2017. potassium. Our Ince. supply agreement under which CHS has the right to purchase annually from CFN up to approximately 1.1 million tons of granular urea and 580,000 tons of UAN at market prices. As a result of its minority equity interest in CFN, CHS is entitled to semi-annual cash distributions from CFN. We are also entitled to semi-annual cash distributions from CFN. See Note 17—Noncontrolling Interests for additional information on our strategic venture with CHS. the “Nitrogen Product Segments." For the $4.57 billion, respectively. We operated as a traditional manufacturing and supply cooperative until 2002, when we adopted a new business model that established financial performance as our principal objective, rather than assured supply to our owners. A critical aspect of the new business model was to establish a more economically driven approach to the marketplace. measurement of segment profitability reviewed by management. See Note 21—Segment Disclosures for additional information. Nitrogen Fertilizer Products Ammonia Granular urea UAN AN Other nitrogen products(1) Total industrial markets. Donaldsonville, Louisiana(6) Medicine Hat, Alberta 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. The complex is owned by CFL, which until April 30, 2013, was a variable interest entity which we consolidated in our financial statements. In April 2013, we purchased the remaining noncontrolling interest. CFL Resources—Capacity Expansion Projects and Restricted Cash. Nitrogen Fertilizer Raw Materials activities. Our United Kingdom nitrogen production facilities mainly ship products via truck. Ince manufacturing facilities. have operating results subsequent to that quarter. 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 existing or new environmental, health and safety laws in the future. Additionally, future environmental, health and safety laws and regulations or reinterpretation of current laws and regulations may require us to make substantial expenditures. 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. fee. Request. Regulation of Greenhouse Gases program with WCI. The current cap will mandate that, by 2020, GHG emissions decline by 15% below levels seen in 1990. Plants lower realized margins by taking higher cost production facilities off line. nitrogen fertilizer. The period of time that these conditions will persist and the degree to which they will impact our business, financial condition, results of operations and cash flows is uncertain. Consolidation in the industry has increased, and future consolidation is expected to further increase, the resources of several of our competitors. For example, in September 2016, our competitors Agrium Inc. and Potash Corporation of Saskatchewan Inc. announced plans to merge. Some of cash flows. While the current Renewable Any reduction in the demand for chemical fertilizer products, including any limitation on the use and application of chemical fertilizer, could affect the demand for our products, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. Additionally, due to the aging infrastructure of certain bridges, roadways, rail lines, river locks, and equipment that our third party service providers utilize, we may experience delays in both the receipt of raw materials or the shipment of finished product while repairs, maintenance or replacement activities are conducted. Also, certain third party service providers, particularly railroads, have experienced periodic service slowdowns due to capacity constraints in their systems which impact the shipping times of our products. Increases in transportation costs, or changes in such costs relative to transportation costs incurred by our competitors, and any railroad industry initiatives that may impact our ability to transport our products, could have a material adverse effect on our business, financial condition, results of operations and cash flows. 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 plant 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. There can be no assurance that we will be able to buy and maintain insurance with adequate limits and reasonable pricing terms and conditions. Adverse weather conditions may decrease demand for our fertilizer products, increase the cost of natural gas or materially disrupt our operations. business. our projected returns from any future acquisitions, partnerships, joint ventures, business combination transactions or other major investments. Among the risks associated with the pursuit and consummation of acquisitions, partnerships, joint ventures or other major investments or business combination transactions are those involving: existing permit or approval, or a determination that we have violated a law or permit as a result of a governmental inspection of our facilities could have a material adverse effect on our ability to continue operations at 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. 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 financial instruments or by the trigger of any cross default provisions or credit support requirements. equipment that may be difficult to replace and could result in operational disruptions. venture. us. operations or cash flows. Quality (MDEQ) of MDEQ’s intent to impose a civil penalty of an amount exceeding $100,000 for alleged violations of certain fuel firing rate limits in the Company’s Clean Air Act Title V Permit for the Yazoo City, Mississippi facility. Representatives of the Company attended an administrative conference with MDEQ in early July 2016 to discuss MDEQ’s findings and calculation of the proposed penalty. On September 23, 2016, the Company agreed to a settlement that will require it to pay $95,625 to resolve the alleged violations. The Company expects to finalize the terms of an Agreed Order with MDEQ that will fully and finally resolve the alleged permit limit exceedances at issue in this matter. 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 First Quarter Second Quarter Third Quarter Fourth Quarter First Quarter Second Quarter Third Quarter Fourth Quarter October 1, 2013 - October 31, 2013 November 1, 2013 - November 30, 2013 December 1, 2013 - December 31, 2013 Total 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 We operate in a highly competitive, global industry. Our Global Supply Factors lower priced environment. Imports account for a significant portion of the nitrogen fertilizer consumed in North America. Producers of Termination of Agreement to Combine with Certain of OCI N.V.’s Businesses 2015 included a $70 million loss. factors noted above. In 2016 and 2015, equity in (losses) earnings of operating affiliates also includes impairments of our equity method investment in PLNL. on the gain. We own 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 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 noncontrolling interest 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 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 Year Ended December 31, ammonia and UAN sales volume. Our ammonia sales volume was lower in 2015 partly due to a poor fall application season in North America as a result of poor weather conditions in the Midwest. The season started late and ended early in November due to snow in the Midwest. In addition, our ammonia and UAN sales volume were lower as customers were hesitant to buy in a declining pricing environment. projects compared to $74 million in 2014. 2014. Tax (Benefit) Provision of operating affiliates in 2015. Our income tax provision does not include a tax benefit for the impairment of our equity method investment as it does not give rise to a tax deduction. Keytrade during the second quarter of 2015. 2015 for $527 million, or an average cost of $59 per share. The total shares repurchased during 2015 represented 4% of the shares outstanding as of December 31, 2014. Net sales Cost of sales Gross margin Gross margin percentage 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 Granular urea UAN AN Cost of natural gas (per MMBtu)(1) Average daily market price of natural gas (per MMBtu) Henry Hub (Louisiana) Depreciation and amortization Capital expenditures Production volume by product (000s) Ammonia(2) 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 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(1) Capital expenditures Production volume by product (000s) Phosphate rock Sulfuric acid Phosphoric acid as P2O5(2) DAP/MAP Cash and Cash Equivalents INDUSTRIES HOLDINGS, INC. the following Public Senior Notes Public Senior Notes, provided that such requirement will no longer apply with respect to the Public Senior Notes due 2023, 2034, 2043 and 2044 following the repayment of the Public Senior Notes due 2018 and 2020 or the subsidiaries of ours, other than CF Industries, otherwise becoming no longer subject to such a requirement to guarantee the Public Senior Notes due 2018 and 2020. this report for additional information. Customer advances, which typically represent a portion of the contract's sales value, are received shortly after the contract is executed, with any remaining unpaid amount generally being collected by the time the product is shipped, thereby reducing or eliminating the accounts receivable related to such sales. Any cash payments received in advance from customers in connection with forward sales contracts are reflected on our consolidated balance sheets as a current liability until The ISDA agreements are master netting arrangements commonly used for over-the-counter (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. be required in connection with such derivatives. operations is a net loss of $23 million. the prior year period as we entered 2016 with a lower level of customer advances than in 2015 due to customers’ hesitancy to enter into prepaid contracts in a declining fertilizer price environment. in 2015 as compared to 2014 when inventory levels declined. phosphate business. Contractual Obligations Debt Long-term debt(1) Interest payments on long-term debt(1) Other Obligations Operating leases Equipment purchases and plant improvements Capacity expansion projects(2) Transportation(3) Purchase obligations(4)(5) Contributions to Pension Plans(6) Net Operating Loss Settlement(7) Total(8) Other Long-Term Obligations Asset retirement obligations(1)(2) Environmental remediation liabilities Total Asset retirement obligations Off-Balance Sheet Arrangements Property, Plant and Equipment We have PLNL. involving potentially two steps. The first step compares the fair value of a reporting unit with its carrying amount, including goodwill. We use an other intangible assets. 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 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 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 Restricted cash Accounts receivable—net Inventories—net Deferred income taxes Prepaid income taxes Assets held for sale Other Total current assets Property, plant and equipment—net Asset retirement obligation funds Investments in and advances to affiliates Goodwill Noncurrent assets held for sale 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 Liabilities held for sale Other Total current liabilities Long-term debt Deferred income taxes Noncurrent liabilities held for sale Other noncurrent liabilities Equity: Stockholders' equity: Preferred stock—$0.01par value, 50,000,000 shares authorized Common stock—$0.01 par value, 500,000,000 shares authorized, 2013—56,733,712 shares issued and 2012—62,961,628 shares issued Paid-in capital Retained earnings Treasury stock—at cost, 2013—885,518 shares and 2012—10,940 shares Accumulated other comprehensive loss Total stockholders' equity Noncontrolling interest Total equity Total liabilities and equity 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 Net earnings Other comprehensive income (loss) 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 Acquisitions of noncontrolling interests in CFL Acquistion of treasury stock under employee stock plans Purchases of treasury stock Retirement of treasury stock 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 ($2.20 per share) Distributions declared to noncontrolling interests Effect of exchange rates changes Balance at December 31, 2013 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 disposal of property, plant and equipment and non-core assets Undistributed earnings of affiliates—net of taxes Changes in: Accounts receivable—net Inventories—net Accrued income taxes Accounts payable and accrued expenses Customer advances Margin deposits 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 Sales and maturities of short-term and auction rate securities Canadian terminal acquisition Deposits to restricted cash funds Deposits to asset retirement obligation funds Other—net Net cash used in investing activities Financing Activities: Proceeds from long-term borrowings Financing fees Purchase of treasury stock Payments of long-term debt Advances from unconsolidated affiliates Repayments of advances from unconsolidated affiliates Acquisitions of noncontrolling intrests in CFL Dividends paid on common stock Distributions to noncontrolling interest Issuances of common stock under employee stock plans Excess tax benefit from stock-based compensation Other Net cash used in financing activities Effect of exchange rate changes on cash and cash equivalents (Decrease) 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 these foreign currency derivatives settled in 2016. information. each reacquisition of common stock, the number of shares and the acquisition price for those shares is added to the treasury stock count and total value. When treasury shares are retired, we allocate the excess of the repurchase price over the par value of shares acquired to both retained earnings and paid-in capital. The portion allocated to paid-in capital is determined by applying the average paid-in capital per share, and the remaining portion is recorded to retained earnings. Noncontrolling interest: Beginning balance Earnings attributable to noncontrolling interest Declaration of distributions payable Acquisitions of noncontrolling interests in CFL 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 Restricted cash Asset retirement obligation funds 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 Restricted cash Unrealized gains on derivative instruments Asset retirement obligation funds 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 trusts Total assets at fair value Unrealized losses on derivative instruments Total liabilities at fair value statement of operations is a net loss of $23 million. Long-term debt, including current portion The 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 to be recognized in the future. employees and the two United Kingdom plans are closed to new employees and 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 new mortality assumptions. Other noncurrent asset Accrued expenses Other noncurrent liability 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 expenses on our consolidated statement of operations for the year ended December 31, 2014. Prior service cost Net actuarial loss 2013 As of year-end Fair value of plan assets Benefit obligation Accumulated benefit obligation For the year Net periodic benefit cost Funding contributions 2012 As of year-end Fair value of plan assets Benefit obligation Accumulated benefit obligation For the year Net periodic benefit cost Funding contributions 2014 2015 2016 2017 2018 5 years thereafter The following assumptions were used in determining the benefit obligations and expense: 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 Effect on: Total of service and interest cost components for 2013 Benefit obligation at December 31, 2013 The target asset allocation for the CF Canadian plan is 60% non-equity and 40% equity, and for the Terra Canadian plan is 75% non-equity and 25% equity. The equity investments are passively managed portfolios that diversify assets across multiple securities, economic sectors and countries. The non-equity investments are high quality passively managed portfolios that diversify assets across economic sectors, countries and maturity spectrums. This investment strategy is achieved through the use of mutual funds. 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 Loss on property, plant and equipment and non-core assets—net Expansion project costs Gain on currency derivatives Engineering studies Closed facilities costs Other Interest on borrowings Fees on financing agreements Interest on tax liabilities Interest capitalized and other 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 Accretion expense Liabilities incurred Expenditures Change in estimate Obligation at December 31, 2013 Domestic Non-U.S. Current Federal Foreign State Deferred Federal Foreign State Income tax provision Earnings before income taxes and equity in earnings of non-operating 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 Valuation allowance Non-deductible capital costs Federal tax settlement 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 Intangible asset Federal tax settlement 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 lapsed statutes of limitations Reductions related to settlements with tax jurisdictions Ending balance Inventories-net Total current assets Property, plant and equipment, net Asset retirement obligation funds Goodwill Other assets Total assets held for sale Accrued expenses Asset retirement obligations—current Total current liabilities Asset retirement obligations Total liabilities held for sale Trade Other Fertilizer Raw materials, spare parts and supplies Prepaid expenses Unrealized gains on derivatives Margin deposits Product exchanges Financial advances 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 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 at December 31, 2012 Goodwill related to acquisitions of Canadian terminals Goodwill reclassified to non-current assets held for sale Balance at December 31, 2013 Intangible assets: Customer Relationships TerraCair Brand Total intangible assets 2014 2015 2016 2017 2018 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 expansion project costs Accrued share repurchase Accrued interest Asset retirement obligations—current portion Other Unsecured senior notes: 6.875% due 2018 7.125% due 2020 3.450% due 2023 4.950% due 2043 Less: Current portion Net long-term debt sub-limit of $125 million. Borrowings under the Revolving Credit Agreement outstanding under the Revolving Credit Agreement as of December 31, 2016 or December 31, 2015. Maximum borrowings outstanding under the Revolving Credit Agreement during the twelve months ended December 31, 2016 were $150 million. The weighted-average annual interest rate of borrowings under the Revolving Credit Agreement during the twelve months ended December 31, 2016 was 1.85%. Maximum borrowings under the Revolving Credit Agreement during the twelve months ended December 31, 2015, were $367 million with a weighted-average annual interest rate of 1.47%. The indentures governing the Public Senior Notes due 2023, 2034, 2043 and 2044 following the repayment of the Public Senior Notes due 2018 and 2020 or the subsidiaries of ours, other than CF Industries, otherwise becoming no longer subject to such a requirement to guarantee the Public Senior Notes due 2018 and 2020. 2014 2015 2016 2017 2018 Thereafter Asset retirement obligations Less: Current portion in accrued expenses Noncurrent portion Benefit plans and deferred compensation Tax related liabilities Capacity expansion project costs Environmental and related costs Other As a result, changes in fair value of these contracts are recognized in earnings. As of December 31, operations. We expect that the amounts to be reclassified within the next twelve months will be insignificant. 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 derivative transactions between the parties or payment 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. December 31, 2013 Total derivative assets Total derivative liabilities Net assets December 31, 2012 Total derivative assets Total derivative liabilities Net assets Beginning balance Exercise of stock options Issuance of restricted stock(1) Forfeitures of restricted stock Purchase of treasury shares(2) Ending balance Preferred Stock 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 net earnings Loss arising during the period Effect of exchange rate changes and deferred taxes Balance at December 31, 2012 Unrealized gain Reclassification to earnings Gain arising during the period Effect of exchange rate changes and deferred taxes Balance at December 31, 2013 Unrealized Gain (Loss) on Securities Available-for-sale securities Total before tax Tax effect Net of tax Defined Benefit Plans Amortization of transition obligation Amortization of prior service cost Amortization of net loss Total before tax Tax effect Net of tax Total reclassifications for the period for future awards under the 2014 Equity and Incentive Plan. The 2014 Equity and Incentive Plan provides that no more than 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 granted Outstanding at December 31, 2012 Granted Exercised Forfeited Outstanding at December 31, 2013 Exercisable at December 31, 2013 Cash received from stock option exercises Actual tax benefit realized from stock option exercises Pre-tax intrinsic value of stock options exercised The following table summarizes information about stock options outstanding and exercisable $ 14.83 - $ 20.00 $ 20.01 - $100.00 $100.01 - $207.95 Awards, Restricted Stock Units and Performance Share Units During the vesting period, the holders of the RSUs are paid dividend equivalents in cash to the extent we pay cash dividends. PSUs accrue dividend equivalents to the extent we pay cash dividends on our common stock during the performance and 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. Outstanding at December 31, 2012 Granted Restrictions lapsed (vested) Forfeited Outstanding at December 31, 2013 Actual tax benefit realized from restricted stock vested Fair value of restricted stock vested Compensation Cost Stock-based compensation expense(1) Income tax benefit Stock-based compensation expense, net of income taxes As of December 31, Cash paid during the year for Interest Income taxes—net of refunds of the explosion. The cases have been consolidated for discovery and pretrial proceedings in the District Court of McLennan County under the caption "In re: West Explosion Cases." The two-year statute of limitations expired on April 17, 2015. As of that date, over 400 plaintiffs had filed claims, including at least 9 entities, 325 individuals, and 80 insurance companies. Plaintiffs allege various theories of negligence, strict liability, and breach of warranty under Texas law. Although we do not own or operate the facility or directly sell our future in the West Fertilizer Co. litigation could negatively affect our results in the period of recognition. However, based upon currently available information, including available insurance coverage, we do not believe that this litigation will have a material adverse effect on our consolidated financial position, results of operations or cash flows. Louisiana Environmental Matters Prior to the imposition of Section 185 fees, the Year ended December 31, 2013 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, 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 DAP MAP Potash 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, 2013 Year ended December 31, 2012 Year ended December 31, 2011 Capital expenditures Year ended December 31, 2013 Year ended December 31, 2012 Year ended December 31, 2011 Assets December 31, 2013 December 31, 2012 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 sales in 2015 or 2014. 2013 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 2012 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 Non-Guarantors. 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 losses of non-operating affiliates Income tax provision (benefit) Equity in losses 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 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 Assets Current assets: Cash and cash equivalents Restricted cash Accounts and notes receivable-net Inventories—net Prepaid income taxes Deferred income taxes Assets held for sale Other Total current assets Property, plant and equipment—net Deferred income taxes Investments in and advances to affiliates Due from affiliates Goodwill Noncurrent assets held for sale Other assets Total assets Liabilities and Equity Current liabilities: Accounts and notes payable and accrued expenses Income taxes payable Customer advances Liabilities held for sale Other Total current liabilities Long-term debt Deferred income taxes Due to affiliates Noncurrent liabilities held for sale 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 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 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 Undistributed loss (earnings) of affiliates—net Due to / from affiliates—net Changes in: Accounts and notes receivable—net Inventories—net Accrued income taxes Accounts and notes payable and accrued expenses Customer advances Margin deposits 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 Sales and maturities of short-term and auction rate securities Canadian terminal acquisition Deposits to restricted cash funds Deposits to asset retirement obligation funds Other—net Net cash provided by (used in) investing activities Financing Activities: Proceeds from long-term borrowings Financing fees Purchase of treasury stock Acquisitions of noncontrolling interests in CFL Dividends paid on common stock Distributions to/from noncontrolling interest Issuances of common stock under employee stock plans Excess tax benefit from stock-based compensation Dividends to / from affiliates Other—net 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 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 principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. Board. stock or cash-based awards. Equity compensation plans approved by security holders Equity compensation plans not approved by security holders TotalUse these links to rapidly review the documentSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-KFORM 10-K (Mark One) ý For the fiscal year ended December 31, 2013OR2016OR 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 Pursuantregistered pursuant to Section 12(b) of the Act: New York Stock Exchange Inc.
Yeso Noý$9,908,048,406$5,597,334,751 based on the closing sale price of common stock on June 30, 2013. 55,465,8802016.atas of January 31, 2014.20142017 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 20132016 fiscal year, or, if we do not file the proxy statementProxy 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. Item 1. Business1Item 1A. Risk Factors18Item 1B. Unresolved Staff Comments33Item 2. Properties33Item 3. Legal Proceedings33Item 4. Mine Safety Disclosures34PART II 35 36 38 74 82 149 149 152 Executive Compensation152 153 154 "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 footnotenote 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.core marketmanufacturing and distribution facilities are concentrated in the midwestern United States and other major agricultural areas of the United States, Canada and Canada.the United Kingdom. We also export nitrogen fertilizer products from our Donaldsonville, Louisiana and Yazoo City, Mississippi manufacturing facilities, and phosphate fertilizer products from our Florida phosphate operations through our Tampa port facility. In October 2013, we entered into a definitive agreement with the Mosaic Company (Mosaic) to sell our entire phosphate miningUnited Kingdom manufacturing facilities in Billingham and manufacturing business, which is located in Florida, for a purchase price of approximately $1.4 billion in cash, subject to adjustment as provided in the agreement, and entered into two agreements to supply ammonia to Mosaic. The first agreement, which is not conditioned upon completion of the phosphate business sale transaction, provides for us to supply between 600,000 and 800,000 tons of ammonia per year from our Donaldsonville, Louisiana nitrogen complex beginning no later than 2017. The second agreement provides for us to supply approximately 300,000 tons of ammonia per year sourced from our Point Lisas Nitrogen Limited (PLNL) joint venture beginning at the closing of the phosphate business sale transaction. The closing of the phosphate business sale transaction is subject to various conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act), approvals under applicable foreign antitrust laws, receipt of other governmental and third party consents and other customary closing conditions. The operating results of the phosphate mining and manufacturing business will continue to be reported in our consolidated results of operation until the sale occurs. In January 2014, we were notified that the U.S. Department of Justice closed its review and terminated the waiting period under the HSR Act relating to the phosphate business sale transaction. The phosphate business sale transaction is expected to close in the first half of 2014. For additional details regarding this sale, including the assumption of certain liabilities by Mosaic, see Note 12—Assets and Liabilities Held for Sale in the consolidated financial statements.nitrogen segment assets include:•sixNorth America), Medicine Hat, Alberta (the largest nitrogen fertilizer complex in Canada),the world); Port Neal, Iowa, Courtright, Ontario,Iowa; Yazoo City, Mississippi,Mississippi; and Woodward, Oklahoma;
Oklahoma. These facilities are owned by 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.•50%strategic venture with CHS on February 1, 2016, at which time CHS purchased a minority equity interest in KEYTRADE AG (Keytrade),CFN for $2.8 billion. On February 1, 2016, CHS also began receiving deliveries pursuant to a global fertilizer trading company headquartered near Zurich, Switzerland.sellterminate the Combination Agreement by mutual written consent. Pursuant to the Termination Agreement, CF Holdings paid OCI a termination fee of $150 million, which is included in transaction costs in our consolidated statement of operations. See Note 4—Acquisitions and Divestitures for additional information.the assetsCompany (Mosaic) for approximately $1.4 billion in cash. Our phosphate mining and liabilities ofmanufacturing business was reported in our phosphate segment, including an integrated ammoniumwhich reflects the reported results of the phosphate fertilizer complex and a phosphate rock mine and associated beneficiation plant—but excluding accounts receivable, accounts payable and certainbusiness through March 17, 2014, plus the continuing sales of the phosphate inventory which will be retained by us and settled in the ordinary course—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. See Note 4—Acquisitions and Divestitures for additional information.classifiedalso referred to throughout this document as assets or liabilities held for sale.yearyears ended December 31, 2013,2016, 2015 and 2014, we sold 12.917.0 million, 13.7 million and 13.3 million product tons of nitrogen fertilizers and 1.9 million tons of phosphate fertilizers,from the Nitrogen Product Segments generating net sales of $5.5$3.69 billion, $4.31 billion and pre-tax earnings of $2.2 billion.thethis Annual Report on Form 10-K.CF INDUSTRIES HOLDINGS, INC.Inc., now our wholly-owned subsidiary, were cancelledcanceled in exchange for all of the proceeds of the offering and shares of our common stock.Operating Segments Our business is divided into two operating segments,nitrogen segment andremaining noncontrolling interest in Canadian Fertilizers Limited (CFL). phosphate segment. The nitrogen segment includes the manufacture and sale of ammonia, granular urea, UAN and AN. The phosphate segment includes the manufacture and sale of DAP and MAP. In October 2013, we entered into a definitive agreement with Mosaic to sell our entire phosphate mining and manufacturing business, which iswas located in Florida. For additional details regardingFlorida, to Mosaic for approximately $1.4 billion in cash.sale, includingAnnual Report on Form 10-K in product tons, which represents the assumptionweight of the product measured in short tons (one short ton is equal to 2,000 pounds). References to UAN product tons assume a 32% nitrogen content basis for production volume. liabilitiessupplementary volume information measured in nutrient tons. Nutrient tons represent the weight of the product’s nitrogen content, which varies by Mosaic, see Note 12—Assetsproduct. Ammonia represents 82% nitrogen content, granular urea represents 46% nitrogen content, UAN represents between 28% and Liabilities Held for Sale32% nitrogen content and AN represents between 29% and 35% nitrogen content. consolidated financial statements.SegmentProduct SegmentsTheNet sales shown do not reflect amounts used internally, such as ammonia, in the manufacture of other products. 2016 2015 2014 Tons Net Sales Tons Net Sales Tons Net Sales (tons in thousands; dollars in millions) Nitrogen Product Segments Ammonia 2,874 $ 981 2,995 $ 1,523 2,969 $ 1,576 Granular urea 3,597 831 2,460 788 2,459 915 UAN 6,681 1,196 5,865 1,480 6,092 1,670 AN 2,151 411 1,290 294 958 243 1,654 266 1,108 223 798 171 Total 16,957 $ 3,685 13,718 $ 4,308 13,276 $ 4,575 2013 2012 2011 Tons Net Sales Tons Net Sales Tons Net Sales (tons in thousands; dollars in millions) 2,427 $ 1,437.9 2,786 $ 1,677.6 2,668 $ 1,562.8 2,506 924.6 2,593 1,143.4 2,600 1,069.7 6,383 1,935.1 6,131 1,886.2 6,241 1,991.6 859 215.1 839 222.8 953 247.5 770 165.1 620 166.6 540 140.5 12,945 $ 4,677.8 12,969 $ 5,096.6 13,002 $ 5,012.1 Other segment products include DEF, urea liquor, nitric acid, aqua ammonia and NPKs.
