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29, 2016. potassium. Our core market and distribution facilities are concentrated in the midwestern United States and other major agricultural areas of the to The Mosaic Company (Mosaic) for approximately $1.4 billion in cash. See Note 4—Acquisitions and Divestitures for additional information. Switzerland, to the other key principals of Keytrade. $4.68 billion, respectively. Terra acquisition, we acquired five nitrogen fertilizer manufacturing facilities, our 75.3% interest in TNCLP and certain joint venture interests. segment profitability reviewed by management. Nitrogen Fertilizer Products Ammonia Granular urea UAN AN Other nitrogen products(1) Total Gross margin for the The following table shows the production capacities at each of our nitrogen Donaldsonville, Louisiana(6) Medicine Hat, Alberta(7) Port Neal, Iowa(8) Verdigris, Oklahoma(7)(10) Woodward, Oklahoma Yazoo City, Mississippi(8)(9)(10) Courtright, Ontario(8)(10) Unconsolidated Affiliates(11) Point Lisas, Trinidad Ince, U.K.(12) Billingham, U.K. Total Ammonia(1) Granular urea UAN (32%) AN Donaldsonville, Louisiana Resources—Capacity Expansion Projects and Restricted Cash. For further information about CFL, see Note Resources—Capacity Expansion Projects and Restricted Cash. Ince, United Kingdom plant; and the North Tees site, approximately seven miles away, which contains an ammonia storage area. These locations collectively have on-site storage for 40,000 tons of ammonia and 128,000 tons of AN. Ontario; and the National Balancing Point in the United Kingdom. Our United Kingdom nitrogen production facilities ship products via truck. fertilizer. We also export nitrogen fertilizer products via barge from our Billingham, United Kingdom manufacturing facility. Phosphate Fertilizer Products DAP MAP Total Hardee Phosphate Rock Mine Phosphate rock Plant City Phosphate Fertilizer Complex Sulfuric acid Phosphoric acid as P2O5(1) DAP/MAP Permitted Pending permit Total Storage Facilities and Other Properties Plants Tampa Port Terminal & Warehouse Locations Owned Leased(3) Total In-Market Total Storage Capacity The principal customers for our nitrogen fertilizer and The fertilizer business is seasonal. The degree of seasonality of our business can change significantly from year to year due to conditions in the agricultural industry and other factors. The strongest demand for our products occurs during the spring planting season, with a second period of strong demand following the fall harvest. We and our customers generally build inventories during the low demand periods of the year in order to ensure timely product availability during the peak sales seasons. Seasonality is greatest for ammonia due to the short application season and the limited ability of our customers and their customers to store significant quantities of this product. The seasonality of fertilizer demand generally results in our sales volumes and net sales being the highest during the spring and our working capital requirements being the highest just prior to the start of the spring planting season. Our quarterly financial results can vary significantly from one year to the next due to weather-related shifts in planting schedules and purchasing patterns. If seasonal demand is greater than we expect, we may experience product shortages, and customers of ours may turn to our competitors for products that they would otherwise have purchased from us. Under our forward sales programs, customers generally make an initial cash down payment at the time of order and pay the remaining portion of the contract sales value in advance of the shipment physical purchase and sales contracts, futures, financial swaps and option contracts traded in the over-the-counter markets or on exchanges. In order to manage our exposure to changes in foreign currency exchange rates, from time to time, we may use foreign currency derivatives, primarily forward exchange contracts. instruments. equipment that may be difficult to replace and could result in operational disruptions. We are subject to risks associated with international operations. growth. others: conditions in the credit markets could business. operations or cash flows. certain toxic First Quarter Second Quarter Third Quarter Fourth Quarter First Quarter Second Quarter Third Quarter Fourth Quarter The selected historical financial data should be read in conjunction with the information contained in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and Item 8. Financial Statements and Supplementary Data. Statement of Operations Data: Net sales Cost of sales Gross margin Selling, general and administrative Restructuring and integration costs Other operating—net Total other operating costs and expenses Equity in earnings of operating affiliates Operating earnings Interest expense (income)—net Loss on extinguishment of debt Other non-operating—net Earnings before income taxes and equity in earnings (loss) of non-operating affiliates Income tax provision Equity in earnings (loss) of non-operating affiliates—net of taxes Net earnings Less: Net earnings attributable to the noncontrolling interest Net earnings attributable to common stockholders Cash dividends declared per common share Share and per share data: Net earnings attributable to common stockholders: Basic Diluted Weighted average common shares outstanding: Basic Diluted Other Financial Data: Depreciation, depletion and amortization Capital expenditures Balance Sheet Data: Cash and cash equivalents Short-term investments Total assets Customer advances Total debt Total equity potassium. Our core market and distribution facilities are concentrated in the midwestern United States and other major agricultural areas of the to The Mosaic Company (Mosaic) for approximately $1.4 billion in cash. See the section titled Items Affecting Comparability of Results for further information on this transaction and its impact. Switzerland, to the other key principals of Keytrade. Modifications 2013 comparable period. our initial public offering (IPO) in 2005, we had accumulated a substantial amount of NOLs. Due to the uncertainty of realizing the tax benefit from the NOLs when we ceased to be a non-exempt cooperative for income tax purposes and became a public company, a full valuation allowance was recorded against the benefit of those NOLs. At that time, we entered into an agreement (NOL Agreement) with the pre-IPO owners under which they would benefit should any of the pre-IPO NOLs be realized in future years by using the NOLs to offset post-IPO taxable income. If this were to occur, we would pay the pre-IPO owners amounts equal to the resulting federal and state income taxes actually saved. As of December 31, 2012, the NOLs had a potential tax benefit of $94.3 million, which had been fully reserved by the valuation allowance. the phosphate business. During 2015, capital expenditures totaled $2.47 billion compared to $1.81 billion in 2014. The increase in capital expenditures is primarily related to the capacity expansion projects in Donaldsonville, Louisiana and Port Neal, Iowa. We also acquired the remaining 50% equity interest in CF Fertilisers UK not previously owned by us for a net cash payment of $551.6 million, which is net of cash acquired of $18.8 million. Raw materials are dependent on energy sources such as natural gas or coal; supply costs are affected by the supply availability and demand for these commodities. in 2015. credit and governmental Selling, General and Administrative Expenses. Our selling, general and administrative expenses consist primarily of corporate office expenses such as salaries and other payroll-related costs for our executive, administrative, legal, financial and marketing functions, as well as certain taxes and insurance and other professional service Equity in Earnings of Non-Operating Affiliates—Net of Taxes. Equity in earnings of non-operating affiliates—net of taxes represents our share of the net earnings of the entities Net sales(1) Cost of sales Gross margin(1) Selling, general and administrative expenses Restructuring and integration costs Other operating—net Total other operating costs and expenses Equity in earnings of operating affiliates Operating earnings Interest expense Interest income Loss on extinguishment of debt Other non-operating—net Earnings before income taxes and equity in earnings of non-operating affiliates Income tax provision Equity in earnings of non-operating affiliates—net of taxes Net earnings Less: Net earnings attributable to the noncontrolling interest(1) Net earnings attributable to common stockholders Diluted net earnings per share attributable to common stockholders Diluted weighted average common shares outstanding Dividends declared per common share N/M—Not Meaningful Net sales As reported Impact of selling price adjustment As adjusted Gross margin As reported Impact of selling price adjustment As adjusted Net earnings attributable to the noncontrolling interest As reported Impact of selling price adjustment As adjusted a declining pricing environment. Nitrogen Product Segments average selling prices declined due primarily to lower ammonia and UAN selling prices compared to the prior year period. Ammonia prices were lower due primarily to the higher producer inventory levels that carried over from the end of 2013 as compared to the previous year as a result of the shortened 2013 fall ammonia application season caused by cold weather conditions. The decline in UAN prices was due primarily to customer preferences for attractively priced ammonia during the extended spring ammonia application season in 2014. respectively. operating results from PLNL. 2005 public offering that are being paid to pre‑IPO owners as NOL tax benefits are realized. included in Item 8 of this report. Keytrade. The following table presents summary operating Net sales(1) Cost of sales Gross margin(1) Gross margin percentage(1) Tons of product sold (000s) Sales volume by product (000s) Ammonia Granular urea UAN AN Other nitrogen products Average selling price per ton by product Ammonia(1) Granular urea(1) UAN AN Cost of natural gas (per MMBtu)(2) Average daily market price of natural gas (per MMBtu) Henry Hub (Louisiana) Depreciation and amortization Capital expenditures Production volume by product (000s) Ammonia(3) Granular urea UAN (32%) AN Net sales As reported Impact of selling price adjustment As adjusted Gross margin As reported Impact of selling price adjustment As adjusted Gross margin percentage As reported Impact of selling price adjustment As adjusted Average selling price per ton by product Ammonia As reported Impact of selling price adjustment As adjusted Granular urea As reported Impact of selling price adjustment As adjusted outages in 2014. Net sales Cost of sales Gross margin Gross margin percentage Tons of product sold (000s) Sales volume by product (000s) DAP MAP Domestic vs. export sales (000s) Domestic Export Average selling price per ton by product DAP MAP Depreciation, depletion and amortization Capital expenditures Production volume by product (000s) Phosphate rock Sulfuric acid Phosphoric acid as P2O5(1) DAP/MAP Year Ended December 31, March 2014. Generally, our primary source of cash is cash from operations, which includes cash generated by customer advances. We may also from time to time access the capital markets or engage in borrowings under our credit agreements. 2014. and Retirements Restricted Cash consolidated balance sheets. sheets and statements of cash flows. the $422.4 million increase in cash spent on the two capacity expansion projects and increased capital expenditures on sustaining projects in 2015 compared to 2014. CFL this report. the requisite lenders is required to, accelerate the loans under the Revolving Credit Agreement or terminate the lenders’ commitments under the Revolving Credit Agreement. Combination Agreement; and in an amount of up to $1.3 billion for general corporate purposes. forward sales activity. Derivative Financial Instruments position. Other Postretirement Benefits 2016. in 2015 as compared to 2014 when inventory levels declined. 2013. projects. Debt Long-term debt(1) Notes payable(2) Interest payments on long-term debt and notes payable(1) Other Obligations Operating leases Equipment purchases and plant improvements Major capital expansion projects(3) Transportation(4) Purchase obligations(5)(6) Contributions to Pension Plans(7) Total(8) Asset retirement obligations(1)(2) Environmental remediation liabilities Total Asset retirement obligations Property, Plant and Equipment estimate fair value. We have consistent with those used in our internal planning process. The recoverability of the values associated with our goodwill, long-lived assets and investments in unconsolidated immediately in earnings. Income Taxes Net sales Cost of sales Gross margin Selling, general and administrative expenses Restructuring and integration costs Other operating—net Total other operating costs and expenses Equity in earnings of operating affiliates Operating earnings Interest expense Interest income Loss on extinguishment of debt Other non-operating—net Earnings before income taxes and equity in earnings of non-operating affiliates Income tax provision Equity in earnings of non-operating affiliates—net of taxes Net earnings Less: Net earnings attributable to the noncontrolling interest Net earnings attributable to common stockholders Net earnings per share attributable to common stockholders Basic Diluted Weighted average common shares outstanding Basic Diluted Net earnings Other comprehensive income (loss): Foreign currency translation adjustment—net of taxes Unrealized gain on hedging derivatives—net of taxes Unrealized gain (loss) on securities—net of taxes Defined benefit plans—net of taxes Comprehensive income Less: Comprehensive income attributable to the noncontrolling interest Comprehensive income attributable to common stockholders Assets Current assets: Cash and cash equivalents Accounts receivable—net Inventories—net Deferred income taxes Other Total current assets Property, plant and equipment, net Asset retirement obligation funds Investments in and advances to affiliates Goodwill Other assets Total assets Liabilities and Equity Current liabilities: Accounts payable and accrued expenses Income taxes payable Customer advances Notes payable Deferred income taxes Distributions payable to noncontrolling interest Other Total current liabilities Notes payable Long-term debt Deferred income taxes Other noncurrent liabilities Equity: Stockholders' equity: Preferred stock—$0.01 par value, 50,000,000 shares authorized Common stock—$0.01 par value, 500,000,000 shares authorized, 2012—62,961,628 shares issued and 2011—71,935,838 shares issued Paid-in capital Retained earnings Treasury stock—at cost, 2012—10,940 shares and 2011—6,515,251 shares Accumulated other comprehensive loss Total stockholders' equity Noncontrolling interest Total equity Total liabilities and equity Balance at December 31, 2009 Net earnings Other comprehensive income Foreign currency translation adjustment Unrealized (loss) on securities—net of taxes Defined benefit plans—net of taxes Comprehensive income Acquisition of Terra Industries Inc. Issuance of $0.01 par value common stock in connection with acquisition of Terra Industries Inc. Issuance of $0.01 par value common stock in connection with equity offering, net of costs of $41.4 million Acquisition of treasury stock under employee stock plans Issuance of $0.01 par value common stock under employee stock plans Stock-based compensation expense Excess tax benefit from stock-based compensation Cash dividends ($0.40 per share) Distributions declared to noncontrolling interest Effect of exchange rates changes Balance at December 31, 2010 Net earnings Other comprehensive income Foreign currency translation adjustment Unrealized gain on securities—net of taxes Defined benefit plans—net of taxes Comprehensive income Purchases of treasury stock Acquisition of treasury stock under employee stock plans Issuance of $0.01 par value common stock under employee stock plans Stock-based compensation expense Excess tax benefit from stock-based compensation Cash dividends ($1.00 per share) Distributions declared to noncontrolling interest Effect of exchange rates changes Balance at December 31, 2011 Net earnings Other comprehensive income Foreign currency translation adjustment Unrealized gain on hedging derivatives—net of taxes Unrealized gain on securities—net of taxes Defined benefit plans—net of taxes Comprehensive income Purchases of treasury stock Retirement of treasury stock Acquisition of treasury stock under employee stock plans Issuance of $0.01 par value common stock under employee stock plans Stock-based compensation expense Excess tax benefit from stock-based compensation Cash dividends ($1.60 per share) Distributions declared to noncontrolling interest Effect of exchange rates changes Balance at December 31, 2012 Operating Activities: Net earnings Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation, depletion and amortization Deferred income taxes Stock compensation expense Excess tax benefit from stock-based compensation Unrealized (gain) loss on derivatives Loss on extinguishment of debt Gain on sale of marketable equity securities Loss on disposal of property, plant and equipment and non-core assets Undistributed earnings of affiliates—net of taxes Changes in (net of effects of acquisition): Accounts receivable Margin deposits Inventories Accrued income taxes Accounts payable and accrued expenses Customer advances Other—net Net cash provided by operating activities Investing Activities: Additions to property, plant and equipment Proceeds from sale of property, plant and equipment and non-core assets Purchases of short-term and auction rate securities Sales and maturities of short-term and auction rate securities Sale of marketable equity securities Deposits to asset retirement obligation funds Purchase of Terra Industries Inc.—net of cash acquired Other—net Net cash used in investing activities Financing Activities: Proceeds from long-term borrowings Payments of long-term debt Advances from unconsolidated affiliates Repayments of advances from unconsolidated affiliates Financing fees Dividends paid on common stock Dividends paid to former Terra stockholders Distributions to noncontrolling interest Issuance of common stock Issuances of common stock under employee stock plans Purchase of treasury stock Excess tax benefit from stock-based compensation Net cash (used in) provided by financing activities Effect of exchange rate changes on cash and cash equivalents Increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period A deferred income tax liability is recorded for income taxes that would result from the repatriation of the portion of the investment in the Company's non-U.S. subsidiaries and Customer Advances of likely outcomes of litigation matters, many factors are considered. These factors include, but are not limited to, past history, scientific and other evidence, and the specifics and status of each matter. If the assessment of various factors changes, the estimates may change. Predicting the outcome of claims and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments. Additionally, information concerning the costs to obtain and fulfill a contract, including assets to be recognized, is to be capitalized and disclosed. In Noncontrolling interest: Beginning balance Terra acquistion Earnings attributable to noncontrolling interest Declaration of distributions payable Effect of exchange rate changes Ending balance Distributions payable to noncontrolling interest Beginning balance Declaration of distributions payable Distributions to noncontrolling interest Effect of exchange rate changes Ending balance Cash U.S. and Canadian government obligations Other debt securities Total cash and cash equivalents Investments in auction rate securities Asset retirement obligation funds Nonqualified employee benefit trusts Cash and cash equivalents Unrealized gains on derivative instruments Asset retirement obligation funds Investments in auction rate securities Nonqualified employee benefit trusts Total assets at fair value Unrealized losses on derivative instruments Total liabilities at fair value Cash and cash equivalents Unrealized gains on derivative instruments Asset retirement obligation funds Investments in auction rate securities Nonqualified employee benefit trust Total assets at fair value Unrealized losses on derivative instruments Total liabilities at fair value Fair value, December 31, 2011 Sales and redemptions Unrealized loss included in other comprehensive income Fair value, December 31, 2012 Nonqualified Employee Benefit Trusts Net earnings attributable to common stockholders Basic earnings per common share: Weighted average common shares outstanding Net earnings attributable to common stockholders Diluted earnings per common share: Weighted average common shares outstanding Dilutive common shares—stock options Diluted weighted average shares outstanding Net earnings attributable to common stockholders reclassified as an offset to noncurrent deferred tax liabilities. future accruals. We also provide group medical insurance benefits to certain Our plan assets, benefit obligations, funded status and amounts recognized on the consolidated balance Change in plan assets Fair value of plan assets January 1 Return on plan assets Funding contributions Benefit payments Foreign currency translation Fair value of plan assets December 31 Change in benefit obligation Benefit obligation at January 1 Curtailment Service cost Interest cost Benefit payments Foreign currency translation Change in assumptions and other Benefit obligation at December 31 Funded status as of year end other" in the table above). Other noncurrent asset Accrued expenses Other noncurrent liability Pre-tax amounts recognized in accumulated other comprehensive loss consist of the following: Transition obligation Prior service cost Net actuarial loss Service cost for benefits earned during the period Interest cost on projected benefit obligation Expected return on plan assets Curtailment Amortization of transition obligation Amortization of prior service cost Amortization of actuarial loss Net periodic benefit cost (income) Net actuarial loss (gain) Prior service cost Amortization of transition obligation Amortization of prior service cost Amortization of actuarial loss Total recognized in accumulated other comprehensive loss Total recognized in net periodic benefit cost and accumulated other comprehensive loss Amounts that will be amortized from accumulated other comprehensive Net transition obligation Prior service cost Net actuarial loss 2012 As of year-end Fair value of plan assets Benefit obligation Accumulated benefit obligation For the year Net periodic benefit cost Funding contributions 2011 As of year-end Fair value of plan assets Benefit obligation Accumulated benefit obligation For the year Net periodic benefit cost Funding contributions the United Kingdom plans. Actual contributions are usually agreed with the plan trustees in connection with each triennial valuation and may vary following each such review depending on changes in assumptions, actual returns on plan assets, changes in regulatory requirements and funding decisions. 2013 2014 2015 2016 2017 5 years thereafter Weighted average discount rate—obligation Weighted average discount rate—expense Weighted average rate of increase in future compensation Weighted average expected long-term rate of return on assets—expense In determining our benefit obligation, we use the actuarial present value of the vested benefits to which each eligible employee is currently entitled, based on the employee’s expected date of separation or retirement. Effect on: Total of service and interest cost components for 2012 Benefit obligation at December 31, 2012 Cash and cash equivalents(1) Equity mutual funds Index equity(2) Pooled equity(3) Fixed income U.S. Treasury bonds and notes(4) Mutual funds(5) Corporate bonds and notes(6) Government and agency securities(7) Other(8) Total assets at fair value Accruals and payables—net Total assets Cash and cash equivalents(1) Equity mutual funds Index equity(2) Pooled equity(3) Fixed income U.S. Treasury bonds and notes(4) Mutual funds(5) Corporate bonds and notes(6) Government and agency securities(7) Other(8) Total assets at fair value Accruals and payables—net Total assets In 2015, 2014 and 2013, we recognized expense related to company contributions to the defined contribution plans of $13.8 million, $12.3 million, and $13.1 million, respectively. Loss on property, plant and equipment and non-core assets—net Engineering studies Business combination costs Closed facilities costs Other Interest on borrowings Fees on financing agreements Interest capitalized and other Obligation at December 31, 2009 Accretion expense Liabilities incurred Expenditures Change in estimate Obligation at December 31, 2010 Accretion expense Liabilities incurred Expenditures Change in estimate Obligation at December 31, 2011 Accretion expense Liabilities incurred Expenditures Change in estimate Obligation at December 31, 2012 Domestic Non-U.S. Current Federal Foreign State Deferred Federal Foreign State Income tax provision Earnings before income taxes and equity in earnings of unconsolidated affiliates Expected tax at U.S. statutory rate State income taxes, net of federal Net earnings attributable to the noncontrolling interest U.S. manufacturing profits deduction Difference in tax rates on foreign earnings Depletion Non-deductible transaction costs Valuation allowance Non-deductible capital costs Other Income tax at effective rate Deferred tax assets Net operating loss carryforward, patronage—sourced Other net operating loss carryforwards Retirement and other employee benefits Asset retirement obligations Unrealized loss on investments Other Valuation allowance Deferred tax liabilities Depreciation and amortization Foreign earnings Deferred patronage from CFL Depletable mineral properties Unrealized gain on hedging derivatives Other Net deferred tax liability Less amount in current assets (liabilities) Noncurrent liability Unrecognized tax benefits: Beginning balance Additions for tax positions taken during the current year Additions for tax positions taken during prior years Reductions related to settlements with tax jurisdictions Ending balance Net sales Net earnings attributable to common stockholders Net earnings per share attributable to common stockholders—diluted Assets acquired and liabilities assumed Current assets Property, plant and equipment, net Investments in unconsolidated affiliates Goodwill Other assets Total assets acquired Current liabilities Long-term debt Deferred tax liabilities—noncurrent Other liabilities Noncontrolling interests Total liabilities and noncontrolling interests assumed Total net assets acquired Trade Other Fertilizer Raw materials, spare parts and supplies Prepaid expenses Unrealized gains on derivatives Deposits Product exchanges Unrealized losses on derivatives Product exchanges Operating equity method investments Non-operating equity method investments Investments in and advances to affiliates Condensed statement of operations information: Net sales Net earnings Equity in earnings of operating affiliates Condensed balance sheet information: Current assets Noncurrent assets Total assets Current liabilities Long-term liabilities Equity Total liabilities and equity We have Condensed statement of operations information: Net sales Net earnings Equity in earnings of non-operating affiliates Condensed balance sheet information: Current assets Noncurrent assets Total assets Current liabilities Long-term liabilities Equity Total liabilities and equity Land Mineral properties Machinery and equipment Buildings and improvements Construction in progress Less: Accumulated depreciation, depletion and amortization Net capitalized turnaround costs at beginning of the year Additions Depreciation Effect of exchange rate changes Net capitalized turnaround costs at end of the year Balance by segment Intangible assets: Customer Relationships TerraCair Brand Total intangible assets 2013 2014 2015 2016 2017 Deferred financing fees Spare parts Investments in auction rate securities Intangible assets—net Nonqualified employee benefit trusts Tax related assets Other Accounts payable Accrued natural gas costs Payroll and employee related costs Accrued interest Asset retirement obligations—current portion Other Unsecured senior notes: 6.875% due 2018 7.125% due 2020 7.0% due 2017 Less: Current portion Net long-term debt September 18, 2020. Borrowings under the As of December 31, 2015, the carrying value of the 2018/2020 Public Senior Notes was $1.60 billion and the fair value was approximately $1.78 billion. 2013 2014 2015 2016 2017 Thereafter Asset retirement obligations Less: Current portion in accrued expenses Noncurrent portion Benefit plans and deferred compensation Tax related liabilities Environmental and related costs Deferred rent Other As a result, changes in fair value of these contracts are recognized in earnings. The effect of derivatives in our consolidated statements of operations is shown Foreign exchange contracts Foreign exchange contracts Natural gas derivatives Foreign exchange contracts Unrealized gains (losses) Derivatives not designated as hedges Cash flow hedge ineffectiveness Total unrealized gains (losses) Realized gains (losses) Net derivative gains (losses) Derivatives designated as hedging instruments Foreign exchange contracts Other current assets Other current liabilities Foreign exchange contracts Other noncurrent assets Other noncurrent liabilities Derivatives not designated as hedging instruments Foreign exchange contracts Other current assets Other current liabilities Foreign exchange contracts Other noncurrent assets Other non current liabilities Natural gas derivatives Other current assets Other current liabilities Natural gas derivatives Other noncurrent assets Other non current liabilities Total derivatives Current / Non-Current Totals Other current assets Other current liabilities Other noncurrent assets Other non current liabilities Total derivatives trades or may require us to collateralize derivatives in a net liability position. As of December 31, our counterparties the right to set off collateral against amounts owing under the ISDA agreements upon the occurrence of a default or a specified termination event. price and other factors. treasury approximately 2.4 million and 4.2 million shares of repurchased stock, respectively. Beginning balance Exercise of stock options Issuance of restricted stock(1) Forfeitures of restricted stock Issuance for Terra acquisition Issuance for equity offering Purchase of treasury shares(2) Ending balance Stockholder Rights Plan successor rights agent. The rights expired on March 31, 2015 without having been exercised. Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2009 Unrealized loss Reclassification to net earnings Loss arising during the period Effect of exchange rate changes and deferred taxes Balance at December 31, 2010 Unrealized gain Reclassification to net earnings Loss arising during the period Effect of exchange rate changes and deferred taxes Balance at December 31, 2011 Unrealized gain Reclassification to earnings Loss arising during the period Effect of exchange rate changes and deferred taxes Balance at December 31, 2012 record as of the close of business on June 1, 2015 (Record Date) received four additional shares of common stock for each share of common stock held on the Record Date in the form of a stock dividend (five-for-one stock split). Share and per share amounts have been retroactively restated to reflect the five-for-one stock split. Shares reserved under the Company's equity and incentive plans were adjusted to reflect the five-for-one stock split. Assumptions: Weighted-average expected volatility Expected term of stock options Risk-free interest rate Weighted-average expected dividend yield Weighted-average grant date fair value per share of options Outstanding at December 31, 2011 Granted Exercised Forfeited Outstanding at December 31, 2012 Exercisable at December 31, 2012 Cash received from stock option exercises Actual tax benefit realized from stock option exercises Pre-tax intrinsic value of stock options exercised $ 14.83 - $ 20.00 $ 20.01 - $100.00 $100.01 - $170.57 Awards, Restricted Stock Units and Performance Share Units Outstanding at December 31, 2011 Granted Restrictions lapsed (vested) Forfeited Outstanding at December 31, 2012 2013. Actual tax benefit realized from restricted stock vested Fair value of restricted stock vested Stock-based compensation expense(1) Income tax benefit Stock-based compensation expense, net of income taxes As of December 31, An excess tax benefit is generated when the realized tax benefit from the vesting of Cash paid during the year for Interest Income taxes—net of refunds From time to time, we are subject to ordinary, routine legal proceedings related to the usual conduct of our business, including proceedings regarding public utility and transportation rates, environmental matters, taxes and permits relating to the operations of our various plants and facilities. Based on the information available as of the date of this filing, we believe that the ultimate outcome of these routine matters will not have a material adverse effect on our consolidated financial position, results of operations or cash flows. Louisiana Environmental Matters In 2006, the federal D.C. Circuit Court of Appeals rejected the EPA's position and held that Section 185 fees were controls that must be maintained and fees should have been assessed under the Act. In January 2008, the U.S. Supreme Court declined to accept the case for review, making the appellate court's decision final. Year ended December 31, 2012 Net sales Ammonia Urea UAN AN DAP MAP Other Cost of sales Gross margin Total other operating costs and expenses Equity in earnings of operating affiliates Operating earnings Year ended December 31, 2011 Net sales Ammonia Urea UAN AN DAP MAP Other Cost of sales Gross margin Total other operating costs and expenses Equity in earnings of operating affiliates Operating earnings Year ended December 31, 2010 Net sales Ammonia Urea UAN AN DAP MAP Other Cost of sales Gross margin Total other operating costs and expenses Equity in earnings of operating affiliates Operating earnings Depreciation, depletion and amortization Year ended December 31, 2012 Year ended December 31, 2011 Year ended December 31, 2010 Capital expenditures Year ended December 31, 2012 Year ended December 31, 2011 Year ended December 31, 2010 Assets December 31, 2012 December 31, 2011 Enterprise-wide data by geographic region is as follows: Sales by geographic region (based on destination of shipments) U.S. Canada Export Property, plant and equipment—net by geographic region U.S. Canada Consolidated 2015, 2014 or 2013. conclusion. conjunction with the audited consolidated financial statements and related disclosures. Operating results for any quarter apply to that quarter only and are not necessarily indicative of results for any future period. 2012 Net sales Gross margin Unrealized (losses) gains on derivatives(1) Net earnings attributable to common stockholders Net earnings per share attributable to common stockholders Basic Diluted 2011 Net sales Gross margin Unrealized gains (losses) on derivatives(1) Net earnings attributable to common stockholders Net earnings per share attributable to common stockholders Basic Diluted Net sales Cost of sales Gross margin Selling, general and administrative expenses Other operating—net Total other operating costs and expenses Equity in earnings of operating affiliates Operating earnings (loss) Interest expense Interest income Net (earnings) of wholly-owned subsidiaries Other non-operating—net Earnings before income taxes and equity in earnings of non-operating affiliates Income tax provision Equity in earnings (loss) of non-operating affiliates—net of taxes Net earnings Less: Net earnings attributable to noncontrolling interest Net earnings attributable to common stockholders Net earnings Other comprehensive income Comprehensive income Less: Comprehensive income attributable to noncontrolling interest Comprehensive income attributable to common stockholders Net sales Cost of sales Gross margin Selling, general and administrative expenses Restructuring and integration costs Other operating—net Total other operating costs and expenses Equity in earnings of operating affiliates Operating earnings (loss) Interest expense Interest income Net (earnings) of wholly-owned subsidiaries Other non-operating—net Earnings before income taxes and equity in earnings of non-operating affiliates Income tax (benefit) provision Equity in earnings (loss) of non-operating affiliates—net of taxes Net earnings Less: Net earnings attributable to noncontrolling interest Net earnings attributable to common stockholders Net earnings Other comprehensive income (loss) Comprehensive income Less: Comprehensive income attributable to noncontrolling interest Comprehensive income attributable to common stockholders Net sales Cost of sales Gross margin Selling, general and administrative expenses Restructuring and integration costs Other operating—net Total other operating costs and expenses Equity in earnings of operating affiliates Operating earnings (loss) Interest expense Interest income Loss on extinguishment of debt Net (earnings) of wholly-owned subsidiaries Other non-operating—net Earnings before income taxes and equity in earnings of non-operating affiliates Income tax provision (benefit) Equity in earnings (loss) of non-operating affiliates—net of taxes Net earnings Less: Net earnings attributable to noncontrolling interest Net earnings attributable to common stockholders Net earnings Other comprehensive income (loss) Comprehensive income Less: Comprehensive income attributable to noncontrolling interest Comprehensive income attributable to common stockholders Assets Current assets: Cash and cash equivalents Accounts and notes receivable—net Income taxes receivable Inventories—net Deferred income taxes Other Total current assets Property, plant and equipment—net Deferred income taxes Asset retirement obligation funds Investments in and advances to affiliates Due from affiliates Goodwill Other assets Total assets Liabilities and Equity Current liabilities: Accounts payable and accrued expenses Income taxes payable Customer advances Notes payable Distributions payable to noncontrolling interest Other Total current liabilities Long-term debt Deferred income taxes Due to affiliates Other noncurrent liabilities Equity: Stockholders' equity: Preferred stock Common stock Paid-in capital Retained earnings Treasury stock Accumulated other comprehensive income (loss) Total stockholders' equity Noncontrolling interest Total equity Total liabilities and equity Assets Current assets: Cash and cash equivalents Accounts and notes receivable—net Income taxes receivable Inventories—net Other Total current assets Property, plant and equipment—net Deferred income taxes Asset retirement obligation funds Investments in and advances to affiliates Due from affiliates Goodwill Other assets Total assets Liabilities and Equity Current liabilities: Accounts payable and notes payable and accrued expenses Income taxes payable Customer advances Deferred income taxes Distributions payable to noncontrolling interest Other Total current liabilities Notes payable Long-term debt Deferred income taxes Due to affiliates Other noncurrent liabilities Equity: Stockholders' equity: Preferred stock Common stock Paid-in capital Retained earnings Treasury stock Accumulated other comprehensive income (loss) Total stockholders' equity Noncontrolling interest Total equity Total liabilities and equity Operating Activities: Net earnings Adjustments to reconcile net earnings to net cash provided by (used in) operating activities Depreciation, depletion and amortization Deferred income taxes Stock compensation expense Excess tax benefit from stock-based compensation Unrealized loss (gain) on derivatives Loss (gain) on disposal of property, plant and equipment and non-core assets Undistributed loss (earnings) of affiliates—net Due to / from affiliates—net Changes in: Accounts and notes receivable—net Margin deposits Inventories—net Accrued income taxes Accounts and notes payable and accrued expenses Customer advances Other—net Net cash provided by (used in) operating activities Investing Activities: Additions to property, plant and equipment Proceeds from sale of property, plant and equipment and non-core assets Sales and maturities of short-term and auction rate securities Deposits to asset retirement funds Net cash provided by (used in) investing activities Financing Activities: Payments of long-term debt Advances from unconsolidated affiliates Repayments of advances from unconsolidated affiliates Dividends paid on common stock Dividends to / from affiliates Distributions to/from noncontrolling interest Purchase of treasury stock Issuances of common stock under employee stock plans Excess tax benefit from stock-based compensation Net cash provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Operating Activities: Net earnings Adjustments to reconcile net earnings to net cash provided by (used in) operating activities Depreciation, depletion and amortization Deferred income taxes Stock compensation expense Excess tax benefit from stock-based compensation Unrealized loss (gain) on derivatives Loss (gain) on disposal of property, plant and equipment and non-core assets Undistributed loss (earnings) of affiliates—net Due to / from affiliates—net Changes in: Accounts and notes receivable—net Margin deposits Inventories—net Accrued income taxes Accounts and notes payable and accrued expenses Customer advances Other—net Net cash provided by (used in) operating activities Investing Activities: Additions to property, plant and equipment Proceeds from sale of property, plant and equipment and non-core assets Sales and maturities of short-term and auction rate securities Deposits to asset retirement obligation funds Other—net Net cash provided by (used in) investing activities Financing Activities: Payments on long-term debt Financing fees Purchase of treasury stock Dividends paid on common stock Dividends to / from affiliates Distributions to / from noncontrolling interest Issuances of common stock under employee stock plans Excess tax benefit from stock-based compensation Net cash provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Operating Activities: Net earnings Adjustments to reconcile net earnings to net cash provided by (used in) operating activities Depreciation, depletion and amortization Deferred income taxes Stock compensation expense Excess tax benefit from stock-based compensation Unrealized loss (gain) on derivatives Loss on extinguishment of debt Gain on sale of marketable equity securities Loss (gain) on disposal of property, plant and equipment Undistributed loss (earnings) of affiliates—net Due to / from affiliates—net Changes in: Accounts and notes receivable—net Margin deposits Inventories—net Accrued income taxes Accounts and notes payable and accrued expenses Customer advances Other—net Net cash provided by (used in) operating activities Investing Activities: Additions to property, plant and equipment Proceeds from sale of property, plant and equipment and non-core assets Purchases of short-term and auction rate securities Sales and maturities of short-term and auction rate securities Sale of marketable equity securities Deposits to asset retirement obligation funds Purchase of Terra Industries Industries Inc.—net of cash acquired Other—net Net cash provided by (used in) investing activities Financing Activities: Proceeds from long-term borrowings Payments on long-term debt Financing fees Dividends paid on common stock Dividends paid to former Terra stockholders Dividends to / from affiliates Distributions to / from noncontrolling interest Issuance of common stock Issuances of common stock under employee stock plans Excess tax benefit from stock-based compensation Net cash provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Net sales Cost of sales Gross margin Selling, general and administrative expenses Other operating—net Total other operating costs and expenses Equity in earnings of operating affiliates Operating earnings (loss) Interest expense Interest income Net (earnings) of wholly-owned subsidiaries Other non-operating—net Earnings before income taxes and equity in earnings of non-operating affiliates Income tax provision (benefit) Equity in earnings (loss) of non-operating affiliates—net of taxes Net earnings Less: Net earnings attributable to noncontrolling interest Net earnings attributable to common stockholders Net earnings Other comprehensive income Comprehensive income Less: Comprehensive income attributable to noncontrolling interest Comprehensive income attributable to common stockholders Net sales Cost of sales Gross margin Selling, general and administrative expenses Restructuring and integration costs Other operating—net Total other operating costs and expenses Equity in earnings (loss) of operating affiliates Operating earnings (loss) Interest expense Interest income Net (earnings) of wholly-owned subsidiaries Other non-operating—net Earnings before income taxes and equity in earnings of non-operating affiliates Income tax provision (benefit) Equity in earnings (loss) of non-operating affiliates—net of taxes Net earnings Less: Net earnings attributable to noncontrolling interest Net earnings attributable to common stockholders Net earnings Other comprehensive loss Comprehensive income Less: Comprehensive income attributable to noncontrolling interest Comprehensive income attributable to common stockholders Net sales Cost of sales Gross margin Selling, general and administrative expenses Restructuring and integration costs Other operating—net Total other operating costs and expenses Equity in earnings (loss) of operating affiliates Operating earnings (loss) Interest expense Interest income Loss on extinguishment of debt Net (earnings) of wholly-owned subsidiaries Other non-operating—net Earnings before income taxes and equity in earnings of non-operating affiliates Income tax provision (benefit) Equity in earnings (loss) of non-operating affiliates—net of taxes Net earnings Less: Net earnings attributable to noncontrolling interest Net earnings attributable to common stockholders Net earnings Other comprehensive income (loss) Comprehensive income Less: Comprehensive income attributable to noncontrolling interest Comprehensive income attributable to common stockholders Assets Current assets: Cash and cash equivalents Accounts and notes receivable—net Income taxes receivable Inventories—net Deferred income taxes Other Total current assets Property, plant and equipment—net Deferred income taxes Asset retirement obligation funds Investments in and advances to affiliates Due from affiliates Goodwill Other assets Total assets Liabilities and Equity Current liabilities: Accounts payable and accrued expenses Income taxes payable Customer advances Notes payable Distributions payable to noncontrolling interest Other Total current liabilities Long-term debt Deferred income taxes Due to affiliates Other noncurrent liabilities Equity: Stockholders' equity: Preferred stock Common stock Paid-in capital Retained earnings Treasury stock Accumulated other comprehensive income (loss) Total stockholders' equity Noncontrolling interest Total equity Total liabilities and equity Assets Current assets: Cash and cash equivalents Accounts and notes receivable—net Income taxes receivable Inventories—net Other Total current assets Property, plant and equipment—net Deferred income taxes Asset retirement obligation funds Investments in and advances to affiliates Due from affiliates Goodwill Other assets Total assets Liabilities and Equity Current liabilities: Accounts and notes payable and accrued expenses Income taxes payable Customer advances Deferred income taxes Distributions payable to noncontrolling interest Other Total current liabilities Notes payable Long-term debt Deferred income taxes Due to affiliates Other noncurrent liabilities Equity: Stockholders' equity: Preferred stock Common stock Paid-in capital Retained earnings Treasury stock Accumulated other comprehensive income (loss) Total stockholders' equity Noncontrolling interest Total equity Total liabilities and equity Operating Activities: Net earnings Adjustments to reconcile net earnings to net cash provided by (used in) operating activities Depreciation, depletion and amortization Deferred income taxes Stock compensation expense Excess tax benefit from stock-based compensation Unrealized loss (gain) on derivatives Loss (gain) on disposal of property, plant and equipment and non-core assets Undistributed loss (earnings) of affiliates—net Due to / from affiliates—net Changes in: Accounts and notes receivable—net Margin deposits Inventories—net Accrued income taxes Accounts and notes payable and accrued expenses Customer advances Other—net Net cash provided by (used in) operating activities Investing Activities: Additions to property, plant and equipment Proceeds from sale of property, plant and equipment and non-core assets Sales and maturities of short-term and auction rate securities Deposit to asset retirement funds Net cash provided by (used in) investing activities Financing Activities: Payments of long-term debt Advances from unconsolidated affiliates Repayments of advances from unconsolidated affiliates Dividends paid on common stock Dividends to / from affiliates Distributions to/from noncontrolling interest Purchase of treasury stock Issuances of common stock under employee stock plans Excess tax benefit from stock-based compensation Net cash provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Operating Activities: Net earnings Adjustments to reconcile net earnings to net cash provided by (used in) operating activities Depreciation, depletion and amortization Deferred income taxes Stock compensation expense Excess tax benefit from stock-based compensation Unrealized loss (gain) on derivatives Loss (gain) on disposal of property, plant and equipment and non-core assets Undistributed loss (earnings) of affiliates—net Due to / from affiliates—net Changes in: Accounts and notes receivable-net Margin deposits Inventories -net Accrued income taxes Accounts and notes payable and accrued expenses Customer advances Other—net Net cash provided by (used in) operating activities Investing Activities: Additions to property, plant and equipment Proceeds from sale of property, plant and equipment and non-core assets Sales and maturities of short-term and auction rate securities Deposit to asset retirement obligation funds Other—net Net cash provided by (used in) investing activities Financing Activities: Payments on long-term debt Financing fees Purchase of treasury stock Dividends paid on common stock Dividends to / from affiliates Distributions to / from noncontrolling interest Issuances of common stock under employee stock plans Excess tax benefit from stock-based compensation Net cash provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Operating Activities: Net earnings Adjustments to reconcile net earnings to net cash provided by (used in) operating activities Depreciation, depletion and amortization Deferred income taxes Stock compensation expense Excess tax benefit from stock-based compensation Unrealized loss (gain) on derivatives Loss on extinguishment of debt Gain on sale of marketable equity securities Loss (gain) on disposal of property, plant and equipment and non-core assets Undistributed loss (earnings) of affiliates—net of taxes Due to / from affiliates—net Changes in: Accounts and notes receivable-net Margin deposits Inventories -net Accrued income taxes Accounts and notes payable and accrued expenses Customer advances Other—net Net cash provided by (used in) operating activities Investing Activities: Additions to property, plant and equipment Proceeds from sale of property, plant and equipment and non-core assets Purchases of short-term and auction rate securities Sales and maturities of short-term and auction rate securities Sale of marketable equity securities Deposit to asset retirement obligation funds Purchase of Terra Industries Inc.—net of cash acquired Other—net Net cash provided by (used in) investing activities Financing Activities: Proceeds from long-term borrowings Payments on long-term debt Financing fees Dividends paid on common stock Dividends paid to former Terra stockholders Dividends to / from affiliates Distributions to noncontrolling interest Issuance of common stock Issuances of common stock under employee stock plans Excess tax benefit from stock-based compensation Net cash provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. Equity compensation plans approved by security holders Equity compensation plans not approved by security holders TotalSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-KFORM 10-K (Mark One) ý For the fiscal year ended December 31, 2012OR2015OR o Delaware 20-2697511 (I.R.S. Employer Identification No.)
4 Parkway North, Suite 400, Deerfield, Illinois 60015 (Address of principal executive offices) (Zip Code) Securities Registered Pursuant to Section 12(b) of the Act: Preferred Stock Purchase Rights New York Stock Exchange Inc.
Yeso Noý$12,081,046,149$14,966,659,383 based on the closing sale price of common stock on June 30, 2012. 63,004,2572015.atas of January 31, 2013.20132016 annual meeting of stockholders (Proxy Statement) are incorporated herein by reference into Part III of this Annual Report on Form 10-K. The Proxy Statement will be filed with the Securities and Exchange Commission, pursuant to Regulation 14A, not later than 120 days after the end of the 20122015 fiscal year, or, if we do not file the proxy statement within such 120-day period, we will amend this Annual Report on Form 10-K to include the information required under Part III hereof not later than the end of such 120-day period.CF INDUSTRIES HOLDINGS, INC. Business1 Risk Factors18 34 Properties34 Legal Proceedings34 36 36 39 76 84 162 162 165 Executive Compensation165 166 167 "us""us," and "our" refer to CF Industries Holdings, Inc. and its subsidiaries, except where the context makes clear that the reference is only to CF Industries Holdings, Inc. itself and not its subsidiaries. All references to "CF Industries" refer to CF Industries, Inc., a 100% owned subsidiary of CF Industries Holdings, Inc. Notes referenced throughout this document refer to consolidated financial statement footnote disclosures that are found in Item 8. Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements.phosphate fertilizerother nitrogen products in the world. Our operations are organized into two business segments—the nitrogen segment and the phosphate segment. Our principal customers are cooperatives, and independent fertilizer distributors.distributors, farmers and industrial users. Our principal nitrogen fertilizer products in the nitrogen segment are ammonia, granular urea, urea ammonium nitrate solution or UAN,(UAN) and ammonium nitrate or AN.(AN). Our other nitrogen products include urea liquor, diesel exhaust fluid or DEF,(DEF), urea liquor, nitric acid and aqua ammonia, which are sold primarily to our industrial customers. Our principalcustomers, and compound fertilizer products in(NPKs), which are solid granular fertilizer products for which the phosphate segment are diammonium phosphate, or DAP,nutrient content is a combination of nitrogen, phosphorus, and monoammonium phosphate, or MAP.U.S.United States, Canada and Canada.the United Kingdom. We also export nitrogen fertilizer products from our Donaldsonville, LouisianaLouisiana; Yazoo City, Mississippi; and Billingham, United Kingdom manufacturing facilitiesfacilities.fromwere diammonium phosphate (DAP) and monoammonium phosphate (MAP). On March 17, 2014, we completed the sale of our phosphate mining and manufacturing business, which was located in Florida, phosphate operations through our Tampa port facility.•fiveinlocated in: Donaldsonville, Louisiana (the largest nitrogen fertilizer complex in North America),; Medicine Hat, Alberta (the largest nitrogen fertilizer complex in Canada); Port Neal, Iowa,Iowa; Courtright, Ontario,Ontario; Yazoo City, MississippiMississippi; and Woodward, Oklahoma;•publicly tradedpublicly-traded limited partnership of which we are the sole general partner and the majority limited partner and which, through its subsidiary Terra Nitrogen, Limited Partnership (TNLP), operates a nitrogen fertilizer manufacturing facility in Verdigris, Oklahoma;•a 66% economic interest in the largest nitrogen fertilizer complex in Canada which we operate in Medicine Hat, Alberta through Canadian Fertilizers Limited (CFL), a consolidated variable interest entity. We have announced our plans to acquire all of the noncontrolling interests of CFL (see Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A));•one of the largest integrated ammonium phosphate fertilizer complexes in the United States in Plant City, Florida;•the most-recently constructed phosphate rock mine and associated beneficiation plant in the United States in Hardee County, Florida;•CF INDUSTRIES HOLDINGS, INC.•joint venture investments that we account for under the equity method, which consist of:•a 50% interest in GrowHow UK Limited (GrowHow), a nitrogen products production joint venture located in the United Kingdom and serving primarily the British agricultural and industrial markets;•Tobago;Tobago that we account for under the equity method.•a transactions as follows:Switzerland.yearyears ended December 31, 2012,2015, 2014 and 2013, we sold 13.013.7 million, 13.3 million and 12.9 million product tons of nitrogen fertilizers and 2.0 million tons of phosphate fertilizers,from the Nitrogen Product Segments generating net sales of $6.1$4.31 billion, $4.57 billion and pre-tax earnings of $2.8 billion.thethis Annual Report on Form 10-K.Inc., now our wholly-owned subsidiary, were cancelledcanceled in exchange for all of the proceeds of the offering and shares of our common stock.Terra's financial results have been included in our consolidated financial results and in the nitrogen segment results since the acquisition date of April 5, 2010. As a result of theCF INDUSTRIES HOLDINGS, INC.Operating Segments Ourdivided into two operatingequal to 2,000 pounds). References to UAN product tons assume a 32% nitrogen content basis for production volume. nitrogen segment and the phosphate segment. The nitrogen segment includes the manufacture and sale offollowing segments: ammonia, granular urea, UAN, AN, Other, and AN. The phosphatephosphate. These segments are differentiated by products. Historical financial results have been restated to reflect this new reportable segment includesstructure on a comparable basis. See Note 21—Segment Disclosures for additional information.manufacture and salemeasurement of DAP and MAP.SegmentProduct SegmentsTheNet sales shown do not reflect amounts used internally, such as ammonia, in the manufacture of other products. 2015 2014 2013 Tons Net Sales Tons Net Sales Tons Net Sales (tons in thousands; dollars in millions) Nitrogen Product Segments Ammonia 2,995 $ 1,523.1 2,969 $ 1,576.3 2,427 $ 1,437.9 Granular urea 2,460 788.0 2,459 914.5 2,506 924.6 UAN 5,865 1,479.7 6,092 1,669.8 6,383 1,935.1 AN 1,290 294.0 958 242.7 859 215.1 1,108 223.5 798 171.5 770 165.1 Total 13,718 $ 4,308.3 13,276 $ 4,574.8 12,945 $ 4,677.8 2012 2011 2010 Tons Net Sales Tons Net Sales Tons Net Sales (tons in thousands; dollars in millions) 2,786 $ 1,677.6 2,668 $ 1,562.8 2,809 $ 1,129.4 2,593 1,143.4 2,600 1,069.7 2,602 777.7 6,131 1,886.2 6,241 1,991.6 4,843 994.3 839 222.8 953 247.5 788 164.7 620 166.6 540 140.5 419 121.4 12,969 $ 5,096.6 13,002 $ 5,012.1 11,461 $ 3,187.5 Other segment products include DEF, urea liquor, nitric acid, aqua ammonia and NPKs. (1)Other nitrogen segment products include aqua ammonia, nitric acid, urea liquor and DEF.nitrogen segmentNitrogen Product Segments was $2,913.6 million, $2,563.2 million$1.55 billion, $1.77 billion and $1,026.7 million$2.45 billion for the fiscal years ended December 31, 2012, 20112015, 2014 and 2010,2013, respectively. Total assets for the nitrogen segment were $6.0 billion as of both December 31, 2012 and 2011 and $6.1 billion as of December 31, 2010.productionmanufacturing facilities in North America. We own 100% of four productionnitrogen fertilizer manufacturing facilities in the Central United States, one in Medicine Hat, Alberta, Canada and one in Courtright, Ontario, Canada. We also have a 75.3% interest in TNCLP and its subsidiary, TNLP, which owns a nitrogen fertilizer manufacturing facility in Verdigris, Oklahoma, and a 66% economic interest in CFL, a variable interest entity that owns the nitrogen fertilizer complex in Medicine Hat, Alberta, Canada.Oklahoma. In 2012,2015, the combined production capacity of these seven facilities represented approximately 39%37%, 34%, 47%45% and 22%21% of North American ammonia, granular urea, UAN and ammonium nitrateAN production capacity, respectively. Each of our nitrogen fertilizer productionmanufacturing facilities in North America has on-site storage to provide flexibility to manage the flow of outbound shipments without impacting production. Our joint venture interests in PLNL and GrowHow provide additional production capacity in three additionalfertilizer production facilities, onemanufacturing complexes located in Ince and Billingham that produce ammonia, AN and NPKs and serve primarily the Republic of TrinidadBritish agricultural and Tobago and two located in the United Kingdom.industrial markets.fertilizer productionmanufacturing facilities: NPKs (tons in thousands) 3,070 1,130 2,415 1,680 — — Medicine Hat, Alberta 1,250 790 — 810 — — 380 30 800 50 — — 1,180 390 1,975 — — — Woodward, Oklahoma 480 140 820 25 — — 560 — 160 40 1,075 — 500 265 345 160 — — 380 20 — — 575 385 550 270 — — 620 — 8,350 3,035 6,515 2,765 2,270 385 Unconsolidated Affiliate 360 360 — — — — Total 8,710 3,395 6,515 2,765 2,270 385 Average Annual Capacity(1) Gross
Ammonia(2) Net
Ammonia(2) UAN(3) Urea(4) Ammonium
Nitrate(5) Fertilizer
Compounds (in thousands of tons) 2,950 1,010 2,415 1,680 — — 1,250 790 — 810 — — 380 30 800 50 — — 1,130 345 1,965 — — — 480 140 820 25 — — 560 — 160 20 1,075 — 500 265 345 160 — — 7,250 2,580 6,505 2,745 1,075 — 360 360 — — — — 190 — — — 330 165 275 135 — — 310 — 8,075 3,075 6,505 2,745 1,715 165 (1)Average annual capacity includes allowance for normal outages and planned maintenance shutdowns.(2)Gross ammonia capacity includes ammonia used to produce upgraded products. Net ammonia capacity is gross ammonia capacity less ammonia used to produce upgraded products based on the product mix shown in the table.(3)Measured in tons of UAN containing 32% nitrogen by weight.(4)Urea is sold as granular urea from the Donaldsonville and Medicine Hat facilities, as urea liquor from the Port Neal, Woodward and Yazoo City facilities and as either granular urea or urea liquor from the Courtright facility. Urea liquor produced at the Yazoo City, Courtright, Woodward and Port Neal facilities can be sold as DEF.(5)Ammonium nitrate includes prilled products (Amtrate and IGAN) and ammonium nitrate solution produced for sale.(6)The Donaldsonville facility's production capacity depends on product mix. With the UAN plants operating at capacity, approximately 1.7 million tons of granular urea can be produced. Granular urea production can be increased to 2 million tons if UAN production is reduced.(7)Represents 100% of the capacity of each of these facilities.(8)Production of urea products at the Port Neal and Courtright facilities can be increased by reducing UAN production. Urea liquor production at the Yazoo City facility can be increased by obtaining additional ammonia to supplement the facility's ammonia production.(9)The Yazoo City facility's production capacity depends on product mix. With the facility maximizing the production of AN products, 160,000 tons of UAN can be produced. UAN production can be increased to 450,000 tons by reducing the production of AN nitrate products.(10)The Yazoo City, Courtright and Verdigris facilities also produce merchant nitric acid by reducing UAN or ammonium nitrate production.(11)Represents our 50% interest in the capacity of each of these facilities.(12)The Ince facility's production capacity depends on product mix. The facility can increase production of fertilizer compounds to 335,000 tons by reducing ammonium nitrate production to 220,000 tons (volumes represent our 50% interest).Average annual capacity includes allowance for normal outages and planned maintenance shutdowns. Gross ammonia capacity includes ammonia used to produce upgraded products. Net ammonia capacity is gross ammonia capacity less ammonia used to produce upgraded products based on the product mix shown in the table. Measured in tons of UAN containing 32% nitrogen by weight. Urea is sold as granular urea from the Donaldsonville and Medicine Hat facilities, as urea liquor from the Port Neal, Woodward and Yazoo City facilities and as either granular urea or urea liquor from the Courtright facility. Urea liquor produced at the Yazoo City, Courtright, Woodward and Port Neal facilities can be sold as DEF. AN includes prilled products (Amtrate and IGAN) and AN solution produced for sale. The urea expansion capacity at Donaldsonville is online and available (Note: the urea expansion capacity of approximately 1.3 million tons has not been added to the capacity table above). If the full urea expansion capacity of approximately 1.3 million tons were produced, then the net ammonia balance would decrease by approximately 768,000 tons. The Donaldsonville facility's remaining production capacity depends on product mix. Including the urea expansion capacity, the facility is capable of producing approximately 3.0 million tons of granular urea with UAN running at capacity. Granular urea production can be increased to approximately 3.3 million tons if UAN production is reduced to approximately 1.6 million tons. Production of urea products at the Port Neal and Courtright facilities can be increased by reducing UAN production. Urea liquor production at the Yazoo City facility can be increased by obtaining additional ammonia to supplement the facility's ammonia production. Represents 100% of the capacity of this facility. Reduction of UAN or AN production at the Yazoo City, Courtright, Verdigris and Billingham facilities can allow more merchant nitric acid to be made available for sale. The Yazoo City facility's production capacity depends on product mix. With the facility maximizing the production of AN products, 160,000 tons of UAN can be produced. UAN production can be increased to 450,000 tons by reducing the production of AN to 945,000 tons. The Ince facility's production capacity depends on product mix. The facility can increase production of NPKs to 550,000 tons by reducing AN production to 485,000 tons. Represents our 50% interest in the capacity of PLNL. December 31, 2015 2014 2013 (tons in thousands) 7,673 7,011 7,105 Granular urea 2,520 2,347 2,474 UAN (32%) 5,888 5,939 6,332 AN 1,283 950 882 December 31, 2012 2011 2010 (tons in thousands) 7,067 7,244 6,110 2,560 2,588 2,488 6,027 6,349 4,626 839 952 796 Gross ammonia production, including amounts subsequently upgraded on-site into granular urea, UAN or AN. (1)Gross ammonia production, including amounts subsequently upgraded on-site into granular urea or UAN.world-scale ammonia plants, fourfive urea plants, three nitric acid plants and two UAN plants. The complex, which is located on the Mississippi River, includes deep-water docking facilities, access to an ammonia pipeline, and truck and railroad loading capabilities. The complex has on-site storage for 130,000160,000 tons of ammonia, 168,000 tons of UAN (measured on a 32% nitrogen content basis) and 83,000163,000 tons of granular urea.plans to invest $2.1 billion in anour expansion project atplans for our Donaldsonville, Louisiana facility, which is projected to be completed by 2016. When completed, this project will increase our annual capacity of ammonia and granular urea each by approximatelyup to 1.3 million tons each and UAN by up to 1.8 million tons. The new Donaldsonville urea plant became operational during the fourth quarter of 2015. For additional details regarding this project, see Item 7. MD&A—Liquidity and Capital Resources.The facility is owned by CFL, a variable interest entity which we consolidate in our financial statements. It has two ammonia plants and aone urea plant. The complex has on-site storage for 60,000 tons of ammonia and 70,00060,000 tons of granular urea. We operate the Medicine Hat facility and purchase approximately 66% of the facility's ammonia and urea production, pursuant to a management agreement and a product purchase agreement. We ship our share of ammonia and urea produced at the Medicine Hat nitrogen fertilizertruck and rail to customers in the United States and Canada and to our storage facilities in the northern United States. Viterra, Inc. (Viterra)Canadian Fertilizers Limited (CFL), which owns 34% of CFL, has the right, but not the obligation, to purchaseuntil April 30, 2013, was a variable interest entity which we consolidated in our financial statements. In April 2013, we purchased the remaining 34% of the facility's ammonia and urea production undernoncontrolling interest. CFL is now a similar product purchase agreement. To the extent that Viterra does not purchase its 34% of the facility's production, we are obligated to purchase any remaining amounts. However, since 1995, Viterra and its predecessor purchased at least 34% of the facility's production each year.wholly-owned subsidiary.CF INDUSTRIES HOLDINGS, INC. In August 2012, we entered into an agreement to acquire the 34% of CFL's common and preferred shares owned by Viterra and the product purchase agreement between Viterra and CFL for a total purchase price of C$0.9 billion, subject to certain adjustments. In October 2012, we entered into an agreement with each of GROWMARK and La Coop fédérée to acquire CFL's common shares held by them. As a result of these transactions, we will own 100% of CFL and will be entitled to purchase 100% of CFL's ammonia and granular urea production. The completion of the transactions is subject to receipt of regulatory approvals in Canada and other terms and conditions in the definitive agreements.4—15—Noncontrolling Interest.plans to invest $1.7 billion in anour expansion project atplans for our Port Neal, Iowa facility, which is projected to be completed by 2016. When completed, this project will increase our annual capacity of ammonia by approximately 0.8 million tons and granular urea by approximately 1.3 million tons. For additional details regarding this project, see Item 7. MD&A—Liquidity and Capital Resources.28,00060,000 tons of ammonia and 49,100100,000 tons of 32% UAN.28,00050,000 tons of ammonia, 48,000 tons of 32% UAN and 7,000 tons of AN and related products.onean ammonia plant, a UAN plant, a nitric acid plant and onea urea plant. The location has on-site storage for 64,100 tons of ammonia, 10,400 tons of granular urea and 16,000 tons of 32% UAN.Point Lisas, Trinidad The Point Lisas Nitrogen facility in the Republic of Trinidad and Tobago is owned jointly through a 50/50 venture with Koch Fertilizers. This facility has the capacity to produce 720,000 tons of ammoniaCF INDUSTRIES HOLDINGS, INC.annually from natural gas supplied under a contract with the National Gas Company of Trinidad and Tobago. GrowHow is a 50/50 joint venture between us and Yara International ASA (Yara) that owns and operates the Ince and Billingham facilities. fertilizer compoundNPK plants. The location has on-site storage for 11,000 tons of ammonia, 110,000 tons of AN, and 50,000 tons of NPKs.twothree primary areas:locations: the main site, which contains an ammonia plant, three nitric acid plants and a carbon dioxide plant andplant; the Portrack site, approximately two miles away, which contains an AN fertilizer plant.2012,2015, natural gas accounted for approximately 39%45% of our total cost of salesproduction costs for nitrogen fertilizers and a higher percentage of cash production costs (total production costs less depreciation and amortization).fertilizer products. Our nitrogen fertilizer manufacturing facilities have access to abundant, competitively-priced natural gas through a reliable network of pipelines that are connected to major natural gas trading hubs near the facilities. We haveOur facilities located at or nearutilize the following natural gas hubs: Henry Hub in Louisiana,Louisiana; ONEOK in Oklahoma,Oklahoma; AECO in Alberta,Alberta; Ventura in Iowa andIowa; Demarcation in Kansas; Dawn in Ontario.in excess of 250approximately 280 million MMBtus of natural gas annually. We employ a combination of spot and term purchases from a variety of quality suppliers to maintain a reliable, competitively-priced supply of natural gas. We also use certain financial instruments to hedge natural gas prices. For further information about our natural gas hedging activities, see Note 25—16—Derivative Financial Instruments.capabilitycapacity and location.5,2005,600 tank and hopper cars, as well as railcars provided by rail carriers.tentwelve leased tow boats and 3240 river barges to ship ammonia and UAN. We also utilize contract marine services to move urea and phosphate fertilizers.Phosphate Segment We are a major manufacturer of phosphate fertilizer products. Our phosphate fertilizer products are DAP and MAP. 2012 2011 2010 2014 2013 Tons Net Sales Tons Net Sales Tons Net Sales Tons Net Sales Tons Net Sales (tons in thousands; dollars in millions) (tons in thousands; dollars in millions) 1,611 $ 794.5 1,468 $ 829.1 1,412 $ 583.3 372 $ 127.6 1,408 $ 600.6 424 212.9 454 256.7 455 194.2 115 40.8 449 196.3 2,035 $ 1,007.4 1,922 $ 1,085.8 1,867 $ 777.5 487 $ 168.4 1,857 $ 796.9 $199.7 million, $332.4$10.1 million and $152.8$74.9 million for the fiscal years ended December 31, 2012, 20112014 and 2010,2013, respectively. Total assets for the phosphate segment were $795.2 million, $696.4 million and $618.3 million as of December 31, 2012, 2011 and 2010, respectively. Our phosphate fertilizer manufacturing operations are located in central Florida and consist of a phosphate fertilizer chemical complex in Plant City, a phosphate rock mine, a beneficiation plant and phosphate rock reserves in Hardee County and a deepwater terminal facility in the port of Tampa. We own each of these facilities and properties. The following table summarizes our phosphate fertilizer production volumes for the last three years and current production capacities for phosphate-related products. December 31, Normalized
Annual
Capacity(2) 2012 2011 2010 (tons in thousands) 3,483 3,504 3,343 3,500 2,530 2,633 2,419 2,785 975 1,005 906 1,055 1,952 1,997 1,799 2,165 (1)P2O5 is the basic measure of the nutrient content in phosphate fertilizer products.(2)Capacities shown for phosphate rock at the Hardee County Phosphate Rock Mine and DAP/MAP granulation at the Plant City facility are constrained by Plant City's capacity to produce phosphoric acid.Hardee County Phosphate Rock Mine In 1975, we purchased 20,000 acres of land in Hardee County, Florida that was originally estimated to contain in excess of 100 million tons of recoverable rock reserves. Between 1978 and 1993, we operated a one million ton per year phosphate rock mine on a 5,000-acre portion of these reserves. In 1995, we began operations at an expanded mine on the remaining 15,000-acre area of the reserve property. Since that time, we have acquired additional rock reserves through acquisitions or exchanges of several smaller parcels of land. The table below shows the estimated reserves at the Hardee phosphate complex as of December 31, 2012. Also reflected in the table is the grade of the reserves, expressed as a percentage of bone phosphate of lime (BPL) and P2O5. The table also reflects the average values of the following material contaminants contained in the reserves: ferrous oxide (Fe2O3) plus aluminum oxide (Al2O3) and magnesium oxide (MgO).PROVEN AND PROBABLE RESERVES(1)As of December 31, 2012 Recoverable Tons(2)
(in millions) % BPL % P2O5 % Fe2O3+AI2O3 % MgO 42.2 65.21 29.84 2.38 0.74 34.7 64.61 29.57 2.38 0.78 76.9 64.94 29.72 2.38 0.76 (1)The minimum drill hole density for the proven reserves classification is 1 hole per 20 acres.(2)The reserve estimates provided have been developed by the Company in accordance with Industry Guide 7 promulgated by the SEC. We estimate that 99% of the reserves are proven. Our phosphate reserve estimates are based on geological data assembled and analyzed by our staff geologist as of December 31, 2012. Reserve estimates are updated periodically to reflect actual phosphate rock recovered, new drilling information and other geological or mining data. Estimates for 99% of the reserves are based on 20-acre density drilling.Plant City Phosphate Complex Our Plant City phosphate fertilizer complex is one of the largest phosphate fertilizer facilities in North America. At one million tons per year, its phosphoric acid capacity represents approximately 10% of the total U.S. capacity. All of Plant City's phosphoric acid is converted into ammonium phosphates (DAP and MAP), representing approximately 13% of U.S. capacity for ammonium phosphate fertilizer products in 2012. The combination of the Plant City phosphate fertilizer complex and the Hardee mine gives us one of the largest integrated ammonium phosphate fertilizer operations in North America.Bartow Phosphate Complex We own a site in Bartow, Florida on which we operated a phosphate manufacturing complex. This complex ceased production in 1999 and the former manufacturing facilities have been dismantled and disposed of in accordance with local laws and regulations. The related phosphogypsum stack has been closed and the former storage and distribution facilities were sold along with excess land. We continue to be obligated for the closure of the cooling pond, management of water treatment on the site and providing long-term care for the site in accordance with regulatory requirements.Phosphate Raw Materials Phosphate Rock Supply. Phosphate rock is the basic nutrient source for phosphate fertilizers. Approximately 3.5 tons of phosphate rock are needed to produce one ton of P2O5 (the measure of nutrient content of phosphate fertilizers). Our Plant City phosphate fertilizer complex typically consumes in excess of three million tons of rock annually. As of December 31, 2012, our Hardee rock mine had approximately 12 years of fully permitted recoverable phosphate reserves remaining at current operating rates. We have initiated the process of applying for authorization and permits toCF INDUSTRIES HOLDINGS, INC.expand the geographical area at our Hardee property where we can mine. The expanded area has an estimated 34.7 million tons of recoverable phosphate reserves. We estimate that we will be able to conduct mining operations at our Hardee property for approximately 10 additional years at current operating rates, assuming we secure the authorization and permits to mine in this area. Sulfur Supply. Sulfur is used to produce sulfuric acid, which is combined with phosphate rock to produce phosphoric acid. Approximately three quarters of a long ton of sulfur is needed to produce one ton of P2O5. Our Plant City phosphate fertilizer complex uses approximately 800,000 long tons of sulfur annually when operating at capacity. We obtain molten sulfur from several domestic and foreign producers under contracts of varied duration. In 2012, Martin Sulphur, our largest molten sulfur supplier, supplied approximately 61% of the molten sulfur used at Plant City. Ammonia Supply. DAP and MAP have a nitrogen content of 18% and 11%, respectively, and a phosphate nutrient content of 46% and 52%, respectively. Ammonia is the primary source of nitrogen in DAP and MAP. Operating at capacity, our Plant City phosphate fertilizer complex consumes approximately 400,000 tons of ammonia annually. The ammonia used at our Plant City phosphate fertilizer complex is shipped by rail from our ammonia storage facility located in Tampa, Florida. This facility consists of a 38,000-ton ammonia storage tank, access to a deep-water dock that is capable of discharging ocean-going vessels, and rail and truck loading facilities. In addition to supplying our Plant City phosphate fertilizer complex, our Tampa ammonia distribution system has the capacity to support ammonia sales to, and distribution services for other customers. Sales of ammonia from our Tampa terminal are reported in our nitrogen business segment. The ammonia supply for Tampa is purchased from offshore sources, providing us with access to the broad international ammonia market.Phosphate Distribution We operate a phosphate fertilizer warehouse located at a deep-water port facility in Tampa, Florida. Most of the phosphate fertilizer produced at Plant City is shipped by truck or rail to our Tampa warehouse, where it is loaded onto vessels for shipment to export customers or for transport across the Gulf of Mexico to the Mississippi River. In 2012, our Tampa warehouse handled approximately 1.3 million tons of phosphate fertilizers, or about 67% of our production. The remainder of our phosphate fertilizer production is transported by truck or rail directly to customers or to in-market storage facilities. Phosphate fertilizer shipped across the Gulf of Mexico to the Mississippi River is transferred into river barges near New Orleans. Phosphate fertilizer in these river barges is transported to our storage facilities or delivered directly to customers. River transportation is provided primarily under an agreement with one of the major inland river system barge operators. At2012,2015, we owned or leased space at 7688 in-market storage terminals and warehouses located in a 20-state region.22-state region of the United States, Canada and the United Kingdom. Including storage at our production facilities, and at the TampaCF INDUSTRIES HOLDINGS, INC.warehouse and ammonia terminal, we have an aggregate storage capacity for approximately three3.3 million tons of fertilizer. Our storage capabilities are summarized in the following table. Ammonia Granular Urea AN Plants 9 511 3 233 6 497 3 245 Terminal and Warehouse Locations Owned 22 815 1 40 8 219 — — 3 110 2 49 52 534 — — Total In-Market 25 925 3 89 60 753 — — Total Storage Capacity 1,436 322 1,250 245 Ammonia UAN(1) Ammonium Nitrate Dry Products(2) Number of
Facilities Capacity
(000 Tons) Number of
Facilities Capacity
(000 Tons) Number of
Facilities Capacity
(000 Tons) Number of
Facilities Capacity
(000 Tons) 7 376 6 446 1 7 4 220 1 38 — — — — 1 100 414 446 7 320
19
700
10
269
—
—
1
170 2 90 41 493 1 8 2 39 21 790 51 762 1 8 3 209
1,204
1,208
15
529 Capacity is expressed as the equivalent volume of UAN measured on a 32% nitrogen content basis. Our lease agreements are typically for periods of one to five years. (1)Capacity is expressed as the equivalent volume of UAN measured on a 32% nitrogen content basis.(2)Our dry products include urea, DAP and MAP.(3)Our lease agreements are typically for periods of one to three years.Customersphosphate fertilizersother nitrogen products are cooperatives, and independent fertilizer distributors. CHS Inc. wasdistributors, farmers and industrial users. None of our largest customercustomers in 2012 and2015 accounted for more than ten percent of our consolidated net sales. Sales are generated by our internal marketing and sales force. In our nitrogen segment, ourKoch Nitrogen.Potash Corporation of Saskatchewan Inc. There is also significant competition from products sourced from other regions of the world, including some with lower natural gas or other feedstock costs. Because ammonia, urea and UAN are widely-traded fertilizer products and there are limited barriers to entry, we experience competition from foreign-sourced products continuously. In our phosphate segment, ourNorth American-based competitors include Agrium, Mosaic, Potash Corp.United Kingdom competition comes from imported products supplied by companies including Yara International, Origin Fertilisers, Bunn Fertiliser Limited (Koch), Ameropa, CHS and Simplot. The domestic phosphate industry is tied to the global market through its position as the world's largest exporter of DAP/MAP. Consequently, phosphate fertilizer pricesHelm. Urea and demand for U.S. DAP/MAPUAN are subject to considerable volatility and dependent on a wide variety of factors impacting the world market, including fertilizer and/or trade policies of foreign governments, changes in ocean bound freight rates and international currency fluctuations.Seasonality The sales patterns of our six major products are seasonal. The strongest demand for our products occurs during the spring planting season, with a second period of strong demand following the fall harvest. We and/or our customers generally build inventories during the low demand periods of the year in order to ensure timely product availability during the peak sales seasons. Seasonality is greatest for ammonia due to the limited ability of our customers and their customers to store significantCF INDUSTRIES HOLDINGS, INC.quantities of this product. The seasonality of fertilizer demand generally results in our sales volumes and net sales being the highest during the spring and our working capital requirements being the highest just prior to the start of the spring season. Our quarterly financial results can vary significantly from one year to the next due to weather-related shifts in planting schedules and purchasing patterns.Financial Information About Foreign and Domestic Sales and Operations The amount of net sales attributable to our sales to foreign and domestic markets over the last three fiscal years and the carrying value of our foreign and domestic assets are set forth in Note 30—Segment Disclosures.Environment, Health and Safety We are subject to numerous environmental, health and safety laws and regulations, including laws and regulations relating to land reclamation; the generation, treatment, storage, disposal and handling of hazardous substances and wastes; and the cleanup of hazardous substance releases. These laws include the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act (RCRA), the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), the Toxic Substances Control Act and various other federal, state, provincial, local and international statutes. Violations can result in substantial penalties, court orders to install pollution-control equipment, civil and criminal sanctions, permit revocations and facility shutdowns. In addition, environmental, health and safety laws and regulations may impose joint and several liability, without regard to fault, for cleanup costs on potentially responsible parties who have released or disposed of hazardous substances into the environment.Environmental Health and Safety Expenditures Our environmental, health and safety capital expenditures in 2012 totaled approximately $45.2 million. In 2013, we estimate that we will spend approximately $61.3 million for environmental, health and safety capital expenditures. The increase in expenditures in 2013 is primarily related to certain projects to reduce emissions from our facilities, including projects to improve the integrity and capacity of storage tanks at certain plant locations. Environmental, health and safety laws and regulations are complex, change frequently and have tended to become more stringent over time. We expect that continued government and public emphasis on environmental issues will result in increased future expenditures for environmental controls at our operations. Such expenditures could have a material adverse effect on our business, financial condition, results of operations and cash flows.Clean Air Act—Section 185 Fee Our Donaldsonville Nitrogen Complex is located in a five-parish region near Baton Rouge, Louisiana that, as of 2005, was designated as being in "severe" nonattainment with respect to the national ambient air quality standard (NAAQS) for ozone (the "1-hour ozone standard") pursuant to the Federal Clean Air Act (the Clean Air Act). Section 185 of the Act requires states, in their state implementation plans, to levy a fee (Section 185 fee) on major stationary sources (such as the Donaldsonville facility) located in a severe nonattainment area that did not meet the 1-hour ozone standard by November 30, 2005. For additional information on the Section 185 fee, see Note 29—Contingencies.CF INDUSTRIES HOLDINGS, INC.Clean Air Act Information Request On February 26, 2009, the Company received a letter from the EPA under Section 114 of the Federal Clean Air Act requesting information and copies of records relating to compliance with New Source Review and New Source Performance Standards at the Donaldsonville facility. For additional information on the Clean Air Act Information Request, see Note 29—Contingencies.Clean Air Act Investigation. By letter dated June 16, 2010, the Company received a Notice of Violation (NOV) from the EPA alleging violations of the Prevention of Significant Deterioration (PSD) Clean Air Act regulations relating to certain projects undertaken at the Company's sulfuric acid plants at its Plant City, Florida facility. For additional information on the Clean Air Act Investigation, see Legal Proceedings—Environmental and Note 29—Contingencies.EPCRA/CERCLA Investigation By letter dated July 6, 2010, the EPA issued to the Company a NOV alleging violations of the Emergency Planning and Community Right-to-know Act (EPCRA) and CERCLA. For additional information on the EPCRA/CERCLA Investigation, see Legal Proceedings—Environmental and Note 29—Contingencies.CERCLA/Remediation Matters From time to time, we receive notices from governmental agencies or third parties alleging that we are a potentially responsible party at certain cleanup sites under CERCLA or other environmental cleanup laws. In 2002 and in 2009, we were asked by the current owner of a former phosphate mine and processing facility that we owned in the late 1950s and early 1960s located in Georgetown Canyon, Idaho, to contribute to a cleanup of the former processing portion of the site. For additional information on the CERCLA/Remediation matters, see Note 29—Contingencies.Federal and State Numeric Nutrient Criteria Regulation On August 18, 2009, the EPA entered into a consent decree with certain environmental groups with respect to the promulgation of numeric criteria for nitrogen and phosphorous in surface waters in Florida. The consent decree was approved by a Federal District Court (the Court) on November 16, 2009. The EPA adopted final numeric nutrient criteria for Florida lakes and inland flowing waters on November 14, 2010. On February 18, 2012, the Court upheld parts of the numeric nutrient criteria regulation, but found that the EPA had not adequately justified the criteria for streams and therefore concluded that the adoption of such criteria was arbitrary and capricious. The Court ordered the EPA to issue proposed or final numeric nutrient criteria for streams by May 21, 2012 (subject to the EPA seeking an extension of such time period pursuant to the terms of the 2009 consent decree). Subsequently, the Court granted the EPA's motion to allow the EPA to propose numeric nutrient criteria for streams by November 30, 2012 and to finalize such criteria by August 31, 2013. In December 2011, the State of Florida proposed its own numeric nutrient criteria for surface waters. The nitrogen and phosphorous criteria in the proposed rule are substantially identical to the federal rule, but the state proposal includes biological verification as a component of the criteria and adopts existing nutrient Total Maximum Daily Loads (TMDL) as applicable numeric criteria. The impact of these modifications could be to provide more flexibility with respect to nitrogen and phosphorous limits in wastewater discharge permits so long as such discharges do not impair the biological health of receiving water bodies. Environmental groups filed a challenge to the proposedCF INDUSTRIES HOLDINGS, INC.state rule, but the rule was upheld by an administrative law judge on June 8, 2012 and became final. An appeal of the administrative decision upholding the rule is now pending before a Florida appellate court. On November 30, 2012, the EPA approved Florida's rule. However, because the EPA identified what it considered to be gaps in the scope of the waters covered by Florida's rule and potential legal issues that might bar the Florida rule from going into effect, the EPA, pursuant to the Court order described above, has again proposed numeric nutrient criteria for Florida streams. There is substantial uncertainty as to whether this rule will be withdrawn before it is finalized or, if a rule is finalized, as to the scope of Florida inland flowing waters that will be covered by the EPA regulation. Moreover, notwithstanding the EPA's approval of the Florida rule, the federal criteria for lakes and inland waters previously upheld by the Court (excluding the criteria found to be arbitrary and capricious) became effective on January 6, 2013. The EPA has proposed to stay the effective date of these criteria in light of the on-going developments with the Florida regulation. The 2009 consent decree also requires the EPA to develop numeric nutrient criteria for Florida coastal and estuarine waters. The numeric criteria adopted by the State of Florida and approved by the EPA includes numeric criteria for some coastal and estuarine waters, but, as with streams, EPA has raised issues regarding the scope of coverage of Florida's regulation. Accordingly, on November 30, 2012, the EPA proposed numeric nutrient criteria for Florida coastal and estuarine waters. The EPA must finalize these criteria by September 30, 2013 unless future developments allow the EPA to withdraw the rule. Depending on the developments discussed herein, federal or state numeric nutrient water quality criteria for Florida waters could result in substantially more stringent nitrogen and phosphorous limits in wastewater discharge permits for our mining, manufacturing and distribution operations in Florida. More stringent limits on wastewater discharge could increase our costs and limit our operations and, therefore, could have a material adverse effect on our business, financial condition, results of operations and cash flows.Regulation of Greenhouse Gases We are subject to regulationsproduced in the United Kingdom, Canada and the United States concerning climate change and greenhouse gas (GHG) emissions. The United Kingdom is a partybut along with AN, are widely-traded fertilizer products with limited barriers to the Kyoto Protocol. As a result of agreements reached during a conference in Durban, South Africa in 2011, the Kyoto Protocol will continue in force for a second commitment period, which will expire by 2020, to be replaced by another international agreement to be negotiated by 2015 (which agreement is to go into effect in 2020). The United Kingdom has adopted GHG emissions regulations, including regulations to implement the European Union Greenhouse Gas Trading System. Our joint venture U.K. manufacturing plants are required to report GHG emissions annually to the United Kingdom Environment Agency pursuant to their site Environmental Permits and Climate Change Agreement, which specify energy efficiency targets. Failure to meet efficiency targets may require the joint venture to purchase CO2 emissions allowances. The steam boilers at each of our joint venture U.K. sites are also subject to the European Union Emissions Trading Scheme. More stringent GHG emission limits in the U.K and Europe are expected to go into effect beginning in 2013. In Canada (which in December 2011 withdrew from further participation in the Kyoto Protocol, but signed the Durban platform to negotiate a new international GHG agreement or protocol by 2015), we are required to conduct an annual review of our operations with respect to compliance with Environment Canada's National Pollutant Release Inventory and Ontario's Mandatory Monitoring andReporting Regulation and the GHG Reporting Regulation. Ontario is also a party to the Western Climate Initiative, comprised of California (the other states in the initiative having withdrawn) and several Canadian provinces, which intends to establish a cap and trade regime for the trading of GHG credits within the regional area beginning in 2013. Although Ontario has not disavowed its participation in the initiative, it has not developed regulations to establish a cap and trade program. In the United States (not a party to the Kyoto Protocol, but a signatory to the Durban platform with respect to the negotiation of a replacement for the Kyoto Protocol), GHG regulation is evolving at state, regional and federal levels. The EPA has issued federal GHG regulations that impact our facilities, including a mandatory GHG reporting rule that required all of our U.S. manufacturing facilities to commence monitoring GHG emissions beginning on January 1, 2010 and begin reporting the previous year's emissions annually starting in 2011. In May 2010, the EPA issued the Prevention of Significant Deterioration (PSD) and Title V Greenhouse Gas Tailoring Rule (Tailoring Rule). This regulation establishes that the construction of new or modification of existing major sources of GHG emissions would become subject to the PSD air permitting program (and later, the Title V permitting program) beginning in January 2011, and the regulation could significantly decrease the emissions thresholds that would subject facilities to these regulations in the future. On December 20, 2012, the U.S. Court of Appeals for the D.C. Circuit rejected a request to reconsider its decision to uphold the GHG regulations. Regulation of GHG emissions pursuant to the PSD program could subject new capital projects to additional permitting requirements that may result in increased costs or delays in completing such projects. Under the Title V provisions of the Tailoring Rule, all of our U.S. manufacturing facilities will be required to include GHG emissions in future Title V air permit applications. Other than the states' implementation of the Tailoring Rule, none of the states where our U.S. production facilities are located—Florida, Louisiana, Mississippi, Iowa and Oklahoma—has proposed control regulations limiting GHG emissions. Iowa is a member of the Midwest Greenhouse Gas Reduction Accord, signed in 2007, but the member states appear to have discontinued any action to implement the accord.Revisions to New Source Performance Standards for Nitric Acid Plants. We operate 13 nitric acid plants in the United States. On August 14, 2012, the EPA issued a final regulation revising air emission standards applicable to newly constructed, reconstructed or modified nitric acid plants. The regulations will apply to these plants if and when we undertake activities or operations that are considered modifications, including physical changes that would allow us to increase our production capacity at these plants. The regulations include certain provisions that could make it difficult for us to meet the limits on emissions of nitrogen oxides (NOx) notwithstanding pollution controls we may add to our plants, and accordingly, the regulations, could impact our ability to expand production at our existing plants. The EPA regulation did not include a limitation on emissions of nitrous oxide (a greenhouse gas).Regulatory Permits and Approvals We hold numerous environmental and mining permits authorizing operations at our facilities. A decision by a government agency to deny or delay issuing a new or renewed material permit or approval, or to revoke or substantially modify an existing permit, could have a material adverse effect on our ability to continue operations at the affected facility. Any future expansion of our existing operations is also predicated upon securing the necessary environmental or other permits or approvals. As of December 31, 2012, the area permitted for mining at our Hardee phosphate complex had approximately 42.2 million tons of recoverable phosphate rock reserves, which we expect to meet our
