Strong Operational Performance in Strengthening
Global Price Environment
Second Highest Quarterly Sales Volume in
Company's History
$2.0 Billion Cash on Balance Sheet
CF Industries Holdings, Inc. (NYSE: CF), the global leader in
nitrogen products manufacturing and distribution, today announced
results for its third quarter ended September 30, 2017.
Highlights
- Net loss of $87 million, or $0.37 per
diluted share; adjusted net loss(1) of $90 million or $0.39 per
diluted share(1)
- EBITDA(2) of $139 million; adjusted
EBITDA(2) of $134 million
- Highest sales volume for a third
quarter in company's history
- $2.0 billion of cash on balance
sheet
- Company to redeem Senior Notes due May
2018 on December 1, 2017
Overview of Results
CF Industries Holdings, Inc., today announced third quarter 2017
net loss attributable to common stockholders of $87 million,
or $0.37 per diluted share, and adjusted net loss of $90 million,
or $0.39 per diluted share. Third quarter 2017 EBITDA was $139
million, and adjusted EBITDA was $134 million. These results
compare to third quarter 2016 net loss attributable to common
stockholders of $30 million, or $0.13 per diluted share; adjusted
net earnings for the third quarter 2016 of $30 million, or $0.13
per diluted share; EBITDA loss of $6 million; and adjusted EBITDA
of $83 million. Third quarter 2017 results include a realized
loss on natural gas hedges of $10 million, compared to a realized
loss on natural gas hedges of $11 million for the third quarter of
2016.
“The CF team delivered strong results in what is typically the
quarter with the lowest demand in North America," said Tony Will,
president and chief executive officer, CF Industries Holdings, Inc.
"We ran our plants safely and at high utilization rates, leveraged
our North American distribution platform and increased our global
customer base. Together, these enabled our company to benefit from
the strengthening global price environment that developed during
the third quarter."
_________________________________________________________________________
(1) See reconciliations of adjusted net loss and adjusted
net loss per diluted share to the most directly comparable GAAP
measures in the tables accompanying this release. (2) EBITDA is
defined as net earnings (loss) attributable to common stockholders
plus interest expense-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 third quarter of 2017. As
of September 30, 2017, CF Industries' 12-month rolling average
recordable incident rate was 0.85 incidents per 200,000 work hours,
well below industry averages.
Gross ammonia production during the third quarter of 2017 was
2.5 million tons, the third highest volume for a quarter in
the company's history.
Sales Overview
Net sales in the third quarter of 2017 increased to
$870 million from $680 million in the same period last year as
higher sales volumes more than offset lower average selling prices
across most segments.
Sales volumes for the quarter were significantly higher compared
to the third quarter of 2016 as the company's production increased
at the Donaldsonville and Port Neal Nitrogen Complexes.
Average selling prices were lower year-over-year across most
segments due to increased global nitrogen supply. Prices in North
America traded at a discount to international parity due to
seasonal low demand during the quarter and continued buyer
reluctance in the region to take substantial positions.
Additionally, CF's sales in the quarter compared to the prior year
included a higher proportion of sales originating near the Gulf of
Mexico, including a substantial level of ammonia, urea and urea
ammonium nitrate (UAN) export sales.
The company's average selling price for ammonia was $235 per ton
in the third quarter of 2017 compared to $287 per ton in the third
quarter of 2016. The average selling price for urea was $195 per
ton in the third quarter of 2017 compared to $203 per ton in the
third quarter of 2016, and the average selling price for UAN was
$144 per ton in the third quarter of 2017 compared to $157 per ton
in the third quarter of 2016.
Cost of sales per ton decreased 5 percent in the third quarter
of 2017 compared to the third quarter of 2016, primarily driven by
production efficiencies due to increased volume, capacity expansion
costs in the third quarter of 2016, and an unrealized net
mark-to-market gain on natural gas derivatives in the third quarter
of 2017 compared to a loss in the third quarter of 2016, partially
offset by higher realized natural gas costs and higher depreciation
and amortization.