CF INDUSTRIES HOLDINGS, INC.(1)Other nitrogen segment products include aqua ammonia, nitric acid, urea liquor and DEF.nitrogen segmentNitrogen Product Segments was $2,445.3 million, $2,913.6 million$0.84 billion, $1.55 billion and $2,563.2 million$1.77 billion for the fiscal years ended December 31, 2013, 20122016, 2015 and 2011,2014, respectively. Total assets for the nitrogen segment were $6.9 billion as of December 31, 2013 $6.0 billion as of December 31, 2012 and 2011.CF INDUSTRIES HOLDINGS, INC. We operate seven nitrogen fertilizer productionmanufacturing facilities in North America. We own four productionAmerica, including five nitrogen 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 facility in Verdigris, Oklahoma. In 2013,As of December 31, 2016, the combined production capacity of these seven facilities represented approximately 39%43%, 36%50%, 47%48% and 22%19% 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.fertilizer productionmanufacturing facilities: NPKs (tons in thousands) 4,335 1,390 3,255 2,835 — — Medicine Hat, Alberta 1,230 770 — 810 — — Port Neal, Iowa 1,230 110 800 1,400 — — 1,210 430 1,955 — — — Woodward, Oklahoma 480 130 810 45 — — 570 — 160 50 1,035 — 500 265 345 160 — — 380 20 — — 575 385 595 310 — — 625 — 10,530 3,425 7,325 5,300 2,235 385 Unconsolidated Affiliate 360 360 — — — — Total 10,890 3,785 7,325 5,300 2,235 385 Average Annual Capacity(1) Gross
Ammonia(2) Net
Ammonia(2) UAN(3) Urea(4) Ammonium
Nitrate(5) Fertilizer
Compounds (in thousands of tons) 3,050 1,110 2,415 1,680 — — 1,250 790 — 810 — — 380 30 800 50 — — 1,140 350 1,975 — — — 480 140 820 25 — — 560 — 160 20 1,075 — 500 265 345 160 — — 7,360 2,685 6,515 2,745 1,075 — 360 360 — — — — 190 — — — 280 185 275 135 — — 310 — 8,185 3,180 6,515 2,745 1,665 185 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.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 Woodward, Yazoo City and Courtright facilities and as either granular urea or urea liquor from the Port Neal 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 Donaldsonville facility capacities present an estimated production mix. This facility is capable of producing between 2.4 million and 3.3 million tons of granular urea and between 1.2 million and 4.3 million tons of UAN annually. 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 900,000 tons. Production of urea products at the Courtright facility can be increased by reducing UAN production. 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. (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 this facility.(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 260,000 tons by reducing ammonium nitrate production to 240,000 tons (volumes represent our 50% interest). December 31, 2016 2015 2014 (tons in thousands) 8,307 7,673 7,011 Granular urea 3,368 2,520 2,347 UAN (32%) 6,698 5,888 5,939 AN 1,845 1,283 950 December 31, 2013 2012 2011 (tons in thousands) 7,105 7,067 7,244 2,474 2,560 2,588 6,332 6,027 6,349 882 839 952 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.facility in North America.facility. It has fivesix ammonia plants, fourfive urea plants, threefour nitric acid plants and twothree 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, 168,000201,000 tons of UAN (measured on a 32% nitrogen content basis) and 83,000173,000 tons of granular urea. In2012, we announced plans to invest $2.1 billion2015. The new UAN plant was placed in an expansion project at our Donaldsonville, Louisiana facility, which is projected to be completed byservice in the first quarter of 2016, and the new ammonia plant was placed in service in October 2016. When completed, this project will increase our annual capacity of ammonia and granular urea by up to 1.3 million tons and UAN by up to 1.8 million tons. For additional details regarding this project,the capacity expansion projects, see MD&A—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.aone urea plant. The complex has on-site storage for 60,000 tons of ammonia and 70,00060,000 tons of granular urea.CF INDUSTRIES HOLDINGS, INC.is nowcontinues to be a wholly owned subsidiary. For further information about CFL, see Note 4—Noncontrolling Interest.antwo ammonia plant, twoplants, three urea plants, two nitric acid plants and a UAN plant. The location has on-site storage for 30,00090,000 tons of ammonia, 154,000 tons of granular urea, and 81,000 tons of 32% UAN. Infourth quarter of 2012, we announced plans to invest $1.7 billionammonia and urea plants were placed in an expansion project at our Port Neal, Iowa facility, which is projected to be completed byservice in December 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,the capacity expansion projects, see MD&A—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.urea plants, two UAN plants and a port terminal. Through our approximately 75.3% interest in TNCLP and its subsidiary, TNLP, we operate the plants and lease the port terminal from the Tulsa-Rogers County Port Authority. The complex has on-site storage for 28,00060,000 tons of ammonia and 49,100100,000 tons of 32% UAN.83,90084,000 tons of 32% UAN.28,00050,000 tons of ammonia, 48,000 tons of 32% UAN and 7,00011,000 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 64,10064,000 tons of ammonia, 10,400 tons of granular urea and 16,000 tons of 32% UAN.Tobago.Tobago (NGC).United Kingdom GrowHow is a 50/50 joint venture between us and Yara International ASA (Yara) that owns and operates the Ince and Billingham facilities. The Ince facility is located in northwestern England and consists of an ammonia plant, three nitric acid plants, an AN plant and three fertilizer compound plants. The Billingham facility located in the Teesside chemical area, is geographically split between two primary areas: the main site contains an ammonia plant, three nitric acid plants and a carbon dioxide plant; and the Portrack site, approximately two miles away, contains an AN fertilizer plant.2013,2016, natural gas accounted for approximately 41%47% 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; SONAT in Louisiana; TETCO ELA in Louisiana; ONEOK in Oklahoma,Oklahoma; AECO in Alberta,Alberta; Ventura in Iowa andIowa; Demarcation in Kansas; Welcome in Minnesota; Dawn in Ontario. OurOntario; Parkway in Ontario; and the National Balancing Point (NBP) in the United Kingdom.consume,consumed, in the aggregate, in excess of 250approximately 295 million MMBtus of natural gas. In 2017, the amount of natural gas annually.consumed by our nitrogen manufacturing facilities will increase as a result of the completion of our capacity expansion projects. 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 furtherSee Note 15—Derivative Financial Instruments for additional information about our natural gas hedging activities, see Note 24—Derivative Financial Instruments.capabilitycapacity and location.5,4005,700 tank and hopper cars, as well as railcars provided by rail carriers.WeTo ship ammonia and UAN, we employ a fleet of ten leased tow boats and 32thirty-two river barges, to ship ammonia and UAN.which arephosphate fertilizers. We are a major manufacturer phosphate fertilizer products. Our phosphate fertilizer products are DAP and MAP.CF INDUSTRIES HOLDINGS, INC. In October 2013, we entered into a definitive agreement with Mosaic to sell our entire phosphate mining and manufacturing business, which is located in Florida, for a purchase price of approximately $1.4 billion in cash, subject to adjustment as provided in the agreement, and entered into two agreements to supply ammonia to Mosaic. The assets and liabilities of our phosphate business segment being sold to Mosaic comprise a disposal group that is classified on our December 31, 2013 Consolidated Balance Sheet as assets or liabilities held for sale. The accounts receivable, and accounts payable pertaining to the phosphate mining and manufacturing business and certain phosphate inventory held in distribution facilities will not be sold to Mosaic in the phosphate business sale transaction and will be retained by us and settled inthrough March 17, 2014, plus the ordinary course. These retained assets and liabilities of our phosphate segment are not included in assets or liabilities held for sale. The contract to supply ammonia to the disposed business from our PLNL joint venture represents the continuation, following the salecontinuing sales of the phosphate mining and manufacturing business,inventory in the distribution network after March 17, 2014. The remaining phosphate inventory was sold in the second quarter of a supply arrangement that historically has been maintained between2014; therefore, the phosphate mining and manufacturing business and other operations of the Company and its subsidiaries. Because of the significance of this continuing supply arrangement, in accordance with U.S. generally accepted accounting principles, the phosphate mining and manufacturing business issegment does not reported as discontinued operations in our consolidated statement of operations. For additional information regarding this sale, See Note 12—Assets and Liabilities Held for Sale in the Consolidated Financial Statements. 2013 2012 2011 2014 Tons Net Sales Tons Net Sales Tons Net Sales Tons Net Sales (tons in thousands; dollars in millions) (tons in thousands; dollars in millions) 1,408 $ 600.6 1,611 $ 794.5 1,468 $ 829.1 372 $ 127 449 196.3 424 212.9 454 256.7 115 41 1,857 $ 796.9 2,035 $ 1,007.4 1,922 $ 1,085.8 487 $ 168 $74.9 million, $199.7 million and $332.4$10 million for the fiscal yearsyear ended December 31, 2013, 2012 and 2011, respectively. Total assets for the phosphate segment were $817.6 million, $795.2 million and $696.4 million as of December 31, 2013, 2012 and 2011, 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.CF INDUSTRIES HOLDINGS, INC. 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) 2013 2012 2011 (tons in thousands) 3,565 3,483 3,504 3,500
2,480 2,530 2,633 2,785 921 975 1,005 1,055 1,847 1,952 1,997 2,165
2014.(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, 2013. 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, 2013 Recoverable Tons(2)
(in millions) % BPL % P2O5 % Fe2O3 + AI2O3 % MgO 38.5 65.21 29.84 2.37 0.75 35.3 64.63 29.58 2.38 0.78 73.8 64.93 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, 2013. Reserve estimates are updated periodically to reflect actualCF INDUSTRIES HOLDINGS, INC.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 2013. 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, 2013, our Hardee rock mine had approximately 11 years of fully permitted recoverable phosphate reserves remaining at current operating rates. We have initiated the process of applying for authorization and permits to expand the geographical area at our Hardee property where we can mine. The expanded area has an estimated 35.3 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 2013, Martin Sulphur, our largest molten sulfur supplier, supplied approximately 63% 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 distributionCF INDUSTRIES HOLDINGS, INC.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 2013, our Tampa warehouse handled approximately 1.2 million tons of phosphate fertilizers, or about 66% 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. At2013,2016, we owned or leased space at 8591 in-market storage terminals and warehouses located in a 20-state23-state region of the United States, Canada and Canada.the United Kingdom. Including storage at our production facilities, and at the Tampa warehouse and ammonia terminal, we have an aggregate storage capacity for approximately three3.7 million tons of fertilizer. Our storage capabilities are summarized in the following table. Ammonia Granular Urea AN Plants 9 571 5 447 6 530 3 249 Terminal and Warehouse Locations Owned 22 810 1 200 8 219 — — 4 130 1 9 55 576 — — Total In-Market 26 940 2 209 63 795 — — Total Storage Capacity 1,511 656 1,325 249 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
21
779
10
269
—
—
1
170 2 90 49 420 — — 2 39 23 869 59 689 — — 3 209
1,283
1,135
7
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. None ofdistributors, farmers and industrial users. CHS was our customerslargest customer in 20132016 and accounted for more than ten percentapproximately 12% of our consolidated net sales. Sales are generated by our internal marketing and sales force. In our nitrogen segment, ourKoch Nitrogen Company.Potash Corporation of Saskatchewan Inc. Additionally, Iowa Fertilizer Company and Yara BASF are expected to bring new North American nitrogen fertilizer production facilities on line in 2017. 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 CorporationUnited Kingdom competition comes from imported products supplied by companies including Yara International, Origin Fertilisers, Bunn Fertiliser Limited (Koch), Ameropa, CHS and Helm. Urea and UAN are not produced in the United Kingdom, but along with AN are widely-traded fertilizer products with limited barriers to entry.Saskatchewan Inc. and J.R. Simplot Company. 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 are 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 patternsseasonality of our six major products are seasonal.business can change significantly from year to year due to conditions in the agricultural industry and other factors. The strongest demand for our products in North America 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.29—21—Segment Disclosures.Environment,land reclamation; the generation treatment, storage, disposal and handling of hazardous substances and wastes; and the cleanup of hazardous substance releases. Thesereleases; the discharge of regulated substances to air or water; 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, the Resource Conservation and Recovery Act (RCRA), the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), the Toxic Substances Control Act (TSCA) and various other federal, state, provincial, local and international statutes. Violations of environmental, 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. 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.Table We may be subject to more stringent enforcement of ContentsCF INDUSTRIES HOLDINGS, INC.20132016 totaled approximately $41.5$29 million. In 2014, weWe estimate that we will spendhave approximately $38.3$37 million of capital expenditures for environmental, health and safety capital expenditures.in 2017. 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.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-hour1-hour ozone standard")standard) pursuant to the Federal Clean Air Act (Clean Air(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. ForSee Note 20—Contingencies for additional information on the Section 185 fee, see Note 28—Contingencies.the Companywe received a letter from the EPAEnvironmental Protection Agency (EPA) under Section 114 of the Clean Air Act requesting information and copies of records relating to compliance with New Source Review and New Source Performance Standards at theour Donaldsonville facility. ForSee Note 20—Contingencies for additional information on the Clean Air Act Information Request, see Note 28—Contingencies.Clean Air Act Notice of Violation. 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 28—Contingencies.EPCRA/CERCLA Notice of Violation 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 28—Contingencies.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 that 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. We and the current owner are currently conducting a remedial investigation/feasibility study of the site. ForIn 2015, we and several other parties received a notice that the U.S. Department of Interior and other trustees intend to undertake a natural resource damage assessment for a group of former phosphate mines in southeast Idaho, including the former Georgetown Canyon mine. See Note 20—Contingencies for additional information on the CERCLA/Remediation matters, see Note 28—Contingencies.matters.CF INDUSTRIES HOLDINGS, INC.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 federal district court (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. Subsequently, the Florida Department of Environmental Protection (FDEP) adopted its own nitrogen and phosphorous criteria for surface waters and related implementation standards. On November 30, 2012, the EPA approved Florida's nutrient criteria and, on June 27, 2013, the EPA approved new water quality standards submitted by the FDEP relating to the scope of coverage of the FDEP's numeric nutrient criteria for surface waters. On January 7, 2014, the U.S. District Court for the Northern District of Florida granted the EPA's motion to amend the 2009 consent decree. As a result, the EPA is no longer required by the consent decree to promulgate numeric nitrogen and phosphorous criteria for certain surface waters that the FDEP had determined were more properly regulated by the state's narrative standard. The Court's order allows the EPA to withdraw its federal numeric nutrient criteria, after which the FDEP's regulations will become effective. The 2009 consent decree also required the EPA to develop numeric nutrient criteria for Florida coastal and estuarine waters. Although the EPA proposed such criteria in 2012, the FDEP submitted to the EPA new numeric nutrient water quality standards for those waters on July 31 and August 1, 2013. On September 26, 2013, the EPA approved Florida's new and revised nutrient water quality standards for estuaries and coastal waters and informed the Court that as a result, it was not required to finalize the federal criteria that it had proposed. There is continuing regulatory uncertainty because the EPA's approval of the FDEP nutrient water quality standards is still subject to challenge. Nonetheless, numeric nutrient water quality criteria for Florida waters, whether federal or state, 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.2020, to be replaced2020. On December 12, 2015, 195 countries adopted by anotherconsensus a new international agreement known as the Paris Agreement. The Paris Agreement is intended to be negotiatedprovide a framework pursuant to which the parties to the agreement will attempt to hold the increase in global average temperatures to below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels. The Paris Agreement, which has been accepted by 2015 (which agreement is to gothe United States and ratified by Canada and the United Kingdom, went into effect in 2020). November 2016. The Paris Agreement could result in more aggressive efforts to reduce GHG emissions in the jurisdictions in which we operate. 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 venturethese plants 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.CF INDUSTRIES HOLDINGS, INC. In Canada (which in December 2011 withdrew from further participation in the Kyoto Protocol in December 2011, but signedis a party to the Durban platform to negotiate a new international GHG agreement or protocol by 2015),Paris Agreement. In Canada, 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 and Reporting Regulation and the GHG Reporting Regulation. In October 2016, Canadian Prime Minister Justin Trudeau announced that his government will introduce a plan to put a price on carbon pollution, which plan would serve as a floor for the GHG emissions reduction requirements of the separate Canadian provinces and territories. The announced plan would impose a $10 per ton (Canadian dollars) charge beginning in 2018, rising to $50 per ton by 2022. also a party to the Western Climate Initiative comprised of(WCI), comprising California and several Canadian provinces. PartiesOn January 1, 2017, Ontario launched its own GHG cap and trade program. Under this program, the Ontario government will set a hard limit on emissions, which will steadily decline annually. Facilities that generate more than 25,000 tonnes of GHG emissions per year will be required to the Western Climate Initiative are working to create a regional program linkingparticipate in the cap and trade program and will require emissions programsallowances for everyhas not disavowedintends to link its participation in the initiative, it has not developed regulations to establish a cap and trade program.(notis not a party to the Kyoto Protocol, but is a signatoryparty to the Durban platform with respectParis Agreement. However, as a result of the recent presidential election, the United States may decide to withdraw from the negotiationParis Agreement (or the United Nations Framework Convention on Climate Change, which would also result in withdrawal from the Paris Agreement) or, prior to taking such actions, could disregard its commitments under the Paris Agreement. The impact of a replacement forsuch actions, if they take place, on the Kyoto Protocol),future implementation of the Paris Agreement is uncertain. In the United States, GHG regulation is evolving at state, regional and federal levels.levels, although some of the more significant developments to date, including EPA's Clean Power Plan, do not directly impose obligations on our facilities. 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 reportingreport the previous year's emissions annually starting in 2011. In May 2010, the EPA issued theaddition, if we seek to modify or expand any of our major facilities and as a result, are required to obtain a Prevention of Significant Deterioration (PSD) and Title V Greenhouse Gas Tailoring Rule (Tailoring Rule). Pursuantconstruction permit applicable to this regulation, the construction of new or modification of existing major sources of GHG emissions becamesuch facilities, we could be subject to the PSDpollution control requirements applicable to GHGs in addition to requirements applicable to conventional air permitting program (and later, the Title V permitting program) in January 2011, and the regulation could significantly decrease the emissions thresholds that would subject facilities to these regulations in the future. The United States Supreme Court has accepted a petition for certiorari entertaining certain challenges to the EPA's regulation of GHGs from new and modified emissions sources and a decision in this case is expected by June 2014. Regulation of GHG emissions pursuant to the PSD program could subject new capital projects to additional permittingpollutants. Such 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,this permitting requirement, none of the states where our U.S. production facilities are located—Florida,Iowa, Louisiana, Mississippi, Iowa and Oklahoma—has proposed control regulations limiting GHG emissions.Revisions to Plants.1314 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).miningother governmental permits and approvals authorizing operations at each of our facilities. A decision by a government agency to deny or delay issuing a new or renewed regulatory material permit or approval, or to revoke or substantially modify an existing material permit or approval, 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.CF INDUSTRIES HOLDINGS, INC. In October 2013, we entered into a definitive agreement with Mosaic More stringent environmental standards may impact our ability to sellobtain such permits. On December 15, 2016, the EPA re-designated the Greater Baton Rouge Nonattainment Area (BRNA), where our entire phosphate mining and manufacturing business, whichDonaldsonville facility is located, to attainment with the 2008 8-hour ozone standard. However, on October 26, 2015, the EPA published a more stringent national ambient air quality standard for ozone. The State of Louisiana has recommended to the EPA that Baton Rouge be designated as nonattainment with the 2015 ozone standard. Such a classification (in the Baton Rouge area or in Florida. For additional details regarding this sale, includingother areas where our manufacturing facilities are located) could result in more stringent air pollution emissions limits for our existing operations and would also subject our facilities to more stringent requirements to obtain approvals for plant expansions, or could make it difficult to obtain such approvals. The EPA is supposed to designate areas under the assumption2015 standard by Mosaic of certain liabilities such as the closure and long-term maintenance costs of our phosphogypsum stack systems, see Note 12—Assets and Liabilities Held for Sale in the consolidated financial statements. The sale is expected to close in the first half of 2014. October 2017.2013, the area permitted for mining at our Hardee phosphate complex had approximately 38.5 million tons of recoverable phosphate rock reserves, which we expect to meet our requirements, at current production rates, for approximately 11 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 35.3 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. With the completion of our recent phosphogypsum stack 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 $4,700 to $19,600 an acre, with an average of $12,200 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 $5 million between 2014 and 2016, to complete closure of the cooling pond and channels. Water treating expenditures at BartowCF INDUSTRIES HOLDINGS, INC.are estimated to require about $10 million over the next 43 years. Post-closure long-term care expenditures at Bartow are estimated to total approximately $48 million for a 49 year period including 2014. To close the phosphogypsum stack at the Plant City phosphate complex including the recently constructed expansion, we estimate that we will spend approximately $115 million during the years 2038 through 2042, and another $61 million in 2092 to close the cooling pond. Water treating expenditures at Plant City are estimated to approximate $6 million in 2018, $80 million in 2038 through 2042, and $198 million thereafter through 2092. Post-closure long-term care expenditures at Plant City are estimated to total $129 million for a 50 year period commencing in 2043. 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 2092. 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, 2013, we employed approximately 2,8002,900 full-time and 100 part-time employees.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 2013, the average daily closing price at the Henry Hub, the most heavily-traded natural gas pricing basis in North America, reached a low of $3.08 per MMBtu on January 11, 2013 and a high of $4.52 per MMBtu on December 24, 2013. During the three year period ended December 31, 2013, the average daily closing price at the Henry Hub reached a high of $4.92 per MMBtu on June 9, 2011 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 volatile natural gas prices. If high prices 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. North American prices have declined over the last several years 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, or if other developments adversely impact the supply/demand balance for natural gas in the United States, natural gas prices could rise, which could have a material adverse impact on our business, financial condition, results of operations and cash flows.highstrong demand, high capacity utilization and increasing operating margins tend to result instimulate global investment in production capacity. The construction of new nitrogen fertilizer manufacturing capacity in the industry, plus improvements to increase output from the existing production assets, increase nitrogen supply and affect the supply and demand balance. In recent years, fertilizer producers, including CF Holdings, have built new production facilities or expanded capacity of existing production assets, or announced plans to do so. In the current environment, global nitrogen fertilizer supply has increased faster than global nitrogen fertilizer demand, creating a global nitrogen fertilizer oversupply leading to lower nitrogen fertilizer selling prices. Lower global production costs driven by lower feedstock costs and foreign exchange rate changes, and reduced ocean freight costs, have further contributed to the lower priced environment.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.CF INDUSTRIES HOLDINGS, INC.both domestic and foreign sources. Fertilizersour competitors. Most 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.a number of domestic and foreignmany producers, including state-owned and government-subsidized entities.theseour 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. Furthermore, certain governments as owners of some of our competitors may be willing to accept lower prices and profitability on their products in order to support domestic employment or other political or social goals. 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.world'sworld’s largest producer and consumer of nitrogen fertilizers, currently has significant capacity surplus and many high-cost plants. As a result, the domestic nitrogen industry in China is expected to continue expanding its fertilizer production capability.operating at low rates. If Chinese government policy, devaluation of the Chinese renminbi or decreases in Chinese producers'producers’ underlying costs such as the price of Chinese coal encourages exports, this expected increase inencourage increased production capacity utilization, any resulting export volume could adversely affect the balance and Ukraine have significant nitrogen fertilizer export capacity to produce and export nitrogen fertilizers, and producers in these countries continue to pay below-market prices forbenefit from non-market pricing of natural gas, duewhich allows them to ongoing government intervention in natural gas pricing. Competition in the United States with importsincrease exports at aggressive prices, depending on market conditions. The 2016 revocations of U.S. antidumping measures on solid urea and fertilizer grade ammonium nitrate from Russia and Ukraine is currently subjectcould lead to the discipline imposed by U.S. antidumping duty orders, which require suchsignificant increases in imports to be priced at or above fair value when soldfrom that country.U.S. market. The antidumping orders have affected the pricingMiddle East, Europe and Latin America, who, depending on market conditions, fluctuating input prices, geographic location and freight economics, may take actions at times with respect to price or selling volumes that adversely affect our business, financial condition, results of these imports,operations and have also restrained the volumes imported. However, if there were to be significant decreases in the antidumping duty rates applied to most Russian and Ukrainian exporters, we could face much higher volumes of lower priced Russian and Ukrainian urea and fertilizer grade ammonium nitrate in the United States. The Russian and Ukrainian solid urea antidumping orders are expected to remain in place until at least December 2016. The Russian ammonium nitrate order is currently scheduled to remain in place until at least August 2016; the Ukrainian ammonium nitrate order is expected to remain in place until at least June 2018. U.S. agricultural production or limitations on the use of our products for agricultural purposes could materially adversely affect the marketdemand for our products.the U.S. agricultural industry, European and other global agriculture areas significantly impact our operating results. The U.S. agricultural industryAgricultural planted areas and production 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 foreigngovernmental policies regarding trade in agricultural products. These factors are outside of our control. State and federal governmental due to federal legislation mandating use of renewable fuels. ThisAn 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.CF INDUSTRIES HOLDINGS, INC.FuelsFuel Standard (RFS) encourages continued high levels of corn-based ethanol production, a continuing "food“food versus fuel"fuel” debate and other factors have resulted in calls to allow increased ethanol imports andeliminate or reduce the renewable fuel mandate, or to eliminate or reduce corn-based ethanol as part of the renewable fuel mandate, either of whichmandate. This could have an adverse effect on corn-based ethanol production, planted corn acreage and fertilizer demand. In November 2013, the EPA proposed to reduce the renewable fuels volumes required for calendar year 2014 to around current consumption levels. which subjectsand are subject to environmental, safety and regulatory oversight. This exposes us to risks and uncertainties beyond our control that may adversely affect our operations and exposureexposes us to additional liability.trucking,truck, 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.local, state and federal governmentsgovernmental entities could implement new regulations affecting the transportation of raw materials or finished products.companies'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 ana material adverse effect on our business, financial condition, results of operations financial condition and cash flows. Therailroads'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. For example, various railroads have implemented tariffs that includeTheseIf successful, these initiatives 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, for which our insurance may be insufficient or unavailable. New regulations also could be implemented affecting the equipment used to ship our raw materials or finished products.manufacturing,manufacture, transportation, storage and distribution of chemical fertilizers,products, including ammonia, which is highly toxic and corrosive. TheseCF INDUSTRIES HOLDINGS, INC. 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.WeVarious subsidiaries of CF Industries Holdings, Inc. (the CF Entities) have been named as defendants along with other companies in lawsuits filed in 2013, 2014 and 2015 in the District Court of McLennan County, Texas by the City of West, individual residents of the County and other parties seeking recovery for damages allegedly sustained as a result of the explosion. The cases have been consolidated for discovery and pretrial proceedings in the District Court of McLennan County under the caption “In re: West Explosion Cases.” The two-year statute of limitations expired on April 17, 2015. As of that date, over 400 plaintiffs had filed claims, including at least 9 entities, 325 individuals, and 80 insurance companies. Plaintiffs allege various theories of negligence, strict liability, and breach of warranty under Texas law. Although we do not own or operate the facility or directly sell our productproducts to West Fertilizer Co., products wethat the CF Entities have manufactured and sold to others have been delivered to the facility and may have been stored at the West facility at the time of the incident. BasedThe Court granted in part and denied in part the CF Entities’ Motions for Summary Judgment in August 2015. Thirty-four cases have been resolved pursuant to confidential settlements fully funded by insurance. The remaining cases are in various stages of discovery and pre-trial proceedings. The next group of cases was reset for trial beginning on the initial analysis of the pending lawsuits, weApril 3, 2017. We believe that we have strong legal and factual defenses to the claims and intend to defend ourselvescontinue defending the CF Entities vigorously in the pending lawsuits and any other claims brought against us in connection with the incident. In addition, thelawsuits. The increased focus on the risks associated with fertilizers as a result of the incident could impact the regulatory environment and requirements applicable to fertilizer manufacturing and storage facilities. As we continue to increase our dependence on information technologies to conduct our operations, the risks associated with cyber security also increase. information systems, among other things, to manageof our accounting, manufacturing,financial and supply chain functions and financial functions. This risk not only appliesplant operations. Business and supply chain disruptions, plant and utility outages and information technology system and network disruptions due to us, but alsocyber attacks could seriously harm our operations and materially adversely affect our operating results. Cyber security risks include attacks on information technology and infrastructure by hackers, damage or loss of information due to viruses, the unintended disclosure of confidential information, the misuse or loss of control over computer control systems, and breaches due to employee error. Our exposure to cyber security risks includes exposure through third parties on whose systems we place significant reliance for the conduct of our business. We have implementedroutinely review and implement security procedures and measures in order to protect our systems and information from being vulnerable to theft, loss, damage or interruption from a number of potential sources or events.evolving cyber attacks. We believe these measures and procedures are appropriate. However, we may not have the resources or technical sophistication to anticipate, prevent, or recover from rapidly evolving types of cyber-attacks.cyber attacks. Compromises to our information and control systems could have severe financial and other business implications.CF INDUSTRIES HOLDINGS, INC. intermittently disrupt field work during the planting, and growing, seasonsharvesting or application periods 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,application period, resulting in lower demand for our products.based fertilizers.fertilizer products. Colder than normal winters and warmer than normal summers increase the demand for natural gas for power generation and for residential and industrial use.use, which can increase the cost and/or decrease the availability of natural gas. In addition, adverse weather events such as very low temperatures leading to well freeze-offs or hurricanes affecting the Gulf of Mexico coastal states can impact the supply of natural gas and cause prices to rise.able to complete our capacitysuccessful in the 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. Total invested on these projects through December 31, 2013 was $680.5 million. 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. If any of the third parties fails to perform as we expect, our ability to meet our expansion goals would be affected. 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.domesticallywithin the United States and in foreign locations.elsewhere. Major investments in our business, including as a result of acquisitions, partnerships, joint ventures, business combination transactions or other major investments require significant managerial resources, the diversion of which may be diverted from our other activities and may impair the operation of our businesses.business. We may be unable to identify or successfully compete for certain acquisition targets, which may hinder or prevent us from acquiring a target or completing other transactions. The risks of any expansion of our business through investments, acquisitions, partnerships, or joint ventures or business combination transactions 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 realizeCF INDUSTRIES HOLDINGS, INC. and health and safety laws, regulations and permitting requirements, as well as potential environmental liabilities, which may require us to make substantial expenditures. 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; the discharge of regulated substances to air or water; 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 Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Toxic Substances Control Act and various other federal, state, provincial, local and international statutes.chemicals and other hazardous substances, our business is inherently subject tofaces risks of spills, discharges or other releases of hazardousthose 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 facilities or former facilities previously owned by us or other acquired businesses, 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. 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 rapidlyregularly 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. We may be subject to more stringent and health and safety laws and regulations or reinterpretation of current laws and regulations may require us to make substantial expenditures. Additionally, ourWe sell, among other products, diesel exhaust fluid, which is subject to EPA emissions standards that may become more stringent in the future. 