SeasonalityCF INDUSTRIES HOLDINGS, INC.requirements, at current production rates, for approximately 12 years. We have secured the necessary permits to mine these reserves from the FDEP and the U.S. Army Corps of Engineers. We have initiated the process of applying for authorization and permits to expand the geographical area in which we can mine at our Hardee property. The expanded geographical area has an estimated additional 34.7 million tons of recoverable phosphate reserves, which we expect will allow us to conduct mining operations at our Hardee property for approximately 10 additional years at current operating rates, assuming we secure the authorization and permits to mine in this area. The estimated recoverable phosphate reserves are reflective of the anticipated permittable mining areas based on recent similar permitting efforts. In Florida, local community participation has become an important factor in the authorization and permitting process for mining companies. A denial of the authorizations or permits to continue and/or expand our mining operations at our Hardee property would prevent us from mining all of our reserves and have a material adverse effect on our business, financial condition, results of operations and cash flows. We have secured the state environmental authorization to increase the capacity of our phosphogypsum stack system at Plant City. With the completion of our current expansion project, this stack has sufficient capacity to meet our requirements through 2026 at current operating rates and subject to regular renewals of our operating permits. Including additional expansion phases, the estimated stack system capacity is expected to meet our requirements until 2040 at current operating rates and is subject to securing the corresponding operating permits. This date is approximately six years beyond our current estimate of available phosphate rock reserves at our Hardee mine. A decision by the state or federal authorities to deny a renewal of our current permits or to deny operating permits for the expansion of our stack system could have a material adverse effect on our business, financial condition, results of operations and cash flows. In certain cases, as a condition to procuring such permits and approvals, we may be required to comply with financial assurance regulatory requirements. The purpose of these requirements is to assure that sufficient company funds will be available for the ultimate closure, post-closure care and/or reclamation at our facilities. We currently utilize a trust established for the benefit of the EPA and the FDEP and an escrow account established for the benefit of the FDEP as a means of complying with financial assurance requirements for the closure and long-term care of our phosphogypsum stack systems. For additional information on the cash deposit arrangements, see Note 10—Asset Retirement Obligations. Several of our permits, including our mining permit at the Hardee phosphate complex, require us to reclaim any property disturbed by our operations. At our Hardee property, we currently mine approximately 300 to 500 acres of land each year, all of which must be reclaimed. The costs to reclaim this land vary based on the type of land involved and range from $3,700 to $18,200 an acre, with an average of $11,000 an acre. For additional information on our Hardee asset retirement obligations, see Note 10—Asset Retirement Obligations. Our phosphate operations in Florida are subject to regulations governing the closure and long-term maintenance of our phosphogypsum stack systems. At the site of our former Bartow phosphate complex, we estimate that we will spend a total of approximately $2 million between 2013 and 2016 to complete closure of the cooling pond and channels. Water treating expenditures at Bartow are estimated to require about $11 million over the next 44 years. Post-closure long-term care expenditures at Bartow are estimated to total approximately $51 million for a 50 year period including 2013. To close the phosphogypsum stack at the Plant City phosphate complex including the recently constructed expansion, we estimate that we will spend approximately $96 million during the years 2033 through 2037, and another $45 million in 2087 to close the cooling pond. Water treating expenditures at Plant City are estimated to approximate $6 million in 2018, $63 million in 2033 through 2037, andCF INDUSTRIES HOLDINGS, INC.$164 million thereafter through 2087. Post-closure long-term care expenditures at Plant City are estimated to total $105 million for a 50 year period commencing in 2038. These amounts are in nominal dollars using an assumed inflation rate of 3%. Cost estimates for closure of our phosphogypsum stack systems are based on formal closure plans submitted to the State of Florida, which are subject to revision during negotiations over the next several years. Moreover, the time frame involved in the closure of our phosphogypsum stack systems extends as far as the year 2087. Accordingly, the actual amount to be spent also will depend upon factors such as the timing of activities, refinements in scope, technological developments, cost inflation and changes in applicable laws and regulations. These cost estimates may also increase if the Plant City phosphogypsum stack is expanded further. For additional information on asset retirement obligations related to our phosphogypsum systems, see Note 10—Asset Retirement Obligations.Employees and Labor Relations As of December 31, 2012, we employed approximately 2,500 full-time and 100 part-time employees.In addition to the other information contained in this Annual Report on Form 10-K, you should carefully consider the factors discussed below before deciding to invest in any of our securities. These risks and uncertainties could materially and adversely affect our business, financial condition, results of operations and cash flows.Our business is dependent on North American natural gas, the prices of which are subject to volatility. Natural gas is the principal raw material used to produce nitrogen fertilizers. We use natural gas both as a chemical feedstock and as a fuel to produce ammonia, urea, UAN, AN and other nitrogen products. Because most of our nitrogen fertilizer manufacturing facilities are located in the United States and Canada, North American natural gas comprises a significant portion of the total production cost of our nitrogen fertilizers. The price of natural gas in North America has been volatile in recent years. During 2012, the average daily closing price at the Henry Hub, the most heavily-traded natural gas pricing basis in North America, reached a low of $1.84 per MMBtu on April 20, 2012 and a high of $3.77 per MMBtu on November 27, 2012. During the three year period ended December 31, 2012, the average daily closing price at the Henry Hub reached a high of $7.51 per MMBtu on January 8, 2010 and a low of $1.84 per MMBtu on April 20, 2012. Changes in the supply of and demand for natural gas can lead to periods of high natural gas prices. If this were to occur during a period of low fertilizer selling prices, it could have a material adverse effect on our business, financial condition, results of operations and cash flows. Over the last several years, North American natural gas prices have declined in response to increased supply from the development of production from shale gas formations. Future production of natural gas from shale gas formations could be reduced by regulatory changes that restrict drilling or increase its cost for other reasons. If this were to occur, natural gas prices could rise, which could have a material adverse impact on our business, financial condition, results of operations and cash flows.Our business is cyclical, resulting in periods of industry oversupply during which our results of operations tend to be negatively impacted. Historically, selling prices for our products have fluctuated in response to periodic changes in supply and demand conditions. Demand is affected by planted acreage and application rates, driven by population growth, changes in dietary habits, non-food usage of crops such as the production of ethanol and other biofuels, among other things. Supply is affected by available capacity and operating rates, raw material costs and availability, government policies and global trade. Periods of high demand, high capacity utilization and increasing operating margins tend to result in investment in production capacity, which may cause supply to exceed demand and selling prices and capacity utilization to decline. Future growth in demand for fertilizer may not be sufficient to absorb excess industry capacity. During periods of industry oversupply, our results of operations tend to be affected negatively as the price at which we sell our products typically declines, resulting in possible reduced profit margins, write-downs in the value of our inventory and temporary or permanent curtailments of production.CF INDUSTRIES HOLDINGS, INC.Our products are global commodities, and we face intense global competition from other fertilizer producers. We are subject to intense price competition from both domestic and foreign sources. Fertilizers are global commodities, with little or no product differentiation, and customers make their purchasing decisions principally on the basis of delivered price and to a lesser extent on customer service and product quality. We compete with a number of domestic and foreign producers, including state-owned and government-subsidized entities. Some of these competitors have greater total resources and are less dependent on earnings from fertilizer sales, which make them less vulnerable to industry downturns and better positioned to pursue new expansion and development opportunities. Our competitive position could suffer to the extent we are not able to expand our own resources either through investments in new or existing operations or through acquisitions, joint ventures or partnerships. China, the world's largest producer and consumer of fertilizers, is expected to continue expanding its fertilizer production capability. If Chinese policy encourages exports, this expected increase in capacity could adversely affect the balance between global supply and demand and may put downward pressure on global fertilizer prices, which could adversely affect our business, financial condition, results of operations and cash flows. We may face increased competition from Russian and Ukrainian urea and fertilizer grade ammonium nitrate. Almost all urea imports from Russia and Ukraine are currently subject to antidumping duty orders that impose duties of approximately 65 percent on urea imported into the United States from these two countries. Russia and Ukraine currently have considerable capacity to produce urea and are among the world's largest urea exporters. In Russia, the price for natural gas used for industrial production continues to be set by the government on a non-market basis. Russian nitrogen fertilizer producers benefit from these government-controlled natural gas prices, encouraging inefficient urea production and high volumes of exports. In Ukraine, we believe that the government intervenes with respect to natural gas prices available to fertilizer producers so as to permit continued exports. The antidumping orders have been in place since 1987, and there has been very little urea imported into the United States from Russia or Ukraine since that time. The U.S. Department of Commerce regularly reviews the U.S. sales of urea made by Russian exporters. In October 2011, the U.S. Department of Commerce completed a review of U.S. sales made by the Russian exporter EuroChem and concluded that duties of approximately one percent should be imposed. This low rate of duty resulted in a marked increase in exports of Russian urea to the United States. In October 2012, the Commerce Department completed another review of EuroChem's sales, and reduced to zero the duty applied to EuroChem's U.S. urea imports. This may result in more Russian urea exports to the United States. In 2011, the U.S. Department of Commerce and the U.S. International Trade Commission conducted the third "sunset review" of the urea antidumping orders and determined that they should remain in effect for another five years. The next sunset review of those orders will not be initiated until late 2016. Russia is the world's largest ammonium nitrate producer and exporter. As in the case of urea, Russian ammonium nitrate producers benefit from non-market pricing of natural gas. Fertilizer grade ammonium nitrate from Russia is subject to an antidumping duty order, which currently imposes antidumping duties of almost 254 percent on Russian ammonium nitrate imports into the United States. In May 2011, this order replaced a longstanding "suspension agreement" which had imposed volume and pricing restrictions on Russian ammonium nitrate imports. In 2011, the U.S. Department of Commerce and the U.S. International Trade Commission completed the second "sunset review" of theCF INDUSTRIES HOLDINGS, INC.Russian ammonium nitrate antidumping order and concluded that it will remain in effect for at least another five years. Russian producers of ammonium nitrate are likely to participate in legal processes through which they may reduce the applicable antidumping duty rate applicable to their U.S. imports and, if they are successful, there may be an increase in U.S. imports of unfairly priced Russian ammonium nitrate. Further, one Russian producer is currently seeking permission to import an ammonium nitrate product outside the reach of the antidumping order. If successful, this effort would likely result in a significant increase in U.S. imports of this Russian ammonium nitrate product. Fertilizer grade ammonium nitrate from Ukraine is also subject to an antidumping duty order under which imports of this product are currently subject to a duty of over 156 percent. That order is currently being reviewed and a decision as to whether the order will remain in place for an additional five years is expected to be issued by May, 2013. If the order is revoked, we are likely to experience a significant increase in U.S. imports of unfairly priced Ukrainian ammonium nitrate.A decline in U.S. agricultural production or limitations on the use of our products for agricultural purposes could materially adversely affect the market for our products. Conditions in the U.S. agricultural industry significantly impact our operating results. The U.S. agricultural industry can be affected by a number of factors, including weather patterns and field conditions, current and projected grain inventories and prices, domestic and international demand for U.S. agricultural products and U.S. and foreign policies regarding trade in agricultural products. These factors are outside of our control. State and federal governmental policies, including farm and biofuel subsidies and commodity support programs, as well as the prices of fertilizer products, may also directly or indirectly influence the number of acres planted, the mix of crops planted and the use of fertilizers for particular agricultural applications. In recent years, for example, ethanol production in the United States has increased significantly due, in part, to federal legislation mandating greater use of renewable fuels. This increase in ethanol production has led to an increase in the amount of corn grown in the United States and to increased fertilizer usage on both corn and other crops that have also benefited from improved farm economics. While the current Renewable Fuels Standard (RFS) encourages continued high levels of corn-based ethanol production, a continuing "food versus fuel" debate and other factors have resulted in calls to allow increased ethanol imports and eliminate the fuel mandate, either of which could have an adverse effect on corn-based ethanol production, planted corn acreage and fertilizer demand. Developments in crop technology, such as nitrogen fixation, the conversion of atmospheric nitrogen into compounds that plants can assimilate, could also reduce the use of chemical fertilizers and adversely affect the demand for our products. In addition, from time to time various state legislatures have considered limitations on the use and application of chemical fertilizers due to concerns about the impact of these products on the environment.Our transportation and distribution activities rely on third party providers, which subjects us to risks and uncertainties beyond our control that may adversely affect our operations. We rely on railroad, trucking, pipeline, river barge and ocean vessel companies to transport raw materials to our manufacturing facilities, to coordinate and deliver finished products to our distribution system and to ship finished products to our customers. We also lease rail cars in order to ship raw materials and finished products. These transportation operations, equipment and services are subject to various hazards, including adverse operating conditions on the inland waterway system, extreme weather conditions, system failures, work stoppages, delays, accidents such as spills and derailments and other accidents and other operating hazards.CF INDUSTRIES HOLDINGS, INC. These transportation operations, equipment and services are also subject to environmental, safety, and regulatory oversight. Due to concerns related to accidents, terrorism or the potential use of fertilizers as explosives, local, state and federal governments could implement new regulations affecting the transportation of raw materials or finished products. If shipping of our products is delayed or we are unable to obtain raw materials as a result of these transportation companies' failure to operate properly, or if new and more stringent regulatory requirements are implemented affecting transportation operations or equipment, or if there are significant increases in the cost of these services or equipment, our revenues and cost of operations could be adversely affected. In addition, increases in our transportation costs, or changes in such costs relative to transportation costs incurred by our competitors, could have an adverse effect on our business, results of operations, financial condition and cash flows. The railroad industry continues various efforts to limit the railroads' potential liability stemming from the transportation of Toxic Inhalation Hazard (TIH) materials, such as the anhydrous ammonia we transport to and from our manufacturing and distribution facilities. These efforts by the railroads include (i) requesting that the Surface Transportation Board, or STB, issue a policy statement finding that it is reasonable for a railroad to require a shipper to indemnify the railroads and carry insurance for all liability above a certain amount arising from the transportation of TIH materials; (ii) requesting that the STB approve an increase in the maximum reasonable rates that a railroad can charge for the transportation of TIH materials (including the recovery of the cost to implement the mandatory anti-collision train control system referred to as Positive Train Control); (iii) lobbying for new legislation or regulations that would limit or eliminate the railroads' common carrier obligation to transport TIH materials; and (iv) limit the liability or railroads in Canada when transporting TIH materials. If the railroads were to succeed in one or more of these initiatives, it could materially and adversely affect our operating expenses and potentially our ability to transport anhydrous ammonia and increase our liability for releases of our anhydrous ammonia while in the care, custody and control of the railroads. New regulations also could be implemented affecting the equipment used to ship our raw materials or finished products.Difficulties in the implementation of our new enterprise resource planning system or cyber security risks could result in disruptions in business operations and adverse operating results. Since the Terra acquisition, CF Industries continued to utilize legacy Terra's separate information management systems to process transactions involving business operations of the legacy Terra plants. In the first quarter of 2013, we consolidated all business processes for the combined companies under a new, single enterprise resource planning (ERP) system utilizing software provided by SAP. This company-wide system aligns business processes and procedures, institutes more efficient transaction processing and improves access to and consistency of information to enable standardization of business activities. The implementation of an ERP system across the combined organization entails certain risks. If we do not complete the implementation of the system successfully, or if the system does not perform in a satisfactory manner, it could disrupt our operations and have a material adverse effect on our business, financial condition, results of operations and cash flows. As we continue to increase our dependence on information technologies to conduct our operations, the risks associated with cyber security also increase. We rely on management information systems, among other things, to manage our accounting, manufacturing, supply chain and financial functions. This risk not only applies to us, but also to third parties on whose systems we place significant reliance for the conduct of our business. We have implemented security procedures and measures in order to protect our information from being vulnerable to theft, loss, damage or interruption from a number of potential sources or events. We believe these measures and proceduresCF INDUSTRIES HOLDINGS, INC.are appropriate. However, we may not have the resources or technical sophistication to anticipate, prevent, or recover from rapidly evolving types of cyber attacks. Compromises to our information systems could have severe financial and other business implications.Adverse weather conditions may decrease demand for our fertilizer products, increase the cost of natural gas or materially disrupt our operations. Weather conditions that delay or intermittently disrupt field work during the planting and growing seasons may cause agricultural customers to use different forms of nitrogen fertilizer, which may adversely affect demand for the forms that we sell or may impede farmers from applying our fertilizers until the following growing season, resulting in lower demand for our products. Adverse weather conditions following harvest may delay or eliminate opportunities to apply fertilizer in the fall. Weather can also have an adverse effect on crop yields, which could lower the income of growers and impair their ability to purchase fertilizer from our customers. Our quarterly financial results can vary significantly from one year to the next due to weather-related shifts in planting schedules and purchasing patterns. Weather conditions or, in certain cases, weather forecasts, also can affect the price of natural gas, the principal raw material used to make our nitrogen based fertilizers. Colder than normal winters and warmer than normal summers increase the demand for natural gas for residential and industrial use. In addition, hurricanes affecting the Gulf of Mexico coastal states can impact the supply of natural gas and cause prices to rise.We may not be able to complete our recently announced capacity expansion projects on schedule as planned, on budget or at all due to a number of factors, many of which are beyond our control. On November 1, 2012, we announced that we will construct new ammonia and urea/UAN plants at our complex in Donaldsonville, Louisiana, and new ammonia and urea units at our complex in Port Neal, Iowa. Our Board of Directors has authorized expenditures of $3.8 billion for the projects. The design, development, construction and start-up of the new plants are subject to a number of risks, any of which could prevent us from completing the projects on schedule as planned and on budget or at all, including cost overruns, performance of third parties, permitting matters, adverse weather, defects in materials and workmanship, labor and raw material shortages, transportation constraints, engineering and construction change orders, and other unforeseen difficulties. The Donaldsonville and Port Neal expansion projects are dependent on the availability and performance of the engineering firms, construction firms, equipment suppliers, transportation providers and other vendors necessary to build the new units on a timely basis and on acceptable economic terms. Although we have entered into contracts with an affiliate of ThyssenKrupp Uhde for engineering and procurement services for each of the projects and we have procured bids from several construction firms, we have not yet entered into definitive agreements for construction services for either project. If ThyssenKrupp Uhde or any of the other third parties fails to perform as we expect, our ability to meet our expansion goals would be affected. We must also obtain numerous regulatory approvals and permits in order to construct and operate the additional plants. These requirements may not be satisfied in a timely manner or at all. Our financial exposure to permitting risks may be exacerbated because we have committed to purchase certain equipment that will result in substantial expenditures prior to obtaining all permits necessary to operate the units. In the event that we ultimately fail to obtain all necessary permits, we would be forced to abandon the projects and lose the benefit of any construction costs already incurred. In addition, federal and state governmental requirements may increase our costs substantially, which couldCF INDUSTRIES HOLDINGS, INC.have a material adverse effect on our business, financial condition, results of operations, and cash flows. Our expansion plans may also result in other unanticipated adverse consequences, such as the diversion of management's attention from our existing plants and businesses and other opportunities.Other expansions of our business may result in unanticipated adverse consequences. We routinely consider possible expansions of our business, both domestically and in foreign locations. Major investments in our business, including as a result of acquisitions, partnerships, joint ventures or other major investments require significant managerial resources, which may be diverted from our other activities and may impair the operation of our businesses. The risks of any expansion of our business through investments, acquisitions, partnerships or joint ventures are increased due to the significant capital and other resources that we may have to commit to any such expansion, which may not be recoverable if the expansion initiative to which they were devoted is ultimately not implemented. As a result of these and other factors, including general economic risk, we may not be able to realize our projected returns from any future acquisitions, partnerships, joint ventures or other major investments.We are subject to numerous environmental and health and safety laws, regulations and permitting requirements, as well as potential environmental liabilities, which may require us to make substantial expenditures. We are subject to numerous environmental and health and safety laws and regulations in the United States, Canada, the United Kingdom and the Republic of Trinidad and Tobago, including laws and regulations relating to land reclamation; the generation, treatment, storage, disposal and handling of hazardous substances and wastes; the cleanup of hazardous substance releases; and the demolition of existing plant sites upon permanent closure. In the United States, these laws include the Clean Air Act, the Clean Water Act, RCRA, CERCLA, the Toxic Substances Control Act and various other federal, state, provincial, local and international statutes. As a fertilizer company working with chemicals and other hazardous substances, our business is inherently subject to spills, discharges or other releases of hazardous substances into the environment. Certain environmental laws, including CERCLA, impose joint and several liability, without regard to fault, for cleanup costs on persons who have disposed of or released hazardous substances into the environment. Given the nature of our business, we have incurred, are incurring currently, and are likely to incur periodically in the future, liabilities under CERCLA and other environmental cleanup laws at our current or former facilities, adjacent or nearby third-party facilities or offsite disposal locations. The costs associated with future cleanup activities that we may be required to conduct or finance may be material. Additionally, we may become liable to third parties for damages, including personal injury and property damage, resulting from the disposal or release of hazardous substances into the environment. Violations of environmental and health and safety laws can result in substantial penalties, court orders to install pollution-control equipment, civil and criminal sanctions, permit revocations and facility shutdowns. Environmental and health and safety laws change rapidly and have tended to become more stringent over time. As a result, we have not always been and may not always be in compliance with all environmental and health and safety laws and regulations. Additionally, future environmental and health and safety laws and regulations or reinterpretation of current laws and regulations may require us to make substantial expenditures. Additionally, our costs to comply with, or any liabilities under, these laws and regulations could have a material adverse effect on our business, financial condition, results of operations and cash flows. From time to time, our production of anhydrous ammonia has resulted in accidental releases that have temporarily disrupted our manufacturing operations and resulted in liability for administrative penalties and claims for personal injury. To date, our costs to resolve these liabilities have not been material. However, we could incur significant costs if our liability coverage is not sufficient to pay for all or a large part of any judgments against us, or if our insurance carrier refuses coverage for these losses. We may be impacted by the development of Federal and State numeric nutrient criteria regulation. On August 18, 2009, the EPA entered into a consent decree with certain environmental groups with respect to the promulgation of numeric criteria for nitrogen and phosphorous in surface waters in Florida. The consent decree was approved by a Federal district court judge on November 16, 2009. The EPA adopted final numeric nutrient criteria for Florida lakes and inland flowing waters on November 14, 2010. On February 18, 2012, the Court upheld parts of the numeric nutrient criteria regulation, but found that the EPA had not adequately justified the criteria for streams and therefore concluded that the adoption of such criteria was arbitrary and capricious. The Court ordered the EPA to issue proposed or final numeric nutrient criteria for streams by May 21, 2012 (subject to the EPA seeking an extension of such time period pursuant to the terms of the 2009 consent decree). Subsequently, the Court granted the EPA's motion to allow the EPA to propose numeric nutrient criteria for streams by November 30, 2012 and to finalize such criteria by August 31, 2013. In December 2011, the State of Florida proposed its own numeric nutrient criteria for surface waters. The nitrogen and phosphorous criteria in the proposed rule are substantially identical to the federal rule, but the state proposal includes biological verification as a component of the criteria and adopts existing nutrient Total Maximum Daily Loads (TMDL) as applicable numeric criteria. The impact of these modifications could be to provide more flexibility with respect to nitrogen and phosphorous limits in wastewater discharge permits so long as such discharges do not impair the biological health of receiving water bodies. Environmental groups filed a challenge to the proposed state rule, but the rule was upheld by an administrative law judge on June 8, 2012 and became final. An appeal of the administrative decision upholding the rule is now pending before a Florida appellate court. On November 30, 2012, the EPA approved Florida's rule. However, because the EPA identified what it considered to be gaps in the scope of the waters covered by Florida's rule and potential legal issues that might bar the Florida rule from going into effect, the EPA, pursuant to the Court order described above, has again proposed numeric nutrient criteria for Florida streams. There is substantial uncertainty as to whether this rule will be withdrawn before it is finalized or, if a rule is finalized, as to the scope of Florida inland flowing waters that will be covered by the EPA regulation. Moreover, notwithstanding the EPA's approval of the Florida rule, the federal criteria for lakes and inland waters previously upheld by the Court (excluding the criteria found to be arbitrary and capricious) became effective on January 6, 2013. The EPA has proposed to stay the effective date of these criteria in light of the on-going developments with the Florida regulation. The 2009 consent decree also requires the EPA to develop numeric nutrient criteria for Florida coastal and estuarine waters. The numeric criteria adopted by the State of Florida and approved by the EPA includes numeric criteria for some coastal and estuarine waters, but, as with streams, EPA has raised issues regarding the scope of coverage of Florida's regulation. Accordingly, on November 30, 2012, the EPA proposed numeric nutrient criteria for Florida coastal and estuarine waters. The EPA must finalize these criteria by September 30, 2013 unless future developments allow the EPA to withdraw the rule.CF INDUSTRIES HOLDINGS, INC. Depending on the developments discussed herein, federal or state numeric nutrient water quality criteria for Florida waters could result in substantially more stringent nitrogen and phosphorous limits in wastewater discharge permits for our mining, manufacturing and distribution operations in Florida. More stringent limits on wastewater discharge permits could increase our costs and limit our operations and, therefore, could have a material adverse effect on our business, financial condition, results of operations and cash flows.Our operations are dependent on numerous required permits, approvals and meeting financial assurance requirements from governmental authorities. We hold numerous environmental, mining and other governmental permits and approvals authorizing operations at each of our facilities. Expansion of our operations is dependent upon securing the necessary environmental or other permits or approvals. A decision by a government agency to deny or delay issuing a new or renewed material permit or approval, or to revoke or substantially modify an existing permit or approval, could have a material adverse effect on our ability to continue operations at the affected facility and on our business, financial condition, results of operations and cash flows. In certain cases, as a condition to procure such permits and approvals or as a condition to maintain existing approvals, we may be required to comply with regulatory financial assurance requirements. The purpose of these requirements is to assure local, state or federal government agencies that we will have sufficient funds available for the ultimate closure, post-closure care and reclamation at our facilities. For example, we have funded an escrow account for the benefit of the Florida Department of Environmental Protection (FDEP) as a means of complying with Florida's regulations governing financial assurance related to closure and post-closure of phosphogypsum stacks. Also, pursuant to a Consent Decree with the U.S. EPA and the FDEP, we have funded a trust as a means of complying with similar requirements for closure, post closure and monitoring of the phosphogypsum stack system at our Plant City, Florida phosphate fertilizer complex. Florida regulations also mandate payment of certain mining taxes based on the quantity of ore mined and are subject to change based on local regulatory approvals. Additional financial assurance requirements or other increases in local mining regulations and taxes could have a material adverse effect on our business, financial condition, results of operations and cash flows. Florida regulations also require phosphate rock mining companies to demonstrate financial responsibility for wetland and other surface water mitigation measures in advance of any mining activities. If and when we are able to expand our Hardee mining activities to areas not currently permitted, we will be required to demonstrate financial responsibility for wetland and other surface water mitigation measures in advance of any mining activities. The demonstration of financial responsibility may be provided by passage of financial tests. In the event that we are unable to satisfy these financial tests, alternative methods of complying with the financial assurance requirements would require us to expend funds for the purchase of bonds, letters of credit, insurance policies or similar instruments. It is possible that we will not be able to comply with either current or new financial assurance regulations in the future, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. As of December 31, 2012, the area permitted by local, state and federal authorities for mining at our Hardee phosphate complex contained approximately 42.2 million tons of recoverable phosphate rock reserves, which will meet our requirements, at current operating rates, for approximately 12 years. We have initiated the process of applying for authorization and permits to expand the geographical area in which we can mine at our Hardee property. The expanded geographical area has an estimated 34.7 million tons of recoverable phosphate reserves, which will allow us to conduct mining operations atCF INDUSTRIES HOLDINGS, INC.our Hardee property for approximately 10 additional years at current operating rates, assuming we secure the authorization and permits to mine in this area. In Florida, local community participation has become an important factor in the authorization and permitting process for mining companies. A denial of the authorizations or permits to continue or expand our mining operations at our Hardee property would prevent us from mining all of our reserves and have a material adverse effect on our business, financial condition, results of operations and cash flows. We have secured the state environmental authorization to increase the capacity of our phosphogypsum stack system at Plant City. With the completion of our "Phase II" expansion that is currently being constructed, this stack has sufficient capacity to meet our requirements through 2026 at current operating rates and subject to regular renewals of our operating permits. Including further expansion phases, the estimated stack system capacity is expected to meet our requirements until 2040 at current operating rates and is subject to securing the corresponding operating permits. This time frame is approximately six years beyond our current estimate of available phosphate rock reserves at our Hardee mine. A decision by the state or federal authorities to deny a renewal of our current permits or to deny operating permits for the expansion of our stack system could have a material adverse effect on our business, financial condition, results of operations and cash flows.Future regulatory restrictions on greenhouse gas emissions in the jurisdictions in which we operate could materially adversely affect our business, financial condition, results of operations and cash flows. We are subject to greenhouse gas (GHG) regulations in the United Kingdom, Canada and the United States. There are substantial uncertainties as to the nature, stringency and timing of any future GHG regulations. More stringent GHG limitations, if they are enacted, are likely to have significant impacts on the fertilizer industry due to the fact that our production facilities emit GHGs such as carbon dioxide and nitrous oxide. Regulation of GHGs may require us to make changes in our operating activities that would increase our operating costs, reduce our efficiency, limit our output, require us to make capital improvements to our facilities, increase our costs for or limit the availability of energy, raw materials or transportation, or otherwise materially adversely affect our business, financial condition, results of operations and cash flows. In addition, to the extent that GHG restrictions are not imposed in countries where our competitors operate or are less stringent than in the United States or Canada, our competitors may have cost or other competitive advantages over us.Our inability to predict future seasonal fertilizer demand accurately could result in excess inventory, potentially at costs in excess of market value, or product shortages. Our operating results fluctuate due to seasonality.particularlyCF INDUSTRIES HOLDINGS, INC.acute with respect to our nitrogen fertilizer business because ofexacerbated by the volatility of natural gas and nitrogen fertilizer prices and the relatively brief periods during which farmers can apply nitrogen fertilizers. If prices for our products rapidly decrease, we may be subject to inventory write-downs, causing an adverse change inadversely affecting our operating results.productproducts from us on a forward basis at prices and delivery dates we propose. This improves our liquidity due to the cash payments received from customers in advance of shipment of the product and allows us to improve our production scheduling and planning and the utilization of our manufacturing assets.date, thereby significantly increasingdate. Forward sales improve our liquidity. liquidity due to the cash payments received from customers in advance of shipment of the product and allow us to improve our production scheduling and planning and the utilization of our manufacturing and distribution assets.sheetsheets as a current liability until the related orders are shipped, which can take up to several months. As of December 31, 2012 and 2011, our current liability for customer advances related to unshipped orders equaled approximately 17% and 21%, respectively, of our cash, cash equivalents and short-term investments.productproducts on a forward basis is most appealing to our customers during periods of generally increasing prices for nitrogen fertilizers. Our customers may be less willing or even unwilling to purchase products on a forward basis during periods of generally decreasing or stable prices or during periods of relatively high fertilizer prices due to the expectation of lower prices in the future or limited capital resources. In periods of rising fertilizer prices, selling our nitrogen fertilizers on a forward basis may result in lower profit margins than if we had not sold fertilizer on a forward basis. Conversely, in periods of declining fertilizer prices, selling our nitrogen fertilizers on a forward basis may result in higher profit margins than if we had not sold fertilizer on a forward basis. In addition, fixing the selling prices of our products, often months in advance of their ultimate delivery to customers, typically causes our reported selling prices and margins to differ from spot market prices and margins available at the time of shipment. We also sell phosphate products on a forward basis. In 2012, forward sales of phosphate fertilizer products represented approximately 23% of our phosphate fertilizer volume. Unlike our nitrogen fertilizer products where we have the opportunity to fix or cap the cost of natural gas, we typically are unable to do the same for the cost of phosphate raw materials, such as sulfur and ammonia, which are among the largest components of our phosphate fertilizer costs. As a result, we are typically exposed to margin risk on phosphate products sold on a forward basis. manage the risk of changes in commodity prices and foreign currency exchange rates using derivative instruments. Our business, financial condition, results of operations and cash flows could be adversely affected by changes involving commodity price volatility, adverse correlation of commodity prices, or market liquidity issues. In order to manage financial exposure to commodity price and market fluctuations, we often utilize natural gas derivatives to hedge our financial exposure to the price volatility of natural gas, the principal raw material used in the production of nitrogen basednitrogen-based fertilizers. We have used fixed-price, forward,CF INDUSTRIES HOLDINGS, INC. Hedging arrangements are imperfect and unhedged risks will always exist.forto which we do not apply, hedge accounting. To the extent that our derivative positions lose value, we may be required to post collateral with our counterparties, thereby negatively impactingadversely affecting our liquidity.either large oil and gas companiesmulti-national commercial banks,financial institutions.energy companies. We monitor the derivative portfolio and credit quality of our counterparties and adjust the level of activity we conduct with individual counterparties as necessary. We also manage the credit risk through the use of multiple counterparties, established credit limits, credit monitoring procedures, cash collateral requirements and master netting arrangements. However, our liquidity could be negatively impacted by a counterparty default on derivative settlements.Our operations and the production and handlingsettlement of one or more of our products involve significant risks and hazards. We are not fully insured against all potential hazards and risks incident to our business. Therefore, our insurance coverage may not adequately cover our losses. Our operations are subject to hazards inherent in the manufacturing, transportation, storage and distribution of chemical fertilizers, including ammonia, which is highly toxic and corrosive. These hazards include: explosions; fires; severe weather and natural disasters; train derailments, collisions, vessel groundings and other transportation and maritime incidents; leaks and ruptures involving storage tanks, pipelines and rail cars; spills, discharges and releases of toxic or hazardous substances or gases; deliberate sabotage and terrorist incidents; mechanical failures; unscheduled downtime; labor difficulties and other risks. Some of these hazards can cause bodily injury and loss of life, severe damage to or destruction of property and equipment and environmental damage, and may result in suspension of operations and the imposition of civil or criminal penalties and liabilities. We maintain property, business interruption, casualty and liability insurance policies, but we are not fully insured against all potential hazards and risks incident to our business. If we were to incur significant liability for which we were not fully insured, it could have a material adverse effect on our business, results of operations,derivative financial condition and cash flows. We are subject to various self-retentions, deductibles and limits under these insurance policies. The policies also contain exclusions and conditions that could have a material adverse impact on our ability to receive indemnification thereunder. Our policies are generally renewed annually. As a result of market conditions, our premiums, self-retentions and deductibles for certain insurance policies can increase substantially and, in some instances, certain insurance may become unavailable or available only for reduced amounts of coverage. In addition, significantly increased costs could lead us to decide to reduce, or possibly eliminate, coverage.sevennine separate nitrogen complexes, the largest of which is the Donaldsonville complex, which currently represents approximately 35% of our ammonia production capacity and will represent approximately 40% of the Company'sour ammonia production capacity. Our phosphate fertilizer operationscapacity after the Donaldsonville and Port Neal capacity expansion projects are dependent on our phosphateCF INDUSTRIES HOLDINGS, INC.mine and associated beneficiation plant in Hardee County, Florida; our phosphate fertilizer complex in Plant City, Florida; and our ammonia terminal in Tampa, Florida.fully operational. The suspension of operations at any of these key facilitiescomplexes could adversely affect our ability to produce our products and fulfill our commitments, and could have a material adverse effect on our business.business, financial condition, results of operations and cash flows. In addition, a number of our key facilities, including the Donaldsonville complex and all of our phosphate operations, areis located in regionsan area of the United States that experienceexperiences a relatively high level of hurricane activity.activity and our other complexes are located in areas that experience severe weather. Such storms, depending on their severity and location, have the potential not only to damage our facilities and disrupt our operations, but also to adversely affect the shipping and distribution of our products and the supply and price of natural gas and sulfur in the Gulfrespective regions. Moreover, our facilities may be subject to failure of Mexico region.ventures. We participateventure.joint ventures including CFL (which owns our facility in Medicine Hat, Alberta), Point LisasPLNL (which owns a facility in the Republic of Trinidad and Tobago), GrowHow (which owns facilities in Billingham and Ince, United Kingdom) and Keytrade (a global fertilizer trading company headquartered near Zurich, Switzerland). Our joint venture partners may sharepartner shares a measure of control over the operations of our PLNL joint ventures.venture. As a result, our investmentsinvestment in our PLNL joint ventures involveventure involves risks that are different from the risks involved in owning facilities and operations independently. These risks include the possibility that our PLNL joint venturesventure or our partners:partner: have economic or business interests or goals that are or become inconsistent with our economic or business interests or goals; are in a position to take action contrary to (or have veto rights over) our instructions, requests, policies or objectives; subject theour PLNL joint venture to liabilities exceeding those contemplated; take actions that reduce our return on investment; or take actions that harm our reputation or restrict our ability to run our business.partners,partner, which could lead to impasses or situations that could harm the joint venture, which could reduce our revenues or increase our costs.our plants and ancillary facilitieswe may be targets of terrorist activities. Many of theseour plants and facilities store significant quantities of ammonia and other materials that can be dangerous if mishandled. Any damage to infrastructure facilities, such as electric generation, transmission and distribution facilities, or injury to employees, who could be direct targets or indirect casualties of an act of terrorism, may affect our operations. Any disruption of our ability to produce or distribute our products could result in a significant decrease in revenues and significant additional costs to replace, repair or insure our assets, which could have a material adverse impacteffect on our business, financial condition, results of operations and cash flows. In addition, duelocal, state, federalwe are subject to various security laws and foreign governmentsregulations. In the United States, these security laws include the Maritime Transportation Security Act of 2002and the Chemical Facilities Anti-Terrorism Standards regulation. In addition, President Obama issued Executive Order 13650 Improving Chemical Facility Safety and Security to improve chemical facility safety in coordination with owners and operators. Governmental entities could implement new or impose more stringent regulations impactingaffecting the security of our plants, terminals and warehouses or the transportation and use of fertilizers. These regulations could result in higher operating costs orU.S.United States or foreign governmentselsewhere could impose additional limitations on the use, sale or distribution of nitrogen fertilizers, thereby limiting our ability to manufacture or sell those products, or that such illicit use of our products could result in liability for the Company.us.CF INDUSTRIES HOLDINGS, INC.Our operations and those of our joint ventures are dependent upon raw materials provided by third parties and an increase in the price or any delay or interruption in the delivery of these raw materials may adversely affect our business. We and our joint ventures use natural gas, ammonia and sulfur as raw materials in the manufacture of fertilizers. We purchase these raw materials from third-party suppliers. Prices for these raw materials can fluctuate significantly due to changes in supply and demand. We may not be able to pass along to our customers increases in the costs of raw materials, which could have a material adverse effect on our business. These products are transported by barge, truck, rail or pipeline to our facilities and those of our joint ventures by third-party transportation providers or through the use of facilities owned by third parties. Any delays or interruptions in the delivery of these key raw materials, including those caused by capacity constraints; explosions; fires; severe weather and natural disasters; train derailments, collisions, vessel groundings and other transportation and maritime incidents; leaks and ruptures involving pipelines; deliberate sabotage and terrorist incidents; mechanical failures; unscheduled downtime; or labor difficulties, could have a material adverse effect on our business, financial condition, results of operations and cash flows. During 2012,derived approximately 14%are exposed, besides the U.S. dollar, are the Canadian dollar, British pound and the Euro. We may selectively reduce some foreign currency exchange rate risk by, among other things, requiring contracted purchases of our net sales from outsideproducts to be settled in, or indexed to, the U.S. dollar or a currency freely convertible into U.S. dollars, or hedging through foreign currency derivatives. These efforts, however, may not be effective and could have a material adverse effect on our business, financial condition, results of operations and cash flows.United States. OurU.S. Department of the Treasury, and regulations set forth under the Comprehensive Iran Accountability Divestment Act. As a result of doing business internationally, we are exposed to a risk of violating anti-corruption laws and sanctions regulations applicable in those countries where we, our partners or agents operate. Violations of anti-corruption and sanctions laws and regulations are punishable by civil penalties, including fines, denial of export privileges, injunctions, asset seizures, debarment from government contracts (and termination of existing contracts) and revocations or restrictions of licenses, as well as criminal fines and imprisonment. The violation of applicable laws by our employees, consultants, agents or partners could subject us to penalties and could have a material adverse effect on our business, financial condition, results of operations include a 66% economic interestand cash flows.CFL, a nitrogen fertilizer manufacturervarious countries throughout the world. We cannot predict how these laws or their interpretation, administration and enforcement will change over time. Changes in Medicine Hat, Alberta Canada, a 50% interestantitrust laws globally, or in an ammonia production joint venture in Trinidad, a 50% interest in a U.K. joint venture for the production of anhydrous ammoniatheir interpretation, administration or enforcement, may limit our existing or future operations and other fertilizer products and a 50% interest in a fertilizer trading operation headquartered near Zurich, Switzerland. Our cash flows from operations have resulted in cash and cash-equivalents of approximately $2.3 billion as of December 31, 2012. these cash and cash-equivalentscash equivalents from our operations in what we believe to be relatively short-term, highly liquid and high credit quality instruments, including notes and bonds issued by governmental entities or corporations and money market funds. Securities issued by governmental agenciesentities include those issued directly by the U.S.United States government, those issued by state, local or other governmental entities, and those guaranteed by entities affiliated with governmental entities. Our investments are subject to fluctuations in both market value and yield based upon changes in market conditions, including interest rates, liquidity, general economic and credit market conditions and conditions specific to the issuers.CF INDUSTRIES HOLDINGS, INC.impactaffect the ability of our customers and their customers to obtain sufficient credit to support their operations; the failure of our customers to fulfill their purchase obligations could result in increases in bad debts and impact our working capital; and the failure of certain key suppliers could increase our exposure to disruptions in supply or to financial losses. We also may experience declining demand and falling prices for some of our products due to our customers' reluctance to replenish inventories. The overall impact of a global economic downturn on us is difficult to predict, and our business could be materially adversely impacted.fertilizerfertilizers significantly influence our operating results. The international market for fertilizers is influenced by such factors as currency exchange rates, including the relative value of the U.S. dollar and its impact onupon the importationcost of importing of nitrogen fertilizers into the United States, foreign agricultural policies, the existence of, or changes in, import or foreign currency exchange barriers in certain foreign markets and other regulatory policies of foreign governments, as well as the laws and policies of the United States affectingmarkets in which we operate that affect foreign trade and investment.operations.2012,2015, we had approximately $1.6$5.6 billion of total funded indebtedness, consisting primarily of $800 million of our senior notes due inwith varying maturity dates between 2018 and $800 million of our senior notes due in 2020.2044. We had excess borrowing capacity for general corporate purposes under our existing revolving credit facilityagreement of approximately $491.0$1,995.1 million. The termsIn addition, upon the consummation of the proposed combination with the ENA Business of OCI, we expect to have a substantial amount of indebtedness on a consolidated basis. We expect that this indebtedness will include our existing indebtedness, allowapproximately $1.2 billion of existing secured project finance indebtedness relating to the ENA Business, and indebtedness under any of the existing OCI convertible bonds assumed by us in connection with the combination. In addition, to fund the cash requirements in connection with the consummation of the combination, we expect that we or our subsidiaries will use either cash on hand or a combination of cash on hand and cash proceeds from external sources (whether using alternative financing arranged prior to the closing under the Combination Agreement or, if such financing is not arranged, a portion of the financing under our bridge credit agreement) of approximately $1.0 billion. In addition, upon the consummation of the combination, our bridge credit agreement provides for borrowings of up to $1.3 billion for general corporate purposes and our existing revolving credit agreement provides for up to $2.0 billion of borrowings for general corporate purposes.incurpay or refinance our debts as they become due during adverse economic and industry conditions because any related decrease in revenues could cause us to not have sufficient cash flows from operations to make our scheduled debt payments;debt in the future. Our existing indebtedness and any additional debt we may incurmonies in the future to fund working capital, capital expenditures and other general corporate purposes; andhave negative consequences on our business should operating cash flows be insufficientincrease the cost of further borrowings.cover debt service, which would adversely affect our operations and liquidity. From time to time we consider our options to refinance our outstanding indebtedness.indebtedness from time to time. Our ability to obtain any financing, whether through the issuance of new debt securities or otherwise, and the terms of any such financing are dependent on, among other things, our financial condition, financial market conditions within our industry and generally, credit ratings and numerous other factors.factors, including factors beyond our control. Consequently, in the event that we need to access the credit markets, including to refinance our debt, there can be no assurance that we will be able to obtain financing on acceptable terms or within an acceptable timeframe, if at all. An inability to obtain financing with acceptable terms when needed could have a material adverse effect on our business, financial condition, results of operations and cash flows.The loss of key membersmanagement and professional staff may adversely affect our business. We believe our continued success depends onindebtedness will allow us to incur significant additional debt in the collective abilities and effortsfuture. If we incur additional indebtedness, the risks that we face as a result of our senior management and professional staff. The loss of one or more key personnelleverage could have a material adverse effect onintensify. If our results of operations. Additionally, if we are unable to find, hire and retain needed key personnel in the future, our business, financial condition or operating results deteriorate, our relations with our creditors, including the holders of operationsour outstanding debt securities, the lenders under our revolving credit agreement and cash flows couldour bridge credit agreement and our suppliers, may be materially and adversely affected.forward- lookingforward-looking statements to take into account events or circumstances that occur after the date of this document. Additionally, we do not undertake any responsibility to provide updates regarding the occurrence of any unanticipated events which may cause actual results to differ from those expressed or implied by the forward-looking statements contained in this document.•America;••••reliance on third party providers of transportation services and equipment;•difficulties in the implementation of a new enterprise resource planning system and risks associated with cyber security;•weather conditions;•our ability to complete our recently announced production capacity expansion projects on schedule as planned, on budget or at all;•risks associated with other expansions of our business, including unanticipated adverse consequences and the significant resources that could be required;•potential liabilities and expenditures related to environmental and health and safety laws and regulations;•our potential inability to obtain or maintain required permits and governmental approvals or to meet financial assurance requirements from governmental authorities;•future regulatory restrictions and requirements related to GHG emissions;CF INDUSTRIES HOLDINGS, INC.•the seasonality of the fertilizer business;•the impact of changing market conditions on our forward sales programs;•risks involving derivatives and the effectiveness of our risk measurement and hedging activities;•the significant risks and hazards involved in producing and handling our products against which we may not be fully insured;•our reliance on a limited number of key facilities;•risks associated with joint ventures;•acts of terrorism and regulations to combat terrorism;••••indebtedness; andindebtedness.•loss of key members of management and professional staff.OperatingReportable Segments and Part I, Item 1. Business—Storage Facilities and Other Properties.or results of operations.Investigation On March 19, 2007, the Company received a letter from the EPA under Section 114Notice of the Federal Clean Air Act requesting information and copies of records relating to compliance with New Source Review, New Source Performance Standards, and National Emission Standards for Hazardous Air Pollutants at the Plant City facility. The Company provided the requested information to the EPA in late 2007. The EPA initiated this same process in relation to numerous other sulfuric acid plants and phosphoric acid plants throughout the nation, including other facilities in Florida. The CompanyViolationEPAEnvironmental Protection Agency (EPA) by letter dated June 16, 2010. The NOV alleges the Company2010, alleging that we violated the Prevention of Significant Deterioration (PSD) Clean Air Act regulations relating to certain projects undertaken at the former Plant City, Florida facility's sulfuric acid plants. This NOV further alleges that the actions that are the basis for the alleged PSD violations also resulted in violations of Title V air operating permit regulations. Finally, the NOV alleges that the Companywe failed to comply with certain compliance dates established by hazardous air pollutant regulations for phosphoric acid manufacturing plants and phosphate fertilizer production plants. Although this matter has been referred to the United States Department of Justice (DOJ), the Company has continued to meetWe had several meetings with the EPA withdiscuss these alleged violations. The Company doesthis matter prior to our sale of the phosphate mining and manufacturing business in March 2014. We do not know at this time if itthis matter will settle this matterbe settled prior to initiation of formal legal action.the Company'sour consolidated financial position, results of operations or cash flows.Investigation Pursuant to aNotice of Violation from the DOJ dated July 28, 2008 that was sent to representatives of the major U.S. phosphoric acid manufacturers, including CF Industries, the DOJ stated that it and6, 2010, the EPA believe that apparentissued a NOV to us alleging violations of Section 313 of the Emergency Planning and Community Right-to-Know Act (EPCRA), which in connection with the former Plant City facility. EPCRA requires annual reports to be submitted with respect to the use ofCF INDUSTRIES HOLDINGS, INC.chemicals, have occurred at all of the phosphoric acid facilities operated by these manufacturers.chemicals. The letterNOV also statesincluded an allegation that the DOJ and the EPA believe that most of these facilities havewe violated Section 304 of EPCRA and Section 103 of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) by failing to provide required notificationsfile a timely notification relating to the release of hydrogen fluoride from these facilities. The letter did not specifically identify alleged violations at our Plant City, Florida complex or assert a claim for a specific amount of penalties. The EPA submitted an information request to the Company on February 11, 2009, as a follow-up to the July 2008 letter. The Company provided information in response to the agency's inquiry on May 14 and May 29, 2009. By letter dated July 6, 2010, the EPA issued a NOV to the Company alleging violations of EPCRA and CERCLA. The Company had an initial meeting with the EPA to discuss these alleged violations. The Company doesabove applicable reportable quantities. We do not know at this time if itthis matter will settle this matterbe settled prior to initiation of formal legal action.the Company'sour consolidated financial position, results of operations or cash flows.Federal and State Numeric Nutrient Criteria Regulation For information on the Company's challenge to the EPA's regulation establishing numeric nutrient criteria for Florida waters, see Business—Environmental, Health and Safety and Note 29—Contingencies.29—20—Contingencies. The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to the annual report. Sales Prices Dividends
per Share Sales Prices Dividends
per Share High Low 2015 High Low Dividends
per Share $ 195.48 $ 149.58 $ 0.40 $ 62.89 $ 54.60 203.32 154.17 0.40 65.69 55.60 0.30 227.99 190.10 0.40 70.32 43.88 0.30 226.50 191.90 0.40 54.27 39.64 0.30 Sales Prices Dividends
per Share Sales Prices Dividends
per Share High Low 2014 High Low Dividends
per Share $ 153.83 $ 120.01 $ 0.10 $ 53.55 $ 44.02 158.42 127.29 0.10 53.39 46.48 0.20 192.70 123.09 0.40 56.07 47.71 0.30 176.97 115.34 0.40 58.06 47.89 0.30 13, 2013,18, 2016, there were 934794 stockholders of record. Issuer Purchases of Equity Securities Period Total Number
of Shares
(or Units)
Purchased Average
Price Paid
per Share
(or Unit) Cumulative Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs
Approximate Dollar
Value) of Shares (or
Units) that May Yet Be
Purchased Under the
Plans or Programs
(in thousands)(1)October 1, 2015 - October 31, 2015 — $ — — $ 100,000 November 1, 2015 - November 30, 2015 — — — 100,000 December 1, 2015 - December 31, 2015 — — — 100,000 Total — — Represents the authorized share repurchase program announced on August 6, 2014 that allows management to repurchase common stock for a total expenditure of up to $1.0 billion through December 31, 2016 (the 2014 Program). This program is discussed in Note 18—Stockholders' Equity, in the notes to the consolidated financial statements included in Item 8 of this report. 20122015 and 20112014 and for the years ended December 31, 2012, 20112015, 2014 and 20102013 have been derived from our audited consolidated financial statements and related notes included elsewhere in this document. The following selected historical financial data as of December 31, 2010, 20092013, 2012 and 20082011 and for the years ended December 31, 20092012 and 20082011 have been derived from our consolidated financial statements, which are not included in this document. Since April 2010, the results of Terra have been included in our consolidated financial statements.CF INDUSTRIES HOLDINGS, INC. Year ended December 31, Year ended December 31, 2012 2011 2010 2009 2008 2013 2012 2011 (in millions, except per share amounts) (in millions, except per share amounts) $ 6,104.0 $ 6,097.9 $ 3,965.0 $ 2,608.4 $ 3,921.1 $ 4,308.3 $ 4,743.2 $ 5,474.7 $ 6,104.0 $ 6,097.9 2,990.7 3,202.3 2,785.5 1,769.0 2,698.4 2,761.2 2,964.7 2,954.5 2,990.7 3,202.3 3,113.3 2,895.6 1,179.5 839.4 1,222.7 1,547.1 1,778.5 2,520.2 3,113.3 2,895.6 151.8 130.0 106.1 62.9 68.0 Selling, general and administrative expenses 169.8 151.9 166.0 151.8 130.0 Transaction costs 56.9 — — — — — 4.4 21.6 — — — — — — 4.4 49.1 20.9 166.7 96.7 4.5 92.3 53.3 (15.8 ) 49.1 20.9 200.9 155.3 294.4 159.6 72.5 319.0 205.2 150.2 200.9 155.3 Gain on sale of phosphate business — 750.1 — — — 47.0 50.2 10.6 — — (35.0 ) 43.1 41.7 47.0 50.2 2,959.4 2,790.5 895.7 679.8 1,150.2 1,193.1 2,366.5 2,411.7 2,959.4 2,790.5 131.0 145.5 219.8 (3.0 ) (24.5 ) 131.6 177.3 147.5 131.0 145.5 — — 17.0 — — (1.1 ) (0.6 ) (28.8 ) (12.8 ) (0.7 ) 3.9 1.9 54.5 (1.1 ) (0.6 ) 2,829.5 2,645.6 687.7 695.6 1,175.4 Earnings before income taxes and equity in earnings of non-operating affiliates 1,057.6 2,187.3 2,209.7 2,829.5 2,645.6 964.2 926.5 273.7 246.0 378.1 395.8 773.0 686.5 964.2 926.5 58.1 41.9 26.7 (1.1 ) 4.2 Equity in earnings of non-operating affiliates—net of taxes 72.3 22.5 9.6 58.1 41.9 1,923.4 1,761.0 440.7 448.5 801.5 734.1 1,436.8 1,532.8 1,923.4 1,761.0 74.7 221.8 91.5 82.9 116.9 Less: Net earnings attributable to noncontrolling interest 34.2 46.5 68.2 74.7 221.8 $ 1,848.7 $ 1,539.2 $ 349.2 $ 365.6 $ 684.6 $ 699.9 $ 1,390.3 $ 1,464.6 $ 1,848.7 $ 1,539.2 $ 1.60 $ 1.00 $ 0.40 $ 0.40 $ 0.40 $ 1.20 $ 1.00 $ 0.44 $ 0.32 $ 0.20 $ 28.94 $ 22.18 $ 5.40 $ 7.54 $ 12.35 $ 2.97 $ 5.43 $ 4.97 $ 5.79 $ 4.44 28.59 21.98 5.34 7.42 12.13 2.96 5.42 4.95 5.72 4.40 63.9 69.4 64.7 48.5 55.4 235.3 255.9 294.4 319.3 347.0 64.7 70.0 65.4 49.2 56.4 236.1 256.7 296.0 323.3 350.2 Other Financial Data: Depreciation, depletion and amortization $ 479.6 $ 392.5 $ 410.6 $ 419.8 $ 416.2 Capital expenditures 2,469.3 1,808.5 823.8 523.5 247.2 December 31, 2013 2012 2011 (in millions) Balance Sheet Data: Cash and cash equivalents $ 286.0 $ 1,996.6 $ 1,710.8 $ 2,274.9 $ 1,207.0 12,738.9 11,254.2 10,618.1 10,157.4 8,974.5 Customer advances 161.5 325.4 120.6 380.7 257.2 Total debt 5,592.7 4,592.5 3,098.1 1,605.0 1,617.8 Total equity 4,387.2 4,572.5 5,438.4 6,282.2 4,932.9 Year ended December 31, 2012 2011 2010 2009 2008 (in millions) $ 419.8 $ 416.2 $ 394.8 $ 101.0 $ 100.8 523.5 247.2 258.1 235.7 141.8 December 31, 2012 2011 2010 2009 2008 (in millions) $ 2,274.9 $ 1,207.0 $ 797.7 $ 697.1 $ 625.0 — — 3.1 185.0 — 10,166.9 8,974.5 8,758.5 2,494.9 2,387.6 380.7 257.2 431.5 159.5 347.8 1,605.0 1,617.8 1,959.0 4.7 4.1 6,282.2 4,932.9 4,433.4 1,744.9 1,350.7 On July 31, 2015, we acquired the remaining 50% equity interest in CF Fertilisers UK not previously owned by us. CF Fertilisers UK is now wholly owned by us. The financial results of CF Fertilisers UK have been consolidated within our financial results since July 31, 2015. Prior to July 31, 2015, our initial 50% equity interest in CF Fertilisers UK was accounted for as an equity method investment and the financial results of this investment were included in equity in earnings of non-operating affiliates—net of taxes. See Note 4—Acquisitions and Divestitures, to the Consolidated Financial Statements for additional information. On March 17, 2014, we completed the sale of our phosphate mining and manufacturing business. The selected historical financial data above includes the results of the phosphate business through March 17, 2014, plus the continuing sales of the phosphate inventory in the distribution network after March 17, 2014. The remaining phosphate inventory was sold in the second quarter of 2014. The results of the phosphate mining and manufacturing business are not reported as discontinued operations in our consolidated statements of operations, as further described in Note 4—Acquisitions and Divestitures, to the Consolidated Financial Statements. Share and per share amounts have been retroactively restated for all prior periods presented to reflect the five-for-one split of the Company’s common stock effected in the form of a stock dividend that was distributed on June 17, 2015. Deferred income taxes included in total assets have been retroactively restated for all prior periods presented to reflect our adoption during fiscal year 2015 of Accounting Standards Update 2015-17, Balance Sheet Classification of Deferred Taxes (an update to Topic 740, Income Taxes), which requires the classification of all deferred tax assets and liabilities as noncurrent. See Note 3—New Accounting Standards and Note 10—Income Taxes, to the Consolidated Financial Statements for additional information. 8,8. Financial Statements and Supplementary Data. All references to "CF Holdings," "we," "us""us," "our" and "our""the Company" refer to CF Industries Holdings, Inc. and its subsidiaries, including CF Industries, Inc. except where the context makes clear that the reference is only to CF Industries Holdings, Inc. itself and not its subsidiaries. FootnotesAll references to "CF Industries" refer to CF Industries, Inc., a 100% owned subsidiary of CF Industries Holdings, Inc. References to tons refer to short-tons. Notes referenced in this discussion and analysis refer to the notes to consolidated financial statements that are found in the following section: Item 8. Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements. The following is an outline of the discussion and analysis included herein:••••••••20122015 Compared to Year Ended December 31, 20112014•20112014 Compared to Year Ended December 31, 20102013••••••phosphate fertilizerother nitrogen products in the world. Our operations are organized into two business segments—the nitrogen segment and the phosphate segment. Our principal customers are cooperatives, and independent fertilizer distributors.distributors, farmers and industrial users. Our principal nitrogen fertilizer products in the nitrogen segment are ammonia, granular urea, urea ammonium nitrate solution or UAN,(UAN) and ammonium nitrate or AN.(AN). Our other nitrogen products include urea liquor, diesel exhaust fluid or DEF,(DEF), urea liquor, nitric acid and aqua ammonia, which are sold primarily to our industrial customers. Our principalcustomers, and compound fertilizer products in(NPKs), which are solid granular fertilizer products for which the phosphate segment are diammonium phosphate, or DAP,nutrient content is a combination of nitrogen, phosphorus, and monoammonium phosphate, or MAP.U.S.United States, Canada and Canada.the United Kingdom. We also export nitrogen fertilizer products from our Donaldsonville, LouisianaLouisiana; Yazoo City, Mississippi; and Billingham, United Kingdom manufacturing facilitiesfacilities.fromwere diammonium phosphate (DAP) and monoammonium phosphate (MAP). On March 17, 2014, we completed the sale of our phosphate mining and manufacturing business, which was located in Florida, phosphate operations through our Tampa port facility.•fiveinlocated in: Donaldsonville, Louisiana (the largest nitrogen fertilizer complex in North America),; Medicine Hat, Alberta (the largest nitrogen fertilizer complex in Canada); Port Neal, Iowa,Iowa; Courtright, Ontario,Ontario; Yazoo City, MississippiMississippi; and Woodward, Oklahoma;publicly tradedpublicly-traded limited partnership of which we are the sole general partner and the majority limited partner and which, through its subsidiary Terra Nitrogen, Limited Partnership (TNLP), operates a nitrogen fertilizer manufacturing facility in Verdigris, Oklahoma;•a 66% economic interest in the largest nitrogen fertilizer complex in Canada (which we operate in Medicine Hat, Alberta through Canadian Fertilizers Limited (CFL), a consolidated variable interest entity);•one of the largest integrated ammonium phosphate fertilizer complexes in the United States in Plant City, Florida;•the most-recently constructed phosphate rock mine and associated beneficiation plant in the United States in Hardee County, Florida;••joint venture investments that we account for under the equity method, which consist of:•a 50% interest in GrowHow UK Limited (GrowHow), a nitrogen products production joint venture located in the United Kingdom and serving primarily the British agricultural and industrial markets;•Tobago;Tobago that we account for under the equity method.•a transactions as follows:Switzerland. CF Holdings Reportable Segments CF Fertilisers UK Ammonia AN Other Consolidated (in millions, except percentages) Five months ended December 31, 2015 Net sales $ 38.4 $ 117.0 $ 53.0 $ 208.4 Cost of sales 30.7 108.6 45.6 184.9 Gross margin $ 7.7 $ 8.4 $ 7.4 $ 23.5 Gross margin percentage 20.1 % 7.2 % 14.0 % 11.3 % Modificationcurrently ownsowned 49% of the voting common shares and 66% of the non-voting preferred shares of Canadian Fertilizers Limited (CFL), an Alberta, Canada-basedCanada based nitrogen fertilizer manufacturer and purchaseshad the right to purchase 66% of the production of CFL pursuantCFL. Also prior to a product purchase agreement between CF Industries and CFL.April 30, 2013, Viterra, Inc. (Viterra) holdsheld 34% of CFL's voting common sharesthe equity ownership of CFL and non-voting preferred shares and purchaseshad the right to purchase up to the remaining 34% of CFL's production pursuantproduction. Both CF Industries and Viterra were entitled to a product purchase agreement between Viterra andreceive distributions of net earnings of CFL based upon their respective purchases from CFL. CFL iswas a variable interest entity that iswas consolidated in our financial statements. AsOn April 30, 2013, CF Industries completed the acquisitions of all of the outstanding interests in CFL that it did not already own and CFL became our wholly-owned subsidiary. Once CFL became a result,wholly-owned subsidiary, CF Industries began purchasing all of the netoutput of CFL for resale and reported those sales the resulting earningsin its consolidated financial statements at market prices.noncontrolling interest expense fromselling prices were determined under the 34%provisions of CFL's sales that are made to Viterra are includedthese agreements. Until April 30, 2013, when CFL became a wholly-owned subsidiary in our consolidated financial results. There is no net impact of these CFL sales to Viterra on our net earnings attributable to common stockholders since the net earnings from the 34% of CFL's sales that are made to Viterra are included in our earnings attributable to the noncontrolling interest. There is also no impact on our net cash flows since profits from the sales to Viterra are paid to Viterra as part of the distribution payable to the noncontrolling interest. The net sales from CFL to Viterra do impact our consolidated net sales, gross margin, operating earnings, and earnings before income taxes. Under the provisions of CFL's respective product purchase agreements with CF Industries and Viterra in effect until the fourth quarter of 2012, CFL's selling prices were based on market prices. An initial portion of the selling price was paid based upon production cost plus an agreed-upon margin once title passed as the product was shipped. The remaining portion of the selling price, representing the difference between the market price and production cost plus an agreed-upon margin, was paidCF INDUSTRIES HOLDINGS, INC.after the end of the year. The sales revenue attributable to this remaining portion of the selling price was accrued on an interim basis. On our consolidated financial statements, the net sales and accounts receivable attributable toarewere solely generated solely by CFL's transactions with Viterra, as CFL'sall transactions with CF Industries arewere eliminated in consolidation. Inconsolidation in our financial statements.fourth quarter of 2012,selling prices in the CFL Board of Directors approved an amendment to each of the respective product purchase agreements that impacted the Company's results due to sales transactions to Viterra both before and after the effective date of the amendment.IndustriesIndustries. Once CFL became a wholly-owned subsidiary, CF industries began purchasing all of the output of CFL for resale and Viterra with CFL. The amendments modifiedreported those sales in its consolidated financial statements at market prices.that CFL charges for products sold to CF Industries and Viterra. The modifiedwhile 2013 included four months of selling prices are based on production cost plus an agreed-upon margin and are effective retroactively to January 1, 2012. As a resulteight months of market-based selling prices. These changes affect the January 1, 2012 effective dateyear-over-year comparability of the amendment, we recognized in our fourth quarter 2012 consolidated statement of operations a reduction in net sales revenue from Viterra of $129.7 million and a corresponding reduction in net earnings attributable to the noncontrolling interest to reverse the interim market price accruals recognized in the first three quarters of 2012. These items had no impact on our net earnings attributable to common stockholders, but they did reduce each of our consolidated net sales, gross margin, operating earnings, earnings before income taxes and net earnings attributable to the noncontrolling interest by $129.7 million inof 2013 as compared to 2014 and 2015, however, these changes do not impact the fourth quarter. The selling price modification also had no impact oncomparability of our net earnings attributable to common stockholders or net cash flows asfor the selling price modification was entirely offset by a change in distributions payablesame period. the noncontrolling interest. The CFL selling price modification effective retroactively to January 1, 2012 affected the comparability between the 2012 and 2011 results for certain line items in our financial statements. To provide comparable information for thosethe periods we have included in this Management's Discussion and Analysis of Financial Condition and Results of Operationspresented, certain financial information on an asis being provided for the 2013 comparable period adjusted basis as if all CFL sales to Viterratwelve months of market-based selling prices had been priced based on the modified pricing calculation methodology (production cost plus an agreed-upon margin) beginning January 1, 2011. Such information includes net sales, gross margin, net earnings attributable to the noncontrolling interest, nitrogen net sales, nitrogen gross margin, nitrogen gross margin as a percentage of nitrogen net sales, and average selling prices per ton of ammonia and urea. Tables highlighting these modifications can be foundused in the discussion of the results of consolidated operations and in the operating results for the nitrogen segment, in each case under the heading "Impact of CFL Selling Price Modifications." Financial results provided on an "as adjusted" basis in this Management's Discussion and Analysis of Financial Condition and Results of Operations refer to the items in those tables.generally accepted accounting principles (GAAP).GAAP. Management believes that the presentation in this report of net sales, gross margin, net earnings attributable to the noncontrolling interest, nitrogen net sales, nitrogen gross margin, nitrogen gross margin as a percentagenon-GAAP financial measures of nitrogen net sales, and average selling prices per ton of ammonia and urea on an ascertain adjusted basis as if all CFL sales to Viterra had been priced based on the modified pricing calculation methodology (production cost plus an agreed-upon margin) beginning January 1, 2011,data and the presentation of period-to-period percentage changes in those adjusted items, all of which adjusted items and percentage changes are non-GAAP financialsuch measures, provides investors with additional meaningful information to assess period-to-period changes in our underlying operating performance. This information includes consolidated net sales, gross margin, net earnings attributable to noncontrolling interest, in addition to segment net sales, gross margin, gross margin as a percentage of net sales, and average selling prices per ton of ammonia and granular urea presented on an as adjusted basis as if all CFL sales to the noncontrolling interest had been priced based on market-based selling prices for the twelve months of 2013. These non-GAAP financial measures are provided only for the purpose of facilitating comparisons between our 2012 and 2011 full-yearthe periods' operating performance, and do not purport to represent what our actual consolidated results of operations would have been, had the amendment to the CFL product purchase agreements been in effect beginning on January 1, 2011, nor are they necessarily indicative of our future consolidated results of operations. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results prepared in accordance with U.S. GAAP.
