Company Achieved Record Sales and Production
Volumes
$2.0 Billion Cash on Balance Sheet
Global Nitrogen Tradeflows Transitioning, North
America Pricing Affected Most
CF Industries Holdings, Inc. (NYSE: CF), the global leader in
nitrogen fertilizer manufacturing and distribution, today announced
results for its second quarter ended June 30, 2017.
Second Quarter Highlights
- Net earnings of $3 million, or $0.01
per diluted share; adjusted net earnings(1) of $23 million or $0.10
per diluted share(1)
- EBITDA(2) of $275 million; adjusted
EBITDA(2) of $303 million
- Highest sales volume in company's
history, exceeding five million tons in a quarter for first
time
- Largest quarterly production volume in
company's history
- Start-up of 400ktpa diesel exhaust
fluid unit (urea equivalent) at Donaldsonville Nitrogen
Complex
- Received approximately $815 million in
federal tax refunds
Overview of Results
CF Industries Holdings, Inc., today announced second quarter
2017 net earnings attributable to common stockholders of $3
million, or $0.01 per diluted share, and adjusted net earnings of
$23 million, or $0.10 per diluted share. Second quarter 2017 EBITDA
was $275 million, and adjusted EBITDA was $303 million. These
results compare to second quarter 2016 net earnings attributable to
common stockholders of $47 million, or $0.20 per diluted share;
adjusted net earnings for the second quarter 2016 of $77 million,
or $0.33 per diluted share; EBITDA of $329 million; and adjusted
EBITDA of $342 million. Second quarter 2017 results include a
realized loss on natural gas hedges of $4 million, compared to a
realized loss on natural gas hedges of $61 million for the second
quarter of 2016.
“The CF team delivered outstanding operational performance
during the second quarter," said Tony Will, president and chief
executive officer, CF Industries Holdings, Inc. "We ran our plants
safely and at high utilization rates, sold record volumes and
delivered cost efficiencies in the head office and across the
manufacturing and distribution system. Our focus on execution is
particularly critical during the current challenging market
environment."
_________________________________________________________________________
(1)
See reconciliations of adjusted net earnings and adjusted
net earnings per diluted share to the most directly comparable GAAP
measures in the tables accompanying this release.
(2)
EBITDA is defined as net earnings attributable to common
stockholders plus interest expense (income)-net, income taxes, and
depreciation and amortization. See reconciliations of EBITDA and
adjusted EBITDA to the most directly comparable GAAP measures in
the tables accompanying this release.
Manufacturing Operations
CF Industries' manufacturing network operated efficiently and
continued its focus on safety during the second quarter of 2017. As
of June 30, 2017, CF Industries' 12-month rolling average
recordable incident rate was 0.91 incidents per 200,000 work hours,
well below industry averages.
Second quarter production levels were the highest in the history
of the company. Gross ammonia production during the second quarter
of 2017 was 2.7 million tons, 33 percent higher than in the
second quarter of 2016. The CF system operated at a high
utilization rate, including the new Port Neal ammonia plant, which
ran at more than 115 percent of nameplate capacity in the second
quarter.
During the quarter, the company successfully started up a
400,000 tons per year diesel exhaust fluid unit (urea equivalent)
at the Donaldsonville Nitrogen Complex. The new plant brings
additional flexibility to Donaldsonville's product mix, and allows
the company to pursue additional customer demand in the growing use
of nitrogen for emission control applications.
Sales Overview
Sales volumes for the quarter were significantly higher compared
to the second quarter of 2016 as the company's production increased
with additional production capacity at the Donaldsonville and Port
Neal Nitrogen Complexes.
Net sales in the second quarter of 2017 decreased to
$1,124 million from $1,134 million in the same period last
year as record sales volumes were offset by lower average selling
prices across most segments.
Global nitrogen prices in the second quarter were lower
year-over-year due to recent worldwide capacity expansions. Prices
in North America were pressured further by a high level of imports
that arrived in the first quarter and unfavorable weather in March
and April that delayed fertilizer purchases and applications.
Additionally, CF's sales in the quarter included a higher
proportion of lower-priced ammonia and urea ammonium nitrate (UAN)
export sales than the prior year.
The company's average selling price for ammonia was $338 per ton
in the second quarter of 2017 compared to $411 per ton in the
second quarter of 2016. The average selling price for urea was $212
per ton in the second quarter of 2017 compared to $247 per ton in
the second quarter of 2016, and the average selling price for UAN
was $175 per ton in the second quarter of 2017 compared to $202 per
ton in the second quarter of 2016.
Cost of sales per ton increased 42 percent in the second quarter
of 2017 compared to the second quarter of 2016, and increased 19
percent for the first six months of 2017 compared to the first six
months of 2016, due to the impact of the unrealized net
mark-to-market loss on natural gas derivatives in the second
quarter of 2017 compared to a gain in the same quarter of 2016,
higher realized gas costs and increased depreciation and
amortization. Controllable cost of sales, defined as non-gas cash
costs (maintenance, labor, electricity, other raw materials,
transportation and distribution, and other plant costs), which
excludes the impact of natural gas, derivatives and depreciation
and amortization, decreased $28 million, or 15 percent per ton,(3)
in the second quarter of 2017 compared to 2016, and $45 million, or
17 percent per ton, year-to-date, as a result of the company's
targeted cost reduction initiatives and increases in volume.
In the second quarter of 2017, the average cost of natural gas
reflected in cost of sales for the company was $3.39 per MMBtu,
which includes a realized loss of $0.04 per MMBtu on natural gas
hedges totaling $4 million. This compares to the average cost of
natural gas in cost of sales of $2.85 per MMBtu for the second
quarter of 2016, which included a realized loss of $0.75 per MMBtu
on natural gas hedges totaling $61 million. During the second
quarter of 2017, the average price of natural gas at Henry Hub in
North America was $3.05 per MMBtu, and the average price of natural
gas at the National Balancing Point in the United Kingdom was $4.85
per MMBtu.