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.Our operations are dependent on numerous required permits, approvals and meeting financial assurance requirements from governmental authorities. mining and other governmental permits and approvals authorizing operations at each of our facilities. Expansion or modification of our operations is dependentpredicated 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 regulatory material permit or approval, or to revoke or substantially modify anCF INDUSTRIES HOLDINGS, INC.the affected facilityour facilities and on our business, financial condition, results of operations and cash flows. In certain cases, as On October 26, 2015, the EPA published a conditionfinal regulation lowering the national ambient air quality standard for ozone. Ozone attainment designations are expected by October 2017, and this action is expected 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 benefitresult in additional areas of the Florida Department of Environmental Protection (FDEP)country being classified 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 Decreebeing in nonattainment with the U.S. EPAozone standard 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 assurancemore stringent permitting requirements, or other increaseswhich in local mining regulationsturn could make it much more difficult 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 companiesexpensive 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, 2013, the area permitted by local, state and federal authorities for mining at our Hardee phosphate complex contained approximately 38.5 million tons of recoverable phosphate rock reserves, which will meet our requirements, at current operating rates, for approximately 11 years. We have initiated the process of applying for authorization andobtain permits to expand the geographical area in which we can mine at our Hardee property. The expanded geographical area has an estimated 35.3 million tons of recoverable phosphate reserves, which 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. 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 continueconstruct new facilities 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. The Phase II expansion project was completed in July 2013 and will provide 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 construction and operating permits. This time frame is approximately five years beyond our current estimate of available phosphate rock reserves at ourCF INDUSTRIES HOLDINGS, INC.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. (GHG) regulations in the United Kingdom, Canada and the United States. In the United States, our existing facilities currently are only subject to GHG emissions reporting obligations, although our new and modified facilities are likely to be subject to GHG emissions standards included in their air permits. Our facilities in the United Kingdom are subject to regulatory emissions trading systems, which generally require us to hold or obtain emissions allowances to offset GHG emissions from those aspects of our operations that are subject to regulation under this program. Our facility in Alberta, Canada is subject to a provincial regulation requiring reductions in the facility’s net emissions intensity, which can be met by facility improvements, the purchase of emissions offsets or performance credits, or contributions to a non-profit climate change fund established by Alberta. In June 2016, Alberta promulgated the Climate Leadership Implementation Act, which will impose a wide-ranging carbon tax. The carbon tax will be set at $20 per ton (Canadian dollars) effective January 1, 2017, rise to $30 per ton (Canadian dollars) effective January 1, 2018 and increase with the rate of inflation thereafter. Facilities such as ours that are subject to the existing specified gas emitters regulation will continue to be subject to this regulation in the near term, after which new product and sector-based performance standards (to be developed) will become effective. Our Courtright, Ontario facility will be subject to Ontario’s GHG cap and trade program beginning in January 2017, which regulation was finalized in May 2016. In addition, in October 2016, Canadian Prime Minister Justin Trudeau announced that his government will introduce a plan to put a nationwide price on carbon emissions, which plan would serve as a floor for the GHG emissions reduction requirements of the separate Canadian provinces and territories. The announced plan would impose a $10 per ton (Canadian dollars) charge beginning in 2018, rising to $50 per ton by 2022.impactsimpact on the fertilizer industry due to the fact thatus, because our production facilities emit GHGs such as carbon dioxide and nitrous oxide.oxide and because natural gas, a fossil fuel, is a primary raw material used in our nitrogen production process. 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,Canada,the United Kingdom, our competitors may have cost or other competitive advantages over us. Our operating results fluctuate due to seasonality. 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.particularly 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.CF INDUSTRIES HOLDINGS, INC.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, 2013 and 2012, our current liability for customer advances related to unshipped orders equaled approximately 7% and 17%, respectively, of our cash and cash equivalents.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 2013, forward sales of phosphate fertilizer products represented approximately 14% 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, 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. Hedging arrangements are imperfect and unhedged risks will always exist.forto which we do not apply, hedge accounting. To thethereby negatively impactingadversely affecting our liquidity.eithermulti-national commercial banks, major financial institutions or large oil and gas companies or largeCF INDUSTRIES HOLDINGS, INC.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 settlement of one or more of our derivative settlements.sevennine separate nitrogen complexes, the largest of which is the Donaldsonville complex, which representsrepresented approximately 40% of the Company'sour ammonia production capacity. Our phosphate fertilizer operations are dependent on our phosphate minecapacity as of December 31, 2016, including the Donaldsonville and associated beneficiation plantPort Neal capacity expansion projects, which were completed in Hardee County, Florida; our phosphate fertilizer complex in Plant City, Florida; and our ammonia terminal in Tampa, Florida.2016. 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.or high wind 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.participatehave a 50% ownership interest in joint ventures including Point Lisas (whichPLNL, which owns aand operates an ammonia production 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).Tobago. 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.CF INDUSTRIES HOLDINGS, INC. In addition, dueDue to concerns related to terrorism or the potential use of certain fertilizers as explosives, local, 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 2002 and 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 or limitations on the sale of our products and could result in significant unanticipated costs, lower revenues and reduced profit margins. We manufacture and sell certain nitrogen fertilizers that can be used as explosives. It is possible that governmental entities in the U.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.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 2013, we derived approximately 18% ofnet sales frombusiness operations and investments outside of the United States. Our business operations includeStates increase our nitrogen fertilizer complex in Medicine Hat, Alberta, our nitrogen fertilizer manufacturing facility in Courtright, Ontario, a 50% interest in an ammonia production joint venture in Trinidad, a 50% interest in a U.K. joint venture for the production of anhydrous ammonia and other fertilizer products and a 50% interest in a fertilizer trading operation headquartered near Zurich, Switzerland.Our investments in securities are subject to risks that may result in losses. Our cash flows from operations have resulted in cash and cash-equivalents of approximately $1.7 billion as of December 31, 2013. We generally invest these cash and cash equivalents 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 agencies include those issued directly by the U.S. government, those issued by state, local or other governmental entities, and those guaranteed by entities affiliated with governmental entities. Our investments are subjectrisk related to fluctuations in both market valueforeign currency exchange rates. The main currencies to which we are exposed, besides the U.S. dollar, are the Canadian dollar, the British pound and yield based upon changesthe euro. These exposures may change over time as business practices evolve and economic conditions change, including, for example, inCF INDUSTRIES HOLDINGS, INC.market conditions, including interest rates, liquidity, general economic and credit market conditions and conditions specificexiting the European Union (Brexit). We may selectively reduce some foreign currency exchange rate risk by, among other things, requiring contracted purchases of our products to be settled in, or indexed to, the issuers. Due to the risks of investments, weU.S. dollar or a currency freely convertible into U.S. dollars, or hedging through foreign currency derivatives. These efforts, however, may not achieve expected returns or may realize losses on our investments, whichbe effective and could have a material adverse effect on our business, financial condition, results of operations and cash flows.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'customers’ reluctance to replenish inventories. Changes in global economic conditions can arise suddenly and the full impact of such changes can be difficult to ascertain, resulting in anxiety among market participants that can persist for protracted periods. For example, concern and uncertainty over the potential impact of Brexit on the global economy has resulted in increased volatility in global financial markets. The overall impact of achanges in global economic downturnconditions 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.We have a material amount of indebtedness and may incur additional indebtedness, or need to refinance existing indebtedness, in the future, which may adversely affect our operations. As of December 31, 2013, we had approximately $3.1 billion of total indebtedness, consisting primarily of senior notes with varying maturity dates between 2018 and 2043. We had excess borrowing capacity for general corporate purposes under our existing revolving credit facility of approximately $995.1 million. The terms of our existing indebtedness allow us to incur significant additional debt in the future. Our existing indebtedness and any additional debt we may incur in the future could have negative consequences on our business should operating cash flows be insufficient to cover debt service, which would adversely affect our operations and liquidity. From time to time we consider our options to refinance our outstanding indebtedness. 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. 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 members of our management and professional staff may adversely affect our business. We believe our continued success depends on the collective abilities and efforts of our senior management and professional staff. The loss of one or more key personnel could have a materialadverse effect on our results of operations. Additionally, if we are unable to find, hire and retain needed key personnel in the future, our business, financial condition, results of operations and cash flows could be materially and adversely affected.We are subject to risk associated with the strategic agreements that we entered into with the Mosaic Company, including the risk that we may not be able to complete the sale of our phosphate business to the Mosaic Company as planned, or at all, due to a number of factors, many of which are beyond our control. In October 2013, we entered into a definitive agreement with the Mosaic Company (Mosaic) to sell our entire phosphate mining and manufacturing business, which is located in Florida, and entered into two agreements to supply ammonia to Mosaic. The first agreement, which is not conditioned upon completion of the phosphate business sale transaction, provides for us to supply between 600,000 and 800,000 tons of ammonia per year from our Donaldsonville, Louisiana nitrogen complex beginning no later than 2017. The second agreement provides for us to supply approximately 300,000 tons of ammonia per year sourced from our Point Lisas Nitrogen Limited (PLNL) joint venture beginning at the closing of the phosphate business sale transaction. Mosaic is assuming certain liabilities related to the phosphate mining and manufacturing, and we will transfer to Mosaic the value of our asset retirement obligation trust and escrow funds. The phosphate business sale transaction is expected to close in the first half of 2014. The closing of the phosphate business sale transaction is subject to various conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act), approvals under applicable foreign antitrust laws, receipt of other governmental and third party consents and other customary closing conditions. In January 2014, we were notified that the U.S. Department of Justice closed its review and terminated the waiting period under the HSR Act relating to the phosphate business sale transaction. If these conditions are not satisfied or waived (to the extent permitted by law), the closing of the phosphate sale transaction may be delayed or may not occur. Further, disruptions related to the proposed transactions with Mosaic could harm our relationships with our customers, employees or suppliers.verbaloral statements, we make forward-looking statements that are not statements of historical fact and may involve a number of risks and uncertainties. These statements relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our prospects, future prospects, developments and business strategies. We have used the words "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will" or "would" and similar terms and phrases, including references to assumptions, to identify forward-looking statements in this document. These forward-looking statements are made based on currently available competitive, financial and economic data, our current expectations, estimates, forecasts and projections about the industries and markets in which we operate and management's beliefs and assumptions concerning future events affecting us. These statements are not guarantees of future performance and are subject to risks, uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Therefore, our actual results may differ materially from what is expressed in or implied by any forward-looking statements. We want to caution you not to place undue reliance on any forward-looking statements. We do not undertake any responsibility to release publicly any revisions to these 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.•the volatility of natural gas prices in North America;••••reliance on third party providerstransportation servicesnatural gas prices in North America and equipment;•risks associated with cyber security;•weather conditions;•our ability to complete our 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;•the seasonality of the fertilizer business;CF INDUSTRIES HOLDINGS, INC.•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;•••losses on our investments in securities;•conditions;•our ability to manage our indebtedness;•loss of key members of management and professional staff; and•risks and uncertainties arising from the possibility that the proposed transactions with Mosaic may be delayed or may not occur, including delays arising from any ability to obtain governmental approvals of the transactions; the risk that other conditions to the closing of the proposed transactions with Mosaic may not be satisfied; difficulties with realization of the benefits of the proposed transactions with Mosaic; the risk that disruptions from the proposed transactions with Mosaic will harm relationships with customers, employees and suppliers.OperatingReportable Segments and Part I, Item 1. Business—Storage Facilities and Other Properties. InWeVarious subsidiaries of CF Industries Holdings, Inc. (the CF Entities) have been named as defendants along with other companies in lawsuits filed in 2013, 2014 and 2015 in the District Court of McLennan County, Texas by the City of West, individual residents of the County and other parties seeking recovery for damages allegedly sustained as a result of the explosion. The cases have been consolidated for discovery and pretrial proceedings in the District Court of McLennan County under the caption "In re: West Explosion Cases." The two-year statute of limitations expired on April 17, 2015. As of that date, over 400 plaintiffs had filed claims, including at least 9 entities, 325 individuals, and 80 insurance companies. Plaintiffs allege various theories of negligence, strict liability, and breach of warranty under Texas law. Although we do not own or operate the facility or directly sell our productproducts to West Fertilizer Co., products wethat the CF Entities have manufactured and sold to others have been delivered to the facility and may have been stored at the West facility at the time of the incident. Basedthe initial analysis of the pending lawsuits,April 3, 2017. While we believe that we have strong legal and factual defenses to the claims and intend to defend ourselvescontinue defending the CF Entities vigorously in the pending lawsuits, andincluding in any otherappeals that may follow, we have concluded based on continuing developments in the case that some loss is probable for a subset of the outstanding claims. We have made an accrual for this subset of the outstanding claims, brought against us in connection with the incident.Other Litigation From time to time, we are subject to ordinary, routine legal proceedings relatedwhich is not material to the usual conductConsolidated Financial Statements. Beyond the amounts accrued, the Company cannot provide a range of our business, including proceedings regarding public utility and transportation rates, environmental matters, taxes and permits relatingreasonably possible loss due to the operationslack of our various plantsdamages discovery for the remaining claims and facilities. Based on the information available as of the dateuncertain nature of this filing,litigation, including uncertainties around the potential allocation of responsibility by a jury to other defendants or responsible third parties. The recognition of a potential loss in the future in the West Fertilizer Co. litigation could negatively affect our results in the period of recognition. However, based upon currently available information, including available insurance coverage, we do not believe that the ultimate outcome of these routine mattersthis litigation will not have a material adverse effect on our consolidated financial position, or results of operations. The Companythe Companywe 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 with respect to discuss 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.CF INDUSTRIES HOLDINGS, INC.the Company'sour consolidated financial position, results of operations or cash flows.the Companyus 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 of certain toxic chemicals. The NOV also included an allegation that the Companywe violated Section 304 of EPCRA and Section 103 of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)CERCLA by failing to file a timely notification relating to the release of hydrogen fluoride above applicable reportable quantities. The Company doesWe 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 28—Contingencies.28—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 2016 High Low Dividends
per Share $ 233.43 $ 189.74 $ 0.40 $ 40.95 $ 26.10 197.38 170.53 0.40 35.84 23.15 0.30 216.49 169.33 0.40 28.32 20.77 0.30 239.40 203.04 1.00 32.61 22.00 0.30 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 12, 2014,16, 2017, there were 902779 stockholders of record.2013.2016. 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, 2016 - October 31, 2016 — $ — — $ 100,000 November 1, 2016 - November 30, 2016 — — — 100,000 — — — — Total — Issuer Purchases of Equity Securities 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 Maximum Number (or
Approximate Dollar
Value) of Shares (or
Units) that May Yet Be
Purchased Under the
Plans or Programs
(in thousands) 65 (2) $ 215.16 5,827,272 $ 1,889,000 628,967 (1) 216.57 (3) 6,456,239 1,752,300 884,443 (1) 227.94 (3) 7,340,682 1,550,700 1,513,475 223.21 Represents the authorized share repurchase program announced on August 6, 2014 that allowed management to repurchase common stock for a total expenditure of up to $1.0 billion through December 31, 2016 (the 2014 Program). See Note 18—Stockholders' Equity for additional information about the 2014 program. The $100 million of authorized share repurchases remaining under the 2014 Program expired on December 31, 2016. (1)In the third quarter of 2012, our Board of Directors authorized management to repurchase common stock for a total expenditure of up to $3.0 billion through December 31, 2016, subject to market conditions (the 2012 Stock Repurchase Program). This program is discussed in Note 25—Stockholders' Equity, in the notes to the consolidated financial statements included in Item 8 of this report.(2)Repurchases represents shares withheld to pay employee tax obligations upon the vesting of restricted stock awards.(3)Average price paid per share of common stock repurchased under the 2012 Stock Repurchase Program is the execution price, excluding commissions paid to brokers.20132016 and 20122015 and for the years ended December 31, 2013, 20122016, 2015 and 20112014 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, 2011, 20102014, 2013 and 20092012 and for the years ended December 31, 20102013 and 20092012 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. Year ended December 31, 2013 2012 2011 2010 2009 (in millions, except per share amounts) $ 5,474.7 $ 6,104.0 $ 6,097.9 $ 3,965.0 $ 2,608.4 2,954.5 2,990.7 3,202.3 2,785.5 1,769.0 2,520.2 3,113.3 2,895.6 1,179.5 839.4 166.0 151.8 130.0 106.1 62.9 — — 4.4 21.6 — (15.8 ) 49.1 20.9 166.7 96.7 150.2 200.9 155.3 294.4 159.6 41.7 47.0 50.2 10.6 — ��� 2,411.7 2,959.4 2,790.5 895.7 679.8 147.5 131.0 145.5 219.8 (3.0 ) — — — 17.0 — 54.5 (1.1 ) (0.6 ) (28.8 ) (12.8 ) 2,209.7 2,829.5 2,645.6 687.7 695.6 686.5 964.2 926.5 273.7 246.0 9.6 58.1 41.9 26.7 (1.1 ) 1,532.8 1,923.4 1,761.0 440.7 448.5 68.2 74.7 221.8 91.5 82.9 $ 1,464.6 $ 1,848.7 $ 1,539.2 $ 349.2 $ 365.6 $ 2.20 $ 1.60 $ 1.00 $ 0.40 $ 0.40 $ 24.87 $ 28.94 $ 22.18 $ 5.40 $ 7.54 24.74 28.59 21.98 5.34 7.42 58.9 63.9 69.4 64.7 48.5 59.2 64.7 70.0 65.4 49.2 Year ended December 31, 2016 2013 2012 (in millions, except per share amounts) Statement of Operations Data: Net sales $ 3,685 $ 4,308 $ 4,743 $ 5,475 $ 6,104 Cost of sales 2,845 2,761 2,965 2,955 2,991 Gross margin 840 1,547 1,778 2,520 3,113 Selling, general and administrative expenses 174 170 152 166 152 Transaction costs 179 57 — — — Other operating—net 208 92 53 (16 ) 49 Total other operating costs and expenses 561 319 205 150 201 Gain on sale of phosphate business — — 750 — — Equity in (losses) earnings of operating affiliates (145 ) (35 ) 43 42 47 Operating earnings 134 1,193 2,366 2,412 2,959 Interest expense (income)—net 195 131 177 147 131 Loss on debt extinguishment 167 — — — — Other non-operating—net (2 ) 4 2 55 (1 ) (Loss) earnings before income taxes and equity in earnings of non-operating affiliates (226 ) 1,058 2,187 2,210 2,829 Income tax (benefit) provision (68 ) 396 773 687 964 Equity in earnings of non-operating affiliates—net of taxes — 72 23 10 58 Net (loss) earnings (158 ) 734 1,437 1,533 1,923 Less: Net earnings attributable to noncontrolling interests 119 34 47 68 75 Net (loss) earnings attributable to common stockholders $ (277 ) $ 700 $ 1,390 $ 1,465 $ 1,848 Cash dividends declared per common share $ 1.20 $ 1.20 $ 1.00 $ 0.44 $ 0.32 Share and per share data: Net (loss) earnings per share attributable to common stockholders: Basic $ (1.19 ) $ 2.97 $ 5.43 $ 4.97 $ 5.79 Diluted (1.19 ) 2.96 5.42 4.95 5.72 Weighted-average common shares outstanding: Basic 233.1 235.3 255.9 294.4 319.3 Diluted 233.1 236.1 256.7 296.0 323.3 Other Financial Data: Depreciation, depletion and amortization $ 678 $ 480 $ 393 $ 411 $ 420 Capital expenditures 2,211 2,469 1,809 824 524 Year ended December 31, 2013 2012 2011 2010 2009 (in millions) $ 410.6 $ 419.8 $ 416.2 $ 394.8 $ 101.0 823.8 523.5 247.2 258.1 235.7 December 31, 2013 2012 2011 2010 2009 (in millions) $ 1,710.8 $ 2,274.9 $ 1,207.0 $ 797.7 $ 697.1 — — — 3.1 185.0 10,678.1 10,166.9 8,974.5 8,758.5 2,494.9 120.6 380.7 257.2 431.5 159.5 3,098.1 1,605.0 1,617.8 1,959.0 4.7 5,438.4 6,282.2 4,932.9 4,433.4 1,744.9 December 31, 2016 2013 2012 (in millions) Balance Sheet Data: Cash and cash equivalents $ 1,164 $ 286 $ 1,997 $ 1,711 $ 2,275 15,131 12,683 11,200 10,574 10,122 Customer advances 42 162 325 121 381 5,778 5,537 4,538 3,054 1,570 Total equity 6,492 4,387 4,572 5,438 6,282 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 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. See Note 4—Acquisitions and Divestitures for additional information. Total debt and total assets have been retroactively restated for the years ended December 31, 2015, 2014, 2013 and 2012 to reflect our adoption during fiscal year 2016 of Accounting Standards Update 2015-03, Interest—Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs, which resulted in the reclassification of deferred debt issuance costs from other assets to an offset of long-term debt on our consolidated balance sheets. See Note 3—New Accounting Standards and Note 12—Financing Agreements for additional information. 8,8. Financial Statements and Supplementary Data. All references to "CF Holdings," "we," "us," "our" and "the Company" 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. References to tons refer to short-tons. FootnotesNotes 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:•••••Key Industry Factors•Factors Affecting Our Results••20132016 Compared to Year Ended December 31, 20122015•YearYear Ended December 31, 20122015 Compared to Year Ended December 31, 20112014••••••Discussion of Seasonality Impacts on Operationsphosphate 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.core marketmanufacturing and distribution facilities are concentrated in the midwestern United States and other major agricultural areas of the United States, Canada and Canada.the United Kingdom. We also export nitrogen fertilizer products from our Donaldsonville, Louisiana and Yazoo City, Mississippi manufacturing facilities, and phosphateour United Kingdom manufacturing facilities in Billingham and Ince.products from our Florida phosphate operations through our Tampa port facility. In October 2013, we entered into a definitive agreement with the Mosaic Company (Mosaic) to sell our entire phosphate mining and manufacturing business, which isfacilities, located in Florida for, a purchase price of approximately $1.4 billion in cash, subject to adjustment as providedDonaldsonville, Louisiana (the largest nitrogen fertilizer complex in the agreement,world); Port Neal, Iowa; Yazoo City, Mississippi; and entered into two agreements to supply ammonia to Mosaic. The first agreement,Woodward, Oklahoma. These facilities are owned by CF Industries Nitrogen, LLC (CFN), in which is not conditioned upon completion of the phosphate business sale transaction, provides for us to supply between 600,000we own a majority equity interest and 800,000 tons of ammonia per year from our Donaldsonville, LouisianaCF INDUSTRIES HOLDINGS, INC.nitrogen complex beginning no later than 2017. The second agreement provides for us to supply approximately 300,000 tons of ammonia per year sourced from our Point Lisas Nitrogen Limited (PLNL) joint venture beginning at the closing of the phosphate business sale transaction. The closing of the phosphate business sale transaction is subject to various conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act), approvals under applicable foreign antitrust laws, receipt of other governmental and third party consents and other customary closing conditions. In January 2014, we were notified that the U.S. Department of Justice closed its review and terminated the waiting period under the HSR Act relating to the phosphate business sale transaction. The phosphate business sale transaction is expected to close in the first half of 2014. For additional details regarding this sale, seeCHS Inc. (CHS) owns a minority equity interest. See Note 12—Assets and Liabilities Held for Sale to the consolidated financial statements17—Noncontrolling Interests to our consolidated financial statements included in Item 8 of this report. Our principal nitrogen segment assets include:•six nitrogen fertilizer manufacturing facilities in Donaldsonville, Louisiana (the largest nitrogen fertilizer complex in North America), Medicine Hat, Alberta (the largest nitrogen fertilizer complex in Canada), Port Neal, Iowa, Courtright, Ontario, Yazoo City, Mississippi, and Woodward, Oklahoma;•areport for additional information on our strategic venture with CHS;••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; and•a 50% interest in KEYTRADE AG (Keytrade), a global fertilizer trading company headquartered near Zurich, Switzerland. As a result of the agreement to sell the phosphate mining and manufacturing business to Mosaic, the assets and liabilities of our phosphate segment, including an integrated ammonium phosphate fertilizer complex and a phosphate rock mine and associated beneficiation plant—but excluding accounts receivable, accounts payable and certain phosphate inventory, which will be retained by us and settled in the ordinary course—are classified as assets or liabilities heldTobago that we account for sale.Items Affecting Comparability of ResultsPlanned Disposition of the Phosphate Business and Ammonia Supply Agreements In October 2013, we entered into a definitive agreement with Mosaic to sell our entire phosphate mining and manufacturing business, which is located in Florida, for a purchase price of approximately $1.4 billion in cash, subject to adjustment as provided in the agreement, and entered into two agreements to supply ammonia to Mosaic. The first agreement, which is not conditioned uponCF INDUSTRIES HOLDINGS, INC.completion of the phosphate business sale transaction, provides for us to supply between 600,000 and 800,000 tons of ammonia per year from our Donaldsonville, Louisiana nitrogen complex beginning no later than 2017. The second agreement provides for us to supply approximately 300,000 tons of ammonia per year sourced from our PLNL joint venture beginning at the closing of the phosphate business sale transaction. The ammonia price under the Donaldsonville supply agreement will be based on the cost of natural gas delivered to Donaldsonville. Pricing under the PLNL supply agreement will be similar to that in the existing agreement under which CF Industries purchases ammonia from PLNL. The phosphate miningequity method.manufacturing business assets we are selling in the phosphate business sale transaction include the Hardee County Phosphate Rock Mine; the Plant City Phosphate Complex; an ammonia terminal, phosphate warehouse and dock at the Port of Tampa; and the site of the former Bartow Phosphate Complex. In addition, Mosaic is assuming certain liabilities related to the phosphate mining and manufacturing business, including responsibility for closure, water treatment and long-term maintenance and monitoring of the phosphogypsum stacks at the Plant City and Bartow complexes. We are also transferring to Mosaic the value of the phosphate mining and manufacturing business asset retirement obligation trust and escrow funds totaling approximately $200 million. The closing of the phosphate business sale transaction is subject to various conditions, including the expiration or termination of the waiting period under the HSR Act, approvals under applicable foreign antitrust laws, receipt of other governmental and third party consents and other customary closing conditions. In January 2014, we were notified that the U.S. Department of Justice closed its review and terminated the waiting period under the HSR Act relating to the phosphate business sale transaction. The phosphate business sale transaction is expected to close in the first half of 2014. The assets and liabilities of our phosphate business segment being sold to Mosaic comprise a disposal group that is classified on our December 31, 2013 Consolidated Balance Sheet as assets or liabilities held for sale. The accounts receivable, and accounts payable pertaining to the phosphate mining and manufacturing business and certain phosphate inventory held in distribution facilities will not be sold to Mosaic in the phosphate business sale transaction and will be retained by us and settled in the ordinary course. These retained assets and liabilities of our phosphate segment are not included in assets or liabilities held for sale. Effective November 1, 2013 we ceased depreciation on amounts in property, plant and equipment classified as held for sale. The depreciation that would have been recorded for November and December is estimated at approximately $8.1 million. The contract to supply ammonia to the disposed business from our PLNL joint venture represents the continuation, following the phosphate business sale transaction, of a supply arrangement that historically has been maintained between the phosphate business and other operations of the Company and its subsidiaries. Because of the significance of this continuing supply arrangement, in accordance with U.S. generally accepted accounting principles, the phosphate mining and manufacturing business is not reported as discontinued operations in our consolidated statement of operations.CFL Selling Price ModificationsMarket Conditions Prior to April 30, 2013, CF Industries, Inc. (CF Industries) owned 49% of the voting common shares and 66% of the non-voting preferred shares of Canadian Fertilizers Limited (CFL), an Alberta, Canada based nitrogen fertilizer manufacturer and had the right to purchase 66% of the production of CFL. Also prior to April 30, 2013, Viterra, Inc. (Viterra) held 34% of the equity ownership of CFL and had the right to purchase up to 34% of CFL's production. Both CF Industries and Viterra were entitled to receive distributions of net earnings of CFL based upon their respective purchases from CFL. CFL was a variable interest entity that was consolidated in our financial statements. On 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.CF INDUSTRIES HOLDINGS, INC. CF Industries' and Viterra's purchases of nitrogen fertilizer products from CFL were made under product purchase agreements, and the selling prices were determined under the provisions of these agreements. An initial selling price was paid to CFL based upon CFL's production cost plus an agreed-upon margin once title passed as the product was shipped. At the end of the year, the difference between the market price of products purchased from CFL and the price based on production cost plus an agreed-upon margin was paid to CFL. The sales revenue attributable to this difference was accrued by the Company on an interim basis. Until April 30, 2013 when CFL became a wholly owned subsidiary in our financial statements, net sales and accounts receivable attributable to CFL were solely generated by transactions with Viterra, as all transactions with CF Industries were eliminated in consolidation in our financial statements. In the fourth quarter of 2012, the CFL Board of Directors approved amendments to the product purchase agreements retroactive to January 1, 2012 that modified the selling prices that CFL charged for products sold to Viterra and CF Industries, which eliminated the requirement to pay to CFL the difference between the market price and the price based on production cost plus an agreed-upon margin. The following summarizes the selling prices in the 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.•For the 2011 annual reporting period, the Company's consolidated financial statements reflect market-based selling prices for products purchased from CFL, including sales made by CFL to Viterra.•For the 2012 annual reporting period, and between the period of January 1, 2013 and April 30, 2013, CFL selling prices were based on production cost plus an agreed-upon margin.•Starting on April 30, 2013, CFL became a wholly owned subsidiary of CF Industries. Once CFL became a wholly owned subsidiary, CF industries began purchasing all of the output of CFL for resale and reported those sales in its consolidated financial statements at market prices. As a result, the financial results for 2013 include four months of selling prices based on production cost plus an agreed-upon margin and eight months of market based selling prices. These selling price amendments to the product purchase agreements impact the comparability of the Company's financial results. These changes affect the year-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 the comparability of the Company's net earnings attributable to common stockholders or net cash flows for the same period. In order to provide comparable information for the periods presented, certain financial information is being provided for the prior year comparable periods adjusted as if the current year CFL pricing calculation pattern of four months of cost based pricing and eight months of market based pricing had been used in the prior year comparable periods. We report our financial results in accordance with U.S. generally accepted accounting principles (GAAP). Management believes that the presentation in this report of non-GAAP financial measures of certain adjusted data and the period-to-period percentage changes in such measures, provides investors with additional meaningful information to assess period-to-period changes in our underlying operating performance. This 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 presented on an as adjusted basis as if all CFL sales to the noncontrolling interest had been priced based on the modified pricing calculation methodology (production cost plus the agreed-upon margin) for the first fourCF INDUSTRIES HOLDINGS, INC.months and at market for the remaining eight months of 2011 and 2012. These non-GAAP financial measures are provided only for the purpose of facilitating comparisons between the periods, operating performance and do not purport to represent what our actual consolidated results of operations would have been, 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 GAAP.Net Operating Loss (NOL) Settlement At the time of 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. At December 31, 2012, the NOLs had a potential tax benefit of $94.3 million, which had been fully reserved by the valuation allowance. In January 2013, we and the pre-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 73.1% would be payable to them. In March 2013, we entered into a closing agreement with the IRS to resolve the tax treatment of the pre-IPO NOLs. Pursuant to the Closing Agreement, we have agreed with the IRS that we will be entitled to a tax deduction equal to a portion of the NOLs over five years commencing with the 2012 tax year. The $20.6 million net benefit from this NOL settlement was recognized in the first quarter of 2013 as follows:•NOL tax benefits of $75.8 million were recognized, which reduced income tax expense.•A charge of $55.2 million was recognized for the 73.1% portion of the NOL benefit that will be paid to the pre-IPO owners as the tax benefits are realized. The $55.2 million charge is recognized in the consolidated statement of operations in Other non-operating—net.Financial Executive Summary•During 2013, we experienced lower net sales and net earnings as compared to the prior year due to weakness in the global fertilizer markets. The lower earnings were due primarily to lower selling prices for both nitrogen and phosphate fertilizers and higher natural gas costs as compared to the prior year. The decline in global nitrogen selling prices was attributable to increased supply due primarily to higher exports from China. The decline in phosphate selling prices reflected weaker demand from India.