Cost of sales per ton increased 11 percent for the first nine
months of 2017 compared to the first nine months of 2016, due to
the impact of an unrealized net mark-to-market loss on natural gas
derivatives in the first nine months of 2017 compared to a gain in
the first nine months of 2016, higher realized natural 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 13 percent per ton,(3) in the third
quarter of 2017 compared to 2016, and 16 percent per ton,(3) in the
first nine months of 2017, as a result of the company's targeted
cost reduction initiatives and production cost efficiencies due to
increased volume.
In the third quarter of 2017, the average cost of natural gas
reflected in cost of sales for the company was $3.35 per MMBtu,
which includes a realized loss of $0.13 per MMBtu on natural gas
hedges totaling $10 million. This compares to the average cost of
natural gas in cost of sales of $2.87 per MMBtu for the third
quarter of 2016, which included a realized loss of $0.17 per MMBtu
on natural gas hedges totaling $11 million. During the third
quarter of 2017, the average price of natural gas at Henry Hub in
North America was $2.93 per MMBtu, and the average price of natural
gas at the National Balancing Point in the United Kingdom was $5.46
per MMBtu.
Additionally, the company recorded an unrealized net
mark-to-market gain on natural gas derivatives of $7 million in the
third quarter of 2017 compared to an unrealized net mark-to-market
loss on natural gas derivatives of $21 million in the third
quarter of 2016. The company did not enter into any additional
natural gas hedges in the third 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.
Market Overview
The third quarter of 2017 saw an unexpectedly rapid rise in the
global price of urea from the unsustainable lows of the second
quarter of 2017. The strengthening price environment was driven by
significantly lower Chinese exports; higher energy and production
costs in parts of the world, including higher natural gas costs in
Europe and higher coal costs in China; a weaker U.S. dollar; and
strong global demand. As a result, urea barge prices at New Orleans
increased from approximately $160 per ton at the start of the
quarter to approximately $245 per ton at the end of the
quarter.
CF management expects lower Chinese urea export volumes, which
were down 51 percent year-over-year through August, to continue.
Higher production costs - driven by increased anthracite coal costs
in China, which have risen 25 percent since June - and the impact
of environmental protection and enforcement have pressured marginal
producers in the country. Additionally, strong urea prices within
China have reduced the incentive to export.
Global demand during the quarter was strong. Brazil continued to
be a major purchaser of nitrogen, with imports through August up
approximately 50 percent year-over-year. India issued three tenders
during the quarter, resulting in the purchase of 1.4 million metric
tons of urea.
Urea prices in North America during the third quarter traded at
a significant discount to international parity due to seasonally
low demand and buyer reluctance to take positions. Consequently,
urea barge prices in New Orleans averaged $20 per ton below
international parity. This significant discount discouraged imports
to the region, with imports in the third quarter of 2017 of urea
and UAN to North America down 30 percent and 40 percent
year-over-year, respectively.
CF management believes that nitrogen price volatility in the
global market will continue through 2018 as global tradeflows
adjust to increased global capacity. 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 estimated to be
approximately $375 million. Additionally, as of September 30,
2017, the company had approximately $158 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 September 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.
On October 30, 2017, the company announced that its wholly owned
subsidiary CF Industries, Inc. has elected to redeem in full the
entire outstanding $800 million principal amount of its 6.875
percent Senior Notes (the “Notes”) due May 2018, in accordance with
the optional redemption provisions provided in the indenture
governing the Notes. The Notes will be redeemed on December 1,
2017. Based on market interest rates on October 30, 2017, the
company estimates that the total amount for the redemption of the
Notes will be approximately $817 million.
CHS Inc. Distribution
CHS Inc. (CHS) is entitled to semi-annual distributions
resulting from its minority equity investment in CF Industries
Nitrogen, LLC (CFN). The estimate of the partnership distribution
earned by CHS, but not yet declared, for the third quarter of 2017
is approximately $17 million.