Additionally, the company recorded an unrealized net
mark-to-market loss on natural gas derivatives of $18 million in
the second quarter of 2017 compared to an unrealized net
mark-to-market gain on natural gas derivatives of $211 million
in the second quarter of 2016. The company did not enter into any
additional natural gas hedges in the second quarter of 2017.
_________________________________________________________________________
(3)
See reconciliation of controllable cost of
sales and controllable cost of sales per ton to the most directly
comparable GAAP measures in the tables accompanying this
release.
Outlook
CF expects nitrogen pricing to be challenged through the
remainder of 2017 and into 2018 as the global marketplace continues
to adapt to the significant capacity increases of recent years.
This transition suggests global tradeflows will re-align, which
is beginning to happen. Marginal producers in China are supplying
less product to the global marketplace, a trend that CF expects to
continue. Urea exports from China totaled 2.8 million metric tons
through June, a decline of 46 percent from the same period in 2016.
Published operating rates in China during the second quarter of
2017 were approximately 60 percent.
Additionally, over the last year, multiple industry participants
outside of China have announced price-driven curtailments and
reduced exports. These announcements, which have affected
tradeflows not only in urea but also in ammonia and UAN, have
occurred in Eastern Europe, Russia, South Asia and Ukraine.
North America, which will be import-dependent for the
foreseeable future, is seeing changes to its tradeflows as well.
Urea and UAN imports through May are down 22 percent and 10 percent
respectively. These declines, while significant, are not as large
as would be expected given recent North American capacity
additions. In fact, due to high import levels in the first quarter,
many shipments that arrived after April did not enter distribution
channels. This contributed to urea barge prices in New Orleans
averaging $30 per ton below international parity during the quarter
and breaking through 2016 lows in June. Prices subsequently
rebounded slightly in July as some of this oversupply was
re-exported to other destinations. However, with North America
entering what is typically its period of lowest demand and prices,
new pricing lows could be reached should substantial imports arrive
in the third quarter.
Longer term, global supply growth will slow. CF expects a net
6.2 million metric tons of nameplate urea capacity to start-up in
2017 and 2018. After 2018, the rate of net new capacity growth is
expected to fall below the long-term annual nitrogen demand growth
rate of approximately two percent, helping to tighten the global
supply and demand balance going forward.
Capital Expenditures
New capital expenditures for 2017 are expected to be
approximately $400 million. Additionally, as of June 30, 2017,
the company had approximately $175 million in costs accrued but yet
unpaid for work completed in 2016 related to the capacity expansion
projects. Most of this unpaid amount is the subject of disputes
between the company and certain contractors and vendors. Actual
cash expenditures for 2017 will reflect any payments for these
capacity expansion project amounts if or when they are made.
Liquidity
As of June 30, 2017, the company had cash and cash
equivalents of $2.0 billion on the balance sheet, had no borrowings
outstanding under its $750 million revolving credit facility and
was in compliance with all applicable covenant requirements under
its debt instruments.
In June, the company announced that it had received federal tax
refunds of approximately $815 million due to the carryback of
certain federal tax losses from the 2016 tax year to prior periods.
These tax losses are primarily related to accelerated tax
depreciation of the company’s capacity expansion projects that were
placed in service in 2016. The receipt of the federal tax refunds
was earlier than the previously stated expectations, which had been
the third quarter of 2017. The company intends to use the proceeds
to fund the payment of $800 million in debt coming due in 2018.
CHS Inc. Distribution
On July 31, 2017, the Board of Managers of CF Industries
Nitrogen, LLC approved a semi-annual distribution payment to CHS
Inc. of $59 million for the distribution period ended June 30,
2017. The distribution was paid on July 31, 2017.
Consolidated Results
Three months ended June 30, Six
months ended June 30, 2017 2016
2017 2016 (dollars in millions, except per
share
and per MMBtu amounts)
Net sales $ 1,124 $ 1,134 $ 2,161 $ 2,138 Cost of sales 952
607 1,883 1,394 Gross margin $ 172 $
527 $ 278 $ 744 Gross margin percentage
15.3 % 46.5 % 12.9 % 34.8 % Net earnings (loss) attributable
to common stockholders $ 3 $ 47 $ (20 ) $ 73 Adjusted net earnings
(1) $ 23 $ 77 $ 34 $ 170 Net earnings (loss) per diluted
share $ 0.01 $ 0.20 $ (0.09 ) $ 0.31 Adjusted net earnings per
diluted share(1) $ 0.10 $ 0.33 $ 0.15 $ 0.72 EBITDA(1) $ 275
$ 329 $ 493 $ 536 Adjusted EBITDA(1) $ 303 $ 342 $ 575 $ 642
Tons of product sold (000s) 5,046 4,557 9,791 8,608
Supplemental data (per MMBtu): Natural gas costs in cost of
sales(2) $ 3.35 $ 2.10 $ 3.50 $ 2.29 Realized derivatives loss in
cost of sales(3) 0.04 0.75 0.01 0.77
Cost of natural gas in cost of sales $ 3.39 $ 2.85 $ 3.51 $ 3.06
Average daily market price of natural gas (per MMBtu): Henry
Hub $ 3.05 $ 2.10 $ 3.02 $ 2.04 National Balancing Point UK $ 4.85
$ 4.50 $ 5.43 $ 4.43 Unrealized net mark-to-market loss
(gain) on natural gas derivatives $ 18 $ (211 ) $ 71 $ (190 )
Depreciation and amortization $ 217 $ 181 $ 422 $ 327
Capital expenditures $ 91 $ 703 $ 185 $ 1,379 Production
volume by product tons (000s): Ammonia(4) 2,656 1,991 5,164 3,994
Granular urea 1,236 808 2,238 1,627 UAN (32%) 1,722 1,771 3,539
3,289 AN 459 386 1,001 817
_______________________________________________________________________________
(1)
See reconciliations of EBITDA, adjusted EBITDA, adjusted net
earnings and adjusted net earnings per diluted share to the most
directly comparable GAAP measures in the tables accompanying this
release.