•In 2013, we reported net earnings attributable to common stockholders of $1.5 billion compared to net earnings of $1.8 billion in 2012, or a decline of 21%. Our 2013 results included $52.9 million of pre-tax unrealized mark-to-market gains ($33.5 million after tax) on natural gas derivatives and $20.8 million of realized and unrealized net gains ($13.2 million after tax) on foreign currency derivatives related to our capacity expansion projects in Donaldsonville, Louisiana, and Port Neal, Iowa, and a net $20.6 million benefit from a settlement with the IRS concerning certain pre-IPO NOLs.CF INDUSTRIES HOLDINGS, INC.•Net earnings attributable to common stockholders of $1.8 billion for 2012 included $66.5 million of net pre-tax unrealized mark-to-market gains ($41.2 million after tax) on natural gas derivatives, $8.1 million of realized and unrealized net gains ($5.0 million after tax) on foreign currency derivatives, a $15.2 million charge ($9.4 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 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 decreased 13% to $24.74 in 2013 from $28.59 for 2012 due to lower earnings partially offset by a lower average number of outstanding common shares due to our share repurchase program.•Our gross margin declined by $593.1 million, or 19%, to $2.5 billion in 2013 from $3.1 billion in 2012 due to lower nitrogen and phosphate segment earnings as a result of lower average selling prices and lower phosphate sales volume. In the nitrogen segment, gross margin decreased by $468.3 million, or 16%, due primarily to lower average selling prices. In the phosphate segment, gross margin decreased $124.8 million, or 62%, due to declines in both average selling prices and volume.•Our net sales decreased $629.3 million, or 10%, in 2013 compared to 2012. In the nitrogen segment, net sales decreased by 8% due primarily to an 8% reduction in average selling prices. In the phosphate segment, net sales declined by 21% due to a 13% decline in average selling prices and a 9% decline in sales volume.•Net cash generated from operating activities during 2013 was $1.5 billion as compared to $2.4 billion in 2012. The $0.9 billion decline was due to the combination of lower net earnings and higher net working capital levels due primarily to lower accrued income taxes and lower customer advances as customers delayed purchasing decisions in 2013 as compared to the prior year.•Cash used in investing activities increased by $505.8 million in 2013 to $1,019.3 million as compared to $513.5 million in the prior year. The increase was due primarily to a $300.3 million increase in capital expenditures and a $154.0 million deposit into a restricted cash account, both primarily related to our capacity expansion projects in Donaldsonville, Louisiana, and Port Neal, Iowa.•In October 2013, we entered into a set of strategic agreements with Mosaic. The agreements include: a definitive agreement to sell the entirety of CF Industries' phosphate mining and manufacturing business, which is located in Florida, to Mosaic for a purchase price of approximately $1.4 billion in cash, subject to adjustment as provided in the agreement, and agreements under which the Company will supply Mosaic with ammonia from its Donaldsonville, Louisiana nitrogen complex and the Company's Point Lisas Nitrogen Ltd. (PLNL) joint venture.•During 2013, we repurchased 7.3 million shares of our common stock at an average price of $197.43 representing 12% of the prior year end outstanding shares at a cost of $1.4 billion.Key Industry Factorsagriculturaloperating results are influenced by a broad range of factors, including those outlined below.globally-tradedglobally traded commodities and as a result, we competeare subject to price competition. The customers for our products make their purchasing decisions principally on the basis of delivered price and, to a lesser extent, on customer service and product quality. Moreover,The selling prices of our operating results are influenced by a broad range of factors, including those outlined below.products fluctuate in response to global market conditions and changes in supply and demand.CF INDUSTRIES HOLDINGS, INC.&and Demandfederalgovernmental 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, Russia and Brazil, among others, often play a major role in shaping near-term market fundamentals. The economics of nitrogen-based 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.Natural Gas Prices Natural gas is the principal raw material used to produce nitrogen fertilizers. We use Raw materials are dependent on energy sources such as natural gas both as a chemical feedstock and as a fuel to produce ammonia, granular urea, UAN and AN. Because most of our nitrogen fertilizer manufacturing facilitiesor coal; supply costs 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 declined over the past several years, but are subject to volatility. During the three year period ended December 31, 2013, the average daily closing price at the Henry Hub reached a high of $4.92 per MMBtu on June 9, 2011 and a low of $1.84 per MMBtu on April 20, 2012. Natural gas costs rose 8% in 2013 from 2012. Expenditures on natural gas, including realized gains and losses, comprised approximately 41% of the total cost of sales for our nitrogen fertilizer products in 2013 up from 39% in 2012. Natural gas costs represented a higher percentage of cash production costs (total production costs less depreciation and amortization).Farmers' Economics The demand for fertilizer is affected by the aggregate crop planting decisionssupply of and demand for these commodities.applicationprices stimulated global investment in nitrogen production facilities, which resulted in an increase in global nitrogen fertilizer production capacity. As a result, global nitrogen fertilizer supply increased faster than global nitrogen fertilizer demand, creating the current global oversupply in the market, and leading to lower nitrogen fertilizer selling prices. In addition, lower global production costs, driven by lower feedstock costs and foreign exchange rate decisions of individual farmers. Individual farmers make planting decisions based largely on prospective profitability of a harvest, whilechanges, and reduced ocean freight costs have further contributed to the specific varieties and amounts of fertilizer they apply depend on factors like their current liquidity, soil conditions, weather patterns and the types of crops planted.policies affecting trade and other matters.policies. The development of additional natural gas reserves in North America over the last few yearsdecade 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.CF INDUSTRIES HOLDINGS, INC.nitrogen basednitrogen-based fertilizers located in the Middle East, Ukraine, the Republic of Trinidad and Tobago, Venezuela, North Africa, Russia and China are major exporters to North America.domestic phosphate industrydemand for fertilizer is tiedaffected by the aggregate crop planting decisions and fertilizer application rate decisions of individual farmers. Individual farmers make planting decisions based largely on prospective profitability of a harvest, while the specific varieties and amounts of fertilizer they apply depend on factors like their current liquidity, soil conditions, weather patterns, crop prices and the types of crops planted. 2016 2015 2014 Pre-Tax After-Tax Pre-Tax After-Tax Pre-Tax After-Tax (in millions) Capacity Expansion Projects: Expansion project depreciation $ 116 $ 73 $ 13 $ 8 $ — $ — Start-up costs - Donaldsonville / Port Neal expansion plants 52 32 — — — — Expansion project expenses 73 46 51 32 31 19 Loss on foreign currency derivatives — — 22 13 38 24 Strategic Venture with CHS: Noncontrolling interest 93 93 — — — — Loss on embedded derivative liability 23 14 — — — — Debt Restructuring: Loss on debt extinguishment 167 105 — — — — Debt and revolver amendment fees 16 10 — — — — Private Senior Notes arrangement fees 2 1 — — — — CF Fertilisers UK Acquisition: Gain on remeasurement of CF Fertilisers UK investment — — (94 ) (94 ) — — Equity Method Investments: Impairment of equity method investment in PLNL 134 134 62 62 — — Loss on sale of equity method investments — — 43 31 — — Transaction Costs and Termination of Agreement with OCI: Transaction costs 179 96 57 37 — — Financing costs related to bridge loan commitment fee 28 18 6 4 — — Other Items: Unrealized net mark-to-market (gain) loss on natural gas derivatives (260 ) (163 ) 176 111 79 50 Loss (gain) on foreign currency transactions including intercompany loans 93 93 (8 ) — (15 ) (9 ) Gain on sale of phosphate business — — — — (750 ) (463 ) Retirement benefit settlement charges — — — — 13 8 Total Impact of Significant Items $ 716 $ 552 $ 328 $ 204 $ (604 ) $ (371 ) 2016 2015 2014 Subtotals of Amounts Above by Line Item in the Consolidated Statements of Operations: (in millions) Cost of sales $ (92 ) $ 189 $ 88 Selling, general and administrative expenses 2 — 4 Transaction costs 179 57 — Other operating—net 189 65 54 Gain on sale of phosphate business — — (750 ) Equity in (losses) earnings of operating affiliates 134 62 — Interest expense 44 6 — Loss on debt extinguishment 167 — — Equity in earnings of non-operating affiliates—net of taxes — (51 ) — Net earnings attributable to noncontrolling interests 93 — — Total Impact of Significant Items $ 716 $ 328 $ (604 ) throughprices. As a result of its positionminority equity interest in CFN, CHS is entitled to semi-annual cash distributions from CFN. We are also entitled to semi-annual cash distributions from CFN. The amounts of distributions from CFN to us and CHS are based generally on the profitability of CFN and determined based on the volume of granular urea and UAN sold by CFN to us and CHS pursuant to supply agreements, less a formula driven amount based primarily on the cost of natural gas used to produce the granular urea and UAN, and adjusted for the allocation of items such as operational efficiencies and overhead amounts. We began recognizing the noncontrolling interest pertaining to CHS’ ownership interest in CFN on February 1, 2016, and during 2016, we recognized $93 million of earnings attributable to the noncontrolling interest in CFN. See Note 17—Noncontrolling Interests to our consolidated financial statements included in Item 8 of this report for additional information regarding our strategic venture with CHS.world's largest exporter“Senior Secured Notes”). We recognized $167 million of DAP/MAP. Consequently, phosphate fertilizer pricesthe $170 million cash make-whole payment on the Private Senior Notes as a debt extinguishment charge, with the $3 million remainder being a debt modification cost that will be amortized over the term of the Senior Secured Notes.demand for U.S. DAP/MAP are subjectthe prepayment of the Private Senior Notes, certain amendments to considerable volatility and dependent on a wide variety of factors impacting the world market, including fertilizer and trade policies of foreign governments,Revolving Credit Agreement became effective. The amendments included, among other things, changes in ocean bound freight rates and international currency fluctuations.Politicaladditions to the financial and Social Governmentother covenants and a reduction in the size of the facility from $1.5 billion to $750 million. CF Holdings Reportable Segments CF Fertilisers UK Financial Results Ammonia AN Other Consolidated (dollars in millions) Seven months ended July 31, 2016 Sales volume by product tons (000s) 100 737 468 1,305 Net sales $ 26 $ 164 $ 79 $ 269 Cost of sales 22 155 74 251 Gross margin $ 4 $ 9 $ 5 $ 18 Gross margin percentage 15.4 % 5.5 % 6.3 % 6.7 % CF Holdings Reportable Segments CF Fertilisers UK Financial Results Ammonia AN Other Consolidated (dollars in millions) Five months ended December 31, 2015 Sales volume by product tons (000s) 112 436 277 825 Net sales $ 38 $ 117 $ 53 $ 208 Cost of sales 30 109 46 185 Gross margin $ 8 $ 8 $ 7 $ 23 Gross margin percentage 20.1 % 7.2 % 14.0 % 11.3 % politicalderivatives that we use for this purpose are primarily natural gas fixed price swaps and social policiesnatural gas options. We use natural gas derivatives as an economic hedge of governments aroundnatural gas price risk, but without the worldapplication of hedge accounting. This can result in restrictionsvolatility in reported earnings due to the unrealized mark-to-market adjustments that occur from changes in the value of the derivatives. In 2016, 2015 and 2014, we recognized unrealized net mark-to-market (gains) losses on importsnatural gas derivatives of $(260) million, $176 million and exports,$79 million, respectively, which is reflected in cost of sales in our consolidated statements of operations.subsidizationimpact of changes in foreign currency exchange rates on primarily British pound and Canadian dollar denominated intercompany loans that are not permanently invested. In 2014, we recognized a $15 million gain from the impact of changes in foreign currency exchange rates on Canadian dollar denominated intercompany loans that were not permanently invested.subsidizationfirst half of domestic producersthe year with high storage levels and strong production in North America. Natural gas prices rose towards the end of 2016.subsidizationloss of exports. Due$23 million representing the net fair value adjustments to an embedded derivative related to our strategic venture with CHS. These increases were partly offset by a decrease in realized and unrealized losses on foreign currency derivatives of $22 million.critical rolecombination of higher debt levels due to the issuance of $1.0 billion of Private Senior Notes in September 2015 and debt amendment fees and accelerated amortization of debt issuance costs due to restructuring of our debt and the Revolving Credit Agreement in 2016. In 2016, we modified the Revolving Credit Agreement by reducing its size from $2.0 billion to $750 million and modifying certain covenants and other terms. As a result of these changes, we recognized $16 million of debt amendment fees and accelerated amortization of loan fees in interest expense. The increase in interest expense—net in 2016 also includes the amortization of capitalized Bridge Credit Agreement fees of $28 million pertaining to the bridge loan for our proposed combination with certain of the OCI businesses. We also recorded capitalized interest of $166 million in 2016 related primarily to our capacity expansion projects compared to $154 million in 2015. Twelve months ended December 31, 2016 2015 2014 2016 v. 2015 2015 v. 2014 (in millions, except as noted) Net sales $ 3,685 $ 4,308 $ 4,743 $ (623 ) (14 )% $ (435 ) (9 )% Cost of sales (COS) 2,845 2,761 2,965 84 3 % (204 ) (7 )% Gross margin 840 1,547 1,778 (707 ) (46 )% (231 ) (13 )% Gross margin percentage 22.8 % 35.9 % 37.5 % (13.1 )% (1.6 )% Selling, general and administrative expenses 174 170 152 4 2 % 18 12 % Transaction costs 179 57 — 122 214 % 57 N/M Other operating—net 208 92 53 116 126 % 39 74 % Total other operating costs and expenses 561 319 205 242 76 % 114 56 % Gain on sale of phosphate business — — 750 — N/M (750 ) (100 )% Equity in (losses) earnings of operating affiliates (145 ) (35 ) 43 (110 ) N/M (78 ) N/M Operating earnings 134 1,193 2,366 (1,059 ) (89 )% (1,173 ) (50 )% Interest expense—net 195 131 177 64 49 % (46 ) (26 )% Loss on debt extinguishment 167 — — 167 N/M — N/M Other non-operating—net (2 ) 4 2 (6 ) N/M 2 100 % (Loss) earnings before income taxes and equity in earnings of non-operating affiliates (226 ) 1,058 2,187 (1,284 ) N/M (1,129 ) (52 )% Income tax (benefit) provision (68 ) 396 773 (464 ) N/M (377 ) (49 )% Equity in earnings of non-operating affiliates—net of taxes — 72 23 (72 ) (100 )% 49 213 % Net (loss) earnings (158 ) 734 1,437 (892 ) N/M (703 ) (49 )% Less: Net earnings attributable to noncontrolling interests 119 34 47 85 250 % (13 ) (28 )% Net (loss) earnings attributable to common stockholders $ (277 ) $ 700 $ 1,390 $ (977 ) N/M $ (690 ) (50 )% Diluted net earnings (loss) per share attributable to common stockholders $ (1.19 ) $ 2.96 $ 5.42 $ (4.15 ) N/M $ (2.46 ) (45 )% Diluted weighted-average common shares outstanding 233.1 236.1 256.7 (3.0 ) (1 )% (20.6 ) (8 )% Dividends declared per common share $ 1.20 $ 1.20 $ 1.00 $ — $ 0.20 Natural Gas Supplemental Data (per MMBtu) $ 2.61 $ 3.00 $ 4.46 $ (0.39 ) (13 )% $ (1.46 ) (33 )% 0.46 0.28 (0.24 ) 0.18 64 % 0.52 N/M Cost of natural gas in COS $ 3.07 $ 3.28 $ 4.22 $ (0.21 ) (6 )% $ (0.94 ) (22 )% Average daily market price of natural gas Henry Hub (Louisiana) $ 2.48 $ 2.61 $ 4.32 $ (0.13 ) (5 )% $ (1.71 ) (40 )% $ 4.66 $ 6.53 $ — $ (1.87 ) (29 )% $ 6.53 N/M Unrealized net mark-to-market (gain) loss on natural gas derivatives $ (260 ) $ 176 $ 79 $ (436 ) N/M $ 97 123 % Capital expenditures $ 2,211 $ 2,469 $ 1,809 $ (258 ) (10 )% $ 660 36 % Sales volume by product tons (000s) 16,957 13,718 13,763 3,239 24 % (45 ) — % Production volume by product tons (000s): 8,307 7,673 7,011 634 8 % 662 9 % Granular urea 3,368 2,520 2,347 848 34 % 173 7 % UAN (32%) 6,698 5,888 5,939 810 14 % (51 ) (1 )% AN 1,845 1,283 950 562 44 % 333 35 % Includes the cost of natural gas that is included in cost of sales during the period under the first-in, first-out (FIFO) inventory cost method. Includes realized gains and losses on natural gas derivatives settled during the period. Excludes unrealized mark-to-market gains and losses on natural gas derivatives. Amount represents average daily market price for the full year 2015 and 2016. Gross ammonia production, including amounts subsequently upgraded on-site into granular urea, UAN, or AN. fertilizers playare described above under "Overview of CF Holdings—Items Affecting Comparability of Results."food2016 from $1.55 billion in 2015. The impact of the CF Fertilisers UK acquisition increased gross margin by $18 million, or 1%. The remaining decline in our gross margin of $725 million was due primarily to lower average selling prices and higher capacity expansion project related costs, partially offset by the impact of unrealized net mark-to-market gains on natural gas derivatives, increased sales volume, and lower physical natural gas costs and production costs:constructioncompletion of our capacity expansion project upgrading facilities at our Donaldsonville, Louisiana complex for granular urea and operationUAN.fertilizer plants often are influencedthe year with high storage levels and strong production in North America. Natural gas prices rose towards the end of 2016.these political$62 million as 2016 included a $132 million loss and social objectives.Factors Affecting Our ResultsSales.Sales 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.Sales.Salesand 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. We offer our customers the opportunity to purchase product 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 use derivative instruments to reduce our exposure to changes in thenatural gas, the largest and most volatile component of our manufacturing cost. We report our natural gas derivatives on the balance sheet at their fair value. Changes in the fair value of these derivatives are recordedsales increased $84 million, or 3%, from 2015 to 2016. The overall increase in cost of sales is due primarily to the impact of the CF Fertilisers UK acquisition, which increased cost of sales by $251 million, or 9%, as 2016 includes a full year of CF Fertilisers UK results and 2015 includes five months of CF Fertilisers UK results. The remaining decrease in our cost of sales of $167 million, or 6%, was due primarily to the changes occur. See "Forward Salescombination of unrealized net mark-to-market gains on natural gas derivatives and Customer Advances" laterlower realized natural gas costs, partly offset by higher capacity expansion project related costs. Cost of sales includes a $260 million unrealized net mark-to-market gain in this discussion2016 as compared to a $176 million unrealized net mark-to-market loss in 2015. Realized natural gas costs, including the impact of lower purchased natural gas costs and analysis. Asrealized derivatives, declined 6% from $3.28 per MMBtu in 2015 to $3.07 per MMBtu in 2016 as natural gas prices were lower in 2016, particularly in the first half of the year with high storage levels and strong production in North America, although natural gas prices increased towards the end of 2016.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.Expenses.ExpensesNet.Net the costs associated with engineering studies for proposed capital projects, administrative costs associated with our 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, engineering studies, amounts recorded for environmental remediation for other areas of our business, litigation expenses and gains and losses on the disposal of fixed assets.Affiliates. We have investments accounted for under the equity method for which the results are includedAffiliatesour(losses) earnings 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 equity method 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.activities. 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.Expense.Expense—Netexpenseexpense—net includes the interest expense on our long-term debt, and notes payable, amortization of the related fees required to execute financing agreements and annual fees onpursuant to our senior revolving credit facility.Revolving Credit Agreement. Capitalized interest relating to the construction of major capital 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. Interest Income. Our interest expense—net also includes interest income, which represents amounts earned on our cash, cash equivalents, investments and advances to unconsolidated affiliates.Provision.(Benefit) Provisionprovision includes all currently payable and deferred United States and foreignbenefit for 2016 was $68 million on a pre-tax loss of $226 million, resulting in an effective tax rate of 30.0%, compared to an income tax expense applicableprovision of $396 million on pre-tax income of $1.06 billion, or an effective tax rate of 37.4%, in the prior year.ongoing operations. 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 incomelegal entity structure effected in the yearsfirst quarter of 2016 as part of our strategic venture with CHS. See Note 17—Noncontrolling Interests to our consolidated financial statements included in which those differences are projected to be recovered or settled. RealizationItem 8 of deferredthis report for additional information.assets is dependent on our ability to generate sufficient taxable income,benefit of an appropriate character, in future periods.$46 million, net of federal tax effect, for state net operating loss carryforwards. A valuation allowance of $4 million is established if it is determinedrecorded for certain loss carryforwards for which we do not expect to be more likely than notrealize in the future. a deferred tax asset will not be realized. Interestdeductible as a result of our intention to carryback the tax net operating loss for the year ended December 31, 2016 to those prior tax years.penalties relatedDivestitures to unrecognized tax benefitsour consolidated financial statements included in Item 8 of this report for additional information.reported as interest expenseindefinitely available to offset capital gains in those foreign jurisdictions. As the future realization of these carryforwards is not anticipated, a valuation allowance of $28 million was recorded in 2016.respectively.Taxes.TaxesIncome taxes related to these investments, if any, are reflected in this line. The amounts recorded as equityEquity in earnings of non-operating affiliates—affiliates—net of taxes relatein 2015 included the previously owned 50% equity method earnings of CF Fertilisers UK and also included our share ofinvestmentsinitial 50% equity interest in GrowHow and Keytrade. OurCF Fertilisers UK in connection with the closing of the acquisition. Equity in earnings of non-operating affiliates—net of taxes on 2015 also included our share of CF Fertilisers UK operating results up to the net earnings includes the amortization of certain tangible and intangible assets identified as partdate of the applicationacquisition. In addition, during the second quarter of purchase accounting at acquisition. We account for these investments as non-operating equity method investments,2015, we sold our interests in Keytrade and exclude the net earningsrecorded an after-tax loss 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.$29 million (pre-tax loss of $40 million).the Noncontrolling Interest.Intereststhe noncontrolling interest for 2013 and 2012 includedinterests includes the net earnings attributable to the 24.7% interest of the publicly heldpublicly-held common units of TNCLP. Net earnings attributable to the noncontrolling interestCF INDUSTRIES HOLDINGS, INC.for the first four months of 2013 and all of 2012 also included the interest of the 34% holder of CFL's equity ownership. On April 30, 2013 we purchased the noncontrolling interests of CFL, which is the primary reason for the 2013 decline in earnings attributable to the noncontrolling interest.an aggregateapproximately 75.3% of TNCLP and outside investors own the remaining 24.7%. The TNCLP Agreement of Limited Partnership allowsNet earnings attributable to noncontrolling interests also includes 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.Results of Consolidated Operations The following table presents our consolidated results of operations: Year Ended December 31, 2013 2012 2011 2013 v. 2012 2012 v. 2011 (in millions, except per share amounts) $ 5,474.7 $ 6,104.0 $ 6,097.9 $ (629.3 ) (10 )% $ 6.1 — % 2,954.5 2,990.7 3,202.3 (36.2 ) (1 )% (211.6 ) (7 )% 2,520.2 3,113.3 2,895.6 (593.1 ) (19 )% 217.7 8 %
166.0
151.8
130.0
14.2
9
%
21.8
17
% — — 4.4 — N/M (4.4 ) (100 )% (15.8 ) 49.1 20.9 (64.9 ) (132 )% 28.2 135 % 150.2 200.9 155.3 (50.7 ) (25 )% 45.6 29 % 41.7 47.0 50.2 (5.3 ) (11 )% (3.2 ) (6 )% 2,411.7 2,959.4 2,790.5 (547.7 ) (19 )% 168.9 6 % 152.2 135.3 147.2 16.9 12 % (11.9 ) (8 )% (4.7 ) (4.3 ) (1.7 ) (0.4 ) 9 % (2.6 ) 153 % 54.5 (1.1 ) (0.6 ) 55.6 N/M (0.5 ) 83 % 2,209.7 2,829.5 2,645.6 (619.8 ) (22 )% 183.9 7 %
686.5
964.2
926.5
(277.7
)
(29
)%
37.7
4
% 9.6 58.1 41.9 (48.5 ) (83 )% 16.2 39 % 1,532.8 1,923.4 1,761.0 (390.6 ) (20 )% 162.4 9 %
68.2
74.7
221.8
(6.5
)
(9
)%
(147.1
)
(66
)% $ 1,464.6 $ 1,848.7 $ 1,539.2 $ (384.1 ) (21 )% $ 309.5 20 % �� $ 24.74 $ 28.59 $ 21.98 $ (3.85 ) $ 6.61
59.2
64.7
70.0
(5.5
)
(5.3
)
$
2.20
$
1.60
$
1.00
$
0.60
$
0.60 N/M—Not MeaningfulImpact of CFL Selling Price Modifications As discussed in the Items Affecting Comparability of Results section of this discussion and analysis, in the fourth quarter of 2012, the CFL selling prices to Viterra were modified to cost plus anCF INDUSTRIES HOLDINGS, INC.agreed-upon margin from market-based pricing retroactive to January 1, 2012. This change had no impact on our net earnings attributable to common stockholders as CFL wasthe CHS minority equity interest in CFN, a consolidated variable interest entity prior to April 30, 2013. However, these changes impact the comparability of certain amounts between 2013 and prior years. On April 30, 2013, CF Industries acquired the noncontrolling interests in CFL and CFL became a wholly owned subsidiary of CF Industries. The financial resultsHoldings, purchased for 2013 include four months$2.8 billion on February 1, 2016.CFL selling prices based on production cost plus an agreed-upon margin and eight monthsthe publicly held common units of market based selling prices. The following table adjusts the results for 2012 and 2011TNCLP.similar selling price patternloss of four months based on production costs and eight months based on market prices$1.19 per share in 2016 from diluted net earnings per share attributable to be comparablecommon stockholders of $2.96 per share in 2015. This decrease is due to the 2013 results. Year Ended December 31, 2013 2012 2011 2013 v. 2012 2012 v. 2011 (in millions) $ 5,474.7 $ 6,104.0 $ 6,097.9 $ (629.3 ) (10 )% $ 6.1 0 % — 135.9 (41.5 ) (135.9 ) 177.4 $ 5,474.7 $ 6,239.9 $ 6,056.4 $ (765.2 ) (12 )% $ 183.5 3 % $ 2,520.2 $ 3,113.3 $ 2,895.6 $ (593.1 ) (19 )% $ 217.7 8 % — 135.9 (41.5 ) (135.9 ) 177.4 $ 2,520.2 $ 3,249.2 $ 2,854.1 $ (729.0 ) (22 )% $ 395.1 14 % $ 68.2 $ 74.7 $ 221.8 $ (6.5 ) (9 )% $ (147.1 ) (66 )% 135.9 (41.5 ) (135.9 ) 177.4 $ 68.2 $ 210.6 $ 180.3 $ (142.4 ) (68 )% $ 30.3 17 % 20132015 Compared to Year Ended December 31, 20122014 Net salesnet earnings for 2013Other segments are referred to in this section of the discussion and analysis as the “Nitrogen Product Segments.”both2015 from $1.78 billion in 2014. The impact of the nitrogen and phosphate segments from prior year levels. These declines wereCF Fertilisers UK acquisition increased gross margin by $23 million. The remaining decline in our gross margin of $254 million, or 14%, was due to increased supply and weaknessthe $244 million decrease in global fertilizer markets. Higher exports by Chinese producers increased supply and weighed on global nitrogen prices, while weaker demand from India had a similar impact on phosphate prices. North American demand in 2013 for both nitrogen and phosphate fertilizers was impacted by a delayed fall application period due to a late harvest and a shortened application window due to adverse weathergross margin in the Midwest. Additionally, an 8% increaseNitrogen Product Segments and the $10 million decline in realized natural gas costs contributed to lower earnings. Our gross margin decreased $593.1 million, or 19%, to $2.5 billion in 2013 from $3.1 billionthe phosphate segment as the phosphate business was sold in 2012 reflecting declinesthe first quarter of 2014. The remaining decrease in both the nitrogen and phosphate segments. TheNitrogen Product Segments gross margin, was impacted by the CFL selling price modifications previously discussed. On an as adjusted basis, the gross margin decreased 22% from the prior year. In the nitrogen segment, the gross margin decreased by $468.3 million, or 16%, to $2.4 billion as compared to $2.9 billion in 2012more fully described below, was due primarily to an 8% decrease inlower average selling prices, an 8% increase in realized natural gas costs,lower sales volume, and a $13.6 million decrease in net unrealizedthe impact of mark-to-market gainslosses on natural gas derivatives, in the current year as compared to 2012. The nitrogen segmentpartially offset by lower physical natural gas costs.was impacted by $349 million as international nitrogen fertilizer prices declined 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 CFL sales price modifications. On an as adjusted basis, theresulting supply weighed on global prices.for the nitrogen segment decreased 20%. In the phosphate segment, gross margin decreased by $124.8$72 million or 62%, to $74.9 million in 2013 from $199.7 million in 2012, due primarily to a 13%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.9% decrease3% decline in sales volume. Net earnings attributable to common stockholders$1.5 billion for 2013 included $52.9 million of pre-tax unrealized mark-to-market gains ($33.5 million after tax) on natural gas derivatives and $20.8 million ($13.2 million after tax) of net realized and unrealized gains on foreign currency derivatives and a net $20.6 million benefit from a settlement with the IRS concerning certain pre-IPO NOLs. Net earningsCF Fertilisers UK acquisition, were $318 per ton in 2012 of $1.8 billion included $66.5 million of net pre-tax unrealized mark-to-market gains ($41.2 million after tax) on natural gas derivatives, $8.1 million ($5.0 million after tax) of net realized and unrealized gains on foreign currency derivatives, a $15.2 million charge ($9.4 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 million pre-tax curtailment gain ($6.8 million after tax) from a reduction in certain retiree medical benefits.Net Sales Net sales decreased 10% to $5.5 billion in 20132015 compared to 2012 due to an 8% decrease$345 per ton in the nitrogen segment and a 21% decrease in the phosphate segment. These results were impacted by the CFL selling price modifications. On an as adjusted basis, 2013 net sales decreased 12% compared to 2012. In the nitrogen segment, net sales decreased by $418.8 million, or 8%,2014 due primarily to an 8% decreaselower UAN, granular urea and ammonia selling prices in average selling2015 as international nitrogen fertilizer prices declined 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. The decreasedecline in UAN average selling prices was due primarily to increased supplyexcess global supply. Granular urea exports from China were at a record high in 2015 and a shiftRussian exports increased significantly while global capacity additions in product mix from ammonia2015 further contributed to UAN. The comparability of 2013 nitrogen segment net sales to prior years was impacted by the CFL sales price modifications. On an as adjusted basis, nitrogen segment net sales declined 11% from 2012. Inglobal supply excess and the phosphate segment, net sales declined $210.5 million, or 21%, due to a 13% decreasedecline in average selling prices and a 9% decrease in volume.compared to 2014. The decrease in ammonia average 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.global demand, notably India.decreased $36.2in 2015 also included $176 million or 1%, from 2012of unrealized net mark-to-market losses on natural gas derivatives compared to 2013. Costlosses of $79 million in 2014. Lower gas costs were primarily driven by increasing North American natural gas production, as increased well efficiencies increased supply. Warm weather conditions, especially in the fourth quarter, also contributed to the high storage levels and the resulting decline in gas prices. The cost of sales per ton in our nitrogen segmentNitrogen Product Segments averaged $172$200 in 2013,2015, a 2% increase over a cost of sales5% decrease from the $211 per ton of $168 in 2012.2014. 8% increase in realized natural gascorporate project activities, and higher intangible asset amortization expense.a $13.6legal services associated primarily with executing the strategic agreements in connection with, and preparing for the proposed combination with certain businesses of OCI, our strategic venture with CHS and our acquisition of the remaining 50% equity interest in CF Fertilisers UK not previously owned by us.decreasefrom $53 million of expense in net mark-to-market gains related2014 to natural gas derivatives. Phosphate segment costexpense of sales averaged $389 per ton in 2013 compared to $397 per ton in the prior year. This 2% decrease was due primarily to reduced raw material costs, namely ammonia and sulfur.Selling, General and Administrative Expenses Selling, general and administrative expenses increased $14.2 million to $166.0$92 million in 2013 from $151.8 million in 2012.2015. The increaseincreased expense was due primarily to higher corporate officeexpansion project costs including costs associated with certain information technology development activities, includingpertaining to our Donaldsonville, Louisiana and Port Neal, Iowa capacity expansion projects that did not qualify for capitalization. This was partially offset by the implementation and incremental amortization of the cost of a new enterprise resource planning system. Additionally, higher legal fees were incurred due to strategic initiatives including the acquisition of CFL and the sale of the phosphate business.Other Operating—Net Other operating—net was $15.8 million of income in 2013 compared to a $49.1 million net expense in 2012. The 2013 income included $34.3 milliondecrease in realized and unrealized foreign exchange gainsCF INDUSTRIES HOLDINGS, INC.including gainslosses on foreign currency derivatives related to our capacity expansion projects, partially offset by $10.8 million of expenses related to our capacity expansion activities and $5.6from $38 million of losses on the disposal of fixed assets. 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 environmental and other costs associated with our closed facilities and $5.52014 to $22 million of losses on the disposalin 2015.PLNL and our 50% interestPLNL. Equity in an ammonia storage joint venture located in Houston, Texas. Equity in(losses) earnings of operating affiliates decreased 11% to $41.7by $78 million in 20132015 as compared to $47.02014 due primarily to a $62 million impairment of our equity method investment in 2012 due to reduced operating results from these ventures.Interest—Net Net interest expensePLNL that was $147.5 millionrecognized in 2013 compared to $131.0 million in 2012.the fourth quarter of 2015. The $16.5 million increaseremaining decrease was due primarily to lower operating results from PLNL due to lower average selling prices.we issued during the second quarter of 2013, partially offset by higherin September 2015 and in March 2014, respectively. We recorded capitalized interest of $154 million in 20132015 primarily related to our capacity expansion projects.non-operating-netnon-operating—net was a $54.5$4 million expense in 20132015 compared to incomeexpense of $1.1$2 million in 2012. As discussed under Items Affecting Comparability of Results-Net Operating Loss Settlement, in 2013 a charge of $55.2 million was recognized for the 73.1% portion of the NOL's we had accumulated prior to our 2005 public offering that will be paid to pre-IPO owners as NOL tax benefits are realized.Taxes20132015 was $686.5$396 million on pre-tax income of $2.2$1.06 billion, or an effective tax rate of 31.1%37.4%, compared to an income tax provision of $964.2$773 million on pre-tax income of $2.8$2.19 billion, or an effective tax rate of 34.1%35.3% in the prior year. The increase in the effective tax rate in 2015 was reduced due primarily to an IRS tax settlement (2.2%), the impact of lower statecertain transactional expenses that are not deductible for tax purposes. The income taxes resulting from our legal entity restructuring (1.5%) and the increased tax benefits from a depletion tax method change (.8%), partially offset by an increasedprovision in 2014 included $287 million of income tax expense relatedrelating to the phosphate business sale, which increased the effective tax rate by 1.5%.future repatriationinitial 50% equity interest in CF Fertilisers UK. The earnings in CF Fertilisers UK have been permanently reinvested. Therefore, the recognition of foreignthe $94 million gain on the remeasurement of the historical equity investment does not include the recognition of tax expense on the gain.(1.5%).the noncontrolling interest in TNCLP (a partnership), which is not a taxable entity. For additional information on income taxes, see Note 11 to our consolidated financial statements included in Item 8 of this report.Equity in Earnings of Non-Operating Affiliates—Net of Taxes Equity in earnings of non-operating affiliates—net of taxes consists of our share of the operating results of unconsolidated joint venture interests in GrowHow and Keytrade. The $48.5 million decrease in 2013 compared to 2012 was due primarily to lower earnings at GrowHow due to higher natural gas costs and lower average fertilizer selling prices in the United Kingdom.CF INDUSTRIES HOLDINGS, INC.Net Earnings Attributable to the Noncontrolling Interest Net earnings attributable to the noncontrolling interest decreased $6.5 million in 2013 compared to 2012 due primarily to lower net earnings at TNCLP for the year and the April 30, 2013 purchase of the noncontrolling interests in CFL. Net earnings attributable to the noncontrolling interest for 2013 and 2012 include the net earnings attributable to the 24.7% interest of the publicly held common units of TNCLP for the entire year. For additional information, see the section titled Items Affecting Comparability of Results earlier in this discussion and analysis.Diluted Net Earnings Per Share Attributable to Common Stockholders Diluted net earnings per share attributable to common stockholders decreased to $24.74 in the 2013 from $28.59 in 2012 due to a decrease in net earnings attributable to common stockholders, partially offset by a decrease in the weighted average number of shares outstanding due to our share repurchase programs. During 2013, we repurchased 7.3 million shares of our common stock for $1.4 billion, representing 12% of the shares outstanding at December 31, 2012. During 2012, we repurchased 3.1 million shares for $500.0 million.Year Ended December 31, 2012 Compared to Year Ended December 31, 2011Consolidated Operating Results Our total gross margin increased $217.7 million, or 8%, to $3.1 billion in 2012 from $2.9 billion in 2011 due to an increase in gross margin in the nitrogen segment, partially offset by a decrease in the phosphate segment. The gross margin was impacted by the CFL selling price modifications previously discussed. On an as adjusted basis, the gross margin increased 14%. 