Net Operating Loss (NOL) SettlementTableContentsCF INDUSTRIES HOLDINGS, INC.Terra Industries Inc. (Terra) AcquisitionApril 2010,January 2013, we completedand the acquisitionpre-IPO owners amended the NOL Agreement to provide, among other things, that we would be entitled to retain 26.9% of any settlement realized and merger73.1% would be payable to them.Terra,the pre-IPO NOLs. Pursuant to the closing agreement, we agreed with the IRS that we will be entitled to a leading North American producer and marketertax deduction equal to a portion of nitrogen fertilizer products, for a purchase price of $4.6 billion. Terra's financial results have been includedthe NOLs over five years commencing with the 2012 tax year. The $20.6 million net benefit from this NOL settlement was recognized in our consolidated financial results and in the nitrogen segment results since the acquisition date of April 5, 2010. Therefore, Terra's financial results are not included in the consolidated financial results for the first quarter of 2010. Further information regarding2013 as follows:acquisition73.1% portion of Terra, including the related issuanceNOL benefit that will be paid to the pre-IPO owners as the tax benefits are realized. The $55.2 million charge was recognized in the consolidated statement of long-term debtoperations in other non-operating—net.public offeringassumption of commonapproximately $2 billion in net debt. The combination transaction also includes the purchase by CF Holdings or its designee of a 45% interest plus an option to acquire the remaining interest in OCI’s Natgasoline project in Texas, which upon completion in 2017 will be one of the world’s largest methanol facilities.canin accordance with the terms of the Combination Agreement. The base share consideration will represent 25.6% of the ordinary shares of New CF that, upon consummation of the combination, subject to downward adjustment to account for the assumption by New CF, as contemplated by the Combination Agreement, of any of OCI’s 3.875% convertible bonds due 2018 that remain outstanding as of the closing date of the combination. The consideration for the 45% interest in Natgasoline is $517.5 million in cash. The actual ownership split of New CF upon completion of the combination as between former CF Holdings shareholders, on the one hand, and OCI and its shareholders, on the other hand, will be founddependent on our share price at the time of closing, the amount of convertible bonds to be assumed by New CF at closing, the amount of adjustments to the amount of the additional consideration, and the mix of cash and New CF ordinary shares used to pay the additional consideration.Notes 12mid-2016, subject to the approval of shareholders of both CF Holdings and 26OCI, the receipt of certain regulatory approvals and other closing conditions. The consummation of the Natgasoline portion of the transaction is subject to conditions that are in addition to the conditions to which the consummation of the portion of the transaction involving the ENA Business other than the Natgasoline project is subject, and the consummation of the Natgasoline portion of the transaction is not a condition to consummation of the portion of the transaction involving the ENA Business other than the Natgasoline project. New CF will operate under a name to be determined by CF Holdings and be led by our existing management.Part IIItem 8 of this report for additional information.the section titled "Acquisition of Terra" later in this discussion and analysis.Financial Executive Summary•We reported net earnings attributable to common stockholders of $1.8 billion in 2012 compared to net earnings of $1.5 billion in 2011. Our 2012 results included a $74.6 million pre-tax unrealized net mark-to-market gain ($46.2 million after tax) on natural gas and foreign currency derivatives, a $15.2 million charge ($9.4 million after tax) for the accelerated amortization of deferred loan fees associated with the termination of our former senior secured credit agreement (the 2010 Credit Agreement) which was replaced by a new unsecured credit agreement dated May 1, 2012 (the 2012 Credit Agreement) and a $10.9 million pre-tax curtailment gain ($6.8 million after tax) from a reduction in certain retiree medical benefits.•Diluted net earnings per share attributable to common stockholders increased to $28.59 in 2012 from $21.98 in 2011 due to higher net earnings and lower average number of outstanding common shares due to our share repurchase program.•Net earnings attributable to common stockholders of $1.5 billion in 2011 included a $77.3 million pre-tax unrealized net mark-to-market loss ($48.0 million after tax) on natural gas derivatives, a $34.8 million pre-tax ($21.6 million after tax) non-cash impairment charge related to our former Woodward, Oklahoma methanol plant, a $32.5 million ($20.0 million after tax) gainCFN based generally on the salevolume of four dry product warehouses, $19.9 million ($12.3 million after tax) of accelerated amortization of debt issuance costs recognized upon repayment of the remaining balance of the senior secured term loan in the first quarter of 2011, $4.4 million ($2.7 million after tax) of restructuring and integration costs associated with the acquisition of Terra and a $2.0 million ($1.3 million after tax) gain on the sale of a non-core transportation business.•Our gross margin increased $217.7 million, or 8%, to $3.1 billion in 2012 from $2.9 billion in 2011 due primarily to an increase in the nitrogen segment, partially offset by a decline in the phosphate segment. The increase in gross margin is impacted by the modification of the CFL selling prices described above. On an as adjusted basis, the gross margin increase was 13%.In the nitrogen segment, gross margin increased by $350.4 million, or 14%, driven by higher average selling prices, unrealized mark-to-market gains on natural gas derivatives in the current year compared to unrealized losses in the prior year and lower realized natural gas costs. On an as adjusted basis, the gross margin of the nitrogen segment increased 20%. The favorable nitrogen segment results were partially offset by a $132.7 million, or 40%, decrease in the phosphate segment gross margin, driven primarily by lower average selling prices.•Our net sales were approximately $6.1 billion in both 2012 and 2011. Slightly higher nitrogen segment sales were essentially offset by lower phosphate segment sales. In the nitrogen segment, net sales increased by 2% as higher average selling prices for ammonia andgranular urea and higherCF INDUSTRIES HOLDINGS, INC.ammonia sales volume were partially offsetUAN purchased by lower average UAN selling prices and sales volume. The comparability of nitrogen segment net sales is impacted by the 2012 modification of CFL selling prices. On an as adjusted basis, net sales in the nitrogen segment increased 5%. In the phosphate segment, net sales declined by 7% as higher sales volume was more than offset by a 12% decline in average selling prices.•Cash flow from operations was $2.4 billion in 2012. The $296.7 million, or 14% increase compared to 2011 was due mainly to additional cash generated by higher net earnings and an increase in customer advances.•We paid cash dividends of $102.7 million and $68.7 million in 2012 and 2011, respectively. The increase is due to an increase in the quarterly dividend to $0.40 per common share from $0.10 per common share which started in the third quarter of 2011, partially offset by a reduction in the number of outstanding shares.•On August 2, 2012, we entered into a definitive agreement with Glencore International plc (Glencore) to acquire the interests in CFL currently owned by Viterra for total cash consideration of C$0.9 billion subject to certain adjustments. In October 2012, we entered into an agreement with each of GROWMARK, Inc. (GROWMARK) and La Coop fédérée to acquire the CFL common shares held by them. When the transactions are completed we will own 100% of CFL and will be entitled to purchase 100% of CFL's ammonia and urea production. The completion of the transactions is subjectCHS pursuant to the receipt of regulatory approvals in Canada, and other terms and conditions in the definitive purchase agreements. CFL's results are currently included in our financial statements as a consolidated variable interest entity.•On November 1,supply agreement.plans tothat we would construct new ammonia and urea/UAN plants at our complex in Donaldsonville, Louisiana complex and new ammonia and urea plants at our complex in Port Neal, Iowa. Our Board of Directors authorized expenditures of $3.8 billion for the projects.Iowa complex. These projectsnew plants will increase our production capacity, increase our product mix flexibility at Donaldsonville, improve our ability to serve upper-Midwest urea customers from our cost-advantaged Port Neal location, and allow us to benefit from the global cost advantageadvantages of North American natural gas. AllIn combination, these new facilities will be able to produce 2.1 million tons of gross ammonia per year, upgraded products ranging from 2.0 million to 2.7 million tons of granular urea per year and up to 1.8 million tons of UAN 32% solution per year, depending on our choice of product mix.new facilities are scheduledprior year end outstanding shares, at a cost of $527.2 million.be on-stream$1.55 billion in 2015 from $1.78 billion in 2014. The impact of the CF Fertilisers UK acquisition increased gross margin by 2016. We expect to finance the capital expenditures through the use$23.5 million. The remaining decline in our gross margin of cash and cash equivalents, cash generated from operations and borrowings.Significant Items2012 Robust demand in 2012 for nitrogen fertilizer products$254.9 million, or 14%, was due to favorable application conditionsthe $244.8 million decrease in bothgross margin in the springNitrogen Product Segments and the fall, near record corn acreage planted$10.1 million decline in 2012 and expectations of a similar level of acreage to be planted in 2013. High actual and expected planting levels were driven by record crop prices that resulted in record farm income. These market conditions led to higher average selling prices in the nitrogen segment in 2012 that, combined with lower natural gas costs, resulted in record profitability. Average selling prices in our phosphate segment were down due to lower demand from India and additional production capacity, notably from Saudi Arabia. Consolidated net sales of $6.1 billion in 2012 approximated the same level realized in 2011 as increases in the nitrogen segment, due primarily to the higher average selling prices, were offset by decreasesgross margin in the phosphate segment as the phosphate business was sold in the first quarter of 2014. The remaining decrease in Nitrogen Product Segments gross margin, as more fully described below, was due primarily to lower average selling prices. In 2012, average nitrogen fertilizer selling prices, increased by 2%, but average phosphate fertilizer selling prices decreased by 12%. Gross margin increased by $217.7 million, or 8%, to $3.1 billion in 2012 from $2.9 billion in 2011. Nitrogen segmentlower sales to Viterra were made on a cost-plus basis in 2012, in contrast tovolume, and the market-price basis that applied inCF INDUSTRIES HOLDINGS, INC.2011 and prior years, a difference that impacts the comparability of net sales and certain other items between 2012 and prior periods and is discussed above under the heading "Items Affecting Comparability of Results—CFL Selling Price Modification." The 2012 results include $74.6 million ($46.2 million after tax) unrealized net mark-to-market gainslosses on natural gas derivatives, partially offset by lower physical natural gas costs.◦ Average selling prices, primarily UAN and granular urea, decreased by 8%, which reduced gross margin by $348.8 million as international nitrogen fertilizer prices continued to decline due to excess global supply. The combination of falling global production costs, foreign currency devaluation and reduced ocean freight costs allowed many international producers to continue operations and the resulting supply weighed on global prices. ◦ Sales volume, primarily ammonia, decreased by 3%, which decreased gross margin by $72.3 million due primarily to a poor fall application season and weaker demand as customers were unable to apply ammonia due to poor weather conditions and customers were hesitant to buy in a declining pricing environment. ◦ Unrealized net mark-to-market losses on natural gas derivatives decreased gross margin by $96.8 million as 2015 included a $176.3 million loss compared to $79.5 million loss in 2014. ◦ Lower physical natural gas costs in 2015, partially offset by the impact of natural gas derivatives that settled in the period, increased gross margin by $229.8 million compared to 2014. Lower gas costs were primarily driven by increased North American natural gas production, as increased well efficiencies increased supply. Warm weather conditions, especially in the fourth quarter, also contributed to high storage levels and the resulting decline in gas prices. foreign currency derivatives, a $15.2administrative expenses increased $17.9 million pre-tax charge ($9.4to $169.8 million after tax) for the accelerated amortization of deferred fees on the 2010 Credit Agreement that we replaced in May 2012 and a $10.92015 from $151.9 million pre-tax curtailment gain ($6.8 million after tax) from a reduction in certain retiree medical benefits.2011 In 2011, average selling prices increased due primarily to higher demand for fertilizer for the following reasons: higher planted acres in the spring season due to strong demand for corn and other grains which supported favorable farm economics; global fertilizer supply constraints resulting from both export restrictions and production curtailments affecting certain foreign fertilizer producers; and an expected high level of planted acres and fertilizer usage in the 2012 growing season. Higher average selling prices and sales volumes due to increased demand led to robust operating results in 2011. Consolidated net sales in 2011 increased by $2.1 billion, or 54%, to $6.1 billion, with increases due primarily to higher average selling prices in both the nitrogen and phosphate segments and higher sales volume2014. The increase was due primarily to the impact of the Terra acquisition. In 2011, average nitrogenCF Fertilisers UK acquisition, an increase in corporate project activities, and phosphate fertilizer selling priceshigher intangible amortization costs.38% and 36%, respectively. Gross margin increased by $1.7 billion, or 146%, to $2.9 billion in 2011$39.0 million from $1.2 billion in 2010. The 2011 results include a $77.3 million ($48.0 million after tax) unrealized net mark-to-market loss on natural gas derivatives. Results in 2011 also include $145.5$53.3 million of netexpense in 2014 to expense of $92.3 million in 2015. The increased expense was due primarily to increased expansion project costs pertaining to our Donaldsonville, Louisiana and Port Neal, Iowa capacity expansion projects that did not qualify for capitalization compared to 2014.($90.2decreased by $45.7 million after tax), a $34.8to $131.6 million pre-tax ($21.6in 2015 from $177.3 million after tax) non-cash impairment chargein 2014 due primarily to the higher amounts of capitalized interest related to our Woodward, Oklahoma methanol plantcapacity expansion projects, partially offset by higher interest expense pertaining to the $1.0 billion and $1.5 billion of senior notes that were issued in September 2015 and$32.5decline of $204.9 million. This decline was primarily due to unfavorable working capital changes as customer advances were lower and inventory levels were higher in 2015 as compared to 2014 levels. Due to the declining pricing environment for nitrogen fertilizers in 2015, customers delayed making forward purchase commitments to purchase fertilizer in 2015, which reduced the amount of customer advances that were received, as compared to 2014 when fertilizer pricing was stronger. Inventory levels were also higher in 2015 due to a poor fall ammonia application season, as compared to 2014 when inventory levels declined.($20.0 million after tax) gain onin 2014 when we received proceeds of $1.37 billion from the sale of four dry product warehouses.2010April 2010,September 2015, we completedissued senior notes and received proceeds of $1.0 billion. In March 2014, we issued senior notes and received proceeds of approximately $1.5 billion. In 2015, we repurchased shares of our common stock for $556.3 million in cash; in 2014, we repurchased shares of our common stock for $1.93 billion in cash. Dividends paid on common stock were $282.3 million and $255.7 million in 2015 and 2014, respectively.$4.6 billion acquisition of Terra and it became an indirect wholly owned subsidiary of CF Holdings. This acquisition made us a global leader in the nitrogen fertilizer industry, diversified our asset base and increased our geographic reach and operational efficiency, as well as significantly increased our scale and capital market presence. Theconsolidated financial results of the Terra business are included in the consolidated results subsequent to the acquisition date. Consolidated net sales in 2010 were $4.0 billion, up 52%, as compared to $2.6 billion in 2009 due to the impact of the Terra acquisition, optimal weather conditions during both fertilizer application seasons,2015, 2014 and a favorable fertilizer environment due to strong farm economics. While average nitrogen fertilizer selling prices declined by 11% in 2010, average phosphate fertilizer prices increased by 28%. Gross margin increased by $340.1 million, or 41%, in 2010 to $1,179.5 million. The 2010 results include a $9.6 million ($5.9 million after tax) unrealized net mark-to-market gain on natural gas derivatives. Results in 2010 also include $219.8 million of net interest expense ($136.1 million after tax), $150.4 million ($148.8 million after tax) of business combination expenses and Peru project costs, a $28.3 million gain ($17.5 million after tax) on the sale of Terra common stock acquired during 2009, and $21.6 million ($13.4 million after tax) of restructuring and integration costs associated with the acquisition of Terra.2013:◦ Net earnings attributable to common stockholders of $699.9 million for 2015 included a $94.4 million gain as a result of the remeasurement to fair value of our initial 50% equity interest in CF Fertilisers UK ($94.4 million after tax), a $61.9 million impairment of our equity method investment in PLNL ($61.9 million after tax), a $176.3 million unrealized net mark-to-market loss ($110.9 million after tax) on natural gas derivatives, $42.8 million of losses ($30.9 million after tax) as a result of the sale of equity method investments, $56.9 million of transaction costs ($56.9 million after tax), $51.3 million of expenses ($32.3 million after tax) related to our capacity expansion projects in Donaldsonville, Louisiana and Port Neal, Iowa that did not qualify for capitalization, and $21.6 million ($13.6 million after tax) of realized and unrealized net losses on foreign currency derivatives related to our capacity expansion projects. During 2015, we repurchased 8.9 million shares of our common stock at an average price of $59 per share representing 4% of the prior year end's outstanding shares at a cost of $527.2 million. ◦ In 2014, we reported net earnings attributable to common stockholders of $1.39 billion. Our 2014 results included a $750.1 million gain ($462.8 million after tax) on the sale of the phosphate business, a $79.5 million unrealized net mark-to-market loss ($50.1 million after tax) on natural gas derivatives, $30.7 million of expenses ($19.4 million after tax) related to our capacity expansion projects that did not qualify for capitalization, $38.4 million ($24.2 million after tax) of realized and unrealized net losses on foreign currency derivatives and a $13.1 million ($8.2 million after tax) of retirement benefit settlement charges. During 2014, we repurchased 38.4 million shares of our common stock at an average price of $50 per share representing 14% of the prior year end's outstanding shares at a cost of $1.92 billion. ◦ In 2013, we reported net earnings attributable to common stockholders of $1.46 billion. Our 2013 results included a $52.9 million unrealized net mark-to-market gain ($33.5 million after tax) on natural gas derivatives, $10.8 million of expenses ($6.8 million after tax) related to our capacity expansion projects that did not qualify for capitalization, $20.8 million ($13.2 million after tax) of realized and unrealized net gains on foreign currency derivatives and a net $20.6 million benefit from a settlement with the IRS concerning certain pre-IPO NOLs. During 2013, we repurchased 36.7 million shares of our common stock at an average price of $39 representing 12% of the prior year end's outstanding shares at a cost of $1.45 billion. agricultural products are globally-traded commodities and, as a result, we compete principally on the basis of delivered price and to a lesser extent on customer service and product quality. Moreover, our operating results are influenced by a broad range of factors, including those outlined below.federalgovernmental regulations, including requirements mandating increased use of bio-fuels and farm sector income. Other geopolitical factors like temporary disruptions in fertilizer trade related to government intervention or changes in the buying/selling patterns of key consuming/exportingexporting/consuming countries such as China, India and Brazil, among others, often play a major role in shaping near-term market fundamentals. The economics of fertilizer manufacturing play a key role in decisions to increase or reduce production capacity. Supply of fertilizers is generally driven by available capacity and operating rates, raw material costs and availability, of raw materials, government policies and global trade.AN.other nitrogen products. Because most of our nitrogen fertilizer manufacturing facilities are located in the United States and Canada, the price of natural gas in North America directly impacts a substantial portion of our operating expenses. Due to increases in natural gas production resulting from the rise in production from shale gas formations, natural gas prices in North America have declined over the last three years.past several years, but are subject to volatility. During the three year period ended December 31, 2012,2015, the average daily closing price at the Henry Hub reached a highlow of $7.51$1.54 per MMBtu on January 8, 2010four consecutive days in December 2015 and a high of $7.94 per MMBtu on March 5, 2014.$1.84$4.60 per MMBtu on April 20, 2012.December 23, 2015 and December 24, 2015 and a high of $8.50 per MMBtu on February 12, 2015. During the three year period ended December 31, 2015, the daily closing price at NBP reached a low of $4.60 per MMBtu on both December 23, 2015 and December 24, 2015 and a high of $16.00 per MMBtu on March 22, 2013.39%45% of theour Nitrogen Product Segments total cost of sales for our nitrogen fertilizer products in 2012 down from 45% in 2011. Natural gas costs represented a higher percentage of cash production costs (total production costs less depreciation and amortization).CF INDUSTRIES HOLDINGS, INC.policies affecting trade and other matters.policies. The development of additional natural gas reserves in North America over the last few years has decreased natural gas costs relative to the rest of the world, making North American nitrogen fertilizer producers more competitive. These lower natural gas costs contributed to announcements of several nitrogen fertilizer capacity expansion projects in North America.America, including our capacity expansion projects in Donaldsonville, Louisiana and Port Neal, Iowa. Changes in currency values may also alter our cost competitiveness relative to producers in other regions of the world.nitrogen basednitrogen-based fertilizers located in the Middle East, the Ukraine, the Republic of Trinidad and Tobago, Venezuela, North Africa, Russia and China are major exporters to North America. The domestic phosphate industry is tied to the global market through its position as the world's largest exporter of DAP/MAP. Consequently, phosphate fertilizer prices and demand for U.S. DAP/MAP are subject to considerable volatility and dependent on a wide variety of factors impacting the world market, including fertilizer and trade policies of foreign governments, changes in ocean bound freight rates and international currency fluctuations.Political and Social political and social policies of governments around the world can result in restrictions on imports and exports, the subsidization of natural gas prices, the subsidization ofand subsidies or quotas applied to domestic producers, farmers, and the subsidization of exports.imported or exported product. Due to the critical role that fertilizers play in food production, the construction and operation of fertilizer plants often are influenced by these political and social objectives. and phosphate fertilizers and are determined by the quantities of fertilizers we sell and the selling prices we realize. The volumes, mix and selling prices we realize are determined to a great extent by a combination of global and regional supply and demand factors. Net sales also include shipping and handling costs that are billed to our customers. Sales incentives are reported as a reduction in net sales.and phosphate fertilizers to augment or replace production at our facilities. Distribution costs include the cost of freight required to transport finished products from our plants to our distribution facilities and storage costs incurred prior to final shipment to customers.productproducts from us on a forward basis at prices and on delivery dates we propose. As our customers enter into forward nitrogen fertilizer purchase contracts with us, we often use derivative instruments to reduce our exposure to changes in the cost of natural gas, the largest and most volatile component of our manufacturing cost.costs for nitrogen-based fertilizer. We report our natural gas derivatives on the consolidated balance sheetsheets at their fair value. Changes in the fair value of these derivatives are recorded in cost of sales as the changes occur. See "Forward Sales and Customer Advances" later in this discussion and analysis. As a result of fixing the selling prices of our products, often months in advance of their ultimate delivery to customers, our reported selling prices and margins may differ from market spot prices and margins available at the time of shipment. Volatility in quarterly reported earnings also may arise from the unrealized mark-to-market adjustments in the value of derivatives.CF INDUSTRIES HOLDINGS, INC.fees.fees, including those for corporate initiatives. Restructuring and IntegrationTransaction Costs. Restructuring and integrationTransaction costs consist of expensesvarious consulting and legal services associated primarily with executing the strategic agreements and preparing for the proposed combination with the integrationENA Business of OCI, our strategic venture with CHS and our acquisition of the operations of Terra andremaining 50% equity interest in CF Industries.Fertilisers UK not previously owned by us.theadministrative costs associated with engineering studies for proposed capitalour capacity expansion projects and other costs that do not relate directly to our central operations. Costs included in "other costs" can include foreign exchange gains and losses, unrealized gains and losses on foreign currency derivatives, costs associated with our closed facilities, amounts recorded for environmental remediation for other areas of our business, litigation expenses and gains and losses on the disposal of fixed assets. In 2010, other operating-net also included business combination related expenses and Peru project development costs. The business combination related expenses were associated with our acquisition of Terra and costs associated with responding to Agrium's proposed acquisition of CF Holdings. See Note 12 to our consolidated financial statements for additional information on activity related to our acquisition of Terra.We have investments accounted for under the equity method for which the results are includedEquity in ourearnings of operating earnings. These consistaffiliates consists of the following: (1)our 50% ownership interest in PLNL and (2) 50% interest in an ammonia storage joint venture located in Houston, Texas.PLNL. We include our share of the net earnings from these investmentsour investment in PLNL as an element of earnings from operations because these investments providethis investment provides additional production and storage capacity to our operations and areis integrated with our other supply chain and sales activities in the nitrogen segment.Nitrogen Product Segments. Our share of the net earnings includes the amortization of certain tangible and intangible assets identified as part of the application of purchase accounting at acquisition. In the fourth quarter of 2015, we recognized a $61.9 million impairment of our equity method investment in PLNL. and notes payable, amortization of the related fees required to execute financing agreements and annual fees onpursuant to our senior revolving credit facility. It excludes capitalizedagreement. Capitalized interest relating to the construction of major capital projects.projects reduces interest expense as the interest is capitalized and amortized over the estimated useful lives of the facility along with all other construction costs. In connection with our initial public offering (IPO) in August 2005, CF Industries, Inc. (CFI) ceased to be a non-exempt cooperative for income tax purposes, and we entered into a net operating loss agreement (NOL Agreement) with CFI's pre-IPO owners relating to the future utilization of our pre-IPO net operating loss carryforwards (NOLs). The NOL Agreement provided that if we ultimately could utilize the pre-IPO NOLs to offset applicable post-IPO taxable income, we would pay ourCF INDUSTRIES HOLDINGS, INC.pre-IPO owners amounts equal to the resulting federal and state income taxes actually saved. On January 2, 2013, we and the pre-IPO owners amended the NOL Agreement to provide, among other things, that we are entitled to retain 26.9% of any settlement realized with the United States Internal Revenue Service (IRS) at the IRS Appeals level. In January 2013, we entered into a Mediation Report with the IRS to resolve the tax treatment of the pre-IPO NOLs. Pursuant to the Mediation Report, we have agreed with the IRS that we will be entitled to deduct a portion of the NOLs in future years. Our mediation agreement is subject to finalization in a Closing Agreement with the IRS and will be recognized in our financial statements at that time. Under the terms of the amended NOL agreement, 73.1% of the federal and state tax savings will be payable to our pre-IPO owners.in whichthat we have an ownership interestaccount for using the equity method and exert significant operational and financial influence.exclude from operating earnings. Income taxes related to these investments, if any, are reflected in this line. The amounts recorded as equity in earnings of non-operating affiliates—net of taxes relate to our investments in GrowHowCF Fertilisers UK and Keytrade. Our shareDuring the second quarter of 2015, we sold our interests in Keytrade. On July 31, 2015, we acquired the net earnings includesremaining 50% equity interest in CF Fertilisers UK not previously owned by us for total consideration of $570.4 million and recognized a $94.4 million gain on the amortizationremeasurement to fair value of certain tangibleour initial 50% equity interest in CF Fertilisers UK. CF Fertilisers UK became wholly owned by us and intangible assets identified asbeginning July 31, 2015, the operating results of CF Fertilisers UK became part of the application of purchase accounting at acquisition. We account for these investments as non-operating equity method investments, and exclude the net earnings of these investments in earnings from operations since these operations do not provide additional production capacity to us, nor are these operations integrated within our supply chain.consolidated financial results.the Noncontrolling Interest. Amounts reported asNet earnings attributable to noncontrolling interest include the net earnings attributable to the 24.7% interest of the publicly-held common units of TNCLP. Net earnings attributable to noncontrolling interest representfor the first four months of 2013 also included the interest of the 34% interest in the net operating results of CFL and the 24.7% interest in the net operating results of TNCLP, a master limited partnership that owns the nitrogen manufacturing facility in Verdigris, Oklahoma. We own 49% of the voting common stock of CFL and 66%holder of CFL's non-voting preferred stock. Viterra Inc. (Viterra) owns 34%equity ownership. On April 30, 2013, we purchased the noncontrolling interests of the voting common stock and non-voting preferred stock of CFL. The remaining 17% of the voting common stock of CFL is owned by GROWMARK and La Coop fédérée. operate CFL's Medicine Hat facility and purchase approximately 66% of the facility's ammonia and urea production, pursuant to a management agreement and a product purchase agreement. Both the management agreement and the product purchase agreement can be terminated by either us or CFL upon a twelve-month notice. Viterra has the right, but not the obligation, to purchase the remaining 34% of the facility's ammonia and urea production under a similar product purchase agreement. To the extent that Viterra does not purchase its 34% of the facility's production, we are obligated to purchase any remaining amounts. Since 1995, however, Viterra or its predecessor has purchased at least 34% of the facility's production each year. The product purchase agreement also provides that CFL will distribute its net earnings to us and Viterra annually based on the respective quantities of product purchased from CFL. See our previous discussion on the CFL selling price modification. On August 2, 2012, we entered into a definitive agreement with Glencore to acquire the interests in CFL currently owned by Viterra for total cash consideration of C$0.9 billion subject to certain adjustments. In October 2012, we entered into an agreement with each of GROWMARK and La Coop fédérée to acquire the CFL common shares held by them. When these transactions are completed we will own 100% of CFL and will be entitled to purchase 100% of CFL's ammonia and urea production. The completion of the transactions is subject to the receipt of regulatory approvals in Canada, and other terms and conditions in the definitive purchase agreements. CFL's results are currently included in our financial statements as a consolidated variable interest entity. See Note 4 to our consolidated financial statements for additional information on CFL.CF INDUSTRIES HOLDINGS, INC. Through the acquisition of Terra in April 2010, we own an aggregate 75.3% of TNCLP and outside investors own the remaining 24.7%. The TNCLP Agreement of Limited Partnership allows the General Partner to receive Incentive Distribution Rights once a minimum distribution threshold has been met. Partnership interests in TNCLP are traded on the NYSE and TNCLP is separately registered with the SEC.tables presenttable presents our consolidated results of operations: Twelve months ended December 31, 2015 2014 2013 2015 v. 2014 2014 v. 2013 (in millions, except as noted) Net sales $ 4,308.3 $ 4,743.2 $ 5,474.7 $ (434.9 ) (9 )% $ (731.5 ) (13 )% Cost of sales 2,761.2 2,964.7 2,954.5 (203.5 ) (7 )% 10.2 — % Gross margin 1,547.1 1,778.5 2,520.2 (231.4 ) (13 )% (741.7 ) (29 )% Gross margin percentage 35.9 % 37.5 % 46.0 % (1.6 )% (8.5 )% Selling, general and administrative expenses 169.8 151.9 166.0 17.9 12 % (14.1 ) (8 )% Transaction costs 56.9 — — 56.9 N/M — N/M Other operating—net 92.3 53.3 (15.8 ) 39.0 73 % 69.1 N/M Total other operating costs and expenses 319.0 205.2 150.2 113.8 55 % 55.0 37 % Gain on sale of phosphate business — 750.1 — (750.1 ) (100 )% 750.1 N/M Equity in earnings of operating affiliates (35.0 ) 43.1 41.7 (78.1 ) (181 )% 1.4 3 % Operating earnings 1,193.1 2,366.5 2,411.7 (1,173.4 ) (50 )% (45.2 ) (2 )% Interest expense—net 131.6 177.3 147.5 (45.7 ) (26 )% 29.8 20 % Other non-operating—net 3.9 1.9 54.5 2.0 105 % (52.6 ) (97 )% Earnings before income taxes and equity in earnings of non-operating affiliates 1,057.6 2,187.3 2,209.7 (1,129.7 ) (52 )% (22.4 ) (1 )% Income tax provision 395.8 773.0 686.5 (377.2 ) (49 )% 86.5 13 % Equity in earnings of non-operating affiliates—net of taxes 72.3 22.5 9.6 49.8 221 % 12.9 134 % Net earnings 734.1 1,436.8 1,532.8 (702.7 ) (49 )% (96.0 ) (6 )% Less: Net earnings attributable to noncontrolling interest 34.2 46.5 68.2 (12.3 ) (26 )% (21.7 ) (32 )% Net earnings attributable to common stockholders $ 699.9 $ 1,390.3 $ 1,464.6 $ (690.4 ) (50 )% $ (74.3 ) (5 )% $ 2.96 $ 5.42 $ 4.95 $ (2.46 ) (45 )% $ 0.47 9 % 236.1 256.7 296.0 (20.6 ) (8 )% (39.3 ) (13 )% $ 1.20 $ 1.00 $ 0.44 $ 0.20 $ 0.56 Supplemental Data: $ 2.81 $ 4.49 $ 3.64 $ (1.68 ) $ 0.85 0.26 (0.24 ) 0.02 0.50 (0.26 ) Cost of natural gas (per MMBtu) $ 3.07 $ 4.25 $ 3.66 $ (1.18 ) (28 )% $ 0.59 16 % Average daily market price of natural gas (per MMBtu) Henry Hub (Louisiana) $ 2.61 $ 4.32 $ 3.72 $ (1.71 ) (40 )% $ 0.60 16 % $ 6.53 — — $ 6.53 N/M — N/M Capital expenditures $ 2,469.3 $ 1,808.5 $ 823.8 $ 660.8 37 % $ 984.7 120 % Production volume by product tons (000s): 7,673 7,011 7,105 662 9 % (94 ) (1 )% Granular urea 2,520 2,347 2,474 173 7 % (127 ) (5 )% UAN (32%) 5,888 5,939 6,332 (51 ) (1 )% (393 ) (6 )% AN 1,283 950 882 333 35 % 68 8 % Year Ended December 31, 2012 2011 2010 2012 v. 2011 2011 v. 2010 (in millions, except per share amounts) $ 6,104.0 $ 6,097.9 $ 3,965.0 $ 6.1 — $ 2,132.9 54 % 2,990.7 3,202.3 2,785.5 (211.6 ) (7 )% 416.8 15 % 3,113.3 2,895.6 1,179.5 217.7 8 % 1,716.1 145 %
151.8
130.0
106.1
21.8
17
%
23.9
23
% — 4.4 21.6 (4.4 ) (100 )% (17.2 ) (80 )% 49.1 20.9 166.7 28.2 135 % (145.8 ) (87 )% 200.9 155.3 294.4 45.6 29 % (139.1 ) (47 )% 47.0 50.2 10.6 (3.2 ) (6 )% 39.6 N/M 2,959.4 2,790.5 895.7 168.9 6 % 1,894.8 212 % 135.3 147.2 221.3 (11.9 ) (8 )% (74.1 ) (33 )% (4.3 ) (1.7 ) (1.5 ) (2.6 ) 153 % (0.2 ) 13 % — — 17.0 — N/M (17.0 ) N/M (1.1 ) (0.6 ) (28.8 ) (0.5 ) 83 % 28.2 (98 )% 2,829.5 2,645.6 687.7 183.9 7 % 1,957.9 285 %
964.2
926.5
273.7
37.7
4
%
652.8
239
% 58.1 41.9 26.7 16.2 39 % 15.2 57 % 1,923.4 1,761.0 440.7 162.4 9 % 1,320.3 N/M 74.7 221.8 91.5 (147.1 ) (66 )% 130.3 142 % $ 1,848.7 $ 1,539.2 $ 349.2 $ 309.5 20 % $ 1,190.0 N/M $ 28.59 $ 21.98 $ 5.34 $ 6.61 $ 16.64
64.7
70.0
65.4
(5.3
)
4.6
$
1.60
$
1.00
$
0.40
$
0.60
$
0.60 (1)During 2012, the CFL selling prices to Viterra were modified to cost plus an agreed-upon margin from market-based pricing in the prior years. This impacts the comparability of certain amounts between 2012 and the previous years. To provide comparable information for 2012 and 2011, the table presented below under the heading "Impact of CFL Selling Price Modifications" presents these line items adjusted as if the CFL selling price modifications had been in effect beginning on January 1, 2011.Share and per share amounts have been retroactively restated for all prior periods presented to reflect the five-for-one split of the Company’s common stock effected in the form of a stock dividend that was distributed on June 17, 2015. Includes the cost of natural gas purchased during the period for use in production. Includes the impact of gains and losses on natural gas derivatives that were settled and realized during the period. Excludes the unrealized mark-to-market gains and losses on natural gas derivatives. Amount represents average daily market price for the full year 2015. Gross ammonia production, including amounts subsequently upgraded on-site into granular urea, UAN, or AN. Management's Discussiondiscussion and Analysisanalysis, on April 30, 2013, CF Industries acquired the noncontrolling interests in CFL and CFL became a wholly-owned subsidiary of Financial ConditionCF Industries. As a result, the consolidated financial results for 2015 and Results2014 included twelve months of Operations, during 2012, the CFLmarket-based selling prices, to Viterra were modified towhile 2013 included four months of selling prices based on production cost plus an agreed-upon margin fromand eight months of market-based pricing inselling prices. These changes affect the prior years. This change had noyear-over-year comparability of net sales, gross margin, operating earnings, earnings before income taxes and net earnings attributable to noncontrolling interest, but do not impact onthe comparability of our net earnings attributable to common stockholders sinceor net sales and net earnings attributable to the noncontrolling interest were each modified bycash flows for the same amount. However, this change impacts the comparability of certain amounts between 2012 and 2011. period. is presentedadjusts the results for 2013 to provide comparable information between 2012 and 2011 by presentingmarket-based selling prices for the 2011 informationfull year to be on a comparable basis comparable with the 2012 data with respect to CFL selling prices.2015 and 2014. Year Ended December 31 Twelve months ended December 31, 2012 2011 2012 v. 2011 2015 2014 2013 2015 v. 2014 2014 v. 2013 (in millions) (in millions, except percentages) $ 6,104.0 $ 6,097.9 $ 6.1 0 % $ 4,308.3 $ 4,743.2 $ 5,474.7 $ (434.9 ) (9 )% $ (731.5 ) (13 )% — (142.6 ) 142.6 — — 71.1 — (71.1 ) $ 6,104.0 $ 5,955.3 $ 148.7 2 % $ 4,308.3 $ 4,743.2 $ 5,545.8 $ (434.9 ) (9 )% $ (802.6 ) (14 )% $ 3,113.3 $ 2,895.6 $ 217.7 8 % $ 1,547.1 $ 1,778.5 $ 2,520.2 $ (231.4 ) (13 )% $ (741.7 ) (29 )% — (142.6 ) 142.6 — — 71.1 — (71.1 ) $ 3,113.3 2,753.0 $ 360.3 13 % $ 1,547.1 $ 1,778.5 $ 2,591.3 $ (231.4 ) (13 )% $ (812.8 ) (31 )% Net earnings attributable to noncontrolling interest $ 74.7 $ 221.8 $ (147.1 ) (66 )% $ 34.2 $ 46.5 $ 68.2 $ (12.3 ) (26 )% $ (21.7 ) (32 )% — (142.6 ) 142.6 — — 71.1 — (71.1 ) $ 74.7 $ 79.2 $ (4.5 ) (6 )% $ 34.2 $ 46.5 $ 139.3 $ (12.3 ) (26 )% $ (92.8 ) (67 )% 20122015 Compared to Year Ended December 31, 20112014increased $217.7declined by $231.4 million, or 8%13%, to $3.1$1.55 billion in 20122015 from $2.9$1.78 billion in 20112014. The impact of the CF Fertilisers UK acquisition increased gross margin by $23.5 million. The remaining decline in our gross margin of $254.9 million, or 14%, was due to an increasethe $244.8 million decrease in gross margin in the nitrogen segment, partially offset by a decreaseNitrogen Product Segments and the $10.1 million decline in gross margin in the phosphate segment.segment as the phosphate business was sold in the first quarter of 2014. The 8%remaining decrease in Nitrogen Product Segments gross margin, increaseas more fully described below, was impacted by lower average CFL selling prices in 2012 as compared to 2011 due to the CFL selling price modification previously discussed. On an as adjusted basis, the gross margin increased 13%. In the nitrogen segment, the gross margin increased by $350.4 million, or 14%, to $2.9 billion as compared to $2.6 billion in 2011 due to an increase in average nitrogen fertilizer selling prices, a decline in natural gas costs and unrealized mark-to-market gains on natural gas derivatives in the current year as compared to unrealized losses in 2011. The 14% increase in nitrogen segment gross margin was impacted by lower average CFL selling prices in 2012 as compared to 2011 due to the CFL selling price modification previously discussed. On an as adjusted basis, the gross margin for the nitrogen segment increased 20%.CF INDUSTRIES HOLDINGS, INC. In the phosphate segment, gross margin decreased by $132.7 million, or 40%, to $199.7 million in 2012 from $332.4 million in 2011, due primarily to lower average phosphate fertilizer selling prices, lower sales volume, and the impact of mark-to-market losses on natural gas derivatives, partially offset by an increaselower physical natural gas costs.sales volume.$1.8 billion$699.9 million for 20122015 included a $74.6$94.4 million pre-tax unrealized net mark-to-market gain as a result of the remeasurement to fair value of our initial 50% equity interest in CF Fertilisers UK ($46.294.4 million after tax) on natural gas and foreign currency derivatives,, a $15.2$61.9 million chargeimpairment of our equity method investment in PLNL ($9.461.9 million after tax) for the accelerated amortization of deferred loan fees on our 2010 Credit Agreement that we replaced in May 2012 and, a $10.9$176.3 million pre-tax curtailment gain ($6.8 million after tax) from a reduction in certain retiree medical benefits. The net earnings attributable to common stockholders of $1.5 billion for 2011 included a $77.3 million pre-tax unrealized net mark-to-market loss ($48.0110.9 million after tax) on natural gas derivatives, a $34.8$42.8 million pre-taxof losses ($21.630.9 million after tax) non-cash impairment chargeas a result of the sale of equity method investments, $56.9 million of transaction costs ($56.9 million after tax), $51.3 million of expenses ($32.3 million after tax) related to our Woodward, Oklahoma methanol plant, a $32.5capacity expansion projects in Donaldsonville, Louisiana and Port Neal, Iowa that did not qualify for capitalization, and $21.6 million of realized and unrealized losses ($20.013.6 million after tax) on foreign currency derivatives related to our capacity expansion projects. Net earnings attributable to common stockholders of $1.39 billion in 2014 included a $750.1 million gain ($462.8 million after tax) on the sale of four dry product warehouses, $19.9the phosphate business, a $79.5 million unrealized net mark-to-market loss ($12.350.1 million after tax) on natural gas derivatives, $30.7 million of expenses ($19.4 million after tax) related to our capacity expansion projects that did not qualify for capitalization, $38.4 million ($24.2 million after tax) of acceleratedrealized and unrealized net losses on foreign currency derivatives and $13.1 million ($8.2 million after tax) of retirement benefits settlement charges.debt issuancetransaction costs recognized upon repaymentfor various consulting and legal services associated primarily with executing the strategic agreements and preparing for the proposed combination with the ENA Business of OCI, our strategic venture with CHS and our acquisition of the remaining balance50% equity interest in CF Fertilisers UK not previously owned by us.secured term loannotes issued in September 2015 and in March 2014, respectively. We recorded capitalized interest of $154.5 million in 2015 primarily related to our capacity expansion projects compared to $74.2 million in 2014.2011, $4.42014, but had reported results in both the first half of 2014 and the entire year in 2013. Gross margin for the Nitrogen Product Segments declined by $676.9 million, or 28%. This decline in gross margin is due primarily to the following factors:2.7462.8 million after tax) on the sale of the phosphate business, a $79.5 million of pre-tax unrealized mark-to-market loss ($50.1 million after tax) on natural gas derivatives, $30.7 million of expenses ($19.4 million after tax) related to our capacity expansion projects in Donaldsonville, Louisiana, and Port Neal, Iowa, $38.4 million ($24.2 million after tax) of restructuringrealized and integration costs associated with the acquisition of Terraunrealized net losses on foreign currency derivatives and a $2.0$13.1 million ($1.38.2 million after tax) of retirement benefits settlement charges. Net earnings in 2013 of $1.46 billion included $52.9 million of unrealized net mark-to-market gain ($33.5 million after tax) on natural gas derivatives, $10.8 million of expenses ($6.8 million after tax) related to our capacity expansion projects, $20.8 million ($13.2 million after tax) of realized and unrealized net gains on foreign currency derivatives and a net $20.6 million benefit from a settlement with the saleIRS concerning certain pre-IPO NOLs.were $6.1decreased $731.5 million, or 13%, to $4.74 billion in both 2012 and 2011 as increases2014 compared to $5.47 billion in the nitrogen segment in 2012 were offset by declines in the phosphate segment.2013. These results were impacted by lower average CFL selling prices in 2012 as compared to 2011 due to the CFL selling price modification.modifications in 2013. On an as adjusted basis, the 2014 net sales increased 2%. In the nitrogen segment,decreased 14% compared to 2013. The $731.5 million decrease in net sales increased by $84.5is attributable to a $103.0 million decrease in the Nitrogen Product Segments and a $628.5 million decrease in the phosphate segment due to the sale of the phosphate business in March 2014.higher nitrogen fertilizer average selling prices which were partially offset by lower sales volume. Average selling prices for nitrogen fertilizer increased due primarily to positive market conditions as favorable weather created a longer application window, tight world market conditions existed for ammonia and urea due to lower international ammonia production and tight domestic supply conditions existed due to increased demand caused by the high level of planted acres and low downstream inventories. The 2% increase in nitrogen segment net sales was impacted by lower average CFL selling prices in 2012 as compared to 2011 due to the CFL selling price modification. On an as adjusted basis, net sales in the nitrogen segment increased 5%. In the phosphate segment, net sales declined $78.4 million, or 7%, due to a 12% decline4% decrease in average phosphate fertilizer selling prices, partially offset by a 6%3% increase in phosphate sales volume.our nitrogen segment averaged approximately $168March 2014. Total cost of sales per ton in 2012our Nitrogen Product Segments averaged $211 in 2014 compared to $188 per ton$172 in 2011.2013. This 11%23% increase was due primarily to higher natural gas costs and higher other production costs. Total realized gas costs increased 16%. Natural gas costs for 2014 also included a $79.5 million unrealized net mark-to-market loss on natural gas derivatives and 2013 included a $52.9 million gain. Additionally, we incurred higher other production costs, including production outage related expenses, and distribution and storage expenses compared to 2013.realized natural gas costincentive compensation costs and a $66.5lower corporate office costs for certain corporate activities such as information technology projects.unrealizedfrom $15.8 million net mark-to-market gain on natural gas derivativesincome in the current year compared2013 to a $77.3 million unrealized net loss in the prior year. Phosphate segment costexpense of sales averaged $397 per ton in 2012 compared to $392 per ton in the prior year.Selling, General and Administrative Expenses Selling, general and administrative expenses increased $21.8 million to $151.8$53.3 million in 2012 from $130.0 million in 20112014. The increased expense was due primarily to higher corporate office$38.4 million of realized and unrealized losses on foreign currency derivatives in 2014 compared to $20.8 million of gains in 2013. Additionally, expenses including higher professionalCF INDUSTRIES HOLDINGS, INC.service fees associated withrelated to the design and implementation of a new enterprise resource planning (ERP) system and higher outside legal fees and employee incentive compensation costs. The higher legal costs were primarily associated with environmental regulatory costs and corporate activities including our planned acquisition of the noncontrolling interest in CFL and capacity expansion projects atin Donaldsonville, Louisiana and Port Neal, Iowa.RestructuringIowa that did not qualify for capitalization increased by $19.9 million between the years.Integration Costs No restructuringmanufacturing business to Mosaic pursuant to the terms of the definitive transaction agreement executed in October 2013, among the Company, CF Industries and integration costs were incurredMosaic for approximately $1.4 billion in 2012 compared to $4.4 million in 2011, as integration activities associated with the acquisition of Terra were completed in 2011.Other Operating—Net Other operating—net was $49.1 million in 2012 compared to $20.9 million in 2011. The expense recorded in 2012 consisted primarily of $21.9 million of costs associated with engineering studies for capacity expansion projects at various nitrogen complexes, $13.3 million of environmentalcash. In 2014, we recognized pre-tax and other costs associated with our closed facilities and $5.5 million of losses on the disposal of fixed assets. The expense recorded in 2011 included a $34.8 million impairment charge related to our Woodward, Oklahoma methanol plant, $8.1 million of costs associated with our closed facilities and losses of $7.2 million on the disposal of fixed assets, partially offset by a $32.5 million gainafter-tax gains on the sale of four dry product warehousesthe phosphate business of $750.1 million and a $2.0$462.8 million, gain on the sale of a non-core transportation business.decreased $3.2 million to $47.0was $43.1 million in 20122014 as compared to $50.2$41.7 million in 20112013. The increase was due primarily to reduced sales and earnings at PLNL due to a planned turnaround, which was partially offset by improved sales and earnings for the ammonia storage joint venture.$131.0$177.3 million in 20122014 compared to $145.5$147.5 million in 2011.2013. The decrease$29.8 million increase in net interest expense was due primarily to the interest expense on the $1.5 billion of senior notes we issued during the first quarter of 2014 and the $1.5 billion of senior notes issued during the second quarter of 2013. This increase was partially offset by capitalized interest of $74.2 million in 2014 primarily related to our capacity expansion projects compared to $26.7 million in 2013.decrease$1.9 million expense in amortized loan fees, including2014 compared to expense of $54.5 million in 2013. As discussed under Items Affecting Comparability of Results—NOL Settlement, in 2013, a $4.7charge of $55.2 million decrease in accelerated loan fee amortization. In 2012,was recognized for the 73.1% portion of the NOLs we terminated the 2010 Credit Agreement and recognized $15.2 million accelerated amortization of deferred loan fees. In 2011, we repaid the remaining balance ofhad accumulated prior to our senior secured term loan and recognized $19.9 million accelerated amortization of debt issuance costs.20122014 was $964.2$773.0 million on pre-tax income of $2.8$2.19 billion, or an effective tax rate of 34.1%35.3%, compared to an income tax provision of $926.5$686.5 million on a pre-tax income of $2.6$2.21 billion, andor an effective tax rate of 35.0%31.1% in 2011.2013. The declineprimary increase in the effective tax rate in 2014 was driven primarilydue to the fact that we recognized a tax benefit in 2013 for the impact of our closing agreement with the IRS (2.2%), enabling us to utilize a portion of our pre-IPO NOLs. The 2014 effective tax rate is also impacted by lower U.S. taxes on foreign earnings as well as lower state taxesreduced tax benefits from depletion (1.1%) related to our disposed phosphate business. The income tax provision in 2012 than in2014 includes $287.3 million of income tax expense relating to the prior year. phosphate business sale, which increased the effective tax rate by 1.5%.includereflect a tax provision on the earnings attributable to the noncontrolling interestsinterest in TNCLP (a partnership), which doesis not record ana taxable entity. For additional information on income tax provision. On August 2, 2012 we entered into a definitive agreement with Glencore International plc ("Glencore") to acquire the interest in CFL currently owned by Viterra. As a result, CFL recorded an income taxCF INDUSTRIES HOLDINGS, INC.provision in 2012. In 2011, CFL did not record an income tax provision. Seetaxes, see Note 1110—Income Taxes to our consolidated financial statements for additional information on income taxes.GrowHowCF Fertilisers UK and Keytrade. The $16.2$12.9 million increase in 20122014 compared to 20112013 was due primarily to higher netincreased earnings from CF Fertilisers UK reflecting lower natural gas costs in the United Kingdom and improved trading performance at GrowHow due to improved operating results, declines in UK corporate tax rates and an $11.1 million insurance settlement related to a fire that occurred in 2011.the Noncontrolling Interestthe noncontrolling interest include the interest of the 34% holder of CFL's common and preferred shares and thedecreased $21.7 million in 2014 compared to 2013 due primarily to lower net earnings attributable to the 24.7% interest of the publicly heldpublicly-held common units of TNCLP. The $147.1 million decrease was mainly due to the impact of the CFL selling price modification that was made in 2012. During each quarter of 2012 and 2011, the TNCLP minimum quarterly distribution was exceeded, which entitled us to receive increased distributions on our general partner interests as provided for in the TNCLP Agreement of Limited Partnership. For additional information, see Note 4 to our consolidated financial statements.$28.59$5.42 in 20122014 from $21.98$4.95 in 20112013 due primarily to an increase in net earnings attributable to common stockholdersthe gain on the phosphate business sale and a decrease in the weighted averagelower weighted-average number of shares outstanding due to the impact of our share repurchase program under which weprograms. We repurchased 6.538.4 million shares of our common stock in 2011 and2014 for $1.92 billion, or an additional 3.1 millionaverage cost of $50 per share. The total shares in 2012.Year Endedrepurchased during 2014 represent 14% of the shares outstanding as of December 31, 2011 Compared to Year Ended December 31, 2010Consolidated Operating Results Our total gross margin increased $1.7 billion, or 146%, to $2.9 billion for the year ended December 31, 2011 from $1.2 billion in 2010 due to increases in both the nitrogen and phosphate segments. In the nitrogen segment, the gross margin increased by $1.6 billion to $2.6 billion for 2011 compared to $1.0 billion in 2010 due primarily to higher average selling prices, the acquisition of Terra, the results of which were included for four quarters in 2011 and three quarters in 2010, and lower realized natural gas costs. These results were partially offset by unrealized mark-to-market losses on natural gas derivatives in 2011 compared to unrealized gains in 2010. In the phosphate segment, gross margin increased by $179.6 million to $332.4 million for 2011 compared to $152.8 million for 2010, due primarily to higher average phosphate fertilizer selling prices, partially offset by higher raw material costs, namely sulfur and ammonia. The net earnings attributable to common stockholders of $1.5 billion for 2011 included a $77.3 million pre-tax unrealized net mark-to-market loss ($48.0 million after tax) on natural gas derivatives, a $34.8 million pre-tax ($21.6 million after tax) non-cash impairment charge related to our Woodward, Oklahoma methanol plant, a $32.5 million ($20.0 million after tax) gain on the sale of four dry product warehouses, $19.9 million ($12.3 million after tax) of accelerated amortization of debt issuance costs recognized upon repayment of the remaining balance of the senior secured term loan in the first quarter of 2011, $4.4 million ($2.7 million after tax) of restructuring and integration costsacquisition of Terraremaining 50% equity interest in CF Fertilisers UK not previously owned by us. CF Fertilisers UK is now wholly owned by us and a $2.0 million ($1.3 million after tax) gain on the sale of a non-core transportation business. The 2010 net earnings attributable to common stockholders of $349.2 millionits results are included $219.8 million ($136.1 million after tax) of net interest expense including $85.9 million ($53.1 million after tax) of accelerated amortization of debt issuance costs and original issue discount recognized upon repaymentin our results as of the senior secured bridge loan and partial repaymentdate of the senior secured term loan, $150.4 million ($148.8 million after tax) of business combination related expenses and Peru project development costs, a $28.3 million ($17.5 million after tax) gain on the sale of 5.0 million shares of Terra common stock, $21.6 million ($13.4 million after tax) of restructuring and integration costs associated with the acquisition of Terra, a $19.4 million ($12.0 million after tax) non-cash charge in cost of sales recognized upon the sale of Terra's product inventory due to revaluing it to fair value under purchase accounting, a loss of $17.0 million ($10.5 million after tax) on the early retirement of Terra's 2019 Notes, and a $9.6 million pre-tax unrealized net mark-to-market gain ($5.9 million after tax) on natural gas derivatives.Net Sales Our net sales increased 54% to $6.1 billion in the year ended December 31, 2011 from $4.0 billion in 2010. This $2.1 billion increase was due to higher nitrogen and phosphate fertilizer average selling prices and sales volumes, including the impact of the Terra acquisition. Average nitrogen and phosphate fertilizer selling prices increased by 38% and 36%, respectively. Average selling prices increased due primarily to higher demand for fertilizer for the following reasons: higher planted acres in the spring season due to strong demand for corn and other grains which supported favorable farm economics; global fertilizer supply constraints resulting from both export restrictions and production curtailments at certain foreign fertilizer producers; and expected high planted acres and fertilizer usage in the 2012 growing season. Total sales volume increased 1.6 million tons, or 12%, in 2011 to 14.9 million tons as compared to 13.3 million tons in 2010, as higher UAN and AN sales volumes due to the impact of the Terra acquisition and phosphate fertilizer sales volumes were partially offset by lower ammonia sales volume.Cost of Sales Average cost of sales in our nitrogen segment of $188 per ton in 2011 approximated 2010 as lower realized natural gas costs in 2011 were offset by unrealized mark-to-market losses on natural gas derivatives. Phosphate segment cost of sales averaged $392 per ton in 2011 compared to $335 per ton in the prior year, an increase of 17%, due primarily to higher sulfur and ammonia costs.Selling, General and Administrative Expenses Selling, general and administrative expenses increased $23.9 million to $130.0 million in 2011 from $106.1 million in 2010 due primarily to higher professional service fees, costs associated with the design and implementation of a new ERP system and higher performance-based incentive compensation.Restructuring and Integration Costs Restructuring and integration costs decreased $17.2 million to $4.4 million in 2011 from $21.6 million in 2010, as integration activities associated with the acquisition of Terra declined substantially and were completed in 2011.CF INDUSTRIES HOLDINGS, INC.Other Operating—Net Other operating—net decreased $145.8 million to $20.9 million in 2011 compared to $166.7 million in 2010. The $20.9 million of expense recorded in 2011 consists primarily of the following items: a $34.8 million impairment charge related to our Woodward, Oklahoma methanol plant, a $32.5 million gain that was recognized on the sale of four dry-product warehouses, $8.1 million of costs associated with our closed facilities, losses of $7.2 million on the disposal of fixed assets and a $2.0 million gain on the sale of a non-core transportation business. The Woodward, Oklahoma methanol plant was part of a nitrogen complex that was acquired with the Terra acquisition. The Woodward complex could produce both nitrogen based fertilizers and methanol. Based on a strategic review that was completed in the third quarter of 2011, the Woodward complex will focus on fertilizer production. As a result, management approved the permanent shutdown, removed the methanol plant, and recognized the impairment charge. The expense in 2010 is primarily business combination costs associated with our acquisition of Terra, including a $123.0 million termination fee paid to Yara International ASA in the first quarter of 2010, and project development costs.Equity in Earnings of Operating Affiliates Equity in earnings of operating affiliates in 2011 and 2010 consists of our 50% share of the operating results of PLNL and our 50% interest in an ammonia storage joint venture located in Houston, Texas. The $39.6 million increase in 2011 compared to 2010 is due to improved PLNL operating results due primarily to higher ammonia prices caused by a strong international market.Interest—Net Net interest expense was $145.5 million in 2011 compared to $219.8 million in 2010. The financing costs of the Terra acquisition, including the accelerated amortization of debt fees, impacted both 2010 and 2011. In the second quarter of 2010, we financed the Terra acquisition with a senior secured bridge loan, a senior secured term loan and senior notes. The senior secured bridge loan and a portion of the senior secured term loan were repaid over the last three quarters of 2010 and accelerated loan fee amortization of $85.9 was recognized in 2010. In the first quarter of 2011, the remaining balance of the senior secured term loan was repaid in full and accelerated amortization of debt issuance costs of $19.9 million was recognized.Loss on Extinguishment of Debt Loss on extinguishment of debt in 2010 consisted of the $17.0 million loss on the early retirement of Terra's 2019 Notes. This amount represents the difference between the amount paid to settle the debt of $744.5 million and the fair value of the notes on April 5, 2010 of $727.5 million as the notes were recognized at fair value under purchase accounting.Other Non-Operating—Net Other non-operating—net was $0.6 million in 2011 compared to $28.8 million in 2010. The income in 2010 includes a $28.3 million gain on the sale of 5.0 million shares of Terra's common stock.Income Taxes Our income tax provision for the year ended December 31, 2011 was $926.5 million compared to $273.7 million for 2010. The effective tax rate for 2011 based on the reported tax provision ofCF INDUSTRIES HOLDINGS, INC.$926.5 million and reported pre-tax income of $2.6 billion was 35.0%. This compares to 39.8% in the prior year. The decrease in the effective tax rate resulted primarily from a decrease in non-deductible costs associated with our acquisition of Terra and Peru project development activities, partially offset by higher U.S. taxes related to foreign operations. The effective tax rate does not include tax provisions on the earnings attributable to the noncontrolling interests in TNCLP and CFL, which recorded no income tax provisions. See Note 118—Equity Method Investments to our consolidated financial statements included in Item 8 of this report for additional information on income taxes.Equityinformation. CF Fertilisers UK has nitrogen manufacturing complexes located in EarningsInce, United Kingdom, and Billingham, United Kingdom. The Ince complex produces AN, ammonia and NPKs while the Billingham complex produces AN and ammonia. In the third quarter of Non-Operating Affiliates—Net2015, we changed our reportable segment structure to separate AN from our Other segment as our AN products increased in significance as a result of Taxes Equity in earnings of non-operating affiliates—net of taxes for 2011 and 2010 consiststhe CF Fertilisers UK acquisition. Our new reportable segment structure reflects how our CODM assesses the performance of our sharereportable segments and makes decisions about resource allocation. Our reportable segments now consist of ammonia, granular urea, UAN, AN, other, and phosphate. These segments are differentiated by products. Historical financial results have been restated to reflect the new reportable segment structure on a comparable basis.operating results of unconsolidated joint venture interests in GrowHow and Keytrade. The $15.2 million increase in 2011 compared to 2010 was due primarily to higher GrowHow earnings resulting from a strong U.K. nitrogen fertilizer market.Net Earnings Attributable tophosphate business through March 17, 2014, plus the Noncontrolling Interest Amounts reported as net earnings attributable to the noncontrolling interests include the interestcontinuing sales of the 34% holder of CFL's common and preferred shares and the net earnings attributable to the 24.7% interest of the publicly held common units of TNCLP. During all four quarters of 2011 and the last three quarters of 2010, the TNCLP minimum quarterly distribution was exceeded, which entitled us to receive increased distributions on our general partner interests as provided forphosphate inventory in the TNCLP Agreement of Limited Partnership. For additional information, see Note 4 to our consolidated financial statements.Diluted Net Earnings Per Share Attributable to Common Stockholders Diluted net earnings per share attributable to common stockholders increased to $21.98 per share in 2011 from $5.34 per share in 2010 due primarily to the increase in net earnings attributable to common stockholders, partially offset by an increasedistribution network after March 17, 2014. The remaining phosphate inventory was sold in the diluted weighted average shares outstanding. In April 2010, we issued 9.5 million sharessecond quarter of our common stock in connection with the Terra acquisition and 12.9 million shares in the subsequent public offering. During the last half of 2011, we repurchased 6.5 million shares.Operating Results by Business Segment Our business is organized and managed internally based on two segments, the nitrogen segment and2014; therefore, the phosphate segment whichdoes not have operating results subsequent to that quarter. However, the segment will continue to be included until the reporting of comparable period phosphate results ceases. We use gross margin to evaluate segment performance and allocate resources. Total other operating costs and expenses (consisting of selling, general and administrative expenses and other operatingdifferentiated primarilycentrally managed and are not included in the measurement of segment profitability reviewed by their products, the markets they serve and the regulatory environments in which they operate.management.Nitrogen Segmentdata for our nitrogen segment: Ammonia Phosphate Consolidated (in million, except percentages) Year ended December 31, 2015 Net sales $ 1,523.1 $ 788.0 $ 1,479.7 $ 294.0 $ 223.5 $ — $ 4,308.3 Cost of sales 883.7 469.5 954.5 290.8 162.7 — 2,761.2 Gross margin $ 639.4 $ 318.5 $ 525.2 $ 3.2 $ 60.8 $ — $ 1,547.1 Gross margin percentage 42.0 % 40.4 % 35.5 % 1.1 % 27.2 % — % 35.9 % Year ended December 31, 2014 Net sales $ 1,576.3 $ 914.5 $ 1,669.8 $ 242.7 $ 171.5 $ 168.4 $ 4,743.2 Cost of sales 983.2 516.6 997.4 189.1 120.1 158.3 2,964.7 Gross margin $ 593.1 $ 397.9 $ 672.4 $ 53.6 $ 51.4 $ 10.1 $ 1,778.5 Gross margin percentage 37.6 % 43.5 % 40.3 % 22.1 % 30.0 % 6.0 % 37.5 % Year ended December 31, 2013 Net sales $ 1,437.9 $ 924.6 $ 1,935.1 $ 215.1 $ 165.1 $ 796.9 $ 5,474.7 Cost of sales 656.5 410.1 895.6 155.9 114.4 722.0 2,954.5 Gross margin $ 781.4 $ 514.5 $ 1,039.5 $ 59.2 $ 50.7 $ 74.9 $ 2,520.2 Gross margin percentage 54.3 % 55.6 % 53.7 % 27.5 % 30.7 % 9.4 % 46.0 % Year Ended December 31 2012 2011 2010 2012 v. 2011 2011 v. 2010 (in millions, except as noted) $ 5,096.6 $ 5,012.1 $ 3,187.5 $ 84.5 2 % $ 1,824.6 57 % 2,183.0 2,448.9 2,160.8 (265.9 ) (11 )% 288.1 13 % $ 2,913.6 $ 2,563.2 $ 1,026.7 $ 350.4 14 % $ 1,536.5 150 %
57.2
%
51.1
%
32.2
%
12,969
13,002
11,461
(33
)
(0
)%
1,541
13
% 2,786 2,668 2,809 118 4 % (141 ) (5 )% 2,593 2,600 2,602 (7 ) (0 )% (2 ) (0 )% 6,131 6,241 4,843 (110 ) (2 )% 1,398 29 % 839 953 788 (114 ) (12 )% 165 21 % 620 540 419 80 15 % 121 29 % $ 602 $ 586 $ 402 $ 16 3 % $ 184 46 % 441 411 299 30 7 % 112 37 % 308 319 205 (11 ) (3 )% 114 56 % 266 260 209 6 2 % 51 24 % $ 3.39 $ 4.28 $ 4.47 $ (0.89 ) (21 )% $ (0.19 ) (4 )% $ 2.75 $ 3.99 $ 4.37 $ (1.24 ) (31 )% $ (0.38 ) (9 )% $ 334.6 $ 316.3 $ 229.2 $ 18.3 6 % $ 87.1 38 % $ 431.3 $ 177.0 $ 204.9 $ 254.3 144 % $ (27.9 ) (14 )% 7,067 7,244 6,110 (177 ) (2 )% 1,134 19 % 2,560 2,588 2,488 (28 ) (1 )% 100 4 % 6,027 6,349 4,626 (322 ) (5 )% 1,723 37 % 839 952 796 (113 ) (12 )% 156 20 % The cost of ammonia that is upgraded into other products is transferred at cost into the upgraded product results. (1)During 2012, the CFL selling prices to Viterra were modified to cost plus an agreed-upon margin from market-based pricing in the prior years. This impacts the comparability of certain amounts between 2012 and the previous years. To provide comparable information for 2012 and 2011, the table presented below under the heading "Impact of CFL Selling Price Modifications" presents these line items adjusted as if the CFL selling price modifications had been in effect beginning on January 1, 2011.(2)Includes the cost of natural gas purchases and realized gains and losses on natural gas derivatives.(3)Gross ammonia production, including amounts subsequently upgraded on-site into granular urea, UAN or AN.Management Discussionnoncontrolling interests in CFL and Analysis, during 2012,CFL became a wholly-owned subsidiary of CF Industries. As a result, the CFLconsolidated financial results for 2015 and 2014 included twelve months of market-based selling prices, to Viterra were modified towhile 2013 included four months of selling prices based on production cost plus an agreed-upon margin fromand eight months of market-based pricing inselling prices. These changes affect the prior years. This change had noyear-over-year comparability of net sales, gross margin, operating earnings, earnings before income taxes and net earnings attributable to noncontrolling interest, but do not impact onthe comparability of our net earnings attributable to common stockholders sinceor net sales and net earnings attributable to the noncontrolling interest were each modified bycash flows for the same amount. However, this change impacts the comparability of certain amounts between 2012 and 2011. period. is presentedadjusts the results for 2013 to provide comparable information between 2012 and 2011 by presentingmarket-based selling prices for the 2011 informationfull year to be on a comparable basis comparable with the 2012 data with respect to CFL selling prices.2015 and 2014. Year Ended December 31 2012 2011 2012 v. 2011 Year Ended December 31, (in millions, except as noted) 2015 2014 2013 2015 v. 2014 2014 v. 2013 (in millions, except percentages) Ammonia Segment $ 5,096.6 $ 5,012.1 $ 84.5 2 % $ 1,523.1 $ 1,576.3 $ 1,437.9 $ (53.2 ) (3 )% $ 138.4 10 % — (142.6 ) 142.6 — — 44.8 — (44.8 ) $ 5,096.6 $ 4,869.5 $ 227.1 5 % $ 1,523.1 $ 1,576.3 $ 1,482.7 $ (53.2 ) (3 )% $ 93.6 6 % $ 2,913.6 $ 2,563.2 $ 350.4 14 % $ 639.4 $ 593.1 $ 781.4 $ 46.3 8 % $ (188.3 ) (24 )% — (142.6 ) 142.6 — — 44.8 — (44.8 ) $ 2,913.6 $ 2,420.6 $ 493.0 20 % $ 639.4 $ 593.1 $ 826.2 $ 46.3 8 % $ (233.1 ) (28 )% 57.2 % 51.1 % 42.0 % 37.6 % 54.3 % — (1.4 ) — — 1.4 As adjusted 42.0 % 37.6 % 55.7 % Average selling price per product ton As reported $ 509 $ 531 $ 592 $ (22 ) (4 )% $ (61 ) (10 )% Impact of selling price adjustment — — 19 — (19 ) 57.2 % 49.7 % $ 509 $ 531 $ 611 $ (22 ) (4 )% $ (80 ) (13 )% Granular Urea Segment Net sales $ 602 $ 586 $ 16 3 % $ 788.0 $ 914.5 $ 924.6 $ (126.5 ) (14 )% $ (10.1 ) (1 )% — (28 ) 28 — — 26.3 — (26.3 ) $ 602 $ 558 $ 44 8 % $ 788.0 $ 914.5 $ 950.9 $ (126.5 ) (14 )% $ (36.4 ) (4 )% Gross margin $ 441 $ 411 $ 30 7 % $ 318.5 $ 397.9 $ 514.5 $ (79.4 ) (20 )% $ (116.6 ) (23 )% — (26 ) 26 — — 26.3 — (26.3 ) $ 441 $ 385 $ 56 15 % $ 318.5 $ 397.9 $ 540.8 $ (79.4 ) (20 )% $ (142.9 ) (26 )% Gross margin percentage As reported 40.4 % 43.5 % 55.6 % Impact of selling price adjustment — — 1.3 As adjusted 40.4 % 43.5 % 56.9 % Average selling price per product ton As reported $ 320 $ 372 $ 369 $ (52 ) (14 )% $ 3 1 % Impact of selling price adjustment — — 10 — (10 ) As adjusted $ 320 $ 372 $ 379 $ (52 ) (14 )% $ (7 ) (2 )% Twelve months ended December 31, 2015 2014 2013 2015 v. 2014 2014 v. 2013 (in millions, except as noted) Net sales $ 1,523.1 $ 1,576.3 $ 1,437.9 $ (53.2 ) (3 )% $ 138.4 10 % Cost of sales 883.7 983.2 656.5 (99.5 ) (10 )% 326.7 50 % Gross margin $ 639.4 $ 593.1 $ 781.4 $ 46.3 8 % $ (188.3 ) (24 )% 42.0 % 37.6 % 54.3 % 4.4 % (16.7 )% Sales volume by product tons (000s) 2,995 2,969 2,427 26 1 % 542 22 % 2,456 2,434 1,990 22 1 % 444 22 % Average selling price per product ton $ 509 $ 531 $ 592 $ (22 ) (4 )% $ (61 ) (10 )% $ 620 $ 648 $ 723 $ (28 ) (4 )% $ (75 ) (10 )% Gross margin per product ton $ 213 $ 200 $ 322 $ 13 7 % $ (122 ) (38 )% $ 260 $ 244 $ 393 $ 16 7 % $ (149 ) (38 )% Depreciation and amortization $ 95.4 $ 69.0 $ 58.2 $ 26.4 38 % $ 10.8 19 % Includes the impact of tons purchased from PLNL at market-based prices and sold to Mosaic, which began in the first quarter of 2014. Ammonia represents 82% nitrogen content. Nutrient tons represent the tons of nitrogen within the product tons. 20122015 Compared to Year Ended December 31, 20112014NetTotal net sales in the nitrogenammonia segment increased $84.5decreased by $53.2 million, or 2%3%, to $5.1$1.52 billion in 20122015 from $5.0$1.58 billion in 20112014 due primarily to a 2% increase4% decrease in average selling prices. The 2012 nitrogen segmentprices partially offset by a 1% increase in sales volume. These results include the impact of the CF Fertilisers UK acquisition completed on July 31, 2015 which increased net sales were impacted by $38.4 million, or 2%. The remaining decrease in our ammonia net sales of $91.6 million, or 6%, was due to lower average CFL selling prices asand lower sales volume compared to 20112014. The decrease in average ammonia selling prices from prior year levels is due primarily to weaker nitrogen fertilizer market conditions compared to the prior year as a weak fall application season combined with higher producer inventory levels and slowing demand from phosphate fertilizer producers weighed on prices at the end of 2015. At the end of 2014, the pricing environment was stronger due to a tighter supply after the strong North American 2014 spring season and a higher level of global production outages in 2014. Sales volumes are lower in 2015 due to the CFL selling price modification described earlier. On anweak fall application season in North America as adjusted basis, net salesa result of poor weather conditions in the nitrogen segment increased 5%. Average nitrogen fertilizer selling prices increasedMidwest. The fall application season started late and then ended early in November due to $393snow in the Midwest.2012 from $385our ammonia segment averaged $296 per ton in 2011 with increases in ammonia and urea. Higher ammonia and urea2015, an 11% decrease over the average selling prices resulted from tight industry-wide supply conditions due to increased U.S. demandCF INDUSTRIES HOLDINGS, INC.caused by the higher level of planted acres in 2012 and expected in 2013, and lower downstream inventories. Sales volume in 2012 approximated the level in 2011 as higher sales of ammonia and other nitrogen products were offset by lower sales volumes of UAN and ammonium nitrate. A favorable application environment for ammonia during 2012 supported the higher sales volume for this product. The lower sales volumes of UAN and ammonia nitrate were due to scheduled plant turnaround and maintenance activities during 2012 that resulted in lower production of these products. Lower UAN sales volume was also due to a shift in product mix favoring higher margin nitrogen products during the year. Cost of Sales. Total cost of sales in the nitrogen segment averaged approximately $168$331 per ton in 2012 compared to $188 per ton in 2011.2014. The 11% decrease was due primarily to lower realized natural gas costs and $66.5 million induring 2015 partly offset by increased unrealized net mark-to-market gainslosses on natural gas derivatives in 20122015 compared to net losses of $77.3 million in 2011. The average cost of natural gas declined by 21% from $4.28 per MMBtu in 2011 to $3.39 per MMBtu in 2012.2014.20112014 Compared to Year Ended December 31, 20102013NitrogenNet sales in the ammonia segment net sales increased $1.8 billion,by $138.4 million, or 57%10%, to $5.0$1.58 billion in 2011 compared to $3.22014 from $1.44 billion in 20102013 due primarily to higher average nitrogen fertilizer selling prices and UAN and ANa 22% increase in sales volume, partially offset by lowera 10% decrease in average selling prices. The comparability of the ammonia segment net sales volume. Average nitrogen fertilizerwas impacted by the CFL selling price modifications in 2013. On an as adjusted basis, net sales in the ammonia segment increased by $93.6 million, or 6%, and average selling prices decreased 13%. The increased volume is due to $385 per tona combination of attractive pricing compared to other forms of nitrogen, favorable weather conditions that resulted in 2011 from $278 per ton in 2010, with increases across all products. Strong demand for thean extended spring application season, dueand effective utilization of our terminal and logistics system to an increaseresupply in planted acres, depleted supplies available at both the producer and customer level dueadvance of periods of high demand. In addition, sales to strong demand, globalMosaic under our contract to supply constraints and expectations that 2012 planted acres will remain at historically high levels resultedammonia higher average selling prices. Nitrogen fertilizer sales volume in 2011 increased 1.5 million tonsprices from 2010 due primarily to higher UAN and AN sales volumes, partially offset by lower ammonia sales volume. UAN sales volume increased significantly during 2011 compared to 2010 due primarily to the acquisition of Terra and the increased supply available from the Woodward, Oklahoma UAN plant expansion. The increased UAN production capacity allowed us to meet increased demand for UAN resulting from favorable spring application conditions and customers replenishing depleted downstream inventories after the strong spring application season. The increase in AN sales in 2011 from the prior year is due to the inclusion of a full year of AN sales in 2011 as the production capacity for this product was obtained in the Terra acquisition. The 2011 decrease in ammonia sales2013 levels is due primarily to the additionalNorth American inventory levels that were higher entering 2014 as a result of the shortened 2013 fall ammonia requiredapplication season caused by cold weather conditions. This was partially offset by a stronger pricing environment at the end of 2014 due to supporttighter supply after the strong 2014 spring season and a high level of global production from the UAN plant expansion at Woodward.Total costCost of sales in the nitrogenour ammonia segment averaged approximately $188$331 per ton in 2011 compared to $1892014, a 23% increase over the $270 per ton in 2010. Lower realized2013 due primarily to higher natural gas costs in 2011 were offset by unrealizedand higher other production cost. Total gas costs for 2014 increased 16%, plus the impact of mark-to-market losses on natural gas derivatives. We recognized a $77.3derivatives increased ammonia segment gas costs by $42.9 million unrealized net mark-to-market loss in 2011 compared to a $9.6 million unrealized net mark-to-market gain in 2010.2013.Phosphate The phosphateresults, as shown inproduces granular urea, which contains 46% nitrogen. Produced from ammonia and carbon dioxide, it has the highest nitrogen content of any of our solid nitrogen fertilizers. Granular urea is produced at our Courtright, Ontario; Donaldsonville, Louisiana; and Medicine Hat, Alberta nitrogen complexes.include resultspresents summary operating data for our DAP and MAP phosphate products.granular urea segment: Twelve months ended December 31, 2015 2014 2013 2015 v. 2014 2014 v. 2013 (in millions, except as noted) Net sales $ 788.0 $ 914.5 $ 924.6 $ (126.5 ) (14 )% $ (10.1 ) (1 )% Cost of sales 469.5 516.6 410.1 (47.1 ) (9 )% 106.5 26 % Gross margin $ 318.5 $ 397.9 $ 514.5 $ (79.4 ) (20 )% $ (116.6 ) (23 )% Gross margin percentage 40.4 % 43.5 % 55.6 % (3.1 )% (12.1 )% Sales volume by product tons (000s) 2,460 2,459 2,506 1 — % (47 ) (2 )% 1,132 1,131 1,153 1 — % (22 ) (2 )% Average selling price per product ton $ 320 $ 372 $ 369 $ (52 ) (14 )% $ 3 1 % $ 696 $ 809 $ 802 $ (113 ) (14 )% $ 7 1 % Gross margin per product ton $ 129 $ 162 $ 205 $ (33 ) (20 )% $ (43 ) (21 )% $ 281 $ 352 $ 446 $ (71 ) (20 )% $ (94 ) (21 )% Depreciation and amortization $ 50.5 $ 37.5 $ 37.4 $ 13.0 35 % $ 0.1 — % Granular urea represents 46% nitrogen content. Nutrient tons represent the tons of nitrogen within the product tons. Year Ended December 31 2012 2011 2010 2012 v. 2011 2011 v. 2010 (in millions, except as noted) $ 1,007.4 $ 1,085.8 $ 777.5 $ (78.4 ) (7 )% $ 308.3 40 % 807.7 753.4 624.7 54.3 7 % 128.7 21 % $ 199.7 $ 332.4 $ 152.8 $ (132.7 ) (40 )% $ 179.6 118 %