(2)
Includes the cost of natural gas that is included in cost of sales
during the period under the first-in, first-out inventory cost
method.
(3)
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.
(4)
Gross ammonia production including amounts subsequently upgraded
into other products.
During the three and six months ended June 30, 2017 and
2016, certain significant items impacted our financial results. The
following table outlines these significant items and how they
impacted the comparability of our financial results during these
periods. During the three months ended June 30, 2017 and 2016,
we reported net earnings attributable to common stockholders of
$3 million and $47 million, respectively. During the six
months ended June 30, 2017 and 2016, we reported net (loss)
earnings attributable to common stockholders of $(20) million and
$73 million, respectively.
Three months ended June 30, Six
months ended June 30, 2017 2016
2017 2016 Pre-Tax
After-Tax Pre-Tax After-Tax
Pre-Tax After-Tax Pre-Tax
After-Tax (in millions) Depreciation and
amortization(1) $ 217 $ 137 $ 181 $ 114 $ 422
$ 265 $ 327 $ 205 Unrealized net mark-to-market loss (gain)
on natural gas derivatives(2) 18 11 (211 ) (132 ) 71 44 (190 ) (119
) Transaction costs(3) — — 165 84 — — 179 96 Loss on foreign
currency transactions including intercompany loans(4)(5) 1 1 38 37
1 1 83 81 Capacity expansion project expenses(4) — — 19 12 — — 35
22 Equity method investment tax contingency accrual(6) 7 7 — — 7 7
— — Financing costs related to bridge loan commitment fee(7) — — 28
18 — — 28 18 Strategic Venture with CHS: Noncontrolling interest(8)
15 15 23 23 23 23 40 40 Loss on embedded derivative(4)(9) 2
1 — — 3 2 —
—
Total Impact of Significant Items $
260 $ 172 $ 243 $ 156 $
527 $ 342 $ 502 $ 343
_______________________________________________________________________________
(1)
Included primarily in cost of sales and selling, general and
administrative expenses in our consolidated statements of
operations.
(2)
Included in cost of sales in our consolidated statements of
operations.
(3)
Transaction costs relate to costs of various consulting and legal
services associated with the company's proposed combination with
certain businesses of OCI and the company's strategic venture with
CHS.
(4)
Included in other operating—net in our consolidated statements of
operations.
(5)
Primarily relates to the unrealized foreign currency exchange rate
impact on intercompany debt that has not been permanently invested.
(6)
Represents an accrual on the books of Point Lisas Nitrogen Ltd.
(PLNL), the company's Trinidad joint venture, for a disputed tax
assessment. Amount reflects the company's 50 percent equity
interest in PLNL. This is included in equity in losses of operating
affiliates in our consolidated statements of operations.
(7)
Included in interest expense in our consolidated statements of
operations.
(8)
Included in net earnings attributable to noncontrolling interests
in our consolidated statements of operations.
(9)
Represents the change in fair value of the embedded derivative
included within the terms of the company's strategic venture with
CHS.
Segment Results
Ammonia Segment
CF Industries’ ammonia segment produces anhydrous ammonia
(ammonia), which is the company’s most concentrated nitrogen
fertilizer, containing 82 percent nitrogen. The results of the
ammonia segment consist of sales of ammonia to external customers.
In addition, ammonia is the “basic” nitrogen product that the
company upgrades into other nitrogen fertilizers such as urea, UAN
and AN.
Three months ended June 30, Six
months ended June 30, 2017 2016
2017 2016 (dollars in millions,
except per ton amounts)
Net sales $ 389 $ 358 $ 671 $ 625 Cost of sales 302 152
567 356 Gross margin $ 87 $ 206
$ 104 $ 269 Gross margin percentage 22.4
%
57.5 % 15.5 % 43.0 % Sales volume by product tons (000s)
1,152 870 2,072 1,607 Sales volume by nutrient tons (000s)(1) 945
713 1,699 1,318 Average selling price per product ton $ 338
$ 411 $ 324 $ 389 Average selling price per nutrient ton(1) 412 502
395 474 Gross margin per product ton $ 76 $ 237 $ 50 $ 167
Gross margin per nutrient ton(1) 92 289 61 204 Adjusted
gross margin(2): Gross margin $ 87 $ 206 $ 104 $ 269 Depreciation
and amortization 49 19 93 40 Unrealized net mark-to-market loss
(gain) on natural gas derivatives 6 (69 ) 23 (62 )
Adjusted gross margin $ 142 $ 156 $ 220 $ 247
Adjusted gross margin as a percent of net sales 36.5 % 43.6
% 32.8 % 39.5 %
_______________________________________________________________________________
(1)
Nutrient tons represent the tons of nitrogen within the
product tons.
(2)
Adjusted gross margin and adjusted gross margin as a percent of net
sales are non-GAAP financial measures. Adjusted gross margin is
defined as gross margin excluding depreciation and amortization and
unrealized net mark-to-market (gain) loss on natural gas
derivatives. The company has presented adjusted gross margin and
adjusted gross margin as a percent of net sales because management
uses these measures, and believes they are useful to investors, as
supplemental financial measures in the comparison of year-over-year
performance. A reconciliation of adjusted gross margin and adjusted
gross margin as a percent of net sales to gross margin, the most
directly comparable GAAP measure, is provided in the table above.
See "Note Regarding Non-GAAP Financial Measures" in this release.
Comparison of 2017 to 2016 second quarter periods:
- Ammonia sales volume increased for the
second quarter of 2017 compared to the second quarter of 2016 due
to additional production volume from the new capacity expansions at
the company's Donaldsonville and Port Neal Nitrogen Complexes.
- Ammonia average selling prices
decreased primarily due to greater global nitrogen supply
availability.
- Ammonia gross margin per ton decreased
in the second quarter of 2017 compared to the second quarter of
2016 due to a $6 million unrealized net mark-to-market loss on
natural gas derivatives compared to a $69 million unrealized net
mark-to-market gain in the prior year period; lower average selling
prices; an increase in realized natural gas costs; and a $30
million increase in depreciation primarily related to the new
Donaldsonville and Port Neal ammonia plants. These were partially
offset by targeted cost reduction initiatives and the effects of
increased volumes.