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 decrease 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 nitrogen segment gross margin was impacted by the CFL selling price modifications. On an as adjusted basis, the gross margin for the nitrogen segment increased 21%. 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, partially offset by an increase in sales volume. Net earnings attributable to common stockholders of $1.8 billion for 2012 included $66.5 million of pre-tax unrealized mark-to-market gains ($41.2 million after tax) on natural gas derivatives and $8.1 million ($5.0 million after tax) of net realized and unrealized gains on foreign currency derivatives, a $15.2 million charge ($9.4 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 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 ($48.0 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 costsCF INDUSTRIES HOLDINGS, INC.associated with the acquisition of Terra Industries, Inc. (Terra) and a $2.0 million ($1.3 million after tax) gain on the sale of a non-core transportation business.Net Sales Net sales were $6.1 billion in both 2012 and 2011 as increases in the nitrogen segment in 2012 were offset by declines in the phosphate segment. These results were impacted by the CFL selling price modifications. On an as adjusted basis, net sales increased 3%. In the nitrogen segment, net sales increased by $84.5 million, or 2%, due primarily to 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. Nitrogen segment net sales was impacted by the CFL selling price modifications. 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% decline in average phosphate fertilizer selling prices, partially offset by a 6% increase in phosphate sales volume.Cost of Sales Total cost of sales in our nitrogen segment averaged approximately $168 per ton in 2012 compared to $188 per ton in 2011. This 11% decrease was due primarily to lower realized natural gas cost and a $66.5 million unrealized net mark-to-market gain on natural gas derivatives in the current year compared to a $77.3 million unrealized net loss in the prior year. Phosphate segment cost 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 million in 2012 from $130.0 million in 2011 due primarily to higher corporate office expenses including higher professional service fees associated with 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 at Donaldsonville, Louisiana and Port Neal, Iowa.Restructuring and Integration Costs No restructuring and integration costs were incurred 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 environmental 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 ofCF INDUSTRIES HOLDINGS, INC.$7.2 million on the disposal of fixed assets, partially offset by a $32.5 million gain on the sale of four dry product warehouses and a $2.0 million gain on the sale of a non-core transportation business.Equity in Earnings of Operating Affiliates Equity in earnings of operating affiliates 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. Equity in earnings of operating affiliates decreased $3.2 million to $47.0 million in 2012 as compared to $50.2 million in 2011 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.Interest—Net Net interest expense was $131.0 million in 2012 compared to $145.5 million in 2011. The decrease in expense was due primarily to a decrease in amortized loan fees, including a $4.7 million decrease in accelerated loan fee amortization. In 2012, we terminated the 2010 credit agreement and recognized $15.2 million accelerated amortization of deferred loan fees. In 2011, we repaid the remaining balance of our senior secured term loan and recognized $19.9 million accelerated amortization of debt issuance costs.Income Taxes Our income tax provision for 2012 was $964.2 million on pre-tax income of $2.8 billion, or an effective tax rate of 34.1%, compared to an income tax provision of $926.5 million on a pre-tax income of $2.6 billion and an effective tax rate of 35.0% in 2011. The decline in the effective tax rate was driven primarily by lower U.S. taxes on foreign earnings as well as lower state taxes in 2012 than in the prior year. The effective tax rate does not include a tax provision on the earnings attributable to the noncontrolling interests in TNCLP (a partnership), which does not record an 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 tax provision in 2012. In 2011, CFL did not record an income tax provision. See Note 1110—Income Taxes to our consolidated financial statements included in Item 8 of this report for additional information on income taxes.operatingfinancial results of unconsolidated joint venture interests in GrowHowCF Fertilisers UK and Keytrade. The $16.2During the second quarter of 2015, we sold our interests in Keytrade. On July 31, 2015, we completed the CF Fertilisers UK acquisition for total consideration of $570 million, increaseand CF Fertilisers UK became wholly owned by us and became part of our consolidated financial results.2012earnings of non-operating affiliates—net of taxes increased by $49 million in 2015 compared to 20112014 due primarily to the $94 million gain on the remeasurement to fair value of our initial 50% equity interest in CF Fertilisers UK that was due to higher net earningsrecorded in connection with the closing of the transaction. This was partially offset by the combination of operating losses experienced at GrowHow due to improved operating results, declinesKeytrade and from the loss on sale of our investments 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 $13 million in 2015 compared to 2014 due primarily to lower net earnings attributable to the approximately 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 LimitedPartnership. For additional information, see Note 4 to our consolidated financial statements included in Item 8 of this report.increaseddecreased $2.46, or 45%, to $28.59$2.96 per share in 20122015 from $21.98$5.42 per share in 20112014. This decrease is due primarily to the $1.80 per share gain from the sale of the phosphate business in 2014, partially offset by the impact of lower diluted weighted-average shares outstanding in 2015 as compared to 2014 due to an increase in net earnings attributable to common stockholders and a decrease in the weighted average numberimpact of shares outstanding due to our share repurchase program under which weprograms. We repurchased 6.5 million shares of our common stock in 2011 and an additional 3.18.9 million shares in 2012.business is organizedreportable segment structure reflects how our chief operating decision maker (CODM), as defined under U.S. GAAP, assesses the performance of our reportable segments and makes decisions about resource allocation. These segments are differentiated by products. Our management uses gross margin to evaluate segment performance and allocate resources. Total other operating costs and expenses (consisting of selling, general and administrative expenses and other operating—net) and non-operating expenses (interest and income taxes), are centrally managed internally based on two segments,and are not included in the nitrogenmeasurement of segment andprofitability reviewed by management.segment, which are differentiated primarilybusiness 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 and reportable results ceased.their products, the markets they serve and the regulatory environments in which they operate.business segment: Ammonia Phosphate Consolidated (in millions, except percentages) Year ended December 31, 2016 Net sales $ 981 $ 831 $ 1,196 $ 411 $ 266 $ — $ 3,685 Cost of sales 715 584 920 409 217 — 2,845 Gross margin $ 266 $ 247 $ 276 $ 2 $ 49 $ — $ 840 Gross margin percentage 27.1 % 29.7 % 23.1 % 0.5 % 18.4 % — % 22.8 % Year ended December 31, 2015 Net sales $ 1,523 $ 788 $ 1,480 $ 294 $ 223 $ — $ 4,308 Cost of sales 884 469 955 291 162 — 2,761 Gross margin $ 639 $ 319 $ 525 $ 3 $ 61 $ — $ 1,547 Gross margin percentage 42.0 % 40.4 % 35.5 % 1.1 % 27.2 % — % 35.9 % Year ended December 31, 2014 Net sales $ 1,576 $ 915 $ 1,670 $ 243 $ 171 $ 168 $ 4,743 Cost of sales 983 517 998 189 120 158 2,965 Gross margin $ 593 $ 398 $ 672 $ 54 $ 51 $ 10 $ 1,778 Gross margin percentage 37.6 % 43.5 % 40.3 % 22.1 % 30.0 % 6.0 % 37.5 % The cost of ammonia that is upgraded into other products is transferred at cost into the upgraded product results. Nitrogennitrogen segment: Year Ended December 31, 2013 2012 2011 2013 v. 2012 2012 v. 2011 (in millions, except as noted) $ 4,677.8 $ 5,096.6 $ 5,012.1 $ (418.8 ) (8 )% $ 84.5 2 % 2,232.5 2,183.0 2,448.9 49.5 2 % (265.9 ) (11 )% $ 2,445.3 $ 2,913.6 $ 2,563.2 $ (468.3 ) (16 )% $ 350.4 14 %
52.3
%
57.2
%
51.1
%
12,945
12,969
13,002
(24
)
(0
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(33
)
(0
)% 2,427 2,786 2,668 (359 ) (13 )% 118 4 % 2,506 2,593 2,600 (87 ) (3 )% (7 ) (0 )% 6,383 6,131 6,241 252 4 % (110 ) (2 )% 859 839 953 20 2 % (114 ) (12 )% 770 620 540 150 24 % 80 15 %
$ 592 $ 602 $ 586 $ (10 ) (2 )% $ 16 3 % 369 441 411 (72 ) (16 )% 30 7 % 303 308 319 (5 ) (2 )% (11 ) (3 )% 250 266 260 (16 ) (6 )% 6 2 %
$
3.66
$
3.39
$
4.28
$
0.27
8
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$
(0.89
)
(21
)%
$
3.72
$
2.75
$
3.99
$
0.97
35
%
$
(1.24
)
(31
)% $ 328.4 $ 334.6 $ 316.3 $ (6.2 ) (2 )% $ 18.3 6 % $ 759.5 $ 431.3 $ 177.0 $ 328.2 76 % $ 254.3 144 %
7,105 7,067 7,244 38 1 % (177 ) (2 )% 2,474 2,560 2,588 (86 ) (3 )% (28 ) (1 )% 6,332 6,027 6,349 305 5 % (322 ) (5 )% 882 839 952 43 5 % (113 ) (12 )%
ammonia segment, including the impact of our acquisition of the remaining 50% equity interest in CF Fertilisers UK:(1)Includes the cost of natural gas purchases and realized gains and losses on natural gas derivatives.(2)Gross ammonia production, including amounts subsequently upgraded into other nitrogen products.Impact of CFL Selling Price Modifications As discussed in the Items Affecting Comparability of Results section of this discussion and analysis, in the fourth quarter of 2012, the CFL selling prices to Viterra were modified to cost plus an agreed-upon margin from market-based pricing retroactive to January 1, 2012. This change had no impact on our net earnings attributable to common stockholders as CFL was a consolidated variable interest entity prior to April 30, 2013. However, these changes impact the comparability of certain amounts between 2013 and prior years. On April 30, 2013, CF Industries acquired the noncontrolling interests in CFL and CFL became a wholly owned subsidiary of CF Industries. The financial results for 2013 include four months of CFL selling prices based on production cost plus an agreed-upon margin and eight months of market based selling prices. The following table adjusts the nitrogen segment results for 2012 and 2011 to a similar selling price pattern of 4 months based on production costs and 8 months based on market prices to be comparable to the 2013 results. Year Ended December 31, 2013 2012 2011 2013 v. 2012 2012 v. 2011 (in millions) $ 4,677.8 $ 5,096.6 $ 5,012.1 $ (418.8 ) (8 )% $ 84.5 2 % — 135.9 (41.5 ) (135.9 ) 177.4 $ 4,677.8 $ 5,232.5 $ 4,970.6 $ (554.7 ) (11 )% $ 261.9 5 %
$ 2,445.3 $ 2,913.6 $ 2,563.2 $ (468.3 ) (16 )% $ 350.4 14 % — 135.9 (41.5 ) (135.9 ) 177.4 $ 2,445.3 $ 3,049.5 $ 2,521.7 $ (604.2 ) (20 )% $ 527.8 21 %
52.3 % 57.2 % 51.1 % — 1.1 (0.4 ) 52.3 % 58.3 % 50.7 %
$ 592 $ 602 $ 586 $ (10 ) (2 )% $ 16 3 % — 26 (10 ) (26 ) 36 $ 592 $ 628 $ 576 $ (36 ) (6 )% $ 52 9 %
$ 369 $ 441 $ 411 $ (72 ) (16 )% $ 30 7 % — 24 (6 ) (24 ) 30 $ 369 $ 465 $ 405 $ (96 ) (21 )% $ 60 15 % Twelve months ended December 31, 2016 2015 2014 2016 v. 2015 2015 v. 2014 (in millions, except as noted) Net sales $ 981 $ 1,523 $ 1,576 $ (542 ) (36 )% $ (53 ) (3 )% Cost of sales 715 884 983 (169 ) (19 )% (99 ) (10 )% Gross margin $ 266 $ 639 $ 593 $ (373 ) (58 )% $ 46 8 % Gross margin percentage 27.1 % 42.0 % 37.6 % (14.9 )% 4.4 % Sales volume by product tons (000s) 2,874 2,995 2,969 (121 ) (4 )% 26 1 % 2,358 2,456 2,434 (98 ) (4 )% 22 1 % Average selling price per product ton $ 341 $ 509 $ 531 $ (168 ) (33 )% $ (22 ) (4 )% $ 416 $ 620 $ 648 $ (204 ) (33 )% $ (28 ) (4 )% Gross margin per product ton $ 93 $ 213 $ 200 $ (120 ) (56 )% $ 13 7 % $ 113 $ 260 $ 244 $ (147 ) (57 )% $ 16 7 % Depreciation and amortization $ 96 $ 95 $ 69 $ 1 1 % $ 26 38 % Unrealized net mark-to-market loss (gain) on natural gas derivatives $ (85 ) $ 40 $ 25 $ (125 ) N/M $ 15 60 % Ammonia represents 82% nitrogen content. Nutrient tons represent the tons of nitrogen within the product tons. 20132016 Compared to Year Ended December 31, 20122015NetTotal net sales in the nitrogenammonia segment decreased $418.8by $542 million, or 8%36%, to $981 million in 20132016 from 2012$1.52 billion in 2015 due primarily to an 8%a 33% decrease in average selling prices. The nitrogen segmentprices and a 4% decrease in sales volume. These results include the impact of the CF Fertilisers UK acquisition, which increased net sales wereCF INDUSTRIES HOLDINGS, INC.impacted by the CFL selling price modifications. On an as adjusted basis,$26 million, or 2%. The remaining decrease in our ammonia net sales in the nitrogen segment decreased by 11%. Averageof $568 million, or 37%, was due primarily to lower average selling prices decreased to $361 per ton in 2013 from $393 per ton in 2012 including declines of 16% for urea, 6% for AN and 2% for both ammonia and UAN as compared to the prior year. The decline in ureasales volume. Selling prices versus the prior year was primarilydeclined due to excess global nitrogen supply. In addition, our selling prices reflect the impact of a higher proportion of export sales, the volumes of which increased supply as a result of higher urea exports from Chinese producers during the low tariff export season. The decline in ammonia prices versus the prior year was due to the combination of a weaker nitrogen pricing environment, higher domestic production rates and inventory levels and reduced demand associated with unfavorable weather conditions. During 2013, the cold and wet spring and the shortenedweak fall application season reduced ammonia demand comparedattributable to the favorablecombined impact of weather conditions and low crop prices on our customers' decisions related to applying fertilizer in the fall. Sales volume in 2016 declined due to combination of the weak fall application environment during 2012.season and the impact of upgrading additional ammonia production at our Donaldsonville facility into granular urea and UAN as a result of our capacity expansion projects coming on line at our Donaldsonville, Louisiana complex.declineremaining cost of sales per ton was $250 in UAN prices versus2016, a 16% decrease from the prior year$296 per ton in 2015. The decrease was due primarily to higher global supplythe impact of nitrogen products. Cost of Sales. Cost of sales in the nitrogen segment averaged $172 per ton in 2013 compared to $168 per ton in 2012. This 2% increase was due primarily to an 8% increase in the realized cost of natural gas and a $13.6 million reduction inunrealized net unrealized mark-to-market gains on natural gas derivatives in the current year2016 compared to 2012. The current year includes a mark-to-market gain onlosses in 2015 and to the impact of lower realized natural gas derivativescosts in 2016. This was partly offset by capacity expansion project start-up costs of $52.9$50 million while 2012 includesand an increase in expansion project depreciation as a mark-to-market gainresult of $66.5 million.the new ammonia plants at our Donaldsonville and Port Neal facilities.20122015 Compared to Year Ended December 31, 20112014nitrogenammonia segment increased $84.5decreased by $53 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 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 the CFL selling price modifications. On an as adjusted basis,$38 million, or 2%. The remaining decrease in our ammonia net sales of $91 million, or 6%, was due to lower average selling prices and lower sales volume compared to 2014. The decrease in average ammonia selling prices from prior year levels was 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 volume was lower in 2015 due to the weak fall application season in North America as a 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 in 2015, a 11% decrease over the $331 per ton in 2011 with increases in ammonia and urea. Higher ammonia and urea average selling prices resulted from tight industry-wide supply conditions due to increased U.S. demand 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.2014. The lower sales volumes of UAN and ammonia nitrate were due to scheduled plant turnarounds 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 per ton in 2012 compared to $188 per ton in 2011. The 11% decrease was due primarily to lower realized natural gas costs during 2015 partly offset by increased unrealized net mark-to-market losses on natural gas derivatives in 2015 compared to 2014.$66.5carbon dioxide, it has the highest nitrogen content of any of our solid nitrogen fertilizers. Granular urea is produced at our Courtright, Ontario; Donaldsonville, Louisiana; Medicine Hat, Alberta; and Port Neal, Iowa nitrogen complexes. Twelve months ended December 31, 2016 2015 2014 2016 v. 2015 2015 v. 2014 (in millions, except as noted) Net sales $ 831 $ 788 $ 915 $ 43 5 % $ (127 ) (14 )% Cost of sales 584 469 517 115 25 % (48 ) (9 )% Gross margin $ 247 $ 319 $ 398 $ (72 ) (23 )% $ (79 ) (20 )% Gross margin percentage 29.7 % 40.4 % 43.5 % (10.7 )% (3.1 )% Sales volume by product tons (000s) 3,597 2,460 2,459 1,137 46 % 1 — % 1,654 1,132 1,131 522 46 % 1 — % Average selling price per product ton $ 231 $ 320 $ 372 $ (89 ) (28 )% $ (52 ) (14 )% $ 502 $ 696 $ 809 $ (194 ) (28 )% $ (113 ) (14 )% Gross margin per product ton $ 69 $ 129 $ 162 $ (60 ) (47 )% $ (33 ) (20 )% $ 149 $ 281 $ 352 $ (132 ) (47 )% $ (71 ) (20 )% Depreciation and amortization $ 112 $ 51 $ 37 $ 61 120 % $ 14 38 % Unrealized net mark-to-market loss (gain) on natural gas derivatives $ (67 ) $ 47 $ 17 $ (114 ) N/M $ 30 176 % Granular urea represents 46% nitrogen content. Nutrient tons represent the tons of nitrogen within the product tons. 20122016 compared to net losses in 2015. This was partly offset by increased depreciation expense related to our expanded urea production at our Donaldsonville, Louisiana complex and $2 million of $77.3start-up costs at our Port Neal, Iowa complex that came on line in December 2016.2011.average selling prices. Average selling prices decreased to $320 per ton in 2015 compared to $372 per ton in 2014 due primarily to excess global nitrogen supply weighing on global nitrogen fertilizer selling prices. Granular urea exports from China were at a record high in 2015 and Russian exports had increased significantly while global capacity additions in 2015 further contributed to the excess global nitrogen supply. Our sales volume in 2015 was flat compared to the prior year as we offset weaker domestic demand with sales out of our new urea production at our Donaldsonville, Louisiana complex that came on line in November 2015.average cost ofdecrease was due primarily to lower realized natural gas declinedcosts partly offset by 21% from $4.28 per MMBtuthe impact of increased unrealized net mark-to-market losses on natural gas derivatives in 20112015 compared to $3.39 per MMBtu in 2012.2014. Twelve months ended December 31, 2016 2015 2014 2016 v. 2015 2015 v. 2014 (in millions, except as noted) Net sales $ 1,196 $ 1,480 $ 1,670 $ (284 ) (19 )% $ (190 ) (11 )% Cost of sales 920 955 998 (35 ) (4 )% (43 ) (4 )% Gross margin $ 276 $ 525 $ 672 $ (249 ) (47 )% $ (147 ) (22 )% Gross margin percentage 23.1 % 35.5 % 40.3 % (12.4 )% (4.8 )% Sales volume by product tons (000s) 6,681 5,865 6,092 816 14 % (227 ) (4 )% 2,109 1,854 1,925 255 14 % (71 ) (4 )% Average selling price per product ton $ 179 $ 252 $ 274 $ (73 ) (29 )% $ (22 ) (8 )% $ 567 $ 798 $ 867 $ (231 ) (29 )% $ (69 ) (8 )% Gross margin per product ton $ 41 $ 90 $ 110 $ (49 ) (54 )% $ (20 ) (18 )% $ 131 $ 283 $ 349 $ (152 ) (54 )% $ (66 ) (19 )% Depreciation and amortization $ 247 $ 192 $ 179 $ 55 29 % $ 13 7 % Unrealized net mark-to-market loss (gain) on natural gas derivatives $ (81 ) $ 73 $ 30 $ (154 ) N/M $ 43 143 % 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. Twelve months ended December 31, 2016 2015 2014 2016 v. 2015 2015 v. 2014 (in millions, except as noted) Net sales $ 411 $ 294 $ 243 $ 117 40 % $ 51 21 % Cost of sales 409 291 189 118 41 % 102 54 % Gross margin $ 2 $ 3 $ 54 $ (1 ) (33 )% $ (51 ) (94 )% Gross margin percentage 0.5 % 1.1 % 22.1 % (0.6 )% (21.0 )% Sales volume by product tons (000s) 2,151 1,290 958 861 67 % 332 35 % 726 437 329 289 66 % 108 33 % Average selling price per product ton $ 191 $ 228 $ 253 $ (37 ) (16 )% $ (25 ) (10 )% $ 566 $ 673 $ 738 $ (107 ) (16 )% $ (65 ) (9 )% Gross margin per product ton $ 1 $ 2 $ 56 $ (1 ) (50 )% $ (54 ) (96 )% $ 3 $ 7 $ 163 $ (4 ) (57 )% $ (156 ) (96 )% Depreciation and amortization $ 93 $ 66 $ 47 $ 27 41 % $ 19 40 % Unrealized net mark-to-market loss (gain) on natural gas derivatives $ (10 ) $ 16 $ 7 $ (26 ) N/M $ 9 129 % Nutrient tons represent the tons of nitrogen within the product tons. Twelve months ended December 31, 2016 2015 2014 2016 v. 2015 2015 v. 2014 (in millions, except as noted) Net sales $ 266 $ 223 $ 171 $ 43 19 % $ 52 30 % Cost of sales 217 162 120 55 34 % 42 35 % Gross margin $ 49 $ 61 $ 51 $ (12 ) (20 )% $ 10 20 % Gross margin percentage 18.4 % 27.2 % 30.0 % (8.8 )% (2.8 )% Sales volume by product tons (000s) 1,654 1,108 798 546 49 % 310 39 % 317 215 155 102 47 % 60 39 % Average selling price per product ton $ 161 $ 202 $ 215 $ (41 ) (20 )% $ (13 ) (6 )% $ 839 $ 1,040 $ 1,106 $ (201 ) (19 )% $ (66 ) (6 )% Gross margin per product ton $ 30 $ 55 $ 64 $ (25 ) (45 )% $ (9 ) (14 )% $ 155 $ 283 $ 332 $ (128 ) (45 )% $ (49 ) (15 )% Depreciation and amortization $ 46 $ 35 $ 20 $ 11 31 % $ 15 75 % Unrealized net mark-to-market loss (gain) on natural gas derivatives $ (17 ) $ — $ — $ (17 ) N/M $ — — % Nutrient tons represent the tons of nitrogen within the product tons. segment:segment for the year ended December 31, 2014: 2014 (in millions, except as noted) Net sales $ 168 Cost of sales 158 Gross margin $ 10 Gross margin percentage 6.0 % 487 Average selling price per product ton $ 346 Gross margin per product ton $ 21 $ — Year Ended December 31, 2013 2012 2011 2013 v. 2012 2012 v. 2011 (in millions, except as noted) $ 796.9 $ 1,007.4 $ 1,085.8 $ (210.5 ) (21 )% $ (78.4 ) (7 )% 722.0 807.7 753.4 (85.7 ) (11 )% 54.3 7 % $ 74.9 $ 199.7 $ 332.4 $ (124.8 ) (62 )% $ (132.7 ) (40 )%
9.4
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19.8
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1,857
2,035
1,922
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)
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113
6
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1,408 1,611 1,468 (203 ) (13 )% 143 10 % 449 424 454 25 6 % (30 ) (7 )%
1,061 1,254 1,197 (193 ) (15 )% 57 5 % 796 781 725 15 2 % 56 8 %
$ 427 $ 493 $ 565 $ (66 ) (13 )% $ (72 ) (13 )% 437 502 565 (65 ) (13 )% (63 ) (11 )%
$
42.3
$
43.5
$
50.7
$
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)
(3
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$
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)
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3,565 3,483 3,504 82 2 % (21 ) (1 )% 2,480 2,530 2,633 (50 ) (2 )% (103 ) (4 )% 921 975 1,005 (54 ) (6 )% (30 ) (3 )% 1,847 1,952 1,997 (105 ) (5 )% (45 ) (2 )% In October 2013Represents DAP and MAP product sales.entered into an agreement to sell thesold our phosphate mining and manufacturing business, which is located in Florida, to Mosaic.business. The assets and liabilities expected to be sold arewere classified as held for sale. Effective November 1, 2013, we ceasedsale as of December 31, 2013; therefore, no depreciation, on amountsdepletion or amortization was recorded in 2014 for the related property, plant and equipment. The depreciation that would have been recorded for November and December is estimated at approximately $8.1 million.(2)P2O5 is the basic measure of the nutrient content in phosphate fertilizer products.Year Ended December 31, 2013 Compared to Year Ended December 31, 2012 Net Sales. Phosphate segment net sales decreased $210.5 million, or 21%, to $796.9 million in 2013 compared to $1.0 billion in 2012 due to a 13% decline in average selling prices and a 9% decrease in volume. Average DAP and MAP selling prices each decreased 13% with DAP decreasing from $493 to $427 per ton and MAP decreasing from $502 to $437 per ton due primarily to lower global demand, notably India, and buyers delaying purchases due to the expectation for lower prices. Phosphate segment sales volume of 1,857,000 tons in 2013 was 9% lower than 2012 due primarily to reduced domestic sales partially offset by increased exports. Cost of Sales. The average phosphate segment cost of sales of $389 per ton in 2013 was 2% lower than the $397 per ton in the prior year due to lower raw material costs, primarily ammonia and sulfur.Year Ended December 31, 2012 Compared to Year Ended December 31, 2011 Net Sales. Phosphate segment net sales decreased $78.4 million, or 7%, to $1.0 billion in 2012 compared to $1.1 billion in 2011 due to lower average selling prices, partially offset by higher sales volume. Average selling prices for 2012 decreased by 12% compared to the prior year reflecting lower demand from India. Our total sales volume of phosphate fertilizer of 2.0 million tons in 2012 was 6% higher than in 2011 due primarily to higher export sales volume. Cost of Sales. Average phosphate segment cost of sales of $397 per ton in 2012 was comparable to the $392 per ton in the prior year. and storage costs and seasonal factors inherent in the business. 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 agreement. During 2013,agreements.following significant events have had or will havecurrent global oversupply of nitrogen fertilizer and the resulting low nitrogen fertilizer selling prices. See discussion under "Overview of CF Holdings—Industry Factors and Market Conditions—2016 Market Conditions," above, for further information.impact on our cashamendment to the Revolving Credit Agreement, and, liquidity position.•Under our current Board-authorized $3.0 billion sharein September 2016, we entered into an amendment to the note purchase program, we repurchased 7.3 million common shares in 2013 for a total cost of $1.4 billion.•Throughagreement governing the Private Senior Notes (the Note Purchase Agreement). The amendments increased, through the end of 2013, we made $0.7 billion2017, the maximum total leverage ratio permitted under the Revolving Credit Agreement and the Note Purchase Agreement and reduced the size of capital expenditures related to our $3.8 billion capacity expansion projects. These projects are expected to be on-stream by 2016. During 2014, we expect to spend approximately $2.0 billion on these projects.•In April 2013, we completed the acquisition of the remaining noncontrolling interest in CFL for $0.9 billion.•In October 2013, we entered into a set of strategic agreements with Mosaic including a definitive agreement to sell the entirety of our phosphate mining and manufacturing business, which is located in Florida, for a purchase price of approximately $1.4 billion in cash, subject to adjustment as provided in the agreement, plus two agreements to supply ammonia to Mosaic. We expect the phosphate business sale transaction will close in the first half of 2014.•In April 2013, we amended and restated our credit agreement, increasing the revolving credit facility by $0.5 billionunder the Revolving Credit Agreement.extending the maturity daterelated make-whole amount of approximately $170 million with the issuance of new long-term secured debt, as described in further detail below under “—Debt—Senior Secured Notes.”May 2018.•May 2013,October 2016 each of the three credit rating agencies reviewed our corporate credit rating as follows. S&P Global Ratings reduced our corporate credit rating to BB+ from BBB- and indicated the outlook was negative; Moody’s Investors Service, Inc. reduced our corporate credit rating to Baa3 from Baa2 and indicated the rating was under further review; and Fitch Ratings, Inc. reduced our corporate credit rating to BB+ from BBB and indicated the outlook was stable. In November 2016, Moody’s Investors Service, Inc. further reduced our corporate credit rating to Ba2 from Baa3 and updated the outlook to stable.issued $1.5 billionwere in compliance with all applicable covenant requirements under the Revolving Credit Agreement and our senior notes with $750 million due in 2023 and $750 million due in 2043.•In December 2013, we announced our intent to raise up to $1.5 billion in long-term debt in 2014.Further details regarding these events are provided below.CF INDUSTRIES HOLDINGS, INC.$1.7$1.16 billion and $286 million as of December 31, 20132016 and $2.3 billion as of December 31, 2012.2015, 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.Share Repurchase Programs In the third quarterHoldings common stock through December 31, 2013. During 2011, we repurchased 6.5 million shares under the program for $1.0 billion, and in the second quarter of 2012, we repurchased 3.1 million shares of CF Holdings 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 were retired. In our consolidated balance sheet, the retirement of these shares eliminated the recorded treasury stock and reduced retained earnings and paid-in capital by $1,125.9 million and $374.2 million, respectively, as of 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 in the open market, in privately negotiated transactions, or otherwise. The manner, timing, and amount of any repurchases will be determined by our management based on evaluation of market conditions, stock price, and other factors. In 2013, we repurchased 7.3 million shares for $1.4 billion. There were no repurchases under this program in 2012. In 2013 we retired 6.4 million shares of our stock repurchased during the year. In our consolidated balance sheet, the retirement of these shares eliminated the recorded treasury stock and reduced retained earnings and paid-in capital by $1,067.4 million and $180.4 million, respectively.November2016, we completed our capacity expansion projects at Donaldsonville, Louisiana and Port Neal, Iowa. These projects, originally announced in 2012, we announced that our Boardincluded the construction of Directors had authorized expenditures of $3.8 billion to construct new ammonia, urea, and urea/UAN plants at our Donaldsonville, Louisiana complex and new ammonia and urea plants at our Port Neal, Iowa complex. These plants increased our overall production capacity by approximately 25%, improved our product mix flexibility at Donaldsonville, and improved our ability to serve upper-Midwest urea customers from our Port Neal location. In combination, these two new facilities will beare able to produce 2.1 million tons of gross ammonia per year, and 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. The $3.8 billion cost estimate includes: engineering and design; equipment procurement; construction; associated infrastructure including natural gas connections and power supply; and product storage and handling systems. These plantsnew facilities 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 cost advantageadvantages of North American natural gas. AllFurther details regarding our production capacity and production flexibility are included in Part I, Item 1. Business.these new facilities are scheduled2016, the UAN plant was placed in service in the first quarter of 2016 and the granular urea plant was placed in service in the fourth quarter of 2015. At our Port Neal, Iowa complex, both the ammonia and granular urea plants were placed in service in the fourth quarter of 2016. Depreciation expense pertaining to be on-stream byeach of our capacity expansion plants commenced once the applicable plant was placed in service, and the total depreciation expense pertaining to our capacity expansion plants recognized in 2016 and 2015 was $116 million and $13 million, respectively.We expect to finance the capital expenditures through availableExpansion project expenses, consisting primarily of administrative costs and other project costs that do not qualify for capitalization, totaled $73 million, $51 million and $31 million in 2016, 2015 and 2014, respectively.and securities, cash generated from operations and borrowings. Total cash spent to date on capital expenditures for the capacity expansion projects was $476.9 million, including $356.1 million spent during 2013. In addition, $203.6 million was invested in the expansion project and not paid atthrough December 31, 20132016 was $5.1 billion. We estimate that the final payments on the capital component of the capacity expansion projects will occur in early 2017 and recognized inwill bring the consolidated balance sheet intotal capital cash spending for the lines labeled accounts payable and accrued expenses and other non-current liabilities.capacity expansion projects to approximately $5.2 billion.TableWe retained an affiliate of ContentsCF INDUSTRIES HOLDINGS, INC. We have retainedThyssenKrupp Industrial Solutions (ThyssenKrupp) to provide engineering and procurement services from an affiliate of ThyssenKrupp Uhde (Uhde) for both the Donaldsonville, Louisiana and Port Neal, Iowacapacity expansion projects. Under the terms of the engineering and procurement services contract, we have granted UhdeThyssenKrupp a security interest in a restricted cash account and maintain a cash balance in that account equal to the cancellation fees for procurement services and equipment that would arise if we were to cancel the projects. The amount in the account will changechanges over time based on procurement costs. The amount is projected to reach approximately $375 million at certain points in time during construction and will be zero by the endAs of the project. At December 31, 20132016, there was $154.0$5 million held in this account. This restricted cash is not included inexcluded from our cash and cash equivalents and is reported separately on our consolidated balance sheetsheets and statementstatements of cash flows.to increase our capacity, to improve plant efficiency and to comply with various environmental, health and safety requirements. Capital expenditures totaled $823.8 million$2.21 billion in 2013 as2016 compared to $523.5 million$2.47 billion in 2012.2015. The increasedecrease in capital expenditures is primarily the result of the $356.1 milliondecrease in cash spent on the two capacity expansion projects discussed above.Projected Capital Spending We expect capital expenditures in 2014 to be approximately $2.5 billion, including $2.0 billion for the capacity expansion projects and $0.5 billionin 2016 compared to 2015.AcquisitionsNoncontrolling InterestsPATH Act, eligible capital additions will be subject to 50% bonus depreciation in Canadian Fertilizers Limited In 2012,the year the asset is placed in service. A significant portion of the capital assets constructed as part of the Donaldsonville, Louisiana and Port Neal, Iowa capacity expansion projects is expected to qualify for 50% bonus depreciation. Given the size of the bonus depreciation tax deduction, we entered into agreementsestimate that we generated a substantial federal tax loss in 2016. We intend to acquirefile a claim to carry back the 34%2016 federal tax loss to prior income tax years and receive a refund 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 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 reduction infederal taxes paid in capital; a $0.1 billion deferred tax asset; andthose prior years. We currently estimate that the removal of the CFL noncontrolling interest. CFL is now a wholly owned subsidiary and we are entitled to purchase 100% of CFL's ammonia and granular urea production. For additional information, see Note 4 to our consolidated financial statements included in Item 8amount of this report.Planned Disposition of Phosphate Businessrefund will be approximately $816 million and Ammonia Supply Agreements In October 2013, we entered into a definitive agreement with Mosaicexpect to sell our entire phosphate mining and manufacturing business, which is located in Florida, for a purchase price of approximately $1.4 billion in cash, subject to adjustment as providedreceive it in the agreement, and entered into two agreements to supply ammonia to Mosaic. The first agreement, which is not conditioned upon completionthird quarter of the phosphate business sale transaction, provides for us to supply between 600,000 and 800,000 tons2017. As of ammonia per year from our Donaldsonville, Louisiana nitrogen complex beginning no later than 2017. The second agreement provides for us to supply approximately 300,000 tons of ammonia per year sourced from our Point Lisas Nitrogen Limited (PLNL) joint venture beginning at the closing of the phosphate business sale transaction. See further discussion of this transactionDecember 31, 2016, we have prepaid income taxes in the section titled Items Affecting Comparabilityamount of Results and in Note 12—Assets and Liabilities Held for Sale to the consolidated financial statements included in Item 8 of this report.and interests in corporate joint ventures in the United Kingdom and an 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 indefinitelypermanently 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. At2013,2016, approximately $282.3$127 million of our consolidated cash and cash equivalents balance of $1.7$1.16 billion was held primarily by our Canadian and United Kingdom subsidiaries. The cash balance held by the Canadian subsidiaries represents accumulated earnings of our foreign operations which isthat are 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, 2013,2016, the estimated cash tax cost to repatriate the Canadian and United Kingdom cash balances would be approximately $14.1$6 million.Debt We intendraiserepurchase shares of our common stock. Each of these programs has permitted repurchases to be made from time to time in the open market, through privately-negotiated transactions, through block transactions or otherwise. Our management has determined the manner, timing and amount of repurchases based on the evaluation of market conditions, stock price and other factors. $1.5$3 billion in long-term debt in 2014. This new debt, in addition to cash from operations and proceeds from the sale of the phosphate mining and manufacturing business, will fund our capital expenditure programs, dividends to shareholders, working capital and additional share repurchases.Credit Agreement On April 22, 2013, we amended and restated thecommon stock of CF Holdings credit agreement (Credit Agreement) increasing the revolving credit facility from $500 million to $1.0 billion and extending the maturity from May 1, 2017 to May 1, 2018. All obligationsthrough December 31, 2016 (the 2012 Program). The repurchases under the Credit Agreement are unsecured. Currently,2012 Program were completed in the second quarter of 2014. On August 6, 2014, the Board authorized a program to repurchase up to $1 billion of the common stock of CF Holdings is the only guarantor of CF Industries' obligations under the Credit Agreement. Certain of CF Industries' material domestic subsidiaries would be required to become guarantors under the Credit Agreement if such subsidiary were to guarantee our other debt or CF Industries' debt in excess of $350 million.through December 31, 2016 (the 2014 Program). As of December 31, 2013, $995.12015, 15.9 million shares had been repurchased for an aggregate expenditure of $900 million. The remaining $100 million of share repurchase authorization under the 2014 Program expired on December 31, 2016.available for borrowing underrecognized as follows:netAmendment) and an amendment entered into on October 31, 2016 and effective November 21, 2016 (the November 2016 Credit Agreement Amendment), the Revolving Credit Agreement) providing for a revolving credit facility of $4.9up to $750 million (reflecting a reduction from $1.5 billion as effected by the November 2016 Credit Agreement Amendment) with a maturity of outstandingSeptember 18, 2020. The Revolving Credit Agreement includes a letter of credit sub-limit of $125 million. Borrowings under the Revolving Credit Agreement may be used for working capital and general corporate purposes. CF Industries may designate as borrowers one or more wholly owned subsidiaries that are organized in the United States or any state thereof or the District of Columbia.there were no outstanding borrowings. Our(ii) interest rate or other hedging arrangements, in each case between CF Holdings or certain of its subsidiaries, on the one hand, and any person that is a lender or the administrative agent under the Revolving Credit Agreement includesor an affiliate of such person, on the other hand, that are designated by CF Industries as Secured Bilateral LC Facilities or Secured Swap Agreements (each as defined in the Revolving Credit Agreement), as applicable, pursuant to the terms of the Revolving Credit Agreement (such additional obligations, the Additional Guaranteed Obligations). Obligations under Secured Bilateral LC Facilities in an aggregate amount up to $300 million and obligations under Secured Swap Agreements are secured by the same security interest that secures the obligations under the Revolving Credit Agreement.eventslimited the ability of default, including requirements that we maintain a minimum interest coverage ratioCF Holdings and not exceed a maximum total leverage ratio, as well asits subsidiaries to grant liens, merge or consolidate with other customaryentities and sell, lease or transfer all or substantially all of the assets of CF Holdings and its subsidiaries to another entity, in each case, subject to specified exceptions. The November 2016 Credit Agreement Amendment modified the negative covenants in the Revolving Credit Agreement to limit further the ability of CF Holdings and eventsits subsidiaries to grant liens and add limitations on the ability of default. Our senior notes indentures also includeCF Holdings and its subsidiaries to incur debt, pay dividends, voluntarily prepay certain debt, make investments and dispose ofevents of default. its subsidiaries in the Revolving Credit Agreement (the New Financial Covenants):(i) restrict the ratio of total secured debt to EBITDA (as defined in the Revolving Credit Agreement) for the period of four consecutive fiscal quarters most recently ended to a maximum of 3.75:1.00, (ii) require the ratio of EBITDA for the period of four consecutive fiscal quarters most recently ended to consolidated interest expense (as defined in the Revolving Credit Agreement) for the period of four consecutive fiscal quarters most recently ended to be a minimum of 1.20:1.00 for the fiscal quarters ending on or prior to December 31, 2018, and 1.50:1.00 thereafter, and (iii) require the ratio of total debt to total capitalization as of the last day of any fiscal quarter to be less than or equal to 0.60:1.00. 2013,2016, we were in compliance with all covenants under the Revolving Credit Agreement.senior notes indentures.guarantees supporting, and the collateral securing, the Secured Bilateral LC Facilities and the Secured Swap Agreements. Such a choice by CF Industries would commence a "Covenant Suspension Period" that would expire upon the Company's no longer having an investment grade corporate rating from two of three selected rating agencies. Upon the expiration of a Covenant Suspension Period, the Additional Negative Covenants and the New Financial Covenants would be reinstated, and the Loan Parties party to the Revolving Credit Agreement would be required to guarantee the Additional Guaranteed Obligations and grant a first priority security interest in substantially all of each Loan Party’s assets, including a pledge by CFS of its equity interests in CFN and mortgages over certain material fee-owned domestic real properties, subject to certain exceptions, to secure the obligations under the Revolving Credit Agreement, the Secured Bilateral LC Facilities and the Secured Swap Agreements. At20132016 and December 31, 2012, we had $3.1 billion and $1.6 billion2015 consisted of senior notes outstanding, respectively, with maturities ranging from 2018 through 2043 as follows:due 2018(unsecured), Senior Secured Notes and 2020Private Senior Notes (unsecured): Effective Interest Rate December 31,