19.8
%
30.6
%
19.7
%
2,035
1,922
1,867
113
6
%
55
3
% 1,611 1,468 1,412 143 10 % 56 4 % 424 454 455 (30 ) (7 )% (1 ) (0 )% 1,254 1,197 1,259 57 5 % (62 ) (5 )% 781 725 608 56 8 % 117 19 % $ 493 $ 565 $ 413 $ (72 ) (13 )% $ 152 37 % 502 565 426 (63 ) (11 )% 139 33 %
$
43.5
$
50.7
$
48.6
$
(7.2
)
(14
)%
$
2.1
4
% $ 64.4 $ 52.0 $ 52.6 $ 12.4 24 % $ (0.6 ) (1 )% 3,483 3,504 3,343 (21 ) (1 )% 161 5 % 2,530 2,633 2,419 (103 ) (4 )% 214 9 % 975 1,005 906 (30 ) (3 )% 99 11 % 1,952 1,997 1,799 (45 ) (2 )% 198 11 % (1)P2O5 is the basic measure of the nutrient content in phosphate fertilizer products.20122015 Compared to Year Ended December 31, 20112014PhosphateNet sales in the granular urea segment net sales decreased $78.4by $126.5 million, or approximately 7%14%, to $1.0 billion in 2012for 2015 compared to $1.1 billion2014 due primarily to a 14% decrease in 2011 due to lower average selling prices, partially offset by higher sales volume.prices. Average selling prices for 2012 decreased by 12%to $320 per ton in 2015 compared to $372 per ton in 2014 primarily due to the excess global supply availability weighing on global nitrogen fertilizer selling prices. Granular urea exports from China were at a record high in 2015 and Russian exports have increased significantly while global capacity additions in 2015 further contributed to the excess global supply. Our sales volume was flat compared to the prior year reflecting loweras we offset weaker domestic demand with sales out of our new urea production at our Donaldsonville, Louisiana complex that came on line in November of 2015.India and additional production capacity, notably from Saudi Arabia. Our total sales volume of phosphate fertilizer of 2.0 million tonsthe $210 per ton in 20122014. The decrease was 6% higher than in 2011 due primarily to higher export sales volume. Costlower realized natural gas costs partly offset by the impact of Sales. Average phosphate segment cost of sales of $397 per tonincreased unrealized net mark-to-market losses on natural gas derivatives in 2012 was comparable2015 compared to the $392 per ton in the prior year.2014.20112014 Compared to Year Ended December 31, 20102013PhosphateNet sales in the granular urea segment decreased by $10.1 million, or 1%, for 2014 compared to 2013 due primarily to a 2% decrease in sales volume, partially offset by a 1% increase in average selling prices. The comparability of the granular urea segment net sales was impacted by the CFL selling price modifications in 2013. On an as adjusted basis, net sales decreased by $36.4 million, or 4%, and average selling prices decreased 2%. Volumes were lower mainly due to our decision to reduce export volume as compared to 2013 due to anticipated robust domestic demand. The poor fall 2014 ammonia season combined with a tight ammonia supply contributed to increased $308.3demand at the end of 2014 and expectations for a strong 2015 spring season.$1.1 billion2013.2011Courtright, Ontario; Donaldsonville, Louisiana; Port Neal, Iowa; Verdigris, Oklahoma; Woodward, Oklahoma; and Yazoo City, Mississippi. Twelve months ended December 31, 2015 2014 2013 2015 v. 2014 2014 v. 2013 (in millions, except as noted) Net sales $ 1,479.7 $ 1,669.8 $ 1,935.1 $ (190.1 ) (11 )% $ (265.3 ) (14 )% Cost of sales 954.5 997.4 895.6 (42.9 ) (4 )% 101.8 11 % Gross margin $ 525.2 $ 672.4 $ 1,039.5 $ (147.2 ) (22 )% $ (367.1 ) (35 )% Gross margin percentage 35.5 % 40.3 % 53.7 % (4.8 )% (13.4 )% Sales volume by product tons (000s) 5,865 6,092 6,383 (227 ) (4 )% (291 ) (5 )% 1,854 1,925 2,015 (71 ) (4 )% (90 ) (4 )% Average selling price per product ton $ 252 $ 274 $ 303 $ (22 ) (8 )% $ (29 ) (10 )% $ 798 $ 867 $ 960 $ (69 ) (8 )% $ (93 ) (10 )% Gross margin per product ton $ 90 $ 110 $ 163 $ (20 ) (18 )% $ (53 ) (33 )% $ 283 $ 349 $ 516 $ (66 ) (19 )% $ (167 ) (32 )% Depreciation and amortization $ 191.6 $ 179.3 $ 172.6 $ 12.3 7 % $ 6.7 4 % UAN represents between 28% and 32% of nitrogen content, depending on the concentration specified by the customer. Nutrient tons represent the tons of nitrogen within the product tons. $777.5the average of $164 per ton in 2014. The decrease was due primarily to lower realized natural gas costs partly offset by the impact of higher unrealized net mark-to-market losses on natural gas derivatives in 2015 compared to 2014. Twelve months ended December 31, 2015 2014 2013 2015 v. 2014 2014 v. 2013 (in millions, except as noted) Net sales $ 294.0 $ 242.7 $ 215.1 $ 51.3 21 % $ 27.6 13 % Cost of sales 290.8 189.1 155.9 101.7 54 % 33.2 21 % Gross margin $ 3.2 $ 53.6 $ 59.2 $ (50.4 ) (94 )% $ (5.6 ) (9 )% Gross margin percentage 1.1 % 22.1 % 27.5 % (21.0 )% (5.4 )% Sales volume by product tons (000s) 1,290 958 859 332 35 % 99 12 % 437 329 295 108 33 % 34 12 % Average selling price per product ton $ 228 $ 253 $ 250 $ (25 ) (10 )% $ 3 1 % $ 673 $ 738 $ 729 $ (65 ) (9 )% $ 9 1 % Gross margin per product ton $ 2 $ 56 $ 69 $ (54 ) (96 )% $ (13 ) (19 )% $ 7 $ 163 $ 201 $ (156 ) (96 )% $ (38 ) (19 )% Depreciation and amortization $ 65.6 $ 46.5 $ 41.0 $ 19.1 41 % $ 5.5 13 % Nutrient tons represent the tons of nitrogen within the product tons. 2010the second half of 2015. The remaining cost of sales per ton averaged $213 per ton, an 8% increase from the average of $197 per ton in 2014, due primarily to the impact of higher unrealized net mark-to-market losses on natural gas derivatives in 2015 compared to 2014. Twelve months ended December 31, 2015 2014 2013 2015 v. 2014 2014 v. 2013 (in millions, except as noted) Net sales $ 223.5 $ 171.5 $ 165.1 $ 52.0 30 % $ 6.4 4 % Cost of sales 162.7 120.1 114.4 42.6 35 % 5.7 5 % Gross margin $ 60.8 $ 51.4 $ 50.7 $ 9.4 18 % $ 0.7 1 % Gross margin percentage 27.2 % 30.0 % 30.7 % (2.8 )% (0.7 )% Sales volume by product tons (000s) 1,108 798 770 310 39 % 28 4 % 215 155 151 60 39 % 4 3 % Average selling price per product ton $ 202 $ 215 $ 214 $ (13 ) (6 )% $ 1 — % $ 1,040 $ 1,106 $ 1,093 $ (66 ) (6 )% $ 13 1 % Gross margin per product ton $ 55 $ 64 $ 66 $ (9 ) (14 )% $ (2 ) (3 )% $ 283 $ 332 $ 336 $ (49 ) (15 )% $ (4 ) (1 )% Depreciation and amortization $ 35.2 $ 20.4 $ 19.2 $ 14.8 73 % $ 1.2 6 % Nutrient tons represent the tons of nitrogen within the product tons. phosphate fertilizerselling prices, primarily urea liquor, due to overall weaker pricing conditions. This decrease was partially offset by an increase in our DEF average selling prices and sales volume. Average phosphate fertilizer selling prices for 2011 increased by 36%volume as the North American DEF market continued to grow in response to stricter diesel engine emission requirements.the prior year, resulting2014.supply constraints$165.1 million in the international market and strong domestic demand for theCF INDUSTRIES HOLDINGS, INC.spring application season. Our total2013 due to a 4% increase in sales volume, of phosphate fertilizerprimarily DEF. DEF sales increased 3%along with the growing North American DEF market in response to 1.9 million tonsstricter engine emission requirements.2011our Other segment averaged $151 in 2014, a 2% increase over the average of $148 per ton in 2013 due primarily to increased planted corn acres, favorable farm-level economics duringnatural gas costs.spring application seasonterms of the definitive transaction agreement executed in October 2013, among the Company, CF Industries and increased exportMosaic. The phosphate segment reflects the reported results of the phosphate business through March 17, 2014, plus the continuing sales of the phosphate inventory in the distribution network after March 17, 2014. The remaining phosphate inventory was sold in the second quarter of 2014; therefore, the phosphate segment does not have operating results subsequent to that quarter although the segment will continue to be included until the reporting of comparable period phosphate results ceases. Twelve months ended December 31, 2015 2014 2013 2015 v. 2014 2014 v. 2013 (in millions, except as noted) Net sales $ — $ 168.4 $ 796.9 $ (168.4 ) (100 )% $ (628.5 ) (79 )% Cost of sales — 158.3 722.0 (158.3 ) (100 )% (563.7 ) (78 )% Gross margin $ — $ 10.1 $ 74.9 $ (10.1 ) (100 )% $ (64.8 ) (87 )% Gross margin percentage — % 6.0 % 9.4 % (6.0 )% (3.4 )% — 487 1,857 (487 ) (100 )% (1,370 ) (74 )% Average selling price per product ton $ — $ 346 $ 429 $ (346 ) (100 )% $ (83 ) (19 )% Gross margin per product ton $ — $ 21 $ 40 $ (21 ) (100 )% $ (19 ) (48 )% $ — $ — $ 42.3 $ — N/M $ (42.3 ) (100 )% Represents DAP and MAP product sales. On March 17, 2014, we sold our phosphate mining and manufacturing business. The assets and liabilities sold were classified as held for sale as of December 31, 2013; therefore, no depreciation, depletion or amortization was recorded in 2014 for the related property, plant and equipment. fourth quarterphosphate segment decreased due to the sale of 2011the phosphate business in response to weakness in the domestic market.Phosphate segment costCost of sales averaged $392 per ton in 2011 compared to $335 per ton in the prior year. The 17% increase wasphosphate segment averaged $325 in 2014, a 16% decrease over the average of $389 per ton in 2013 due primarily to higherlower raw material costs for sulfur and ammonia.costs. Generally, our primary source of cash is cash from operations, which includes cash generated by customer advances. storage costs and seasonal factors inherent in the business.2012, we announced2015, the following significant events that have had or will have an impact on our cash and liquidity position.•In June 2012,completedacquired the remaining portion50% equity interest in CF Fertilisers UK not previously owned by us for total consideration of $570.4 million.$1.5new urea plant at the Donaldsonville, Louisiana complex came on line and is the first plant to be commissioned as part of our capacity expansion projects in North America. The UAN plant at Donaldsonville is expected to be commissioned in the first quarter of 2016. The remaining projects are expected to be on line in mid-2016.announced in August 2011;•In August 2012,authorized by our Board of Directors authorized an additional $3 billion share repurchase program;•Inin August 2012, we announced our agreement to acquire the 34% interest in CFL that is held by Viterra, Inc. for C$0.9 billion, subject to regulatory approval and certain closing conditions, and;•In November 2012, our Board of Directors authorized expenditures of $3.8 billion to construct new ammonia, urea and UAN plants at two of our existing manufacturing complexes, in Donaldsonville, Louisiana and Port Neal, Iowa.announcementsevents are provided below.$2.3 billion$286.0 million and $1.2$2.0 billion as of December 31, 2012,2015 and 2011,2014, respectively. Cash equivalents include highly liquid investments that are readily convertible to known amounts of cash with original maturities of three months or less. Under our short-term investment policy, we may invest our excess cash balances, either directly or through mutual funds, in several types of investment-grade securities, including notes and bonds issued by governmental entities or corporations, and money market funds.corporations. Securities issued by governmental agenciesentities include those issued directly by the U.S. and Canadian federal governments; those issued by state, local or other governmental entities; and those guaranteed by entities affiliated with governmental entities.2011,2012, our Board of Directors authorized a program to repurchase up to $1.5$3.0 billion of the common stock of CF Holdings common stock through December 31, 2013. During 2011, we repurchased 6.5 million shares2016 (the 2012 Program). The repurchases under the program for $1.0 billion, and2012 Program were completed in the second quarter of 2014. On August 6, 2014, our Board of Directors authorized a program to repurchase up to $1.0 billion of the common stock of CF Holdings through December 31, 2016 (the 2014 Program). As of December 31, 2015, there were approximately $100 million remaining repurchases under the 2014 Program. 2014 Program 2012 Program Shares Amounts Average Price Per Share Shares Amounts Average Price Per Share (in millions, except per share amounts) Shares repurchased in 2013 — $ — $ — 36.7 $ 1,449.3 $ 39 Shares repurchased in 2014: First quarter — $ — $ — 16.0 $ 793.9 $ 50 Second quarter — — — 15.4 756.8 49 Third quarter — — — — — — Fourth quarter 7.0 372.8 53 — — — Total shares repurchased in 2014 7.0 372.8 53 31.4 1,550.7 49 7.0 $ 372.8 $ 53 68.1 $ 3,000.0 $ 44 Shares repurchased in 2015: First quarter 4.1 $ 236.6 $ 58 Second quarter 4.5 268.1 60 Third quarter 0.3 22.5 63 Fourth quarter — — — Total shares repurchased in 2015 8.9 527.2 59 Shares repurchased as of December 31, 2015 15.9 $ 900.0 $ 57 repurchased 3.1retired 10.7 million shares of CF Holdingsour common stock for $500.0 million, thereby completing this program. In June 2012, all 9.6 million shares that had been repurchased under this program wereCF INDUSTRIES HOLDINGS, INC.retired.repurchased. In our consolidated balance sheet, the retirement of these shares eliminated the recorded treasury stock and reduced retained earnings and paid-in capitalpaid-in-capital by $1,125.9$535.0 million and $374.2$62.0 million, respectively, asrespectively.June 30, 2012. In the third quarter of 2012, our Board of Directors authorized a program to repurchase up to $3.0 billion of CF Holdings common stock through December 31, 2016. Repurchases under this program may be made from time to time inthat had been repurchased. In our consolidated balance sheet, the open market, in privately negotiated transactions, or otherwise. The manner, timing,retirement of these shares eliminated the recorded treasury stock and amountreduced retained earnings and paid-in-capital by $1.68 billion and $220.3 million, respectively.any repurchases will be determinedour common stock that had been repurchased. In our consolidated balance sheet, the retirement of these shares eliminated the recorded treasury stock and reduced retained earnings and paid-in-capital by our management based on evaluation$1.07 billion and $180.1 million, respectively.other factors. There were no repurchases under this program in 2012.Major Capital Expansion Projects November 2012, we announced plans tothat we would construct new ammonia and urea/UAN plants at our Donaldsonville, Louisiana complex and new ammonia and urea plants at our Port Neal, Iowa complex. Our Board of Directors authorized expenditures of $3.8 billion for these projects. In combination, these twoThese new facilities will be able to produce 2.1 million tons of gross ammonia per year and upgraded products ranging from 2.0 to 2.7 million tons of granular urea per year and up to 1.8 million tons of UAN 32% solution per year, depending on product mix. The $3.8 billion cost estimate includes: engineering and design; equipment procurement; construction; associated infrastructure including natural gas connections, power supply; and product storage and handling systems. These plants will increase our product mix flexibility at Donaldsonville, improve our ability to serve upper-Midwest urea customers from our Port Neal location, and allow us to benefit from the favorable pricing advantagecost advantages of North American natural gas. All ofIn combination, these new facilities are scheduledwill be able to produce 2.1 million tons of gross ammonia per year, upgraded products ranging from 2.0 million to 2.7 million tons of granular urea per year and up to 1.8 million tons of UAN 32% solution per year, depending on our choice of product mix.on-stream bycommissioned as part of our capacity expansion projects. The UAN plant at Donaldsonville is expected to be commissioned in the first quarter of 2016. We expectThe remaining plants are expected to finance thebe commissioned in mid-2016.the use ofavailable cash and short-term investments,cash equivalents, cash generated from operations and borrowings. DuringIn addition, $471.1 million was invested in the fourth quartercapacity expansion projects and not paid as of 2012, we incurred capital expenditures of $120.8 million on these projects, contributing toDecember 31, 2015 and recognized as liabilities in the increase in capital expenditures in 2012 over those in 2011.Uhde (Uhde) through their affiliate Uhde Corporation of AmericaIndustrial Solutions (ThyssenKrupp) for both the Donaldsonville, Louisiana and Port Neal, Iowacapacity expansion projects. Under the terms of the Uhdeengineering and procurement services contract, we are required to establish a separate cash account and granthave granted ThyssenKrupp a security interest in thea restricted cash account to Uhde. We are required toand maintain in this account a cash balance in that account equal to the cancellation fees for procurement services and equipment that would arise if we were to cancel thesethe projects. The amount of cash in the account will change over time based on procurement costs and is projected to reach approximately $500 million at certain points in time during the lifecosts. As of the projects. At December 31, 2012,2015, there was no cash$22.8 million held in this account. Cash placed in this account in the future will be considered restricted cash since a security interest in the account has been granted to Uhde. This restricted cash will not be included inis excluded from our cash and cash equivalents and will be reported separately on our consolidated balance sheet. Capital expenditures totaled $523.5 million in 2012 as compared to $247.2 million in 2011 and $258.1 million in 2010. The increase in 2012 is primarily the result of the $120.8 million capital expenditures for the two major capital expansion projects discussed above plus certain capital improvement projects at our production facilities. Capital expenditures are made to sustain our asset base, to increase our capacity, to improve plant efficiency and to comply with various environmental, health and safety requirements.CF INDUSTRIES HOLDINGS, INC.spend between $1.4be approximately $1.8 billion, and $1.7including $1.2 billion on capital projects during 2013, of which $1.0 billion to $1.3 billion relates tofor the major capitalcapacity expansion projects at Donaldsonville, Louisiana and Port Neal, Iowa, discussed above.$0.6 billion of sustaining and other capital expenditures. Planned capital expenditures are subject to change due to delays in regulatory approvals or permitting, unanticipated increases in the cost, changes in scope and completion time, performance of third parties, adverse weather, defects in materials and workmanship, labor or material shortages, transportation constraints, acceleration or delays in the timing of the work and other unforeseen difficulties.InterestInterests in Canadian Fertilizers Limited August 2012, we entered into an agreementagreements to acquire the 34% of CFL's common and preferred shares owned by Viterra, and the product purchase agreement between CFL and Viterra, and the CFL common shares held by GROWMARK and La Coop fédérée for a total purchase price of approximately C$0.9 billion. In April 2013, we completed the acquisitions. Since CFL was previously a consolidated variable interest entity, the purchase price was recognized as follows: a $0.8 billion subject to certain adjustments. See Note 4 to our consolidated financial statements for further information regarding CFL. In October 2012, we entered into an agreement with eachreduction in paid-in capital; a $0.1 billion deferred tax asset; and the removal of GROWMARK and La Coop fédérée to acquire the CFL common shares held by them. Asnoncontrolling interest. CFL is now a result of these transactions,wholly-owned subsidiary and we will own 100% of CFL and will beare entitled to purchase 100% of CFL's ammonia and granular urea production. The completionFor additional information, see Note 15—Noncontrolling Interest to our consolidated financial statements included in Item 8 of these transactions is subject to receipt of regulatory approvals in Canada and other terms and conditions in the definitive agreements.and interests in corporate joint ventures in the United Kingdom and interest in a joint venture in the Republic of Trinidad and Tobago, and Switzerland.Tobago. The estimated additional U.S. and foreign income taxes due upon repatriation of the earnings of these foreign operations to the U.S. are recognized in our consolidated financial statements as the earnings are recognized, unless the earnings are considered to be indefinitely reinvested based upon our current plans. However, the cash payment of the income tax liabilities associated with repatriation of earnings from foreign operations occurs at the time of the repatriation. As a result, the recognition of income tax expense related to foreign earnings, as applicable, and the payment of taxes resulting from repatriation of those earnings can occur in different periods. Cash balances held by corporateour joint venturesventure are maintained at sufficient levels to fund local operations as accumulated earnings are repatriated from the joint venturesventure on a periodic basis. At2012,2015, approximately $886.0$44.7 million of our consolidated cash and cash equivalents balance of $2.3 billion$286.0 million was held by our Canadian and United Kingdom subsidiaries. It is expected that a significant portion of this cash balance will be used to fund the acquisition of the noncontrolling interest in CFL noted above, if the transaction is completed. The cash balance held by the Canadian subsidiaries represents accumulated earnings of our foreign operations, which is not considered to be permanently reinvested. We have recognized deferred income taxes on these earnings for the foreign and domestic taxes that would be due upon their repatriation to the United States. AtAs of December 31, 2012,2015, the cash tax cost to repatriate the Canadian and United Kingdom cash balances would be approximately $45$3.2 million. Depending upon how we implement the acquisitionnoncontrolling interest in CFL, some or allProtecting Americans from Tax Hikes (PATH) Act of 2015Canadianprovisions of the PATH Act permits companies to deduct 50% of their capital expenditures for federal income tax purposes in the year qualifying assets were placed into service. As a result of this provision, for the year ended December 31, 2015, we recorded a federal tax receivable of approximately $120 million that is expected to result in a tax refund. This receivable is primarily associated with the new urea plant and related offsites that were placed into service at our Donaldsonville, Louisiana complex during November of 2015.balancestax payments in 2016.repatriatedused for working capital and general corporate purposes. CF Industries is a borrower, and CF Industries and CF Holdings are guarantors, under the Revolving Credit Agreement. Following the date of the closing of the transactions contemplated by the Combination Agreement (the Combination Agreement Closing Date), New CF would be required to be a borrower and a guarantor under the U.S., resultingRevolving Credit Agreement, at which time CF Industries would cease to be a borrower under the Revolving Credit Agreement. CF Industries or, following the Combination Agreement Closing Date, New CF, may designate as borrowers one or more wholly-owned subsidiaries that are organized in the paymentUnited States or any state thereof, the District of Columbia, England and Wales or the Netherlands.foreign taxescommitments under the Revolving Credit Agreement and customary letter of credit fees. The specified margin and the amount of the commitment fee depend on CF Holdings’ (or, after the consummation of the transactions contemplated by the Combination Agreement on the repatriation.Debt At both December 31, 2012Combination Agreement Closing Date, New CF’s) credit rating at the time.2011, we had $1.6 billionon and after the Combination Agreement Closing Date, certain of senior notes outstandingNew CF’s and CF Holdings’ material wholly-owned U.S. and foreign subsidiaries, will be required to become guarantors of the obligations under the Revolving Credit Agreement if (i) such subsidiaries guarantee other debt for borrowed money (subject to specified exceptions) of CF Holdings, CF Industries or New CF in an aggregate principal amount in excess of $500 million or (ii) such subsidiaries are borrowers under, issuers of, or guarantors of specified debt obligations of CF Holdings, CF Industries or New CF, including debt under the Bridge Credit Agreement (as defined below).series of $800 million each. The first series carries anfinancial maintenance covenants: (i) a requirement that the interest rate of 6.875% and is duecoverage ratio, as defined in the aggregate in 2018. The second series carries an interest rateRevolving Credit Agreement, be maintained at a level of 7.125%not less than 2.75 to 1.00 and is due(ii) a requirement that the total leverage ratio, as defined in the aggregateRevolving Credit Agreement, be maintained at a level of not greater than 3.75 to 1.00.2020. AtCF INDUSTRIES HOLDINGS, INC.December 31, 2011 we also had $13.0 millionan event of Terra 7% senior notes due 2017, which were redeemed indefault under the second quarterRevolving Credit Agreement and after any applicable cure period, subject to specified exceptions, the administrative agent may, and at the request of 2012.2012, $491.02015, we had excess borrowing capacity under the Revolving Credit Agreement of $1,995.1 million was available for borrowing under our credit agreement, net of $9.0 million(net of outstanding letters of credit $4.9 million), and there were no borrowings outstanding borrowings. Our 2012as of December 31, 2015 or 2014. Maximum borrowings during the year ended December 31, 2015 were $367.0 million with a weighted-average annual interest rate of 1.47%. There were no borrowings during the years ended December 31, 2014 and 2013. includes representations, warranties, covenantseventsCF Fertilisers UK Limited as guarantor entered into a £40.0 million senior unsecured credit agreement, dated October 1, 2012 (the CF Fertilisers UK Credit Agreement), which provided for a revolving credit facility of default, including requirements that we maintainup to £40.0 million with a minimum interest coverage ratiomaturity of five years.not exceed a maximum total leverage ratio, as well as other customary covenants and eventsDecember 31, 2014 consisted of default. Ourthe following unsecured senior notes: December 31,
2015 December 31,
2014 (in millions) Public Senior Notes: 6.875% due 2018 $ 800.0 $ 800.0 7.125% due 2020 800.0 800.0 3.450% due 2023 749.4 749.4 5.150% due 2034 746.3 746.2 4.950% due 2043 748.8 748.8 5.375% due 2044 748.2 748.1 Private Senior Notes: 4.490% due 2022 250.0 — 4.930% due 2025 500.0 — 5.030% due 2027 250.0 — 5,592.7 4,592.5 Less: Current portion — — Net long-term debt $ 5,592.7 $ 4,592.5 indentures also include certain covenantsdue May 1, 2018 and events$800 million aggregate principal amount of default.7.125% senior notes due May 1, 2020 (the 2018/2020 Public Senior Notes). Interest on the 2018/2020 Public Senior Notes is paid semiannually on May 1 and November 1 and the 2018/2020 Public Senior Notes are redeemable at our option, in whole at any time or in part from time to time, at specified make-whole redemption prices. As of December 31, 2012, we were2015, the carrying value of the 2018/2020 Public Senior Notes was $1.60 billion and the fair value was approximately $1.78 billion.compliancewhole at any time or in part from time to time, at specified make-whole redemption prices. We received net proceeds from the issuance and sale of the 2023/2043 Public Senior Notes, after deducting underwriting discounts and offering expenses, of approximately $1.48 billion. As of December 31, 2015, the carrying value of the 2023/2043 Public Senior Notes was approximately $1.50 billion and the fair value was approximately $1.34 billion.all covenantsa Ratings Downgrade (as both terms are defined under the 2012indentures governing the Public Senior Notes), CF Industries would be required to offer to repurchase each series of Public Senior Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest. In addition, in the event that a subsidiary of ours, other than CF Industries, becomes a borrower or a guarantor under the Revolving Credit Agreement (or any renewal, replacement or refinancing thereof), such subsidiary would be required to become a guarantor of the Public Senior Notes, provided that such requirement will no longer apply with respect to the 2023/2043 Public Senior Notes and 2034/2044 Public Senior Notes following the repayment of the 2018/2020 Public Senior Notes or the subsidiaries of ours, other than CF Industries, otherwise becoming no longer subject to such a requirement to guarantee the 2018/2020 Public Senior Notes.senior notes indentures.productproducts from us on a forward basis at prices and on delivery dates we propose. We also use derivative financial instruments to reduceTherefore, our exposure to changes in prices for natural gas that will be purchased in the future. Natural gas is the largest and most volatile component of our manufacturing cost for nitrogen-based fertilizers. As a result of using derivative instruments to hedge against movements of future prices of natural gas, volatility in reported quarterly earnings can result from the unrealized mark-to-market adjustments in the value of the derivatives and our reportedfertilizer selling prices and margins may differ from market spot prices and margins available at the time of shipment. Unlike nitrogen fertilizer products sold under forward sales contracts, we typically are unable to use hedges to reduce our exposure to raw material price changes for components of our phosphate manufacturing cost, the largest of which are sulfur and ammonia. As a result, we typically are exposed to margin risk on phosphate products sold on a forward basis.which may be several months after the order is placed. As is the case for all of our sale transactions,and revenue is recognized when title and risk of loss transfers upon shipment or delivery of the product to customers.recognized. As of December 31, 20122015 and 2011,2014, we had approximately $380.7$161.5 million and $257.2$325.4 million, respectively, in customer advances on our consolidated balance sheets.wereare generally a significant source of liquidity, in both 2012 and 2011, the level of forward sales contracts is affected by many factors including current market conditions and our customers' outlook of future market fundamentals. TheIf the level of sales under our forward orders may reflectsales programs were to decrease in the future, our customers' viewscash received from customer advances could likely decrease and our accounts receivable balances would likely increase. Additionally, borrowing under the Revolving Credit Agreement could become necessary. Due to the volatility inherent in our business and changing customer expectations, we cannot estimate the amount of the current fertilizer pricing environment and expectations regarding future pricing and availability of supply. We may also be subject to storage charges under these arrangements should we be unable to deliver product at the specified time. If the level of sales under our forward sales programs were to decrease in the future, our cash received from customer advances would likely decrease and our accounts receivable balances would likely increase. Also, borrowing under our senior revolving credit facility could become necessary. Due to the volatility inherent in ourCF INDUSTRIES HOLDINGS, INC.business and changing customer expectations, we cannot estimate the amount of future forward sales activity.commodity prices for natural gas that will be purchased in the future. Natural gas is the largest and most volatile component of our manufacturing cost for nitrogen-based fertilizers. We also use derivative financial instruments to reduce our exposure to changes in foreign currency exchange rates. Because we use derivative instruments, volatility in reported quarterly earnings can result from the unrealized mark-to-market adjustments in the value of the derivatives. The counterparties to our derivatives are either large oil and gas companies or large financial institutions. Cash collateral is deposited with or received from counterparties when predetermined unrealized loss or gain thresholds are exceeded. For derivatives that are in net asset positions, we are exposed to credit loss from nonperformance by the counterparties. We control our credit risk through the use of multiple counterparties individual credit limits, monitoring procedures, cash collateral requirementsthat are multinational commercial banks, major financial institutions or large energy companies, and, in most cases, the use of International Swaps and Derivatives Association (ISDA) master netting arrangements.somemost of our derivative instruments also contain credit-risk-related contingent features, thatsuch as cross default provisions and credit support requirements. In the event of certain defaults or a credit ratings downgrade, our counterparty may request early termination and net settlement of certain derivative trades or may require us to maintain minimumcollateralize derivatives in a net worth levels and certain financial ratios. If we fail to meet these minimum requirements, the counterparties to those derivative instruments where we hold liability positions could require daily cash settlement of unrealized losses or some other form of credit support.2012,2015 and 2014, the aggregate fair value of the derivative instruments with credit risk relatedcredit-risk-related contingent features in a net liability positionpositions was $0.9 million. We$211.3 million and $47.1 million, respectively, which also approximates the fair value of the maximum amount of additional collateral that would need to be posted or assets needed to settle the obligations if the credit-risk-related contingent features were triggered at the reporting dates. As of December 31, 2015 and 2014, we had open natural gas derivative contracts for 431.5 million MMBtus and 58.7 million MMBtus, respectively. At both December 31, 2015 and 2014, we had no cash collateral on deposit with counterparties for derivative contracts ascontracts.2012.Financial Assurance Requirements In addition to various operational2015 and environmental regulations related to our phosphate segment, we are also subject to financial assurance requirements related to2014, the closure and maintenancenotional amount of our phosphogypsum stack systems at both our Plant City, Florida phosphate fertilizer complexopen foreign currency derivatives was €89.0 million and our former Bartow, Florida phosphate fertilizer complex. There are two sources€209.0 million, respectively. None of these financial assurance requirements. First, in 2010, we entered into a consent decree with the U.S. Environmental Protection Agency (EPA)open foreign currency derivatives were designated as hedging instruments for accounting purposes.the Florida Department of Environmental Protection (FDEP) with respect to our compliance with the Resource Conservation and Recovery Act (RCRA) at our Plant City, Florida complex (the Plant City Consent Decree). Second, the State of Florida financial assurance regulations (Florida Financial Assurance) apply to both our Plant City and Bartow complexes. Both of these regulations allow the use of a funding mechanism as a means of complying with the financial assurance requirements associated with the closure, long-term maintenance, and monitoring costs for the phosphogypsum stacks, as well as costs incurred to manage the water contained in the stack system upon closure. We have established a trust account for the benefit of the EPA and FDEP and an escrow account for the benefit of the FDEP to meet these financial assurance requirements. On our consolidated balance sheet, these are collectively referred to as "Asset retirement obligation funds" (ARO funds). In October 2012, we deposited $53.0 million into the trust for the Plant City Consent Decree, thereby reaching full funding of that obligation, and we expect to fund the remaining approximately $4.0 million of the State of Florida Financial Assurance escrow account near the end of 2015. Both financial assurance funding obligations require estimates of future expenditures that could be impacted by refinements in scope, technological developments, cost inflation, changes in regulations, discount rates and the timing of activities. Additional funding will be required in the future if increases in cost estimates exceed investment earnings in the trust or escrow accounts. At December 31, 2012 and 2011, the balance in the ARO funds was $200.8 million and $145.4 million, respectively. The amounts recognized as expense in operations pertaining to our phosphogypsum stack systems closure and land reclamation are determined and accounted for on an accrual basis as described in Note 10 to our consolidated financial statements. These expense amounts are expected to differ from the anticipated contributions to the trust and escrow accounts, which are based on the guidelines set forth in the Plant City Consent Decree and Florida Financial Assurance regulations. Ultimately, the funds in these accounts will be used to fund the closure and maintenance of the phosphogypsum stack systems. Florida regulations require mining companies to demonstrate financial responsibility for reclamation, wetland and other surface water mitigation measures in advance of any mining activities. We will also be required to demonstrate financial responsibility for reclamation and for wetland and other surface water mitigation measures, if and when we are able to expand our Hardee mining activities to areas not currently permitted. The demonstration of financial responsibility by mining companies in Florida may be provided by passing a financial test or by establishing a trust fund agreement or escrow account. Based on these current regulations, we will have the option to demonstrate financial responsibility in Florida utilizing any of these methods.Acquisition of Terra In April of 2010, we completed the acquisition and merger of Terra. As a result of the merger, each outstanding share of Terra common stock was converted into the right to receive $37.15 in cash and 0.0953 of a share of CF Holdings common stock. CF Holdings issued an aggregate of 9.5 million shares of its common stock with a fair value of $882.0 million and paid an aggregate of $3.2 billion in cash, net of $0.5 billion cash acquired, for 100% of Terra's common stock. Additional details regarding the Terra acquisition can be found in Note 12 to the consolidated financial statements.Liquidity Requirements We are subject to federal, state and local laws and rules concerning surface and underground waters. Such rules evolve through various stages of proposal or development and the ultimate outcome of such rulemaking activities often cannot be predicted prior to enactment. At the present time, rules in the State of Florida are being developed to limit nutrient content in water discharges, including certain specific rules pertaining to water bodies near our Florida operations. Additional information regarding numeric nutrient criteria regulations in surface and ground water can be found in Note 29 to the consolidated financial statements, titled Contingencies. We are monitoring the evolution of these rules. Potential costs associated with compliance cannot be determined currently and we cannot reasonably estimate the impact on our financial position, results of operations or cash flows.approximately $20.1$27.7 million to our pension plans in 2012.2015. We expect to contribute approximately $23.2$39.8 million to our pension plans in 2013.20122015 Compared to Year Ended December 31, 20112014 cash generated from operating activities in 2012 was $2.4 billion as compared to $2.1 billion in 2011. The $296.7 million increase in cash provided by operating activities in 2015 was due primarily to an increase in net earnings from the nitrogen segment, and a lower level of working capital invested in the business at the end of 2012$1.20 billion as compared to the end$1.41 billion in 2014, a decline of 2011$204.9 million. This decline was primarily due to unfavorable working capital changes as lower inventory, lower receivables andCF INDUSTRIES HOLDINGS, INC.higher customer advances were lower and accounts payable and accrued expensesinventory levels were higher in 2015 as compared to 2014 levels. Due to the declining pricing environment for nitrogen fertilizers in 2015, customers delayed making forward purchase commitments to purchase fertilizer in 2015, which reduced the amount of customer advances that were received, as compared to 2014 when fertilizer pricing was stronger. A poor fall ammonia application season contributed to the lowerhigher inventory levels of working capital.20112014 Compared to Year Ended December 31, 20102013 cash generated from operating activities in 2011 was $2.1 billion as compared to $1.2 billion in 2010. The $884.5 million increase in cash provided by operating activities in 2014 was due primarily$1.41 billion as compared to improved$1.47 billion in 2013. The $58.2 million decrease in net cash provided by operating activities resulted from lower earnings in both the nitrogen and phosphate segments,from core operating activities partially offset by favorable working capital changes in 2014 as compared to 2013. The lower earnings from core operating activities were primarily a result of the $741.7 million decline in gross margin. Partially offsetting the decline in gross margin, $638.6 million less was invested in net working capital than in 2013. Improvements in working capital during 2014 were due to a combination of higher customer advances, lower inventory levels and an increaselower amounts paid for income taxes in cash invested2014 as compared in inventory and accounts receivable2013. Customer advances were higher in 2011anticipation of a busy spring 2015 application season combined with tighter North American nitrogen fertilizer supply compared to 2010.2012, 20112015, 2014 and 20102013$513.5$2.98 billion in 2015 compared to $343.5 million in 20122014 when we received proceeds of $1.37 billion from the sale of the phosphate business. During 2015, capital expenditures totaled $2.47 billion compared to $173.8$1.81 billion in 2014. The increase in capital expenditures is primarily related to the capacity expansion projects in Donaldsonville, Louisiana and Port Neal, Iowa. We also acquired the remaining 50% equity interest in CF Fertilisers UK not previously owned by us for a net cash payment of $551.6 million, in 2011.which was net of cash acquired of $18.8 million. The $1.02 billion net cash used in investing activities in 2012 was primarily for capital expenditures, partially offset by $65.42013 included $823.8 million from the sale of short term securities and property, plant and equipment. The cash used in investing activities in 2011 was primarily for capital expenditures, partially offset by $54.7 million in proceeds from the sale of property, plant and equipment and $37.9 million in sales and maturities of short term securities. The proceeds from the sale of property, plant and equipment in 2011 primarily related to the sale of four dry product warehouses and a non-core transportation business. The $3.1 billion in cash used in investing activities in 2010 was due primarily to the net cash consideration of $3.2 billion for the acquisition of Terra, partially offset by $209.6 million of cash provided by net sales of short-term investments and redemptions of auction rate securities, and proceeds of $167.1 million from the sale of Terra common stock prior to the acquisition of Terra. Additions to property, plant and equipment accounted for $523.5 million, $247.2 million, and $258.1 million of cash used in investing activities in 2012, 2011, and 2010, respectively. The increase in capital expenditures and $154.0 million transferred to a restricted cash account in 2012 related primarily to cash spendingsupport of $120.8 million for the major capitalcapacity expansion projects at our Donaldsonville, Louisiana and Port Neal, Iowa facilities, plus certain other significant capital projects at our existing production complexes to sustain our asset base, increase our production capacity, improve plant efficiency and comply with various environmental, health and safety requirements. We made contributions of $55.4 million, $50.4 million, and $58.5 million in 2012, 2011 and 2010, respectively, to our asset retirement obligation trust and escrow accounts. The balance in these accounts is reported at fair value on our consolidated balance sheets.2012, 20112015, 2014 and 20102013was $796.8 million in 2012 compared to $1.5 billion in 2011. In 2012, we repurchased $500.0 million of our common stock and distributed $231.82013 included $918.7 million to acquire the noncontrolling interests.interests in CFL. Cash used for share repurchases in 2015, 2014 and 2013 was $556.3 million, $1.93 billion and $1.41 billion, respectively. We repurchased $1.0 billion of our common stock and distributed $145.7$45.0 million to the noncontrolling interests in 2011. In 2012, $13.0 million was used for the repayment of long term debt2015, compared to $346.0$46.0 million in 2011. Dividends paid on common stock increased to $102.72014 and $73.7 million in 2012 from $68.7 million2013. The decrease in 2011distributions to noncontrolling interests in 2015 and 2014 as compared to 2013 was due to the increaseacquisition of the noncontrolling interests in CFL in April 2013, which impacted the payments made in the common dividend to $0.40 per share from $0.10 per share which started in the third quarterfirst four months of 2011 partially offset by a reduction in number of outstanding shares. Net cash provided by financing activities in 2010 of $2.0 billion was due primarily to $5.2 billion of proceeds from the issuance of debt and $1.2 billion from the issuance of common stock in a public offering associated with our acquisition of Terra,2013.partially offset by $4.0 billion of prepayments on our debt and $0.2 billion of financing fees. Dividends paid on common stock were $26.2 million in 2010 and we also paid $20.0 million of dividends declared by Terra prior to the acquisition date. We also paid distributions to our noncontrolling interests of $117.0 million in 2010.Obligations2012:2015: 2016 2017 2018 2019 2020 After 2020 Total (in millions) Contractual Obligations Debt $ — $ — $ 800.0 $ — $ 800.0 $ 4,000.0 $ 5,600.0 312.9 305.4 277.9 250.4 221.1 2,602.5 3,970.2 Other Obligations Operating leases 82.2 87.9 70.8 58.3 46.3 115.6 461.1 Equipment purchases and plant improvements 142.5 23.6 1.5 — — — 167.6 953.2 — — — — — 953.2 62.6 11.1 8.4 7.6 3.3 — 93.0 641.6 335.5 109.5 38.1 37.2 148.3 1,310.2 39.8 — — — — — 39.8 10.8 10.6 — — — — 21.4 $ 2,245.6 $ 774.1 $ 1,268.1 $ 354.4 $ 1,107.9 $ 6,866.4 $ 12,616.5 Based on debt balances before discounts, offering expenses and interest rates as of December 31, 2015. We expect to spend approximately $1.2 billion during 2016 related to the Donaldsonville and Port Neal capacity expansion projects expected to be completed in mid-2016. Contractual commitments do not include any amounts related to our foreign currency derivatives. For further information, see our previous discussion under Capacity Expansion Projects and Restricted Cash in the Liquidity and Capital Resources section of this discussion and analysis. Includes anticipated expenditures under certain contracts to transport raw materials and finished product to and from our facilities. The majority of these arrangements allow for reductions in usage based on our actual operating rates. Amounts set forth above are based on projected normal operating rates and contracted or current spot prices, where applicable, as of December 31, 2015 and actual operating rates and prices may differ. Includes minimum commitments to purchase natural gas based on prevailing market-based forward prices as of December 31, 2015. Purchase obligations do not include any amounts related to our natural gas derivatives. Includes a commitment to purchase ammonia from PLNL at market-based prices under an agreement that expires in 2018. The annual commitment based on market prices as of December 31, 2015 is $87.1 million with a total remaining commitment of $239.6 million. Represents the contributions we expect to make to our pension plans during 2016. Our pension funding policy is to contribute amounts sufficient to meet minimum legal funding requirements plus discretionary amounts that we may deem to be appropriate. Represents the amounts we expect to pay to our pre-IPO owners in conjunction with the amended NOL Agreement and the 2013 settlement with the IRS. See Note 10—Income Taxes to our consolidated financial statements included in Item 8 of this report for further discussion of this matter. Excludes $182.6 million of unrecognized tax benefits due to the uncertainty in the timing of potential tax payments. Excludes $10.6 million of environmental remediation liabilities. 2013 2014 2015 2016 2017 After 2017 Total (in millions) $ — $ — $ — $ — $ — $ 1,600.0 $ 1,600.0 5.0 — — — — — 5.0 113.5 113.4 113.4 113.4 112.5 170.0 736.2 78.0 52.3 34.7 31.6 24.1 49.6 270.3 129.3 14.3 — — — — 143.6 133.9 109.9 12.9 — — — 256.7 93.7 30.7 24.5 19.4 16.0 126.3 310.6 499.0 230.6 201.5 197.0 195.8 195.7 1,519.6 23.2 — — — — — 23.2 $ 1,075.6 $ 551.2 $ 387.0 $ 361.4 $ 348.4 $ 2,141.6 $ 4,865.2 (1)Based on debt balances and interest rates as of December 31, 2012.(2)Represents notes payable to the CFL noncontrolling interest holder. While the entire principal amount is due December 31, 2013, CFL may prepay all or a portion of the principal at its sole option.(3)Contractual commitments do not include any amounts related to our foreign currency derivatives. We expect to spend in the range of $1.0 billion to $1.3 billion during 2013 related to the planned $3.8 billion Donaldsonville and Port Neal capacity expansion projects expected to be completed by 2016. For further information, see our previous discussion under Major Capital Expansion Projects in the Liquidity and Capital Resources section.(4)Includes anticipated expenditures under certain contracts to transport raw materials and finished product between our facilities. The majority of these arrangements allow for reductions in usage based on our actual operating rates. Amounts set forth above are based on projected normal operating rates and contracted or current spot prices, where applicable, as of December 31, 2012 and actual operating rates and prices may differ.(5)Includes minimum commitments to purchase natural gas based on prevailing market-based forward prices at December 31, 2012. Purchase obligations do not include any amounts related to our natural gas derivatives.(6)Includes a commitment to purchase ammonia from PLNL at market-based prices under an agreement that expires in 2018. The annual commitment based on market prices at December 31, 2012 is $195.6 million with a total remaining commitment of $1.2 billion.(7)Represents the contributionsSubsequent Eventexpect to make to our pension plans during 2013. Our pension funding policy is to contribute amounts sufficient to meet minimum legal funding requirements plus discretionary amountsannounced that we may deemagreed to be appropriate.(8)Excludes the planned purchases of C$0.9 billion for the 34%enter into a strategic venture with CHS Inc. (CHS). The strategic venture commenced on February 1, 2016, at which time CHS purchased a minority equity interest in CFL ownedCF Industries Nitrogen, LLC (CFN), a subsidiary of CF Holdings, for $2.8 billion. CHS also began receiving deliveries from us pursuant to a supply agreement under which CHS has the right to purchase annually from us up to approximately 1.1 million tons of granular urea and 580,000 tons of UAN at market prices. CHS is entitled to semi-annual profit distributions from CFN as a result of its minority equity interest in CFN based generally on the volume of granular urea and UAN purchased by Viterra, the amounts relatedCHS pursuant to the purchase of the remaining minority interests in CFL and $93.9 million of unrecognized tax benefits due to the uncertainty in the timing of payments, if any, on these items. See Note 4 to our consolidated financial statements for further discussion of the purchase of the interests in CFL and Note 11 for discussion of the unrecognized tax benefits.Other Long-Term Obligations As of December 31, 2012, our other liabilities included balances related to asset retirement obligations (AROs) and environmental remediation liabilities. The estimated timing and amount of cash outflows associated with these liabilities are as follows: Payments Due by Period 2013 2014 2015 2016 2017 After
2017 Total (in millions) $ 16.1 $ 7.6 $ 6.3 $ 10.5 $ 8.5 $ 714.3 $ 763.3 0.5 0.5 0.5 0.5 0.5 3.4 5.9 $ 16.6 $ 8.1 $ 6.8 $ 11.0 $ 9.0 $ 717.7 $ 769.2 (1)Represents the undiscounted, inflation-adjusted estimated cash outflows required to settle the recorded AROs. The corresponding present value of these future expenditures is $145.0 million as of December 31, 2012. Excludes any amounts we may be required to deposit into our escrow or trust accounts to meet our financial assurance funding requirements. See the discussion of our financial assurance requirements earlier in this section.We also have unrecorded AROs at our nitrogen manufacturing facilities and at our distribution and storage facilities that are conditional upon cessation of operations. These AROs include certain decommissioning activities as well as the removal and disposition of certain chemicals, waste materials, structures, equipment, vessels, piping and storage tanks. Also included is reclamation of land and closure of effluent ponds. The most recent estimate of the aggregate cost of these AROs expressed in 2012 dollars is approximately $51.0 million. We do not believe that there is a reasonable basis for currently estimating a date or range of dates of cessation of operations at these facilities. Therefore, the table above does not contain any payments for these AROs. See Note 10 to our consolidated financial statements for further discussion of our AROs. As described in "Financial Assurance Requirements," we intend to set aside cash on an annual basis in escrow and trust accounts established to cover costs associated with closure of our phosphogypsum stack systems as required. These accounts will be the source of a significant portion of the cash required to settle the AROs pertaining to the phosphogypsum stack systems.(2)Cash flows occurring after 2017 are detailed in the following table. The following table details the undiscounted, inflation-adjusted estimated payments after 2017 required to settle the recorded AROs, as discussed above. Payments Due by Period 2018 - 19 2020 - 29 2030 - 39 2040 - 49 2050 - 59 After
2059 Total (in millions) $ 18.4 $ 47.2 $ 250.4 $ 137.9 $ 57.9 $ 202.5 $ 714.3
supply agreement.CF INDUSTRIES HOLDINGS, INC.teneleven years and the barge charter commitments currently have terms rangingrange from onetwo to seven years. We also have terminal and warehouse storage agreements for our distribution system, some of which contain minimum throughput requirements. The storage agreements contain minimum terms generally ranging from one to threefive years and commonly contain automatic annual renewal provisions thereafter unless canceled by either party. See Note 2324—Leases in the notes to our consolidated financial statements included in Item 8 of this report for additional information concerning leases.isare stated at historical cost and depreciation depletion and amortization isare computed using either the straight-line method or the units-of-production method over the lives of the assets. The lives used in computing depreciation and amortization expense are based on estimates of the period over which the assets will be of economic benefit to us. Estimated lives are based on historical experience, manufacturers' or engineering estimates, valuation or appraisal estimates and future business plans. We review the depreciable lives assigned to our property, plant and equipment on a periodic basis, and change our estimates to reflect the results of those reviews.intoin property, plant and equipment when incurred and amortized to production costs on a straight-line basis over the period benefited, which is until the next scheduled turnaround in up to 5 years. Should the estimated period between turnarounds change, we may be required to amortize the remaining cost of the turnaround over a shorter period, which would lead to higher productiondepreciation and amortization costs. If we used the direct expense method,Consolidated Statementsconsolidated statements of Cash Flowscash flows in the line entitled, "Additions to property, plant and equipment."ifwhether the carrying amount of inventories exceeds their net realizablemarket value. This review process incorporates current industry and customer-specific trends, current operating plans, historical price activity, and selling prices expected to be realized. If the carrying amount of our inventory exceeds its estimated net realizablemarket value, we immediately adjust our carrying values accordingly. Upon inventory liquidation, if the actual sales prices ultimately realized are less than our most recent estimate of net realizablemarket value, additional losses would be recorded in the period of liquidation. Fixed production costs related to idle capacity are not included in the cost of inventory but are charged directly to cost of sales. and Environmental Remediation Liabilities AROs are legal obligations associated with the closureretirement of our phosphogypsum stack systems atlong-lived assets that result from the Bartow and Plant City, Florida phosphate fertilizer complexes, land reclamation activities at our Hardee, Florida phosphate rock mine and the cessationacquisition, construction, development or normal operation of operations at all of our facilities. If the cost of closure can be reasonably estimated,such assets. AROs are initially recognized in the period in which the related assets are put into service. We are requiredas incurred when sufficient information exists to recognize an ARO for costs associated with the cessation of operations at our facilities at the time those obligations are imposed, even if the timing and manner of settlement are difficult to ascertain. The obligations at active facilities related to closure, reclamationCF INDUSTRIES HOLDINGS, INC.and cessation of operations are capitalized at their present value and a corresponding asset retirement liability is recorded. The liability is adjusted in subsequent periods through accretion expense. Accretion expense represents the increase in the present value of the liability due to the passage of time. The asset retirement costs capitalized as part of the carrying amount of the related asset are depreciated over the estimated useful life. In the case of reclamation, the asset is depreciated over the period the mining occurs, which in some cases, may be after initial recognition of the liability. The aggregate carrying value of all of our AROs was $145.0 million as of December 31, 2012 and $131.6 million as of December 31, 2011. The increase in the aggregate carrying value of these AROs is due to normal accretion expense and the recognition of new obligations, partially offset by cash expenditures on AROs and reductions in previous estimates. Environmental remediation liabilities are recognized when the related costs are considered probable and can be reasonably estimated. Estimates of these costs are based upon currently available facts, existing technology, site-specific costs and currently enacted laws and regulations. In reporting environmental liabilities, no offset is made for potential recoveries. All liabilities are monitored and adjusted as new facts or changes in law or technology occur. In accordance with GAAP, environmental expenditures are capitalized when such costs provide future economic benefits. Changes in laws, regulations or assumptions used in estimating these costs could have a material impact on our financial statements. The amount recorded for environmental remediation liabilities totaled $5.9 million as of December 31, 2012 and $6.7 million as of December 31, 2011. The actual amounts to be spent on AROs and environmental remediation liabilities will depend on factors such as the timing of activities, refinements in scope, technological developments and cost inflation, as well as present and future environmental laws and regulations. The estimates of amounts to be spent are subject to considerable uncertainty and long timeframes. We are also required to select discount rates to calculate the present value of AROs. Changes in these estimates or the selection of a different discount rate could have a material impact on our results of operations and financial position. unrecorded AROs at our nitrogen fertilizer manufacturing facilitiescomplexes and at our distribution and storage facilities that are conditional upon cessation of operations. These AROs include certain decommissioning activities as well as the removal and dispositiondisposal of certain chemicals, waste materials, structures, equipment, vessels, piping and storage tanks. Also included are reclamation of land and the closure of certain effluent ponds. A liability has not been recorded for these conditional AROs. The most recent estimate of the aggregate cost of these AROs expressed in 20122015 dollars is $51.0$66.4 million. We have not recorded a liability for these conditional AROs atas of December 31, 20122015 because we do not believe there is currently a reasonable basis for estimating a date or range of dates of cessation of operations at theseour nitrogen fertilizer manufacturing facilities or our distribution and storage facilities, which is necessary in order to estimate fair value. In reaching this conclusion, we considered the historical performance of each complex or facility and have taken into account factors such as planned maintenance, asset replacements and upgrades of plant and equipment, which if conducted as in the past, can extend the physical lives of our nitrogen manufacturing facilities and our distribution and storage facilities indefinitely. We also considered the possibility of changes in technology, risk of obsolescence, and availability of raw materials in arriving at our conclusion.unconsolidated subsidiariesaffiliates including joint ventures in accordance with U.S. GAAP in order to assess recoverability. Factors that we must estimate when performing impairment tests include sales volume, selling prices, raw material costs, operating rates, operating expenses, inflation, discount rates, exchange rates, tax rates and capital spending. Significant judgment is involved in estimating each of these factors, which include inherent uncertainties. The factors we use areCF INDUSTRIES HOLDINGS, INC.subsidiariesaffiliates is dependent upon future operating performance of the specific businesses to which they are attributed. Certain of the operating assumptions are particularly sensitive to the cyclical nature of the fertilizer business. Adverse changes in demand for our products, increases in supply and the availability and costs of key raw materials could significantly affect the results of our review.We reviewOur investments in unconsolidated affiliates are reviewed for impairment whenever events or circumstances indicate that the carrying value of our investments in unconsolidated subsidiaries annually to determine if there is a loss in value of the investment. We determinemay not be recoverable. When circumstances indicate that the fair value of theour investment using an income approach valuation method. If the sum of the expected future discounted net cash flowsin any such affiliate is less than theits carrying value, an impairment lossand the reduction in value is other than temporary, the reduction in value is recognized immediately.nitrogenammonia, granular urea, UAN, AN and phosphateOther segments. Our evaluation can begin with a qualitative assessment of the factors that could impact the significant inputs used to estimate fair value. If after performing the qualitative assessment, we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill, then no further testing is performed. However, if it is unclear based on the results of the qualitative test, we perform a quantitative test involving potentially two steps. The first step compares the fair value of a reporting unit with its carrying amount, including goodwill. We use an income basedincome-based valuation method, determining the present value of future cash flows, to estimate the fair value of a reporting unit. If the fair value of a reporting unit exceeds its positive carrying amount, goodwill of the reporting unit is considered not impaired, and the second step of the impairment test is unnecessary. The second step of the goodwill impairment test, if needed, compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. We recognize an impairment loss immediately to the extent the carrying value exceeds its implied fair value. We identified no goodwill impairment in our 20122015, 2014 or 20112013 reviews. As of December 31, 20122015 and 2011,2014, the carrying value of our goodwill resulting mainly from thewas $2.39 billion and $2.09 billion, respectively.was $2.1 billion.Fair Value Measurements We have classified our investments in auction rate securities includedof CF Fertilisers UK consist of customer relationships and trade names which are being amortized over a remaining period of approximately 20 years. Our intangible assets are presented in other assets as those measured using significant unobservable inputs (Level 3 securities) underon the provisions of the current rules for assessing fair value. No other assets or liabilities are classified as Level 3 items on our consolidated balance sheet as of December 31, 2012. See Note 5 to our consolidated financial statements forsheets. For additional information concerning fair value measurements.Derivative Financial Instruments The accounting for the change in the fair value of a derivative instrument depends on whether the instrument has been designated as a hedging instrumentregarding our goodwill and whether the instrument is effective as part of a hedging relationship. Changes in the fair value of derivatives designated as cash flow hedging instruments considered effective are recorded in accumulated other comprehensive income (AOCI) as the changes occur,intangible assets, see Note 7—Goodwill and are reclassified into income or expense as the hedge item is recognized in earnings. The ineffective portion of derivatives designated as cash flow hedges and changes in the fair value of derivatives not designated as hedging instruments are recorded in the statement of operations as the changes occur.CF INDUSTRIES HOLDINGS, INC. Certain of our foreign currency derivatives that we use to manage our exposure to changes in exchange rates on Euro-denominated expenditures associated with our capital expansion projects have been designated as cash flow hedges. The expected cash flows for the capital projects involve the use of judgments and estimates which are subject to change. We assess, both at the hedge's inception and on an ongoing basis, whether the designated cash flow hedges are highly effective in offsetting changes in cash flows of the hedged items. When a derivative is determined not to be highly effective as a hedge or the underlying hedged transaction is no longer probable, hedge accounting is discontinued in accordance with the derecognition criteria for hedge accounting.whenin which these changes occur. Year ended December 31, 2015 2014 2013 (in millions, except per share amounts) Net sales $ 4,308.3 $ 4,743.2 $ 5,474.7 Cost of sales 2,761.2 2,964.7 2,954.5 Gross margin 1,547.1 1,778.5 2,520.2 Selling, general and administrative expenses 169.8 151.9 166.0 Transaction costs 56.9 — — Other operating—net 92.3 53.3 (15.8 ) Total other operating costs and expenses 319.0 205.2 150.2 Gain on sale of phosphate business — 750.1 — Equity in earnings of operating affiliates (35.0 ) 43.1 41.7 Operating earnings 1,193.1 2,366.5 2,411.7 Interest expense 133.2 178.2 152.2 Interest income (1.6 ) (0.9 ) (4.7 ) Other non-operating—net 3.9 1.9 54.5 Earnings before income taxes and equity in earnings of non-operating affiliates 1,057.6 2,187.3 2,209.7 Income tax provision 395.8 773.0 686.5 Equity in earnings of non-operating affiliates—net of taxes 72.3 22.5 9.6 Net earnings 734.1 1,436.8 1,532.8 Less: Net earnings attributable to noncontrolling interest 34.2 46.5 68.2 Net earnings attributable to common stockholders $ 699.9 $ 1,390.3 $ 1,464.6 Basic $ 2.97 $ 5.43 $ 4.97 Diluted $ 2.96 $ 5.42 $ 4.95 Basic 235.3 255.9 294.4 Diluted 236.1 256.7 296.0 Share and per share amounts have been retroactively restated for all prior periods presented to reflect the five-for-one split of the Company’s common stock effected in the form of a stock dividend that was distributed on June 17, 2015. Year ended December 31, 2015 2014 2013 (in millions) Net earnings $ 734.1 $ 1,436.8 $ 1,532.8 Other comprehensive income (loss): Foreign currency translation adjustment—net of taxes (157.3 ) (72.4 ) (30.2 ) Unrealized (loss) gain on hedging derivatives—net of taxes — (1.8 ) 1.9 Unrealized gain on securities—net of taxes 0.2 0.2 1.0 Defined benefit plans—net of taxes 67.1 (43.2 ) 33.6 (90.0 ) (117.2 ) 6.3 Comprehensive income 644.1 1,319.6 1,539.1 Less: Comprehensive income attributable to noncontrolling interest 34.2 46.5 67.5 Comprehensive income attributable to common stockholders $ 609.9 $ 1,273.1 $ 1,471.6 December 31, 2015 2014 Assets Current assets: Cash and cash equivalents $ 286.0 $ 1,996.6 Restricted cash 22.8 86.1 Accounts receivable—net 267.2 191.5 Inventories 321.2 202.9 Prepaid income taxes 184.6 34.8 Other current assets 45.3 18.6 Total current assets 1,127.1 2,530.5 Property, plant and equipment—net 8,539.0 5,525.8 Investments in and advances to affiliates 297.8 861.5 Goodwill 2,390.1 2,092.8 Other assets 384.9 243.6 Total assets $ 12,738.9 $ 11,254.2 Liabilities and Equity Current liabilities: Accounts payable and accrued expenses $ 917.7 $ 589.9 Income taxes payable 5.5 16.0 Customer advances 161.5 325.4 Other current liabilities 130.5 48.4 Total current liabilities 1,215.2 979.7 Long-term debt 5,592.7 4,592.5 Deferred income taxes 916.2 734.6 Other liabilities 627.6 374.9 Equity: Stockholders' equity: Preferred stock—$0.01 par value, 50,000,000 shares authorized — — 2.4 2.5 1,377.4 1,413.9 Retained earnings 3,057.9 3,175.3 (152.7 ) (222.2 ) Accumulated other comprehensive loss (249.8 ) (159.8 ) Total stockholders' equity 4,035.2 4,209.7 Noncontrolling interest 352.0 362.8 Total equity 4,387.2 4,572.5 Total liabilities and equity $ 12,738.9 $ 11,254.2 December 31, 2014 amounts have been retroactively restated to reflect the five-for-one split of the Company’s common stock effected in the form of a stock dividend that was distributed on June 17, 2015. Common Stockholders
Value
Common
Stock(1)
Stock(1)
Capital(1) Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Total
Stockholders'
Equity Noncontrolling
Interest Total
