CF Industries Adopts One-Year Tax Benefits Preservation Plan
September 06 2016 - 05:43PM
Business Wire
CF Industries Holdings, Inc. (NYSE: CF) today announced that its
Board of Directors has adopted a one-year tax benefits preservation
plan (the "Plan") designed to preserve the Company's ability to
utilize its net operating losses and certain other tax assets. The
Company estimates that it will generate a federal tax net operating
loss in excess of $2 billion in 2016, arising principally from
accelerated depreciation on the Company’s capacity expansion
projects. The Plan is similar to plans adopted by other public
companies with significant tax attributes, and was not adopted in
response to any specific takeover threat or accumulation of the
Company’s stock.
The purpose of the Plan is to preserve the Company's ability to
use its tax assets to offset taxable income, which would be
substantially limited if the Company experienced an "ownership
change" as defined under Section 382 of the Internal Revenue Code
and related Internal Revenue Service pronouncements. In general, an
ownership change would occur if the Company's "5-percent
shareholders," as defined under Section 382, collectively increase
their ownership in the Company by more than 50 percentage points
during the relevant testing period.
Under the Plan, the Company is issuing one Right for each share
of its common stock outstanding at the close of business on
September 16, 2016. The Rights are not taxable to stockholders.
Stockholders are not required to take any action to receive the
Rights. The Rights will expire on the earliest of (i) the close of
business on September 5, 2017, (ii) the time at which the Rights
are redeemed or exchanged under the Plan, and (iii) the time at
which the Board determines that the Plan is no longer necessary or
desirable for the preservation of the tax assets.
Pursuant to the Plan, if a shareholder (or group) becomes a
5-percent shareholder after adoption of the Plan without meeting
certain customary exceptions, the Rights would become exercisable
and entitle stockholders (other than the 5-percent shareholder or
group) to purchase additional shares of CF at a significant
discount, resulting in significant dilution in the economic
interest and voting power of the 5-percent shareholder or group.
5-percent shareholders existing at the time of adoption of the Plan
are grandfathered and will only cause the Rights to distribute and
become exercisable if they acquire an additional 1% of the
Company's outstanding shares. Under the Plan, the Board has the
discretion to exempt certain transactions and persons whose
acquisitions of the Company’s common stock is determined by the
Board not to impair the availability of the Company’s tax
assets.
Details of the Plan will be communicated in a current report on
Form 8-K to be filed with the U.S. Securities and Exchange
Commission.
About CF Industries Holdings,
Inc.
CF Industries Holdings, Inc., headquartered in Deerfield,
Illinois, through its subsidiaries is a global leader in the
manufacturing and distribution of nitrogen products, serving both
agricultural and industrial customers. CF Industries operates
world-class nitrogen manufacturing complexes in Canada, the United
Kingdom and the United States, and distributes plant nutrients
through a system of terminals, warehouses, and associated
transportation equipment located primarily in the Midwestern United
States. The company also owns a 50 percent interest in an ammonia
facility in The Republic of Trinidad and Tobago. CF Industries
routinely posts investor announcements and additional information
on the company’s website at www.cfindustries.com and
encourages those interested in the company to check there
frequently.
Safe Harbor Statement
All statements in this communication by CF Industries Holdings,
Inc. (together with its subsidiaries, the "Company"), other than
those relating to historical facts, are forward-looking statements.
Forward-looking statements can generally be identified by their use
of terms such as "anticipate," "believe," "could," "estimate,"
"expect," "intend," "may," "plan," "predict" or "project" and
similar terms and phrases, including references to assumptions.
Forward-looking statements are not guarantees of future performance
and are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the Company's control,
which could cause actual results to differ materially from such
statements. These statements may include, but are not limited to,
statements about strategic plans and statements about future
financial and operating results.
Important factors that could cause actual results to differ
materially from those in the forward-looking statements include,
among others, the volatility of natural gas prices in North America
and Europe; the cyclical nature of the Company's business and the
agricultural sector; the global commodity nature of the Company's
fertilizer products, the impact of global supply and demand on the
Company's 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 the Company's products
against which the Company may not be fully insured; risks
associated with cyber security; weather conditions; the Company's
ability to complete its production capacity expansion projects on
schedule as planned, on budget or at all; risks associated with
expansions of the Company's 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 the Company's forward sales programs; risks involving
derivatives and the effectiveness of the Company's risk measurement
and hedging activities; the Company's reliance on a limited number
of key facilities; risks associated with the operation or
management of the strategic venture with CHS Inc. (the "CHS
Strategic Venture"); risks and uncertainties relating to the market
prices of the fertilizer products that are the subject of the
supply agreement with CHS Inc. over the life of the supply
agreement and the risk that any challenges related to the CHS
Strategic Venture will harm the Company's other business
relationships; risks associated with the Company's Point Lisas
Nitrogen Limited joint venture; acts of terrorism and regulations
to combat terrorism; risks associated with international
operations; losses on the Company's investments in securities;
deterioration of global market and economic conditions; and the
Company's ability to manage its indebtedness.
More detailed information about factors that may affect the
Company's performance and could cause actual results to differ
materially from those in any forward-looking statements may be
found in CF Industries Holdings, Inc.'s filings with the Securities
and Exchange Commission, including CF Industries Holdings, Inc.'s
most recent annual report on Form 10-K, which is available in the
Investor Relations section of the Company's web site.
Forward-looking statements are given only as of the date of this
communication and the Company disclaims any obligation to update or
revise the forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
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version on businesswire.com: http://www.businesswire.com/news/home/20160906006612/en/
CF Industries Holdings, Inc.MediaChris CloseDirector,
Corporate Communications847-405-2542 –
cclose@cfindustries.comorInvestorsDan AldridgeDirector,
Investor Relations847-405-2530 – daldridge@cfindustries.com
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