2016 December 31,
2015 Principal Outstanding Principal Outstanding (in millions) Public Senior Notes: 6.875% due 2018 7.344% $ 800 $ 795 $ 800 $ 792 7.125% due 2020 7.529% 800 791 800 788 3.450% due 2023 3.562% 750 745 750 745 5.150% due 2034 5.279% 750 739 750 739 4.950% due 2043 5.031% 750 741 750 741 5.375% due 2044 5.465% 750 741 750 740 Senior Secured Notes: 3.400% due 2021 3.784% 500 491 — — 4.500% due 2026 4.760% 750 735 — — Private Senior Notes: 4.490% due 2022 4.664% — — 250 248 4.930% due 2025 5.061% — — 500 496 5.030% due 2027 5.145% — — 250 248 Total long-term debt $ 5,850 $ 5,778 $ 5,600 $ 5,537 On April 23, 2010, CF Industries issued $800 million aggregate principal amount of 6.875%Carrying amount is net of unamortized debt discount and deferred debt issuance costs. Total unamortized debt discount was $12 million and $7 million as of December 31, 2016 and December 31, 2015, respectively, and total deferred debt issuance costs were $60 million and $56 million as of December 31, 2016 and December 31, 2015, respectively. May 1, 2018, 2020, 2023, 2034, 2043 and $800 million aggregate principal amount2044 identified in the table above (the Public Senior Notes), each series of 7.125% senior notes due May 1, 2020 (the 2018/2020 Notes).Public Senior Notes is guaranteed by CF Holdings. Interest on the Public Senior Notes is paidpayable semiannually, on May 1 and November 1 and the 2018/2020Public 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. Under the supplemental The indentures governing the 2018/2020Public Senior Notes contain customary events of default (including cross-default triggered by acceleration of, or a principal payment default that is not cured within an applicable grace period under, other debt having a principal amount of $150 million or more) and covenants that limit, among other things, the 2018/2020ability of CF Holdings and its subsidiaries, including CF Industries, to incur liens on certain properties to secure debt.are guaranteed by CF Holdings.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,CF Holdings, 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 2018/2020 Notes.2043May 23, 2013,November 21, 2016, in connection with the effectiveness of the November 2016 Credit Agreement Amendment, CFE and CFS became subsidiary guarantors of the Public Senior Notes.$750$500 million aggregate principal amount of 3.450%3.400% senior secured notes due June 1, 20232021 (the 2021 Notes) and $750 million aggregate principal amount of 4.950%4.500% senior secured notes due 2026 (the 2026 Notes, and together with the 2021 Notes, the Senior Secured Notes). The net proceeds, after deducting discounts and offering expenses, from the issuance and sale of the Notes were approximately $1.23 billion. CF Industries used approximately $1.18 billion of the net proceeds for the prepayment (including payment of a make-whole amount of approximately $170 million and accrued interest) in full of the outstanding $1.0 billion aggregate principal amount of the Private Senior Notes. See "—Private Senior Notes," below. The Company intends that the remainder of the net proceeds be used for general corporate purposes.2043 (the 2023/2043 Notes). Interest is paid semiannuallybeginning on June 1, and December 12017, and the 2023/2043Senior Secured Notes are redeemable at our option, in whole at any time or in part from time to time, at specified make-whole redemption prices. We received net proceeds of approximately $1.48 billion fromissuance and saleterms of the 2023/2043applicable indenture, the Senior Secured Notes after deducting underwriting discountsof each series are fully and offering expenses. Underunconditionally guaranteed on a senior secured basis, jointly and severally, by CF Holdings and each current and future domestic subsidiary of CF Holdings (other than CF Industries) that from time to time is a borrower, or guarantees indebtedness, under the Revolving Credit Agreement. The requirement for any subsidiary of CF Holdings to guarantee the Senior Secured Notes of a series will apply only until, and the subsidiary guarantees of the Senior Secured Notes of a series will be automatically released upon, the latest to occur of (a) CF Holdings having an investment grade corporate rating, with a stable or better outlook, from two of three selected ratings agencies and there being no default or event of default under the applicable Indenture, (b) the retirement, discharge or legal or covenant defeasance of, or satisfaction and discharge of the supplemental indenture governing, the Public Senior Notes due 2018 or the subsidiaries of CF Holdings (other than CF Industries) otherwise becoming no longer subject to the requirement, described in the second paragraph under "—Public Senior Notes," above, to guarantee the Public Senior Notes due 2018 and (c) the retirement, discharge or legal or covenant defeasance of, or satisfaction and discharge of the supplemental indenture governing, the Public Senior Notes due 2020 or the subsidiaries of CF Holdings (other than CF Industries) otherwise becoming no longer subject to the requirement, described in the second paragraph under "—Public Senior Notes," above, to guarantee the Public Senior Notes due 2020. In accordance with the applicable indenture, CFE and CFS, in addition to CF Holdings, guaranteed the Senior Secured Notes of each series upon the initial issuance of the Senior Secured Notes.2023/2043Senior Secured Notes, specified changes of control involving CF Holdings or CF Industries, when accompanied by a ratings downgrade, as defined with respect to the 2023/2043applicable series of Senior Secured Notes, areconstitute change of control repurchase events. Upon the occurrence of a change of control repurchase event with respect to the 2021 Notes or the 2026 Notes, as applicable, unless CF Industries has exercised its option to redeem such Senior Secured Notes, CF Industries will be required to offer to repurchase them at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the date of repurchase.In addition,All obligations under the Note Purchase Agreement were unsecured.event thatoutstanding $1.0 billion aggregate principal amount of our Private Senior Notes. The prepayment of $1.18 billion included the payment of a subsidiarymake-whole amount of ours, other thanapproximately $170 million and accrued interest. Loss on debt extinguishment of $167 million on our consolidated statement of operations excludes $3 million of the make-whole payment, which was accounted for as a modification and recognized on our consolidated balance sheet as deferred financing fees, a reduction of long-term debt, and is being amortized using the effective interest rate method over the term of the Senior Secured Notes.becomesentered into a borrower or a guarantorsenior unsecured 364-Day Bridge Credit Agreement (as amended, the Bridge Credit Agreement). Upon the termination of the Combination Agreement on May 22, 2016, the lenders’ commitments under the Bridge Credit Agreement (or any renewal, replacement or refinancing thereof), such subsidiary would be requiredterminated automatically. There were no borrowings under the Bridge Credit Agreement. See Note 4—Acquisitions and Divestitures and Note 13—Interest Expense to become a guarantorour consolidated financial statements included in Item 8 of the 2023/2043 Notes, provided that such requirement will no longer apply following the repayment of both issues of the 2018/2020 Notes or the subsidiaries of ours, other than CF Industries, otherwise become no longer subject to such a requirement to guarantee the 2018/2020 Notes.productproducts from us on a forward basis at prices and on delivery dates we propose. We also use derivative financial instruments to reduce 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. Additionally,Therefore, our reported fertilizer 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.CF INDUSTRIES HOLDINGS, INC.the related orders are shipped and revenue is recognized. As of December 31, 20132016 and 2012,2015, we had $120.6$42 million and $380.7$162 million, respectively, in customer advances on our consolidated balance sheets.couldwould likely decrease and our accounts receivable balances couldwould likely increase. Also,Additionally, borrowing under ourthe Revolving Credit Agreement could become necessary. Due to the volatility inherent in our 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. In 2016, 2015 and 2014, we recognized unrealized net mark-to-market (gains) losses on natural gas derivatives of $(260) million, $176 million and $79 million, respectively, which is reflected in cost of sales in our consolidated statements of operations.either large oil and gas companiesmultinational commercial banks, other major financial institutions or large financial institutionsenergy companies, and, in most cases, the use of International Swaps and Derivatives Association (ISDA) master netting arrangements.with sliding-scalesuch as cross default provisions and credit support thresholdsthresholds. 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 collateralize derivatives in a net liability position. The Revolving Credit Agreement, at any time when it is secured, provides a cross collateral feature for those of our derivatives that are dependent uponwith counterparties that are party to, or affiliates of parties to, the ratings assigned to our long-term unsecured debt by certain credit rating agencies. Downgrades in our credit ratings could cause the applicable threshold levels to increase. If our net liability positions with the counterparties exceed the threshold amounts,Revolving Credit Agreement so that no separate collateral would be required for those counterparties in connection with such derivatives. In the event the Revolving Credit Agreement becomes unsecured, separate collateral could require cash collateral, some other form of credit support, or daily cash settlement of unrealized losses.20132016 and 2012,2015, the aggregate fair value of the derivative instruments with credit-risk-related contingent features in net liability positions was $0.2 millionzero and $0.9$211 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, 2013,2016 and 2015, we had open natural gas derivative contracts for 76.3183.0 million MMBtus and the notional amount of our open foreign currency derivatives was $636.3 million.431.5 million MMBtus, respectively. At both December 31, 20132016 and 2012,2015, we had no cash collateral on deposit with counterparties for derivative contracts.Financial Assurance Requirements In addition to various operational and environmental regulations related to our phosphate segment, we are also subject to financial assurance obligations related toclosure and maintenancenotional amount of our phosphogypsum stack systems at both our Plant City, Florida phosphate fertilizer complex andopen foreign currency derivatives was €89 million. None of these open foreign currency derivatives were designated as hedging instruments for accounting purposes. All of these foreign currency derivatives were settled in 2016.closed Bartow, Florida phosphate fertilizer complex. These financial assurance obligations result fromstrategic venture with CHS, if our credit rating is reduced below certain levels by two requirements.of three specified credit rating agencies, we are required to make a non-refundable yearly payment of $5 million to CHS. The first ispayment would continue on a 2010 consent decree withyearly basis until 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). The second is State of Florida financial assurance regulations (Florida Financial Assurance) that 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 maintain a trust account for the benefitearlier of the EPA and the FDEP and an escrow account for the benefitdate that our credit rating is upgraded to or above certain levels by two of three specified credit rating agencies or February 1, 2026. On February 1, 2016, we recognized this term of the FDEP to meet these financial assurance requirements. Onstrategic venture as an embedded derivative and its value of $8 million was included in other liabilities on our consolidated balance sheets, these are collectively referred to as "Asset retirement obligation funds" (ARO funds) and at December 31, 2013, these assets were recorded as assets held for sale. The trust for the Plant City Consent Decree is fully funded, and we expect the remaining $1.0 million will be funded 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 would be required in the future if increases in cost estimates exceed investment earnings in the trust or escrow accounts. In the fourth quarter of 2013, we entered into a definitive agreement with Mosaic to sell our entire phosphate mining and manufacturing business, which is located in Florida. As a result, the asset retirement obligation funds are included in noncurrent assets held for sale at December 31, 2013. At December 31, 2013 and 2012, the balance in the ARO funds was $203.7 million and $200.8 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 insheet. See Note 1017—Noncontrolling Interests to our consolidated financial statements included in Item 8 of this report. These expense amounts are expectedreport for additional information.differ fromincrease the anticipated contributionsvalue of the embedded derivative liability by $23 million to reflect our credit evaluations. The inputs into the trustfair value measurement include the probability of future upgrades and escrow accounts, which aredowngrades of our credit rating based on historical credit rating movements of other public companies and the guidelines set forth in the Plant City Consent Decree and Florida Financial Assurance regulations. Ultimately, the funds in these accounts willdiscount rates to be usedapplied to fund the closure and maintenancepotential annual payments based on applicable credit spreads of the phosphogypsum stack systems. Florida regulations require miningother public 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.at different credit rating levels. Based on these inputs, our fair value measurement is classified as Level 2. Additionally, as a result of the reduction in our credit rating in the fourth quarter of 2016, we made a $5 million payment to CHS. The fair value of the embedded derivative liability as of December 31, 2016, is $26 million, which is included in other liabilities and other current regulations, we will have the option to demonstrate financial responsibilityliabilities on our consolidated balance sheet. Included in Florida utilizing anyother operating—net in our consolidated statement of these methods.Other Liquidity Requirements$7.0$23 million to our pension plans in 2013.2016. We expect to contribute approximately $21.2$22 million to our pension plans in 2014.2017.20132016 Compared to Year Ended December 31, 20122015generated fromprovided by operating activities in 20132016 was $1.5 billion$617 million as compared to $2.4$1.21 billion in 2012.2015, a decline of $590 million. The $0.9 billion decline wasresulted primarily from lower net earnings during 2016 due to the combinationlower selling prices from excess global nitrogen supply, partially offset by lower amounts of a $390.6 million decline in net earnings and a higher level of netcash used for working capital invested in the business in 2013 versus 2012. During 2013, $740.2 million more was invested in netpurposes. Lower working capital thanlevels in 2012 due primarily to higheraccounts receivable and inventory, plus lower amounts paid for income taxes and certain income tax payments and lower customer advances as customers delayed purchasing decisionsrefunds received in 20132016, contributed to the reduction in cash used for working capital. Favorable changes in working capital also included a greater proportion of sales was paid in 2016 as compared to 2012.20122015 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, and a lower level of working capital invested in the business at the end of 2012$1.21 billion as compared to the end of 2011$1.42 billion in 2014. The $214 million decrease was primarily due to unfavorable working capital changes as lower inventory, lower receivables and 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.2013, 20122016, 2015 and 20112014$1,019.3 million$2.18 billion in 20132016 compared to $513.5$2.98 billion in 2015. This decrease is due primarily to the 2015 acquisition of the remaining 50% equity interest in CF Fertilisers UK not previously owned by us for a net cash payment of $552 million, which was net of cash acquired of $18 million. This decrease was also attributable in 2012. Cashpart to a decline in capital expenditures related primarily to the capacity expansion projects in Donaldsonville, Louisiana and Port Neal, Iowa. During 2016, capital expenditures totaled $2.21 billion compared to $2.47 billion in 2015. The $344 million net cash used in investing activities in 20132014 included $823.8 million$1.81 billion in capital expenditures and $154.0$505 million transferred to a restricted cash account in support of the capacity expansion projects discussed previously. The cash used in investing activities in 2012 was primarily for capital expenditures, partially offset by $65.4 millioncash proceeds of $1.37 billion 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. Additions to property, plant and equipment accounted for $823.8 million, $523.5 million and $247.2 million of cash used in investing activities in 2013, 2012 and 2011, respectively. The increases in capital expenditures in 2013 and 2012 related primarily to cash spending for the major capacity expansion projects at our Donaldsonville, Louisiana and Port Neal, Iowa facilities. We made contributions of $2.9 million, $55.4 million and $50.4 million in 2013, 2012 and 2011, 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.2013, 20122016, 2015 and 20112014was $980.3of $787 million in 2013,2014. In 2016, CHS purchased a minority equity interest in CFN for $2.8 billion. We distributed $119 million to the noncontrolling interests, including CHS, in 2016, compared to $796.8$45 million and $46 million in 2012,2015 and $1.52014, respectively. The increase in distributions to noncontrolling interests in 2016 compared to 2015 and 2014 was due to the CHS strategic venture, which increased the distributions by $79 million, representing the distributions paid to CHS in the third quarter of 2016 for the distribution period ended June 30, 2016.in 2011.net of discounts, from the issuance of the Senior Secured Notes which were used to fund the prepayment of the $1.0 billion of Private Senior Notes and the related make-whole payment of $170 million. In May 2013,both 2015 and 2014, we issued senior notes and received proceeds of approximately $1.0 billion and $1.5 billion. Cash used in financing activities in 2013 included $918.7 millionbillion, respectively. No share repurchases were made during 2016 compared to acquire the noncontrolling interests in CFL. Cashcash used for stockshare repurchases in 2013, 20122015 and 2011 was $1.4 billion, $500.02014 of $556 million and $1.0$1.94 billion, respectively. We distributed $73.7 million to the noncontrolling interests in 2013, compared to $231.8 million in 2012 and $145.7 million in 2011. The decrease in distributions to noncontrolling interests in 2013 was due to the acquisition of thenoncontrolling interests in CFL in April and the modifications to CFL selling prices in the fourth quarter of 2012, which impacted the payments made the first four months of 2013. In 2012, $13.0 million was used for the repayment of long term debt compared to $346.0 million in 2011.2013:2016: 2017 2018 2019 2020 2021 After 2021 Total (in millions) Contractual Obligations Debt $ — $ 800 $ — $ 800 $ 500 $ 3,750 $ 5,850 308 278 251 222 191 2,393 3,643 Other Obligations Operating leases 89 83 65 51 41 92 421 236 3 2 — — — 241 11 8 7 3 — — 29 656 103 44 42 37 114 996 22 — — — — — 22 11 — — — — — 11 $ 1,333 $ 1,275 $ 369 $ 1,118 $ 769 $ 6,349 $ 11,213 2014 2015 2016 2017 2018 After
2018 Total (in millions)
$ — $ — $ — $ — $ 800.0 $ 2,300.0 $ 3,100.0 177.6 177.6 177.6 177.6 148.4 1,111.5 1,970.3
88.8 81.5 76.1 58.7 42.3 91.0 438.4 175.7 9.2 0.7 — — — 185.6 1,430.0 445.5 71.5 — — — 1,947.0 95.3 30.3 31.1 21.4 20.7 111.3 310.1 537.5 260.3 137.9 134.1 101.1 0.8 1,171.7 21.2 — — — — — 21.2 10.2 10.2 10.2 12.3 — — 42.9 $ 2,536.3 $ 1,014.6 $ 505.1 $ 404.1 $ 1,112.5 $ 3,614.6 $ 9,187.2 Based on debt balances before discounts, offering expenses and interest rates as of December 31, 2013.(2)We expect to spend approximately $2.0 billion during 2014 related to the $3.8 billion Donaldsonville and Port Neal capacity expansion projects expected to be completed by 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.(3)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, 2013 and actual operating rates and prices may differ.(4)Includes minimum commitments to purchase natural gas based on prevailing market-based forward prices at December 31, 2013. Purchase obligations do not include any amounts related to our natural gas derivatives.(5)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, 2013 is $126.4 million with a total remaining commitment of $600.6 million.Based on debt balances before discounts, offering expenses and interest rates as of December 31, 2016. Includes anticipated expenditures under certain contracts to transport 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 in this table are based on projected normal operating rates and contracted or current spot prices, where applicable, as of December 31, 2016 and actual operating rates and prices may differ. Includes minimum commitments to purchase and transport natural gas based on prevailing market-based forward prices as of December 31, 2016 excluding reductions for plant maintenance and turnaround activities. Purchase obligations do not include any amounts related to our natural gas derivatives. See Note 15—Derivative Financial Instruments to our consolidated financial statements included in Item 8 of this report for additional information. 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, 2016 is $57 million with a total remaining commitment of $100 million. Represents the contributions we expect to make to our pension plans during 2017. 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. Excludes $162 million of unrecognized tax benefits due to the uncertainty in the timing of potential tax payments. Excludes $14 million of environmental remediation liabilities due to the uncertainty in the timing of payments. Excludes $5 million annual payments to CHS related to our embedded derivative through 2026 due to uncertainty of future credit ratings, as this is only applicable if our credit rating stays below certain levels from two of three specified credit rating agencies. See Note 9—Fair Value Measurements or Note 17—Noncontrolling Interests to our consolidated financial statements included in Item 8 of this report for additional information. (6)Represents the contributions we expect to make to our pension plans during 2014. 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.(7)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 11 to our consolidated financial statements included in Item 8 of this report for further discussion of this matter.(8)Excludes $128.1 million of unrecognized tax benefits due to the uncertainty in the timing of potential tax payments.Other Long-Term Obligations As of December 31, 2013, our liabilities held for sale included balances related to asset retirement obligations (AROs) and our other liabilities included environmental remediation liabilities. The estimated timing and amount of cash outflows associated with these liabilities are as follows: Payments Due by Period 2014 2015 2016 2017 2018 After
2018 Total (in millions) $ 12.7 $ 7.1 $ 11.8 $ 9.5 $ 14.0 $ 827.3 $ 882.4 3.0 0.6 0.6 0.6 0.6 2.3 7.7 $ 15.7 $ 7.7 $ 12.4 $ 10.1 $ 14.6 $ 829.6 $ 890.1 (1)Represents the undiscounted, inflation-adjusted estimated cash outflows required to settle the recorded AROs. The corresponding present value of these future expenditures is $166.6 million as of December 31, 2013. 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 2013 dollars is approximately $53.0 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 included in Item 8 of this report for further discussion of our AROs. As described in "Financial Assurance Requirements," we are required 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 if necessary. 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 2018 are detailed in the following table.CF INDUSTRIES HOLDINGS, INC. The following table details the undiscounted, inflation-adjusted estimated payments after 2018 required to settle the recorded AROs, as discussed above. Payments Due by Period 2019 2020 - 29 2030 - 39 2040 - 49 2050 - 59 After
2059 Total (in millions) $ 5.7 $ 52.2 $ 164.3 $ 253.0 $ 74.0 $ 278.1 $ 827.3 Subsequent Event In 2014, we repurchased 1.2 million of the Company's common shares for $294.9 million as part of the $3.0 billion share repurchase program announced in the third quarter of 2012. Together with the 7.3 million shares repurchased during 2013, these repurchases bring the total repurchased shares to date under this program to 8.5 million for an aggregate expenditure of $1.7 billion.teneleven years and the barge charter commitments currently have terms rangingrange from twoone 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 2224—Leases 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 5five 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, turnaround costs would be expensed as incurred. 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 a full plant shut down including required safety inspections, which entails the disassembly of various components such as steam boilers, pressure vessels and other equipment requiring safety certifications. Capitalized turnaround costs have been applied consistently in the periods presented. Internal employee costs and overhead amounts are not considered turnaround costs and are not capitalized. Turnaround costs are classified as investing activities in the 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. (AROs)Retirement Obligationsretirement 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 to our consolidated financial statements included in Item 8 of this report.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. 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. The most recent estimate of the aggregate cost of these AROs expressed in 20132016 dollars is $53.0$72 million. We have not recorded a liability for these conditional AROs atas of December 31, 20132016 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.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 may not be recoverable. When circumstances indicate that the fair value of our investment in any such affiliate is less than its carrying value, and the reduction in value is other than temporary, the reduction in value is recognized immediately in earnings.investmentsequity method investment in unconsolidated subsidiaries annuallyPLNL at December 31, 2016 is approximately $139 million. If NGC does not make sufficient quantities of natural gas available to determine if there is a lossPLNL at prices that permit profitable operations, PLNL may cease operating its facility and we would write off the remaining investment in value of the investment. We determine the fair value of the investment using an income approach valuation method. If the sum of the expected future discounted net cash flows is less than the carrying value, an impairment loss 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 testCF INDUSTRIES HOLDINGS, INC.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 20132016, 2015 or 20122014 reviews. As of December 31, 20132016 and 2012,2015, the carrying value of our goodwill was $2.1 billion.Derivative Financial Instruments The accounting for the change$2.35 billion and $2.39 billion, respectively.the fair value of a derivative instrument depends on whether the instrument has been designated as a hedging instrument 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, 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. Certain of our foreign currency derivatives that we use to manage our exposure to changes in exchange rates on Euro-denominated expenditures associatedconnection with our major capacity expansion projects have been designated as cash flow hedges. The expected cash flows for the capital projects involve the use2010 acquisition of judgments and estimates,Terra Industries Inc. consist of customer relationships, which are subjectbeing amortized over a period of 18 years. The intangible assets identified in connection with our 2015 acquisition of 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 on our consolidated balance sheets. See Note 7—Goodwill and Other Intangible Assets to change. We assess, both at the hedge's inceptionour consolidated financial statements included in Item 8 of this report for additional information regarding our goodwill 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. North America Plans Increase/(Decrease) in Increase/(Decrease) in Assumption +50 bps -50 bps +50 bps -50 bps ( in millions) Discount Rate $ (43 ) $ 47 $ (1 ) $ 3 EROA N/A N/A (3 ) 3 United Kingdom Plans Increase/(Decrease) in Increase/(Decrease) in Assumption +50 bps -50 bps +50 bps -50 bps ( in millions) Discount Rate $ (45 ) $ 50 $ — $ (1 ) EROA N/A N/A (2 ) 2 RPI 29 (28 ) 1 (1 ) Year ended December 31, 2016 2015 2014 (in millions, except per share amounts) Net sales $ 3,685 $ 4,308 $ 4,743 Cost of sales 2,845 2,761 2,965 Gross margin 840 1,547 1,778 Selling, general and administrative expenses 174 170 152 Transaction costs 179 57 — Other operating—net 208 92 53 Total other operating costs and expenses 561 319 205 Gain on sale of phosphate business — — 750 Equity in (losses) earnings of operating affiliates (145 ) (35 ) 43 Operating earnings 134 1,193 2,366 Interest expense 200 133 178 Interest income (5 ) (2 ) (1 ) Loss on debt extinguishment 167 — — Other non-operating—net (2 ) 4 2 (Loss) earnings before income taxes and equity in earnings of non-operating affiliates (226 ) 1,058 2,187 Income tax (benefit) provision (68 ) 396 773 Equity in earnings of non-operating affiliates—net of taxes — 72 23 Net (loss) earnings (158 ) 734 1,437 Less: Net earnings attributable to noncontrolling interests 119 34 47 Net (loss) earnings attributable to common stockholders $ (277 ) $ 700 $ 1,390 Net (loss) earnings per share attributable to common stockholders: Basic $ (1.19 ) $ 2.97 $ 5.43 Diluted $ (1.19 ) $ 2.96 $ 5.42 Weighted-average common shares outstanding: Basic 233.1 235.3 255.9 Diluted 233.1 236.1 256.7 Year ended December 31, 2016 2015 2014 (in millions) Net (loss) earnings $ (158 ) $ 734 $ 1,437 Other comprehensive (loss) income: Foreign currency translation adjustment—net of taxes (74 ) (157 ) (72 ) Unrealized loss on hedging derivatives—net of taxes — — (2 ) Defined benefit plans—net of taxes (74 ) 67 (43 ) (148 ) (90 ) (117 ) Comprehensive (loss) income (306 ) 644 1,320 Less: Comprehensive income attributable to noncontrolling interests 119 34 47 Comprehensive (loss) income attributable to common stockholders $ (425 ) $ 610 $ 1,273 December 31, 2016 2015 Assets Current assets: Cash and cash equivalents $ 1,164 $ 286 Restricted cash 5 23 Accounts receivable—net 236 267 Inventories 339 321 Prepaid income taxes 841 185 Other current assets 70 45 Total current assets 2,655 1,127 Property, plant and equipment—net 9,652 8,539 Investments in affiliates 139 298 Goodwill 2,345 2,390 Other assets 340 329 Total assets $ 15,131 $ 12,683 Liabilities and Equity Current liabilities: Accounts payable and accrued expenses $ 638 $ 918 Income taxes payable 1 5 Customer advances 42 162 Other current liabilities 5 130 Total current liabilities 686 1,215 Long-term debt 5,778 5,537 Deferred income taxes 1,630 916 Other liabilities 545 628 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, 2016—233,141,771 shares issued and 2015—235,493,395 shares issued 2 2 Paid-in capital 1,380 1,378 Retained earnings 2,365 3,058 Treasury stock—at cost, 2016—27,602 shares and 2015—2,411,839 shares (1 ) (153 ) Accumulated other comprehensive loss (398 ) (250 ) Total stockholders' equity 3,348 4,035 Noncontrolling interests 3,144 352 Total equity 6,492 4,387 Total liabilities and equity $ 15,131 $ 12,683 Common Stockholders $0.01 Par