Equity (in millions) Balance as of December 31, 2012 $ 3.1 $ (2.3 ) $ 2,489.9 $ 3,461.1 $ (49.6 ) $ 5,902.2 $ 380.0 $ 6,282.2 Net earnings — — — 1,464.6 — 1,464.6 68.2 1,532.8 Other comprehensive income: Foreign currency translation adjustment—net of taxes — — — — (29.5 ) (29.5 ) (0.7 ) (30.2 ) Unrealized net gain on hedging derivatives—net of taxes — — — — 1.9 1.9 — 1.9 Unrealized net gain on securities—net of taxes — — — — 1.0 1.0 — 1.0 Defined benefit plans—net of taxes — — — — 33.6 33.6 — 33.6 Comprehensive income 1,471.6 67.5 1,539.1 Acquisitions of noncontrolling interests in Canadian Fertilizers Limited (CFL) — — (752.5 ) — — (752.5 ) (16.8 ) (769.3 ) Purchases of treasury stock — (1,449.3 ) — — — (1,449.3 ) — (1,449.3 ) Retirement of treasury stock (0.3 ) 1,247.8 (180.1 ) (1,067.4 ) — — — — Acquisition of treasury stock under employee stock plans — (3.2 ) — — — (3.2 ) — (3.2 ) Issuance of $0.01 par value common stock under employee stock plans — 5.2 8.7 (3.6 ) — 10.3 — 10.3 Stock-based compensation expense — — 12.6 — — 12.6 — 12.6 Excess tax benefit from stock-based compensation — — 13.5 — — 13.5 — 13.5 — — — (129.1 ) — (129.1 ) — (129.1 ) Distributions declared to noncontrolling interest — — — — — — (68.5 ) (68.5 ) Effect of exchange rates changes — — — — — — 0.1 0.1 Balance as of December 31, 2013 $ 2.8 $ (201.8 ) $ 1,592.1 $ 3,725.6 $ (42.6 ) $ 5,076.1 $ 362.3 $ 5,438.4 Net earnings — — — 1,390.3 — 1,390.3 46.5 1,436.8 Other comprehensive income: Foreign currency translation adjustment—net of taxes — — — — (72.4 ) (72.4 ) — (72.4 ) Unrealized net loss on hedging derivatives—net of taxes — — — — (1.8 ) (1.8 ) — (1.8 ) Unrealized net gain on securities—net of taxes — — — — 0.2 0.2 — 0.2 Defined benefit plans—net of taxes — — — — (43.2 ) (43.2 ) — (43.2 ) Comprehensive income 1,273.1 46.5 1,319.6 Purchases of treasury stock — (1,923.7 ) — — — (1,923.7 ) — (1,923.7 ) Retirement of treasury stock (0.3 ) 1,905.5 (220.3 ) (1,684.9 ) — — — — Acquisition of treasury stock under employee stock plans — (3.1 ) — — — (3.1 ) — (3.1 ) Issuance of $0.01 par value common stock under employee stock plans — 0.9 16.7 — — 17.6 — 17.6 Stock-based compensation expense — — 16.7 — — 16.7 — 16.7 Excess tax benefit from stock-based compensation — — 8.7 — — 8.7 — 8.7 — — — (255.7 ) — (255.7 ) — (255.7 ) Distributions declared to noncontrolling interest — — — — — — (46.0 ) (46.0 ) Balance as of December 31, 2014 $ 2.5 $ (222.2 ) $ 1,413.9 $ 3,175.3 $ (159.8 ) $ 4,209.7 $ 362.8 $ 4,572.5 Net earnings — — — 699.9 — 699.9 34.2 734.1 Other comprehensive income: Foreign currency translation adjustment—net of taxes — — — — (157.3 ) (157.3 ) — (157.3 ) Unrealized net gain on securities—net of taxes — — — — 0.2 0.2 — 0.2 Defined benefit plans—net of taxes — — — — 67.1 67.1 — 67.1 Comprehensive income 609.9 34.2 644.1 Purchases of treasury stock — (527.2 ) — — — (527.2 ) — (527.2 ) Retirement of treasury stock (0.1 ) 597.1 (62.0 ) (535.0 ) — — — — Acquisition of treasury stock under employee stock plans — (1.3 ) — — — (1.3 ) — (1.3 ) Issuance of $0.01 par value common stock under employee stock plans — 0.9 7.5 — — 8.4 — 8.4 Stock-based compensation expense — — 16.5 — — 16.5 — 16.5 Excess tax benefit from stock-based compensation — — 1.5 — — 1.5 — 1.5 Cash dividends ($1.20 per share) — — — (282.3 ) — (282.3 ) — (282.3 ) Distributions declared to noncontrolling interest — — — — — — (45.0 ) (45.0 ) Balance as of December 31, 2015 $ 2.4 $ (152.7 ) $ 1,377.4 $ 3,057.9 $ (249.8 ) $ 4,035.2 $ 352.0 $ 4,387.2 Amounts have been retroactively restated for all prior periods presented to reflect the five-for-one split of the Company’s common stock effected in the form of a stock dividend that was distributed on June 17, 2015. Year ended December 31, 2015 2014 2013 (in millions) Operating Activities: Net earnings $ 734.1 $ 1,436.8 $ 1,532.8 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation, depletion and amortization 479.6 392.5 410.6 Deferred income taxes 77.9 18.5 (34.3 ) Stock-based compensation expense 16.8 16.6 12.6 Excess tax benefit from stock-based compensation (1.5 ) (8.7 ) (13.5 ) Unrealized loss on derivatives 162.8 119.2 (59.3 ) Gain on remeasurement of CF Fertilisers UK investment (94.4 ) — — Impairment of equity method investment in PLNL 61.9 — — Loss on sale of equity method investments 42.8 — — Gain on sale of phosphate business — (750.1 ) — Loss on disposal of property, plant and equipment 21.4 3.7 5.6 Undistributed earnings of affiliates—net of taxes (3.3 ) (11.5 ) (11.3 ) Changes in: Accounts receivable—net (4.8 ) 36.1 0.4 Inventories (71.0 ) 63.8 (80.3 ) Accrued and prepaid income taxes (147.8 ) (56.8 ) (153.4 ) Accounts payable and accrued expenses 41.7 (53.2 ) 49.5 Customer advances (163.9 ) 204.8 (260.1 ) Other—net 51.4 (3.1 ) 67.5 Net cash provided by operating activities 1,203.7 1,408.6 1,466.8 Investing Activities: Additions to property, plant and equipment (2,469.3 ) (1,808.5 ) (823.8 ) Proceeds from sale of property, plant and equipment 12.4 11.0 12.6 Proceeds from sale of equity method investment 12.8 — — Proceeds from sale of phosphate business — 1,372.0 — Purchase of CF Fertilisers UK, net of cash acquired (551.6 ) — — Sales and maturities of short-term and auction rate securities — 5.0 13.5 Canadian terminal acquisition — — (72.5 ) Deposits to restricted cash funds — (505.0 ) (154.0 ) Withdrawals from restricted cash funds 63.3 573.0 — Deposits to asset retirement obligation funds — — (2.9 ) Other—net (43.5 ) 9.0 7.8 Net cash used in investing activities (2,975.9 ) (343.5 ) (1,019.3 ) Financing Activities: Proceeds from long-term borrowings 1,000.0 1,494.2 1,498.0 Proceeds from short-term borrowings 367.0 — — Payments of short-term borrowings (367.0 ) — — Financing fees (46.4 ) (16.0 ) (14.5 ) Purchases of treasury stock (556.3 ) (1,934.9 ) (1,409.1 ) Acquisitions of noncontrolling interests in CFL — — (918.7 ) Dividends paid on common stock (282.3 ) (255.7 ) (129.1 ) Distributions to noncontrolling interest (45.0 ) (46.0 ) (73.7 ) Issuances of common stock under employee stock plans 8.4 17.6 10.3 Excess tax benefit from stock-based compensation 1.5 8.7 13.5 Other—net — (43.0 ) 43.0 Net cash provided by (used in) financing activities 79.9 (775.1 ) (980.3 ) Effect of exchange rate changes on cash and cash equivalents (18.3 ) (4.2 ) (31.3 ) (Decrease) increase in cash and cash equivalents (1,710.6 ) 285.8 (564.1 ) Cash and cash equivalents at beginning of period 1,996.6 1,710.8 2,274.9 Cash and cash equivalents at end of period $ 286.0 $ 1,996.6 $ 1,710.8 Years Mobile and office equipment 3 to 10 Production facilities and related assets 2 to 30 Land improvements 10 to 30 Buildings 10 to 40 A deferred income tax liability is recorded for income taxes that would result from the repatriation of the portion of the investment in our non-U.S. subsidiaries and corporate joint ventures which are considered to not be permanently reinvested. No deferred income tax liability is recorded for the remainder of our investment in non-U.S. subsidiaries and corporate joint ventures which we believe to be indefinitely reinvested. As a large commercial enterprise with international operations, our income tax expense and our effective tax rate may change from period to period due to many factors. The most significant of these factors are changes in tax legislation, changes in the geographic mix of earnings, the tax characteristics of our income, the ability to realize certain foreign tax credits and net operating losses, and the portion of the income of our foreign subsidiaries and corporate joint ventures that is expected to be remitted to the U.S. and be taxable. It is reasonably likely that these items will impact income tax expense, net income and liquidity in future periods. In connection with our IPO in August 2005, CFI ceased to be a non-exempt cooperative for income tax purposes, and we entered into an NOL Agreement with CFI's pre-IPO owners relating to the future utilization of the pre-IPO NOLs. The NOL Agreement provided that if we ultimately could utilize the pre-IPO NOLs to offset applicable post-IPO taxable income, we would pay our pre-IPO owners amounts equal to the resulting federal and state income taxes actually saved. On January 2, 2013, we and the pre-IPO owners amended the NOL Agreement to provide, among other things, thatCF INDUSTRIES HOLDINGS, INC.we are entitled to retain 26.9% of any settlement realized with the IRS at the IRS Appeals level. See Note 11 to our consolidated financial statements for additional information concerning the utilization of the NOLs.Pension Assets and Liabilities Pension assets and liabilities are affected by the fair value of plan assets, estimates of the expected return on plan assets, plan design, actuarial estimates and discount rates. Actual changes in the fair value of plan assets and differences between the actual return on plan assets and the expected return on plan assets affect the amount of pension expense ultimately recognized. Our projected benefit obligation (PBO) related to our qualified pension plans was $832.4 million at December 31, 2012, which was $112.5 million higher than pension plan assets. The December 31, 2012 PBO was computed based on a weighted average discount rate of 4.0%, which was based on yields for high-quality (Aa rated or better) fixed income debt securities that match the timing and amounts of expected benefit payments as of the measurement date of December 31. Declines in comparable bond yields would increase our PBO. If the discount rate used to compute the PBO was lower or higher by 50 basis points, our PBO would have been $57.5 million higher or $51.8 million lower, respectively, than the amount previously discussed. The weighted average discount rate used to calculate pension expense in 2012 was 4.6%. If the discount rate used to compute 2012 pension expense decreased or increased by 50 basis points, the expense would have been approximately $3.8 million higher or $2.9 million lower, respectively, than the amount calculated. Our net benefit obligation, after deduction of plan assets, could increase or decrease depending on the extent to which returns on pension plan assets are lower or higher than the discount rate. The 5.7% weighted average expected long-term rate of return on assets used to calculate pension expense in 2012 is based on studies of actual rates of return achieved by equity and non-equity investments, both separately and in combination over historical holding periods. If the expected long-term rate of return on assets was higher or lower by 50 basis points, pension expense for 2012 would have been $3.0 million lower or higher, respectively. See Note 7 to our consolidated financial statements for further discussion of our pension plans.Consolidation We consolidate all entities that we control by ownership of a majority interest as well as variable interest entities for which we are the primary beneficiary. Our judgment in determining whether we are the primary beneficiary of the variable interest entities includes: assessing our level of involvement in setting up the entity; determining whether the activities of the entity are substantially conducted on our behalf; determining whether we provide more than half the subordinated financial support to the entity; and determining whether we direct the activities that most significantly impact the entity's economic performance and absorb the majority of the entity's expected losses or returns. We use the equity method to account for investments in affiliates that we do not consolidate, but for which we have the ability to exercise significant influence over operating and financial policies. Our consolidated net earnings include our share of the net earnings of these companies plus the amortization expense of certain tangible and intangible assets identified as part of purchase accounting. Our judgment regarding the level of influence over our equity method investment includes considering key factors such as ownership interest, representation on the board of directors, participation in policy decisions and material intercompany transactions. We regularly review our variable interest entities for potential changes in consolidation status. We eliminate from our consolidated financial results all significant intercompany transactions.Recent Accounting Pronouncements See Note 3 to our consolidated financial statements for a discussion of recent accounting pronouncements.Discussion of Seasonality Impacts on Operations Our sales of fertilizers to agricultural customers are typically seasonal in nature. The strongest demand for our products occurs during the spring planting season, with a second period of strong demand following the fall harvest. We and our customers generally build inventories during the low demand periods of the year in order to ensure timely product availability during the peak sales seasons. Seasonality is greatest for ammonia due to the limited ability of our customers and their customers to store significant quantities of this product. The seasonality of fertilizer demand results in our sales volumes and net sales being the highest during the spring and our working capital requirements being the highest just prior to the start of the spring season. Our quarterly financial results can vary significantly from one year to the next due to weather-related shifts in planting schedules and purchasing patterns. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. We are exposed to the impact of changes in commodity prices, the valuation of our investments, interest rates and foreign currency exchange rates.Commodity Prices Our net sales, cash flows and estimates of future cash flows related to fertilizer sales are sensitive to changes in fertilizer prices as well as changes in the prices of natural gas and other raw materials unless these costs have been fixed or hedged. A $1.00 per MMBtu change in the price of natural gas would change the cost to produce a ton of ammonia, granular urea and UAN (32%) by approximately $33, $22 and $14, respectively. Natural gas is the largest and most volatile component of the manufacturing cost for nitrogen-based fertilizers. We manage the risk of changes in natural gas prices primarily through the use of derivative financial instruments covering periods of generally less than 18 months. The derivative instruments that we use currently are natural gas swaps and options. These derivatives settle using NYMEX futures price indexes, which represent the basis for fair value at any given time. The contracts are traded in months forward and settlements are scheduled to coincide with anticipated natural gas purchases during those future periods. At December 31, 2012, we had open derivative contracts for 58.9 million MMBtus of natural gas, consisting primarily of options. A $1.00 per MMBtu increase in the forward curve prices of natural gas at December 31, 2012 would favorably change the fair value of these derivative positions by $28.0 million, and a $1.00 per MMBtu decrease in the forward curve prices of natural gas would unfavorably change their fair value by $10.3 million. At December 31, 2011, we had open derivative contracts for 156.3 million MMBtus of natural gas, consisting primarily of swaps. We purchase ammonia and sulfur for use as raw materials in the production of DAP and MAP. There can be no guarantee that significant increases in input prices can always be recovered through increases in selling prices. We enter into raw material purchase contracts to procure ammonia and sulfur at market prices. A $10 per ton change in the related cost of a short ton of ammonia or a long ton of sulfur would change DAP production cost by $2.10 per ton and $3.80 per ton, respectively. WeCF INDUSTRIES HOLDINGS, INC.also may, from time to time, purchase ammonia, granular urea, UAN, DAP and MAP to augment or replace production at our facilities.Interest Rate Fluctuations As of September 30, 2012, we had two series of senior notes, each with $800.0 million outstanding and original maturity dates of May 1, 2018 and May 1, 2020. The senior notes have fixed interest rates. The fair value of our senior notes outstanding at December 31, 2012 was approximately $2.0 billion. Borrowings under our 2012 Credit Agreement bear a current market rate of interest and we are subject to interest rate risk on such borrowings. However, in 2012, there were no borrowings under that agreement.Foreign Currency Exchange Rates In the fourth quarter of 2012, we entered into Euro/U.S. Dollar derivative hedging transactions related to the Euro denominated construction costs associated with our recently announced capacity expansion projects at our Donaldsonville and Port Neal facilities. At December 31, 2012, the notional amount of our open foreign currency forward contracts was approximately $884.0 million and the fair value was $15.3 million. A 10% change in USD/Euro forward exchange rates would change the fair value of these positions by $88.4 million. We are also directly exposed to changes in the value of the Canadian dollar, the British pound, and the Swiss franc. We do not maintain any exchange rate derivatives or hedges related to these currencies, and prior to the fourth quarter of 2012 we did not utilize any foreign currency derivatives. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. Report of Independent Registered Public Accounting FirmThe Board of Directors and StockholdersCF industries Holdings, Inc.: We have audited the accompanying consolidated balance sheets of CF Industries Holdings, Inc. and subsidiaries (the Company) as of December 31, 2012 and 2011, and the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2012. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of CF Industries Holdings, Inc. and subsidiaries as of December 31, 2012 and 2011, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), CF Industries Holdings, Inc.'s internal control over financial reporting as of December 31, 2012, based on criteria established inInternal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 27, 2013 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.KPMG LLPChicago, IllinoisFebruary 27, 2013CF INDUSTRIES HOLDINGS, INC.CONSOLIDATED STATEMENTS OF OPERATIONS Year ended December 31, 2012 2011 2010 (in millions, except
per share amounts) $ 6,104.0 $ 6,097.9 $ 3,965.0 2,990.7 3,202.3 2,785.5 3,113.3 2,895.6 1,179.5 151.8 130.0 106.1 — 4.4 21.6 49.1 20.9 166.7 200.9 155.3 294.4 47.0 50.2 10.6 2,959.4 2,790.5 895.7 135.3 147.2 221.3 (4.3 ) (1.7 ) (1.5 ) — — 17.0 (1.1 ) (0.6 ) (28.8 ) 2,829.5 2,645.6 687.7 964.2 926.5 273.7 58.1 41.9 26.7 1,923.4 1,761.0 440.7 74.7 221.8 91.5 $ 1,848.7 $ 1,539.2 $ 349.2 $ 28.94 $ 22.18 $ 5.40 $ 28.59 $ 21.98 $ 5.34 63.9 69.4 64.7 64.7 70.0 65.4 See Accompanying Notes to Consolidated Financial Statements.CF INDUSTRIES HOLDINGS, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Year ended December 31, 2012 2011 2010 (in millions) $ 1,923.4 $ 1,761.0 $ 440.7 46.7 (7.6 ) 24.2 4.6 — — 2.6 1.9 (14.6 ) (3.5 ) (40.9 ) (18.3 ) 50.4 (46.6 ) (8.7 ) 1,973.8 1,714.4 432.0 75.4 221.2 92.9 $ 1,898.4 $ 1,493.2 $ 339.1 See Accompanying Notes to Consolidated Financial Statements.CF INDUSTRIES HOLDINGS, INC.CONSOLIDATED BALANCE SHEETS December 31, 2012 2011 (in millions,
except share and
per share amounts) $ 2,274.9 $ 1,207.0 217.4 269.4 277.9 304.2 9.5 — 27.9 18.0 2,807.6 1,798.6 3,900.5 3,736.0 200.8 145.4 935.6 928.6 2,064.5 2,064.5 257.9 301.4 $ 10,166.9 $ 8,974.5 $ 366.5 $ 327.7 187.1 128.5 380.7 257.2 5.0 — — 90.1 5.3 149.7 5.6 78.0 950.2 1,031.2 — 4.8 1,600.0 1,613.0 938.8 956.8 395.7 435.8 — — 0.6 0.7 2,492.4 2,804.8 3,461.1 2,841.0 (2.3 ) (1,000.2 ) (49.6 ) (99.3 ) 5,902.2 4,547.0 380.0 385.9 6,282.2 4,932.9 $ 10,166.9 $ 8,974.5 See Accompanying Notes to Consolidated Financial Statements.CF INDUSTRIES HOLDINGS, INC.CONSOLIDATED STATEMENTS OF EQUITY Common Stockholders $0.01 Par
Value
Common
Stock Treasury
Stock Paid-In
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Total
Stockholders'
Equity Noncontrolling
Interest Total
Equity (in millions) $ 0.5 $ — $ 723.5 $ 1,048.1 $ (43.2 ) $ 1,728.9 $ 16.0 $ 1,744.9 — — — 349.2 — 349.2 91.5 440.7 — — — — 22.8 22.8 1.4 24.2 — — — — (14.6 ) (14.6 ) — (14.6 ) — — — — (18.3 ) (18.3 ) — (18.3 ) 339.1 92.9 432.0 — — — — — — 373.0 373.0 0.1 — 881.9 — — 882.0 — 882.0 0.1 — 1,108.5 — — 1,108.6 — 1,108.6 — (0.7 ) — — — (0.7 ) — (0.7 ) — 0.7 4.6 (0.3 ) — 5.0 — 5.0 — — 7.9 — — 7.9 — 7.9 — — 5.8 — — 5.8 — 5.8 — — — (26.2 ) — (26.2 ) — (26.2 ) — — — — — — (101.1 ) (101.1 ) — — — — — — 2.2 2.2 $ 0.7 $ — $ 2,732.2 $ 1,370.8 $ (53.3 ) $ 4,050.4 $ 383.0 $ 4,433.4 — — — 1,539.2 — 1,539.2 221.8 1,761.0 — — — — (7.0 ) (7.0 ) (0.6 ) (7.6 ) — — — — 1.9 1.9 — 1.9 — — — — (40.9 ) (40.9 ) — (40.9 ) 1,493.2 221.2 1,714.4 — (1,000.2 ) — — — (1,000.2 ) — (1,000.2 ) — (0.4 ) — — — (0.4 ) — (0.4 ) — 0.4 15.5 (0.3 ) — 15.6 — 15.6 — — 9.9 — — 9.9 — 9.9 — — 47.2 — — 47.2 — 47.2 — — — (68.7 ) — (68.7 ) — (68.7 ) — — — — — — (213.9 ) (213.9 ) — — — — — — (4.4 ) (4.4 ) $ 0.7 $ (1,000.2 ) $ 2,804.8 $ 2,841.0 $ (99.3 ) $ 4,547.0 $ 385.9 $ 4,932.9 — — — 1,848.7 — 1,848.7 74.7 1,923.4 — — — — 46.0 46.0 0.7 46.7 — — — — 4.6 4.6 — 4.6 — — — — 2.6 2.6 — 2.6 — — — — (3.5 ) (3.5 ) — (3.5 ) 1,898.4 75.4 1,973.8 — (500.0 ) — — — (500.0 ) — (500.0 ) (0.1 ) 1,500.2 (374.2 ) (1,125.9 ) — — — — — (2.3 ) — — — (2.3 ) — (2.3 ) — — 14.6 — — 14.6 — 14.6 — — 11.1 — — 11.1 — 11.1 — — 36.1 — — 36.1 — 36.1 — — — (102.7 ) — (102.7 ) — (102.7 ) — — — — — — (83.1 ) (83.1 ) — — — — — — 1.8 1.8 $ 0.6 $ (2.3 ) $ 2,492.4 $ 3,461.1 $ (49.6 ) $ 5,902.2 $ 380.0 $ 6,282.2 See Accompanying Notes to Consolidated Financial Statements.CF INDUSTRIES HOLDINGS, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS Year ended December 31, 2012 2011 2010 (in millions) $ 1,923.4 $ 1,761.0 $ 440.7 419.8 416.2 394.8 (138.4 ) (32.9 ) 88.6 11.9 10.6 8.3 (36.1 ) (47.2 ) (5.8 ) (78.8 ) 77.3 (9.4 ) — — 17.0 — — (28.3 ) 5.5 8.8 11.0 (14.9 ) (13.5 ) (49.9 ) 53.2 (35.5 ) 70.6 0.8 1.4 (5.1 ) 34.8 (38.5 ) 79.8 58.7 101.6 95.7 25.5 5.2 (71.3 ) 123.3 (174.3 ) 166.4 (13.1 ) 38.7 (8.7 ) 2,375.6 2,078.9 1,194.4 (523.5 ) (247.2 ) (258.1 ) 17.0 54.7 16.5 — — (28.6 ) 48.4 37.9 238.2 — — 167.1 (55.4 ) (50.4 ) (58.5 ) — — (3,177.8 ) — 31.2 31.0 (513.5 ) (173.8 ) (3,070.2 ) — — 5,197.2 (13.0 ) (346.0 ) (4,008.7 ) 40.5 — — (40.5 ) — — — (1.5 ) (209.1 ) (102.7 ) (68.7 ) (26.2 ) — — (20.0 ) (231.8 ) (145.7 ) (117.0 ) — — 1,150.0 14.6 15.5 5.0 (500.0 ) (1,000.2 ) — 36.1 47.2 5.8 (796.8 ) (1,499.4 ) 1,977.0 2.6 3.6 (0.6 ) 1,067.9 409.3 100.6 1,207.0 797.7 697.1 $ 2,274.9 $ 1,207.0 $ 797.7 See Accompanying Notes to Consolidated Financial Statements. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS1. Background and Basis of Presentation We are one of the largest manufacturers and distributors of nitrogen and phosphate fertilizer products in the world. Our operations are organized into two business segments—the nitrogen segment and the phosphate segment. Our principal customers are cooperatives and independent fertilizer distributors. Our principal fertilizer products in the nitrogen segment are ammonia, granular urea, urea ammonium nitrate solution, or UAN, and ammonium nitrate, or AN. Our other nitrogen products include urea liquor, diesel exhaust fluid, or DEF, and aqua ammonia, which are sold primarily to our industrial customers. Our principal fertilizer products in the phosphate segment are diammonium phosphate, or DAP, and monoammonium phosphate, or MAP. Our core market and distribution facilities are concentrated in the midwestern United States and other major agricultural areas of the U.S. and Canada. We also export nitrogen fertilizer products from our Donaldsonville, Louisiana manufacturing facilities and phosphate fertilizer products from our Florida phosphate operations through our Tampa port facility. Our principal assets include:•five nitrogen fertilizer manufacturing facilities in Donaldsonville, Louisiana (the largest nitrogen fertilizer complex in North America), Port Neal, Iowa, Courtright, Ontario, Yazoo City, Mississippi and Woodward, Oklahoma;•a 75.3% interest in Terra Nitrogen Company, L.P. (TNCLP), a publicly traded limited partnership of which we are the sole general partner and the majority limited partner and which, through its subsidiary Terra Nitrogen, Limited Partnership (TNLP), operates a nitrogen fertilizer manufacturing facility in Verdigris, Oklahoma;•a 66% economic interest in the largest nitrogen fertilizer complex in Canada (which we operate in Medicine Hat, Alberta through Canadian Fertilizers Limited (CFL), a consolidated variable interest entity);•one of the largest integrated ammonium phosphate fertilizer complexes in the United States in Plant City, Florida;•the most-recently constructed phosphate rock mine and associated beneficiation plant in the United States in Hardee County, Florida;•an extensive system of terminals and associated transportation equipment located primarily in the midwestern United States; and•joint venture investments that we account for under the equity method, which consist of:•a 50% interest in GrowHow UK Limited (GrowHow), a nitrogen products production joint venture located in the United Kingdom and serving primarily the British agricultural and industrial markets;•a 50% interest in Point Lisas Nitrogen Limited (PLNL), an ammonia production joint venture located in the Republic of Trinidad and Tobago; and•a 50% interest in KEYTRADE AG (Keytrade), a global fertilizer trading company headquartered near Zurich, Switzerland.CF INDUSTRIES HOLDINGS, INC. All references to "CF Holdings," "the Company," "we," "us" and "our" refer to CF Industries Holdings, Inc. (CF Holdings) and its subsidiaries, including CF Industries, Inc. (CF), except where the context makes clear that the reference is only to CF Holdings itself and not its subsidiaries. The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). In these notes to our consolidated financial statements, certain prior year amounts have been reclassified to conform to the current year's presentation.2. Summary of Significant Accounting PoliciesConsolidation and Noncontrolling Interest The consolidated financial statements of CF Holdings include the accounts of CF, all majority-owned subsidiaries and variable interest entities in which CF Holdings or a subsidiary is the primary beneficiary. All significant intercompany transactions and balances have been eliminated. CFL is a variable interest entity that is consolidated in the financial statements of CF Holdings. CFL owns a nitrogen fertilizer complex in Medicine Hat, Alberta, Canada and supplies fertilizer products to CF and Viterra Inc. (Viterra). CF Industries, Inc. owns 49% of CFL's voting common shares and 66% of CFL's nonvoting preferred shares. Viterra owns 34% of the voting common stock and non-voting preferred stock of CFL. The remaining 17% of the voting common stock is owned by GROWMARK, Inc. and La Coop fédérée. Viterra's 34% interest in the distributed and undistributed earnings of CFL is included in noncontrolling interest reported in the consolidated statement of operations. The interests of Viterra and the holders of 17% of CFL's common shares are included in noncontrolling interest reported on the consolidated balance sheet. During the second half of 2012, we entered into agreements to purchase all of the noncontrolling interests in CFL. For additional information, see Note 4—Noncontrolling Interest. TNCLP is a master limited partnership that is consolidated in the financial statements of CF Holdings. TNCLP owns the nitrogen manufacturing facility in Verdigris, Oklahoma. Through the acquisition of Terra in April 2010, we own an aggregate 75.3% of TNCLP and outside investors own the remaining 24.7%. Partnership interests in TNCLP are traded on the NYSE. As a result, TNCLP files separate financial reports with the Securities Exchange Commission (SEC). The outside investors' limited partnership interests in the partnership are included in noncontrolling interest in the consolidated financial statements. This noncontrolling interest represents the noncontrolling unitholders' interest in the partners' capital of TNCLP.Revenue Recognition The basic criteria necessary for revenue recognition are: (1) evidence that a sales arrangement exists, (2) delivery of goods has occurred, (3) the seller's price to the buyer is fixed or determinable, and (4) collectability is reasonably assured. We recognize revenue when these criteria have been met and when title and risk of loss transfers to the customer, which can be at the plant gate, a distribution facility, a supplier location or a customer destination. Revenue from forward sales programs is recognized on the same basis as other sales (when title transfers to the customer) regardless of when the customer advances are received. We offer certain incentives that typically involve rebates if a customer reaches a specified level of purchases. Incentives are accrued monthly and reported as a reduction in net sales. This process is intended to report sales at the ultimate net realized price and requires the use of estimates.CF INDUSTRIES HOLDINGS, INC. Shipping and handling fees billed to customers are reported in revenue. Shipping and handling costs incurred by us are included in cost of sales. Fees billed to third parties for ancillary throughput and storage services at distribution facilities are reported as a reduction of cost of sales.Cash and Cash Equivalents Cash and cash equivalents include highly liquid investments that are readily convertible to known amounts of cash with original maturities of three months or less. The carrying value of cash and cash equivalents approximates fair value.Investments Short-term investments and noncurrent investments are accounted for primarily as available-for-sale securities reported at fair value with changes in fair value reported in other comprehensive income unless fair value is below amortized cost (i.e., the investment is impaired) and the impairment is deemed other-than-temporary, in which case, some or all of the decline in value would be charged to earnings. The carrying values of short-term investments approximate fair values because of the short maturities and the highly liquid nature of these investments. We also hold auction rate securities (ARS), which are included in other assets. They are classified as noncurrent assets as a result of continuing market illiquidity and our judgment regarding the period of time that may elapse until the traditional auction process resumes or other market trading mechanisms develop. We intend to hold our ARS until a market recovery occurs and, based on our current liquidity position, we do not believe it is likely that these securities will need to be sold prior to their recovery in value. Therefore, we expect to recover our cost basis in the investments. As a result, the unrealized holding loss on the ARS is classified as a temporary impairment and is reported in other comprehensive income. Also included in our investments are a trust fund and an escrow account that we utilize as a means of complying with regulations and consent decrees pertaining to financial assurance requirements for certain asset retirement obligations (AROs) in Florida. These ARO funds are carried at fair value as noncurrent assets on the consolidated balance sheet. Contributions to the ARO funds are reported in the consolidated statements of cash flow as investing activities.Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at face amounts less an allowance for doubtful accounts. The allowance is an estimate based on historical collection experience, current economic and market conditions, and a review of the current status of each customer's trade accounts receivable. A receivable is past due if payments have not been received within the agreed-upon invoice terms. Account balances are charged-off against the allowance when management determines that it is probable that the receivable will not be recovered. Accounts receivable includes trade receivables and non-trade receivables such as miscellaneous non-product related billings.Inventories Fertilizer inventories are reported at the lower of cost or net realizable value with cost determined on a first-in, first-out or average cost basis. Inventory includes the cost of materials, production labor and production overhead. Inventory at warehouses and terminals also includes distribution costs. Net realizable value is reviewed at least quarterly. Fixed production costs related to idle capacity are not included in the cost of inventory but are charged directly to cost of sales.CF INDUSTRIES HOLDINGS, INC.Investments in and Advances to Unconsolidated Affiliates The equity method of accounting is used for investments in affiliates that we do not consolidate, but over which we have the ability to exercise significant influence. Profits resulting from sales or purchases with equity method investees are eliminated until realized by the investee or investor, respectively. Losses in the value of an investment in an unconsolidated affiliate, which are other than temporary, are recognized when the current fair value of the investment is less than its carrying value. Investments in and advances to unconsolidated affiliates is included in the Other segment in our segment disclosures. Our equity method investments for which the results are included in operating earnings consist of: (1) 50% ownership interest in PLNL, which operates an ammonia production facility in the Republic of Trinidad and Tobago and (2) 50% interest in an ammonia storage joint venture located in Houston, Texas. Our share of the net earnings from these investments is reported as an element of earnings from operations because these operations provide additional production and storage capacity to our operations and are integrated with our supply chain and sales activities in the nitrogen segment. Our non-operating equity method investments consist of: (1) 50% ownership in Keytrade, a fertilizer trading company headquartered near Zurich, Switzerland and (2) a 50% ownership in GrowHow, which operates nitrogen production facilities in the United Kingdom. Our share of the net earnings of these investments is not reported in earnings from operations since these operations do not provide us with additional capacity, nor are these operations integrated within our supply chain. Advances to unconsolidated affiliates are loans made to Keytrade and are classified as held-to-maturity debt securities and are reported at amortized cost.Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation, depletion and amortization are computed using the units-of-production method or the straight-line method. Depreciable lives are as follows:YearsMobile and office equipment3 to 12Production facilities and related assets3 to 25Mining assets and phosphogypsum stacks20Land improvements10 to 20Buildings10 to 45 We periodically review the depreciable lives assigned to production facilities and related assets, as well as estimated production capacities used to develop units-of-production (UOP) depreciation expense, and we change the estimates to reflect the results of those reviews. Scheduled inspections, replacements and overhauls of plant machinery and equipment at the Company's continuous process manufacturing facilities during a full plant shutdown are referred to as plant turnarounds. Plant turnarounds are accounted for under the deferral method, as opposed to the direct expense or built-in overhaul methods. Under the deferral method, expenditures related to turnarounds are capitalized into property, plant and equipment when incurred and amortized to production costs on a straight-line basis over the period benefited, which is until the next scheduled turnaround in up to 5 years. If the direct expense method were used, all turnaround costs would be expensed as incurred. Internal employee costs and overhead amounts are not considered turnaround costs and are not capitalized. Turnaround costs are classified as investing activities in the consolidatedCF INDUSTRIES HOLDINGS, INC.statements of cash flows. For additional information, see Note 18—Property, Plant and Equipment—Net.Recoverability of Long-Lived Assets We review property, plant and equipment and other long-lived assets in order to assess recoverability based on expected future undiscounted cash flows whenever events or circumstances indicate that the carrying value may not be recoverable. If the sum of the expected future net cash flows is less than the carrying value, an impairment loss is recognized. The impairment loss is measured as the amount by which the carrying value exceeds the fair value of the asset.Goodwill and Intangible Assets Goodwill represents the excess of the purchase price of an acquired entity over the amounts assigned to the assets acquired and liabilities assumed. Goodwill is not amortized, but is reviewed for impairment annually or more frequently if certain impairment conditions arise. We perform our annual goodwill impairment review in the fourth quarter of each year at the reporting unit level, which in our case, are the nitrogen and phosphate segments. Our evaluation can begin with a qualitative assessment of the factors that could impact the significant inputs used to estimate fair value. If after performing the qualitative assessment, we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill, then no further testing is performed. However, if it is unclear based on the results of the qualitative test, we perform a quantitative test involving potentially two steps. The first step compares the fair value of a reporting unit with its carrying amount, including goodwill. We use an income based valuation method, determining the present value of future cash flows, to estimate the fair value of a reporting unit. If the fair value of a reporting unit exceeds its positive carrying amount, goodwill of the reporting unit is considered not impaired, and the second step of the impairment test is unnecessary. The second step of the goodwill impairment test, if needed, compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. We recognize an impairment loss immediately to the extent the carrying value exceeds its implied fair value. Intangible assets identified with our acquisition of Terra consist of customer relationships and trademarks, which are being amortized over amortization periods of 18 years and 10 years, respectively. Our intangible assets are presented in noncurrent other assets on the consolidated balance sheet.Leases Leases are classified as either operating leases or capital leases. Assets acquired under capital leases are depreciated on the same basis as property, plant and equipment. Rental payments, including rent holidays, leasehold incentives, and scheduled rent increases are expensed on a straight-line basis. Leasehold improvements are amortized over the shorter of the depreciable lives of the corresponding fixed assets or the lease term including any applicable renewals.Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those differences are projected to be recovered or settled. Realization of deferred tax assets is dependent on our ability to generate sufficient taxable income of an appropriate character in future periods. A valuation allowance is established if it is determined to be more likely than not that aCF INDUSTRIES HOLDINGS, INC.deferred tax asset will not be realized. Interest and penalties related to unrecognized tax benefits are reported as interest expense and income tax expense, respectively.corporate joint ventures which isventure that are considered to not be permanently reinvested. No deferred income taxes have beentax liability is recorded for the remainder of our investment in non-U.S. subsidiaries and corporate joint venturesventure, which we believe to be indefinitely reinvested.currently usedthat we use are primarily fixed price swaps and options traded in the over-the-counter (OTC) markets. The derivatives reference primarily NYMEX futures contract prices, which represent the basis for fair value at any given time. These derivatives are traded in months forward and settlements are scheduled to coincide with anticipated gas purchases during those future periods. In order to manage our exposure to changes in foreign currency exchange rates, we use foreign currency derivatives, primarily forward exchange contracts.statementconsolidated statements of operations as the changes occur. Changes in the fair value of derivatives designated as cash flow hedging instruments considered effective are recorded in accumulated other comprehensive income (AOCI) as the changes occur, and are reclassified into income or expense as the hedgehedged item is recognized in earnings.sheet.sheets. The fair values of derivative instruments and any related cash collateral are reported on a gross basis rather than on a net basis.long termlong-term assets.25—16—Derivative Financial Instruments.Asset Retirement Obligations Asset Retirement Obligations (AROs) are legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development or normal operation of such assets. AROs are initially recognized as incurred when sufficient information exists to estimate fair value. When initially recognized, the fair value based on discounted future cash flows is recorded both as a liability and an increase in the carrying amount of the related long-lived asset. In subsequent periods, depreciation of the asset and accretion of the liability are recorded. For additional information, see Note 10—Asset Retirement Obligations.CF INDUSTRIES HOLDINGS, INC. Our most significant AROs are driven by regulations in Florida governing the construction, operation, closure and long-term maintenance of phosphogypsum stack systems and site reclamation for the phosphate rock mine in Hardee County, Florida. Other AROs consist of conditional AROs for the Plant City, Bartow and Hardee facilities for which a reasonable basis exists for estimating a settlement date. These AROs relate to cessation of operations, and generally include the removal and disposition of certain chemicals, waste materials, asbestos, equipment, vessels, piping, and storage tanks. We also have unrecorded AROs at our nitrogen fertilizer manufacturing complexes and at our distribution and storage facilities, that are conditional upon cessation of operations. These AROs include certain decommissioning activities as well as the removal and disposition of certain chemicals, waste materials, structures, equipment, vessels, piping and storage tanks. Also included are reclamation of land and closure of effluent ponds. A liability has not been recorded for these conditional AROs because we do not believe there is currently a reasonable basis for estimating a date or range of dates of cessation of operations at these facilities, which is necessary in order to estimate fair value.the Company'sour forward sales programs. Such advances typically represent a significant portion of the contract's sales value and are generally collected by the time the product is shipped, thereby reducing or eliminating accounts receivable from customers upon shipment. Revenue is recognized when title and risk of loss transfers upon shipment or delivery of the product to customers.a liabilityan obligation has been incurred and the costs can be reasonably estimated. Environmental liabilities are not discounted.the CF Industries Holdings, Inc. 2009 Equityour equity and Incentive Plan.incentive plans. The awards that have been granted to date are nonqualified stock options, restricted stock awards, restricted stock units and restricted stock.performance share units. The cost of employee services received in exchange for the awards is measured based on the fair value of the award on the grant date and is recognized as expense on a straight-line basis over the period during which the employee is required to provide the services. For additional information, see Note 27—19—Stock-Based Compensation.the Company iswe are subject to ordinary, routine legal proceedings related to the usual conduct of itsour business. The CompanyWe are also is involved in proceedings regarding public utility and transportation rates, environmental matters, taxes and permits relating to the operations of itsour various plants and facilities. Accruals for such contingencies are recorded to the extent management concludes their occurrence is probable and the financial impact of an adverse outcome is reasonably estimable. Legal fees are recognized as incurred and are not included in accruals for contingencies. Disclosure for specific legal contingencies is provided if the likelihood of occurrence is at least reasonably possible and the exposure is considered material to the consolidated financial statements. In making determinationsCF INDUSTRIES HOLDINGS, INC.translatedremeasured into U.S. dollars at exchange rates existing at the respective balance sheet dates. Translation adjustments resulting from fluctuations in exchange rates are recorded as a separate component of accumulated other comprehensive income within stockholders' equity. Results of operations of foreign subsidiaries are translated at the average exchange rates during the respective periods. Gains and losses resulting from these foreign currency transactions the amounts of which are not material, are included in other operating—net income.on our consolidated statements of operations. Gains and losses resulting from intercompany foreign currency transactions that are of a long-term investment nature, if any, are reported in other comprehensive income.included in other noncurrent assetsrecorded as deferred charges and are amortized over the term of the related debt.debt, in either current or noncurrent assets depending on the term. Debt issuance discounts are netted against the related debt and are amortized over the term of the debt using the effective interest method. Following are summaries of accounting pronouncements that either were adopted recently or may become applicable to our consolidated financial statements. It should be noted that the accounting standards references provided below reflect(ASC),Topic 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires additional disclosure about the nature, amount, timing and related Accounting Standards Updates (ASU).Recently Adopted PronouncementsMay 2011,July 2015, the FASB issued a standard that is intendedvoted to improve comparabilitydefer the effective date of fair value measurements presented and disclosed in financial statements prepared in accordancethis ASU through the issuance of ASU No. 2015-14, Revenue from Contracts with U.S. generally accepted accounting principles and International Financial Reporting Standards (ASU No. 2011-04). This standard clarifies the application of existing fair value measurement requirements including (1) the applicationCustomers: Deferral of the highest and best use valuation premise, (2) the methodologyEffective Date, to measure the fair value of an instrument classified in a reporting entity's stockholders' equity, (3) disclosure requirements for quantitative information on Level 3 fair value measurements and (4) guidance on measuring the fair value of financial instruments managed within a portfolio. In addition, the standard requires additional disclosures of the sensitivity of fair value to changes in unobservable inputs for Level 3 securities. This standard is effectiveDecember 15, 2017 for interim and annual reporting periods beginning after that date. Early adoption of the standard as of December 15, 2011. We adopted this standard in the first quarter of 2012 and its adoption did not have a material impact on our consolidated financial statements. In June 2011, the FASB issued a standard that pertains to the presentation of comprehensive income (ASU No. 2011-05). This standard requires that comprehensive income be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The standard also requires entities to disclose on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net earnings. This standard no longer allows companies to present components of other comprehensive income only in theCF INDUSTRIES HOLDINGS, INC.statement of equity. In December 2011, the FASB deferred the new requirement to present the reclassification components of other comprehensive income in the statement of operations by issuing ASU No. 2011-12. (See discussion of ASU No. 2013-02 below.) The remaining components of the original ASU No. 2011-05 are effective for2016 (for interim and annual reporting periods beginning on or after December 15, 2011.that date) is permitted. We adoptedare currently evaluating the impact of the adoption of this standard in the first quarter of 2012 and its adoption did not have a material impactASU on our consolidated financial statements. In September 2011,FASB issuedremaining 50% equity interest in CF Fertilisers UK not previously owned by us for total consideration of $570.4 million, and CF Fertilisers UK became wholly owned by us. The purchase price was funded with cash on hand. We recorded a standardgain of $94.4 million on the remeasurement to simplifyfair value of our initial 50% equity interest in CF Fertilisers UK that is included in equity in earnings of non-operating affiliates—net of taxes for the processyear ended December 31, 2015. See Note 8—Equity Method Investments for determining goodwill impairment (ASU No. 2011-08). This standard gives an entityadditional information.option,Company incurred direct transaction costs of $3.6 million for the acquisition of CF Fertilisers UK, which were expensed as incurred and included in transaction costs in our consolidated statements of operations.first step,replacement cost approach for property, plant and equipment and the income approach for intangible assets. Final determination of the fair values may result in further adjustments to assess qualitative factors in determining whether a two-step quantitative goodwill impairment test must be performed. If an assessmentthe amounts presented below. Original Valuation Adjusted Valuation (In millions) Fair value of consideration transferred $ 570.4 $ — $ 570.4 Fair value of 50% of equity interest already held by the Company 570.4 — 570.4 Total fair value $ 1,140.8 $ — $ 1,140.8 Assets acquired and liabilities assumed Current assets $ 165.1 $ 1.5 $ 166.6 Property, plant and equipment 898.1 (0.1 ) 898.0 Goodwill 328.4 (8.3 ) 320.1 Other assets 140.0 (1.2 ) 138.8 Total assets acquired 1,531.6 (8.1 ) 1,523.5 Current liabilities 73.6 0.5 74.1 Deferred tax liabilities—noncurrent 128.8 (8.6 ) 120.2 Other liabilities 188.4 — 188.4 Total liabilities assumed 390.8 (8.1 ) 382.7 Total net assets acquired $ 1,140.8 $ — $ 1,140.8 qualitative factors leads2015, adjustments were made to a determination that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then performing the two-step test is deemed unnecessary. This standard is effective for interimassets acquired and annual goodwill impairment tests performed for fiscal years beginning after December 15, 2011. We adopted this standardliabilities assumed, which resulted in a corresponding $8.3 million decrease to goodwill.first quarterrecognition of 2012$320.1 million of goodwill, which is not deductible for income tax purposes. Other assets acquired included intangible assets of $131.8 million. See Note 7—Goodwill and its adoption did not have a material impact on our consolidated financial statements.Recently Issued Pronouncements In December 2011, the FASB issued a standard pertainingOther Intangible Assets, for additional information related to disclosures about offsetting assets and liabilities (ASU No. 2011-11). This standard requires an entity to disclose information about offsetting and related arrangements, including financial instruments and derivative instruments,goodwill and the effect these arrangements have on the entity's financial position. In January 2013, the FASB issued an amendment to ASU No. 2011-11 (ASU No. 2013-01) clarifying that its scope applies to derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions that are either offset or subject to an enforceable master netting arrangement or similar agreement. These standards are effective for disclosures in interim and annual reporting periods beginning on or after January 1, 2013. We do not expect the adoption of these standards to have a significant impact on our consolidated financial statement disclosures. In February 2013, the FASB issued a standard pertaining to the reporting of amounts reclassified out of accumulated other comprehensive income (AOCI) (ASU No. 2013-02). The standard requires that an entity provide, by component, information regarding the amounts reclassified out of AOCI, either on the face of the statement of operations or in the notes, and an indication as to the line items in the statement of operations that the amounts were reclassified to. In addition, in certain cases, an entity is required to cross-reference to other disclosures that provide additional details about the reclassified amounts. This standard is effective prospectively for reporting periods beginning after December 15, 2012. We do not expect the adoption of this standard to have a significant impact on our consolidated financial statements.4. Noncontrolling InterestCanadian Fertilizers Limited (CFL) CFL owns a nitrogen fertilizer complex in Medicine Hat, Alberta, Canada which supplies fertilizer products to CF Industries, Inc. and Viterra Inc. (Viterra). CFL's Medicine Hat complex is the largest nitrogen fertilizer complex in Canada, with two world-scale ammonia plants, a world-scale granular urea plant and on-site storage facilities for both ammonia and urea. CF Industries, Inc. owns 49% of CFL's voting common shares and 66% of CFL's nonvoting preferred shares. Viterra owns 34% of the voting common shares and non-voting preferred shares ofCF INDUSTRIES HOLDINGS, INC.CFL. The remaining 17% of the voting common shares are owned by GROWMARK, Inc. and La Coop fédérée. CFL is a variable interest entity that we consolidate in our financial statements. General creditors of CFL do not have direct recourse to the assets of CF Industries, Inc. However, the product purchase agreement between CF Industries, Inc. and CFL does require CF Industries, Inc. to advance funds to CFL in the event that CFL is unable to meet its obligations as they become due. The amount of each advance would be at least 66% of the deficiencysales and would be more in any year in which CF Industries, Inc. purchased more than 66% of Medicine Hat's production. A similar purchase agreement and obligation also exists for Viterra. CF Industries, Inc. and Viterra currently manage CFL such that each party is responsible for its share of CFL's fixed costs and that CFL's production volume is managed to meet the parties' combined requirements. Based on the contractual arrangements, CF Industries, Inc. is the primary beneficiary of CFL as CF Industries, Inc. directs the activities that most significantly impact CFL's economic performance and receives at least 66% of the economic risks and rewards of CFL. CFL's net sales were $217.1 million and $709.6 million and $454.0 million, for 2012, 2011 and 2010, respectively. CFL's net sales in 2012 were impacted by the selling price modification discussed further below. CFL's assets and liabilities at December 31, 2012 were $108.1 million and $57.6 million, respectively, and at December 31, 2011 were $528.5 million and $479.5 million, respectively. Because CFL's functional currency is the Canadian dollar, consolidation of CFL results in a cumulative foreign currency translation adjustment, which is reported in other comprehensive income (loss). In accordance with CFL's governing agreements, CFL's net earnings are distributed to its members annually based on approval by CFL's shareholders. A portion of CF Fertilisers UK since the amounts reported as noncontrolling interestacquisition date included in the consolidated statements of operations represents Viterra's 34%for the year ended December 31, 2015 was $208.4 million and $21.8 million, respectively. Year ended December 31, 2015 2014 (in millions) Net sales $ 4,676.9 $ 5,407.8 Net earnings attributable to common stockholders 626.2 1,519.2 earningsyear ended December 31, 2014. The pro forma results are not necessarily indicative of CFL, whilethe combined results had the CF Fertilisers UK acquisition been completed on January 1, 2014.amountstransaction is subject to conditions that are in addition to the conditions to which the consummation of the portion of the transaction involving the ENA Business other than the Natgasoline project is subject, and the consummation of the Natgasoline portion of the transaction is not a condition to consummation of the portion of the transaction involving the ENA Business other than the Natgasoline project. New CF will operate under a name to be determined by CF Holdings and be led by our existing management.noncontrollingdiscontinued operations in our consolidated statements of operations. Year ended December 31, 2015 2014 2013 (in millions, except per share amounts) Net earnings attributable to common stockholders $ 699.9 $ 1,390.3 $ 1,464.6 Weighted-average common shares outstanding 235.3 255.9 294.4 Net earnings attributable to common stockholders $ 2.97 $ 5.43 $ 4.97 Weighted-average common shares outstanding 235.3 255.9 294.4 Dilutive common shares—stock options 0.8 0.8 1.6 Diluted weighted-average shares outstanding 236.1 256.7 296.0 Net earnings attributable to common stockholders $ 2.96 $ 5.42 $ 4.95 Share and per share amounts have been retroactively restated for all prior periods presented to reflect the five-for-one split of the Company’s common stock effected in the form of a stock dividend that was distributed on June 17, 2015. December 31, 2015 2014 (in millions) Land $ 68.1 $ 48.4 Machinery and equipment 7,347.6 5,268.7 Buildings and improvements 270.9 160.7 3,626.6 2,559.0 11,313.2 8,036.8 Less: Accumulated depreciation and amortization 2,774.2 2,511.0 $ 8,539.0 $ 5,525.8 Year ended December 31, 2015 2014 2013 (in millions) Net capitalized turnaround costs at beginning of the year $ 153.2 $ 119.8 $ 82.1 Additions 134.9 88.3 78.6 Depreciation (65.4 ) (53.9 ) (40.8 ) Effect of exchange rate changes (2.6 ) (1.0 ) (0.1 ) Net capitalized turnaround costs at end of the year $ 220.1 $ 153.2 $ 119.8 Ammonia Granular Urea UAN AN Other Total (in millions) Balance as of December 31, 2014 $ 578.7 $ 829.6 $ 577.0 $ 68.9 $ 38.6 $ 2,092.8 10.5 — — 271.0 38.6 320.1 Effect of exchange rate changes (1.9 ) (1.8 ) (1.3 ) (15.6 ) (2.2 ) (22.8 ) Balance as of December 31, 2015 $ 587.3 $ 827.8 $ 575.7 $ 324.3 $ 75.0 $ 2,390.1 sheets representsheets. December 31, 2015 December 31, 2014 Gross
Carrying
Amount Accumulated
Amortization Net Gross
Carrying
Amount Accumulated
Amortization Net (in millions) Intangible assets: Customer relationships $ 139.5 $ (17.9 ) $ 121.6 $ 50.0 $ (13.2 ) $ 36.8 TerraCair brand 10.0 (10.0 ) — 10.0 (5.0 ) 5.0 Trade names 34.8 (0.7 ) 34.1 — — — Total intangible assets $ 184.3 $ (28.6 ) $ 155.7 $ 60.0 $ (18.2 ) $ 41.8 intereststable above are definite-lived intangible assets of Viterra and$131.8 million identified in connection with the holders of 17% of CFL's common shares. CF Industries, Inc. operates the Medicine Hat facility pursuant to a management agreement and purchases approximately 66%July 31, 2015 acquisition of the facility's ammonia and granular urea production pursuant toremaining 50% equity interest in CF Fertilisers UK not previously owned by us. CF Fertilisers UK's intangible assets are being amortized over a product purchase agreement. Viterra has the right, but not the obligation, to purchase the remaining 34%period of the facility's production under a similar product purchase agreement. To the extent that Viterra does not purchase its 34%approximately 20 years.the facility's production, CF Industries, Inc. is obligated to purchase any remaining amounts. However, since 1995, Viterra has purchased at least 34% of the facility's production each year. Both the management agreement and the product purchase agreement can be terminated by either CF Industries, Inc. or CFL upon a twelve-month notice. Under the product purchase agreements that were in effect until the fourth quarter of 2012, both CF Industries, Inc. and Viterra paid the greater of production cost or market price for purchases. An initial portion of the selling priceour identifiable intangibles was paid based upon production cost plus an agreed-upon margin once title passes as the products were shipped. The remaining portion of the selling price, representing the difference between the market price and production cost plus an agreed-upon margin, was paid after the end of the year. The sales revenue attributable to this remaining portion of the selling price was accrued on an interim basis. In the Company's consolidated financial statements, the net sales and accounts receivable attributable to CFL are solely generated by transactions with Viterra, as all transactions with CF Industries are eliminated in consolidation. At December 31, 2012 and December 31, 2011, the net receivable due from Viterra related to the product purchases that was reflected on our consolidated balance sheets was $2.0$10.4 million, $4.0 million and $141.0$3.8 million respectively. See further discussion below regarding a modification to the CFL selling prices which reduced the net receivable due from Viterra.CF INDUSTRIES HOLDINGS, INC. The product purchase agreements also provide that CFL will distribute its net earnings to CF Industries, Inc. and Viterra annually based on the respective quantities of product purchased from CFL. The net earnings attributable to Viterra that are reported in noncontrolling interest on the consolidated balance sheets at December 31, 2012 and December 31, 2011 were approximately $5.3 million and $149.7 million, respectively. The annual distribution is paid after the end of the year. The distributions to Viterra are reported as financing activities in the consolidated statements of cash flows, as we consider these payments to be similar to dividends. In August 2012, CF Industries Holdings, Inc. entered into an agreement to acquire Viterra's interest in CFL for a total purchase price of C$0.9 billion, subject to certain adjustments. In October 2012, we entered into an agreement with each of GROWMARK, Inc. and La Coop fédérée to acquire the common shares of CFL owned by those parties. As a result of these transactions, we will own 100% of CFL and will be entitled to purchase 100% of CFL's nitrogen fertilizer production. The completion of these transactions is subject to the receipt of regulatory approvals in Canada and other terms and conditions in the definitive agreements. In the fourth quarter of 2012, the CFL Board of Directors approved an amendment to the product purchase agreements. The amendment modified the selling prices that CFL charges for products sold to Viterra and CF Industries. The modified selling prices are based on production cost plus an agreed-upon margin and are effective retroactive to January 1, 2012. As a result of the January 1, 2012 effective date, the Company has recognized in its fourth quarter 2012 consolidated statement of operations a reduction in net sales to Viterra of $129.7 million and a corresponding reduction in earnings attributable to the noncontrolling interest to reverse the interim market price accruals recognized in the first three quarters of 2012. The net effect of this change had no impact on the Company's net earnings attributable to common stockholders, but did reduce the Company's reported net sales, gross margin, operating earnings and earnings before income taxes by $129.7 million in the fourth quarter. The selling price modification also had no impact on the Company's net cash flows as the selling price modification was entirely offset by a change in the distributions payable to the noncontrolling interest.Terra Nitrogen Company, L.P. (TNCLP) TNCLP is a master limited partnership that owns a nitrogen manufacturing facility in Verdigris, Oklahoma. We own an aggregate 75.3% of TNCLP through general and limited partnership interests. Outside investors own the remaining 24.7% of the limited partnership. For financial reporting purposes, the assets, liabilities and earnings of the partnership are consolidated into our financial statements. The outside investors' limited partnership interests in the partnership have been recorded as part of noncontrolling interest in our consolidated financial statements. The noncontrolling interest represents the noncontrolling unitholders' interest in the equity of TNCLP. An affiliate of CF Industries is required to purchase all of TNCLP's fertilizer products at market prices as defined in the Amendment to the General and Administrative Services and Product Offtake Agreement, dated September 28, 2010. TNCLP makes cash distributions to the general and limited partners based upon formulas defined within its Agreement of Limited Partnership. Cash available for distribution is defined in the agreement generally as all cash receipts less all cash disbursements, less certain reserves (including reserves for future operating and capital needs) established as the general partner determines in its reasonable discretion to be necessary or appropriate. Changes in working capital impact available cash, as increases in the amount of cash invested in working capital items (such as accounts receivable or inventory) reduce available cash, while declines in the amount of cash invested in working capital increase available cash. Cash distributions to the limited partners and general partner vary depending on theCF INDUSTRIES HOLDINGS, INC.extent to which the cumulative distributions exceed certain target threshold levels set forth in the Agreement of Limited Partnership. In each of the applicable quarters of 2012, 2011 and 2010, the minimum quarterly distributions were satisfied, which entitled us, as the general partner, to receive increased distributions on our general partner interests as provided for in the Agreement of Limited Partnership. The earnings attributed to our general partner interest in excess of the threshold levels for the years ended December 31, 2012, 2011,2015, 2014 and 2010 were $234.0 million, $214.2 million and $49.0 million,2013, respectively. At December 31, 2012, Terra Nitrogen GP Inc. (TNGP), In early 2015, management approved a plan to discontinue the general partner of TNCLP (and an indirect wholly-owned subsidiary of CF Industries), and its affiliates owned 75.3% of TNCLP's outstanding units. When not more than 25% of TNCLP's issued and outstanding units are held by non-affiliates of TNGP, TNCLP, at TNGP's sole discretion, may call, or assign to TNGP or its affiliates, TNCLP's right to acquire all such outstanding units held by non-affiliated persons. If TNGP elects to acquire all outstanding units, TNCLP is required to give at least 30 but not more than 60 days notice of TNCLP's decision to purchase the outstanding units. The purchase price per unit will be the greater of (1) the averageuse of the previous 20 trading days' closing prices asTerraCair brand in the sale of DEF. Based on the discontinuation of the date five days beforeuse of this brand, the purchase is announced or (2)related intangible assets were fully amortized during the highest price paid by TNGP or anyfirst quarter of its affiliates2015.any unit within the 90 days preceding the date the purchase is announced. A reconciliationeach of the beginning and ending balances of noncontrolling interest and distributions payable to the noncontrolling interests on our consolidated balance sheetsfive succeeding fiscal years is provided below. Year ended December 31, 2012 2011 2010 CFL TNCLP Total CFL TNCLP Total CFL TNCLP Total (in millions) $ 16.7 $ 369.2 $ 385.9 $ 17.4 $ 365.6 $ 383.0 $ 16.0 $ — $ 16.0 — — — — — — — 373.0 373.0 3.5 71.2 74.7 154.0 67.8 221.8 75.8 15.7 91.5 (5.3 ) (77.8 ) (83.1 ) (149.7 ) (64.2 ) (213.9 ) (78.0 ) (23.1 ) (101.1 ) 2.5 — 2.5 (5.0 ) — (5.0 ) 3.6 — 3.6 $ 17.4 $ 362.6 $ 380.0 $ 16.7 $ 369.2 $ 385.9 $ 17.4 $ 365.6 $ 383.0 $ 149.7 $ — $ 149.7 $ 78.0 $ — $ 78.0 $ 92.1 $ — $ 92.1 5.3 77.8 83.1 149.7 64.2 213.9 78.0 23.1 101.1 (154.0 ) (77.8 ) (231.8 ) (81.5 ) (64.2 ) (145.7 ) (93.9 ) (23.1 ) (117.0 ) 4.3 — 4.3 3.5 — 3.5 1.8 — 1.8 $ 5.3 $ — $ 5.3 $ 149.7 $ — $ 149.7 $ 78.0 $ — $ 78.0 Estimated
Amortization
Expense (in millions) 2016 $ 9.0 2017 9.0 2018 9.0 2019 9.0 2020 9.0 December 31, 2015 2014 (in millions) Operating equity method investments $ 297.8 $ 377.6 Non-operating equity method investments — 483.9 Investments in and advances to affiliates $ 297.8 $ 861.5 Year ended December 31, 2015 2014 2013 (in millions) Equity in earnings of operating affiliates: $ (36.2 ) $ 37.6 $ 34.6 Ammonia storage joint venture 1.2 5.5 7.1 Total equity in earnings of operating affiliates $ (35.0 ) $ 43.1 $ 41.7 Year ended December 31, 2015 2014 2013 (in millions) Equity in earnings of non-operating affiliates—net of taxes: $ 107.2 $ 19.7 $ 10.8 (34.9 ) 2.8 (1.2 ) Total equity in earnings of non-operating affiliates—net of taxes $ 72.3 $ 22.5 $ 9.6 5.(1) Equity in earnings of non-operating affiliates—net of taxes in 2015 includes our after-tax remeasurement gain of $94.4 million, and our equity in earnings of CF Fertilisers UK from January 1, 2015 through July 31, 2015, the acquisition date. short-term investments and other investments consist of the following: December 31, 2012 December 31, 2011 December 31, 2015 Adjusted
Cost Unrealized
Gains Unrealized
Losses Fair Value Adjusted
Cost Unrealized
Gains Unrealized
Losses Fair Value Cost Basis Unrealized
Gains Unrealized
Losses Fair Value (in millions) (in millions) $ 106.0 $ — $ — $ 106.0 $ 99.8 $ — $ — $ 99.8 $ 70.7 $ — $ — $ 70.7 Cash equivalents: 1,996.9 — — 1,996.9 515.0 — — 515.0 190.3 — — 190.3 172.0 — — 172.0 592.2 — — 592.2 25.0 — — 25.0 $ 2,274.9 $ — $ — $ 2,274.9 $ 1,207.0 $ — $ — $ 1,207.0 $ 286.0 $ — $ — $ 286.0 27.3 — (1.3 ) 26.0 75.6 — (4.7 ) 70.9 200.8 — — 200.8 145.4 — — 145.4 Restricted cash 22.8 — — 22.8 21.2 0.8 — 22.0 20.3 — (0.1 ) 20.2 17.7 1.7 — 19.4 December 31, 2014 Cost Basis Unrealized
Gains Unrealized
Losses Fair Value (in millions) Cash $ 71.3 $ — $ — $ 71.3 Cash equivalents: U.S. and Canadian government obligations 1,916.3 — — 1,916.3 Other debt securities 9.0 — — 9.0 Total cash and cash equivalents $ 1,996.6 $ — $ — $ 1,996.6 Restricted cash 86.1 — — 86.1 Nonqualified employee benefit trusts 17.4 2.0 — 19.4 atas of December 31, 20122015 and 20112014 that are recognized at fair value on a recurring basis, and indicatesindicate the fair value hierarchy utilized to determine such fair value.value: December 31, 2012 Total Fair Value Quoted Prices
in Active
Markets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) (in millions) $ 2,274.9 $ 2,274.9 $ — $ — 17.3 — 17.3 — 200.8 200.8 — — 26.0 — — 26.0 22.0 22.0 — — $ 2,541.0 $ 2,497.7 $ 17.3 $ 26.0 $ 5.6 $ — $ 5.6 $ — $ 5.6 $ — $ 5.6 $ — December 31, 2015 Total Fair Value Quoted Prices
in Active
Markets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) (in millions) Cash equivalents $ 215.3 $ 215.3 $ — $ — Restricted cash 22.8 22.8 — — Derivative assets 0.6 — 0.6 — Nonqualified employee benefit trusts 19.4 19.4 — — Derivative liabilities (211.3 ) — (211.3 ) — December 31, 2011 Total Fair Value Quoted Prices
in Active
Markets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) (in millions) $ 1,207.0 $ 1,207.0 $ — $ — 0.5 — 0.5 — 145.4 145.4 — — 70.9 — — 70.9 20.2 20.2 — — $ 1,444.0 $ 1,372.6 $ 0.5 $ 70.9 $ 74.7 $ — $ 74.7 $ — $ 74.7 $ — $ 74.7 $ — December 31, 2014 Total Fair Value Quoted Prices
in Active
Markets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) (in millions) Cash equivalents $ 1,925.3 $ 1,925.3 $ — $ — Restricted cash 86.1 86.1 — — Derivative assets 0.5 — 0.5 — Nonqualified employee benefit trusts 19.4 19.4 — — Derivative liabilities (48.4 ) — (48.4 ) — Following is a summary of the valuation techniques for assets and liabilities recorded in our consolidated balance sheets at fair value on a recurring basis:Cash and At20122015 and 2011,2014, our cash and cash equivalents consisted primarily of U.S. and Canadian government obligations and money market mutual funds that invest in U.S. government obligations and other investment-grade securities. ��currently use are fixed priceprimarily natural gas fixed priced swaps, andnatural gas options and foreign currency forward contracts traded in the over-the-counterOTC markets with either large oil and gas companiesmulti-national commercial banks, other major financial institutions or large financial institutions.energy companies. The natural gas derivatives are traded in months forwardderivative contracts represent anticipated gas needs for future periods and settlements are scheduled to coincide with anticipated gas purchases during those future periods. The foreign currency derivative contracts held are for the exchange of a specified notional amount of currencies at specified future dates coinciding with anticipated foreign currency cash outflows associated with our Donaldsonville, LALouisiana and Port Neal, IA capitalIowa capacity expansion projects. The natural gas derivative contracts settle using primarily NYMEX futures prices and accordingly, toprices. To determine the fair value of these instruments, we use quoted market prices from NYMEX and standard pricing models with inputs derived from or corroborated by observable market data such as forward curves supplied by an industry recognized and unrelatedindustry-recognized independent third party. The currency derivatives are valued based on quoted market prices supplied by an industry recognized, unrelatedindustry-recognized independent third party. See Note 25—16—Derivative Financial Instruments, for additional information.Asset Retirement Obligation Funds In order to meet financial assurance requirements associated with certain AROs in Florida, we maintain investments in an escrow account established for the benefit of the Florida Department of Environmental Protection (FDEP) and a trust established to comply with a 2010 Consent Decree with the U.S. Environmental Protection Agency (EPA) and the FDEP. The investments in the trust and escrow account are accounted for as available-for-sale securities. The fair values of these investments are based upon daily quoted prices representing the Net Asset Value (NAV) of the investments. SeeCF INDUSTRIES HOLDINGS, INC.Note 10—Asset Retirement Obligations, for additional information regarding the trust and escrow accounts. The fair values of the ARO funds approximate their cost basis.Investments in Auction Rate Securities Our investments in Auction Rate Securities (ARS) are accounted for as available-for-sale securities and are included on our consolidated balance sheets in other assets. They are classified as noncurrent assets as a result of the continuing market illiquidity and our judgment regarding the period of time that may elapse until the traditional auction process resumes or other effective market trading mechanisms develop. These ARS have maturities that range up to 35 years, with 63% of the carrying value maturing in 20 to 30 years. We currently intend to hold our ARS until a market recovery occurs and, based on our current liquidity position, we do not believe it is likely that we will need to sell these securities prior to their recovery in value. Therefore, we expect to recover our amortized cost basis in the investments. As a result, our unrealized holding loss on these securities is classified as a temporary impairment and is reported in other comprehensive income (loss). During 2012, $48.4 million of our ARS were redeemed at par. We are unable to use significant observable (Level 1 or Level 2) inputs to value these investments and they are therefore classified as Level 3 for purposes of the fair value disclosure requirements. To determine the fair value of our ARS, we use a mark-to-model approach that relies on discounted cash flows, market data and inputs derived from similar instruments to arrive at the fair value of these instruments. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset. It is reasonably possible that a change in the estimated fair value for these instruments measured using Level 3 inputs could occur in the future. The following table provides a reconciliation of changes in these Level 3 assets. (in millions) $ 70.9 (48.4 ) 3.5 $ 26.0 deferred compensation related to nonqualified employee benefits.supplemental pension plans. The investments are accounted for as available-for-sale securities. The fair values of the truststrust assets are based on daily quoted prices representingin an active market, which represents the net asset values (NAV) of the investments.shares held in the trusts. These trusts are included on our consolidated balance sheetsheets in other assets.net earnings per share were computedcarrying amounts and estimated fair values of our financial instruments are as follows: Year ended December 31, 2012 2011 2010 (in millions, except
per share amounts) $ 1,848.7 $ 1,539.2 $ 349.2 63.9 69.4 64.7 $ 28.94 $ 22.18 $ 5.40 63.9 69.4 64.7 0.8 0.6 0.7 64.7 70.0 65.4 $ 28.59 $ 21.98 $ 5.34 December 31, 2015 2014 Carrying
Amount Fair Value Carrying
Amount Fair Value (in millions) Long-term debt $ 5,592.7 $ 5,455.8 $ 4,592.5 $ 4,969.3 Year ended December 31, 2015 2014 2013 (in millions) Domestic $ 1,030.4 $ 2,073.2 $ 2,155.4 Non-U.S. 27.2 114.1 54.3 $ 1,057.6 $ 2,187.3 $ 2,209.7 Year ended December 31, 2015 2014 2013 (in millions) Current Federal $ 258.1 $ 645.2 $ 641.5 Foreign 20.1 29.8 8.6 State 38.5 79.5 70.7 316.7 754.5 720.8 Deferred Federal 76.4 11.7 (6.5 ) Foreign (13.3 ) (8.0 ) (6.7 ) State 16.0 14.8 (21.1 ) 79.1 18.5 (34.3 ) Income tax provision $ 395.8 $ 773.0 $ 686.5 Year ended December 31, 2015 2014 2013 (in millions, except percentages) Earnings before income taxes and equity in earnings of non-operating affiliates $ 1,057.6 $ 2,187.3 $ 2,209.7 Expected tax at U.S. statutory rate 370.2 35.0 % 765.6 35.0 % 773.4 35.0 % State income taxes, net of federal 32.2 3.0 % 61.7 2.8 % 32.0 1.4 % Net earnings attributable to noncontrolling interest (12.0 ) (1.1 )% (16.3 ) (0.8 )% (23.9 ) (1.1 )% U.S. manufacturing profits deduction (16.8 ) (1.6 )% (28.4 ) (1.3 )% (47.0 ) (2.1 )% Foreign tax rate differential (17.5 ) (1.7 )% (40.3 ) (1.8 )% (46.9 ) (2.1 )% U.S. tax on foreign earnings (0.5 ) — % 9.1 0.4 % 35.4 1.6 % Depletion — — % (0.5 ) — % (24.2 ) (1.1 )% Valuation allowance 16.1 1.5 % 17.7 0.8 % 26.8 1.2 % Non-deductible capital costs 17.7 1.7 % — — % — — % Federal tax settlement — — % — — % (50.1 ) (2.2 )% Other 6.4 0.6 % 4.4 0.2 % 11.0 0.5 % Income tax at effective rate $ 395.8 37.4 % $ 773.0 35.3 % $ 686.5 31.1 % computationfourth quarter of diluted2015, we determined the carrying value of our equity method investment in PLNL exceeded fair value and recognized an impairment of our equity method investment in PLNL of $61.9 million, which is included in the equity in earnings of operating affiliates in 2015. Our income tax provision does not include a tax benefit for the impairment of the equity investment as it does not give rise to a tax deduction. See Note 8—Equity Method Investments for additional information. December 31, 2015 2014 (in millions) Deferred tax assets: Net operating loss carryforwards, principally in foreign jurisdictions $ 100.2 $ 102.6 Retirement and other employee benefits 95.1 87.5 Unrealized loss on hedging derivatives 67.8 5.3 Intangible asset 60.2 84.8 Federal tax settlement 14.1 27.8 Other 111.2 102.4 448.6 410.4 Valuation allowance (109.2 ) (115.7 ) 339.4 294.7 Deferred tax liabilities: Depreciation and amortization (1,209.1 ) (979.7 ) Foreign earnings (27.9 ) (34.0 ) Unrealized gain on hedging derivatives (2.8 ) — Other (15.8 ) (15.6 ) (1,255.6 ) (1,029.3 ) Net deferred tax liability $ (916.2 ) $ (734.6 ) earnings per common share, potentially dilutive stock optionsoperating loss carryforwards of $320.3 million that are excluded ifindefinitely available in the effectforeign jurisdiction. As the future realization of their inclusionthese carryforwards is anti-dilutive. Fornot anticipated, a valuation allowance of $93.6 million has been recorded. Of this amount, $14.5 million and $17.2 million were recorded as valuation allowances for the years ended December 31, 2012, 20112015 and 2010, anti-dilutive stock options2014, respectively.insignificant.August 2011,general, filed tax returns remain subject to examination by United States tax jurisdictions for years 1999 and thereafter, by Canadian tax jurisdictions for years 2006 and thereafter, and by United Kingdom tax jurisdictions for years 2014 and thereafter. December 31, 2015 2014 (in millions) Unrecognized tax benefits: Beginning balance $ 135.8 $ 103.7 Additions for tax positions taken during the current year 2.4 22.3 Additions for tax positions taken during prior years 17.4 18.3 Reductions related to lapsed statutes of limitations (0.8 ) (8.5 ) Ending balance $ 154.8 $ 135.8 Boardconsolidated balance sheets for accrued interest and penalties related to income taxes of Directors authorized$27.8 million and $24.6 million are included in other liabilities as of December 31, 2015 and 2014, respectively.programresult of this provision, for the year ended December 31, 2015, we recorded a federal tax receivable of approximately $120 million that is expected to repurchase Company common stockresult in a tax refund and is included in prepaid income taxes on our consolidated balance sheet as of December 31, 2015. This receivable is primarily associated with the new urea plant and related offsites that were placed into service at our Donaldsonville, Louisiana complex during November of 2015.a total expenditureadditional information.up to $1.5 billion plus program expenses (the 2011 Stock Repurchase Program). In the second half of 2011, we repurchased 6.5$11.9 million shares for $1.0 billion and during the second quarter of 2012, we repurchased an2015 for the pre-tax losses on the sale of equity method investments. The tax benefit related to the loss on the sale of our interests in Keytrade is included in equity in earnings of non-operating affiliates—net of taxes in our consolidated statements of operations. See Note 8—Equity Method Investments for additional 3.1 million shares under the programinformation.$500.0 million, thereby completing the 2011 Stock Repurchase Program.Canadian income tax purposes and distributed all of its earnings as patronage dividends to its customers, including CF Industries. The impactpatronage dividends were deductible for Canadian income tax purposes for tax years preceding April 29, 2013. As a result of the share repurchase program on weighted average shares outstandingAugust 2, 2012 definitive agreement we entered into with Glencore International plc to acquire their interests in CFL and our April 30, 2013 acquisition of those interests, CFL is reflectedno longer permitted to deduct the dividends it distributes to CF Industries. As a result, CFL has recorded an income tax provision in the table above. Also, seeyears 2013 through 2015. See Note 26—Stockholders' Equity.7.15—Noncontrolling Interest for further information. Through December 31, 2012, we maintained fourdefined benefit pension plans; twoplans—three in North America (one U.S. plansplan and two Canadian plans. Threeplans) and two in the United Kingdom (CF Fertilisers UK plans acquired by us as a result of our July 31, 2015 acquisition of the four plans have been closed to new employees.remaining 50% equity interest in CF Fertilisers UK not previously owned by us). One of our Canadian plans has remained openis closed to new employees. As of January 1, 2013, we adopted amendmentsemployees and the two United Kingdom plans are closed to our U.S. pension plans to combine them into a single plannew employees and provide a pension benefit to eligible U.S. employees not previously covered by the U.S. plans. These amendments had no impact on our net periodic benefit cost in 2012 or our benefit obligation or funded status, as of December 31, 2012.retirees.retirees in North America. The specific medical benefits provided to retirees vary by group and location. In 2012, we recognized a curtailment of U.S. retiree medical benefits as described in more detail in this Note 7.CF INDUSTRIES HOLDINGS, INC.sheetsheets for our U.S.North America and CanadianUnited Kingdom plans as of the December 31 measurement date of December 31 are as follows: Pension Plans Retiree Medical Plans North America United Kingdom North America Pension Plans Retiree Medical December 31, December 31, December 31, 2012 2011 2012 2011 2015 2014 2015 2015 2014 (in millions) (in millions) $ 653.4 $ 596.4 $ — $ — Fair value of plan assets as of January 1 $ 664.8 $ 700.7 $ — $ — $ — Acquisition of CF Fertilisers UK plans — — 442.5 — — 76.5 66.1 — — 2.7 83.4 (3.8 ) — — 20.1 23.8 — — Employer contributions 19.0 20.4 8.7 4.3 4.9 Plan participant contributions 0.3 0.4 — 1.0 0.4 (33.3 ) (30.5 ) — — (38.5 ) (128.7 ) (8.4 ) (5.3 ) (5.3 ) 3.2 (2.4 ) — — (21.7 ) (11.4 ) (25.0 ) — — 719.9 653.4 — — Fair value of plan assets as of December 31 626.6 664.8 414.0 — — (763.3 ) (681.2 ) (92.8 ) (83.8 ) — — 24.3 — Benefit obligation as of January 1 (787.8 ) (768.6 ) — (62.4 ) (66.3 ) Acquisition of CF Fertilisers UK plans — — (617.7 ) — — Curtailment gain (loss) — 14.5 — — (2.0 ) Special termination benefits — (0.3 ) — — — (12.4 ) (11.3 ) (2.1 ) (2.7 ) (14.4 ) (13.3 ) — (0.2 ) (0.1 ) (34.4 ) (35.8 ) (3.3 ) (4.3 ) (30.1 ) (34.7 ) (9.2 ) (2.1 ) (2.4 ) 33.3 30.5 5.1 4.4 38.5 128.7 8.4 5.3 5.3 (3.3 ) 2.6 (0.1 ) 0.1 21.3 11.6 34.2 0.6 0.3 Plan amendment — — — — 7.0 Plan participant contributions (0.3 ) (0.4 ) — (1.0 ) (0.4 ) (52.3 ) (68.1 ) (0.7 ) (6.5 ) 37.0 (125.3 ) 21.6 4.2 (3.8 ) (832.4 ) (763.3 ) (69.6 ) (92.8 ) Benefit obligation as of December 31 (735.8 ) (787.8 ) (562.7 ) (55.6 ) (62.4 ) $ (112.5 ) $ (109.9 ) $ (69.6 ) $ (92.8 ) $ (109.2 ) $ (123.0 ) $ (148.7 ) $ (55.6 ) $ (62.4 ) "Change"change in assumptions and other" for our pension plans primarily reflects the impact of changes in discount rates and the adoption of new mortality assumptions.such as rates of retirement and mortality.sheetsheets consist of the following: Pension Plans Retiree Medical December 31, December 31, 2012 2011 2012 2011 (in millions) $ 0.4 $ 4.1 $ — $ — — — (4.9 ) (4.7 ) (112.9 ) (114.0 ) (64.7 ) (88.1 ) $ (112.5 ) $ (109.9 ) $ (69.6 ) $ (92.8 ) Pension Plans Retiree Medical Plans North America United Kingdom North America December 31, December 31, December 31, 2015 2014 2015 2015 2014 (in millions) Other assets $ 9.4 $ 3.8 $ — $ — $ — Accrued expenses — — — (5.0 ) (5.2 ) Other liabilities (118.6 ) (126.8 ) (148.7 ) (50.6 ) (57.2 ) $ (109.2 ) $ (123.0 ) $ (148.7 ) $ (55.6 ) $ (62.4 ) CF INDUSTRIES HOLDINGS, INC. Pension Plans Retiree Medical December 31, December 31, 2012 2011 2012 2011 (in millions) $ — $ — $ — $ 0.3 1.8 0.2 0.4 0.4 126.2 126.9 10.9 24.2 $ 128.0 $ 127.1 $ 11.3 $ 24.9 Pension Plans Retiree Medical Plans North America United Kingdom North America December 31, December 31, December 31, 2015 2014 2015 2015 2014 (in millions) Prior service cost (benefit) $ 0.8 $ 1.2 $ — $ (4.7 ) $ (5.9 ) Net actuarial loss (gain) 87.9 107.9 (7.8 ) 8.3 12.9 $ 88.7 $ 109.1 $ (7.8 ) $ 3.6 $ 7.0 following components: Pension Plans Retiree Medical Year ended December 31, Year ended December 31, 2012 2011 2010 2012 2011 2010 (in millions) $ 12.4 $ 11.3 $ 9.7 $ 2.1 $ 2.7 $ 2.1 34.4 35.8 30.9 3.3 4.3 3.4 (34.6 ) (35.1 ) (31.4 ) — — — — — — (10.9 ) — — — — — 0.3 0.4 0.4 0.1 0.1 0.2 0.1 — — 9.8 6.0 3.3 0.6 0.9 0.2 22.1 18.1 12.7 (4.5 ) 8.3 6.1 9.1 36.1 28.6 (12.7 ) 6.2 12.1 1.7 — — — 0.4 — — — — (0.3 ) (0.4 ) (0.3 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) — — (9.8 ) (6.0 ) (3.3 ) (0.5 ) (1.0 ) (0.2 ) 0.9 30.0 25.2 (13.6 ) 5.2 11.6 $ 23.0 $ 48.1 $ 37.9 $ (18.1 ) $ 13.5 $ 17.7 Pension Plans Retiree Medical Plans North America United Kingdom North America 2015 2014 2013 2015 2015 2014 2013 (in millions) Service cost $ 14.4 $ 13.3 $ 17.8 $ — $ 0.2 $ 0.1 $ 0.3 Interest cost 30.1 34.7 32.8 9.2 2.1 2.4 2.4 Expected return on plan assets (28.6 ) (35.9 ) (32.6 ) (9.5 ) — — — Settlement charge — 9.7 — — — — — Special termination benefits — 0.3 — — — — — Curtailment loss — — — — — 2.0 — Amortization of prior service cost (benefit) 0.1 0.2 0.2 — (1.2 ) (0.9 ) 0.1 Amortization of actuarial loss 5.7 1.7 10.5 — 0.5 0.3 0.6 Net periodic benefit cost (income) 21.7 24.0 28.7 (0.3 ) 1.6 3.9 3.4 Net actuarial (gain) loss (11.2 ) 77.9 (45.4 ) (8.2 ) (4.2 ) 3.8 (0.9 ) Prior service cost — — — — — (7.0 ) — Curtailment effects — (14.5 ) — — — — — Settlement effects — (9.7 ) — — — — — Amortization of prior service (cost) benefit (0.1 ) (0.2 ) (0.2 ) — 1.2 0.9 (0.1 ) Amortization of actuarial loss (5.7 ) (1.7 ) (10.5 ) — (0.5 ) (0.3 ) (0.6 ) Total recognized in accumulated other comprehensive loss (17.0 ) 51.8 (56.1 ) (8.2 ) (3.5 ) (2.6 ) (1.6 ) Total recognized in net periodic benefit cost (income) and accumulated other comprehensive loss $ 4.7 $ 75.8 $ (27.4 ) $ (8.5 ) $ (1.9 ) $ 1.3 $ 1.8 In the third quarter of 2012, we approved and implemented a reduction in certain retiree medical benefits. This curtailment of benefits resulted in a $24.3 million reduction in the retiree medical liability. Of the $24.3 million reduction, $13.4 million was recognized in other comprehensive income (included in Net actuarial (gain) loss in the table above) and $10.9 million was recognized in net periodic benefit plan cost (income). Of the $10.9 million, $9.6 million was reported in cost of sales and $1.3 million was reported in selling, general and administrative expenses.Table of ContentsCF INDUSTRIES HOLDINGS, INC.incomeloss into net periodic benefit cost in 20132016 are as follows: Pension
Plans Retiree
Medical (in millions) $ — $ — 0.2 0.1 11.2 0.4 Pension Plans Retiree Medical Plans North America United Kingdom North America (in millions) Prior service cost (benefit) $ 0.1 $ — $ (1.2 ) Net actuarial loss 0.9 — — Presented below is information by pension plan regarding thefair valuein aggregate for the defined benefit pension plans in North America was approximately $688.2 million and $727.6 million as of December 31, 2015 and December 31, 2014, respectively. The accumulated benefit obligation in aggregate for the defined benefit pension plans in the United Kingdom was approximately $562.7 million as of December 31, 2015.net periodic benefit cost, and funding contributions. Amounts identified as Terra plans relate to benefit plans acquired as part of the Terra acquisition in 2010.December 31: CF
U.S.