Granular Urea Segment
CF Industries’ granular urea segment produces granular urea,
which contains 46 percent nitrogen. Produced from ammonia and
carbon dioxide, it has the highest nitrogen content of any of the
company’s solid nitrogen fertilizers.
Three months ended June 30, Six
months ended June 30, 2017 2016
2017 2016 (dollars in millions,
except per ton amounts)
Net sales $ 259 $ 240 $ 497 $ 475 Cost of sales 235 118
448 293 Gross margin $ 24 $ 122
$ 49 $ 182 Gross margin percentage 9.3 % 50.8
% 9.9 % 38.3 % Sales volume by product tons (000s) 1,221 972
2,179 1,891 Sales volume by nutrient tons (000s)(1) 561 447 1,002
870 Average selling price per product ton $ 212 $ 247 $ 228
$ 251 Average selling price per nutrient ton(1) 462 537 496 546
Gross margin per product ton $ 20 $ 126 $ 22 $ 96 Gross
margin per nutrient ton(1) 43 273 49 209 Adjusted gross
margin(2): Gross margin $ 24 $ 122 $ 49 $ 182 Depreciation and
amortization 67 25 120 50 Unrealized net mark-to-market loss (gain)
on natural gas derivatives 5 (55 ) 19 (49 ) Adjusted
gross margin $ 96 $ 92 $ 188 $ 183
Adjusted gross margin as a percent of net sales 37.1 % 38.3 % 37.8
% 38.5 %
_______________________________________________________________________________
(1)
Nutrient tons represent the tons of nitrogen within the
product tons.
(2)
Adjusted gross margin and adjusted gross margin as a percent of net
sales are non-GAAP financial measures. Adjusted gross margin is
defined as gross margin excluding depreciation and amortization and
unrealized net mark-to-market (gain) loss on natural gas
derivatives. The company has presented adjusted gross margin and
adjusted gross margin as a percent of net sales because management
uses these measures, and believes they are useful to investors, as
supplemental financial measures in the comparison of year-over-year
performance. A reconciliation of adjusted gross margin and adjusted
gross margin as a percent of net sales to gross margin, the most
directly comparable GAAP measure, is provided in the table above.
See "Note Regarding Non-GAAP Financial Measures" in this release.
Comparison of 2017 to 2016 second quarter periods:
- Granular urea sales volume increased
for the quarter primarily due to additional production volume from
the new capacity expansion at the company's Port Neal Nitrogen
Complex.
- Granular urea average selling price per
ton decreased due to greater global nitrogen supply
availability.
- Granular urea gross margin per ton
decreased due to a $5 million unrealized net mark-to-market loss on
natural gas derivatives compared to a $55 million unrealized net
mark-to-market gain in the prior year period; lower average selling
prices; a $42 million increase in depreciation and amortization
primarily associated with the new Port Neal urea plant; and an
increase in realized natural gas costs. These were partially offset
by targeted cost reduction initiatives and the effects of increased
volumes.
UAN Segment
CF Industries’ UAN segment produces urea ammonium nitrate
solution (UAN). UAN is a liquid fertilizer product with nitrogen
content that typically ranges from 28 percent to 32 percent and is
produced by combining urea and ammonium nitrate in solution.
Three months ended June 30, Six
months ended June 30, 2017 2016
2017 2016 (dollars in millions,
except per ton amounts)
Net sales $ 286 $ 370 $ 603 $ 679 Cost of sales 248 197
530 428 Gross margin $ 38 $ 173
$ 73 $ 251 Gross margin percentage 13.3 % 46.8
% 12.1 % 37.0 % Sales volume by product tons (000s) 1,631
1,832 3,480 3,284 Sales volume by nutrient tons (000s)(1) 516 577
1,100 1,034 Average selling price per product ton $ 175 $
202 $ 173 $ 207 Average selling price per nutrient ton(1) 554 641
548 657 Gross margin per product ton $ 23 $ 94 $ 21 $ 76
Gross margin per nutrient ton(1) 74 300 66 243 Adjusted
gross margin(2): Gross margin $ 38 $ 173 $ 73 $ 251 Depreciation
and amortization 56 59 121 117 Unrealized net mark-to-market loss
(gain) on natural gas derivatives 5 (65 ) 21 (59 )
Adjusted gross margin $ 99 $ 167 $ 215 $ 309
Adjusted gross margin as a percent of net sales 34.6 % 45.1
% 35.7 % 45.5 %
_______________________________________________________________________________
(1)
Nutrient tons represent the tons of nitrogen within the
product tons.
(2)
Adjusted gross margin and adjusted gross margin as a percent of net
sales are non-GAAP financial measures. Adjusted gross margin is
defined as gross margin excluding depreciation and amortization and
unrealized net mark-to-market (gain) loss on natural gas
derivatives. The company has presented adjusted gross margin and
adjusted gross margin as a percent of net sales because management
uses these measures, and believes they are useful to investors, as
supplemental financial measures in the comparison of year-over-year
performance. A reconciliation of adjusted gross margin and adjusted
gross margin as a percent of net sales to gross margin, the most
directly comparable GAAP measure, is provided in the table above.
See "Note Regarding Non-GAAP Financial Measures" in this release.
Comparison of 2017 to 2016 second quarter periods:
- UAN sales volume decreased in the
second quarter of 2017 as unfavorable weather in North America
resulted in late planting and delayed UAN purchases and
applications.
- UAN average selling price per ton
decreased due to greater global nitrogen supply availability.
- UAN gross margin per ton decreased in
the second quarter of 2017 compared to the second quarter of 2016
due to a $5 million unrealized net mark-to-market loss on natural
gas derivatives compared to a $65 million unrealized net
mark-to-market gain in the prior year period; lower average selling
prices; and an increase in realized natural gas costs. These were
partially offset by targeted cost reduction initiatives.