Consolidated Results
Three months ended September 30,
Nine months ended September 30, 2017
2016 2017 2016 (dollars in millions,
except per share
and per MMBtu amounts)
Net sales $ 870 $ 680 $ 3,031 $ 2,818 Cost of sales 861 678
2,744 2,072 Gross margin $ 9 $ 2
$ 287 $ 746 Gross margin percentage 1.0 % 0.3
% 9.5 % 26.5 % Net (loss) earnings attributable to common
stockholders $ (87 ) $ (30 ) $ (107 ) $ 43 Adjusted net (loss)
earnings(1) $ (90 ) $ 30 $ (56 ) $ 199 Net (loss) earnings
per diluted share $ (0.37 ) $ (0.13 ) $ (0.46 ) $ 0.19 Adjusted net
(loss) earnings per diluted share(1) $ (0.39 ) $ 0.13 $ (0.24 ) $
0.85 EBITDA(1) $ 139 $ (6 ) $ 632 $ 530 Adjusted EBITDA(1) $
134 $ 83 $ 709 $ 725 Tons of product sold (000s) 4,877 3,666
14,668 12,274 Supplemental data (per MMBtu): Natural gas
costs in cost of sales(2) $ 3.22 $ 2.70 $ 3.41 $ 2.41 Realized
derivatives loss in cost of sales(3) 0.13 0.17 0.05
0.60 Cost of natural gas in cost of sales $ 3.35 $
2.87 $ 3.46 $ 3.01 Average daily market price of natural gas
(per MMBtu): Henry Hub $ 2.93 $ 2.84 $ 2.99 $ 2.31 National
Balancing Point UK $ 5.46 $ 4.08 $ 5.43 $ 4.31 Unrealized
net mark-to-market (gain) loss on natural gas derivatives $ (7 ) $
21 $ 64 $ (169 ) Depreciation and amortization $ 226 $ 148 $
648 $ 475 Capital expenditures $ 105 $ 440 $ 290 $ 1,819
Production volume by product tons (000s): Ammonia(4) 2,489 1,987
7,653 5,981 Granular urea 1,091 827 3,329 2,454 UAN (32%) 1,483
1,614 5,022 4,903 AN 571 475 1,572 1,292
_______________________________________________________________________________
(1)
See reconciliations of EBITDA, adjusted
EBITDA, adjusted net (loss) earnings and adjusted net (loss)
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 nine months ended September 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 September 30, 2017 and
2016, we reported net loss attributable to common stockholders of
$(87) million and $(30) million, respectively. During the
nine months ended September 30, 2017 and 2016, we reported net
(loss) earnings attributable to common stockholders of $(107)
million and $43 million, respectively.
Three months ended September 30,
Nine months ended September 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) $ 226 $ 142 $ 148 $ 93 $ 648 $ 407 $
475 $ 298 Unrealized net mark-to-market (gain) loss on natural gas
derivatives(2) (7 ) (4 ) 21 13 64 40 (169 ) (106 ) Capacity
expansion project expenses(3) — — 24 15 — — 59 37 Start-up costs
Donaldsonville ammonia(2) — — 18 11 — — 18 11 Transaction costs(4)
— — — — — — 179 96 Loss on foreign currency transactions including
intercompany loans(3)(5) 1 1 3 4 2 2 86 85 Equity method investment
tax contingency accrual(6) — — — — 7 7 — — Financing costs related
to bridge loan commitment fee(7) — — — — — — 28 18 Strategic
Venture with CHS: Noncontrolling interest(8) 17 17 27 27 40 40 67
67 Loss on embedded derivative(3)(9) 1 — 22 14
4 2 22 14
Total Impact of
Significant Items $ 238 $ 156 $ 263 $ 177
$ 765 $ 498 $ 765 $ 520
_______________________________________________________________________________
(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) Included in other operating—net in
our consolidated statements of operations. (4) 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. (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 form of
nitrogen, 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 form that the company
upgrades into other nitrogen products such as urea, UAN and AN.
Three months ended September 30,
Nine months ended September 30, 2017
2016 2017 2016 (dollars in
millions,
except per ton amounts)
Net sales $ 194 $ 145 $ 865 $ 770 Cost of sales 204 149
771 505 Gross margin $ (10 ) $ (4 ) $ 94
$ 265 Gross margin percentage (5.2 )% (2.8 )%
10.9 % 34.4 % Sales volume by product tons (000s) 826 505
2,898 2,112 Sales volume by nutrient tons (000s)(1) 677 414 2,376
1,732 Average selling price per product ton $ 235 $ 287 $
298 $ 365 Average selling price per nutrient ton(1) 287 350 364 445
Gross margin per product ton $ (12 ) $ (8 ) $ 32 $ 125 Gross
margin per nutrient ton(1) (15 ) (10 ) 40 153 Adjusted gross
margin(2): Gross margin $ (10 ) $ (4 ) $ 94 $ 265 Depreciation and
amortization 37 19 130 59 Unrealized net mark-to-market (gain) loss
on natural gas derivatives (3 ) 7 20 (55 ) Adjusted
gross margin $ 24 $ 22 $ 244 $ 269
Adjusted gross margin as a percent of net sales 12.4
%
15.2 % 28.2 % 34.9 %
_______________________________________________________________________________
(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 third quarter periods:
- Ammonia sales volume increased for the
third quarter of 2017 compared to the third 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.