Plan Terra
U.S.
Plan CF
Canadian
Plan Terra
Canadian
Plan Consolidated (in millions) $ 293.6 $ 308.4 $ 45.0 $ 72.9 $ 719.9 (363.0 ) (340.2 ) (56.7 ) (72.5 ) (832.4 ) (315.8 ) (326.3 ) (43.3 ) (69.7 ) (755.1 ) 16.3 3.1 2.7 — 22.1 9.3 3.3 4.9 2.6 20.1 $ 262.6 $ 286.7 $ 37.8 $ 66.3 $ 653.4 (333.0 ) (324.7 ) (43.4 ) (62.2 ) (763.3 ) (289.0 ) (312.2 ) (34.8 ) (59.7 ) (695.7 ) 12.8 2.5 2.5 0.3 18.1 8.7 3.3 9.0 2.8 23.8 North America United Kingdom 2015 2014 2015 (in millions) Accumulated benefit obligation $ (585.9 ) $ (610.3 ) $ (562.7 ) Fair value of plan assets 505.7 536.0 414.0 North America United Kingdom 2015 2014 2015 (in millions) Projected benefit obligation $ (679.1 ) $ (719.2 ) $ (562.7 ) Fair value of plan assets 560.6 592.4 414.0 the Companywe may deem to be appropriate. Our consolidated pension funding contributions for 2013 are estimated to be approximately $23.2 million. Actual contributions may vary from estimated amounts depending on changes in assumptions, actual returns on plan assets, changes in regulatory requirements and funding decisions.CF INDUSTRIES HOLDINGS, INC.benefit paymentsplans are as follows: Pension
benefit Retiree
medical (in millions) $ 35.2 $ 4.9 37.1 5.3 38.7 5.6 40.9 5.8 43.1 6.0 245.0 27.4 Pension Plans Retiree Medical Plans North America United Kingdom North America (in millions) 2016 $ 39.7 $ 20.3 $ 5.0 2017 41.6 21.2 5.0 2018 43.1 22.0 4.9 2019 44.3 22.8 4.8 2020 45.3 24.3 4.7 2021-2025 241.1 131.2 17.2 Pension Plans Retiree Medical 2012 2011 2010 2012 2011 2010 4.0 % 4.6 % 5.4 % 3.3 % 4.3 % 5.1 % 4.6 % 5.4 % 6.0 % 4.3 % 5.1 % 5.6 % 4.0 % 4.0 % 4.2 % n/a n/a n/a 5.7 % 6.1 % 6.6 % n/a n/a n/a Pension Plans Retiree Medical Plans North America United Kingdom North America 2015 2014 2013 2015 2015 2014 2013 Weighted-average discount rate—obligation 4.3 % 4.0 % 4.8 % 3.8 % 3.9 % 3.6 % 4.2 % Weighted-average discount rate—expense 4.0 % 4.8 % 4.0 % 3.7 % 3.6 % 4.2 % 3.3 % Weighted-average rate of increase in future compensation 4.3 % 4.3 % 3.9 % n/a n/a n/a n/a Weighted-average expected long-term rate of return on assets—expense 4.8 % 5.5 % 5.1 % 5.4 % n/a n/a n/a Weighted-average retail price index—obligation n/a n/a n/a 3.1 % n/a n/a n/a Weighted-average retail price index—expense n/a n/a n/a 3.1 % n/a n/a n/a for eachby plan using spot rates derived from a yield curve of high quality (Aa(AA rated or better) fixed income debt securities as of the year-end measurement date to calculate discounted cash flows (the projected benefit obligation) and solving for a single equivalent discount rate that produces the same projected benefit obligation.analysesanalysis of historical rates of return achieved by equity and non-equity investments and current market characteristics, adjusted for estimated plan expenses and weighted by target asset allocation percentages. As of January 1, 2013,2016, our weighted averageweighted-average expected long-term rate of return on assets is 5.1%4.9%.health care cost trendexpected long-term rate used to determineof return on assets in our United Kingdom plans is based on the expected long-term performance of the underlying investments, adjusted for investment managers' fees. As of January 1, 2016, our weighted-average expected long-term rate of return on assets is 5.2%.2012 is 8.0% grading down2014 for our primary (U.S.) retiree medical benefit plans, the assumed health care cost trend rates, for pre-65 retirees, start with a 7.25% increase in 2015, followed by a gradual decline in increases to 5.0% in 2018for 2024 and thereafter. At December 31, 2011,For post-65 retirees, the assumed health care cost trend rate was 8.5%, grading downrates start with a 6.75% increase in 2015, followed by a gradual decline in increases to 5.0% in 2018for 2022 and thereafter.atof our primary (U.S.) retiree medical benefit plans as of December 31, 20122015 would have the following effects:effects on our retiree medical benefit plans: One-Percentage-Point Increase Decrease 17 % (14 )% 10 % (9 )% One-Percentage-Point Increase Decrease (in millions) Effect on total service and interest cost for 2015 $ 0.3 $ (0.2 ) Effect on benefit obligation as of December 31, 2015 6.0 (5.0 ) CF INDUSTRIES HOLDINGS, INC.the CFour U.S. pension plan is 75%80% non-equity and 25% equity, and for the Terra U.S. plan is 85% non-equity and 15%20% equity, which has been determined based on analysis of actual historical rates of return and plan needs and circumstances. The equity investments are tailored to exceed the growth of the benefit obligation and are a combination of U.S. and non-U.S. total stock market index mutual funds. The non-equity investments consist primarily of investments in debt securities and money market instruments that are selected based on investment quality and duration to mitigate volatility of the funded status and annual required contributions. The non-equity investments have a duration profile that is similar to the benefit obligation in order to mitigate the impact of interest rate changes on the funded status. This investment strategy is achieved through the use of mutual funds and individual securities.fair valuespension assets in the United Kingdom plans are each administered by a Board of our U.S.Trustees consisting of employer nominated trustees, member nominated trustees and Canadian pensionan independent trustee. Trustees may be appointed or removed by the Company, provided the Company fulfills its obligation to have at least one third of the Board of Trustees as member nominated. It is the responsibility of the trustees to ensure prudent management and investment of the assets in the plans. The trustees meet on a quarterly basis to review and discuss fund performance and other administrative matters.assets at December 31, 2012is 55% actively managed target return funds, 30% actively and December 31, 2011, by major asset class are as follows: December 31, 2012 Total Fair
Value Quoted
Prices in
Active
Markets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) (in millions) $ 14.6 $ 14.6 $ — $ — 117.7 117.7 — — 37.9 — 37.9 — 18.3 18.3 — — 82.5 — 82.5 — 399.8 — 399.8 — 58.6 — 58.6 — 2.5 — 2.5 — $ 731.9 $ 150.6 $ 581.3 $ — (12.0 ) $ 719.9 CF INDUSTRIES HOLDINGS, INC. December 31, 2011 Total Fair
Value Quoted
Prices in
Active
Markets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) (in millions) $ 13.5 $ 13.5 $ — $ — 103.8 103.8 — — 36.2 — 36.2 — 13.2 13.2 — — 103.6 — 103.6 — 330.5 — 330.5 — 60.7 — 60.7 — 2.8 — 2.8 — $ 664.3 $ 130.5 $ 533.8 $ — (10.9 ) $ 653.4
No adjustments have been made to NAV.(1)Cashpassively managed bond and cash equivalents are primarily short-term money marketgilt funds and are classified as Level 1 assets.(2)index equitytarget asset allocation for the United Kingdom Kemira plan is 50% actively managed target return funds, 45% actively and passively managed bond and gilt funds and 5% in an actively managed property fund. The target return funds diversify assets across multiple asset classes (which may include, among others, traditional equities and bonds) and make use of derivatives. The bond and gilt funds generally invest in fixed income debt securities including government bonds, gilts, high yield and emerging market bonds, and investment grade corporate bonds and can make use of derivatives. The property funds are mutualinvested predominately in freehold and leasehold property. All of the funds that utilize a passively managed investment approach designed to track specific equity indices. They are valued at quoted market prices in an active market, which represent the net asset values of the shares held by the plan and are classified as Level 1 investments.(3)The pooled equity funds consist of actively managed pooled funds that invest in common stock and other equity securities that are traded on U.S., Canadian and foreign markets. These funds are valued using net asset valuesvalue (NAV) as determined by the fund manager which are based on the value of the underlying net assets of the fund. Although the NAV is not based on quoted market prices in an active market, it is based on observable market data and therefore the funds are categorized as Level 2 investments.(4)U.S. Treasury bonds and notes are valued based on quoted market prices in an active market and are classified as Level 1 investments.(5)The fixed income mutual funds are actively managed bond funds that invest in investment-grade corporate debt, various governmental debt obligations and mortgage-backed securities with varying maturities. They are classified as Level 2 investments valued using NAV as determined by the fund manager.(6)Corporate bonds and notes are traded and private placement securities valued by institutional bond pricing services which gather information from market sources and integrate credit information, observed market movements and sector news into their pricing applications and models. These securities are classified as Level 2.(7)Government and agency securities consist of U.S. Federal and other government and agency debt securities which are classified as Level 2 securities.(8)Other includes primarily collateralized mortgage obligationsThe fair values of our pension plan assets as of December 31, 2015 and asset-backed securities which2014, by major asset class, are valued through pricing modelsas follows: December 31, 2015 North America (in millions) $ 32.3 $ 32.3 $ — $ — Equity mutual funds 102.9 102.9 — — Fixed income 10.7 10.7 — — 337.8 — 337.8 — 21.7 — 21.7 — 1.8 — 1.8 — Total assets at fair value by fair value levels $ 507.2 $ 145.9 $ 361.3 $ — Assets measured at net asset value (NAV) 38.8 82.0 120.8 Total assets at fair value 628.0 Accruals and payables—net (1.4 ) Total assets $ 626.6 December 31, 2015 United Kingdom (in millions) Cash $ 3.0 $ 3.0 $ — $ — Total assets at fair value by fair value levels $ 3.0 $ 3.0 $ — $ — Assets measured at NAV 216.3 Fixed income 26.0 126.8 41.9 411.0 Total assets at fair value 414.0 Accruals and payables—net — Total assets $ 414.0 December 31, 2014 North America (in millions) $ 26.0 $ 26.0 $ — $ — Equity mutual funds 102.8 102.8 — — Fixed income 4.9 4.9 — — 375.9 — 375.9 — 26.0 — 26.0 — 2.1 — 2.1 — Total assets at fair value by fair value levels $ 537.7 $ 133.7 $ 404.0 $ — Assets measured at NAV 44.0 86.9 130.9 Total assets at fair value 668.6 Accruals and payables—net (3.8 ) Total assets $ 664.8 Cash and cash equivalents are primarily short-term money market funds and short-term federal home loan discount notes. The index equity funds are mutual funds that utilize a passively managed investment approach designed to track specific equity indices. They are valued at quoted market prices in an active market, which represent the net asset values of the shares held by the plan. U.S. Treasury bonds and notes are valued based on quoted market prices in an active market and are classified as Level 1 investments. Corporate bonds and notes, including private placement securities, are valued by institutional bond pricing services, which gather information from market sources and integrate credit information, observed market movements and sector news into their pricing applications and models. Government and agency securities consist of municipal bonds that are valued by institutional bond pricing services, which gather information on current trading activity, market movements, trends, and specific data on specialty issues. Other includes primarily mortgage-backed and asset-backed securities, which are valued through pricing models of reputable third party sources based on market data. The equity pooled mutual funds consist of pooled funds that invest in common stock and other equity securities that are traded on U.S., Canadian, and foreign markets. The fixed income pooled mutual funds invest in investment-grade corporate debt, various governmental debt obligations, and mortgage-backed securities with varying maturities. Pooled target return funds invest in a broad array of asset classes and a range of diversifiers including the use of derivatives. Pooled United Kingdom government index-linked funds invest primarily in United Kingdom government index-linked gilt securities. Pooled global fixed income funds invest primarily in government bonds, investment grade corporate bonds, high yield and emerging market bonds and can make use of derivatives. Pooled property funds invest primarily in freehold and leasehold property in the United Kingdom. These funds are valued using NAV as a practical expedient. NAV is determined by the fund managers based on the value of the underlying net assets of the fund. employees. Dependingemployees in North America and the United Kingdom. In North America, depending on the specific provisions of each plan, thequalified employees receive company may provide basic contributions based on a percentage of base salary, matching of employee contributions up to specified limits, or a combination of both. In 2012, 2011 and 2010,Qualified employees in the United Kingdom receive company contributions based on a percentage of base salary that are greater than employee contributions up to the defined contribution plans were $14.2 million, $11.8 million, and $12.7 million, respectively.specified limits. As of January 1, 2013, we adopted amendments to our U.S. qualified defined contribution plans to combine them into a single plan.noncurrent liabilities in our consolidated balance sheets for these plans were $2.5 million and $19.7$18.7 million atas of December 31, 20122015 and $2.0$2.5 million and $19.3$19.8 million atas of December 31, 2011,2014, respectively. We recognized expense for these plans of $1.7$1.9 million, $1.6 million and $1.5 million in 2012, 2011 and 2010, respectively. We maintain incentive compensation plans that cover virtually all employees. The aggregate awards under the plans are based on predetermined targets and can include both financial and operating performance measures. Awards are accrued during the year and paid in the first quarter of the subsequent year. We recognized expense for these plans of $35.9 million, $26.2 million and $16.5 million in 2012, 2011 and 2010, respectively.8. Other Operating—Net Details of other operating—net are as follows: Year ended December 31, 2012 2011 2010 (in millions) $ 5.5 $ 7.5 $ 11.6 21.9 — — — — 144.6 13.3 8.1 6.5 8.4 5.3 4.0 $ 49.1 $ 20.9 $ 166.7 In 2011, we recorded a non-cash impairment charge of $34.8 million related to a former methanol plant at our Woodward, Oklahoma nitrogen complex. The Woodward complex was acquired in the Terra acquisition and was able to produce nitrogen fertilizers and methanol. Based on a strategic review, management approved the shutdown and removal of the methanol plant, resulting in recognition of an impairment charge, which is included in the first line of the table above. In February 2011, we sold four of our dry product warehouses to GROWMARK and realized a pre-tax gain of $32.5 million, which is also included in the first line in the table above. Engineering studies includes detailed design work, feasibility studies and cost estimates for certain proposed capital projects at our manufacturing complexes.CF INDUSTRIES HOLDINGS, INC. Business combination costs include expenses associated with the Terra acquisition, including the $123 million termination fee that was paid on behalf of Terra to Yara International ASA. For additional discussion of the Terra acquisition, see Note 12—Terra Acquisition. Closed facilities costs includes environmental remediation costs and provisions for AROs and site maintenance costs associated with our closed facilities. Other includes losses (gains) on foreign currency derivatives, litigation related costs and other transactions.9. Interest Expense Details of interest expense are as follows: Year ended December 31, 2012 2011 2010 (in millions) $ 112.2 $ 113.9 $ 114.8 32.1 40.3 114.2 (9.0 ) (7.0 ) (7.7 ) $ 135.3 $ 147.2 $ 221.3 The fees on financing agreements for the year ended December 31, 2012 includes $15.2 million of accelerated amortization of deferred fees related to the termination of a credit agreement in May 2012. Refer to Note 22—Financing Agreements, for additional information. The fees on financing agreements for the year ended December 31, 2011 includes $19.9 million of accelerated amortization of debt issuance costs recognized upon repayment in full of a senior secured term loan. The fees on financing agreements for the year ended December 31, 2010, includes $85.9 million of accelerated amortization of debt issuance costs recognized upon repayment of the senior secured bridge loan and partial repayment of the senior secured term loan.10. Asset Retirement Obligations Asset retirement obligations (AROs) are legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development or normal operation of such assets. Our AROs are primarily associated with phosphogypsum stack systems and mine reclamation in Florida.CF INDUSTRIES HOLDINGS, INC. The balances of AROs and changes thereto are summarized below. AROs are reported in other noncurrent liabilities and accrued expenses in our consolidated balance sheets. Phosphogypsum
Stack
System Costs Mine
Reclamation
Costs Other
AROs Total (in millions) $ 51.5 $ 46.1 $ 6.1 $ 103.7 3.9 4.5 0.3 8.7 — 1.0 — 1.0 (5.5 ) (3.2 ) — (8.7 ) 2.2 12.9 — 15.1 52.1 61.3 6.4 119.8 3.9 5.1 0.4 9.4 — 2.4 — 2.4 (2.8 ) (2.7 ) (0.5 ) (6.0 ) 1.7 1.5 2.8 6.0 54.9 67.6 9.1 131.6 4.1 5.3 0.4 9.8 12.5 0.9 — 13.4 (1.5 ) (3.3 ) (1.4 ) (6.2 ) 0.1 (3.8 ) 0.1 (3.6 ) $ 70.1 $ 66.7 $ 8.2 $ 145.0 Our phosphate operations in Florida are subject to regulations governing the construction, operation, closure and long-term maintenance of phosphogypsum stack systems and regulations concerning site reclamation for phosphate rock mines. Our liability for phosphogypsum stack system costs includes the cost of stack closure at Plant City and the costs of cooling pond closure, post-closure monitoring, and ongoing water treatment at both Bartow and Plant City. The actual amounts to be spent will depend on factors such as the timing of activities, refinements in scope, technological developments, cost inflation and changes in regulations. It is possible that these factors could change at any time and impact the estimates. Closure expenditures for the Bartow cooling pond are estimated to occur through 2016. Closure expenditures for the Plant City stack expansion are estimated to occur in the 2033 to 2037 time frame and closure of the Plant City cooling pond is assumed to occur in the year 2087. Additional AROs may be incurred in the future. The liability for mine reclamation costs is primarily for work involving the re-contouring, re-vegetation and re-establishment of wildlife habitat and hydrology of land disturbed by phosphate rock mining activities. In accordance with regulations in Florida, physical reclamation and restoration of disturbed areas is generally required to be completed within a prescribed time frame after completion of mining operations, and the timing of reconnection to surrounding lands and waterways varies based on achievement of applicable release criteria. The actual time required to complete the work may vary depending on site-specific reclamation plans and other circumstances. The $15.1 million change in estimate in 2010 relates primarily to a change in the reclamation plan at our Hardee County, Florida phosphate rock mine that resulted from changes in cost, scope and timing of reclamation activities. Of this amount, $9.2 million was recorded as an increase in property, plant and equipment and $5.9 million was charged to earnings.CF INDUSTRIES HOLDINGS, INC. The $6.0 million change in estimate in 2011 relates primarily to changes in the scope of closure activities of our Bartow phosphogypsum stack system and mine reclamation activities at our Hardee County, Florida phosphate rock mine. Of this amount, $6.6 million was charged to earnings and an offsetting $0.6 million was recorded as a decrease in property, plant and equipment. The $3.6 million change in estimate in 2012 relates primarily to changes in mining and reclamation plans at our Hardee County, Florida phosphate rock mine. Of this amount, $6.5 million was recorded as a decrease in property, plant and equipment and $2.9 million was charged to cost of sales. The $13.4 million liability incurred in 2012 relates primarily to the expansion of our phosphogysum stack at the Plant City, Florida phosphate facility. This expansion will allow us to continue to operate the Plant City facility through the life of our current phosphate rock reserves. In addition to various operational and environmental regulations related to our phosphate segment, we are also subject to financial assurance requirements related to the closure and maintenance of our phosphogypsum stack systems at both our Plant City, Florida phosphate fertilizer complex and our closed Bartow, Florida phosphate fertilizer complex. There are two sources of these financial assurance requirements. First, in 2010, we entered into a consent decree with the EPA and the FDEP with respect to our compliance with the Resource Conservation and Recovery Act (RCRA) at our Plant City complex (the Plant City Consent Decree). Second, the State of Florida financial assurance regulations (Florida Financial Assurance) apply to both our Plant City and Bartow complexes. Both of these regulations allow the use of a funding mechanism as a means of complying with the financial assurance requirements associated with the closure, long-term maintenance, and monitoring costs for the phosphogypsum stacks, as well as costs incurred to manage the water contained in the stack system upon closure. We have established a trust account for the benefit of the EPA and FDEP and an escrow account for the benefit of the FDEP to meet these financial assurance requirements. On our consolidated balance sheet, these are collectively referred to as "Asset retirement obligation funds" (ARO funds). In October 2012, we deposited $53.0 million into the trust for the Plant City Consent Decree, thereby reaching full funding of that obligation, and we expect to fund the remaining approximately $4.0 million in the State of Florida Financial Assurance escrow account near the end of 2015. Both financial assurance funding obligations require estimates of future expenditures that could be impacted by refinements in scope, technological developments, cost inflation, changes in regulations, discount rates and the timing of activities. Additional funding will be required in the future if increases in cost estimates exceed investment earnings in the trust or escrow accounts. At December 31, 2012 and December 31, 2011, the balance in the ARO funds was $200.8 million and $145.4 million, respectively. Prior to the Plant City Consent Decree, the Company's financial assurance requirements for the closure, water treatment, long-term maintenance, and monitoring costs for the Plant City phosphogypsum stack system were determined solely by Florida regulations that would have required funding of the escrow account over a period of years. The Plant City Consent Decree described above effectively requires the Company to fund the greater of the requirements under the Plant City Consent Decree or Florida law, which may vary over time. We are still required under Florida law to maintain the existing Florida escrow account for the closure, long-term maintenance, and monitoring costs for the phosphogypsum stack system at our closed Bartow phosphate complex. We have unrecorded AROs at our nitrogen fertilizer manufacturing facilities and at our distribution and storage facilities that are conditional upon cessation of operations. These AROs include certain decommissioning activities as well as the removal and disposition of certain chemicals, waste materials, structures, equipment, vessels, piping and storage tanks. Also included is reclamation of land and the closure of certain effluent ponds. The most recent estimate of the aggregate cost of these AROs expressed in 2012 dollars is $51.0 million. We have not recorded a liability for theseCF INDUSTRIES HOLDINGS, INC.conditional AROs at December 31, 2012 because we do not believe there is currently a reasonable basis for estimating a date or range of dates of cessation of operations at these facilities, which is necessary in order to estimate fair value. In reaching this conclusion, we considered the historical performance of each facility and have taken into account factors such as planned maintenance, asset replacements and upgrades of plant and equipment, which if conducted as in the past, can extend the physical lives of our nitrogen manufacturing facilities indefinitely. We also considered the possibility of changes in technology, risk of obsolescence, and availability of raw materials in arriving at our conclusion.11. Income Taxes The components of earnings before income taxes and equity in earnings of non-operating affiliates are as follows: Year ended December 31, 2012 2011 2010 (in millions) $ 2,629.0 $ 2,502.0 $ 591.8 200.5 143.6 95.9 $ 2,829.5 $ 2,645.6 $ 687.7 The components of the income tax provision are as follows: Year ended December 31, 2012 2011 2010 (in millions) $ 915.4 $ 811.4 $ 141.7 56.0 31.5 8.6 131.2 116.5 34.8 1,102.6 959.4 185.1 (130.2 ) (63.0 ) 79.8 (4.5 ) (2.8 ) (5.1 ) (3.7 ) 32.9 13.9 (138.4 ) (32.9 ) 88.6 $ 964.2 $ 926.5 $ 273.7 CF INDUSTRIES HOLDINGS, INC. Differences in the expected income tax provision based on statutory rates applied to earnings before income taxes and the income tax provision reflected in the consolidated statements of operations are summarized below: Year ended December 31, 2012 2011 2010 (in millions, except percentages) $ 2,829.5 $ 2,645.6 $ 687.7 990.3 35.0 % 925.9 35.0 % 240.7 35.0 % 82.9 2.9 % 88.6 3.3 % 31.6 4.6 % (26.2 ) (0.9 )% (77.6 ) (2.9 )% (32.0 ) (4.7 )% (47.0 ) (1.7 )% (39.0 ) (1.5 )% (10.7 ) (1.6 )% (43.3 ) (1.5 )% 5.8 0.2 % (19.6 ) (2.8 )% (8.0 ) (0.3 )% (8.6 ) (0.3 )% — — — — — — 47.8 7.0 % 16.5 0.6 % 29.8 1.1 % 12.0 1.7 % 0.2 — 0.6 — 2.0 0.3 % (1.2 ) — 1.0 0.1 % 1.9 0.3 % $ 964.2 34.1 % $ 926.5 35.0 % $ 273.7 39.8 % CF INDUSTRIES HOLDINGS, INC. Deferred tax assets and deferred tax liabilities are as follows: December 31, 2012 2011 (in millions) $ 94.3 $ 94.9 70.8 54.9 92.1 106.6 31.8 25.3 0.2 22.9 56.7 54.1 345.9 358.7 (176.1 ) (162.8 ) 169.8 195.9 (968.0 ) (1,009.1 ) (24.4 ) (25.8 ) (1.7 ) (111.6 ) (46.7 ) (50.2 ) (3.3 ) — (55.0 ) (46.1 ) (1,099.1 ) (1,242.8 ) (929.3 ) (1,046.9 ) 9.5 (90.1 ) $ (938.8 ) $ (956.8 ) We consider the earnings of certain of our Canadian subsidiaries, including Terra International (Canada) Inc., to not be permanently reinvested and we recognize a deferred tax liability for the future repatriation of these earnings, as they are earned. As of December 31, 2012, we have recorded a deferred income tax liability of approximately $24 million, which reflects the additional U.S. and foreign income taxes that would be due upon the repatriation of the accumulated earnings of our non-U.S. subsidiaries that are considered to not be permanently reinvested. At December 31, 2012, we have approximately $915 million of indefinitely reinvested earnings related to investment in other non-U.S. subsidiaries and corporate joint ventures, for which a deferred tax liability has not been recognized. It is not practicable to estimate the amount of such taxes. Uncertain Tax Positions—the Company files federal, provincial, state and local income tax returns principally in the United States and Canada as well as in certain other foreign jurisdictions. In general, filed tax returns remain subject to examination by United States tax jurisdictions for years 1999 and thereafter and by Canadian tax jurisdictions for years 2003 and thereafter.CF INDUSTRIES HOLDINGS, INC. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: December 31, 2012 2011 (in millions) $ 137.1 $ 111.5 17.3 0.4 — 30.1 — (4.9 ) $ 154.4 $ 137.1 Unrecognized tax benefits increased in 2012 by $17.3 million for tax return positions taken during the current year and by $30.1 million in 2011 as the result of tax return positions taken in prior years. Our effective tax rate would be affected by $154.4 million if these unrecognized tax benefits were to be recognized in the future. In connection with our initial public offering (IPO) in August 2005, CF Industries, Inc. (CFI) ceased to be a non-exempt cooperative for income tax purposes, and we entered into a net operating loss agreement (NOL Agreement) with CFI's pre-IPO owners relating to the future utilization of our pre-IPO net operating loss carryforwards (NOLs). The NOL Agreement provided that if we ultimately could utilize the pre-IPO NOLs to offset applicable post-IPO taxable income, we would pay the pre-IPO owners amounts equal to the resulting federal and state income taxes actually saved. On January 2, 2013, we and the pre-IPO owners amended the NOL Agreement to provide, among other things, that we are entitled to retain 26.9% of any settlement realized with the United States Internal Revenue Service (IRS) at the IRS Appeals level. In January 2013, we entered into a Mediation Report with the IRS to resolve the tax treatment of the pre-IPO NOLs. Pursuant to the Mediation Report, we have agreed with the IRS that we will be entitled to deduct a portion of the NOLs in future years. Our mediation agreement is subject to finalization in a Closing Agreement with the IRS and will be recognized in our financial statements at that time. As a result of the mediation, it is expected that both our tax liability and our effective tax rate will be affected within the next twelve months by approximately $70 million due to the recognition of these unrecognized tax benefits. Under the terms of the amended NOL agreement, 73.1% of the federal and state tax savings will be payable to our pre-IPO owners. A portion of the pre-IPO NOL was realized in 2011 as the result of the completion of a federal examination of the Company's final tax year as a cooperative. As a result, our unrecognized tax benefits decreased by $4.9 million. Valuation Allowance—a foreign subsidiary of the Company has net operating loss carryovers of $232.9 million that are indefinitely available in the foreign jurisdiction. As the future realization of these losses is not anticipated, a valuation allowance of $65.2 million has been recorded. Of this amount, $16.5 million and $16.7 million were recorded as valuation allowances for the years ended December 31, 2012 and 2011, respectively. In addition, a valuation allowance of $13.1 million was recorded in the year ended December 31, 2011 due to the uncertainty of the realization of certain deferred tax assets. Interest expense and penalties of $1.3 million, $13.9 million, and $3.1 million principally related to unrecognized tax benefits were recorded for the years ended December 31, 2012, 2011 and 2010, respectively. Amounts recognized in our consolidated balance sheets for accrued interest and penaltiesCF INDUSTRIES HOLDINGS, INC.related to income taxes of $30.4 million and $25.0 million are included in other noncurrent liabilities as of December 31, 2012 and 2011, respectively. CFL operates as a cooperative for Canadian income tax purposes and distributes all of its earnings as patronage dividends to its customers, including CFI. The patronage dividends were deductible for Canadian income tax purposes for years preceding 2012. On August 2, 2012, we entered into a definitive agreement with Glencore International plc (Glencore) to acquire the interests in CFL currently owned by Viterra, subject to Glencore's acquisition of Viterra. As a result of Glencore's acquisition of Viterra, CFL is no longer permitted to deduct the dividends it distributes to CFI. As a result, CFL recorded an income tax provision in 2012. No CFL income tax provision was recorded in 2011 or 2010. See Note 4—Noncontrolling Interest for further information. The American Taxpayer Relief Act of 2012 was enacted on January 2, 2013 which includes certain retroactive tax legislation that will have an impact on our tax liabilities for 2012. The impact of the legislation is not expected to be material and will be reflected in our financial statements for the period ending March 31, 2013, the period that includes the date of enactment.12. Terra Acquisition In April of 2010, we completed the acquisition and merger of Terra Industries Inc. (Terra). As a result of the merger, each outstanding share of Terra common stock was converted into the right to receive $37.15 in cash and 0.0953 of a share of CF Holdings common stock. CF Holdings issued an aggregate of 9.5 million shares of its common stock with a fair value of $882 million and paid an aggregate of $3.2 billion in cash, net of $0.5 billion cash acquired, for 100% of Terra's common stock. We funded the acquisition with cash on hand and with $1.75 billion of borrowings under a senior secured bridge facility and approximately $1.9 billion of borrowings under a senior secured term loan facility that provided for up to $2.0 billion of borrowings. On April 21, 2010, CF Holdings completed a public offering of approximately 12.9 million shares of common stock at $89.00 per share. The net proceeds of $1.1 billion were used to repay a portion of the senior secured bridge facility. On April 23, 2010, CF Industries completed a public offering of senior notes in an aggregate principal amount of $1.6 billion. Approximately $645.2 million of the net proceeds of the offering were used to repay in full the remaining outstanding borrowings under the senior secured bridge facility. We used the remaining proceeds from the offering to repay approximately $864.2 million of the senior secured term loan facility. In May 2010, we redeemed Terra's 7.75% senior notes due 2019 for $744.5 million and recognized a $17 million loss on the early extinguishment of that debt.Supplemental pro forma information In accordance with ASC 805—Business Combinations, presented below are supplemental pro forma results of operations for the year ended December 31, 2010. Pro Forma Year Ended December 31, 2010 (unaudited)
(in millions, except
per share amounts) $ 4,373.9 $ 553.9 $ 7.71 CF INDUSTRIES HOLDINGS, INC. The unaudited supplemental pro forma results reflect certain adjustments related to the acquisition, such as increased depreciation and amortization expense resulting from the revaluation of the assets acquired, the impact of adjusting acquired inventory to fair value and the impact of acquisition financing. All transactions costs, including the $123 million termination fee we paid, on behalf of Terra, to Yara International ASA (see Note 8—Other Operating—Net for further details) have been reflected as an adjustment in the pro forma results for the year ended December 31, 2010. The pro forma results do not include any synergies or other effects of the integration of Terra. Adjustments to conform certain accounting policies have not been reflected in the supplemental pro forma results due to the impracticability of estimating such impacts. Accordingly, such pro forma amounts are not necessarily indicative of the results that actually would have occurred had the acquisition been completed on the date indicated.Purchase price and fair values of assets acquired and liabilities assumed The following table summarizes the allocation of the $4.6 billion purchase price of Terra to the assets acquired and liabilities assumed from Terra on April 5, 2010, net of certain adjustments made during the measurement period that ended on March 31, 2011. (in millions) $ 966.8 3,112.6 908.0 2,063.6 85.2 $ 7,136.2 392.2 740.5 930.1 96.9 373.2 $ 2,532.9 $ 4,603.3 13. Restructuring and Integration Costs In connection with the acquisition of Terra in 2010, our management approved a restructuring plan that involved the consolidation of our corporate headquarters including the closure of our Sioux City, Iowa offices. The total cost recorded in connection with the plan was $9.3 million, which included employee termination costs associated with the elimination of 105 positions. At December 31, 2012 and 2011, the balance in our restructuring reserve was $0.6$5.1 million and $2.0 million in 2015, 2014 and 2013, respectively. During 2010, we recorded $21.6 million The expense recognized in 2014 includes a settlement charge of restructuring and integration costs, consisting of $6.9 million of restructuring costs for employee termination benefits and $14.7 million of integration costs such as consulting and other professional fees representing our incremental costs to directly related to integrating Terra. During 2011, we recorded $4.4 million of restructuring and integration costs, consisting of $2.4 million of restructuring costs and $2.0 million of integration costs. In 2012, we did not incur any significant restructuring and integration costs.CF INDUSTRIES HOLDINGS, INC.14. Accounts Receivable—Net Accounts receivable—net consist of the following: December 31, 2012 2011 (in millions) $ 213.2 $ 266.9 4.2 2.5 $ 217.4 $ 269.4 Trade accounts receivable includes amounts due from related parties. For additional information, see Note 31—Related Party Transactions and Note 17—Equity Method Investments. Trade accounts receivable is net of a $1.1 million and $0.3 million allowance for doubtful accounts at December 31, 2012 and 2011, respectively.15. Inventories—Net Inventories—net consist of the following: December 31, 2012 2011 (in millions) $ 212.2 $ 245.2 65.7 59.0 $ 277.9 $ 304.2 16. Other Current Assets and Other Current Liabilities Other current assets consist of the following: December 31, 2012 2011 (in millions) $ 13.9 $ 11.9 10.1 0.5 3.8 4.6 0.1 1.0 $ 27.9 $ 18.0 Other current liabilities consist of the following: December 31, 2012 2011 (in millions) $ 5.6 $ 74.7 — 3.3 $ 5.6 $ 78.0
$3.4 million.CF INDUSTRIES HOLDINGS, INC.17. Equity Method Investments Equity method investments consist of the following: December 31, 2012 2011 (in millions) $ 394.2 $ 413.1 541.4 515.5 $ 935.6 $ 928.6 Operating Equity Method Investments Our equity method investments included in operating earnings consist of: (1) a 50% ownership interest in Point Lisas Nitrogen Limited (PLNL), which operates an ammonia production facility in the Republic of Trinidad and Tobago; and (2) a 50% interest in an ammonia storage joint venture located in Houston, Texas. We include our share of the net earnings from these investments as an element of earnings from operations because these operations provide additional production and storage capacity to our operations and are integrated with our other supply chain and sales activities in the nitrogen segment. The combined results of operations and financial position for our operating equity method investments are summarized below: Year ended December 31, 2012 2011 2010 (in millions) $ 320.9 $ 347.2 $ 172.6 $ 97.3 $ 117.5 $ 52.3 $ 47.0 $ 50.2 $ 10.6
December 31,
2012 2011 (in millions) $ 93.9 $ 126.6 164.8 147.2 $ 258.7 $ 273.8 $ 45.9 $ 41.1 26.0 24.2 186.8 208.5 $ 258.7 $ 273.8 The carrying value of these investments at December 31, 2012 was $394.2 million, which was $300.8 million more than our share of the affiliates' book value. The excess is primarily attributable to the purchase accounting impact of our acquisition of the investment in PLNL and reflects primarily the revaluation of property, plant and equipment, the value of an exclusive natural gas contract andCF INDUSTRIES HOLDINGS, INC.goodwill. The increased basis for property, plant and equipment and the gas contract are being amortized over a remaining period of approximately 21 years and 11 years, respectively. Our equity in earnings of operating affiliates is different from our ownership interest in income reported by the unconsolidated affiliates due to amortization of basis differences.transactions in the normal course of business with PLNL reflecting our obligation to purchase 50% of the ammonia produced by PLNL at current market prices. Our ammonia purchases from PLNL totaled $145.7 million, $161.9 million and $92.1 million in 2012, 2011 and 2010, respectively.Non-Operating Equity Method Investments Our non-operating equity method investments consist of: (1) a 50% ownership of KEYTRADE AG (Keytrade), a fertilizer trading company headquartered near Zurich, Switzerland; and (2) a 50% ownership in GrowHow UK Limited (GrowHow), which operates nitrogen production facilities in the United Kingdom. We account for these investments as non-operating equity method investments, and do not include the net earnings of these investments in earnings from operations since these operations do not provide additional capacity to us, nor are these operations integrated within our supply chain. The combined results of operations and financial position of our non-operating equity method investments are summarized below: Year ended December 31, 2012 2011 2010 (in millions) $ 2,751.6 $ 2,841.9 $ 1,698.8 $ 141.9 $ 117.4 $ 77.8 $ 58.1 $ 41.9 $ 26.7
December 31,
2012 2011 (in millions) $ 595.0 $ 504.2 293.4 293.4 $ 888.4 $ 797.6 $ 385.6 $ 339.5 147.3 149.4 355.5 308.7 $ 888.4 $ 797.6 In conjunction with our investment in Keytrade, we provided financing to Keytrade in the form of subordinated notes that mature on September 30, 2017 and bear interest at LIBOR plus 1.00 percent. At December 31, 2012 and 2011, the amount of the outstanding advances to Keytrade on our consolidated balance sheets was $12.4 million. For the twelve months ended December 31, 2012, 2011 and 2010, we recognized interest income on advances to Keytrade of $0.2 million. The carrying value of our advances to Keytrade approximates fair value.CF INDUSTRIES HOLDINGS, INC. Excluding the advances to Keytrade, the carrying value of our non-operating equity method investments at December 31, 2012 was $529.0 million, which was $351.3 million more than our share of the affiliates' book value. The excess is primarily attributable to the purchase accounting impact of our acquisition of the investments in GrowHow and KeyTrade and reflects the revaluation of property, plant and equipment, identifiable intangibles and goodwill. The increased basis for fixed assets and identifiable intangibles are being amortized over remaining periods ranging from 1 to 13 years. Our equity in earnings of non-operating affiliates is different than our ownership interest in their net earnings due to the amortization of basis differences. At December 31, 2012, the amount of our consolidated retained earnings that represents our undistributed earnings of non-operating equity method investments is $15.8 million.18. Property, Plant and Equipment—Net Property, plant and equipment—net consist of the following: December 31, 2012 2011 (in millions) $ 60.2 $ 60.3 202.6 200.7 5,388.6 5,196.1 537.1 524.5 469.1 201.9 6,657.6 6,183.5 2,757.1 2,447.5 $ 3,900.5 $ 3,736.0 Plant turnarounds—Scheduled inspections, replacements and overhauls of plant machinery and equipment at our continuous process manufacturing facilities are referred to as plant turnarounds. The expenditures related to turnarounds are capitalized into property, plant and equipment when incurred and are included in the table above in the line entitled, "Machinery and equipment." The following is a summary of plant turnaround activity for 2012, 2011 and 2010: Year ended December 31, 2012 2011 2010 (in millions) $ 54.8 $ 66.8 $ 57.4 56.6 16.2 34.4 (29.6 ) (27.9 ) (26.1 ) 0.3 (0.3 ) 1.1 $ 82.1 $ 54.8 $ 66.8 Scheduled replacements and overhauls of plant machinery and equipment include the dismantling, repair or replacement and installation of various components including piping, valves, motors, turbines, pumps, compressors, heat exchangers and the replacement of catalyst when a full plant shutdown occurs. Scheduled inspections are also conducted during full plant shutdowns, including required safety inspections which entail the disassembly of various components such as steam boilers, pressure vessels and other equipment requiring safety certifications. Internal employee costs and overhead are not considered turnaround costs and are not capitalized.CF INDUSTRIES HOLDINGS, INC.19. Goodwill and Other Intangible Assets The following table shows the carrying amount of goodwill by business segment at December 31, 2012 and 2011: Nitrogen Phosphate Total $ 2,063.6 $ 0.9 $ 2,064.5 The identifiable intangibles and carrying values are shown below. The Company's intangible assets are presented in noncurrent other assets on our consolidated balance sheets. December 31, 2012 December 31, 2011 Gross
Carrying
Amount Accumulated
Amortization Net Gross
Carrying
Amount Accumulated
Amortization Net (in millions) $ 50.0 $ (7.6 ) $ 42.4 $ 50.0 $ (4.9 ) $ 45.1 10.0 (2.8 ) 7.2 10.0 (1.7 ) 8.3 $ 60.0 $ (10.4 ) $ 49.6 $ 60.0 $ (6.6 ) $ 53.4 Amortization expense of our identifiable intangibles was $3.8 million, $3.8 million and $2.8 million for 2012, 2011 and 2010, respectively. Total estimated amortization expense for the five succeeding fiscal years is as follows: Estimated
Amortization
Expense (in millions) $ 3.8 3.8 3.8 3.8 3.8 $ 19.0 CF INDUSTRIES HOLDINGS, INC.20. Other Assets Other assets consist of the following: December 31, 2012 2011 (in millions) $ 44.7 $ 72.0 72.7 74.5 26.0 70.9 49.6 53.4 21.7 19.8 29.8 — 13.4 10.8 $ 257.9 $ 301.4 Deferred financing fees include amounts associated with our senior notes issued in connection with the Terra acquisition in 2010 and our credit agreement. See Note 12—Terra Acquisition and Note 22—Financing Agreements, for additional information. Our intangible assets are customer relationships and trademarks obtained as part of the Terra acquisition. See Note 19—Goodwill and Other Intangible Assets for additional information.21. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of the following: December 31, 2012 2011 (in millions) $ 117.3 $ 99.5 80.8 73.9 63.1 61.6 22.6 20.0 12.3 13.8 70.4 58.9 $ 366.5 $ 327.7 Payroll and employee related costs include accrued salaries and wages, vacation, incentive plans and payroll taxes. Asset retirement obligations are the current portion of these obligations. Accrued interest on debt includes interest payable on our outstanding financing issued as part of the Terra acquisition. For further details, see Note 12—Terra Acquisition and Note 22—Financing Agreements. Other includes accrued utilities, property taxes, sales incentives and other credits, maintenance and professional services.CF INDUSTRIES HOLDINGS, INC.22. Financing Agreements Long-term debt consisted of the following: December 31, 2012 2011 (in millions) $ 800.0 $ 800.0 800.0 800.0 — 13.0 $ 1,600.0 $ 1,613.0 — — $ 1,600.0 $ 1,613.0 Credit Agreement Until May 1, 2012, we maintained a senior securedunsecured revolving credit facility under an agreement dated April 5, 2010 and(as amended, and restated August 3, 2011 (the 2010the Revolving Credit Agreement), that provided up to $500 million in borrowings. The obligations of CF Industries under the 2010 Credit Agreement were guaranteed by the Company and certain direct and indirect wholly-owned subsidiaries of the Company (collectively, the Guarantors). The obligations of CF Industries and the Guarantors under the 2010 Credit Agreement were secured by senior liens on substantially all of the assets of CF Industries and the Guarantors, subject to certain exceptions. On May 1, 2012, the Company terminated the 2010 Credit Agreement and all of the guarantees and liens on the assets of the Company and its subsidiaries that secured obligations under the 2010 Credit Agreement were released. Immediately after terminating the 2010 Credit Agreement, the Company, as a guarantor, and CF Industries, as borrower, entered into a $500 million senior unsecured credit agreement, dated May 1, 2012 (the 2012 Credit Agreement), which provides providing for a revolving credit facility of up to $500 million$2.0 billion with a maturity of five years.2012Revolving Credit Agreement bear interest at a variable rate based on an applicable margin over LIBOR or a base rate and may be used for working capital capital expenditures, acquisitions, share repurchases and other general corporate purposes. The 2012CF Industries is a borrower, and CF Industries and CF Holdings are guarantors, under the Revolving Credit Agreement. Following the date of the closing of the transactions contemplated by the Combination Agreement (the Combination Agreement Closing Date), New CF would be required to be a borrower and a guarantor under the Revolving Credit Agreement, requires that the Company maintainat which time CF Industries would cease to be a minimum interest coverage ratio and not exceed a maximum total leverage ratio, and includes other customary terms and conditions, including customary events of default and covenants. All obligationsborrower under the 2012Revolving Credit Agreement. CF Industries or, following the Combination Agreement Closing Date, New CF, may designate as borrowers one or more wholly-owned subsidiaries that are organized in the United States or any state thereof, the District of Columbia, England and Wales or the Netherlands.unsecured. Currentlyrequired to pay an undrawn commitment fee on the Company isundrawn portion of the only guarantor of CF Industries' obligationscommitments under the 2012Revolving Credit Agreement. Agreement and customary letter of credit fees. The specified margin and the amount of the commitment fee depend on CF Holdings’ (or, after the consummation of the transactions contemplated by the Combination Agreement on the Combination Agreement Closing Date, New CF’s) credit rating at the time.Industries'Holdings’ U.S. subsidiaries, and, on and after the Combination Agreement Closing Date, certain of New CF’s and CF Holdings’ material domesticwholly-owned U.S. and foreign subsidiaries, will be required to become guarantors of the obligations under the 2012Revolving Credit Agreement only if (i) such subsidiary were tosubsidiaries guarantee other debt for borrowed money (subject to certainspecified exceptions) of the CompanyCF Holdings, CF Industries or New CF Industriesin an aggregate principal amount in excess of $250 million. Currently, no$500 million or (ii) such subsidiary guaranteessubsidiaries are borrowers under, issuers of, or guarantors of specified debt obligations of CF Holdings, CF Industries or New CF, including debt under the Bridge Credit Agreement (as defined below).borrowed moneya financing of this type, including two financial maintenance covenants: (i) a requirement that the interest coverage ratio, as defined in excessthe Revolving Credit Agreement, be maintained at a level of $250 million. Atnot less than 2.75 to 1.00 and (ii) a requirement that the total leverage ratio, as defined in the Revolving Credit Agreement, be maintained at a level of not greater than 3.75 to 1.00.2012, there was $491.0 million of available credit2015, we had excess borrowing capacity under the 2012Revolving Credit Agreement of $1,995.1 million (net of outstanding letters of credit)credit of $4.9 million), and there were no borrowings outstanding.outstanding as of December 31, 2015 or 2014. Maximum borrowings during the year ended December 31, 2015 were $367.0 million with a weighted-average annual interest rate of 1.47%. There were no borrowings during the years ended December 31, 2014 and 2013. December 31, 2015 2014 (in millions) Public Senior Notes: 6.875% due 2018 $ 800.0 $ 800.0 7.125% due 2020 800.0 800.0 3.450% due 2023 749.4 749.4 5.150% due 2034 746.3 746.2 4.950% due 2043 748.8 748.8 5.375% due 2044 748.2 748.1 Private Senior Notes: 4.490% due 2022 250.0 — 4.930% due 2025 500.0 — 5.030% due 2027 250.0 — 5,592.7 4,592.5 Less: Current portion — — Net long-term debt $ 5,592.7 $ 4,592.5 CF INDUSTRIES HOLDINGS, INC. due 2018 and 2020(the 2018 Notes) and $800 million aggregate principal amount of 7.125% senior notes due May 1, 2020 (the 2018/2020 Notes and, together with the 2018 Notes, thePublic Senior Notes). The Company pays interestInterest on the 2018/2020 Public Senior Notes is paid semiannually on May 1 and November 1 and the 2018/2020 Public Senior Notes are redeemable at our option, in whole at any time or in part from time to time, at specified make-whole redemption prices.the CompanyCF Holdings and its subsidiaries, including CF Industries, to incur liens on certain properties to secure debt. Inevent of specified changes of control involvingindentures governing the Company orPublic Senior Notes), CF Industries they also require CF Industrieswould be required to offer to repurchase theeach series of Public Senior Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest. Under the supplemental indentures governing the Notes, the Notes are to be guaranteed by the Company and each of the Company's current and future subsidiaries (other than CF Industries) that from time to time is a borrower or guarantor under the 2010 Credit Agreement, or any renewal, replacement or refinancing thereof, including the 2012 Credit Agreement. Upon the termination of the 2010 Credit Agreement, the guarantees of the subsidiaries of the Company securing obligations under the 2010 Credit Agreement were released. As a result, the subsidiaries were automatically released from their guarantees of the Notes. In addition, in the event that a subsidiary of the Company,ours, other than CF Industries, becomes a borrower or a guarantor under the 2012Revolving Credit Agreement (or any renewal, replacement or refinancing thereof), such subsidiary would be required to become a guarantor of the Public Senior Notes, provided that such requirement will no longer apply with respect to the 2023/2043 Public Senior Notes and 2034/2044 Public Senior Notes following the repayment of the 2018/2020 Public Senior Notes or the subsidiaries of ours, other than CF Industries, otherwise becoming no longer subject to such a requirement to guarantee the 2018/2020 Public Senior Notes. At2012,2015, the carrying value of the Private Senior Notes was $1.6$1.0 billion and the fair value was approximately $2.0$0.99 billion. Year ended December 31, 2015 2014 2013 (in millions) $ 267.4 $ 238.3 $ 150.6 16.8 10.6 15.4 Interest on tax liabilities 3.5 3.5 12.9 Interest capitalized (154.5 ) (74.2 ) (26.7 ) Interest expense $ 133.2 $ 178.2 $ 152.2 See Note 12—Financing Agreements for additional information. Fees on financing agreements for the year ended December 31, 2015 includes $5.9 million of accelerated amortization of deferred fees related to the termination in September 2015 of the tranche A commitment under the Bridge Credit Agreement. Year ended December 31, 2015 2014 2013 (in millions) Loss on disposal of property, plant and equipment—net $ 21.4 $ 3.7 $ 5.6 Expansion project costs 51.3 30.7 10.8 Loss (gain) on foreign currency derivatives 21.6 38.4 (20.8 ) Gain on foreign currency transactions (7.5 ) (14.9 ) (13.5 ) Closed facilities costs — 0.8 4.0 Other 5.5 (5.4 ) (1.9 ) Other operating loss (income)—net $ 92.3 $ 53.3 $ (15.8 ) Senior Notes AtNitrogen Company, L.P. (TNCLP)2011, $13.02015, 2014 and 2013 were $116.4 million, $139.4 million and $200.6 million, respectively.7% Senior Notes due 2017 (2017 Notes)Nitrogen GP Inc. (TNGP), the general partner of TNCLP (and an indirect wholly-owned subsidiary of CF Industries), and its affiliates owned 75.3% of TNCLP's outstanding units. When not more than 25% of TNCLP's issued and outstanding units are held by non-affiliates of TNGP, TNCLP, at TNGP's sole discretion, may call, or assign to TNGP or its affiliates, TNCLP's right to acquire all such outstanding units held by non-affiliated persons. If TNGP elects to acquire all outstanding units, TNCLP is required to give at least 30 but not more than 60 days' notice of TNCLP's decision to purchase the outstanding units. The purchase price per unit will be the greater of (1) the average of the previous 20 trading days' closing prices as of the date five days before the purchase is announced or (2) the highest price paid by TNGP or any of its affiliates for any unit within the 90 days preceding the date the purchase is announced.outstanding. Inentitled to receive distributions of net earnings of CFL based upon their respective purchases from CFL. The remaining 17% of the second quarter ofvoting common shares were owned by GROWMARK, Inc. and La Coop fédérée. CFL was a variable interest entity that was consolidated in our financial statements.redeemedentered into agreements to acquire the remaining outstanding 2017 Notesnoncontrolling interests in CFL for cash. This redemption didC$0.9 billion, which included 34% of CFL's common and preferred shares owned by Viterra, the product purchase agreement between CFL and Viterra and the CFL common shares held by GROWMARK, Inc. and La Coop fédérée. In April 2013, we completed the acquisitions. Since CFL was previously a consolidated variable interest entity, the purchase price was recognized as follows: a $0.8 billion reduction in paid-in capital; a $0.1 billion deferred tax asset; and the removal of the CFL noncontrolling interest because CFL became a wholly-owned subsidiary. Year ended December 31, 2015 2014 2013 TNCLP TNCLP CFL TNCLP Total (in millions) Noncontrolling interest: Beginning balance $ 362.8 $ 362.3 $ 17.4 $ 362.6 $ 380.0 Earnings attributable to noncontrolling interest 34.2 46.5 2.3 65.9 68.2 Declaration of distributions payable (45.0 ) (46.0 ) (2.3 ) (66.2 ) (68.5 ) Acquisitions of noncontrolling interests in CFL — — (16.8 ) — (16.8 ) Effect of exchange rate changes — — (0.6 ) — (0.6 ) Ending balance $ 352.0 $ 362.8 $ — $ 362.3 $ 362.3 Distributions payable to noncontrolling interest: Beginning balance $ — $ — $ 5.3 $ — $ 5.3 Declaration of distributions payable 45.0 46.0 2.3 66.2 68.5 Distributions to noncontrolling interest (45.0 ) (46.0 ) (7.5 ) (66.2 ) (73.7 ) Effect of exchange rate changes — — (0.1 ) — (0.1 ) Ending balance $ — $ — $ — $ — $ — ourthe consolidated financial results.Notes Payable From timecondition or results of operations of CF Holdings.time, CFL receives advances from CF Industriescertain transition provisions. The proposed regulations include as activities that generate qualifying income processing or refining and from CFL's noncontrolling interest holdertransportation activities with respect to finance major capital expenditures. The advances outstanding are evidenced by unsecured promissory notes due December 31, 2013 and bear interest at market rates. The amount shown as notes payable represents the advances payableany mineral or natural resource (including fertilizer), but reserve on specific proposals regarding fertilizer-related activities. We continue to CFL's noncontrolling interest holder. The carrying value of notes payable approximates their fair value.23. Leases We have operating leases for certain property and equipment under various noncancelable agreements, the most significant of which are rail car leases and barge tow charters for the distribution of fertilizer. The rail car leases currently have minimum terms ranging from one to ten years and the barge charter commitments range from one to seven years. We also have terminal and warehouse storage agreements for our distribution system, some of which contain minimum throughput requirements. The storage agreements contain minimum terms generally ranging from one year to three years and commonly contain automatic annual renewal provisions thereafter unless canceled by either party. Our Deerfield corporate office lease has a ten-year minimum term ending in 2017. This lease contains rent escalations, leasehold incentives and rent holidays that are amortized on a straight-line basis over the construction period and the term of the lease. Other than the corporate office lease, our operating lease agreements do not contain significant contingent rents, leasehold incentives, rent holidays, concessions or unusual provisions. Future minimum payments under noncancelable operating leases, including barge charters and storage agreements at December 31, 2012 are shown below. Operating