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Equity (in millions) Balance as of December 31, 2013 $ 3 $ (202 ) $ 1,592 $ 3,726 $ (43 ) $ 5,076 $ 362 $ 5,438 Net earnings — — — 1,390 — 1,390 47 1,437 Other comprehensive income: Foreign currency translation adjustment—net of taxes — — — — (72 ) (72 ) — (72 ) Unrealized net loss on hedging derivatives—net of taxes — — — — (2 ) (2 ) — (2 ) Defined benefit plans—net of taxes — — — — (43 ) (43 ) — (43 ) Comprehensive income 1,273 47 1,320 Purchases of treasury stock — (1,924 ) — — — (1,924 ) — (1,924 ) Retirement of treasury stock (1 ) 1,906 (220 ) (1,685 ) — — — — Acquisition of treasury stock under employee stock plans — (3 ) — — — (3 ) — (3 ) Issuance of $0.01 par value common stock under employee stock plans — 1 17 — — 18 — 18 Stock-based compensation expense — — 17 — — 17 — 17 Excess tax benefit from stock-based compensation — — 8 — — 8 — 8 Cash dividends ($1.00 per share) — — — (256 ) — (256 ) — (256 ) Distributions declared to noncontrolling interest — — — — — — (46 ) (46 ) Balance as of December 31, 2014 $ 2 $ (222 ) $ 1,414 $ 3,175 $ (160 ) $ 4,209 $ 363 $ 4,572 Net earnings — — — 700 — 700 34 734 Other comprehensive income: Foreign currency translation adjustment—net of taxes — — — — (157 ) (157 ) — (157 ) Defined benefit plans—net of taxes — — — — 67 67 — 67 Comprehensive income 610 34 644 Purchases of treasury stock — (527 ) — — — (527 ) — (527 ) Retirement of treasury stock — 597 (62 ) (535 ) — — — — Acquisition of treasury stock under employee stock plans — (2 ) — — — (2 ) — (2 ) Issuance of $0.01 par value common stock under employee stock plans — 1 8 — — 9 — 9 Stock-based compensation expense — — 16 — — 16 — 16 Excess tax benefit from stock-based compensation — — 2 — — 2 — 2 Cash dividends ($1.20 per share) — — — (282 ) — (282 ) — (282 ) Distributions declared to noncontrolling interest — — — — — — (45 ) (45 ) Balance as of December 31, 2015 $ 2 $ (153 ) $ 1,378 $ 3,058 $ (250 ) $ 4,035 $ 352 $ 4,387 Net loss — — — (277 ) — (277 ) 119 (158 ) Other comprehensive (loss) income: Foreign currency translation adjustment—net of taxes — — — — (74 ) (74 ) — (74 ) Defined benefit plans—net of taxes — — — — (74 ) (74 ) — (74 ) Comprehensive (loss) income (425 ) 119 (306 ) Retirement of treasury stock — 150 (14 ) (136 ) — — — — Acquisition of treasury stock under employee stock plans — (1 ) — — — (1 ) — (1 ) Issuance of $0.01 par value common stock under employee stock plans — 3 (3 ) — — — — — Stock-based compensation expense — — 19 — — 19 — 19 Cash dividends ($1.20 per share) — — — (280 ) — (280 ) — (280 ) Issuance of noncontrolling interest in CF Industries Nitrogen, LLC (CFN) — — — — — — 2,792 2,792 Distributions declared to noncontrolling interests — — — — — — (119 ) (119 ) Balance as of December 31, 2016 $ 2 $ (1 ) $ 1,380 $ 2,365 $ (398 ) $ 3,348 $ 3,144 $ 6,492 Year ended December 31, 2016 2015 2014 (in millions) Operating Activities: Net (loss) earnings $ (158 ) $ 734 $ 1,437 Adjustments to reconcile net (loss) earnings to net cash provided by operating activities: Depreciation and amortization 678 480 393 Deferred income taxes 739 78 18 Stock-based compensation expense 19 17 17 Unrealized net (gain) loss on natural gas and foreign currency derivatives (260 ) 163 119 Loss on embedded derivative 23 — — Gain on remeasurement of CF Fertilisers UK investment — (94 ) — Impairment of equity method investment in PLNL 134 62 — Loss on sale of equity method investments — 43 — Loss on debt extinguishment 167 — — Gain on sale of phosphate business — — (750 ) Loss on disposal of property, plant and equipment 10 21 4 Undistributed loss (earnings) of affiliates—net of taxes 9 (3 ) (12 ) Changes in: Accounts receivable—net 18 (4 ) 39 Inventories (7 ) (71 ) 64 Accrued and prepaid income taxes (676 ) (148 ) (57 ) Accounts payable and accrued expenses (18 ) 42 (53 ) Customer advances (120 ) (164 ) 205 Other—net 59 51 (3 ) Net cash provided by operating activities 617 1,207 1,421 Investing Activities: Additions to property, plant and equipment (2,211 ) (2,469 ) (1,809 ) Proceeds from sale of property, plant and equipment 14 12 11 Proceeds from sale of equity method investment — 13 — Proceeds from sale of phosphate business — — 1,372 Purchase of CF Fertilisers UK, net of cash acquired — (552 ) — Sales and maturities of short-term and auction rate securities — — 5 Deposits to restricted cash funds — — (505 ) Withdrawals from restricted cash funds 18 63 573 Other—net 2 (43 ) 9 Net cash used in investing activities (2,177 ) (2,976 ) (344 ) Financing Activities: Proceeds from long-term borrowings 1,244 1,000 1,494 Payments of long-term borrowings (1,170 ) — — Proceeds from short-term borrowings 150 367 — Payments of short-term borrowings (150 ) (367 ) — Payment to CHS related to credit provision (5 ) — — Financing fees (31 ) (47 ) (16 ) Purchases of treasury stock — (556 ) (1,935 ) Dividends paid on common stock (280 ) (282 ) (256 ) Issuance of noncontrolling interest in CFN 2,800 — — Distributions to noncontrolling interests (119 ) (45 ) (46 ) Issuances of common stock under employee stock plans — 8 18 Shares withheld for taxes — (1 ) (3 ) Other—net — — (43 ) Net cash provided by (used in) financing activities 2,439 77 (787 ) Effect of exchange rate changes on cash and cash equivalents (1 ) (19 ) (4 ) Increase (decrease) in cash and cash equivalents 878 (1,711 ) 286 Cash and cash equivalents at beginning of period 286 1,997 1,711 Cash and cash equivalents at end of period $ 1,164 $ 286 $ 1,997 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 CF INDUSTRIES HOLDINGS, INC. 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 that 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.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 $768.6 million at December 31, 2013, which was $67.9 million higher than pension plan assets. The December 31, 2013 PBO was computed based on a weighted average discount rate of 4.8%, 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 $49.0 million higher or $44.5 million lower, respectively, than the amount previously discussed. The weighted average discount rate used to calculate pension expense in 2013 was 4.0%. If the discount rate used to compute 2013 pension expense decreased or increased by 50 basis points, the expense would have been approximately $4.9 million higher or $3.8 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 5.1% weighted average expected long-term rate of return on assets used to calculate pension expense in 2013 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 2013 would have been $3.2 million lower or higher, respectively. See Note 7 to our consolidated financial statements included in Item 8 of this report for further discussion of our pension plans.Consolidation We consolidate all entities that we control by ownership of a majority interest and 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 andCF INDUSTRIES HOLDINGS, INC.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 included in Item 8 of this report 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 $32, $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 primarily natural gas fixed price swaps and call 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, 2013 and 2012, we had open derivative contracts for 76.3 million MMBtus and 58.9 million MMBtus, respectively. A $1.00 per MMBtu increase in the forward curve prices of natural gas at December 31, 2013 would result in a favorable change in the fair value of these derivative positions of $60.3 million, and a $1.00 per MMBtu decrease in the forward curve prices of natural gas would change their fair value unfavorably by $60.3 million. 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 andCF INDUSTRIES HOLDINGS, INC.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 $2.18 per ton and $3.82 per ton, respectively. We 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 At December 31, 2013, we had four series of senior notes totaling $3.1 billion outstanding with maturity dates of May 1, 2018, May 1, 2020, June 1, 2023 and June 1, 2043. The senior notes have fixed interest rates. The fair value of our senior notes outstanding at December 31, 2013 was approximately $3.3 billion. Borrowings under our Credit Agreement bear a current market rate of interest and we are subject to interest rate risk on such borrowings. However, in 2013, there were no borrowings under that agreement.Foreign Currency Exchange Rates We have entered into Euro/U.S. Dollar derivative hedging transactions related to the Euro denominated construction costs associated with our capacity expansion projects at our Donaldsonville and Port Neal facilities. At December 31, 2013, the notional amount of our open foreign currency forward contracts was approximately $636.3 million and the fair value was a net unrealized gain of $28.9 million. A 10% change in USD/Euro forward exchange rates would change the fair value of these positions by $63.6 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. 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, 2013 and 2012, 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, 2013. 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, 2013 and 2012, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2013, 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, 2013, based on criteria established inInternal Control—Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 27, 2014 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.(signed) KPMG LLPChicago, IllinoisFebruary 27, 2014CF INDUSTRIES HOLDINGS, INC.CONSOLIDATED STATEMENTS OF OPERATIONS Year ended December 31, 2013 2012 2011 (in millions, except
per share amounts) $ 5,474.7 $ 6,104.0 $ 6,097.9 2,954.5 2,990.7 3,202.3 2,520.2 3,113.3 2,895.6 166.0 151.8 130.0 — — 4.4 (15.8 ) 49.1 20.9 150.2 200.9 155.3 41.7 47.0 50.2 2,411.7 2,959.4 2,790.5 152.2 135.3 147.2 (4.7 ) (4.3 ) (1.7 ) 54.5 (1.1 ) (0.6 ) 2,209.7 2,829.5 2,645.6 686.5 964.2 926.5 9.6 58.1 41.9 1,532.8 1,923.4 1,761.0 68.2 74.7 221.8 $ 1,464.6 $ 1,848.7 $ 1,539.2
$ 24.87 $ 28.94 $ 22.18 $ 24.74 $ 28.59 $ 21.98
58.9 63.9 69.4 59.2 64.7 70.0 See Accompanying Notes to Consolidated Financial Statements.CF INDUSTRIES HOLDINGS, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Year ended December 31, 2013 2012 2011 (in millions) $ 1,532.8 $ 1,923.4 $ 1,761.0
(30.2 ) 46.7 (7.6 ) 1.9 4.6 — 1.0 2.6 1.9 33.6 (3.5 ) (40.9 ) 6.3 50.4 (46.6 ) 1,539.1 1,973.8 1,714.4 67.5 75.4 221.2 $ 1,471.6 $ 1,898.4 $ 1,493.2 See Accompanying Notes to Consolidated Financial Statements.CF INDUSTRIES HOLDINGS, INC.CONSOLIDATED BALANCE SHEETS December 31, 2013 2012 (in millions,
except share and
per share amounts) $ 1,710.8 $ 2,274.9 154.0 — 230.9 217.4 274.3 277.9 60.0 9.5 33.4 — 74.3 — 92.4 27.9 2,630.1 2,807.6 4,101.7 3,900.5 — 200.8 926.0 935.6 2,095.8 2,064.5 679.0 — 245.5 257.9 $ 10,678.1 $ 10,166.9 $ 564.1 $ 366.5 73.3 187.1 120.6 380.7 — 5.0 — 5.3 26.8 — 43.5 5.6 828.3 950.2 3,098.1 1,600.0 833.2 938.8 154.5 — 325.6 395.7 — — 0.6 0.6 1,594.3 2,492.4 3,725.6 3,461.1 (201.8 ) (2.3 ) (42.6 ) (49.6 ) 5,076.1 5,902.2 362.3 380.0 5,438.4 6,282.2 $ 10,678.1 $ 10,166.9 See Accompanying Notes to Consolidated Financial Statements.CF INDUSTRIES HOLDINGS, INC.CONSOLIDATED STATEMENTS OF EQUITY Common Stockholders $0.01 Par
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Equity Noncontrolling
Interest Total
Equity (in millions) $ 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 — — — 1,464.6 — 1,464.6 68.2 1,532.8 — — — — (29.5 ) (29.5 ) (0.7 ) (30.2 ) — — — — 1.9 1.9 — 1.9 — — — — 1.0 1.0 — 1.0 — — — — 33.6 33.6 — 33.6 1,471.6 67.5 1,539.1 — — (752.5 ) — — (752.5 ) (16.8 ) (769.3 ) — (3.2 ) — — — (3.2 ) — (3.2 ) — (1,449.3 ) — — — (1,449.3 ) — (1,449.3 ) — 1,247.8 (180.4 ) (1,067.4 ) — — — — 5.2 8.7 (3.6 ) — 10.3 — 10.3 — — 12.6 — — 12.6 — 12.6 — — 13.5 — — 13.5 — 13.5 — — — (129.1 ) (129.1 ) — (129.1 ) — — — — — — (68.5 ) (68.5 ) — — — — — — 0.1 0.1 $ 0.6 $ (201.8 ) $ 1,594.3 $ 3,725.6 $ (42.6 ) $ 5,076.1 $ 362.3 $ 5,438.4 See Accompanying Notes to Consolidated Financial Statements.CF INDUSTRIES HOLDINGS, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS Year ended December 31, 2013 2012 2011 (in millions) $ 1,532.8 $ 1,923.4 $ 1,761.0 410.6 419.8 416.2 (34.3 ) (138.4 ) (32.9 ) 12.6 11.9 10.6 (13.5 ) (36.1 ) (47.2 ) (59.3 ) (78.8 ) 77.3 5.6 5.5 8.8 (11.3 ) (14.9 ) (13.5 ) 0.4 53.2 (35.5 ) (80.3 ) 34.8 (38.5 ) (153.4 ) 58.7 101.6 49.5 25.5 5.2 (260.1 ) 123.3 (174.3 ) — 0.8 1.4 67.5 (13.1 ) 38.7 1,466.8 2,375.6 2,078.9
(823.8 ) (523.5 ) (247.2 ) 12.6 17.0 54.7 13.5 48.4 37.9 (72.5 ) — — (154.0 ) — — (2.9 ) (55.4 ) (50.4 ) 7.8 — 31.2 (1,019.3 ) (513.5 ) (173.8 )
1,498.0 — — (14.5 ) — (1.5 ) (1,409.1 ) (500.0 ) (1,000.2 ) — (13.0 ) (346.0 ) — 40.5 — — (40.5 ) — (918.7 ) — — (129.1 ) (102.7 ) (68.7 ) (73.7 ) (231.8 ) (145.7 ) 10.3 14.6 15.5 13.5 36.1 47.2 43.0 — — (980.3 ) (796.8 ) (1,499.4 ) (31.3 ) 2.6 3.6 (564.1 ) 1,067.9 409.3 2,274.9 1,207.0 797.7 $ 1,710.8 $ 2,274.9 $ 1,207.0 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 United States 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. In October 2013, we entered into a definitive agreement with the Mosaic Company (Mosaic) to sell our entire phosphate mining and manufacturing business, which is located in Florida, for a purchase price of approximately $1.4 billion in cash, subject to adjustment as provided in the agreement, and entered into two agreements to supply ammonia to Mosaic. The first agreement, which is not conditioned upon completion of the phosphate business sale transaction, provides for us to supply between 600,000 and 800,000 tons of ammonia per year from our Donaldsonville, Louisiana nitrogen complex beginning no later than 2017. The second agreement provides for us to supply approximately 300,000 tons of ammonia per year sourced from our Point Lisas Nitrogen Limited (PLNL) joint venture beginning at the closing of the phosphate business sale transaction. The closing of the phosphate business sale transaction is subject to various conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act), approvals under applicable foreign antitrust laws, receipt of other governmental and third party consents and other customary closing conditions. In January 2014, we were notified that the U.S. Department of Justice closed its review and terminated the waiting period under the HSR Act relating to the phosphate business sale transaction. The phosphate business sale transaction is expected to close in the first half of 2014. For additional details regarding this sale, see Note 12—Assets and Liabilities Held for Sale. Our principal nitrogen segment assets include:•six nitrogen fertilizer manufacturing facilities in Donaldsonville, Louisiana (the largest nitrogen fertilizer complex in North America), Medicine Hat, Alberta (the largest nitrogen fertilizer complex in Canada), 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;•an extensive system of terminals and associated transportation equipment located primarily in the midwestern United States; andCF 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;•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. As a result of the agreement to sell the phosphate mining and manufacturing business to Mosaic, the assets and liabilities of our phosphate segment, including an integrated ammonium phosphate fertilizer complex and a phosphate rock mine and associated beneficiation plant—but excluding accounts receivable, accounts payable and certain phosphate inventory, which will be retained by us and settled in the ordinary course—are classified as assets or liabilities held for sale. 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).2. Summary of Significant Accounting PoliciesConsolidation and Noncontrolling Interest The consolidated financial statements of CF Holdings include the accounts of CF and all majority-owned subsidiaries. All significant intercompany transactions and balances have been eliminated. 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. 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.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 maintain 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.Restricted Cash In connection with the Company's capacity expansion projects, we are required to grant a contractor a security interest in a restricted cash account. We maintain a cash balance in that account equal to the cancelation fees for procurement services and equipment that would arise if the projects were cancelled. This restricted cash is not included in our cash and cash equivalents and is reported separately on the consolidated balance sheet. Contributions to the restricted cash account are reported on the consolidated statements of cash flows 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 consolidated statements of cash flows. For additional information, see Note 17—Property, Plant and Equipment—Net.CF INDUSTRIES HOLDINGS, INC.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.Assets and Liabilities Held for Sale Assets and liabilities are classified as held for sale and presented separately on the consolidated balance sheet if their carrying amounts will be recovered through a sale transaction rather than through continuing use. We classify assets and liabilities we will sell (disposal group) as held for sale in the period in which all of following criteria are met: (1) management with the authority to approve the action commits to a plan to sell, (2) the disposal group is available for immediate sale in its present condition, subject only to terms that are usual and customary, (3) we have initiated an active program to locate a buyer, (4) the sale is probable, (5) the transfer is expected to qualify as a completed sale within one year of such classification (there are some circumstances beyond the entity's control that may extend the time for completion beyond one year), and (5) we are actively marketing the asset at a reasonable price in relation to its current fair value. Once classified as held for sale, capitalized amounts including those for property, plant and equipment and intangible assets, are not depreciated or amortized. In the consolidated statements of operations an entity must report the results of operating a component it has classified as held for sale as discontinued operations separate from continuing operations if the component's operations and cash flows will be eliminated from the ongoing operations as a result of the disposal and the entity will not have any significant continuing involvement in the component's operations after the disposal. Results of operating a component held for sale but not qualifying as a discontinued operation are included in continuing operations and not reported separately. In October 2013, we entered into a definitive agreement with Mosaic to sell our entire phosphate mining and manufacturing business, which is located in Florida, for a purchase price of approximately $1.4 billion in cash, subject to adjustment as provided in the agreement, and entered into two agreements to supply ammonia to Mosaic. The assets and liabilities of our phosphate mining and manufacturing business being sold to Mosaic comprise a disposal group that is classified on our December 31, 2013 Consolidated Balance Sheet as assets or liabilities held for sale. The contract to supply ammonia to the disposed business from our PLNL joint venture represents the continuation, following the sale of the phosphate mining and manufacturing business, of a supply arrangement that historically has been maintained between the phosphate mining and manufacturing business and other operations of the Company and its subsidiaries. Because of the significance of this continuing supply arrangement, in accordance with U.S. generally accepted accounting principles, the phosphate mining and manufacturing business is not reported as discontinued operations in our consolidated statement of operations.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 assessmentCF INDUSTRIES HOLDINGS, INC.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 a 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 venturesventure that isare 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 indefinitelypermanently 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 related to our capacity expansion projects, we useused foreign currency derivatives, primarily forward exchange contracts.CF INDUSTRIES HOLDINGS, INC.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. At December 31, 2013, the Company elected to de-designate the remaining cash flow hedging instruments.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.hedgehedged future payments for the construction of long termlong-term assets.For additional information, seeSee Note 24—15—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. ForInstruments for additional information, see Note 10—Asset Retirement Obligations. 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.
EnvironmentalCF INDUSTRIES HOLDINGS, INC.Environmentalthe 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. See Note 19—Stock-Based Compensation for additional information.additional information, see Note 26—Stock-Based Compensation.the Company iswe are subject to ordinary, routine legal proceedings related to the usual conduct of itsour business. The CompanyWe may also isbe 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 determinations 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 litigation, and estimating related costs and exposure involves substantial uncertainties that could cause actual costs to vary materially from estimates and accruals.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.includedrecorded on the balance sheet as a direct deduction from the carrying amount of the related debt liability. Costs associated with entering into revolving credit facilities are recorded as an asset in other noncurrent assets andassets. All debt issuance costs are amortized over the term of the related debt. Debt issuance discounts are netted against the related debt and are amortized over the term of the debt using the effective interest method. See Note 12—Financing Agreements for additional information. 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 reflectAccounting Standards Codification (ASC), and related Accounting Standards Updates (ASU).Recently Adopted Pronouncements In December 2011, the FASB issued a standard pertaining 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, 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 applies2016-09, Compensation-Stock Compensation (Topic 718): Improvements to derivatives, repurchase agreementsEmployee Share-Based Payment Accounting. This ASU makes a number of changes meant to simplify and reverse repurchase agreements, and securities borrowing and securities lending transactions that are either offset or subjectimprove accounting for share-based payments, including amendments to an enforceable master netting arrangement or similar agreement. These standards were effectiveshare-based accounting for disclosures in interim and annual reporting periods beginning on or after January 1, 2013. We adopted this standardincome taxes, classifications in the firststatement of cash flows and share award forfeiture accounting. We elected to early adopt ASU No. 2016-09 in the third quarter of 20132016. As a result, we retrospectively recast our consolidated statement of cash flows for the years ended December 31, 2015 and its2014 by reclassifying $2 million and $9 million, respectively, of excess tax benefit previously reported in financing activities to operating activities and $1 million and $3 million, respectively, of cash outflows related to shares withheld for taxes from operating activities to financing activities. We also elected to recognize equity award forfeitures as they occur to determine the amount of compensation cost to be recognized in each period. The update also requires us to recognize excess tax benefits and tax deficiencies in the statement of operations when awards are settled. The adoption of this ASU did not have a material impact on our consolidated financial statements.February 2013,May 2015, the FASB issued ASU No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). The amendments in ASU No. 2015-07 remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. ASU No. 2015-07 is effective for fiscal years beginning after December 15, 2015 and requires retrospective application. We elected to early adopt this ASU in the fourth quarter of 2015, and, as a standard pertainingresult, certain of the investments in our defined benefit pension plans were reflected as reconciling items to the reportingpresentation of amounts reclassified outinvestments categorized within the fair value hierarchy table. In 2016, the American Institute of accumulated other comprehensive income (AOCI) (ASUCertified Public Accountants issued guidance that clarified characteristics of investments that should continue to be categorized within the fair value hierarchy table. As a result, we recast certain investments that were reported as reconciling items to the December 31, 2015 fair value hierarchy tables. See Note 11—Pension and Other Postretirement Benefits for additional information.2013-02). The standard2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. This ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. The ASU requires retrospective application and represents a change in accounting principle. In August 2015, the FASB issued the related ASU No. 2015-15, Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, which clarifies ASU No. 2015-03 and states that the SEC staff would not object to an entity provide, by component, information regardingdeferring and presenting debt issuance costs related to a line-of-credit arrangement as an asset and subsequently amortizing the amounts reclassified outdeferred debt issuance costs ratably over the term of AOCI, eitherthe line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the faceline-of-credit arrangement. We adopted ASU No. 2015-03 and ASU No. 2015-15 retrospectively in the first quarter of 2016, which resulted in the reclassification of deferred debt issuance costs as of December 31, 2015 of $56 million from other assets to an offset of long-term debt on our consolidated balance sheet as of December 31, 2015. Deferred debt issuance costs related to our revolving credit agreement continue to be reflected in other assets. See Note 12—Financing Agreements for additional information.statementbeginning of operations orthe period of adoption. Early adoption is permitted in the notes,first interim period of an annual reporting period for which financial statements have not been issued. We are currently evaluating the impact of this ASU on our consolidated financial statements.an indicationobligations resulting from virtually all leases (other than leases that meet the definition of a short-term lease) on their balance sheets as to the line items in the statement of operations that the amounts were reclassified to. In addition, in certain cases, an entity isright-of-use assets with corresponding lease liabilities. Extensive quantitative and qualitative disclosures, including significant judgments made by management, will be required to cross-referenceprovide greater insight into the extent of income and expense recognized and expected to other disclosures that providebe recognized from existing contracts. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted, and requires the modifieddetails aboutinformation.reclassified amounts. This standard wasFASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, effective prospectively for reportingannual and interim periods beginning after December 15, 2012.2016. ASU No. 2015-11 changes the inventory measurement principle for entities using the FIFO or average cost methods. For entities utilizing one of these methods, the inventory measurement principle will change from lower of cost or market to the lower of cost and net realizable value. We adoptedfollow the FIFO or average cost methods and we have evaluated the effect of this standard in the first quarter of 2013ASU and its adoption didwe believe it will not have a material impacteffect on our consolidated financial statements.Noncontrolling InterestCanadian FertilizersAcquisitions and Divestitures(CFL) CFL owns(formerly known as GrowHow UK Group Limited) (CF Fertilisers UK) not previously owned by us for total consideration of $570 million, and CF Fertilisers UK became wholly owned by us. The purchase price was funded with cash on hand. 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 our consolidated statements of operations in equity in earnings of non-operating affiliates—net of taxes. During the third quarter of 2015, we recorded a nitrogen fertilizer complexgain of $94 million on the remeasurement to fair value of our initial 50% equity interest in Medicine Hat, Alberta, Canada,CF Fertilisers UK that is included in equity in earnings of non-operating affiliates—net of taxes. See Note 8—Equity Method Investments for additional information. Original Valuation December 31, 2015 Final Valuation (in millions) Fair value of consideration transferred $ 570 $ — $ 570 $ — $ 570 Fair value of 50% of equity interest already held by the Company 570 — 570 — 570 Total fair value $ 1,140 $ — $ 1,140 $ — $ 1,140 Assets acquired and liabilities assumed Current assets $ 165 $ 1 $ 166 $ — $ 166 Property, plant and equipment 898 — 898 — 898 Goodwill 328 (8 ) 320 4 324 Other assets 140 (1 ) 139 — 139 Total assets acquired 1,531 (8 ) 1,523 4 1,527 Current liabilities 74 1 75 — 75 Deferred income taxes 129 (9 ) 120 4 124 Other liabilities 188 — 188 — 188 Total liabilities assumed 391 (8 ) 383 4 387 Total net assets acquired $ 1,140 $ — $ 1,140 $ — $ 1,140 In July 2016, final adjustments were made to the fair value of the assets acquired and liabilities assumed, which resulted in a corresponding $4 million increase to goodwill. until April 30,is not deductible for income tax purposes. Other assets acquired included intangible assets of $132 million consisting of customer relationships and trade names, which are being amortized over a weighted-average life of approximately 20 years. See Note 7—Goodwill and Other Intangible Assets for additional information related to goodwill and the acquired intangibles.supplied fertilizer products toamong CF Industries Holdings, Inc. (CF Industries) and Viterra Inc. (Viterra). The 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. Prior to April 30, 2013, CF Industries owned 49% of the voting common shares and 66% of the non-voting preferred shares of CFL and purchased 66% of the production of CFL. Also prior to April 30, 2013, Viterra held 34% of the equity ownership of CFL, and had the right to purchase up to the remaining 34% of CFL's production. Both, CF Industries and ViterraMosaic, for approximately $1.4 billion in cash. We recognized pre-tax and after-tax gains on the transaction of $750 million and $463 million, respectively. Under the terms of the definitive transaction agreement, the accounts receivable and accounts payable pertaining to the phosphate mining and manufacturing business and certain phosphate inventory held in distribution facilities were entitlednot sold to receive distributionsMosaic in the transaction and were settled in the ordinary course.neta supply practice that previously existed between our former phosphate mining and manufacturing business and other operations of the Company. Prior to March 17, 2014, PLNL sold ammonia to us for use in the phosphate business and the cost was included in our production costs in our phosphate segment. Subsequent to the sale of the phosphate business, we now sell the PLNL-sourced ammonia to Mosaic. The revenue from these sales to Mosaic and the costs to purchase the ammonia from PLNL are now included in our ammonia segment. Our 50% share of the operating results of our PLNL joint venture continues to be included in equity in earnings of CFL based upon their respective purchases from CFL. The remaining 17% of the voting common shares were owned by GROWMARK, Inc. and La Coop fédérée. CFL was a variable interest entity that was consolidated in the Company's financial statements. In 2012, the Company entered into agreements to acquire the noncontrolling interests in CFL for C$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 CFLCF INDUSTRIES HOLDINGS, INC.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. CFL is now a wholly owned subsidiary and we purchase 100% of CFL's ammonia and granular urea production. CF Industries' and Viterra's purchases of nitrogen fertilizer products from CFL were made under product purchase agreements, and the selling prices were determined under the provisions of these agreements. Prior to the fourth quarter of 2012, an initial selling price was paid to CFL based upon CFL's production cost plus an agreed-upon margin once title passed as the product was shipped. At the end of the year, the difference between the market price of products purchased from CFL and the price based on production cost plus the agreed-upon margin was paid to CFL. The sales revenue attributable to this difference was accrued by the Company on an interim basis. In the fourth quarter of 2012, the CFL Board of Directors approved amendments to the product purchase agreements retroactive to January 1, 2012 that modified the selling prices that CFL charged for products sold to Viterra and CF Industries to eliminate the requirement to pay to CFL the difference between the market price and the price based on production cost plus an agreed-upon margin. The effect of the selling price amendments to the product purchase agreements impacts the comparability of the Company's financial results. These changes impact the year-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 the comparability of the Company's net earnings attributable to common stockholders or net cash flows for the same period. At December 31, 2013 and 2012, the net receivables due from Viterra related to the product purchases that were reflected on our consolidated balance sheets were zero and $2.0 million, respectively. The net earnings attributable to Viterra that are reported on the consolidated balance sheets in the line titled distributions payable to noncontrolling interest at December 31, 2013 and 2012 were zero and $5.3 million, respectively.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 interestaffiliates in our consolidated financial statements. 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.noncontrolling interest representsphosphate segment reflects the noncontrolling unitholders' interestreported results of the phosphate business through March 17, 2014, plus the continuing sales of the phosphate inventory in the equity of TNCLP. An affiliate of CF Industries is required to purchase all of TNCLP's fertilizer products at market prices as defineddistribution network after March 17, 2014. The remaining phosphate inventory was sold in the Amendmentsecond quarter of 2014; therefore, the phosphate segment does not have operating results subsequent to that quarter. Year ended December 31, 2016 2015 2014 (in millions, except per share amounts) Net (loss) earnings attributable to common stockholders $ (277 ) $ 700 $ 1,390 Basic earnings per common share: Weighted-average common shares outstanding 233.1 235.3 255.9 Net (loss) earnings attributable to common stockholders $ (1.19 ) $ 2.97 $ 5.43 Diluted earnings per common share: Weighted-average common shares outstanding 233.1 235.3 255.9 Dilutive common shares—stock options — 0.8 0.8 Diluted weighted-average shares outstanding 233.1 236.1 256.7 Net (loss) earnings attributable to common stockholders $ (1.19 ) $ 2.96 $ 5.42 General and Administrative Services and Product Offtake Agreement, dated September 28, 2010. TNCLP makes cash distributions tocomputation of diluted earnings per common share, potentially dilutive stock options are excluded if the general and limited partners based upon formulas defined within its Agreementeffect of Limited Partnership. Cash availabletheir inclusion is anti-dilutive. Shares for distribution is definedanti-dilutive stock options not included in the agreement generally as all cash receipts less all cash disbursements, less certain reserves (including reserves for future operatingcomputation of diluted earnings per common share were 4.9 million, 1.6 million 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 the extent to which the cumulative distributions exceed certain target threshold levels set forth in the Agreement of Limited Partnership.CF INDUSTRIES HOLDINGS, INC. In each of the applicable quarters of 2013, 2012 and 2011, 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 levels0.7 million for the years ended December 31, 2013, 20122016, 2015 and 2011 were $200.62014, respectively. December 31, 2016 2015 (in millions) Land $ 69 $ 68 Machinery and equipment 11,664 7,348 Buildings and improvements 878 271 280 3,626 12,891 11,313 Less: Accumulated depreciation and amortization 3,239 2,774 $ 9,652 $ 8,539 As of December 31, 2016 and 2015, we had property, plant and equipment that was accrued but unpaid of approximately $225 million and $543 million, respectively. These amounts included accruals related to our capacity expansion projects of $185 million and $471 million as of December 31, 2016 and 2015, respectively. $234.0$444 million and $214.2$361 million in 2016, 2015 and 2014, respectively. At Year ended December 31, 2016 2015 2014 (in millions) Net capitalized turnaround costs at beginning of the year $ 220 $ 153 $ 120 Additions 74 135 88 Depreciation (89 ) (65 ) (54 ) Effect of exchange rate changes 1 (3 ) (1 ) Net capitalized turnaround costs at end of the year $ 206 $ 220 $ 153 2013 Terra Nitrogen GP Inc. (TNGP), the general partner2016 and 2015: Ammonia Granular Urea UAN AN Other Total (in millions) Balance as of December 31, 2015 $ 587 $ 828 $ 576 $ 324 $ 75 $ 2,390 — — — 3 1 4 Effect of exchange rate changes (2 ) — — (41 ) (6 ) (49 ) Balance as of December 31, 2016 $ 585 $ 828 $ 576 $ 286 $ 70 $ 2,345 In July 2016, final adjustments were made to the fair value of the assets acquired and liabilities assumed in the acquisition of the remaining 50% equity interest in CF Fertilisers UK not previously owned by us, which resulted in a corresponding $4 million increase to goodwill. See Note 4—Acquisitions and Divestitures for additional information. TNCLP (and an indirect wholly-owned subsidiary of CF Industries),our identifiable intangible assets have definite lives 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. A reconciliation of the beginning and ending balances of noncontrolling interest and distributions payable to the noncontrolling interestspresented in other assets on our consolidated balance sheets is provided below. Year ended December 31, 2013 2012 2011 CFL TNCLP Total CFL TNCLP Total CFL TNCLP Total (in millions) $ 17.4 $ 362.6 $ 380.0 $ 16.7 $ 369.2 $ 385.9 $ 17.4 $ 365.6 $ 383.0 2.3 65.9 68.2 3.5 71.2 74.7 154.0 67.8 221.8 (2.3 ) (66.2 ) (68.5 ) (5.3 ) (77.8 ) (83.1 ) (149.7 ) (64.2 ) (213.9 ) (16.8 ) — (16.8 ) — — — — — — (0.6 ) — (0.6 ) 2.5 — 2.5 (5.0 ) — (5.0 ) $ — $ 362.3 $ 362.3 $ 17.4 $ 362.6 $ 380.0 $ 16.7 $ 369.2 $ 385.9
$ 5.3 $ — $ 5.3 $ 149.7 $ — $ 149.7 $ 78.0 $ — $ 78.0 2.3 66.2 68.5 5.3 77.8 83.1 149.7 64.2 213.9 (7.5 ) (66.2 ) (73.7 ) (154.0 ) (77.8 ) (231.8 ) (81.5 ) (64.2 ) (145.7 ) (0.1 ) — (0.1 ) 4.3 — 4.3 3.5 — 3.5 $ — $ — $ — $ 5.3 $ — $ 5.3 $ 149.7 $ — $ 149.7 December 31, 2016 December 31, 2015 Gross
Carrying
Amount Accumulated
Amortization Net Gross
Carrying
Amount Accumulated
Amortization Net (in millions) Intangible assets: Customer relationships $ 125 $ (24 ) $ 101 $ 140 $ (18 ) $ 122 TerraCair brand 10 (10 ) — 10 (10 ) — Trade names 29 (2 ) 27 35 (1 ) 34 Total intangible assets $ 164 $ (36 ) $ 128 $ 185 $ (29 ) $ 156 Estimated
Amortization
Expense (in millions) 2017 $ 9 2018 9 2019 9 2020 9 2021 9 5. December 31, 2013 December 31, 2016 Adjusted
Cost Unrealized
Gains Unrealized
Losses Fair Value Cost Basis Unrealized
Gains Unrealized
Losses Fair Value (in millions) (in millions) $ 148.9 $ — $ — $ 148.9 $ 89 $ — $ — $ 89 Cash equivalents: 1,491.1 — — 1,491.1 1,075 — — 1,075 70.8 — — 70.8 $ 1,710.8 $ — $ — $ 1,710.8 $ 1,164 $ — $ — $ 1,164 154.0 — — 154.0 5 — — 5 203.7 — — 203.7 Nonqualified employee benefit trusts 18 1 — 19 December 31, 2012 December 31, 2015 Adjusted
Cost Unrealized
Gains Unrealized
Losses Fair Value Cost Basis Unrealized
Gains Unrealized
Losses Fair Value (in millions) (in millions) $ 106.0 $ — $ — $ 106.0 $ 71 $ — $ — $ 71 Cash equivalents: 1,996.9 — — 1,996.9 190 — — 190 172.0 — — 172.0 25 — — 25 $ 2,274.9 $ — $ — $ 2,274.9 $ 286 $ — $ — $ 286 27.3 — (1.3 ) 26.0 200.8 — — 200.8 Restricted cash 23 — — 23 21.2 0.8 — 22.0 17 2 — 19 atas of December 31, 20132016 and 20122015 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, 2013 Total Fair Value Quoted Prices
in Active
Markets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) (in millions) $ 1,710.8 $ 1,710.8 $ — $ — 154.0 154.0 — — 74.3 — 74.3 — 203.7 203.7 — — $ 2,142.8 $ 2,068.5 $ 74.3 $ — $ 0.2 $ — $ 0.2 $ — $ 0.2 $ — $ 0.2 $ — December 31, 2016 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 $ 1,075 $ 1,075 $ — $ — Restricted cash 5 5 — — Derivative assets 56 — 56 — Nonqualified employee benefit trusts 19 19 — — Derivative liabilities (6 ) — (6 ) — Embedded derivative liability (26 ) — (26 ) — 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 $ 215 $ — $ — Restricted cash 23 23 — — Nonqualified employee benefit trusts 19 19 — — Derivative liabilities (211 ) — (211 ) — 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 At20132016 and 2012,2015, 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. Cash equivalents approximates fair value because of their short-term maturities.have contractedmaintain a cash account for engineering and procurement services with an affiliate of ThyssenKrupp Uhde (Uhde) for our capacity expansion projects at our Donaldsonville, Louisiana and Port Neal, Iowa production facilities. Underwhich the termsuse of the funds is restricted. The restricted cash account was put in place to satisfy certain requirements included in our engineering and procurement services contract for our capacity expansion projects. Under the terms of this contract, we arewere required to grant Uhdean affiliate of ThyssenKrupp Industrial Solutions a security interest in a restricted cash account and maintain a cash balance in that account equal to the cancellation fees for procurement services and equipment that would arise if we were to cancel the projects. We began funding the restricted account in the second quarter of 2013. The balance in the account is expected to change over time based on the amounts of unpaid engineering and procurement costs.currently use are primarily natural gas fixed price swaps, natural gas swaps and options and foreign currency forward contracts traded in the over-the-counter (OTC) 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 natural gas needs for future periods and settlements are scheduled to coincide with anticipated natural gas purchases during those future periods. The foreign currency derivative contracts held arewere 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, Louisiana and Port Neal, Iowa capitalcapacity expansion projects. All of our foreign currency derivatives settled in 2016. 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 foreign currency derivatives are valued based on quoted market prices supplied by an industry recognized, unrelatedindustry-recognized independent third party. See Note 24—15—Derivative Financial Instruments for additional information.