- Ammonia gross margin per ton decreased
in the third quarter of 2017 compared to the third quarter of 2016
due to lower average selling prices, an increase in realized
natural gas costs and an increase in depreciation primarily related
to the new Donaldsonville and Port Neal ammonia plants. These were
partially offset by the effects of increased volumes, a $3 million
unrealized net mark-to-market gain on natural gas derivatives
compared to a $7 million unrealized net mark-to-market loss in the
prior year period and no recurrence of start-up costs incurred in
the third quarter of 2016 associated with the new Donaldsonville
ammonia plant.
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 products.
Three months ended September 30,
Nine months ended September 30, 2017
2016 2017 2016 (dollars in
millions,
except per ton amounts)
Net sales $ 228 $ 167 $ 725 $ 642 Cost of sales 220 152
668 445 Gross margin $ 8 $ 15 $
57 $ 197 Gross margin percentage 3.5 % 9.0 %
7.9 % 30.7 % Sales volume by product tons (000s) 1,170 823
3,349 2,714 Sales volume by nutrient tons (000s)(1) 539 378 1,541
1,248 Average selling price per product ton $ 195 $ 203 $
216 $ 237 Average selling price per nutrient ton(1) 423 442 470 514
Gross margin per product ton $ 7 $ 18 $ 17 $ 73 Gross margin
per nutrient ton(1) 15 40 37 158 Adjusted gross margin(2):
Gross margin $ 8 $ 15 $ 57 $ 197 Depreciation and amortization 67
25 187 75 Unrealized net mark-to-market (gain) loss on natural gas
derivatives (2 ) 5 17 (44 ) Adjusted gross margin $
73 $ 45 $ 261 $ 228 Adjusted gross
margin as a percent of net sales 32.0 % 26.9 % 36.0 % 35.5 %
_______________________________________________________________________________
(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 third 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.
- Granular urea gross margin per ton
decreased due to lower average selling prices, an increase in
depreciation primarily associated with the new Port Neal urea
plant, and an increase in realized natural gas costs. These were
partially offset by production efficiencies due to increased
volumes and a $2 million unrealized net mark-to-market gain on
natural gas derivatives compared to a $5 million loss in the prior
year period.
UAN Segment
CF Industries’ UAN segment produces urea ammonium nitrate
solution (UAN). UAN is a liquid 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 September 30,
Nine months ended September 30, 2017
2016 2017 2016 (dollars in
millions,
except per ton amounts)
Net sales $ 243 $ 212 $ 846 $ 891 Cost of sales 253 218
783 646 Gross margin $ (10 ) $ (6 ) $ 63
$ 245 Gross margin percentage (4.1 )% (2.8 )%
7.4 % 27.5 % Sales volume by product tons (000s) 1,693 1,350
5,173 4,634 Sales volume by nutrient tons (000s)(1) 536 427 1,636
1,461 Average selling price per product ton $ 144 $ 157 $
164 $ 192 Average selling price per nutrient ton(1) 453 496 517 610
Gross margin per product ton $ (6 ) $ (4 ) $ 12 $ 53 Gross
margin per nutrient ton(1) (19 ) (14 ) 39 168 Adjusted gross
margin(2): Gross margin $ (10 ) $ (6 ) $ 63 $ 245 Depreciation and
amortization 71 58 192 175 Unrealized net mark-to-market (gain)
loss on natural gas derivatives (2 ) 7 19 (52 )
Adjusted gross margin $ 59 $ 59 $ 274 $ 368
Adjusted gross margin as a percent of net sales 24.3 % 27.8
% 32.4 % 41.3 %
_______________________________________________________________________________
(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 third quarter periods:
- UAN sales volume increased in the third
quarter of 2017 due to greater customer participation in the
company's summer UAN fill program compared to the prior year
period.