Lease Payments (in millions) $ 78.0 52.3 34.7 31.6 24.1 49.6 $ 270.3 Total rent expense for cancelable and noncancelable operating leases was $89.7 million for 2012, $81.0 million for 2011 and $63.7 million for 2010.24. Other Noncurrent Liabilities Other noncurrent liabilities consist of the following: December 31, 2012 2011 (in millions) $ 145.0 $ 131.6 12.3 13.8 132.7 117.8 209.1 230.4 38.5 74.8 4.0 4.6 2.3 2.7 9.1 5.5 $ 395.7 $ 435.8 Asset retirement obligations are for phosphogypsum stack closure, mine reclamation and other obligations (see Note 10—Asset Retirement Obligations). Benefit plans and deferred compensation include liabilities for pensions, retiree medical benefits, and the noncurrent portion of incentive plans (see Note 7—Pension and Other Postretirement Benefits). Environmental and related costs consist of the noncurrent portions of the liability for environmental items included in other operating—net (see Note 8—Other Operating—Net).CF INDUSTRIES HOLDINGS, INC.25.16. Derivative Financial Instrumentsfertilizers.products. We manage the risk of changes in natural gas prices primarily through the use of primarily derivative financial instruments covering periods through the end of generally less than 18 months.2018. The natural gas derivative instrumentsderivatives that we currently use are fixed-price swapprimarily fixed price swaps and option contractsoptions traded in the over-the-counterOTC markets. TheThese natural gas derivatives settle using primarily a NYMEX futures price index, which represents the basis for fair value at any given time. The contracts areWe entered into natural gas derivative contracts with respect to natural gas to be consumed by us in the future, and settlements of those derivative contracts are scheduled to coincide with our anticipated purchases of natural gas purchases used to manufacture nitrogen products during those future periods. We use natural gas derivatives as an economic hedge of natural gas price risk, but without the application of hedge accounting.20122015 and 2011,2014, we had open natural gas derivative contracts for 58.9431.5 million MMBtus and 156.358.7 million MMBtus, respectively. For the year ended December 31, 2012,2015, we used derivatives to cover approximately 65%64% of our natural gas consumption.we announced plansour Board of Directors authorized a project to construct new ammonia and urea/UAN plants at our Donaldsonville, Louisiana complex and new ammonia and urea plants at our Port Neal, Iowa complex. Our Board of Directors has authorized expenditures of $3.8 billion for these projects. A portion of the constructioncapacity expansion project costs will be Euro-denominated.are euro-denominated. In order to manage our exposure to changes in the Euroeuro to U.S. dollar currency exchange rates, we have hedged our projected Euroeuro-denominated payments through the third quarter of 2016 using foreign currency forward exchange contracts.2012,2015 and 2014, the notional amount of our open foreign currency derivatives was $884.0 million. Of this amount, $415.6€89.0 million or approximately 47%, have been designated as cash flow hedging instruments for accounting purposes while the remaining $468.4and €209.0 million, have not beenrespectively. None of these open foreign currency derivatives were designated as hedging instruments for accounting purposes. We did not utilizein 2010 or 2011.which were originally designated as cash flow hedges. No reclassification from AOCI to income was madeoccurred in 2012, 20112015 or 2010,2013. As of December 31, 2015 and none is projectedDecember 31, 2014, AOCI includes $7.4 million of pre-tax gains related to the foreign currency derivatives that were originally designated as cash flow hedges. The hedges were de-designated as of December 31, 2013, and the remaining balance in AOCI will be reclassified into income over the depreciable lives of the property, plant and equipment associated with the capacity expansion projects. We expect that the amounts to be reclassified within the next twelve months will be insignificant. See Note 18—Stockholders' Equity, for 2013.further information.CF INDUSTRIES HOLDINGS, INC.below. Gain (loss) recognized
in OCI Gain (loss) reclassified from AOCI into income Gain (loss) recognized in OCI Gain (loss) reclassified from AOCI into income Year ended December 31, Year ended December 31, Year ended December 31, Year ended December 31,
as cash flow hedges 2012 2011 2010 Location 2012 2011 2010 2015 2014 2013 Location 2015 2014 2013 (in millions) (in millions) (in millions) (in millions) $ 7.2 $ — $ — Other operating—net $ — $ — $ — $ — $ — $ 3.0 Other operating—net $ — $ 2.8 $ — Gain (loss) recognized in income Year ended December 31, Location 2012 2011 2010 (in millions) Other operating—net $ 1.8 $ — $ — Gain (loss) recognized in income Year ended December 31, Location 2015 2014 2013 (in millions) Foreign exchange contracts $ — $ — $ (1.8 ) For foreign exchange contracts designated as cash flow hedges, the amount reported as loss recognized in income in 2013 represents the amount excluded from hedge effectiveness. Gain (loss) recognized in income Year ended December 31,
designated as hedges Location 2012 2011 2010 (in millions) Cost of sales $ 66.5 $ (77.3 ) $ 9.6 Other operating—net 6.3 — — $ 72.8 $ (77.3 ) $ 9.6 Gain (loss) in income Year ended December 31, 2012 2011 2010 (in millions) $ 72.8 $ (77.3 ) $ 9.6 1.8 — — 74.6 (77.3 ) 9.6 (144.4 ) (54.5 ) (53.2 ) $ (69.8 ) $ (131.8 ) $ (43.6 ) Unrealized gain (loss) recognized in income Year ended December 31, Location 2015 2014 2013 (in millions) Natural gas derivatives Cost of sales $ (176.3 ) $ (79.5 ) $ 52.9 Foreign exchange contracts Other operating—net 22.4 (43.6 ) 14.8 Unrealized (losses) gains recognized in income $ (153.9 ) $ (123.1 ) $ 67.7 Gain (loss) in income Year ended December 31, All Derivatives 2015 2014 2013 (in millions) Unrealized (losses) gains Derivatives not designated as hedges $ (153.9 ) $ (123.1 ) $ 67.7 Cash flow hedge ineffectiveness — — (1.8 ) Total unrealized (losses) gains (153.9 ) (123.1 ) 65.9 Realized (losses) gains (114.2 ) 64.2 1.8 Net derivative (losses) gains $ (268.1 ) $ (58.9 ) $ 67.7 5—9—Fair Value Measurements. Asset Derivatives Liability Derivatives December 31, December 31, Asset Derivatives Liability Derivatives Balance Sheet
Location Balance Sheet
Location December 31, December 31, 2012 2011 2012 2011 2015 2014 2015 2014 (in millions) (in millions) (in millions) (in millions) $ 4.2 $ — $ — $ — 4.8 — — — $ 9.0 $ — $ — $ — $ 3.9 $ — $ — $ — Other current assets $ 0.5 $ — Other current liabilities $ (0.6 ) $ (22.4 ) 2.4 — — — Other assets — — Other liabilities — — 2.0 0.5 (5.5 ) (74.7 ) Other current assets 0.1 0.5 Other current liabilities (129.9 ) (26.0 ) — — (0.1 ) — Other assets — — Other liabilities (80.8 ) — Total derivatives $ 0.6 $ 0.5 $ (211.3 ) $ (48.4 ) Current / Noncurrent totals $ 8.3 $ 0.5 $ (5.6 ) $ (74.7 ) Other current assets $ 0.6 $ 0.5 Other current liabilities $ (130.5 ) $ (48.4 ) Other assets — — Other liabilities (80.8 ) — $ 17.3 $ 0.5 $ (5.6 ) $ (74.7 ) $ 0.6 $ 0.5 $ (211.3 ) $ (48.4 ) $ 10.1 $ 0.5 $ (5.5 ) $ (74.7 ) 7.2 — (0.1 ) — $ 17.3 $ 0.5 $ (5.6 ) $ (74.7 ) Derivatives expose us to counterparties and the risks associated with their ability to meet the terms of the contracts. either large oilexecuted with several counterparties, generally under International Swaps and gas companiesDerivatives Association (ISDA) agreements. The ISDA agreements are master netting arrangements commonly used for OTC derivatives that mitigate exposure to counterparty credit risk, in part, by creating contractual rights of netting and setoff, the specifics of which vary from agreement to agreement. These rights are described further below:large financial institutions. Cash collateralreceivable, ordinary settlement obligations arising between us under the ISDA agreement on the same day, in the same currency, for the same types of derivative instruments, and through the same pairing of offices.deposited withpayable by the non-defaulting party, that party's obligation to make the payment may be conditioned on factors such as the termination of all derivative transactions between the parties or received frompayment in full of all of the defaulting party's obligations to the non-defaulting party, in each case regardless of whether arising under the ISDA agreement or otherwise.when predetermined unrealized gainunder the ISDA agreement or loss thresholds are exceeded. At both December 31, 2012otherwise. Typically, these setoff rights arise upon the early termination of all transactions outstanding under an ISDA agreement following a default or specified termination event.2011, we had no cash collateral on deposit with counterparties forcredit support requirements. In the event of certain defaults or a credit ratings downgrade, our counterparty may request early termination and net settlement of certain derivative contracts.20122015 and 2011,2014, the aggregate fair value of the derivative instruments with credit-risk-related contingent features in a net liability positionpositions was $0.9$211.3 million and $74.7$47.1 million, respectively. For derivativesrespectively, which also approximates the fair value of the maximum amount of additional collateral that are in net asset positions, we are exposedwould need to credit loss from nonperformance bybe posted or assets needed to settle the counterparties.obligations if the credit-risk-related contingent features were triggered at the reporting dates. At both December 31, 20122015 and 2011, our exposure to credit loss from nonperformance by counterparties to derivative instruments totaled $12.7 million and $0.5 million, respectively. We control our credit risk through the use of multiple counterparties, individual credit limits, monitoring procedures,2014, we had no cash collateral requirementson deposit with counterparties for derivative contracts. The credit support documents executed in connection with certain of our ISDA agreements generally provide us and master netting arrangements.master netting arrangements with respectfollowing table presents amounts relevant to someoffsetting of our derivative instruments also contain credit-risk-related contingent features that require usassets and liabilities as of December 31, 2015 and 2014: Gross amounts not offset in consolidated balance sheets (in millions) December 31, 2015 Total derivative assets $ 0.6 $ 0.6 $ — $ — Total derivative liabilities 211.3 0.6 — 210.7 Net derivative liabilities $ (210.7 ) $ — $ — $ (210.7 ) December 31, 2014 Total derivative assets $ 0.5 $ 0.5 $ — $ — Total derivative liabilities 48.4 0.5 — 47.9 Net derivative liabilities $ (47.9 ) $ — $ — $ (47.9 ) We report the fair values of our derivative assets and liabilities on a gross basis on our consolidated balance sheets. As a result, the gross amounts recognized and net amounts presented are the same. maintain a minimum net worth level and certain financial ratios. If we fail to meet these minimum requirements,or due from, the counterparties to those derivative instruments where we hold our ISDA agreements would have a material effect on our financial position.liability positions could require daily cashconsist of the following: December 31, 2015 2014 (in millions) Trade $ 210.2 $ 185.7 Other 57.0 5.8 $ 267.2 $ 191.5 December 31, 2015 2014 (in millions) Finished goods $ 286.1 $ 179.5 Raw materials, spare parts and supplies 35.1 23.4 $ 321.2 $ 202.9 December 31, 2015 2014 (in millions) Accounts payable $ 96.6 $ 65.8 Capacity expansion project costs 416.3 195.3 Accrued natural gas costs 70.0 96.9 Payroll and employee-related costs 48.8 47.3 Accrued interest 60.0 46.9 Accrued share repurchase — 29.1 Other 226.0 108.6 $ 917.7 $ 589.9 or some other formon derivatives amounting to $130.5 million and $48.4 million as of credit support.December 31, 2015 and 2014, respectively. For further details, see Note 16—Derivative Financial Instruments. December 31, 2015 2014 (in millions) Benefit plans and deferred compensation $ 343.4 $ 209.8 Tax-related liabilities 117.9 95.8 Unrealized losses on derivatives 80.8 — Capacity expansion project costs 54.8 49.0 Environmental and related costs 6.6 3.6 Other 24.1 16.7 $ 627.6 $ 374.9 In April 2010, we issued approximately 9.5 million shares of CF Holdings common stock in connection with our acquisition of Terra. For additional information regarding the Terra acquisition, see Note 12—Terra Acquisition. Also in April 2010, we completed a public offering of approximately 12.9 million shares of CF Holdings common stock at a price of $89.00 per share resulting in net proceeds of $1.1 billion. In the third quarter of 2011, oura programcertain programs to repurchase upshares of our common stock. Each of these programs is consistent in that repurchases may be made from time to $1.5 billion of CF Holdings common stock through December 31, 2013. During 2011, we repurchased 6.5 million shares under the program for $1.0 billion, andtime in the second quarteropen market, through privately-negotiated transactions, through block transactions or otherwise. The manner, timing and amount of 2012, we repurchased 3.1 million sharesrepurchases are determined by our management based on the evaluation of CF Holdings commonmarket conditions, stock for $500.0 million, thereby completing this program. In June 2012, all 9.6 million shares that were repurchased under this program were retired. common stock through December 31, 2016. Repurchases2016 (the 2012 Program). The repurchases under this program may be made from time to timethe 2012 Program were completed in the open market,second quarter of 2014. On August 6, 2014, our Board of Directors authorized a program to repurchase up to $1.0 billion of the common stock of CF Holdings through December 31, 2016 (the 2014 Program). privately negotiated transactions, or otherwise. the share repurchases and changes in common shares outstanding tables below has been retroactively restated for all prior periods presented to reflect the five-for-one split of the Company’s common stock effected in the form of a stock dividend that was distributed on June 17, 2015. See Note 1—Background and Basis of Presentation for further information.manner, timing,following table summarizes the share repurchases under the 2014 Program and the 2012 Program. 2014 Program 2012 Program Shares Amounts Shares Amounts (in millions) Shares repurchased in 2013 — $ — 36.7 $ 1,449.3 Shares repurchased in 2014: First quarter — $ — 16.0 $ 793.9 Second quarter — — 15.4 756.8 Third quarter — — — — Fourth quarter 7.0 372.8 — — Total shares repurchased in 2014 7.0 372.8 31.4 1,550.7 7.0 $ 372.8 68.1 $ 3,000.0 Shares repurchased in 2015: First quarter 4.1 $ 236.6 Second quarter 4.5 268.1 Third quarter 0.3 22.5 Fourth quarter — — Total shares repurchased in 2015 8.9 527.2 Shares repurchased as of December 31, 2015 15.9 $ 900.0 any repurchases will be determined by our management based on evaluationshares repurchased that was accrued but unpaid was zero and $29.1 million, respectively.market conditions,repurchased stock, price,respectively. As of December 31, 2015 and other factors. There were no repurchases under this program2014, we held in 2012. Year ended December 31, 2015 2014 2013 Beginning balance 241,673,050 279,240,970 314,753,440 Exercise of stock options 274,705 942,560 1,131,515 40,673 20,875 150,370 Forfeitures of restricted stock — (65,680 ) (7,850 ) (8,906,872 ) (38,465,675 ) (36,786,505 ) Ending balance 233,081,556 241,673,050 279,240,970 Includes shares issued from treasury. Includes shares withheld to pay employee tax obligations upon the vesting of restricted stock. Year ended December 31, 2012 2011 2010 65,419,989 71,267,185 48,569,985 569,490 638,926 187,599 25,662 32,867 58,275 (2,170 ) (3,140 ) (13,380 ) — — 9,543,356 — — 12,921,350 (3,062,283 ) (6,515,849 ) — 62,950,688 65,419,989 71,267,185 (1)Consists of restricted shares issued, net of shares issued from treasury.(2)Includes treasury shares acquired through shares withheld to pay employee tax obligations upon the vesting of restricted stock. We have adopted (the Rights Plan). The existence of the rights and the Rights Plan is intended to deter coercive or partial offers which may not provide fair value to all stockholders and to enhance our ability to represent all of our stockholders and thereby maximize stockholder value. Under the Rights Plan, each share of common stock has attached to it one right. Each right entitles the holder to purchase one one-thousandth of a share of a series of our preferred stock designated as Series A junior participating preferred stock at an exercise price of $90, subject toCF INDUSTRIES HOLDINGS, INC.adjustment. Rights will only be exercisable under limited circumstances specified in the rights agreement when there has been a distribution of the rights and such rights are no longer redeemable by us. A distribution of the rights would occur upon the earlier of (i) 10 business days following a public announcement that any person or group has acquired beneficial ownership of 15% or more (or, in the case of certain institutional and other investors, 20% or more) of the outstanding shares of our common stock, other than as a result of repurchases of stock by us; or (ii) 10 business days, or such later date as our Board of Directors may determine, after the date of the commencement of a tender offer or exchange offer that would result in any person, group or related persons acquiring beneficial ownership of 15% or more (or, in the case of certain institutional and other investors, 20% or more) of the outstanding shares of our common stock. The rights will expire at 5:00 P.M. (New York City time) on July 21, 2015, unless such date is extended or the rights are earlier redeemed or exchanged by us. If any person or group acquires shares representing 15% or more (or, in the case of certain institutional and other investors, 20% or more) of the outstanding shares of our common stock, the rights will entitle a holder, other than such person, any member of such group or related person, all of whose rights will be null and void, to acquire a number of additional shares of our common stock having a market value of twice the exercise price of each right. If we are involved in a merger or other business combination transaction, each right will entitle its holder to purchase, at the right's then-current exercise price, a number of shares of the acquiring or surviving company's common stock having a market value at that time of twice the right's exercise price. The description and terms of the rights arewere set forth in a Rights Agreement dated as of July 21, 2005 between us and The Bank of New York, as amended by the First Amendment to the Rights Agreement, dated as of August 31, 2010 and March 16, 2015 between us and Mellon Investor Services, LLC (as successor to the Bank of New York)Computershare Inc., as Rights Agent.stock.stock, of which 500,000 have been designated Series A Junior Participating Preferred Stock. Our amended and restated certificate of incorporation authorizes our Board of Directors, without any further stockholder action or approval, to issue these shares in one or more classes or series, and (other than in the case of the Series A Junior Participating Preferred Stock, the terms of which are set forth in our amended and restated certificate of incorporation) to fix the rights, preferences and privileges of the shares of each wholly unissued class or series and any of its qualifications, limitations or restrictions. In connection with our Rights Plan,The 500,000 authorized shares of preferred stock have been designated as Series A junior participating preferred stock.Junior Participating Preferred Stock had been reserved for issuance upon the exercise of rights under the Rights Plan. The rights expired on March 31, 2015 without having been exercised. No shares of preferred stock have been issued.CF INDUSTRIES HOLDINGS, INC. Foreign
Currency
Translation
Adjustment Unrealized
Gain (Loss)
on
Securities Unrealized
Gain (Loss)
on
Derivatives Defined
Benefit
Plans Accumulated
Other
Comprehensive
Income (Loss) (in millions) $ (0.4 ) $ 9.7 $ — $ (52.5 ) $ (43.2 ) — (2.5 ) — — (2.5 ) — (21.2 ) — 6.6 (14.6 ) — — — (35.5 ) (35.5 ) (in millions) Balance as of December 31, 2012 $ 61.4 $ (0.4 ) $ 4.6 $ (115.2 ) $ (49.6 ) Unrealized gain — 2.1 3.0 — 5.1 Reclassification to earnings — (0.6 ) — 12.2 11.6 Gain arising during the period — — — 46.2 46.2 22.8 9.1 — 10.6 42.5 (29.5 ) (0.5 ) (1.1 ) (24.8 ) (55.9 ) 22.4 (4.9 ) — (70.8 ) (53.3 ) — 3.2 — — 3.2 — (0.2 ) — 7.9 7.7 — — — (45.2 ) (45.2 ) (7.0 ) (1.1 ) — (3.6 ) (11.7 ) 15.4 (3.0 ) — (111.7 ) (99.3 ) Balance as of December 31, 2013 31.9 0.6 6.5 (81.6 ) (42.6 ) — 4.3 7.2 — 11.5 — 0.7 — — 0.7 — (0.6 ) — 11.5 10.9 — (0.4 ) (2.8 ) 33.1 29.9 — — — (1.0 ) (1.0 ) — — — (106.2 ) (106.2 ) 46.0 (1.1 ) (2.6 ) (14.0 ) 28.3 (72.4 ) (0.1 ) 1.0 29.9 (41.6 ) $ 61.4 $ (0.4 ) $ 4.6 $ (115.2 ) $ (49.6 ) Balance as of December 31, 2014 (40.5 ) 0.8 4.7 (124.8 ) (159.8 ) Unrealized loss — (0.2 ) — — (0.2 ) Reclassification to earnings — 0.9 — 5.9 6.8 Impact of CF Fertilisers UK acquisition 9.0 — — 38.2 47.2 Gain arising during the period — — — 23.7 23.7 Effect of exchange rate changes and deferred taxes (166.3 ) (0.5 ) — (0.7 ) (167.5 ) Balance as of December 31, 2015 $ (197.8 ) $ 1.0 $ 4.7 $ (57.7 ) $ (249.8 ) The $1.0 million defined benefit plan loss arising during 2012 is net2012. For additional information, refer to Note 7—Pension and Other Postretirement Benefits. The $21.2 million unrealized gain on securities reclassified to earnings in 2010 pertainsAOCI to the holding gain on our investment in marketable equity securities that was realized inconsolidated statements of operations for the first quarteryears ended December 31, 2015. 2014 and 2013 were as follows: Year ended December 31, 2015 2014 2013 (in millions) Foreign Currency Translation Adjustment $ 9.0 $ — $ — Total before tax 9.0 — — Tax effect — — — Net of tax $ 9.0 $ — $ — Unrealized Gain (Loss) on Securities $ 0.9 $ (0.4 ) $ (0.6 ) Total before tax 0.9 (0.4 ) (0.6 ) Tax effect (0.5 ) 0.1 0.2 Net of tax $ 0.4 $ (0.3 ) $ (0.4 ) Unrealized Gain (Loss) on Derivatives $ — $ (2.8 ) $ — Total before tax — (2.8 ) — Tax effect — 1.0 — Net of tax $ — $ (1.8 ) $ — Defined Benefit Plans $ 38.2 $ — $ — (1.0 ) (0.4 ) 0.3 6.9 33.5 11.9 Total before tax 44.1 33.1 12.2 Tax effect (2.1 ) (12.1 ) (4.3 ) Net of tax $ 42.0 $ 21.0 $ 7.9 Total reclassifications for the period $ 51.4 $ 18.9 $ 7.5 Represents the amount that was reclassified from AOCI into equity in earnings of non-operating affiliates—net of taxes as a result of the remeasurement to fair value of our initial 50% equity interest in CF Fertilisers UK. Represents the balance that was reclassified into interest income. Represents the portion of de-designated cash flow hedges that were reclassified into income as a result of the discontinuance of certain cash flow hedges. These components are included in the computation of net periodic pension cost and were reclassified from AOCI into cost of sales and selling, general and administrative expenses. 2009 We grant stock-based compensation awards underPlan (the Plan).Plan. Under the Plan, we may grant incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards (payable in cash or stock) and other stock-based awards to our officers, employees, consultants and independent contractors (including non-employee directors). The purpose of the Plan is to provide an incentive for our employees, officers, consultants and non-employee directors that is aligned with the interests of our stockholders.
Five-for-One Stock SplitTableContentsCF INDUSTRIES HOLDINGS, INC.3.913.9 million and (ii) the number of shares subject to outstanding awards under our predecessor planplans to the extent such awards terminate or expire without delivery of shares. For purposes of determining the number of shares of stock available for grant under the Plan, each option or stock appreciation right is counted against the reserve as one share. Each share of stock granted, other than an option or a stock appreciation right, is counted against the reserve as 1.61 shares. If any outstanding award expires or is settled in cash, any unissued shares subject to the award are again available for grant under the Plan. Shares tendered in payment of the exercise price of an option and shares withheld by the Company or otherwise received by the Company to satisfy tax withholding obligations are not available for future grant under the Plan. AtAs of December 31, 2012,2015, we had 3.113.1 million shares available for future awards under the Plan. The Plan provides that no more than 1.05.0 million underlying shares may be granted to a participant in any one calendar year.the optionseach option is ten years and generally one-third of the options vest on each of the first three anniversaries of the date of grant. 2012 2011 2010 50% 53% 52% 4.5 Years 4.7 Years 5-6 Years 0.7% 0.9% 1.5-2.0% 0.8% 1.1% 0.5%
granted $80.59 $56.60 $35.04 2015 2014 2013 Weighted-average assumptions: Expected volatility 31% 33% 35% Expected term of stock options 4.3 Years 4.3 Years 4.4 Years Risk-free interest rate 1.5% 1.3% 1.4% Expected dividend yield 1.9% 1.6% 0.8% $13.99 $12.77 $10.76 The grant date fair values used to calculate the weighted-average grant date fair value have been retroactively restated for all prior periods presented to reflect the five-for-one stock split. post vestingpost-vesting employment termination behavior and the contractual term. The risk-free interest rate is based on the U.S. Treasury Strip yield curve in effect at the time of grant for the expected term of the options.underduring the plan atyear ended December 31, 20122015 is presented below: Shares Weighted-
Average
Exercise Price 1,215,083 $ 53.95 3,185,165 $ 35.92 130,670 207.11 784,928 61.98 (569,490 ) 25.63 (274,705 ) 30.60 (9,656 ) 113.80 (41,070 ) 47.72 766,607 100.34 475,793 66.40 Outstanding as of December 31, 2015 3,654,318 41.79 Exercisable as of December 31, 2015 2,110,615 32.38 Shares and per share amounts have been retroactively restated for all prior periods presented to reflect the five-for-one stock split. 2012 2011 2010 2015 2014 2013 (in millions) (in millions) $ 14.6 $ 15.5 $ 5.0 $ 8.4 $ 17.6 $ 10.3 $ 36.9 $ 30.0 $ 6.2 $ 1.9 $ 10.2 $ 11.9 $ 95.2 $ 79.4 $ 16.7 $ 8.4 $ 31.1 $ 38.6 at December 31, 2012: Options Outstanding Options Exercisable
Exercise Prices Shares Weighted-
Average
Remaining
Contractual
Term
(years) Weighted-
Average
Exercise Price Aggregate
Intrinsic
Value(1)
(in millions) Shares Weighted-
Average
Remaining
Contractual
Term
(years) Weighted-
Average
Exercise Price Aggregate
Intrinsic
Value(1)
(in millions) 138,350 3.3 $ 15.28 $ 26.0 138,350 3.3 $ 15.28 $ 26.0 333,006 6.6 72.52 43.5 253,003 6.3 71.17 33.4 295,251 8.5 171.58 9.9 84,440 6.8 135.84 5.7 766,607 6.7 100.34 $ 79.4 475,793 5.5 66.40 $ 65.1
2015:(1)The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $203.16 as of December 31, 2012, which would have been received by the option holders had all option holders exercised their options as of that date. Options Outstanding Options Exercisable Shares Shares $ 3.30 - $ 4.00 5,000 0.3 $ 3.35 $ 0.2 5,000 0.3 $ 3.35 $ 0.2 $ 4.01 - $20.00 582,680 3.9 14.67 15.2 582,680 3.9 14.67 15.2 $20.01 - $62.25 3,066,638 7.7 47.00 6.0 1,522,935 6.7 39.26 5.4 3,654,318 7.1 41.79 $ 21.4 2,110,615 5.9 32.38 $ 20.8 The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $40.81 on December 31, 2015, which would have been received by the option holders had all option holders exercised their options as of that date. numbersnumber of shares awardedsubject to the award multiplied by the closing market price of our common stock on the date of grant. The restricted stock awardedWe estimated the fair value of each performance share unit (PSU) on the date of grant using a Monte Carlo simulation. Awards granted to key employees vestsvest three years from the date of grant. The restricted stockvesting of PSUs is also subject to the attainment of applicable performance goals during the performance period. The RSAs awarded to non-management members of our Board of Directors vestsvest the earlier of one year from the date of the grant or the date of the next annual stockholder meeting. During the vesting period, the holders of the restricted stockRSAs are entitled to dividends and voting rights. During the vesting period, the holders of the RSUs are paid dividend equivalents in cash to the extent the Company pays cash dividends. PSUs accrue dividend equivalents to the extent the Company pays cash dividends on our common stock during the performance vesting period. Upon vesting of the PSUs, holders are paid the accrued dividend equivalents based on the shares of common stock, if any, delivered in settlement of PSUs. Holders of RSUs and PSUs are not entitled to voting rights unless and until the awards have vested.underduring the plan atyear ended December 31, 20122015 is presented below: Shares Weighted-
Average
Grant-Date
Fair Value 112,571 $ 100.83 Restricted Stock Awards Restricted Stock Units Performance Share Units 152,355 $ 39.76 40,850 $ 51.16 26,275 $ 77.65 25,662 201.22 18,843 61.54 34,073 61.60 21,940 91.13 (37,779 ) 95.35 (86,280 ) 42.82 — — — — (2,170 ) 105.53 — — (400 ) 62.25 (275 ) 91.13 98,284 129.05 Outstanding as of December 31, 2015 84,918 51.34 74,523 55.87 47,940 83.74 TheShares and per share amounts have been retroactively restated for all prior periods presented to reflect the five-for-one stock split. per sharefor RSAs was $61.54 and $49.76, for RSUs was $61.60 and $51.16, and for PSUs was $91.13 and $77.65, respectively. The 2013 weighted-average grant date fair value of restrictedRSAs was $37.88, adjusted for the five-for-one stock split. No RSUs or PSUs were granted in 2012, 2011 and 2010 was $201.22, $150.64 and $76.45, respectively.Year ended December 31, 2012 2011 2010 2015 2014 2013 (in millions) (in millions) $ 2.9 $ 1.7 $ 1.2 $ 1.2 $ 3.0 $ 3.4 $ 7.6 $ 4.4 $ 3.4 $ 5.3 $ 8.6 $ 10.0 expense.expenses. The following table summarizes stock-based compensation costs and related income tax benefits. Year ended December 31, 2015 2014 2013 (in millions) $ 16.5 $ 16.8 $ 12.6 Income tax benefit (6.0 ) (6.1 ) (4.6 ) Stock-based compensation expense, net of income taxes $ 10.5 $ 10.7 $ 8.0 In 2014, includes incremental compensation expense of $2.2 million related to the modification of 299,950 stock options and 80,495 RSAs, adjusted for the five-for-one stock split. In addition to stock-based compensation expense associated with the Plan and predecessor plans, TNCLP also recognizes stock-based compensation expense for phantom units provided to non-employee directors of TNGP. The expense (income) resulting from these market-based liability awards amounted to $0.3 million, $(0.1) million and zero for the years ended December 31, 2015, 2014 and 2013, respectively, and is included in stock-based compensation expense reported in our consolidated statements of operations and consolidated statements of cash flows. Year ended December 31, 2012 2011 2010 (in millions) $ 11.1 $ 9.9 $ 7.9 (4.0 ) (3.7 ) (2.9 ) $ 7.1 $ 6.2 $ 5.0 (1)In addition to our expense associated with the Plan, TNCLP also recognizes stock-based compensation expense for phantom units provided to non-employee directors of TNGP. The expense resulting from these market-based liability awards amounted to $0.8 million, $0.7 million and $0.4 million for the years ended December 31, 2012, 2011 and 2010 respectively. Stock compensation expense reported in our consolidated statements of operations and consolidated statements of cash flows includes this phantom unit expense.2012,2015, pre-tax unrecognized compensation cost, net of estimated forfeitures, was $13.6$11.1 million for stock options, which will be recognized over a weighted averageweighted-average period of 2.11.7 years, and $6.2$3.0 million for restricted stock,RSAs and RSUs, which will be recognized over a weighted averageweighted-average period of 2.01.4 years, and $1.9 million for PSUs, which will be recognized over 1.8 years.CF INDUSTRIES HOLDINGS, INC.restricted stock,RSAs, or a stock option exercise, exceeds the previously recognized deferred tax asset. Excess tax benefits are required to be reported as a financing cash inflow rather than a reduction of taxes paid. The excess tax benefits in 2012, 20112015, 2014 and 20102013 totaled $36.1$1.5 million, $47.2$8.7 million and $5.8$13.5 million, respectively.28. Financial Statement Data The following provides additional information relating to cash flow activities: Year ended December 31, 2012 2011 2010 (in millions) $ 113.1 $ 126.7 $ 276.2 1,073.7 819.2 95.5 29. ContingenciesLitigationFlorida Environmental MattersClean Air Act Investigation On March 19, 2007, the Company received a letter from the EPA under Section 114 of the Federal Clean Air Act requesting information and copies of records relating to compliance with New Source Review, New Source Performance Standards, and National Emission Standards for Hazardous Air Pollutants at the Plant City facility. The Company provided the requested information to the EPA in late 2007. The EPA initiated this same process in relation to numerous other sulfuric acid plants and phosphoric acid plants throughout the nation, including other facilities in Florida. The Company received a Notice of Violation (NOV) from the EPA by letter dated June 16, 2010. The NOV alleges the Company violated the Prevention of Significant Deterioration (PSD) Clean Air Act regulations relating to certain projects undertaken at the Plant City facility's sulfuric acid plants. This NOV further alleges that the actions that are the basis for the alleged PSD violations also resulted in violations of Title V air operating permit regulations. Finally, the NOV alleges that the Company failed to comply with certain compliance dates established by hazardous air pollutant regulations for phosphoric acid manufacturing plants and phosphate fertilizer production plants. Although this matter has been referred to the United States Department of Justice (DOJ), the Company has continued to meet with the EPA to discuss these alleged violations. The Company does not know at this time if it will settle this matter prior to initiation of formal legal action.CF INDUSTRIES HOLDINGS, INC. We cannot estimate the potential penalties, fines or other expenditures, if any, that may result from the Clean Air Act NOV and, therefore, we cannot determine if the ultimate outcome of this matter will have a material impact on the Company's financial position, results of operations or cash flows.EPCRA/CERCLA Investigation Pursuant to a letter from the DOJ dated July 28, 2008 that was sent to representatives of the major U.S. phosphoric acid manufacturers, including CF Industries, the DOJ stated that it and the EPA believe that apparent violations of Section 313 of the Emergency Planning and Community Right-to-Know Act (EPCRA), which requires annual reports to be submitted with respect to the use of certain toxic chemicals, have occurred at all of the phosphoric acid facilities operated by these manufacturers. The letter also states that the DOJ and the EPA believe that most of these facilities have violated Section 304 of EPCRA and Section 103 of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) by failing to provide required notifications relating to the release of hydrogen fluoride from these facilities. The letter did not specifically identify alleged violations at our Plant City, Florida complex or assert a claim for a specific amount of penalties. The EPA submitted an information request to the Company on February 11, 2009, as a follow-up to the July 2008 letter. The Company provided information in response to the agency's inquiry on May 14 and May 29, 2009. By letter dated July 6, 2010, the EPA issued a NOV to the Company alleging violations of EPCRA and CERCLA. The Company had an initial meeting with the EPA to discuss these alleged violations. The Company does not know at this time if it will settle this matter prior to initiation of formal legal action. We do not expect that penalties or fines, if any, that may arise out of the EPCRA/CERCLA matter will have a material impact on the Company's financial position, results of operations or cash flows.Federal and State Numeric Nutrient Criteria Regulation On August 18, 2009, the EPA entered into a consent decree with certain environmental groups with respect to the promulgation of numeric criteria for nitrogen and phosphorous in surface waters in Florida. The consent decree was approved by a Federal district court judge on November 16, 2009. The EPA adopted final numeric nutrient criteria for Florida lakes and inland flowing waters on November 14, 2010. On February 18, 2012, the Court upheld parts of the numeric nutrient criteria regulation, but found that the EPA had not adequately justified the criteria for streams and therefore concluded that the adoption of such criteria was arbitrary and capricious. The Court ordered the EPA to issue proposed or final numeric nutrient criteria for streams by May 21, 2012 (subject to the EPA seeking an extension of such time period pursuant to the terms of the 2009 consent decree). Subsequently, the Court granted the EPA's motion to allow the EPA to propose numeric nutrient criteria for streams by November 30, 2012 and to finalize such criteria by August 31, 2013. In December 2011, the State of Florida proposed its own numeric nutrient criteria for surface waters. The nitrogen and phosphorous criteria in the proposed rule are substantially identical to the federal rule, but the state proposal includes biological verification as a component of the criteria and adopts existing nutrient Total Maximum Daily Loads (TMDL) as applicable numeric criteria. The impact of these modifications could be to provide more flexibility with respect to nitrogen and phosphorous limits in wastewater discharge permits so long as such discharges do not impair the biological health of receiving water bodies. Environmental groups filed a challenge to the proposedCF INDUSTRIES HOLDINGS, INC.state rule, but the rule was upheld by an administrative law judge on June 8, 2012 and became final. An appeal of the administrative decision upholding the rule is now pending before a Florida appellate court. On November 30, 2012, the EPA approved Florida's rule. However, because the EPA identified what it considered to be gaps in the scope of the waters covered by Florida's rule and potential legal issues that might bar the Florida rule from going into effect, the EPA, pursuant to the Court order described above, has again proposed numeric nutrient criteria for Florida streams. There is substantial uncertainty as to whether this rule will be withdrawn before it is finalized or, if a rule is finalized, as to the scope of Florida inland flowing waters that will be covered by the EPA regulation. Moreover, notwithstanding the EPA's approval of the Florida rule, the federal criteria for lakes and inland waters previously upheld by the Court (excluding the criteria found to be arbitrary and capricious) became effective on January 6, 2013. The EPA has proposed to stay the effective date of these criteria in light of the on-going developments with the Florida regulation. The 2009 consent decree also requires the EPA to develop numeric nutrient criteria for Florida coastal and estuarine waters. The numeric criteria adopted by the State of Florida and approved by the EPA includes numeric criteria for some coastal and estuarine waters, but, as with streams, EPA has raised issues regarding the scope of coverage of Florida's regulation. Accordingly, on November 30, 2012, the EPA proposed numeric nutrient criteria for Florida coastal and estuarine waters. The EPA must finalize these criteria by September 30, 2013 unless future developments allow the EPA to withdraw the rule. Depending on the developments discussed herein, federal or state numeric nutrient water quality criteria for Florida waters could result in substantially more stringent nitrogen and phosphorous limits in wastewater discharge permits for our mining, manufacturing and distribution operations in Florida. More stringent limits on wastewater discharge permits could increase our costs and limit our operations and, therefore, could have a material adverse effect on our business, financial condition, results of operations or cash flows.Nitrogen Complexnitrogen complex is located in a five-parish region near Baton Rouge, Louisiana that, as of 2005, was designated as being in "severe" nonattainment with respect to the national ambient air quality standard (NAAQS) for ozone (the 1-hour ozone standard) pursuant to the Federal Clean Air Act (the Act). Section 185 of the Act requires states, in their state implementation plans, to levy a fee (Section 185 fee) on major stationary sources (such as the Donaldsonville facility)complex) located in a severe nonattainment area that did not meet the 1-hour ozone standard by November 30, 2005. The fee was to be assessed for each calendar year (beginning in 2006) until the area achieved compliance with the ozone NAAQS.EPAEnvironmental Protection Agency (EPA) adopted a new ozone standard (the 8-hour ozone standard) and rescinded the 1-hour ozone standard. The Baton Rouge area was designated as a "moderate" nonattainment area with respect to the 8-hour ozone standard. However, because Section 185 fees had never been assessed prior to the rescission of the 1-hour ozone standard (rescinded prior to the November 30, 2005 ozone attainment deadline), the EPA concluded in a 2004 rulemaking implementing the 8-hour ozone standard that the Act did not require states to assess Section 185 fees. As a result, Section 185 fees were not assessed against CF Industriesus and other companies located in the Baton Rouge area.CF INDUSTRIES HOLDINGS, INC.the Company'sour consolidated financial position, results of operations or cash flows.the Companywe received a letter from the EPA under Section 114 of the Act requesting information and copies of records relating to compliance with New Source Review and New Source Performance Standards at theour Donaldsonville facility. The Company hasWe have completed the submittal of all requested information. There has been no further contact from the EPA regarding this matter.2002 and in 2009,2011, we received a notice from the Idaho Department of Environmental Quality (IDEQ) that alleged that we were asked bya potentially responsible party for the current ownercleanup of a former phosphate mine and processing facility thatsite we owned in the late 1950s and early 1960s located in Georgetown Canyon, Idaho, to contribute to a cleanupIdaho. The current owner of the property and a former processing portionmining contractor received similar notices for the site. In 2014, we and the current property owner entered into a Consent Order with IDEQ and the U.S. Forest Service to conduct a remedial investigation and feasibility study of the site. We declined to participate in the cleanup. The current owner conducted a cleanup of the former processing portion of the site pursuant to a Consent Judgment with the Idaho Department of Environmental Quality (IDEQ). The current owner could bring a lawsuit against us seeking contribution to the cleanup costs, althoughIn 2015, we do not have sufficient information to determine whether or when such a lawsuit will be brought. In 2011, the current owner and weseveral other parties received a notice from IDEQ that alleged that these parties were potentially responsible parties for the cleanupU.S. Department of the former mine portion of the site. IDEQ requested from each party an indication of its willingnessInterior and other trustees intend to enter into negotiationsundertake a natural resource damage assessment for a remedial investigationgroup of former phosphate mines in southeast Idaho, including the former mine portion of the site. The current owner indicated a willingness to negotiate. While reserving all rights and not admitting liability, we also indicated a willingness to negotiate.Georgetown Canyon mine. We are not able to estimate at this time our potential liability, if any, with respect to the cleanup of the former mine portion of the site.site or a possible claim for natural resource damages. However, based on currently available information, we do not expect that any remedial or financial obligations to which we may be subject to involving this or other cleanup sites will have a material adverse effect on our business, financial condition, results of operations or cash flows. We are organizedmanaged based on twoDivestitures and Note 8—Equity Method Investments for additional information. CF Fertilisers UK has nitrogen manufacturing complexes located in Ince, United Kingdom, and Billingham, United Kingdom. The Ince complex produces ammonia, AN and NPKs while the Billingham complex produces ammonia and AN. Our reportable segment structure reflects how our CODM, as defined under U.S. GAAP, assesses the performance of our operating segments whichand makes decisions about resource allocation. In the third quarter of 2015, we changed our reportable segment structure to separate AN from our Other segment as our AN products increased in significance as a result of the CF Fertilisers UK acquisition. Our reportable segments now consist of ammonia, granular urea, UAN, AN, Other, and phosphate. These segments are differentiated primarily by their products,products. Historical financial results have been restated to reflect the markets they servenew reportable segment structure on a comparable basis.regulatory environmentscost was included in which they operate. The two segments areour production costs in our phosphate segment. Subsequent to the nitrogen segment andsale of the phosphate business, we now sell the PLNL-sourced ammonia to Mosaic. The revenue from these sales to Mosaic and costs to purchase the ammonia from PLNL are now included in our ammonia segment. The Company'sOur 50% share of the operating results of our PLNL joint venture continues to be included in our equity in earnings of operating affiliates in our consolidated statements of operations. Because of the significance of this continuing supply practice, in accordance with U.S. GAAP, the phosphate mining and manufacturing business is not reported as discontinued operations in our consolidated statements of operations.Selling,Total other operating costs and expenses (consisting of selling, general and administrative expenses and other operating—net, non-operating—net, interest,net) and non-operating expenses (interest and income taxes,taxes) are centrally managed and are not included in the measurement of segment profitability reviewed by management. The accounting policiesthe segmentsgoodwill, are the same as those describednot monitored by or reported to our CODM by segment; therefore, we do not present total assets by segment. Goodwill by segment is presented in Note 2—Summary7—Goodwill and Other Intangible Assets.Significant Accounting Policies.our six reportable segments: net sales, cost of sales and gross margin depreciation, depletionfor 2015, 2014 and amortization, capital expenditures, and assets for 2012, 2011 and 20102013 are shownpresented in the following tables. Other assets, capital expenditures and depreciation include amounts attributable to the corporate headquarters and unallocated corporate assets, such as our cash and cash equivalents, equity method investments and other investments.tables below. Nitrogen Phosphate Consolidated (in millions) $ 1,677.6 $ — $ 1,677.6 1,143.4 — 1,143.4 1,886.2 — 1,886.2 222.8 — 222.8 — 794.5 794.5 — 212.9 212.9 166.6 — 166.6 5,096.6 1,007.4 6,104.0 2,183.0 807.7 2,990.7 $ 2,913.6 $ 199.7 $ 3,113.3 200.9 47.0 $ 2,959.4 $ 1,562.8 $ — $ 1,562.8 1,069.7 — 1,069.7 1,991.6 — 1,991.6 247.5 — 247.5 — 829.1 829.1 — 256.7 256.7 140.5 — 140.5 5,012.1 1,085.8 6,097.9 2,448.9 753.4 3,202.3 $ 2,563.2 $ 332.4 $ 2,895.6 155.3 50.2 $ 2,790.5 $ 1,129.4 $ — $ 1,129.4 777.7 — 777.7 994.3 — 994.3 164.7 — 164.7 — 583.3 583.3 — 194.2 194.2 121.4 — 121.4 3,187.5 777.5 3,965.0 2,160.8 624.7 2,785.5 $ 1,026.7 $ 152.8 $ 1,179.5 294.4 10.6 $ 895.7 Ammonia Phosphate Consolidated (in millions) Year ended December 31, 2015 Net sales $ 1,523.1 $ 788.0 $ 1,479.7 $ 294.0 $ 223.5 $ — $ 4,308.3 Cost of sales 883.7 469.5 954.5 290.8 162.7 — 2,761.2 Gross margin $ 639.4 $ 318.5 $ 525.2 $ 3.2 $ 60.8 $ — 1,547.1 Total other operating costs and expenses 319.0 Equity in earnings of operating affiliates (35.0 ) Operating earnings $ 1,193.1 Year ended December 31, 2014 Net sales $ 1,576.3 $ 914.5 $ 1,669.8 $ 242.7 $ 171.5 $ 168.4 $ 4,743.2 Cost of sales 983.2 516.6 997.4 189.1 120.1 158.3 2,964.7 Gross margin $ 593.1 $ 397.9 $ 672.4 $ 53.6 $ 51.4 $ 10.1 1,778.5 Total other operating costs and expenses 205.2 Gain on sale of phosphate business 750.1 Equity in earnings of operating affiliates 43.1 Operating earnings $ 2,366.5 Year ended December 31, 2013 Net sales $ 1,437.9 $ 924.6 $ 1,935.1 $ 215.1 $ 165.1 $ 796.9 $ 5,474.7 Cost of sales 656.5 410.1 895.6 155.9 114.4 722.0 2,954.5 Gross margin $ 781.4 $ 514.5 $ 1,039.5 $ 59.2 $ 50.7 $ 74.9 2,520.2 Total other operating costs and expenses 150.2 Equity in earnings of operating affiliates 41.7 Operating earnings $ 2,411.7 The cost of ammonia that is upgraded into other products is transferred at cost into the upgraded product results. Ammonia Granular Urea UAN AN Other Corporate Consolidated (in millions) Depreciation, depletion and amortization Year ended December 31, 2015 $ 95.4 $ 50.5 $ 191.6 $ 65.6 $ 35.2 $ — $ 41.3 $ 479.6 Year ended December 31, 2014 $ 69.0 $ 37.5 $ 179.3 $ 46.5 $ 20.4 $ — $ 39.8 $ 392.5 Year ended December 31, 2013 $ 58.2 $ 37.4 $ 172.6 $ 41.0 $ 19.2 $ 42.3 $ 39.9 $ 410.6 The assets and liabilities of our phosphate business were classified as held for sale as of December 31, 2013; therefore, no depreciation, depletion or amortization was recorded in 2014 for the related property, plant and equipment. Nitrogen Phosphate Other Consolidated (in millions) $ 334.6 $ 43.5 $ 41.7 $ 419.8 316.3 50.7 49.2 416.2 229.2 48.6 117.0 394.8 $ 431.3 $ 64.4 $ 27.8 $ 523.5 177.0 52.0 18.2 247.2 204.9 52.6 0.6 258.1 $ 5,991.5 $ 795.2 $ 3,380.2 $ 10,166.9 $ 5,976.9 $ 696.4 $ 2,301.2 $ 8,974.5 Year ended December 31, 2012 2011 2010 (in millions) $ 5,260.9 $ 5,175.9 $ 3,368.3 446.4 492.1 309.6 396.7 429.9 287.1 $ 6,104.0 $ 6,097.9 $ 3,965.0
December 31,
2012 2011 (in millions) $ 3,327.8 $ 3,144.0 572.7 592.0 $ 3,900.5 $ 3,736.0 Year ended December 31, 2015 2014 2013 (in millions) Sales by geographic region (based on destination of shipments): United States $ 3,484.9 $ 3,994.0 $ 4,497.8 Foreign: Canada 490.0 543.8 508.5 Other foreign 333.4 205.4 468.4 Total foreign 823.4 749.2 976.9 Consolidated $ 4,308.3 $ 4,743.2 $ 5,474.7 The December 31, 2015 2014 2013 (in millions) Property, plant and equipment—net by geographic region: United States $ 7,201.5 $ 4,987.0 $ 3,528.8 Foreign: Canada 497.3 538.8 572.9 United Kingdom 840.2 — — Total foreign 1,337.5 538.8 572.9 Consolidated $ 8,539.0 $ 5,525.8 $ 4,101.7 for our nitrogen and phosphate fertilizers are cooperatives, and independent fertilizer distributors. CHS Inc. isdistributors and industrial users. None of our largest customer andcustomers accounted for 10%more than ten percent of our consolidated net sales in both 2012 and 2011, and 11% in 2010.31. Related Party Transactionsformer chief executive officer of GROWMARK, William Davisson, and the former president and chief executive officer of CHS, Inc. (CHS), John D. Johnson, serve as members of our Board of Directors. GROWMARK and CHS are customers of ours. On August 31, 2012, each of Messrs. Davisson's and Johnson's post-retirement incentive compensation from their former employers was finalized. Therefore, effective as of September 1, 2012, the Board made an affirmative determination that each of Messrs. Davisson and Johnson meet the applicable requirements for "independence" set forth in the corporate governance standards of the NYSE and we no longer consider GROWMARK and CHS related parties. However, since both Year ended December 31, 2015 2014 2013 (in millions) Cash paid during the year for Interest—net of interest capitalized $ 99.8 $ 141.2 $ 135.3 Income taxes—net of refunds 435.1 781.2 847.4 Supplemental disclosure of noncash investing and financing activities: Change in capitalized expenditures in accounts payable and accrued expenses 258.5 71.6 134.4 Change in capitalized expenditures in other liabilities 5.8 (21.5 ) 70.5 Change in accrued share repurchases (29.1 ) (11.2 ) 40.3 CHS wereat our distribution and storage facilities that are conditional upon cessation of operations. These AROs include certain decommissioning activities as well as the removal and disposal of certain chemicals, waste materials, structures, equipment, vessels, piping and storage tanks. Also included are reclamation of land and the closure of certain effluent ponds. A liability has not been recorded for these conditional AROs. The most recent estimate of the aggregate cost of these AROs expressed in 2015 dollars is $66.4 million. We have not recorded a liability for these conditional AROs as of December 31, 2015 because we do not believe there is currently a reasonable basis for estimating a date or range of dates of cessation of operations at our nitrogen fertilizer manufacturing facilities or our distribution and storage facilities, which is necessary in order to estimate fair value. In reaching this conclusion, we considered related parties prior to August 31, 2012, we are providing below the following summarieshistorical performance of transactions with these parties.Product Sales CHS accounted for 10%, 10%each complex or facility and 11%have taken into account factors such as planned maintenance, asset replacements and upgrades of plant and equipment, which if conducted as in the past, can extend the physical lives of our consolidated net salesnitrogen manufacturing facilities and our distribution and storage facilities indefinitely. We also considered the possibility of changes in 2012, 2011technology, risk of obsolescence, and 2010, respectively. GROWMARK accounted for 8%, 8% and 7%availability of raw materials in arriving at our consolidated net sales in 2012, 2011 and 2010, respectively. In addition to purchasing fertilizer from us, CHS and GROWMARK have contracts with us to store fertilizer products at certain of our warehouses. In connection with these storage arrangements, we recognized income of approximately $0.3 million, $0.4 million and $0.7 million from CHS in 2012, 2011 and 2010, respectively, and we recognized income of $0.2 million, $0.4 million and $0.4 million from GROWMARK in 2012, 2011 and 2010, respectively.Supply Contracta multi-year supply contract with GROWMARK relatingoperating leases for certain property and equipment under various noncancelable agreements, the most significant of which are rail car leases and barge tow charters for the distribution of fertilizer. The rail car leases currently have minimum terms ranging from one to purchaseseleven years and the barge charter commitments range from approximately two to seven years. We also have terminal and warehouse storage agreements for our distribution system, some of fertilizer products.which contain minimum throughput requirements. The term of the supply contract with GROWMARK lasts until June 30, 2013storage agreements contain minimum terms generally ranging from one to five years and is extended automatically for successive one-year periodscommonly contain automatic annual renewal provisions thereafter unless a termination notice is givencanceled by either party. The contract specifies a sales target volume and a requirement volume for the first contract year. The requirement volume is a percentage of the sales target volume and represents the volume of fertilizer that we are obligated to sell, and the customer is obligated to purchase, during the first contract year. The sales target volume is subject to yearly adjustment by mutual agreementfailing such agreement, to an amount specified by us which is not more than 105% of the prior year's sales target volume. The requirement volume is also subject to yearly adjustment to an amount specified by the customer which is not less than 65% or more than 100% of the then applicable sales target volume. The contract also contains a reciprocal "meet or release" provision pursuant to which each party must provide the other party with notice and the opportunity to match a transaction with a third party if such a transaction would impact the party's willingness or ability to supply or purchase, as the case may be, the then applicable sales target volume. The "meet or release" provision may not, however, reduce the requirement volume. The price for product sold under the supply contract varies depending on the type of sale selected by the customer. The customer may select (i) cash sales at prices that are published in our weekly cash price list, (ii) index sales at a published index price, (iii) forward pricing sales, or (iv) sales negotiated between the parties. The supply contract also provides for performance incentives based on (i) the percentage of the sales target volume actually purchased, (ii) the timing of purchases under our Forward Pricing Program, (iii) the amount of purchases under our Forward Pricing Program and (iv) specifying a requirement volumeremaining noncancelable lease terms in excess of the then applicable minimum requirement volume. The prices chargedone year as of December 31, 2015 are shown below. (in millions) 2016 $ 82.2 2017 87.9 2018 70.8 2019 58.3 2020 46.3 Thereafter 115.6 $ 461.1 cash sales, index sales,cancelable and forward pricing sales will be the same prices we charge all of our similarly situated customers.Net Operating Loss Carryforwards In connection with our IPO in August 2005, CF Industries, Inc. (CFI) ceased to be a non-exempt cooperativenoncancelable operating leases was $99.6 million for income tax purposes,2015, $92.9 million for 2014 and we entered into an NOL Agreement with CFI's pre-IPO owners relating to the future utilization of the pre-IPO NOLs. The NOL Agreement provided that if we ultimately could utilize the pre-IPO NOLs to offset applicable post-IPO taxable income, we would pay the pre-IPO owners amounts equal to the resulting federal and state income taxes actually saved. On January 2, 2013, we and our pre-IPO owners amended the NOL Agreement to provide, amongother things, that we are entitled to retain 26.9% of any settlement realized with the IRS at the IRS Appeals level, and 73.1% of the federal and state tax savings will be payable to our pre-IPO owners. See Note 11—Income Taxes, for additional information on net operating loss carryforwards.Canadian Fertilizers Limited GROWMARK owns 9% of the outstanding common stock of CFL, a Canadian variable interest entity, and elects one director to the CFL Board. In October 2012, CF Industries Holdings, Inc. entered into an agreement with GROWMARK to acquire the common shares of CFL. See Note 4—Noncontrolling Interest, for additional information on CFL.Sale of Warehouses In February 2011, we sold four of our owned dry product warehouses to GROWMARK. As a result of this sale of assets to GROWMARK, in the first quarter of 2011 we received net proceeds of $38.1 million and reported a pre-tax gain of $32.5 million.KEYTRADE AG We own 50% of the common shares of Keytrade, a global fertilizer trading company headquartered near Zurich, Switzerland. Our sales to Keytrade were $397.4 million, $396.2 million and $263.8 million for 2012, 2011 and 2010, respectively. See Note 17—Equity Method Investments, for additional information on Keytrade.32.2012.2015. This quarterly information has been prepared on the same basis as the consolidated financial statements and, in the opinion of management, reflects all adjustments necessary for the fair representation of the information for the periods presented. This data should be read inCF INDUSTRIES HOLDINGS, INC. Three months ended, March 31 June 30 September 30 December 31 Full Year (in millions, except per share amounts) 2015 Net sales $ 953.6 $ 1,311.5 $ 927.4 $ 1,115.8 $ 4,308.3 Gross margin 415.8 685.9 165.0 280.4 1,547.1 28.7 18.4 (125.9 ) (97.5 ) (176.3 ) 230.6 351.9 90.9 26.5 699.9 0.96 1.50 0.39 0.11 2.97 0.96 1.49 0.39 0.11 2.96 2014 Net sales $ 1,132.6 $ 1,472.7 $ 921.4 $ 1,216.5 $ 4,743.2 Gross margin 442.8 590.3 301.1 444.3 1,778.5 (22.6 ) (28.6 ) 12.1 (40.4 ) (79.5 ) 708.5 312.6 130.9 238.3 1,390.3 2.59 1.22 0.53 0.97 5.43 2.58 1.22 0.52 0.96 5.42 Three months ended March 31 June 30 September 30 December 31 Full Year (in millions, except per share amounts) $ 1,527.6 $ 1,735.6 $ 1,359.4 $ 1,481.4 (2) $ 6,104.0 711.8 1,043.3 702.0 656.2 (2) 3,113.3 (55.9 ) 77.6 39.8 13.1 74.6 368.4 606.3 403.3 470.7 1,848.7 5.62 9.42 6.43 7.48 28.94 5.54 9.31 6.35 7.40 28.59 $ 1,174.0 $ 1,801.7 $ 1,403.8 $ 1,718.4 $ 6,097.9 525.0 867.4 638.0 865.2 2,895.6 0.7 (14.2 ) (14.1 ) (49.7 ) (77.3 ) 282.0 487.4 330.9 438.9 1,539.2 3.95 6.81 4.77 6.71 22.18 3.91 6.75 4.73 6.66 21.98 (1)Amounts represent pre-tax unrealized gains (losses) on natural gas derivatives included in gross margin. See Note 16—Derivative Financial Instruments, for additional information. For the three months ended June 30, 2015, net earnings attributable to common stockholders includes an after-tax loss of $29.2 million (pre-tax loss of $40.1 million) resulting from the sale of our interests in Keytrade that is included in equity in earnings of operating affiliates, and net earnings per share attributable to common stockholders, basic and diluted, include the per share impact of $0.12. See Note 4—Acquisitions and Divestitures and Note 8—Equity Method Investments, for additional information. derivativesthe remeasurement to fair value of our initial 50% equity interest in CF Fertilisers UK that is included in gross margin.equity in earnings of non-operating affiliates—net of taxes, and net earnings per share attributable to common stockholders, basic and diluted, include the per share impact of $0.40. See Note 25—Derivative Financial Instruments,4—Acquisitions and Divestitures and Note 8—Equity Method Investments, for additional information.(2)Net salesgross marginnet earnings per share attributable to common stockholders, basic and diluted, include the per share impact of $0.26. See Note 4—Acquisitions and Divestitures and Note 8—Equity Method Investments, for the fourth quarter of 2012 reflects a $129.7 million reduction relating to a modification to CFL's selling prices, as described in Note 4—Noncontrolling Interest.additional information.Per share amounts have been retroactively restated for all prior periods presented to reflect the five-for-one split of the Company’s common stock effected in the form of a stock dividend that was distributed on June 17, 2015. The sum of the four quarters is not necessarily the same as the total for the year. For the three months ended March 31, 2014, net earnings attributable to common stockholders includes an after-tax gain of $461.0 million from the sale of the phosphate business, and net earnings per share attributable to common stockholders, basic and diluted, include the per share impact of $1.68. During the fourth quarter of 2014, the purchase price was finalized which increased the after-tax gain to $462.8 million for the year ended December 31, 2014, which also increased the per share impact on net earnings attributable to common stockholders, basic and diluted, to $1.80. See Note 4—Acquisitions and Divestitures, for additional information. Statementsstatements of Guarantorsguarantors and Issuersissuers of Guaranteed Securities Registeredguaranteed securities registered or Being Registeredbeing registered, and comprises two separate and distinct presentations. The first presentation of condensed consolidating financial information, under the heading "Condensed Consolidating Financial Information Relating to Senior Notes," relates to the Public Senior Notes issued by CF Industries, Inc. (CFI)(CF Industries), a 100% owned subsidiary of CF Industries Holdings, Inc. (Parent), described in Note 2212—Financing Agreements, and the full and unconditional guarantee of suchthe Public Senior Notes by Parent. Under the supplemental indentures governing the Notes, the Notes are to be guaranteed by Parent and eachto debt securities of its currentCF Industries, and future subsidiaries, other than CFI,the full and unconditional guarantee thereof by Parent, that may be offered and sold from time to time isunder registration statements that have been or may be filed by Parent and CF Industries with the SEC. In the event that a subsidiary of Parent, other than CF Industries, becomes a borrower or a guarantor under the 2012Revolving Credit Agreement or(or any renewal, replacement or refinancing thereof.thereof), such subsidiary would be required to become a guarantor of the Public Senior Notes, provided that such requirement will no longer apply with respect to the Public Senior Notes due in 2023, 2034, 2043 and 2044 following the repayment of the Public Senior Notes due in 2018 and 2020 or the subsidiaries of Parent, other than CF Industries, otherwise becoming no longer subject to such a requirement to guarantee the Public Senior Notes due in 2018 and 2020. As of December 31, 2012,2015, none of such subsidiaries of Parent was, or was required to be, a guarantor of the Notes. In the event that a subsidiary of Parent, other than CFI, becomes a borrower or a guarantor under the 2012 Credit Agreement, it would be required to become a guarantor of thePublic Senior Notes. For purposes of the presentation of condensed consolidating financial information, under the heading "Condensed Consolidating Financial Information Relating to Senior Notes," the subsidiaries of Parent other than CFICF Industries are referred to as the Other Subsidiaries.The second presentation offinancial information, under the heading "Condensed Consolidating Financial Information Relating to Shelf Registration Statement," relates to the Registration Statement on Form S-3 (File Nos. 333-166079statements of operations and 333-166079-01 through -21) (the Registration Statement) registering debt securitiesstatements of CFIcash flows for Parent, CF Industries and the fullOther Subsidiaries for the years ended December 31, 2015, 2014 and unconditional, joint2013 and several guarantees of such debt securities bycondensed consolidating balance sheets for Parent, and certain 100% owned domestic subsidiaries of Parent other than CFI (referred to as the Guarantor Subsidiaries). On June 29, 2012, Parent, CFICF Industries and the GuarantorOther Subsidiaries filed a post-effective amendment to the Registration Statement to terminate the effectivenessas of the Registration StatementDecember 31, 2015 and to deregister all unsold securities thereunder. For purposes of the presentation of condensed consolidating financial information under the heading "Condensed Consolidating Financial Information Relating to Shelf Registration Statement," the subsidiaries of Parent other than CFI and the Guarantor Subsidiaries are referred to as the Non-Guarantor Subsidiaries. In the2014. The condensed consolidating financial information presented below is not necessarily indicative of the financial position, results of operations, comprehensive income or cash flows of Parent, CF Industries or the Other Subsidiaries on a stand-alone basis.Condensed Consolidating Financial Information Relating to Senior Notes Presented below are condensed consolidating statements of operations and statements of cash flows for Parent, CFI and the Other Subsidiaries for the years ended December 31, 2012, 2011 and 2010 and condensed consolidating balance sheets for Parent, CFI and the Other Subsidiaries as of December 31, 2012 and December 31, 2011. The condensed consolidating financial information presented below is not necessarily indicative of the financial position, results of operations, comprehensive income or cash flows of Parent, CFI or the Other Subsidiaries on a stand-alone basis. Year ended December 31, 2012 Year ended December 31, 2015 Parent CFI Other
