026 will be approximately $1.3 billion ⁵⁹, consisting of approximately $550 million ⁶⁰ for its existing operations and approximately $600 million ⁶¹ representing the Blue Point joint venture's planned capital expenditures related to construction of the low-carbon ATR ammonia production facility at its Blue Point complex. The company also anticipates its 2026 capital spending will include approximately $150 million ⁶² related to its construction of the Blue Point complex scalable infrastructure. Of the Blue Point joint venture's $600 million ⁶³ of planned 2026 capital expenditures, approximately $240 million ⁶⁴ will be funded by the company, representing its 40% equity interest in the Blue Point joint venture, and approximately $360 million ⁶⁵ will be funded by its partners in the joint venture. The company expects gross ammonia production for 2026 will be approximately 9.5 million tons ⁶⁶ reflecting a decrease from 2025 due in part to the outage at the Yazoo City complex. The company does not expect production at the Yazoo City complex to resume until the fourth quarter of 2026 at the earliest ⁶⁷.

On May 6, 2025 ⁶⁸, the Board authorized the repurchase of up to $2 billion ⁶⁹ of CF Holdings common stock under the 2025 Share Repurchase Program, effective through December 31, 2029 ⁷⁰. The company paid dividends of $2.00 per share ⁷¹ in 2025. The company contributed $2 million ⁷² to its pension plans in 2025. As a result of the planned windup of its U.S. pension plan with an effective termination date of December 31, 2025 ⁷³, the company expects to contribute approximately $9 million ⁷⁴ to this plan in 2026, representing the estimated plan termination liability.

The company faces structural headwinds from the cyclical nature of the nitrogen industry, with its operating results highly dependent upon and fluctuating based upon changes in supply and demand of nitrogen products, and the company's business, financial condition, results of operations and cash flows tend to be negatively affected in periods of industry oversupply. Additional nitrogen production capacity has come online in the past 12 months and is expected to continue to do so globally over the next 12 months. The company also faces headwinds from the volatility of natural gas prices, which is the principal raw material used in its production of nitrogen products, with the average daily market price of natural gas at the Henry Hub from January 1, 2026 through February 20, 2026 being $6.32 per MMBtu ⁷⁵.

The company faces constraints from the Yazoo City incident, which required it to temporarily idle all production at the site, with management not expecting production to resume until the fourth quarter of 2026 at the earliest ⁷⁶. The company also faces regulatory constraints, including the European Union's carbon border adjustment mechanism (CBAM) which began implementation in 2026 ⁷⁷ requiring importers of nitrogen fertilizer products to purchase certificates reflecting the direct and indirect carbon emissions embedded in covered imports, and the United Kingdom is in the process of adopting its own carbon border adjustment mechanism, currently expected to apply from January 1, 2027 ⁷⁸.

The company's industry is cyclical, and its operating results are highly dependent upon and fluctuate based upon changes in supply and demand of nitrogen products, with periods of industry oversupply negatively affecting financial condition, results of operations and cash flows. The company faces intense global competition from other producers, including state-owned and government-subsidized entities, some of which may have access to lower cost natural gas supplies, financing, transportation and government-subsidies and tax incentives. The company's business is dependent on natural gas, the prices of which are subject to volatility, with natural gas accounting for approximately 34% ⁷⁹ of total production costs in 2025, and a $1.00 per MMBtu change in the price of natural gas would change the cost to produce a ton of ammonia by approximately $32 ⁸⁰. The market for low-carbon ammonia may be slow to develop, may not develop to the size expected or may not develop at all, and the company may not be successful in the development and implementation of its low-carbon ammonia projects in a timely or economic manner due to factors including the ability of third parties to develop Class VI carbon sequestration wells and CO2 transportation pipelines. The company's operations are subject to hazards inherent in the manufacture, transportation, storage and distribution of chemical products, including ammonia, which is highly toxic and can be corrosive, and ammonium nitrate, which is explosive, and the company is not fully insured against all potential hazards and risks incident to its business.

Management's message emphasizes the company's mission to provide clean energy to feed and fuel the world sustainably, with a strategy to leverage its unique capabilities to accelerate the world's transition to clean energy. Key themes include the completion of a significant decarbonization project at the Donaldsonville complex in July 2025 to enable the production of low-carbon ammonia, the formation of the Blue Point joint venture with JERA and Mitsui to construct a low-carbon ammonia production facility, and the execution of further decarbonization projects in the existing network. Management highlights that in 2025, the company completed its first sales of low-carbon ammonia at a premium to traditional ammonia consumers in Europe and Africa, and that the company's expectation of developing demand for low-carbon ammonia for new applications was confirmed through its joint venture partners, who have committed low-carbon ammonia volumes for power generation and steel production. The strategic priorities emphasized for the period ahead include continuing to execute decarbonization projects, including the construction of the low-carbon ATR ammonia production facility at the Blue Point complex with production expected to begin in 2029 ⁸¹, and pursuing demand for low-carbon ammonia and upgraded products for both traditional and new applications.