AN Segment
CF Industries' AN segment produces ammonium nitrate (AN). AN is
used as a nitrogen fertilizer with nitrogen content between 29
percent to 35 percent, and also is used by industrial customers for
commercial explosives and blasting systems. AN is produced at the
company's Yazoo City, Mississippi; Billingham, United Kingdom; and
Ince, United Kingdom, complexes.
Three months ended June 30, Six
months ended June 30, 2017 2016
2017 2016 (dollars in millions,
except per ton amounts)
Net sales $ 112 $ 90 $ 237 $ 215 Cost of sales 102 90
208 202 Gross margin $ 10 $ — $ 29
$ 13 Gross margin percentage 8.9 % — % 12.2 %
6.0 % Sales volume by product tons (000s) 539 453 1,107
1,011 Sales volume by nutrient tons (000s)(1) 183 154 374 342
Average selling price per product ton $ 208 $ 199 $ 214 $
213 Average selling price per nutrient ton(1) 612 584 634 629
Gross margin per product ton $ 19 $ — $ 26 $ 13 Gross margin
per nutrient ton(1) 55 — 78 38 Adjusted gross margin(2):
Gross margin $ 10 $ — $ 29 $ 13 Depreciation and amortization 21 28
40 50 Unrealized net mark-to-market loss (gain) on natural gas
derivatives 1 (9 ) 3 (8 ) Adjusted gross margin $ 32
$ 19 $ 72 $ 55 Adjusted gross margin as
a percent of net sales 28.6 % 21.1 % 30.4 % 25.6 %
_______________________________________________________________________________
(1)
Nutrient tons represent the tons of nitrogen within the
product tons.
(2)
Adjusted gross margin and adjusted gross margin as a percent of net
sales are non-GAAP financial measures. Adjusted gross margin is
defined as gross margin excluding depreciation and amortization and
unrealized net mark-to-market (gain) loss on natural gas
derivatives. The company has presented adjusted gross margin and
adjusted gross margin as a percent of net sales because management
uses these measures, and believes they are useful to investors, as
supplemental financial measures in the comparison of year-over-year
performance. A reconciliation of adjusted gross margin and adjusted
gross margin as a percent of net sales to gross margin, the most
directly comparable GAAP measure, is provided in the table above.
See "Note Regarding Non-GAAP Financial Measures" in this release.
Comparison of 2017 to 2016 second quarter periods:
- AN sales volume increased in the second
quarter of 2017 compared to the second quarter of 2016 due to a new
long-term AN supply agreement that commenced in 2017.
- AN average selling price per ton
increased in the second quarter of 2017 compared to the second
quarter of 2016 due primarily to the long-term AN supply agreement
that commenced in 2017.
- AN gross margin per ton increased due
to higher average selling prices, costs in the second quarter of
2016 related to the completion of the reconfiguration at the Yazoo
City complex, targeted cost reduction initiatives and the effects
of increased volumes partially offset by a $1 million unrealized
net mark-to-market loss on natural gas derivatives compared to a $9
million unrealized net mark-to-market gain in the prior year period
and an increase in realized natural gas costs.
- AN segment adjusted gross margin
increased in the second quarter of 2017 and year-to-date compared
to these periods in 2016.
Other Segment
CF Industries’ Other segment includes diesel exhaust fluid
(DEF), urea liquor, nitric acid and compound fertilizer products
(NPKs).
Three months ended June 30, Six
months ended June 30, 2017 2016
2017 2016 (dollars in millions,
except per ton amounts)
Net sales $ 78 $ 76 $ 153 $ 144 Cost of sales 65 50
130 115 Gross margin $ 13 $ 26 $ 23
$ 29 Gross margin percentage 16.7 % 34.2 %
15.0 % 20.1 % Sales volume by product tons (000s) 503 430
953 815 Sales volume by nutrient tons (000s)(1) 100 84 188 157
Average selling price per product ton $ 155 $ 177 $ 161 $
177 Average selling price per nutrient ton(1) 780 905 814 917
Gross margin per product ton $ 26 $ 60 $ 24 $ 36 Gross
margin per nutrient ton(1) 130 310 122 185 Adjusted gross
margin(2): Gross margin $ 13 $ 26 $ 23 $ 29 Depreciation and
amortization 13 12 25 22 Unrealized net mark-to-market loss (gain)
on natural gas derivatives 1 (13 ) 5 (12 ) Adjusted
gross margin $ 27 $ 25 $ 53 $ 39
Adjusted gross margin as a percent of net sales 34.6 % 32.9 % 34.6
% 27.1 %
_______________________________________________________________________________
(1)
Nutrient tons represent the tons of nitrogen within the
product tons.
(2)
Adjusted gross margin and adjusted gross margin as a percent of net
sales are non-GAAP financial measures. Adjusted gross margin is
defined as gross margin excluding depreciation and amortization and
unrealized net mark-to-market (gain) loss on natural gas
derivatives. The company has presented adjusted gross margin and
adjusted gross margin as a percent of net sales because management
uses these measures, and believes they are useful to investors, as
supplemental financial measures in the comparison of year-over-year
performance. A reconciliation of adjusted gross margin and adjusted
gross margin as a percent of net sales to gross margin, the most
directly comparable GAAP measure, is provided in the table above.
See "Note Regarding Non-GAAP Financial Measures" in this release.
Comparison of 2017 to 2016 second quarter periods:
- Other segment volume increased in the
second quarter of 2017 due primarily to higher year-over-year sales
of DEF as the company continues to grow its North American DEF
business. This was partially offset by lower nitric acid and NPK
sales compared to the prior year period.
- Other segment average selling price per
ton decreased due primarily to greater global nitrogen supply
availability.
- Other segment gross margin per ton
decreased due to a $1 million unrealized net mark-to-market loss on
natural gas derivatives compared to a $13 million unrealized net
mark-to-market gain in the prior year period; lower average selling
prices; and an increase in realized natural gas costs.