- UAN average selling price per ton
decreased due to greater global nitrogen supply.
- UAN gross margin per ton decreased in
the third quarter of 2017 compared to the third quarter of 2016 due
to lower average selling prices and an increase in realized natural
gas costs. These were partially offset by production efficiencies
due to increased volumes and a $2 million unrealized net
mark-to-market gain on natural gas derivatives compared to a $7
million unrealized net mark-to-market loss in the prior year
period.
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 September 30,
Nine months ended September 30, 2017
2016 2017 2016 (dollars in
millions,
except per ton amounts)
Net sales $ 135 $ 103 $ 372 $ 318 Cost of sales 123 114
331 316 Gross margin $ 12 $ (11 ) $ 41
$ 2 Gross margin percentage 8.9 % (10.7 )%
11.0 % 0.6 % Sales volume by product tons (000s) 670 599
1,777 1,610 Sales volume by nutrient tons (000s)(1) 225 203 599 545
Average selling price per product ton $ 201 $ 172 $ 209 $
198 Average selling price per nutrient ton(1) 600 507 621 583
Gross margin per product ton $ 18 $ (18 ) $ 23 $ 1 Gross
margin per nutrient ton(1) 53 (54 ) 68 4 Adjusted gross
margin(2): Gross margin $ 12 $ (11 ) $ 41 $ 2 Depreciation and
amortization 24 22 64 72 Unrealized net mark-to-market loss (gain)
on natural gas derivatives — 1 3 (7 ) Adjusted
gross margin $ 36 $ 12 $ 108 $ 67
Adjusted gross margin as a percent of net sales 26.7 % 11.7 % 29.0
% 21.1 %
_______________________________________________________________________________
(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 loss (gain) 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 third quarter periods:
- AN sales volume increased in the third
quarter of 2017 compared to the third quarter of 2016 due to
increased demand from all major end uses of the product.
- AN average selling price per ton
increased in the third quarter of 2017 compared to the third
quarter of 2016 due to the effects of higher global AN prices and
of a long-term AN supply agreement that commenced in 2017.
- AN gross margin per ton increased due
to higher average selling prices and production efficiencies due to
increased volumes partially offset by an increase in realized
natural gas costs.
Other Segment
CF Industries’ Other segment includes diesel exhaust fluid
(DEF), urea liquor, nitric acid and compound fertilizer products
(NPKs).
Three months ended September 30,
Nine months ended September 30, 2017
2016 2017 2016 (dollars in
millions,
except per ton amounts)
Net sales $ 70 $ 53 $ 223 $ 197 Cost of sales 61 45
191 160 Gross margin $ 9 $ 8 $ 32
$ 37 Gross margin percentage 12.9 % 15.1 %
14.3 % 18.8 % Sales volume by product tons (000s) 518 389
1,471 1,204 Sales volume by nutrient tons (000s)(1) 97 73 285 230
Average selling price per product ton $ 135 $ 136 $ 152 $
164 Average selling price per nutrient ton(1) 722 726 782 857
Gross margin per product ton $ 17 $ 21 $ 22 $ 31 Gross
margin per nutrient ton(1) 93 110 112 161 Adjusted gross
margin(2): Gross margin $ 9 $ 8 $ 32 $ 37 Depreciation and
amortization 15 12 40 34 Unrealized net mark-to-market loss (gain)
on natural gas derivatives — 1 5 (11 )
Adjusted gross margin $ 24 $ 21 $ 77 $ 60
Adjusted gross margin as a percent of net sales 34.3 % 39.6
% 34.5 % 30.5 %
_______________________________________________________________________________
(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 loss (gain) 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 third quarter periods:
- Other segment volume increased in the
third quarter of 2017 due primarily to higher year-over-year sales
of DEF as the company continues to grow its North American DEF
business.
- Other segment average selling price per
ton decreased due primarily to greater global nitrogen supply.
- Other segment gross margin per ton
decreased due to lower average selling prices and an increase in
realized natural gas costs.