Subsidiaries Eliminations Consolidated Parent CF Industries Eliminations Consolidated (in millions) (in millions) $ — $ 3,747.9 $ 2,514.5 $ (158.4 ) $ 6,104.0 $ — $ 462.2 $ 4,542.8 $ (696.7 ) $ 4,308.3 — 1,854.6 1,287.2 (151.1 ) 2,990.7 — 361.6 3,096.3 (696.7 ) 2,761.2 — 1,893.3 1,227.3 (7.3 ) 3,113.3 — 100.6 1,446.5 — 1,547.1 2.5 128.0 21.3 — 151.8 4.4 7.7 157.7 — 169.8 Transaction costs 45.8 — 11.1 — 56.9 — 24.0 25.1 — 49.1 — (8.5 ) 100.8 — 92.3 2.5 152.0 46.4 — 200.9 50.2 (0.8 ) 269.6 — 319.0 — 4.9 42.1 — 47.0 — — (35.0 ) — (35.0 ) (2.5 ) 1,746.2 1,223.0 (7.3 ) 2,959.4 Operating (losses) earnings (50.2 ) 101.4 1,141.9 — 1,193.1 — 126.8 10.1 (1.6 ) 135.3 — 285.1 (81.7 ) (70.2 ) 133.2 — (1.4 ) (4.5 ) 1.6 (4.3 ) — (69.0 ) (2.8 ) 70.2 (1.6 ) (1,851.2 ) (792.8 ) — 2,644.0 — Net earnings of wholly-owned subsidiaries (731.2 ) (801.5 ) — 1,532.7 — — — (1.1 ) — (1.1 ) (0.1 ) — 4.0 — 3.9 1,848.7 2,413.6 1,218.5 (2,651.3 ) 2,829.5 681.1 686.8 1,222.4 (1,532.7 ) 1,057.6 — 562.2 402.0 — 964.2 — (0.2 ) 58.3 — 58.1 Income tax (benefit) provision (18.8 ) (44.3 ) 458.9 — 395.8 Equity in earnings of non-operating affiliates—net of taxes — — 72.3 — 72.3 1,848.7 1,851.2 874.8 (2,651.3 ) 1,923.4 699.9 731.1 835.8 (1,532.7 ) 734.1 — — 82.0 (7.3 ) 74.7 — — 34.2 — 34.2 $ 1,848.7 $ 1,851.2 $ 792.8 $ (2,644.0 ) $ 1,848.7 $ 699.9 $ 731.1 $ 801.6 $ (1,532.7 ) $ 699.9 Year ended December 31, 2012 Year ended December 31, 2015 Parent CFI Other
Subsidiaries Eliminations Consolidated Parent CF Industries Eliminations Consolidated (in millions) (in millions) $ 1,848.7 $ 1,851.2 $ 874.8 $ (2,651.3 ) $ 1,923.4 $ 699.9 $ 731.1 $ 835.8 $ (1,532.7 ) $ 734.1 49.6 49.6 23.6 (72.4 ) 50.4 Other comprehensive income (losses) (90.0 ) (90.0 ) (89.5 ) 179.5 (90.0 ) 1,898.3 1,900.8 898.4 (2,723.7 ) 1,973.8 609.9 641.1 746.3 (1,353.2 ) 644.1 — — 82.0 (6.6 ) 75.4 — — 34.2 — 34.2 $ 1,898.3 $ 1,900.8 $ 816.4 $ (2,717.1 ) $ 1,898.4 $ 609.9 $ 641.1 $ 712.1 $ (1,353.2 ) $ 609.9 Year ended December 31, 2011 Year ended December 31, 2014 Parent CFI Other
Subsidiaries Eliminations Consolidated Parent CF Industries Eliminations Consolidated (in millions) (in millions) $ — $ 3,585.3 $ 3,013.8 $ (501.2 ) $ 6,097.9 $ — $ 712.2 $ 5,073.4 $ (1,042.4 ) $ 4,743.2 — 1,932.1 1,470.1 (199.9 ) 3,202.3 — 528.6 3,478.5 (1,042.4 ) 2,964.7 — 1,653.2 1,543.7 (301.3 ) 2,895.6 — 183.6 1,594.9 — 1,778.5 3.6 99.5 26.9 — 130.0 2.8 13.5 135.6 — 151.9 — 2.0 2.4 — 4.4 — (18.9 ) 39.8 — 20.9 — (5.0 ) 58.3 — 53.3 3.6 82.6 69.1 — 155.3 2.8 8.5 193.9 — 205.2 Gain on sale of phosphate business — 764.5 (14.4 ) — 750.1 — (1.2 ) 51.4 — 50.2 — — 43.1 — 43.1 (3.6 ) 1,569.4 1,526.0 (301.3 ) 2,790.5 Operating (losses) earnings (2.8 ) 939.6 1,429.7 — 2,366.5 — 137.1 10.4 (0.3 ) 147.2 — 246.9 (68.5 ) (0.2 ) 178.2 — (0.7 ) (1.3 ) 0.3 (1.7 ) — (0.2 ) (0.9 ) 0.2 (0.9 ) (1,541.5 ) (618.8 ) — 2,160.3 — Net earnings of wholly-owned subsidiaries (1,392.0 ) (969.2 ) — 2,361.2 — — (0.1 ) (0.5 ) — (0.6 ) (0.1 ) — 2.0 — 1.9 1,537.9 2,051.9 1,517.4 (2,461.6 ) 2,645.6 Earnings before income taxes and equity in (losses) earnings of non-operating affiliates 1,389.3 1,662.1 1,497.1 (2,361.2 ) 2,187.3 (1.3 ) 505.6 422.2 — 926.5 (1.0 ) 270.0 504.0 — 773.0 — (4.8 ) 46.7 — 41.9 Equity in (losses) earnings of non-operating affiliates—net of taxes — (0.1 ) 22.6 — 22.5 1,539.2 1,541.5 1,141.9 (2,461.6 ) 1,761.0 1,390.3 1,392.0 1,015.7 (2,361.2 ) 1,436.8 — — 523.1 (301.3 ) 221.8 — — 46.5 — 46.5 $ 1,539.2 $ 1,541.5 $ 618.8 $ (2,160.3 ) $ 1,539.2 $ 1,390.3 $ 1,392.0 $ 969.2 $ (2,361.2 ) $ 1,390.3 Year ended December 31, 2011 Year ended December 31, 2014 Parent CFI Other
Subsidiaries Eliminations Consolidated Parent CF Industries Eliminations Consolidated (in millions) (in millions) $ 1,539.2 $ 1,541.5 $ 1,141.9 $ (2,461.6 ) $ 1,761.0 $ 1,390.3 $ 1,392.0 $ 1,015.7 $ (2,361.2 ) $ 1,436.8 (45.9 ) (45.9 ) (37.4 ) 82.6 (46.6 ) Other comprehensive income (losses) (117.2 ) (117.2 ) (117.2 ) 234.4 (117.2 ) 1,493.3 1,495.6 1,104.5 (2,379.0 ) 1,714.4 1,273.1 1,274.8 898.5 (2,126.8 ) 1,319.6 — — 523.1 (301.9 ) 221.2 — — 46.5 — 46.5 $ 1,493.3 $ 1,495.6 $ 581.4 $ (2,077.1 ) $ 1,493.2 $ 1,273.1 $ 1,274.8 $ 852.0 $ (2,126.8 ) $ 1,273.1 Year ended December 31, 2010 Year ended December 31, 2013 Parent CFI Other
Subsidiaries Eliminations Consolidated Parent CF Industries Eliminations Consolidated (in millions) (in millions) $ — $ 2,442.5 $ 1,831.5 $ (309.0 ) $ 3,965.0 $ — $ 1,105.8 $ 5,767.5 $ (1,398.6 ) $ 5,474.7 — 1,699.6 1,252.5 (166.6 ) 2,785.5 — 886.0 3,463.0 (1,394.5 ) 2,954.5 — 742.9 579.0 (142.4 ) 1,179.5 — 219.8 2,304.5 (4.1 ) 2,520.2 2.5 70.9 32.7 — 106.1 2.7 11.8 151.5 — 166.0 — 13.4 8.2 — 21.6 118.7 35.9 12.1 — 166.7 — 7.6 (23.4 ) — (15.8 ) 121.2 120.2 53.0 — 294.4 2.7 19.4 128.1 — 150.2 — (6.9 ) 17.5 — 10.6 — — 41.7 — 41.7 (121.2 ) 615.8 543.5 (142.4 ) 895.7 Operating (losses) earnings (2.7 ) 200.4 2,218.1 (4.1 ) 2,411.7 — 210.9 10.8 (0.4 ) 221.3 — 155.1 (1.8 ) (1.1 ) 152.2 — (1.3 ) (0.6 ) 0.4 (1.5 ) — (0.9 ) (4.9 ) 1.1 (4.7 ) — — 17.0 — 17.0 (470.4 ) (191.5 ) — 661.9 — Net earnings of wholly-owned subsidiaries (1,466.4 ) (1,423.0 ) — 2,889.4 — — (28.2 ) (0.6 ) — (28.8 ) — (0.4 ) 54.9 — 54.5 349.2 625.9 516.9 (804.3 ) 687.7 — 153.1 120.6 — 273.7 — (2.4 ) 29.1 — 26.7 Earnings before income taxes and equity in (losses) earnings of non-operating affiliates 1,463.7 1,469.6 2,169.9 (2,893.5 ) 2,209.7 Income tax (benefit) provision (0.9 ) 3.0 684.4 — 686.5 Equity in (losses) earnings of non-operating affiliates—net of taxes — (0.2 ) 9.8 — 9.6 349.2 470.4 425.4 (804.3 ) 440.7 1,464.6 1,466.4 1,495.3 (2,893.5 ) 1,532.8 — — 233.9 (142.4 ) 91.5 — — 72.3 (4.1 ) 68.2 $ 349.2 $ 470.4 $ 191.5 $ (661.9 ) $ 349.2 $ 1,464.6 $ 1,466.4 $ 1,423.0 $ (2,889.4 ) $ 1,464.6 Year ended December 31, 2010 Year ended December 31, 2013 Parent CFI Other
Subsidiaries Eliminations Consolidated Parent CF Industries Eliminations Consolidated (in millions) (in millions) $ 349.2 $ 470.4 $ 425.4 $ (804.3 ) $ 440.7 $ 1,464.6 $ 1,466.4 $ 1,495.3 $ (2,893.5 ) $ 1,532.8 (10.1 ) (10.1 ) 18.5 (7.0 ) (8.7 ) Other comprehensive income (losses) 7.0 7.0 (40.1 ) 32.4 6.3 339.1 460.3 443.9 (811.3 ) 432.0 1,471.6 1,473.4 1,455.2 (2,861.1 ) 1,539.1 — — 233.9 (141.0 ) 92.9 — — 72.3 (4.8 ) 67.5 $ 339.1 $ 460.3 $ 210.0 $ (670.3 ) $ 339.1 $ 1,471.6 $ 1,473.4 $ 1,382.9 $ (2,856.3 ) $ 1,471.6 December 31, 2012 December 31, 2015 Parent CFI Other
Subsidiaries Eliminations
and
Reclassifications Consolidated Parent CF Industries Consolidated (in millions) (in millions) $ — $ 440.8 $ 1,834.1 $ — $ 2,274.9 $ 1.3 $ 0.2 $ 284.5 $ — $ 286.0 Restricted cash — — 22.8 — 22.8 — 145.1 1,007.9 (935.6 ) 217.4 0.9 2,987.3 1,565.0 (4,286.0 ) 267.2 — 642.1 — (642.1 ) — — 193.1 84.8 — 277.9 — 9.5 — — 9.5 — 15.4 12.5 — 27.9 Inventories — — 321.2 — 321.2 Prepaid income taxes — — 184.6 — 184.6 Other current assets — 23.7 21.6 — 45.3 — 1,446.0 2,939.3 (1,577.7 ) 2,807.6 2.2 3,011.2 2,399.7 (4,286.0 ) 1,127.1 — 1,008.1 2,892.4 — 3,900.5 — — 8,539.0 — 8,539.0 — 50.7 — (50.7 ) — — 200.8 — — 200.8 5,331.5 6,291.4 935.2 (11,622.5 ) 935.6 4,302.9 8,148.4 297.8 (12,451.3 ) 297.8 570.7 — 1.8 (572.5 ) — 570.7 — 2.2 (572.9 ) — — 0.9 2,063.6 — 2,064.5 — — 2,390.1 — 2,390.1 — 136.5 121.4 — 257.9 — 74.5 310.4 — 384.9 $ 5,902.2 $ 9,134.4 $ 8,953.7 $ (13,823.4 ) $ 10,166.9 $ 4,875.8 $ 11,234.1 $ 13,939.2 $ (17,310.2 ) $ 12,738.9 $ — $ 222.6 $ 159.3 $ (15.4 ) $ 366.5 Accounts and notes payable and accrued expenses $ 840.7 $ 648.1 $ 3,714.9 $ (4,286.0 ) $ 917.7 — — 829.2 (642.1 ) 187.1 — — 5.5 — 5.5 — 247.9 132.8 — 380.7 — — 161.5 — 161.5 — 900.0 14.6 (909.6 ) 5.0 — — 15.7 (10.4 ) 5.3 — 4.5 1.1 — 5.6 Other current liabilities — — 130.5 — 130.5 — 1,375.0 1,152.7 (1,577.5 ) 950.2 840.7 648.1 4,012.4 (4,286.0 ) 1,215.2 — 1,600.0 — — 1,600.0 — 5,592.7 — — 5,592.7 — — 989.5 (50.7 ) 938.8 — 51.8 864.4 — 916.2 — 572.5 — (572.5 ) — — 572.9 — (572.9 ) — — 255.4 140.3 — 395.7 Other liabilities — 65.8 561.8 — 627.6 — — 65.3 (65.3 ) — — — 16.4 (16.4 ) — 0.6 — 154.3 (154.3 ) 0.6 2.4 — 1.1 (1.1 ) 2.4 2,492.3 739.8 4,493.6 (5,233.3 ) 2,492.4 1,377.5 (12.6 ) 8,364.9 (8,352.4 ) 1,377.4 3,461.2 4,641.3 1,598.3 (6,239.7 ) 3,461.1 3,057.7 4,565.2 15.9 (4,580.9 ) 3,057.9 (2.3 ) — — — (2.3 ) (152.7 ) — — — (152.7 ) (49.6 ) (49.6 ) (2.9 ) 52.5 (49.6 ) (249.8 ) (249.8 ) (249.7 ) 499.5 (249.8 ) 5,902.2 5,331.5 6,308.6 (11,640.1 ) 5,902.2 4,035.1 4,302.8 8,148.6 (12,451.3 ) 4,035.2 — — 362.6 17.4 380.0 — — 352.0 — 352.0 5,902.2 5,331.5 6,671.2 (11,622.7 ) 6,282.2 4,035.1 4,302.8 8,500.6 (12,451.3 ) 4,387.2 $ 5,902.2 $ 9,134.4 $ 8,953.7 $ (13,823.4 ) $ 10,166.9 $ 4,875.8 $ 11,234.1 $ 13,939.2 $ (17,310.2 ) $ 12,738.9 December 31, 2011 December 31, 2014 Parent CFI Other
Subsidiaries Eliminations
and
Reclassifications Consolidated Parent CF Industries Consolidated (in millions) (in millions) $ — $ 98.7 $ 1,108.3 $ — $ 1,207.0 $ — $ 105.7 $ 1,890.9 $ — $ 1,996.6 Restricted cash — — 86.1 — 86.1 — 76.9 806.4 (613.9 ) 269.4 — 2,286.5 651.9 (2,746.9 ) 191.5 — 289.4 — (289.4 ) — — 212.6 91.6 — 304.2 — 6.0 12.0 — 18.0 Inventories — — 202.9 — 202.9 Prepaid income taxes 1.9 — 34.8 (1.9 ) 34.8 Other current assets — — 18.6 — 18.6 — 683.6 2,018.3 (903.3 ) 1,798.6 1.9 2,392.2 2,885.2 (2,748.8 ) 2,530.5 — 767.7 2,968.3 — 3,736.0 — — 5,525.8 — 5,525.8 — 26.1 — (26.1 ) — — 145.4 — — 145.4 3,533.4 5,484.7 928.0 (9,017.5 ) 928.6 Investments in and advances to affiliates 6,212.5 9,208.7 861.5 (15,421.2 ) 861.5 1,013.8 — 1.0 (1,014.8 ) — 570.7 — 1.7 (572.4 ) — — 0.9 2,063.6 — 2,064.5 — — 2,092.8 — 2,092.8 — 162.3 139.1 — 301.4 — 65.1 178.5 — 243.6 $ 4,547.2 $ 7,270.7 $ 8,118.3 $ (10,961.7 ) $ 8,974.5 $ 6,785.1 $ 11,666.0 $ 11,545.5 $ (18,742.4 ) $ 11,254.2 $ 0.1 $ 516.3 $ 132.9 $ (321.6 ) $ 327.7 Accounts and notes payable and accrued expenses $ 2,575.4 $ 207.7 $ 553.8 $ (2,747.0 ) $ 589.9 — — 417.9 (289.4 ) 128.5 — 10.8 7.1 (1.9 ) 16.0 — 184.3 72.9 — 257.2 — — 325.4 — 325.4 — 90.1 — — 90.1 — — 441.7 (292.0 ) 149.7 — 66.0 12.0 — 78.0 Other current liabilities — — 48.4 — 48.4 0.1 856.7 1,077.4 (903.0 ) 1,031.2 2,575.4 218.5 934.7 (2,748.9 ) 979.7 — — 14.2 (9.4 ) 4.8 — 1,600.0 13.0 — 1,613.0 — 4,592.5 — — 4,592.5 — — 983.0 (26.2 ) 956.8 — 34.8 699.8 — 734.6 — 1,014.8 — (1,014.8 ) — — 572.4 — (572.4 ) — — 265.8 170.0 — 435.8 Other liabilities — 35.3 339.6 — 374.9 — — 65.3 (65.3 ) — — — 16.4 (16.4 ) — 0.7 — 153.9 (153.9 ) 0.7 2,804.8 739.9 4,493.6 (5,233.5 ) 2,804.8 2.5 — 1.1 (1.1 ) 2.5 1,413.9 (12.6 ) 8,283.5 (8,270.9 ) 1,413.9 2,841.0 2,892.7 805.2 (3,697.9 ) 2,841.0 3,175.3 6,384.9 1,067.8 (7,452.7 ) 3,175.3 (1,000.2 ) — — — (1,000.2 ) (99.2 ) (99.2 ) (26.5 ) 125.6 (99.3 ) (222.2 ) — — — (222.2 ) Accumulated other comprehensive income (loss) (159.8 ) (159.8 ) (160.2 ) 320.0 (159.8 ) 4,547.1 3,533.4 5,491.5 (9,025.0 ) 4,547.0 4,209.7 6,212.5 9,208.6 (15,421.1 ) 4,209.7 — — 369.2 16.7 385.9 — — 362.8 — 362.8 4,547.1 3,533.4 5,860.7 (9,008.3 ) 4,932.9 4,209.7 6,212.5 9,571.4 (15,421.1 ) 4,572.5 $ 4,547.2 $ 7,270.7 $ 8,118.3 $ (10,961.7 ) $ 8,974.5 $ 6,785.1 $ 11,666.0 $ 11,545.5 $ (18,742.4 ) $ 11,254.2 Year ended December 31, 2012 Parent CFI Other
Subsidiaries Eliminations Consolidated (in millions) $ 1,848.7 $ 1,851.2 $ 874.8 $ (2,651.3 ) $ 1,923.4 — 120.9 298.9 — 419.8 — (130.8 ) (7.6 ) — (138.4 ) 11.2 — 0.7 — 11.9 (36.1 ) — — — (36.1 ) — (68.0 ) (10.8 ) — (78.8 ) — 2.4 3.1 —
— 5.5 (1,851.2 ) (805.9 ) (9.1 ) 2,651.3 (14.9 ) 476.7 (476.4 ) (0.3 ) — — — (344.6 ) (198.9 ) 596.7 53.2 — 0.8 — — 0.8 — 24.3 10.5 — 34.8 — (315.4 ) 374.1 — 58.7 — 597.9 24.3 (596.7 ) 25.5 — 63.5 59.8 — 123.3 — (28.8 ) 15.7 — (13.1 ) 449.3 491.1 1,435.2 — 2,375.6 — (339.9 ) (183.6 ) — (523.5 ) — 12.3 4.7 — 17.0 — 48.4 — — 48.4 — (55.4 ) — — (55.4 ) — (334.6 ) (178.9 ) — (513.5 ) — — (13.0 ) — (13.0 ) — — 40.5 — 40.5 — — (40.5 ) — (40.5 ) (102.7 ) — — — (102.7 ) 102.7 (102.7 ) — — — — 300.5 (532.3 ) — (231.8 ) (500.0 ) — — — (500.0 ) 14.6 — — — 14.6 36.1 — — — 36.1 (449.3 ) 197.8 (545.3 ) — (796.8 ) — (12.2 ) 14.8 — 2.6 — 342.1 725.8 — 1,067.9 — 98.7 1,108.3 — 1,207.0 $ — $ 440.8 $ 1,834.1 $ — $ 2,274.9 Year ended December 31, 2015 Parent CF Industries Eliminations Consolidated (in millions) Operating Activities: Net earnings $ 699.9 $ 731.1 $ 835.8 $ (1,532.7 ) $ 734.1 Adjustments to reconcile net earnings to net cash (used in) provided by operating activities: Depreciation and amortization — 13.7 465.9 — 479.6 Deferred income taxes — 17.2 60.7 — 77.9 Stock-based compensation expense 16.5 — 0.3 — 16.8 Excess tax benefit from stock-based compensation (1.5 ) — — — (1.5 ) Unrealized loss on derivatives — — 162.8 — 162.8 Gain on remeasurement of CF Fertilisers UK investment — — (94.4 ) — (94.4 ) Impairment of equity method investment in PLNL — — 61.9 — 61.9 Loss on sale of equity method investments — — 42.8 — 42.8 Loss on disposal of property, plant and equipment — — 21.4 — 21.4 Undistributed (earnings) loss of affiliates—net (731.2 ) (801.4 ) (3.4 ) 1,532.7 (3.3 ) Due to/from affiliates—net 1.6 0.5 (2.1 ) — — Changes in: Accounts and notes receivable—net (0.9 ) 0.2 97.3 (101.4 ) (4.8 ) Inventories — — (71.0 ) — (71.0 ) Accrued and prepaid income taxes 1.9 (10.8 ) (138.9 ) — (147.8 ) Accounts and notes payable and accrued expenses 7.7 (42.6 ) (24.8 ) 101.4 41.7 Customer advances — — (163.9 ) — (163.9 ) Other—net — 30.7 20.7 — 51.4 Net cash (used in) provided by operating activities (6.0 ) (61.4 ) 1,271.1 — 1,203.7 Investing Activities: Additions to property, plant and equipment — — (2,469.3 ) — (2,469.3 ) Proceeds from sale of property, plant and equipment — — 12.4 — 12.4 Proceeds from sale of equity method investment — — 12.8 — 12.8 Purchase of CF Fertilisers UK, net of cash acquired — — (551.6 ) — (551.6 ) Withdrawals from restricted cash funds — — 63.3 — 63.3 Other—net — (81.5 ) (43.5 ) 81.5 (43.5 ) Net cash (used in) provided by investing activities — (81.5 ) (2,975.9 ) 81.5 (2,975.9 ) Financing Activities: Proceeds from long-term borrowings — 1,000.0 — — 1,000.0 Short-term debt—net 553.6 (916.2 ) 362.6 — — Financing fees — (46.4 ) — — (46.4 ) Purchases of treasury stock (556.3 ) — — — (556.3 ) Dividends paid on common stock (282.3 ) (282.4 ) (282.4 ) 564.8 (282.3 ) Distributions to noncontrolling interest — — (45.0 ) — (45.0 ) Issuances of common stock under employee stock plans 8.4 — — — 8.4 Excess tax benefit from stock-based compensation 1.5 — — — 1.5 Dividends to/from affiliates 282.4 282.4 — (564.8 ) — Other—net — — 81.5 (81.5 ) — Net cash provided by (used in) financing activities 7.3 37.4 116.7 (81.5 ) 79.9 Effect of exchange rate changes on cash and cash equivalents — — (18.3 ) — (18.3 ) Increase (decrease) in cash and cash equivalents 1.3 (105.5 ) (1,606.4 ) — (1,710.6 ) Cash and cash equivalents at beginning of period — 105.7 1,890.9 — 1,996.6 Cash and cash equivalents at end of period $ 1.3 $ 0.2 $ 284.5 $ — $ 286.0 Year ended December 31, 2011 Year ended December 31, 2014 Parent CFI Other
Subsidiaries Eliminations Consolidated Parent CF Industries Eliminations Consolidated (in millions) (in millions) $ 1,539.2 $ 1,541.5 $ 1,141.9 $ (2,461.6 ) $ 1,761.0 $ 1,390.3 $ 1,392.0 $ 1,015.7 $ (2,361.2 ) $ 1,436.8 — 133.9 282.3 — 416.2 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation and amortization — 6.8 385.7 — 392.5 2.2 (65.6 ) 30.5 — (32.9 ) — 136.0 (117.5 ) — 18.5 9.8 — 0.8 — 10.6 Stock-based compensation expense 16.6 — — — 16.6 (47.2 ) — — — (47.2 ) (8.7 ) — — — (8.7 ) — 66.5 10.8 — 77.3 — (31.9 ) 40.7 — 8.8 Unrealized loss on derivatives — — 119.2 — 119.2 Gain on sale of phosphate business — (764.5 ) 14.4 — (750.1 ) Loss on disposal of property, plant and equipment — — 3.7 — 3.7 (1,541.5 ) (915.0 ) (18.6 ) 2,461.6 (13.5 ) (1,391.9 ) (969.2 ) (11.6 ) 2,361.2 (11.5 ) 975.3 (975.5 ) 0.2 — — Due to/from affiliates—net 8.8 1.7 (10.5 ) — — — 601.4 (489.4 ) (147.5 ) (35.5 ) — (285.3 ) 658.2 (336.8 ) 36.1 — 2.6 (1.2 ) — 1.4 — (36.0 ) (2.5 ) — (38.5 ) — (237.9 ) 339.5 — 101.6 Inventories — 4.3 59.5 — 63.8 Accrued and prepaid income taxes (1.0 ) (18.3 ) (37.5 ) — (56.8 ) — 337.5 (479.8 ) 147.5 5.2 (3.3 ) 376.8 (763.5 ) 336.8 (53.2 ) — (101.1 ) (73.2 ) — (174.3 ) — — 204.8 — 204.8 (0.3 ) 5.6 33.4 — 38.7 — 5.4 (8.5 ) — (3.1 ) 937.5 326.0 815.4 — 2,078.9 10.8 (114.3 ) 1,512.1 — 1,408.6 — (139.9 ) (107.3 ) — (247.2 ) — (18.3 ) (1,790.2 ) — (1,808.5 ) — 51.9 2.8 — 54.7 Proceeds from sale of property, plant and equipment — — 11.0 — 11.0 Proceeds from sale of phosphate business — 911.5 460.5 — 1,372.0 — 34.8 3.1 — 37.9 — 5.0 — — 5.0 — (50.4 ) — — (50.4 ) Deposits to restricted cash funds — — (505.0 ) — (505.0 ) Withdrawals from restricted cash funds — — 573.0 — 573.0 — — 31.2 — 31.2 — — 9.0 — 9.0 — (103.6 ) (70.2 ) — (173.8 ) — 898.2 (1,241.7 ) — (343.5 ) — (346.0 ) — — (346.0 ) Proceeds from long-term borrowings — 1,494.2 — — 1,494.2 Short-term debt—net 1,897.7 (2,176.0 ) 278.3 — — — (1.5 ) — — (1.5 ) — (16.0 ) — — (16.0 ) (1,000.2 ) — — — (1,000.2 ) Purchases of treasury stock (1,934.9 ) — — — (1,934.9 ) (68.7 ) — — — (68.7 ) (255.7 ) (255.7 ) (255.9 ) 511.6 (255.7 ) 68.7 (68.7 ) — — — — 153.0 (298.7 ) — (145.7 ) Distributions to noncontrolling interest — — (46.0 ) — (46.0 ) 15.5 — — — 15.5 17.6 — — — 17.6 47.2 — — — 47.2 8.7 — — — 8.7 (937.5 ) (263.2 ) (298.7 ) — (1,499.4 ) Dividends to/from affiliates 255.7 255.9 — (511.6 ) — Other—net — (1.0 ) (42.0 ) — (43.0 ) Net cash used in financing activities (10.9 ) (698.6 ) (65.6 ) — (775.1 ) — 3.3 0.3 — 3.6 — — (4.2 ) — (4.2 ) — (37.5 ) 446.8 — 409.3 (Decrease) increase in cash and cash equivalents (0.1 ) 85.3 200.6 — 285.8 — 136.2 661.5 — 797.7 0.1 20.4 1,690.3 — 1,710.8 $ — $ 98.7 $ 1,108.3 $ — $ 1,207.0 $ — $ 105.7 $ 1,890.9 $ — $ 1,996.6 Year ended December 31, 2010 Year ended December 31, 2013 Parent CFI Other
Subsidiaries Eliminations Consolidated Parent CF Industries Eliminations Consolidated (in millions) (in millions) $ 349.2 $ 470.4 $ 425.4 $ (804.3 ) $ 440.7 $ 1,464.6 $ 1,466.4 $ 1,495.3 $ (2,893.5 ) $ 1,532.8 Adjustments to reconcile net earnings to net cash provided by operating activities: — 200.7 194.1 — 394.8 — 47.8 362.8 — 410.6 — 37.7 50.9 — 88.6 — (21.3 ) (13.0 ) — (34.3 ) 8.0 — 0.3 — 8.3 Stock-based compensation expense 12.6 — — — 12.6 (5.8 ) — — — (5.8 ) (13.5 ) — — — (13.5 ) — (0.9 ) (8.5 ) — (9.4 ) — — 17.0 — 17.0 — (28.3 ) — — (28.3 ) — (0.3 ) 11.3 — 11.0 Unrealized gain on derivatives — — (59.3 ) — (59.3 ) Loss on disposal of property, plant and equipment — — 5.6 — 5.6 (470.4 ) (331.9 ) (51.9 ) 804.3 (49.9 ) (1,466.4 ) (1,427.0 ) (11.4 ) 2,893.5 (11.3 ) (999.6 ) 1,005.7 (6.1 ) — — 13.5 — (13.5 ) — — — (466.5 ) 74.6 462.5 70.6 — (220.8 ) (293.4 ) 514.6 0.4 — (3.5 ) (1.6 ) — (5.1 ) — 3.9 75.9 — 79.8 — 1.8 93.9 — 95.7 Inventories — (11.8 ) (68.5 ) — (80.3 ) Accrued and prepaid income taxes (0.9 ) 23.6 (176.1 ) — (153.4 ) — 25.2 366.0 (462.5 ) (71.3 ) (2.8 ) 305.4 261.5 (514.6 ) 49.5 — 125.9 40.5 — 166.4 — — (260.1 ) — (260.1 ) (0.9 ) 10.9 (18.7 ) — (8.7 ) — 3.9 63.6 — 67.5 (1,119.5 ) 1,050.8 1,263.1 — 1,194.4 Net cash provided by operating activities 7.1 166.2 1,293.5 — 1,466.8 — (107.0 ) (151.1 ) — (258.1 ) — (58.9 ) (764.9 ) — (823.8 ) — 16.4 0.1 — 16.5 — (25.5 ) (3.1 ) — (28.6 ) Proceeds from sale of property, plant and equipment — — 12.6 — 12.6 — 238.2 — — 238.2 — 13.5 — — 13.5 — 167.1 — — 167.1 Canadian terminal acquisition — — (72.5 ) — (72.5 ) Deposits to restricted cash funds — — (154.0 ) — (154.0 ) — (58.5 ) — — (58.5 ) — (2.9 ) — — (2.9 ) — (3,721.4 ) — 543.6 (3,177.8 ) — 0.4 30.6 — 31.0 — — 7.8 — 7.8 — (3,490.3 ) (123.5 ) 543.6 (3,070.2 ) Net cash used in investing activities — (48.3 ) (971.0 ) — (1,019.3 ) — 5,197.2 — — 5,197.2 — 1,498.0 — — 1,498.0 — (3,264.2 ) (744.5 ) — (4,008.7 ) (41.3 ) (167.8 ) — — (209.1 ) — (14.5 ) — — (14.5 ) (26.2 ) — — — (26.2 ) (129.1 ) (859.0 ) (129.0 ) 988.0 (129.1 ) — — (20.0 ) — (20.0 ) 26.2 (26.2 ) — — — — 182.2 (299.2 ) — (117.0 ) 1,150.0 — — — 1,150.0 Dividends to/from affiliates 859.0 129.0 — (988.0 ) — Distributions to/from noncontrolling interest — 14.3 (88.0 ) — (73.7 ) Purchases of treasury stock (1,409.1 ) — — — (1,409.1 ) Acquisitions of noncontrolling interests in CFL — (364.9 ) (553.8 ) — (918.7 ) 5.0 — — — 5.0 10.3 — — — 10.3 5.8 — — — 5.8 13.5 — — — 13.5 1,119.5 1,921.2 (1,063.7 ) — 1,977.0 Other—net 648.4 (941.2 ) 335.8 — 43.0 Net cash used in financing activities (7.0 ) (538.3 ) (435.0 ) — (980.3 ) — (8.5 ) 7.9 — (0.6 ) — — (31.3 ) — (31.3 ) — (526.8 ) 83.8 543.6 100.6 0.1 (420.4 ) (143.8 ) — (564.1 ) — 663.0 577.7 (543.6 ) 697.1 — 440.8 1,834.1 — 2,274.9 $ — $ 136.2 $ 661.5 $ — $ 797.7 $ 0.1 $ 20.4 $ 1,690.3 $ — $ 1,710.8 Presented below are condensed consolidating statements. Subsequent Event (Unaudited)operations, comprehensive incomeCF Holdings, for $2.8 billion. CHS also began receiving deliveries from us pursuant to a supply agreement under which CHS has the right to purchase annually from us up to approximately 1.1 million tons of granular urea and statements580,000 tons of cash flows for the Parent, CFI, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries for the years ended December 31, 2012, 2011, and 2010 and condensed consolidating balance sheets for the Parent, CFI, the Guarantor Subsidiaries and the Non-Guarantor SubsidiariesUAN at market prices. CHS is entitled to semi-annual profit distributions from CFN as a result of December 31, 2012 and December 31, 2011. The investmentsits minority equity interest in subsidiaries in these consolidating financial statements are presentedCFN based generally on the equity method. Under this method, our investments are recorded at costvolume of granular urea and adjusted for our ownership share of a subsidiary's cumulative results of operations, distributions and other equity changes. The eliminating entries reflect primarily intercompany transactions such as sales, accounts receivable and accounts payable andUAN purchased by CHS pursuant to the elimination of equity investments and earnings of subsidiaries. The condensed financial information presented below is not necessarily indicative of the financial position, results of operation or cash flow of the Parent, CFI, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries on a stand-alone basis.supply agreement. Condensed, Consolidating Statement of Operations Year ended December 31, 2012 Parent CFI Guarantor
Subsidiaries Non-Guarantor
Subsidiaries Eliminations Consolidated (in millions) $ — $ 3,747.9 $ 1,931.8 $ 1,359.4 $ (935.1 ) $ 6,104.0 — 1,854.6 1,416.1 647.8 (927.8 ) 2,990.7 — 1,893.3 515.7 711.6 (7.3 ) 3,113.3 2.5 128.0 2.9 18.4 — 151.8 — 24.0 8.2 16.9 — 49.1 2.5 152.0 11.1 35.3 — 200.9 — 4.9 9.0 33.1 — 47.0 (2.5 ) 1,746.2 513.6 709.4 (7.3 ) 2,959.4 — 126.8 8.5 1.6 (1.6 ) 135.3 — (1.4 ) 16.2 (20.7 ) 1.6 (4.3 ) (1,851.2 ) (792.8 ) (732.4 ) — 3,376.4 — — — (1.1 ) — — (1.1 ) 1,848.7 2,413.6 1,222.4 728.5 (3,383.7 ) 2,829.5 — 562.2 354.1 47.9 — 964.2 — (0.2 ) — 58.3 — 58.1 1,848.7 1,851.2 868.3 738.9 (3,383.7 ) 1,923.4 — — 71.2 10.8 (7.3 ) 74.7 $ 1,848.7 $ 1,851.2 $ 797.1 $ 728.1 $ (3,376.4 ) $ 1,848.7 Condensed, Consolidating Statement of Comprehensive Income Year ended December 31, 2012 Parent CFI Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated (in millions) $ 1,848.7 $ 1,851.2 $ 868.3 $ 738.9 $ (3,383.7 ) $ 1,923.4 49.6 49.6 28.5 60.8 (138.1 ) 50.4 1,898.3 1,900.8 896.8 799.7 (3,521.8 ) 1,973.8 — — 71.2 10.8 (6.6 ) 75.4 $ 1,898.3 $ 1,900.8 $ 825.6 $ 788.9 $ (3,515.2 ) $ 1,898.4 CF INDUSTRIES HOLDINGS, INC.Condensed, Consolidating Statement of Operations Year ended December 31, 2011 Parent CFI Guarantor
Subsidiaries Non-Guarantor
Subsidiaries Eliminations Consolidated (in millions) $ — $ 3,585.3 $ 2,003.7 $ 1,808.0 $ (1,299.1 ) $ 6,097.9 — 1,932.1 1,489.0 779.0 (997.8 ) 3,202.3 — 1,653.2 514.7 1,029.0 (301.3 ) 2,895.6 3.6 99.5 9.2 17.7 — 130.0 — 2.0 2.4 — — 4.4 — (18.9 ) 37.9 1.9 — 20.9 3.6 82.6 49.5 19.6 — 155.3 — (1.2 ) 2.1 49.3 — 50.2 (3.6 ) 1,569.4 467.3 1,058.7 (301.3 ) 2,790.5 — 137.1 8.0 2.4 (0.3 ) 147.2 — (0.7 ) 17.0 (18.3 ) 0.3 (1.7 ) (1,541.5 ) (618.8 ) (636.6 ) — 2,796.9 — — (0.1 ) (0.5 ) — — (0.6 ) 1,537.9 2,051.9 1,079.4 1,074.6 (3,098.2 ) 2,645.6 (1.3 ) 505.6 400.9 21.3 — 926.5 — (4.8 ) — 46.7 — 41.9 1,539.2 1,541.5 678.5 1,100.0 (3,098.2 ) 1,761.0 — — 67.7 455.4 (301.3 ) 221.8 $ 1,539.2 $ 1,541.5 $ 610.8 $ 644.6 $ (2,796.9 ) $ 1,539.2 Condensed, Consolidating Statement of Comprehensive Income Year ended December 31, 2011 Parent CFI Guarantor
Subsidiaries Non-Guarantor
Subsidiaries Eliminations Consolidated (in millions) $ 1,539.2 $ 1,541.5 $ 678.5 $ 1,100.0 $ (3,098.2 ) $ 1,761.0 (45.9 ) (45.9 ) (32.9 ) (27.2 ) 105.3 (46.6 ) 1,493.3 1,495.6 645.6 1,072.8 (2,992.9 ) 1,714.4 — — 67.7 455.4 (301.9 ) 221.2 $ 1,493.3 $ 1,495.6 $ 577.9 $ 617.4 $ (2,691.0 ) $ 1,493.2 CF INDUSTRIES HOLDINGS, INC.Condensed, Consolidating Statement of Operations Year ended December 31, 2010 Parent CFI Guarantor
Subsidiaries Non-Guarantor
Subsidiaries Eliminations Consolidated (in millions) $ — $ 2,442.5 $ 816.3 $ 1,015.2 $ (309.0 ) $ 3,965.0 — 1,699.6 588.8 663.8 (166.7 ) 2,785.5 — 742.9 227.5 351.4 (142.3 ) 1,179.5 2.5 70.9 21.4 11.3 — 106.1 — 13.4 8.2 — — 21.6 118.7 35.9 2.1 10.0 — 166.7 121.2 120.2 31.7 21.3 — 294.4 — (6.9 ) 1.2 16.3 — 10.6 (121.2 ) 615.8 197.0 346.4 (142.3 ) 895.7 — 210.9 8.1 2.7 (0.4 ) 221.3 — (1.3 ) 14.8 (15.4 ) 0.4 (1.5 ) — — 17.0 — — 17.0 (470.4 ) (191.5 ) (166.5 ) — 828.4 — — (28.2 ) (0.5 ) (0.1 ) — (28.8 ) 349.2 625.9 324.1 359.2 (970.7 ) 687.7 — 153.1 123.9 (3.3 ) — 273.7 — (2.4 ) — 29.1 — 26.7 349.2 470.4 200.2 391.6 (970.7 ) 440.7 — — 15.7 218.1 (142.3 ) 91.5 $ 349.2 $ 470.4 $ 184.5 $ 173.5 $ (828.4 ) $ 349.2 Condensed, Consolidating Statement of Comprehensive Income Year ended December 31, 2010 Parent CFI Guarantor
Subsidiaries Non-Guarantor
Subsidiaries Eliminations Consolidated (in millions) $ 349.2 $ 470.4 $ 200.2 $ 391.6 $ (970.7 ) $ 440.7 (10.1 ) (10.1 ) 19.8 18.5 (26.8 ) (8.7 ) 339.1 460.3 220.0 410.1 (997.5 ) 432.0 — — 15.7 218.1 (140.9 ) 92.9 $ 339.1 $ 460.3 $ 204.3 $ 192.0 $ (856.6 ) $ 339.1 CF INDUSTRIES HOLDINGS, INC. Condensed, Consolidating Balance Sheet December 31, 2012 Parent CFI Guarantor
Subsidiaries Non-Guarantor
Subsidiaries Eliminations
and
Reclassifications Consolidated (in millions) $ — $ 440.8 $ 796.8 $ 1,037.3 $ — $ 2,274.9 — 145.1 968.9 39.0 (935.6 ) 217.4 — 642.1 — — (642.1 ) — — 193.1 53.9 30.9 — 277.9 — 9.5 — — — 9.5 — 15.4 6.9 5.6 — 27.9 — 1,446.0 1,826.5 1,112.8 (1,577.7 ) 2,807.6 — 1,008.1 1,561.6 1,330.8 — 3,900.5 — 50.7 — — (50.7 ) — — 200.8 — — — 200.8 5,331.5 6,291.4 3,942.2 925.0 (15,554.5 ) 935.6 570.7 — — 996.1 (1,566.8 ) — — 0.9 2,063.6 — — 2,064.5 — 136.5 98.9 22.5 — 257.9 $ 5,902.2 $ 9,134.4 $ 9,492.8 $ 4,387.2 $ (18,749.7 ) $ 10,166.9 $ — $ 222.6 $ 95.1 $ 64.4 $ (15.6 ) $ 366.5 — — 789.3 39.9 (642.1 ) 187.1 — 247.9 122.2 10.6 — 380.7 — 900.0 — 14.6 (909.6 ) 5.0 — — — 15.7 (10.4 ) 5.3 — 4.5 — 1.1 — 5.6 — 1,375.0 1,006.6 146.3 (1,577.7 ) 950.2 — 1,600.0 — — — 1,600.0 — — 821.9 167.6 (50.7 ) 938.8 — 572.5 994.3 — (1,566.8 ) — — 255.4 96.3 44.0 — 395.7 — — — 65.3 (65.3 ) — 0.6 — 153.1 4.7 (157.8 ) 0.6 2,492.3 739.8 4,450.2 3,476.0 (8,665.9 ) 2,492.4 3,461.2 4,641.3 1,592.4 438.8 (6,672.6 ) 3,461.1 (2.3 ) — — — — (2.3 ) (49.6 ) (49.6 ) 15.4 44.5 (10.3 ) (49.6 ) 5,902.2 5,331.5 6,211.1 4,029.3 (15,571.9 ) 5,902.2 — — 362.6 — 17.4 380.0 5,902.2 5,331.5 6,573.7 4,029.3 (15,554.5 ) 6,282.2 $ 5,902.2 $ 9,134.4 $ 9,492.8 $ 4,387.2 $ (18,749.7 ) $ 10,166.9 CF INDUSTRIES HOLDINGS, INC.Condensed, Consolidating Balance Sheet December 31, 2011 Parent CFI Guarantor
Subsidiaries Non-Guarantor
Subsidiaries Eliminations
and
Reclassifications Consolidated (in millions) $ — $ 98.7 $ 300.2 $ 808.1 $ — $ 1,207.0 — 76.9 367.4 439.0 (613.9 ) 269.4 — 289.4 — — (289.4 ) — — 212.6 62.9 28.7 — 304.2 — 6.0 6.6 5.4 — 18.0 — 683.6 737.1 1,281.2 (903.3 ) 1,798.6 — 767.7 1,592.4 1,375.9 — 3,736.0 — 26.1 — — (26.1 ) — — 145.4 — — — 145.4 3,533.4 5,484.7 1,346.1 919.4 (10,355.0 ) 928.6 1,013.8 — 1,398.3 — (2,412.1 ) — — 0.9 2,063.6 — — 2,064.5 — 162.3 113.8 25.3 — 301.4 $ 4,547.2 $ 7,270.7 $ 7,251.3 $ 3,601.8 $ (13,696.5 ) $ 8,974.5 $ 0.1 $ 516.3 $ 74.7 $ 58.4 $ (321.8 ) $ 327.7 — — 396.9 21.0 (289.4 ) 128.5 — 184.3 65.1 7.8 — 257.2 — 90.1 — — — 90.1 — — — 441.7 (292.0 ) 149.7 — 66.0 — 12.0 — 78.0 0.1 856.7 536.7 540.9 (903.2 ) 1,031.2 — — — 14.2 (9.4 ) 4.8 — 1,600.0 13.0 — — 1,613.0 — — 811.9 171.0 (26.1 ) 956.8 — 1,014.8 — 1,397.3 (2,412.1 ) — — 265.8 135.1 34.9 — 435.8 — — — 65.3 (65.3 ) — 0.7 — 153.1 33.2 (186.3 ) 0.7 2,804.8 739.9 4,450.2 1,098.0 (6,288.1 ) 2,804.8 2,841.0 2,892.7 795.2 263.3 (3,951.2 ) 2,841.0 (1,000.2 ) — — — — (1,000.2 ) (99.2 ) (99.2 ) (13.1 ) (16.3 ) 128.5 (99.3 ) 4,547.1 3,533.4 5,385.4 1,443.5 (10,362.4 ) 4,547.0 — — 369.2 — 16.7 385.9 4,547.1 3,533.4 5,754.6 1,443.5 (10,345.7 ) 4,932.9 $ 4,547.2 $ 7,270.7 $ 7,251.3 $ 3,601.8 $ (13,696.5 ) $ 8,974.5 CF INDUSTRIES HOLDINGS, INC. Condensed, Consolidating Statement of Cash Flows Year ended December 31, 2012 Parent CFI Guarantor
Subsidiaries Non-Guarantor
Subsidiaries Eliminations Consolidated (in millions) $ 1,848.7 $ 1,851.2 $ 868.3 $ 738.9 $ (3,383.7 ) $ 1,923.4 — 120.9 151.2 147.7 — 419.8 — (130.8 ) (3.1 ) (4.5 ) — (138.4 ) 11.2 — — 0.7 — 11.9 (36.1 ) — — — — (36.1 ) — (68.0 ) — (10.8 ) — (78.8 ) — 2.4 3.0 0.1 — 5.5 (1,851.2 ) (805.9 ) (680.7 ) (60.8 ) 3,383.7 (14.9 ) 476.7 (476.4 ) 535.3 (535.6 ) — — — (344.6 ) (601.6 ) 402.7 596.7 53.2 — 0.8 — — — 0.8 — 24.3 5.5 5.0 — 34.8 — (315.4 ) 354.2 19.9 — 58.7 — 597.9 20.7 3.6 (596.7 ) 25.5 — 63.5 57.2 2.6 — 123.3 — (28.8 ) (9.6 ) 25.3 — (13.1 ) 449.3 491.1 700.4 734.8 — 2,375.6 — (339.9 ) (117.7 ) (65.9 ) — (523.5 ) — 12.3 4.7 — — 17.0 — 48.4 — — — 48.4 — (55.4 ) — — — (55.4 ) — (334.6 ) (113.0 ) (65.9 ) — (513.5 ) — — (13.0 ) — — (13.0 ) — — — 40.5 — 40.5 — — — (40.5 ) — (40.5 ) (102.7 ) — — — — (102.7 ) 102.7 (102.7 ) — — — — — 300.5 (77.8 ) (454.5 ) — (231.8 ) (500.0 ) — — — — (500.0 ) 14.6 — — — — 14.6 36.1 — — — — 36.1 (449.3 ) 197.8 (90.8 ) (454.5 ) — (796.8 ) — (12.2 ) — 14.8 — 2.6 — 342.1 496.6 229.2 — 1,067.9 — 98.7 300.2 808.1 — 1,207.0 $ — $ 440.8 $ 796.8 $ 1,037.3 $ — $ 2,274.9 CF INDUSTRIES HOLDINGS, INC.Condensed, Consolidating Statement of Cash Flows Year ended December 31, 2011 Parent CFI Guarantor
Subsidiaries Non-Guarantor
Subsidiaries Eliminations Consolidated (in millions) $ 1,539.2 $ 1,541.5 $ 678.5 $ 1,100.0 $ (3,098.2 ) $ 1,761.0 — 133.9 142.1 140.2 — 416.2 2.2 (65.6 ) 33.3 (2.8 ) — (32.9 ) 9.8 — — 0.8 — 10.6 (47.2 ) — — — — (47.2 ) — 66.5 (0.4 ) 11.2 — 77.3 — (31.9 ) 38.9 1.8 — 8.8 (1,541.5 ) (915.0 ) (636.6 ) (18.6 ) 3,098.2 (13.5 ) 975.3 (975.5 ) 472.0 (471.8 ) — — — 601.4 (1.1 ) (488.3 ) (147.5 ) (35.5 ) — 2.6 — (1.2 ) — 1.4 — (36.0 ) (12.1 ) 9.6 — (38.5 ) — (237.9 ) 313.0 26.5 — 101.6 — 337.5 (773.4 ) 293.6 147.5 5.2 — (101.1 ) (16.1 ) (57.1 ) — (174.3 ) (0.3 ) 5.6 41.4 (8.0 ) — 38.7 937.5 326.0 279.5 535.9 — 2,078.9 — (139.9 ) (81.9 ) (25.4 ) — (247.2 ) — 51.9 2.8 — — 54.7 — 34.8 — 3.1 — 37.9 — (50.4 ) — — — (50.4 ) — — — 31.2 — 31.2 — (103.6 ) (79.1 ) 8.9 — (173.8 ) — (346.0 ) — — (346.0 ) — (1.5 ) — — — (1.5 ) (1,000.2 ) — — — — (1,000.2 ) (68.7 ) — — — — (68.7 ) 68.7 (68.7 ) — — — — — 153.0 (64.2 ) (234.5 ) — (145.7 ) 15.5 — — — — 15.5 47.2 — — — — 47.2 (937.5 ) (263.2 ) (64.2 ) (234.5 ) — (1,499.4 ) — 3.3 — 0.3 — 3.6 — (37.5 ) 136.2 310.6 — 409.3 — 136.2 164.0 497.5 — 797.7 $ — $ 98.7 $ 300.2 $ 808.1 $ — $ 1,207.0 CF INDUSTRIES HOLDINGS, INC.Condensed, Consolidating Statement of Cash Flows Year ended December 31, 2010 Parent CFI Guarantor
Subsidiaries Non-Guarantor
Subsidiaries Eliminations Consolidated (in millions) $ 349.2 $ 470.4 $ 200.2 $ 391.6 $ (970.7 ) $ 440.7 — 200.7 85.8 108.3 — 394.8 — 37.7 53.4 (2.5 ) — 88.6 8.0 — — 0.3 — 8.3 (5.8 ) — — — — (5.8 ) — (0.9 ) (4.6 ) (3.9 ) — (9.4 ) — — 17.0 — — 17.0 — (28.3 ) — — — (28.3 ) — (0.3 ) 2.4 8.9 — 11.0 (470.4 ) (331.9 ) (166.5 ) (51.8 ) 970.7 (49.9 ) (999.6 ) 1,005.7 140.4 (146.5 ) — — — (466.5 ) 18.2 56.4 462.5 70.6 — (3.5 ) — (1.6 ) — (5.1 ) — 3.9 38.2 37.7 — 79.8 — 1.8 76.1 17.8 — 95.7 — 25.2 367.1 (1.1 ) (462.5 ) (71.3 ) — 125.9 39.3 1.2 — 166.4 (0.9 ) 10.9 (1.4 ) (17.3 ) — (8.7 ) (1,119.5 ) 1,050.8 865.6 397.5 — 1,194.4 — (107.0 ) (102.1 ) (49.0 ) — (258.1 ) — 16.4 — 0.1 — 16.5 — (25.5 ) — (3.1 ) — (28.6 ) — 238.2 — — — 238.2 — 167.1 — — — 167.1 — (58.5 ) — — — (58.5 ) — (3,721.4 ) 543.6 (3,177.8 ) — 0.4 — 30.6 — 31.0 — (3,490.3 ) (102.1 ) (21.4 ) 543.6 (3,070.2 ) — 5,197.2 — — — 5,197.2 — (3,264.2 ) (744.5 ) — — (4,008.7 ) (41.3 ) (167.8 ) — — — (209.1 ) (26.2 ) — — — — (26.2 ) — — (20.0 ) — — (20.0 ) 26.2 (26.2 ) — — — — — 182.2 (23.1 ) (276.1 ) — (117.0 ) 1,150.0 — — — — 1,150.0 5.0 — — — — 5.0 5.8 — — — — 5.8 1,119.5 1,921.2 (787.6 ) (276.1 ) — 1,977.0 — (8.5 ) — 7.9 — (0.6 ) — (526.8 ) (24.1 ) 107.9 543.6 100.6 — — 663.0 188.1 389.6 (543.6 ) 697.1 $ — $ 136.2 $ 164.0 $ 497.5 $ — $ 797.7 CF INDUSTRIES HOLDINGS, INC.Principal Executive Officerprincipal executive officer and Principal Financial Officer,principal financial officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this report. Based on such evaluation, the Company's Principal Executive Officerprincipal executive officer and Principal Financial Officerprincipal financial officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective in (i) recording, processing, summarizing and reporting, on a timely basis,ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including the Company's Principal Executive Officerprincipal executive officer and Principal Financial Officer,principal financial officer, as appropriate to allow timely decisions regarding required disclosure.ofunder the Exchange Act.Act, for the Company. Under the supervision and with the participation of our senior management, including our Principal Executive Officerprincipal executive officer and Principal Financial Officer,principal financial officer, we assessed the effectiveness of our internal control over financial reporting as of December 31, 2012,2015, using the criteria set forth in theInternal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.Commission in 2013. Based on this assessment, management has concluded that our internal control over financial reporting is effective as of December 31, 2012.2015. KPMG LLP, the independent registered public accounting firm that audited the Company's consolidated financial statements, has issued an attestation report on the Company's internal control over financial reporting as of December 31, 2012,2015, which appears on page 163.149.(b)Changes in Internal Control over Financial Reporting. There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 20122015 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. In April 2010, CF completed its acquisition of Terra. We continue to integrate policies, processes, technology and operations for the combined company and will continue to evaluate our internal control over financial reporting as we complete our integration activities. Until the companies are fully integrated, we will maintain the operational integrity of each company's legacy internal controls over financial reporting. The Company has replaced various business information systems with an enterprise resource planning system from SAP and implementation is occurring in 2013. This activity involves the migration of multiple legacy systems and users to a common SAP information platform.Industriesindustries Holdings, Inc.'s (the Company) internal control over financial reporting as of December 31, 2012,2015, based on criteria established inInternal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.2012,2015, based on criteria established inInternal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.Commission (COSO).20122015 and 2011,2014, and the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2012,2015, and our report dated February 27, 201325, 2016 expressed an unqualified opinion on those consolidated financial statements.27, 201325, 2016CF INDUSTRIES HOLDINGS, INC."Directors and Director Nominees;""Director Nominees"; "Executive Officers;"Officers"; "Corporate Governance—Committees of the Board—Audit Committee;"Committee"; and "Common Stock Ownership—Section 16(a) Beneficial Ownership Reporting Compliance" is incorporated herein by reference.willintend to disclose amendmentson our Internet website any amendment to or waivers from,any provision of the Code of Corporate Conduct onthat relates to any element of the definition of “code of ethics” enumerated in Item 406(b) of Regulation S-K under the Exchange Act and any waiver from any such provision granted to our Internet website, www.cfindustries.com.andAnne P. Noonan, Edward A. Schmitt and Theresa E. Wagler currently serve as the members of the Compensation Committee of the Company's Board of Directors.CF INDUSTRIES HOLDINGS, INC.20092014 Equity and Incentive Plan (Plan). Under the Plan, we may grant incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards (payable in cash or stock) and other stock-based compensation. Number of securities
to be issued
upon exercise of
outstanding options,
warrants and rights Weighted-average
exercise price of
outstanding options,
warrants and rights Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in
the first column) Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights Weighted-average
exercise price of
outstanding options,
warrants and rights Number of securities
remaining available for future
issuance under equity
compensation plans
(excluding securities
reflected in the first column) 489,709 $ 130.58 3,110,305 3,456,933 $ 43.21 13,090,350 276,898 $ 46.87 — 197,385 $ 16.83 — 766,607 $ 100.34 3,110,305 3,654,318 �� $ 41.79 13,090,350 27—19—Stock-Based Compensation."Certain Relationships and"Policy Regarding Related Person Transactions" is incorporated herein by reference.Non-AuditNon-audit Fees" and "Pre-approval of Audit and Non-AuditNon-audit Services" is incorporated herein by reference.CF INDUSTRIES HOLDINGS, INC.(a) Documents filed as part of this report: (1 1.) All financial statements:
The following financial statements are included in Part II, Item 8. Financial Statements and Supplementary Data.
Financial Statements Schedulesstatement schedules are omitted because they are not applicable or the required information is included in the consolidated financial statements or notes thereto.
(2
)2.ExhibitsExhibits
170153 of this report. CF INDUSTRIES HOLDINGS, INC.
Date:
February 25, 2016February 27, 2013
By:By:
/s/ STEPHEN R. WILSON
W. ANTHONY WILL Stephen R. Wilson
President and Chief Executive OfficerChairman of the BoardSignature Title(s)Date/s/ STEPHEN R. WILSONStephen R. Wilson President and Chief Executive Officer,Chairman of the Board(Principal Executive Officer)Title(s) February 27, 2013Date/s/ DENNIS P. KELLEHERDennis P. KelleherSenior Vice President andChief Financial Officer(Principal Financial Officer)February 27, 2013/s/ RICHARD A. HOKERRichard A. HokerVice President and Corporate Controller(Principal Accounting Officer)February 27, 2013/s/ ROBERT C. ARZBAECHERRobert C. ArzbaecherDirectorFebruary 27, 2013/s/ WILLIAM DAVISSONWilliam DavissonDirectorFebruary 27, 2013/s/ STEPHEN A. FURBACHERStephen A. FurbacherDirectorFebruary 27, 2013/s/ STEPHEN J. HAGGEStephen J. HaggeDirectorFebruary 27, 2013/s/ JOHN D. JOHNSONJohn D. JohnsonDirectorFebruary 27, 2013/s/ ROBERT G. KUHBACHRobert G. KuhbachDirectorFebruary 27, 2013/s/ EDWARD A. SCHMITTEdward A. SchmittDirectorFebruary 27, 2013EXHIBIT NO.DESCRIPTION /s/ W. ANTHONY WILL February 25, 2016 W. Anthony Will /s/ DENNIS P. KELLEHER February 25, 2016 Dennis P. Kelleher /s/ RICHARD A. HOKER February 25, 2016 Richard A. Hoker /s/ STEPHEN A. FURBACHER Chairman of the Board February 25, 2016 Stephen A. Furbacher /s/ ROBERT C. ARZBAECHER Director February 25, 2016 Robert C. Arzbaecher /s/ WILLIAM DAVISSON Director February 25, 2016 William Davisson /s/ STEPHEN J. HAGGE Director February 25, 2016 Stephen J. Hagge /s/ JOHN D. JOHNSON Director February 25, 2016 John D. Johnson /s/ ROBERT G. KUHBACH Director February 25, 2016 Robert G. Kuhbach /s/ ANNE P. NOONAN Director February 25, 2016 Anne P. Noonan /s/ EDWARD A SCHMITT Director February 25, 2016 Edward A. Schmitt /s/ THERESA E. WAGLER Director February 25, 2016 Theresa E. Wagler EXHIBIT NO. DESCRIPTION 2.1 Agreement and Plan of Merger, dated as of July 21, 2005, by and among CF Industries Holdings, Inc., CF Merger Corp. and CF Industries, Inc. (incorporated by reference to Exhibit 2.1 to Amendment No. 3 to CF Industries Holdings, Inc.'s Registration Statement on Form S-1 filed with the SEC on July 26, 2005, File No. 333-124949)
2.2
Agreement and Plan of Merger, dated as of March 12, 2010, by and among CF Industries Holdings, Inc., Composite Merger Corporation and Terra Industries Inc. (incorporated by reference to Exhibit 2.1 to CF Industries Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on March 12, 2010, File No. 001-32597)
2.3
Purchase and Sale Agreement, dated August 2, 2012, between CF Industries Holdings, Inc. and Glencore International plc.plc (incorporated by reference to Exhibit 2.1 to CF Industries Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on August 6, 2012, File No. 001-32597)
2.4 3.1
Asset Purchase Agreement, dated October 28, 2013, among CF Industries Holdings, Inc., CF Industries, Inc. and The Mosaic Company (incorporated by reference to Exhibit 2.1 to CF Industries Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on November 1, 2013, File No. 001-32597) 2.5 Combination Agreement, dated August 6, 2015, by and among CF Industries Holdings, Inc., Darwin Holdings Limited, Beagle Merger Company LLC and OCI N.V. (incorporated by reference to Exhibit 2.1 to CF Industries Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on August 12, 2015, File No. 001-32597) 2.6 2.7 2.8 2.9 2.10 2.11 2.12 EXHIBIT NO. DESCRIPTION 2.13 3.1 August 11, 2005,May 14, 2014, File No. 333-127422)333-195936)
3.2(a)3.2
By-lawsBylaws of CF Industries Holdings, Inc., as amended through December 12, 2008effective October 14, 2015 (incorporated by reference to Exhibit 3.1 to CF Industries Holdings, Inc.'s’s Current Report on Form 8-K filed with the SEC on December 18, 2008,October 16, 2015, File No. 001-32597)
3.2(b)Amendment No. 1 to the Amended and Restated By-laws of CF Industries Holdings, Inc. adopted December 11, 2012 (incorporated by reference to Exhibit 3.1 to CF Industries Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on December 11, 2012, File No. 001-32597)
4.1
4.1Amendment No. 2 to CF Industries Holdings, Inc.'s Registration StatementQuarterly Report on Form S-110-Q filed with the SEC on July 20, 2005,May 7, 2015, File No. 333-124949)001-32597)
4.2
Rights Agreement,Indenture, dated as of July 21, 2005, between CF Industries Holdings, Inc. and The Bank of New York, as the Rights Agent (incorporated by reference to Exhibit 4.2 to Amendment No. 3 to CF Industries Holdings, Inc.'s Registration Statement on Form S-1 filed with the SEC on July 26, 2005, File No. 333-124949)4.3First Amendment to the Rights Agreement, dated as of August 31, 2010, between the CF Industries Holdings, Inc. and Mellon Investor Services LLC, as successor to The Bank of New York (incorporated by to Exhibit 4.1 to CF Industries Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on September 3, 2010, File No. 001-32597)4.4Indenture, dated April 23, 2010, among CF Industries, Inc., CF Industries Holdings, Inc. and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to CF Industries Holding, Inc.'s Current Report on Form 8-K filed with the SEC on April 27, 2010, File No. 001-32597)CF INDUSTRIES HOLDINGS, INC.EXHIBIT NO.DESCRIPTION 4.54.3 First Supplemental Indenture, dated as of April 23, 2010, among CF Industries, Inc., CF Industries Holdings, Inc. and the other guarantors named therein and Wells Fargo Bank, National Association, as trustee, relating to CF Industries, Inc.'s 6.875% Senior Notes due 2018 (includes form of note) (incorporated by reference to Exhibit 4.2 to CF Industries Holding, Inc.'s Current Report on Form 8-K filed with the SEC on April 27, 2010, File No. 001-32597)
4.64.4
Second Supplemental Indenture, dated as of April 23, 2010, among CF Industries, Inc., CF Industries Holdings, Inc. and the other guarantors named therein and Wells Fargo Bank, National Association, as trustee, relating to CF Industries, Inc.'s 7.125% Senior Notes due 2020 (includes form of note) (includes form of note) (incorporated by reference to Exhibit 4.3 to CF Industries Holding, Inc.'s Current Report on Form 8-K filed with the SEC on April 27, 2010, File No. 001-32597)
10.14.5
Consent DecreeIndenture, dated August 4, 2010as of May 23, 2013, among the United States of America, the Florida Department of Environmental Protection and CF Industries, Inc., CF Industries Holdings, Inc. and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 10.14.1 to CF Industries Holding, Inc.'s Current Report on Form 8-K filed with the SEC on May 23, 2013, File No. 001-32597)4.6 First Supplemental Indenture, dated as of May 23, 2013, among CF Industries, Inc., CF Industries Holdings, Inc. and Wells Fargo Bank, National Association, as trustee, relating to CF Industries, Inc.'s 3.450% Senior Notes due 2023 (includes form of note) (incorporated by reference to Exhibit 4.2 to CF Industries Holding, Inc.'s Current Report on Form 8-K filed with the SEC on May 23, 2013, File No. 001-32597) 4.7 Second Supplemental Indenture, dated as of May 23, 2013, among CF Industries, Inc., CF Industries Holdings, Inc. and Wells Fargo Bank, National Association, as trustee, relating to CF Industries, Inc.'s 4.950% Senior Notes due 2043 (includes form of note) (incorporated by reference to Exhibit 4.3 to CF Industries Holding, Inc.'s Current Report on Form 8-K filed with the SEC on May 23, 2013, File No. 001-32597) 4.8 August 10, 2010,March 11, 2014, File No. 001-32597)
10.24.9
Change in Control Severance Agreement, effectiveApril 29, 2005, and amended and restated as of July 24, 2007, by andMarch 11, 2014, among CF Industries, Inc., CF Industries Holdings, Inc. and Stephen R. WilsonWells Fargo Bank, National Association, as trustee, relating to CF Industries, Inc.'s 5.375% Senior Notes due 2044 (includes form of note) (incorporated by reference to Exhibit 10.14.3 to CF Industries Holdings, Inc.'s QuarterlyCurrent Report on Form 10-Q8-K filed with the SEC on November 5, 2007,March 11, 2014, File No. 001-32597)**
4.10 10.3Note Purchase Agreement, dated September 24, 2015, among CF Industries Holdings, Inc., CF Industries, Inc. and the Purchasers party thereto (incorporated by reference to Exhibit 4.1 to CF Industries Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on September 30, 2015, File No. 001-32597) EXHIBIT NO. DESCRIPTION 4.11 10.1 Change in Control Severance Agreement, effective as of April 29, 2005, and amended and restated as of July 24, 2007, by and among CF Industries, Inc., CF Industries Holdings, Inc. and Douglas C. Barnard (incorporated by reference to Exhibit 10.3 to CF Industries Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the SEC on November 5, 2007, File No. 001-32597)**
10.410.2
Change in Control Severance Agreement, effective as of September 1, 2009, amended as of October 20, 2010, and amended further and restated as of February 17, 2014, by and between CF Industries Holdings, Inc. and Christopher D. Bohn (incorporated by reference to Exhibit 10.3 to CF Industries Holdings, Inc.'s Annual Report on Form 10-K filed with the SEC on February 27, 2014, File No. 001-32597)**10.3 Change in Control Severance Agreement, effective as of November 21, 2008, by and between CF Industries Holdings, Inc. and Bert A. Frost (incorporated by reference to Exhibit 10.11 to CF Industries Holdings, Inc.'s Annual Report on Form 10-K filed with the SEC on February 26, 2009, File No. 001-32597)**
10.510.4
on Form SC 14D9 filed with the SEC on March 23, 2009, File No. 005-80934)**
10.6(a)10.5
Change in Control Severance Agreement, effective as of August 22, 2011, amended as of April 27, 2012, and amended further and restated as of February 17, 2014, by and between CF Industries Holdings, Inc. and Dennis P. Kelleher (incorporated by reference to Exhibit 10.199.2 to CF Industries Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the SEC on November 3, 2011, File No. 001-32597)**10.6(b)Letter Agreement, dated as of April 27, 2012, relating to the Change in Control Severance Agreement effective as of August 22, 2011, by and between CF Industries Holdings, Inc. and Dennis P. Kelleher (incorporated by reference to Exhibit 99.1 to CF Industries Holdings,Holding, Inc.'s Current Report on Form 8-K filed with the SEC on April 27, 2012,February 20, 2014, File No. 001-32597)001-32597***CF INDUSTRIES HOLDINGS, INC.EXHIBIT NO.DESCRIPTION 10.710.6 on Form SC 14D9 filed with the SEC on March 23, 2009, File No. 005-80934)**
10.810.7
Change in Control Severance Agreement, effective as of April 29, 2005 and amended and restated as of July 24, 2007, by and among CF Industries, Inc., CF Industries Holdings, Inc. and Philipp P. Koch (incorporated by reference to Exhibit 10.5 to CF Industries Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the SEC on November 5, 2007, File No. 001-32597)**
10.9Change in Control Severance Agreement, effective as of June 9, 2009, by and between CF Industries Holdings, Inc. and Lynn F. White (incorporated by reference to Exhibit (e)(15) to CF Industries Holdings, Inc.'s Schedule 14D-9/A on Form SC 14D9/A filed with the SEC on June 17, 2009, File No. 005-80934)**
10.8
10.10
Change in Control Severance Agreement, effective as of April 24, 2007, amended as of July 24, 2007, and amended further and restated as of July 24, 2007,February 17, 2014, by and between CF Industries Holdings, Inc. and W. Anthony Will (incorporated by reference to Exhibit 99.1 to CF Industries Holding, Inc.'s Current Report on Form 8-K filed with the SEC on February 20, 2014, File No. 001-32597)**10.9 QuarterlyAnnual Report on Form 10-Q10-K filed with the SEC on November 5, 2007,February 27, 2014, File No. 001-32597)**
10.1110.10
Form of Amendment to Change in Control Severance Agreement (incorporated by reference to Exhibit 10.3 to CF Industries Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on December 24, 2015, File No. 001-32597)**10.11 Form of Indemnification Agreement with Officers and Directors (incorporated by reference to Exhibit 10.10 to Amendment No. 2 to CF Industries Holdings, Inc.'s Registration Statement on Form S-1 filed with the SEC on July 20, 2005, File No. 333-124949)**
10.12 10.12 10.13 CF Industries Holdings, Inc. 2009 Equity and Incentive Plan (incorporated by reference to Appendix A to CF Industries Holdings, Inc.'s Definitive Proxy Statement on Schedule 14A filed with the SEC on March 16, 2009, File No. 001-32597)**
10.13EXHIBIT NO. DESCRIPTION 10.14 10.15 10.16 Form of Non-Qualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.12 to Amendment No. 3 to CF Industries Holdings, Inc.'s Registration Statement on Form S-1 filed with the SEC on July 26, 2005, File No. 333-124949)**
10.1410.17
Form of Non-Qualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.19 to CF Industries Holdings, Inc.'s Annual Report on Form 10-K filed with the SEC on February 27, 2008, File No. 001-32597)**
10.1510.18
Form of Non-Qualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.6 to CF Industries Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the SEC on August 3, 2009, File No. 001-32597)**
10.19 10.16
Form of Non-Qualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.17 to CF Industries Holdings, Inc.'s Annual Report on Form 10-K filed with the SEC on February 27, 2014, File No. 001-32597)** 10.20 Form of Non-Qualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.2 to CF Industries Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the SEC on November 6, 2014, File No. 001-32597)** 10.21 10.22 10.23 Form of Non-Qualified Stock Option Award Agreement** 10.24
10.1710.25
Net Operating Loss dated as of August 16, 2005, by and among CF Industries Holdings, Inc., CF Industries, Inc. and Existing Stockholders of CF Industries, Inc. (incorporated by reference to Exhibit 10.810.19 to CF Industries Holdings, Inc.'s Annual Report on Form 10-K filed with the SEC on February 27, 2014, File No. 001-32597)**10.26 9, 2005,6, 2014, File No. 001-32597)**CF INDUSTRIES HOLDINGS, INC.EXHIBIT NO.DESCRIPTION 10.1810.27 Creditdated as of May 1, 2012 among(incorporated by reference to Exhibit 10.3 to CF Industries Holdings, Inc.,'s Quarterly Report on Form 10-Q filed with the SEC on May 7, 2015, File No. 001-32597)**10.28 Form of Restricted Stock Unit Award Agreement** EXHIBIT NO. DESCRIPTION 10.29 ,'s Annual Report on Form 10-K filed with the various lenders party thereto, Morgan Stanley Bank, N.A., as issuing bank, and Morgan Stanley Senior Funding,SEC on February 27, 2014, File No. 001-32597)**10.30 , as administrative agent's Quarterly Report on Form 10-Q filed with the SEC on November 6, 2014, File No. 001-32597)**10.31 10.32 Holding,Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the SEC on August 6, 2015, File No. 001-32597)**10.33 Form of Performance Restricted Stock Unit Award Agreement** 10.34 10.35 May 1, 2012,December 24, 2015, File No. 001-32597)**
10.1910.36
Form of Non-Employee Director Restricted Stock AwardApril 27, 2009,December 24, 2015, File No. 001-32597)**
10.2010.37
Commitment Letter, dated August 6, 2015, by and among Morgan Stanley Senior Funding, Inc., Goldman Sachs Bank USA and CF Industries Holdings, Inc. Non-Employee Director Compensation Policy (incorporated by reference to Exhibit 10.2310.1 to CF Industries Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on August 12, 2015, File No. 001-32597)10.38 10.39 10.40 EXHIBIT NO. DESCRIPTION 10.41 10.42 AnnualCurrent Report on Form 10-K8-K filed with the SEC on February 25, 2011,December 18, 2015, File No. 001-32597)**
12
Ratio of Earningsearnings to Fixed Chargesfixed charges
21
Subsidiaries of the registrant
23
Consent of KPMG LLP, independent registered public accounting firm
31.1
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2
Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
95Mine Safety Disclosure
101
1012012,2015, formatted in XBRL (Extensible(eXtensible Business Reporting Language) includes:: (1) Consolidated Statements of Operations, (2) Consolidated Statements of Comprehensive Income, (3) Consolidated Balance Sheets, (4) Consolidated Statements of Cash Flows,Equity, (5) Consolidated Statements of EquityCash Flows and (6) the Notes to Consolidated Financial Statements**Management contract or compensatory plan or arrangement required to be filed (and/or incorporated by reference) as an exhibit to this Annual Report on Form 10-K pursuant to Item 15(a)(3) of Form 10-K.* Portions omitted pursuant to an order granting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended. ** Management contract or compensatory plan or arrangement required to be filed (and/or incorporated by reference) as an exhibit to this Annual Report on Form 10-K pursuant to Item 15(a)(3) of Form 10-K.