- Other segment adjusted gross margin
increased in the second quarter of 2017 and year-to-date compared
to these periods in 2016.
Dividend Payment
On July 25, 2017, CF Industries’ Board of Directors
declared a quarterly dividend of $0.30 per common share. The
dividend will be paid on August 31, 2017 to stockholders of
record as of August 15, 2017.
Conference Call
CF Industries will hold a conference call to discuss its second
quarter 2017 results at 9:00 a.m. ET on Thursday, August 3,
2017. This conference call will include discussion of CF
Industries' business environment and outlook. Investors can access
the call and find dial-in information on the Investor Relations
section of the company’s website at www.cfindustries.com.
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.
Note Regarding Non-GAAP Financial Measures
The company reports its financial results in accordance with
U.S. generally accepted accounting principles (GAAP). Management
believes that EBITDA, EBITDA per ton, EBITDA as a percent of net
sales, adjusted EBITDA, adjusted EBITDA per ton, adjusted EBITDA as
a percent of net sales, adjusted net earnings, adjusted net
earnings per diluted share, controllable cost of sales, and
controllable cost of sales per ton, and, on a segment basis,
adjusted gross margin and adjusted gross margin as a percent of net
sales, which are non-GAAP financial measures, provide additional
meaningful information regarding the company's performance and
financial strength. Non-GAAP financial measures should be viewed in
addition to, and not as an alternative for, the company's reported
results prepared in accordance with GAAP. In addition, because not
all companies use identical calculations, EBITDA, EBITDA per ton,
EBITDA as a percent of net sales, adjusted EBITDA, adjusted EBITDA
per ton, adjusted EBITDA as a percent of net sales, adjusted net
earnings, adjusted net earnings per diluted share, adjusted gross
margin, adjusted gross margin as a percent of net sales,
controllable cost of sales and controllable cost of sales per ton,
included in this release may not be comparable to similarly titled
measures of other companies. Reconciliations of EBITDA, EBITDA per
ton, EBITDA as a percent of net sales, adjusted EBITDA, adjusted
EBITDA per ton, adjusted EBITDA as a percent of net sales, adjusted
net earnings, adjusted net earnings per diluted share, controllable
cost of sales, and controllable cost of sales per ton to the most
directly comparable GAAP measures are provided in the tables
accompanying this release under “CF Industries Holdings,
Inc.-Selected Financial Information-Non-GAAP Disclosure Items.”
Reconciliations of adjusted gross margin and adjusted gross margin
as a percent of net sales to the most directly comparable GAAP
measures are provided in the segment tables included in this
release.
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,” “project,” “will” or
“would” 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 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; the volatility of natural gas prices in
North America and Europe; 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; the Company’s
ability to manage its indebtedness; operating and financial
restrictions imposed on the Company by the agreements governing the
Company's senior secured indebtedness; risks associated with the
Company’s incurrence of additional indebtedness; the Company's
ability to maintain compliance with covenants under the agreements
governing its indebtedness; downgrades of the Company’s credit
ratings; risks associated with cyber security; weather conditions;
risks associated with the Company’s ability to utilize its tax net
operating losses and other tax assets, including the risk that the
use of such tax benefits is limited by an “ownership change” (as
defined under the Internal Revenue Code and related Internal
Revenue Service pronouncements); risks associated with changes in
tax laws and disagreements with taxing authorities; 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; and deterioration of global market and economic
conditions.
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 and quarterly reports on Form 10-K and Form
10-Q, which are 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.
CF INDUSTRIES HOLDINGS, INC.
SELECTED FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(unaudited)
Three months ended June 30,
Six months ended June 30, 2017
2016 2017 2016 (in millions, except
per share amounts) Net sales $ 1,124 $ 1,134 $ 2,161 $ 2,138
Cost of sales 952 607 1,883 1,394 Gross
margin 172 527 278 744 Selling, general
and administrative expenses 49 52 95 97 Transaction costs — 165 —
179 Other operating—net 10 63 16 124
Total other operating costs and expenses 59 280 111 400 Equity in
losses of operating affiliates (6 ) (9 ) (3 ) (9 ) Operating
earnings 107 238 164 335 Interest expense 80 61 160 99 Interest
income (2 ) (1 ) (3 ) (2 ) Other non-operating—net — —
— (2 ) Earnings before income taxes 29 178 7 240
Income tax provision (benefit) 5 95 (8 ) 110
Net earnings 24 83 15 130 Less: Net earnings attributable to
noncontrolling interests 21 36 35 57
Net earnings (loss) attributable to common stockholders $ 3
$ 47 $ (20 ) $ 73 Net earnings (loss) per
share attributable to common stockholders: Basic $ 0.01 $
0.20 $ (0.09 ) $ 0.31 Diluted $ 0.01 $ 0.20
$ (0.09 ) $ 0.31 Weighted-average common shares
outstanding: Basic 233.5 233.3 233.2 233.2
Diluted 233.7 233.5 233.2 233.5
CF INDUSTRIES HOLDINGS, INC.
SELECTED FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited)
June 30,
2017
December 31,
2016
(in millions) Assets Current assets: Cash and cash
equivalents $ 2,001 $ 1,164 Restricted cash 4 5 Accounts
receivable—net 282 236 Inventories 325 339 Prepaid income taxes 34
841 Other current assets 29 70 Total current assets 2,675
2,655 Property, plant and equipment—net 9,441 9,652 Investments in
affiliates 120 139 Goodwill 2,360 2,345 Other assets 340 340
Total assets $ 14,936 $ 15,131
Liabilities
and Equity Current liabilities: Accounts payable and accrued
expenses $ 616 $ 638 Income taxes payable — 1 Customer advances 5
42 Current portion of long-term debt 797 — Other current
liabilities 23 5 Total current liabilities 1,441 686
Long-term debt 4,986 5,778 Deferred income taxes 1,632 1,630 Other
liabilities 487 545 Equity: Stockholders' equity 3,270 3,348
Noncontrolling interests 3,120 3,144 Total equity 6,390
6,492
Total liabilities and equity $ 14,936 $
15,131
CF INDUSTRIES HOLDINGS, INC.