Dividend Payment
On October 10, 2017, CF Industries’ Board of Directors
declared a quarterly dividend of $0.30 per common share. The
dividend will be paid on November 30, 2017 to stockholders of
record as of November 15, 2017.
Conference Call
CF Industries will hold a conference call to discuss its third
quarter 2017 results at 9:00 a.m. ET on Thursday, November 2,
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 (loss) earnings, adjusted net
(loss) 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
(loss) earnings, adjusted net (loss) 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 (loss) earnings, adjusted net (loss)
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
September 30, Nine months ended September
30, 2017 2016 2017
2016 (in millions, except per share amounts) Net
sales $ 870 $ 680 $ 3,031 $ 2,818 Cost of sales 861 678
2,744 2,072 Gross margin 9 2 287
746 Selling, general and administrative expenses 45
44 140 141 Transaction costs — — — 179 Other operating—net (2 ) 57
14 181 Total other operating costs and
expenses 43 101 154 501 Equity in losses of operating affiliates (5
) (2 ) (8 ) (11 ) Operating (loss) earnings (39 ) (101 ) 125 234
Interest expense 81 31 241 130 Interest income (5 ) (2 ) (8 ) (4 )
Other non-operating—net — 1 — (1 ) (Loss)
earnings before income taxes (115 ) (131 ) (108 ) 109 Income tax
benefit (47 ) (131 ) (55 ) (21 ) Net (loss) earnings (68 ) — (53 )
130 Less: Net earnings attributable to noncontrolling interests 19
30 54 87 Net (loss) earnings
attributable to common stockholders $ (87 ) $ (30 ) $ (107 ) $ 43
Net (loss) earnings per share attributable to common
stockholders: Basic $ (0.37 ) $ (0.13 ) $ (0.46 ) $ 0.19
Diluted $ (0.37 ) $ (0.13 ) $ (0.46 ) $ 0.19
Weighted-average common shares outstanding: Basic 233.2
233.1 233.2 233.2 Diluted 233.2 233.1
233.2 233.5
CF INDUSTRIES HOLDINGS,
INC. SELECTED FINANCIAL INFORMATION CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited)
September 30, 2017
December 31,2016
(in millions) Assets Current assets: Cash and cash
equivalents $ 1,992 $ 1,164 Restricted cash — 5 Accounts
receivable—net 279 236 Inventories 316 339 Prepaid income taxes 42
841 Other current assets 22 70 Total current assets 2,651
2,655 Property, plant and equipment—net 9,372 9,652 Investments in
affiliates 109 139 Goodwill 2,369 2,345 Other assets 356 340
Total assets $ 14,857 $ 15,131
Liabilities
and Equity Current liabilities: Accounts payable and accrued
expenses $ 635 $ 638 Income taxes payable 7 1 Customer advances 92
42 Current portion of long-term debt 798 — Other current
liabilities 19 5 Total current liabilities 1,551 686
Long-term debt 4,988 5,778 Deferred income taxes 1,592 1,630 Other
liabilities 486 545 Equity: Stockholders' equity 3,167 3,348
Noncontrolling interests 3,073 3,144 Total equity 6,240
6,492
Total liabilities and equity $ 14,857 $
15,131
CF INDUSTRIES HOLDINGS, INC. SELECTED
FINANCIAL INFORMATION CONSOLIDATED STATEMENTS OF CASH
FLOWS (unaudited) Three months
ended September 30, Nine months ended
September 30, 2017 2016 2017
2016 (in millions) Operating
Activities: Net (loss) earnings $ (68 ) $ — $ (53 ) $ 130
Adjustments to reconcile net (loss) earnings to net cash provided
by operating activities: Depreciation and amortization 226 148 648
475 Deferred income taxes (46 ) (145 ) (54 ) 730 Stock-based
compensation expense 5 6 13 15 Unrealized net (gain) loss on
natural gas and foreign currency derivatives (7 ) 20 64 (169 )
Unrealized loss on embedded derivative 1 22 4 22 Loss on disposal
of property, plant and equipment 2 4 3 8 Undistributed losses of
affiliates—net of taxes 1 (1 ) 7 — Changes in: Accounts
receivable—net 6 31 (29 ) 55 Inventories 2 (85 ) 12 (4 ) Accrued