SELECTED FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(unaudited)
Three months ended June 30,
Six months ended June 30, 2017
2016 2017 2016 (in millions)
Operating Activities: Net earnings $ 24 $ 83 $ 15 $ 130
Adjustments to reconcile net earnings to net cash provided by
operating activities: Depreciation and amortization 217 181 422 327
Deferred income taxes 8 839 (8 ) 875 Stock-based compensation
expense 4 5 8 9 Unrealized net loss (gain) on natural gas and
foreign currency derivatives 18 (207 ) 71 (189 ) Unrealized loss on
embedded derivative 2 — 3 — Loss on disposal of property, plant and
equipment — 1 1 4 Undistributed losses of affiliates—net of taxes
11 5 6 1 Changes in: Accounts receivable—net (26 ) 20 (35 ) 24
Inventories 25 65 10 81 Accrued and prepaid income taxes 811 (650 )
806 (673 ) Accounts payable and accrued expenses (17 ) (61 ) (12 )
(67 ) Customer advances (179 ) (214 ) (37 ) (149 ) Other—net (67 )
33 (63 ) 73 Net cash provided by operating activities
831 100 1,187 446
Investing
Activities: Additions to property, plant and equipment (91 )
(703 ) (185 ) (1,379 ) Proceeds from sale of property, plant and
equipment 4 — 12 2 Distributions received from unconsolidated
affiliates 6 — 6 — Proceeds from sale of auction rate securities 9
— 9 — Withdrawals from restricted cash funds — 5 1 16 Other—net —
2 — 3 Net cash used in investing
activities (72 ) (696 ) (157 ) (1,358 )
Financing
Activities: Proceeds from short-term borrowings — — — 150
Payments of short-term borrowings — — — (150 ) Financing fees — (5
) — (5 ) Dividends paid on common stock (70 ) (70 ) (140 ) (140 )
Issuance of noncontrolling interest in CFN — — — 2,800
Distributions to noncontrolling interests (5 ) (7 ) (59 ) (20 ) Net
cash (used in) provided by financing activities (75 ) (82 ) (199 )
2,635 Effect of exchange rate changes on cash and cash
equivalents 5 (3 ) 6 (1 ) Increase (decrease) in cash
and cash equivalents 689 (681 ) 837 1,722 Cash and cash equivalents
at beginning of period 1,312 2,689 1,164 286
Cash and cash equivalents at end of period $ 2,001
$ 2,008 $ 2,001 $ 2,008
CF INDUSTRIES HOLDINGS, INC.SELECTED
FINANCIAL INFORMATIONNON-GAAP DISCLOSURE ITEMS
Reconciliation of net earnings (loss), net earnings (loss)
per ton and net earnings (loss) as a percent of net sales (GAAP
measures) to EBITDA, EBITDA per ton, EBITDA as a percent of net
sales, adjusted EBITDA, adjusted EBITDA per ton and adjusted EBITDA
as a percent of net sales (non-GAAP measures), as
applicable:
EBITDA is defined as net earnings (loss) attributable to common
stockholders plus interest expense (income)—net, income taxes, and
depreciation and amortization. Other adjustments include the
elimination of loan fee amortization that is included in both
interest and amortization, and the portion of depreciation that is
included in noncontrolling interests. The company has presented
EBITDA, EBITDA per ton and EBITDA as a percent of net sales because
management uses these measures to track performance and believes
that they are frequently used by securities analysts, investors and
other interested parties in the evaluation of companies in the
industry.
Adjusted EBITDA is defined as EBITDA adjusted with the selected
items included in EBITDA as summarized in the table below. The
company has presented adjusted EBITDA, adjusted EBITDA per ton and
adjusted EBITDA as a percent of net sales because management uses
these measures, and believes they are useful to investors, as
supplemental financial measures in the comparison of year-over-year
performance.
Three months ended June 30, Six
months ended June 30, 2017 2016
2017 2016 (in millions) Net earnings
(loss) attributable to common stockholders $ 3 $ 47 $ (20 ) $ 73
Interest expense (income)—net 78 60 157 97 Income tax provision
(benefit) 5 95 (8 ) 110 Depreciation and amortization 217 181 422
327 Less: other adjustments (28 ) (54 ) (58 ) (71 ) EBITDA 275
329 493 536 Unrealized net
mark-to-market loss (gain) on natural gas derivatives 18 (211 ) 71
(190 ) Transaction costs(1) — 165 — 179 Loss on foreign currency
transactions including intercompany loans(2) 1 38 1 83 Capacity
expansion project expenses — 19 — 35 Equity method investment tax
contingency accrual(3) 7 — 7 — Loss on embedded derivative(4) 2 — 3
— Loss (gain) on foreign currency derivatives — 2 —
(1 ) Total adjustments 28 13 82 106
Adjusted EBITDA $ 303 $ 342 $ 575 $ 642
Net sales $ 1,124 $ 1,134 $ 2,161 $ 2,138 Tons of
product sold (000s) 5,046 4,557 9,791 8,608 Net earnings
(loss) as a percent of net sales 0.3 % 4.1 % (0.9 )% 3.4 % Net
earnings (loss) per ton $ 0.59 $ 10.31 $ (2.04 ) $ 8.48 EBITDA as a
percent of net sales 24.5 % 29.0 % 22.8 % 25.1 % EBITDA per ton $
54.50 $ 72.20 $ 50.35 $ 62.27 Adjusted EBITDA as a percent of net
sales 27.0 % 30.2 % 26.6 % 30.0 % Adjusted EBITDA per ton $ 60.05 $
75.05 $ 58.73 $ 74.58
_______________________________________________________________________________
(1)
Transaction costs relate to costs of various consulting and
legal services associated with the company's proposed combination
with certain businesses of OCI and the company's strategic venture
with CHS.
(2)
Loss on foreign currency transactions including intercompany loans
primarily relates to the unrealized foreign currency exchange rate
impact on intercompany debt that has not been permanently invested.
(3)
Represents an accrual on the books of Point Lisas Nitrogen Ltd.
(PLNL), the company's Trinidad joint venture, for a disputed tax
assessment. Amount reflects the company's 50 percent equity
interest in PLNL. This is included in equity in losses of operating
affiliates in our consolidated statements of operations.
(4)
Represents the change in fair value of the embedded derivative
included within the terms of the company's strategic venture with
CHS.
Reconciliation of net earnings (loss) attributable to common
stockholders and net earnings (loss) per diluted share attributable
to common stockholders (GAAP measures) to adjusted net earnings and
adjusted net earnings per diluted share (non-GAAP measures), as
applicable:
Adjusted net earnings is defined as net earnings (loss)
attributable to common stockholders adjusted with the impacts of
the selected items included in net earnings (loss) as summarized in
the table below. The company has presented adjusted net earnings
and adjusted net earnings per diluted share because management uses
these measures, and believes they are useful to investors, as
supplemental financial measures in the comparison of year-over-year
performance.
Three months ended June 30, Six
months ended June 30, 2017 2016
2017 2016 (in millions) Net earnings
(loss) attributable to common stockholders $ 3 $ 47 $ (20 ) $ 73
Unrealized net mark-to-market loss (gain) on natural gas
derivatives 18 (211 ) 71 (190 ) Transaction costs(1) — 165 — 179
Loss on foreign currency transactions including intercompany
loans(2) 1 38 1 83 Capacity expansion project expenses — 19 — 35
Equity method investment tax contingency accrual(3) 7 — 7 — Loss on
embedded derivative(4) 2 — 3 — Loss (gain) on foreign currency
derivatives — 2 — (1 ) Financing costs related to bridge loan
commitment fee(5) — 28 — 28 Income tax adjustments(6) (8 ) (11 )
(28 ) (37 ) Total adjustments 20 30 54 97
Adjusted net earnings $ 23 $ 77 $ 34 $
170
Three months ended June 30, Six
months ended June 30, 2017 2016
2017 2016 Net earnings (loss) per diluted share
attributable to common stockholders $ 0.01 $ 0.20 $ (0.09 ) $ 0.31
Unrealized net mark-to-market loss (gain) on natural gas
derivatives 0.08 (0.90 ) 0.30 (0.81 ) Transaction costs(1) — 0.71 —
0.76 Loss on foreign currency transactions including intercompany
loans(2) 0.01 0.16 0.01 0.35 Capacity expansion project expenses —
0.08 — 0.15 Equity method investment tax contingency accrual(3)
0.03 — 0.03 — Loss on embedded derivative(4) 0.01 — 0.01 — Loss on
foreign currency derivatives — 0.01 — — Financing costs related to
bridge loan commitment fee(5) — 0.12 — 0.12 Income tax
adjustments(6) (0.04 ) (0.05 ) (0.11 ) (0.16 ) Total adjustments
0.09 0.13 0.24 0.41 Adjusted net
earnings per diluted share $ 0.10 $ 0.33 $ 0.15
$ 0.72
_______________________________________________________________________________
(1)
Transaction costs relate to costs of various consulting and
legal services associated with the company's proposed combination
with certain businesses of OCI and the company's strategic venture
with CHS.
(2)
Loss on foreign currency transactions including intercompany loans
primarily relates to the unrealized foreign currency exchange rate
impact on intercompany debt that has not been permanently invested.
(3)
Represents an accrual on the books of Point Lisas Nitrogen Ltd.
(PLNL), the company's Trinidad joint venture, for a disputed tax
assessment. Amount reflects the company's 50 percent equity
interest in PLNL. This is included in equity in losses of operating
affiliates in our consolidated statements of operations.
(4)
Represents the change in fair value of the embedded derivative
included within the terms of the company's strategic venture with
CHS.
(5)
Not included in the calculation of EBITDA.
(6)
Represents the adjustment to the GAAP basis tax provision
reflecting the tax impact of the other non-GAAP adjustments.
CF INDUSTRIES HOLDINGS, INC.SELECTED
FINANCIAL INFORMATIONNON-GAAP DISCLOSURE ITEMS
Reconciliation of cost of sales and cost of sales per ton
(GAAP measures) to controllable cost of sales and controllable cost
of sales per ton (non-GAAP measures), as applicable:
Controllable cost of sales is defined as cost of sales adjusted
for natural gas costs, realized and unrealized losses (gains) on
natural gas derivatives, and depreciation and amortization. The
company has presented controllable cost of sales and controllable
cost of sales per ton because management uses these measures, and
believes they are useful to investors, as supplemental financial
measures in the comparison of year-over-year performance.
Three months ended June 30, Six
months ended June 30, 2017 2016
2017 2016 (in millions) Cost of sales $
952 $ 607 $ 1,883 $ 1,394 Natural gas costs(1) 309 170 615 346
Realized net losses on natural gas derivatives(2) 4 61 3 117
Unrealized net mark-to-market loss (gain) on natural gas
derivatives 18 (211 ) 71 (190 ) Depreciation and amortization 205
143 398 280 Total adjustments 536
163 1,087 553 Controllable cost of
sales $ 416 $ 444 $ 796 $ 841
Tons of product sold (000s) 5,046 4,557 9,791 8,608 Cost of
sales per ton $ 188.66 $ 133.20 $ 192.32 $ 161.94 Increase in cost
of sales per ton 42 % 19 % Controllable cost of sales per ton $
82.44 $ 97.43 $ 81.30 $ 97.70 Decrease in controllable cost of
sales per ton (15 )% (17 )%
_______________________________________________________________________________
(1)
Includes the cost of natural gas that is included in cost of
sales during the period under the first-in, first-out 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170802006433/en/
CF Industries Holdings, Inc.MediaChris CloseDirector,
Corporate
Communications847-405-2542cclose@cfindustries.comorInvestorsMartin
JarosickVice President, Investor
Relations847-405-2045mjarosick@cfindustries.com
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