and prepaid income taxes (2 ) 8 804 (665 ) Accounts payable and
accrued expenses 17 60 5 (7 ) Customer advances 88 74 51 (75 )
Other—net (11 ) 3 (74 ) 76 Net cash provided by
operating activities 214 145 1,401 591
Investing Activities: Additions to property, plant and
equipment (105 ) (440 ) (290 ) (1,819 ) Proceeds from sale of
property, plant and equipment 1 6 13 8 Distributions received from
unconsolidated affiliates 6 — 12 — Proceeds from sale of auction
rate securities — — 9 — Withdrawals from restricted cash funds 4 —
5 16 Other—net — 1 — 4 Net cash used in
investing activities (94 ) (433 ) (251 ) (1,791 )
Financing
Activities: Proceeds from short-term borrowings — — — 150
Payments of short-term borrowings — — — (150 ) Financing fees (1 )
(6 ) (1 ) (11 ) Dividends paid on common stock (70 ) (69 ) (210 )
(209 ) Issuance of noncontrolling interest in CFN — — — 2,800
Distributions to noncontrolling interests (66 ) (91 ) (125 ) (111 )
Issuances of common stock under employee stock plans 1 —
1 — Net cash (used in) provided by financing
activities (136 ) (166 ) (335 ) 2,469 Effect of exchange
rate changes on cash and cash equivalents 7 — 13
(1 ) (Decrease) increase in cash and cash equivalents (9 )
(454 ) 828 1,268 Cash and cash equivalents at beginning of period
2,001 2,008 1,164 286
Cash and cash
equivalents at end of period $ 1,992 $ 1,554 $
1,992 $ 1,554
CF INDUSTRIES HOLDINGS, INC. SELECTED
FINANCIAL INFORMATION NON-GAAP DISCLOSURE ITEMS
Reconciliation of net (loss) earnings, net (loss) earnings
per ton and net (loss) earnings 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 (loss) earnings attributable to common
stockholders plus interest expense—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 September 30,
Nine months ended September 30, 2017
2016 2017 2016 (in millions) Net
(loss) earnings attributable to common stockholders $ (87 ) $ (30 )
$ (107 ) $ 43 Interest expense—net 76 29 233 126 Income tax benefit
(47 ) (131 ) (55 ) (21 ) Depreciation and amortization 226 148 648
475 Less: other adjustments (29 ) (22 ) (87 ) (93 ) EBITDA 139
(6 ) 632 530 Start-up costs Donaldsonville
ammonia — 18 — 18 Unrealized net mark-to-market (gain) loss on
natural gas derivatives (7 ) 21 64 (169 ) Transaction costs(1) — —
— 179 Loss on foreign currency transactions including intercompany
loans(2) 1 3 2 86 Capacity expansion project expenses — 24 — 59
Equity method investment tax contingency accrual(3) — — 7 — Loss on
embedded derivative(4) 1 22 4 22 Gain on foreign currency
derivatives — (1 ) — (2 ) Private Senior Notes amendment
arrangement fees — 2 — 2 Total
adjustments (5 ) 89 77 195 Adjusted EBITDA $
134 $ 83 $ 709 $ 725 Net sales $
870 $ 680 $ 3,031 $ 2,818 Tons of product sold (000s) 4,877 3,666
14,668 12,274 Net (loss) earnings as a percent of net sales
(10.0 )% (4.4 )% (3.5 )% 1.5 % Net (loss) earnings per ton $ (17.84
) $ (8.18 ) $ (7.29 ) $ 3.50 EBITDA as a percent of net sales 16.0
% (0.9 )% 20.9 % 18.8 % EBITDA per ton $ 28.50 $ (1.64 ) $ 43.09 $
43.18 Adjusted EBITDA as a percent of net sales 15.4 % 12.2 % 23.4
% 25.7 % Adjusted EBITDA per ton $ 27.48 $ 22.64 $ 48.34 $ 59.07
_______________________________________________________________________________
(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 (loss) earnings attributable to common
stockholders and net (loss) earnings per diluted share attributable
to common stockholders (GAAP measures) to adjusted net (loss)
earnings and adjusted net (loss) earnings per diluted share
(non-GAAP measures), as applicable:
Adjusted net (loss) earnings is defined as net (loss) earnings
attributable to common stockholders adjusted with the impacts of
the selected items included in net (loss) earnings as summarized in
the table below. The company has presented adjusted net (loss)
earnings and adjusted net (loss) 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 September 30,
Nine months ended September 30, 2017
2016 2017 2016 (in millions) Net
(loss) earnings attributable to common stockholders $ (87 ) $ (30 )
$ (107 ) $ 43 Start-up costs Donaldsonville ammonia — 18 — 18
Unrealized net mark-to-market (gain) loss on natural gas
derivatives (7 ) 21 64 (169 ) Transaction costs(1) — — — 179 Loss
on foreign currency transactions including intercompany loans(2) 1
3 2 86 Capacity expansion project expenses — 24 — 59 Equity method
investment tax contingency accrual(3) — — 7 — Loss on embedded
derivative(4) 1 22 4 22 Gain on foreign currency derivatives — (1 )
— (2 ) Revolver amendment fees(5) — 2 — 2 Private Senior Notes
amendment arrangement fees — 2 — 2 Financing costs related to
bridge loan commitment fee(5) — — — 28 Income tax adjustments(6) 2
(31 ) (26 ) (69 ) Total adjustments (3 ) 60 51
156 Adjusted net (loss) earnings $ (90 ) $ 30 $ (56 )
$ 199
Three months ended September
30, Nine months ended September 30, 2017
2016 2017 2016 Net (loss)
earnings per diluted share attributable to common stockholders $
(0.37 ) $ (0.13 ) $ (0.46 ) $ 0.19 Start-up costs Donaldsonville
ammonia — 0.08 — 0.08 Unrealized net mark-to-market (gain) loss on
natural gas derivatives (0.03 ) 0.09 0.27 (0.73 ) Transaction
costs(1) — — — 0.77 Loss on foreign currency transactions including
intercompany loans(2) — 0.01 0.01 0.37 Capacity expansion project
expenses — 0.10 — 0.25 Equity method investment tax contingency
accrual(3) — — 0.03 — Loss on embedded derivative(4) — 0.09 0.02
0.09 Gain on foreign currency derivatives — — — (0.01 ) Revolver
amendment fees(5) — 0.01 — 0.01 Private Senior Notes amendment
arrangement fees — 0.01 — 0.01 Financing costs related to bridge
loan commitment fee(5) — — — 0.12 Income tax adjustments(6) 0.01
(0.13 ) (0.11 ) (0.30 ) Total adjustments (0.02 ) 0.26
0.22 0.66 Adjusted net (loss) earnings per
diluted share $ (0.39 ) $ 0.13 $ (0.24 ) $ 0.85
_______________________________________________________________________________
(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 INFORMATION NON-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, depreciation and amortization, and
start-up costs related to the company's Donaldsonville ammonia
plant. 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 September 30,
Nine months ended September 30, 2017
2016 2017 2016 (in millions)
Cost of sales $ 861 $ 678 $ 2,744 $ 2,072 Natural gas costs(1) 270
169 885 515 Realized net losses on natural gas derivatives(2) 10 11
13 127 Unrealized net mark-to-market (gain) loss on natural gas
derivatives (7 ) 21 64 (169 ) Depreciation and amortization 215 135
613 415 Start-up costs Donaldsonville ammonia — 18 —
18 Total adjustments 488 354 1,575
906 Controllable cost of sales $ 373 $ 324
$ 1,169 $ 1,166 Tons of product sold
(000s) 4,877 3,666 14,668 12,274 Cost of sales per ton $
176.54 $ 184.94 $ 187.07 $ 168.81 (Decrease) increase in cost of
sales per ton (5 )% 11 % Controllable cost of sales per ton $ 76.48
$ 88.38 $ 79.70 $ 95.00 Decrease in controllable cost of sales per
ton (13 )% (16 )%
_______________________________________________________________________________
(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/20171101006718/en/
CF Industries Holdings, Inc.MediaChris CloseDirector,
Corporate Communications847-405-2542 -
cclose@cfindustries.comorInvestorsMartin JarosickVice
President, Investor Relations847-405-2045 -
mjarosick@cfindustries.com
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