Embedded Derivative LiabilityTableContentsCF INDUSTRIES HOLDINGS, INC.Asset Retirement Obligation Funds In orderour strategic venture with CHS, if our credit rating is reduced below certain levels by two of three specified credit rating agencies, we are required to meet financial assurance requirements associated with certain AROs in Florida, we maintain investments in an escrow account established formake a non-refundable yearly payment of $5 million to CHS. The payment would continue on a yearly basis until the benefitearlier of the Florida Departmentdate that our credit rating is upgraded to or above certain levels by two of Environmental Protection (FDEP)the three specified credit rating agencies or February 1, 2026. On February 1, 2016, we recognized this term of the strategic venture as an embedded derivative and a trust establishedits value of $8 million was included in other liabilities on our consolidated balance sheet. See Note 17—Noncontrolling Interests for additional information.comply with a 2010 Consent Decree withincrease the U.S. Environmental Protection Agency (EPA)value of the embedded derivative liability by $23 million to reflect our credit evaluations. The inputs into the fair value measurement include the probability of future upgrades and downgrades of our credit rating based on historical credit rating movements of other public companies and the FDEP. The investments in the trust and escrow account are accounted fordiscount rates to be applied to potential annual payments based on applicable credit spreads of other public companies at different credit rating levels. Based on these inputs, our fair value measurement is classified as available-for-sale securities. The fair values of these investments are based upon daily quoted prices representing the Net Asset Value (NAV)Level 2. Additionally, as a result of the investments. The fair values of the ARO funds approximate their cost basis. Inreduction in our credit rating in the fourth quarter of 20132016, we announced the salemade a $5 million payment to CHS. The embedded derivative liability of our phosphate mining and manufacturing business, which$26 million as of December 31, 2016, is located in Florida. As a result, the asset retirement obligation funds are included in noncurrent assets held for sale at December 31, 2013. See Note 10—Asset Retirement Obligationsother liabilities and Note 12—Assets and Liabilities Held for Sale, for additional information regarding the trust and escrow accounts and the announced agreement to sell our phosphate mining and manufacturing business.Investments in Auction Rate Securities Our investments in Auction Rate Securities (ARS) are accounted for as available-for-sale securities and are includedother current liabilities on our consolidated balance sheetssheet. Included in other assets. At December 31, 2013, our ARS are not material tooperating—net in our consolidated balance sheet.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.valuesvalue of our financial instruments are as follows: December 31, 2013 2012 Carrying
Amount Fair Value Carrying
Amount Fair Value (in millions) $ 3,100.0 $ 3,276.7 $ 1,600.0 $ 1,979.4 December 31, 2016 2015 Carrying
Amount Fair Value Carrying
Amount Fair Value (in millions) Long-term debt $ 5,778 $ 5,506 $ 5,537 $ 5,456 6. Net Earnings Per Sharenetcomponents of (loss) earnings per share were computedbefore income taxes and equity in earnings of non-operating affiliates are as follows: Year ended December 31, 2013 2012 2011 (in millions, except
per share amounts) $ 1,464.6 $ 1,848.7 $ 1,539.2 58.9 63.9 69.4 $ 24.87 $ 28.94 $ 22.18 58.9 63.9 69.4 0.3 0.8 0.6 59.2 64.7 70.0 $ 24.74 $ 28.59 $ 21.98 Year ended December 31, 2016 2015 2014 (in millions) Domestic $ (43 ) $ 1,031 $ 2,073 Non-U.S. (183 ) 27 114 $ (226 ) $ 1,058 $ 2,187 Incomputationincome tax (benefit) provision are as follows: Year ended December 31, 2016 2015 2014 (in millions) Current Federal $ (795 ) $ 258 $ 645 Foreign 11 20 30 State (23 ) 39 79 (807 ) 317 754 Deferred Federal 761 76 12 Foreign (1 ) (13 ) (8 ) State (21 ) 16 15 739 79 19 Income tax (benefit) provision $ (68 ) $ 396 $ 773 Year ended December 31, 2016 2015 2014 (in millions, except percentages) (Loss) earnings before income taxes and equity in earnings of non-operating affiliates $ (226 ) $ 1,058 $ 2,187 Expected tax (benefit) provision at U.S. statutory rate of 35% (79 ) 370 765 State income taxes, net of federal (33 ) 32 62 Net earnings attributable to noncontrolling interests (42 ) (12 ) (16 ) U.S. manufacturing profits deduction 39 (17 ) (28 ) Foreign tax rate differential 30 (17 ) (40 ) U.S. tax on foreign earnings (10 ) — 9 Depletion — — (1 ) Valuation allowance 50 16 18 Non-deductible capital costs (17 ) 18 — Other (6 ) 6 4 Income tax (benefit) provision $ (68 ) $ 396 $ 773 Effective tax rate 30.0 % 37.4 % 35.3 % per common share, potentially dilutive stock optionsfrom our equity method investment in PLNL, a foreign operating affiliate, which are excluded ifincluded in pre-tax earnings on an after-tax basis and the tax effect of their inclusionnet operating losses of a foreign subsidiary of the Company for which a valuation allowance has been recorded. 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 $134 million in the fourth quarter of 2016 and $62 million in the fourth quarter of 2015. The impairments are included in equity in earnings of operating affiliates. Our income tax provisions do not include a tax benefit for the impairment of our equity method investment as the impairment does not give rise to a tax deduction. See Note 8—Equity Method Investments for additional information.anti-dilutive. not anticipated, a valuation allowance of $28 million was recorded in the year ended December 31, 2016. December 31, 2016 2015 (in millions) Deferred tax assets: Net operating loss and capital loss carryforwards, principally in foreign jurisdictions $ 187 $ 100 Retirement and other employee benefits 121 95 Unrealized loss on hedging derivatives 9 68 Intangible asset 34 60 Federal tax settlement — 14 Other 140 111 491 448 Valuation allowance (159 ) (109 ) 332 339 Deferred tax liabilities: Depreciation and amortization (1,909 ) (1,209 ) Foreign earnings (28 ) (28 ) Unrealized gain on hedging derivatives (19 ) (3 ) Other (6 ) (15 ) (1,962 ) (1,255 ) Net deferred tax liability $ (1,630 ) $ (916 ) 2013, 20122016 and 2011, anti-dilutive stock options2015, respectively. December 31, 2016 2015 (in millions) Unrecognized tax benefits: Beginning balance $ 155 $ 136 Additions for tax positions taken during the current year — 2 Additions for tax positions taken during prior years 2 18 Reductions related to lapsed statutes of limitations (7 ) (1 ) Reductions related to settlements with tax jurisdictions (16 ) — Ending balance $ 134 $ 155 insignificant.7.We recorded an income tax benefit of $12 million during the second quarter of 2015 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 information. As of January 1, 2013, we adopted amendments to our U.S. to combine them into a single plan and provide a pension benefit to eligible U.S. employees not previously covered by the U.S. plans. At December 31, 2013, we maintain —three funded defined benefit pension plans; onein North America (one U.S. plan and two Canadian plans.plans) and two in the United Kingdom (CF Fertilisers UK plans acquired by us as a result of our July 31, 2015 acquisition of the remaining 50% equity interest in CF Fertilisers UK not previously owned by us). One of our Canadian plans has beenis closed to new employees.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.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 2013 2012 2013 2012 (in millions) $ 719.9 $ 653.4 $ — $ — 16.3 76.5 — — 7.0 20.1 — — (34.4 ) (33.3 ) — — (8.1 ) 3.2 — — 700.7 719.9 — — (832.4 ) (763.3 ) (69.6 ) (92.8 ) — — — 24.3 (17.8 ) (12.4 ) (0.3 ) (2.1 ) (32.8 ) (34.4 ) (2.4 ) (3.3 ) 34.4 33.3 4.8 5.1 8.6 (3.3 ) 0.3 (0.1 ) 71.4 (52.3 ) 0.9 (0.7 ) (768.6 ) (832.4 ) (66.3 ) (69.6 ) $ (67.9 ) $ (112.5 ) $ (66.3 ) $ (69.6 ) Pension Plans Retiree Medical Plans North America United Kingdom North America December 31, December 31, December 31, 2016 2015 2016 2015 2016 2015 (in millions) Change in plan assets Fair value of plan assets as of January 1 $ 627 $ 665 $ 414 $ — $ — $ — Acquisition of CF Fertilisers UK plans — — — 442 — — Return on plan assets 39 3 21 (4 ) — — Employer contributions 4 19 19 9 4 4 Plan participant contributions — — — — 1 1 Benefit payments (38 ) (38 ) (19 ) (8 ) (5 ) (5 ) Foreign currency translation 4 (22 ) (69 ) (25 ) — — Fair value of plan assets as of December 31 636 627 366 414 — — Change in benefit obligation Benefit obligation as of January 1 (736 ) (788 ) (563 ) — (56 ) (63 ) Acquisition of CF Fertilisers UK plans — — — (618 ) — — Service cost (14 ) (14 ) — — — — Interest cost (31 ) (30 ) (19 ) (9 ) (2 ) (2 ) Benefit payments 38 38 19 8 5 5 Foreign currency translation (3 ) 21 99 34 — 1 Plan participant contributions — — — — (1 ) (1 ) Change in assumptions and other (13 ) 37 (95 ) 22 2 4 Benefit obligation as of December 31 (759 ) (736 ) (559 ) (563 ) (52 ) (56 ) Funded status as of year end $ (123 ) $ (109 ) $ (193 ) $ (149 ) $ (52 ) $ (56 ) "Change"change in assumptions and other" for our pension plans primarily reflects the impact of changes in discount rates and other assumptions such as ratesthe adoption of retirement and mortality.sheetsheets consist of the following: Pension Plans Retiree Medical December 31, December 31, 2013 2012 2013 2012 (in millions) $ 4.7 $ 0.4 $ — $ — — — (5.0 ) (4.9 ) (72.6 ) (112.9 ) (61.3 ) (64.7 ) $ (67.9 ) $ (112.5 ) $ (66.3 ) $ (69.6 ) Pension Plans Retiree Medical Plans North America United Kingdom North America December 31, December 31, December 31, 2016 2015 2016 2015 2016 2015 (in millions) Other assets $ 7 $ 9 $ — $ — $ — $ — Accrued expenses — — — — (5 ) (5 ) Other liabilities (130 ) (118 ) (193 ) (149 ) (47 ) (51 ) $ (123 ) $ (109 ) $ (193 ) $ (149 ) $ (52 ) $ (56 ) Pension Plans Retiree Medical December 31, December 31, 2013 2012 2013 2012 (in millions) $ 1.5 $ 1.8 $ 0.3 $ 0.4 58.2 126.2 9.4 10.9 $ 59.7 $ 128.0 $ 9.7 $ 11.3 Pension Plans Retiree Medical Plans North America United Kingdom North America December 31, December 31, December 31, 2016 2015 2016 2015 2016 2015 (in millions) Prior service cost (benefit) $ 1 $ 1 $ — $ — $ (4 ) $ (4 ) Net actuarial loss (gain) 91 88 80 (8 ) 7 8 $ 92 $ 89 $ 80 $ (8 ) $ 3 $ 4 following components: Pension Plans Retiree Medical Year ended December 31, Year ended December 31, 2013 2012 2011 2013 2012 2011 (in millions) $ 17.8 $ 12.4 $ 11.3 $ 0.3 $ 2.1 $ 2.7 32.8 34.4 35.8 2.4 3.3 4.3 (32.6 ) (34.6 ) (35.1 ) — — — — — — — (10.9 ) — — — — — 0.3 0.4 0.2 0.1 0.1 0.1 0.1 — 10.5 9.8 6.0 0.6 0.6 0.9 28.7 22.1 18.1 3.4 (4.5 ) 8.3 (45.4 ) 9.1 36.1 (0.9 ) (12.7 ) 6.2 — 1.7 — — — 0.4 — — — — (0.3 ) (0.4 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) — (10.5 ) (9.8 ) (6.0 ) (0.6 ) (0.5 ) (1.0 ) (56.1 ) 0.9 30.0 (1.6 ) (13.6 ) 5.2 $ (27.4 ) $ 23.0 $ 48.1 $ 1.8 $ (18.1 ) $ 13.5 Pension Plans Retiree Medical Plans North America United Kingdom North America 2016 2015 2014 2016 2015 2016 2015 2014 (in millions) Service cost $ 14 $ 14 $ 13 $ — $ — $ — $ — $ — Interest cost 31 30 35 19 9 2 2 3 Expected return on plan assets (30 ) (28 ) (36 ) (20 ) (9 ) — — — Settlement charge — — 10 — — — — — Curtailment loss — — — — — — — 2 Amortization of prior service cost (benefit) — — — — — (1 ) (1 ) (1 ) Amortization of actuarial loss (gain) 1 6 2 — — (1 ) 1 — Net periodic benefit cost (income) 16 22 24 (1 ) — — 2 4 Net actuarial (gain) loss 4 (11 ) 78 94 (8 ) (2 ) (4 ) 4 Prior service cost — — — — — — — (7 ) Curtailment effects — — (14 ) — — — — — Settlement effects — — (10 ) — — — — — Amortization of prior service benefit — — — — — 1 1 1 Amortization of actuarial loss (1 ) (6 ) (2 ) — — — (1 ) (1 ) Total recognized in accumulated other comprehensive loss 3 (17 ) 52 94 (8 ) (1 ) (4 ) (3 ) Total recognized in net periodic benefit cost (income) and accumulated other comprehensive loss $ 19 $ 5 $ 76 $ 93 $ (8 ) $ (1 ) $ (2 ) $ 1 2012, we approved and implementedMarch 2014, as a result of a reduction in certain retiree medical benefits. Thisplan participants due to the sale of our phosphate business, we recognized:of benefitsgain for our U.S. pension plan, which resulted in a $24.3reduction of $14 million reduction in theour pension benefit obligation (PBO) and a corresponding increase in other comprehensive income;liability. Of the $24.3 million reduction, $13.4 million was recognizedbenefit obligation due to a plan amendment, with a corresponding increase in other comprehensive income (included in Net actuarial (gain) loss"prior service cost" in the table above); and $10.9was recognizedcurtailment loss related to terminated vested participants in net periodicour U.S. retiree medical plan.plan cost (income).payments of $91 million were made in December 2014 and we incurred a settlement charge of approximately $10 million, with a corresponding reduction in accumulated other comprehensive loss. Of the $10.9$10 million $9.6settlement charge, $9 million was reported in cost of sales and $1.3$1 million was reported in selling, general and administrative expenses.incomeloss into net periodic benefit cost in 20142017 are as follows: Pension
Plans Retiree
Medical (in millions) $ 0.2 $ — 1.1 0.4 Pension Plans Retiree Medical Plans North America United Kingdom North America (in millions) Prior service cost (benefit) $ — $ — $ (1 ) Net actuarial loss (gain) 1 1 (1 ) CF INDUSTRIES HOLDINGS, INC. Presented below isbyfor those individual defined benefit pension plan regarding the benefit obligation, fair valueplans with an ABO in excess of plan assets net periodicas of December 31: North America United Kingdom 2016 2015 2016 2015 (in millions) Accumulated benefit obligation $ (599 ) $ (586 ) $ (559 ) $ (563 ) Fair value of plan assets 508 506 366 414 cost, and funding contributions. CF
U.S.
Plan Terra
U.S.
Plan(1) CF
Canadian
Plan Terra
Canadian
Plan Consolidated (in millions) $ 579.0 n/a $ 50.0 $ 71.7 $ 700.7 (645.7 ) n/a (55.9 ) (67.0 ) (768.6 ) (597.0 ) n/a (44.1 ) (65.2 ) (706.3 ) 23.6 n/a 5.0 0.1 28.7 — n/a 5.0 2.0 7.0
$ 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
assets as of December 31:(1)As of January 1, 2013, we adopted amendments to our U.S. pension plans to combine them intowith a singlePBO in excess of plan and provide a pension benefit to eligible U.S. employees not previously covered by the U.S. plans. North America United Kingdom 2016 2015 2016 2015 (in millions) Projected benefit obligation $ (699 ) $ (679 ) $ (559 ) $ (563 ) Fair value of plan assets 568 561 366 414 the Companywe may deem to be appropriate. Our consolidated pension funding contributions for 2014 are estimated to be approximately $21.2 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.benefit paymentsplans are as follows: Pension
benefit Retiree
medical (in millions) $ 37.2 $ 5.0 39.2 5.4 41.6 5.6 43.8 5.9 46.4 6.2 261.6 26.9 Pension Plans Retiree Medical Plans North America United Kingdom North America (in millions) 2017 $ 42 $ 18 $ 5 2018 43 18 5 2019 45 19 4 2020 46 19 4 2021 47 20 4 2022-2026 246 107 15 CF INDUSTRIES HOLDINGS, INC. Pension Plans Retiree Medical 2013 2012 2011 2013 2012 2011 4.8 % 4.0 % 4.6 % 4.2 % 3.3 % 4.3 % 4.0 % 4.6 % 5.4 % 3.3 % 4.3 % 5.1 % 3.9 % 4.0 % 4.0 % n/a n/a n/a 5.1 % 5.7 % 6.1 % n/a n/a n/a Pension Plans Retiree Medical Plans North America United Kingdom North America 2016 2015 2014 2016 2015 2016 2015 2014 Weighted-average discount rate—obligation 4.0 % 4.3 % 4.0 % 2.8 % 3.8 % 3.8 % 3.9 % 3.6 % Weighted-average discount rate—expense 4.3 % 4.0 % 4.8 % 3.8 % 3.7 % 3.9 % 3.6 % 4.2 % Weighted-average rate of increase in future compensation 4.3 % 4.3 % 4.3 % n/a n/a n/a n/a n/a Weighted-average expected long-term rate of return on assets—expense 4.9 % 4.8 % 5.5 % 5.2 % 5.4 % n/a n/a n/a Weighted-average retail price index—obligation n/a n/a n/a 3.3 % 3.1 % n/a n/a n/a Weighted-average retail price index—expense n/a n/a n/a 3.1 % 3.1 % n/a n/a n/a for eachby plan using spot rates derived from a yield curve of high quality (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. The 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.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, 2014,2017, our weighted averageweighted-average expected long-term rate of return on assets is 5.5%4.2%.health care cost trend rate used to determineretail price index for the United Kingdom plans is developed using the Bank of England implied retail price inflation curve, which is based on the difference between yields on fixed interest government bonds and index-linked government bonds.2013 is 7.5% grading down2015 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 2016, followed by a gradual decline in increases to 5.0% in4.5% for 2024 and thereafter. At December 31, 2012,For post-65 retirees, the assumed health care cost trend rate was 8.0%, grading downrates start with a 9.0% increase in 2016, followed by a gradual decline in increases to 5.0% in 20184.5% for 2024 and thereafter.atof our primary (U.S.) retiree medical benefit plans as of December 31, 20132016 would have the following effects:effects on our retiree medical benefit plans: One-Percentage-Point Increase Decrease 11 % (9 )% 10 % (8 )% One-Percentage-Point Increase Decrease (in millions) Effect on total service and interest cost for 2016 $ — $ — Effect on benefit obligation as of December 31, 2016 6 (5 ) the CFour U.S. pension plan is 80% non-equity and 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.CF INDUSTRIES HOLDINGS, INC.U.S. and Canadian pension plan assets atas of December 31, 20132016 and December 31, 2012,2015, by major asset class, are as follows:North America December 31, 2013 December 31, 2016 Total Fair
Value Quoted
Prices in
Active
Markets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) (in millions) (in millions) $ 7.7 $ 7.7 $ — $ — $ 39 $ 6 $ 33 $ — 118.7 118.7 — — 112 112 — — 41.0 — 41.0 — 41 — 41 — 16.7 16.7 — — 14 14 — — 79.9 — 79.9 — 86 — 86 — 383.3 — 383.3 — 329 — 329 — 48.6 — 48.6 — 15 — 15 — 2.1 — 2.1 — 1 — 1 — $ 698.0 $ 143.1 $ 554.9 $ — Total assets at fair value by fair value levels $ 637 $ 132 $ 505 $ — 2.7 (1 ) $ 700.7 $ 636 United Kingdom December 31, 2016 (in millions) Cash $ 3 $ 3 $ — $ — 185 — 185 — Fixed income — 28 — 28 — 114 — 114 — Total assets at fair value by fair value levels $ 330 $ 3 $ 327 $ — Assets measured at NAV as a practical expedient 36 Total assets measured at NAV as a practical expedient 36 Total assets at fair value 366 Accruals and payables—net — Total assets $ 366 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 (1)Cash and cash equivalents are primarily short-term money market funds and are classified as Level 1 assets.(2)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 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 values (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. North America December 31, 2015 (in millions) $ 32 $ 32 $ — $ — Equity mutual funds 103 103 — — 39 — 39 — Fixed income 11 11 — — 82 — 82 — 338 — 338 — 21 — 21 — 2 — 2 — Total assets at fair value by fair value levels $ 628 $ 146 $ 482 $ — Accruals and payables—net (1 ) Total assets $ 627 United Kingdom 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 $ 3 $ 3 $ — $ — 216 — 216 — Fixed income 26 — 26 — 127 — 127 — Total assets at fair value by fair value levels $ 372 $ 3 $ 369 $ — Assets measured at NAV as a practical expedient 42 Total assets measured at NAV as a practical expedient 42 Total assets at fair value 414 Accruals and payables—net — Total assets $ 414 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. 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. U.S. Treasury bonds and notes are valued based on quoted market prices in an active market. (8)Other includes primarily collateralized mortgage obligations and asset-backed securities which are valued through pricing models of reputable third party sources based on market data and are classified as Level 2 investments.The fixed income pooled mutual funds invest in investment-grade corporate debt, various governmental debt obligations, and mortgage-backed securities with varying maturities. 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 by institutional pricing services, which gather information from market sources and integrate credit information, observed market movements and sector news into their pricing applications and models. Pooled target return funds invest in a broad array of asset classes and a range of diversifiers including the use of derivatives. The funds are valued at net asset value (NAV) as determined by the fund managers based on the value of the underlying net assets of the fund. Pooled United Kingdom government index-linked funds invest primarily in United Kingdom government index-linked gilt securities. The funds are valued at NAV as determined by the fund managers based on the value of the underlying net assets of the fund. 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. The funds are valued at NAV as determined by the fund managers based on the value of the underlying net assets of the fund. Pooled property funds invest primarily in freehold and leasehold property in the United Kingdom. The 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. AsQualified employees in the United Kingdom receive company contributions based on a percentage of January 1, 2013,base salary that are greater than employee contributions up to specified limits. In 2016, 2015 and 2014, we adopted amendmentsrecognized expense related to our U.S. qualified defined contribution plans to combine them into a single plan. In 2013, 2012 and 2011, company contributions to the defined contribution plans were $13.1of $16 million, $14.2$14 million, and $11.8$12 million, respectively.noncurrent liabilities in our consolidated balance sheets for these plans were $6.9$3 million and $17.2$17 million atas of December 31, 20132016 and $2.5$3 million and $19.7$19 million atas of December 31, 2012,2015, respectively. We recognized expense for these plans of $2.0$3 million, $1.7$2 million and $1.6$5 million in 2013, 20122016, 2015 and 2011,2014, respectively. We maintain incentive compensation plans that cover virtually all employees. The aggregate awards under the plans are based on predetermined targetsexpense recognized in 2016 and can include both financial and operating performance measures. Awards are accrued during the year and paid in the first quarter2014 includes settlement charges of the subsequent year. We recognized expense for these plans of $36.6 million, $35.9$1 million and $26.2$3 million, in 2013, 2012 and 2011, respectively.8. Other Operating—Net Details of other operating—net are as follows: Year ended December 31, 2013 2012 2011 (in millions) $ 5.6 $ 5.5 $ 7.5 10.8 — — (20.8 ) (8.1 ) — — 21.9 — 4.0 13.3 8.1 (15.4 ) 16.5 5.3 $ (15.8 ) $ 49.1 $ 20.9 Expansion project costs includes amounts related to administrative and consulting services. Engineering studies includes detailed design work, feasibility studies and cost estimates for certain proposed capital projects at our manufacturing complexes. 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 transactions, litigation related costs and other transactions. 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.9. Interest Expense Details of interest expense are as follows: Year ended December 31, 2013 2012 2011 (in millions) $ 150.6 $ 112.2 $ 113.9 15.4 32.1 40.3 12.9 1.4 3.1 (26.7 ) (10.4 ) (10.1 ) $ 152.2 $ 135.3 $ 147.2 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 21— 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 ofterm 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 recorded AROs are associated with phosphogypsum stack systems and mine reclamation of our phosphate operations in Florida. This recorded liability is included in the disposal group pertaining to our announced sale of the phosphate business and is included in current and non-current liabilities held for sale at December 31, 2013.CF INDUSTRIES HOLDINGS, INC. The balances of AROs and changes thereto are summarized below. Phosphogypsum
Stack
System Costs Mine
Reclamation
Costs Other
AROs Total (in millions) $ 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 4.7 5.2 0.4 10.3 — 2.5 — 2.5 (0.6 ) (2.3 ) (1.3 ) (4.2 ) 4.7 9.3 (1.0 ) 13.0 $ 78.9 $ 81.4 $ 6.3 $ 166.6 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 2038 to 2042 time frame and closure of the Plant City cooling pond is assumed to occur in the year 2092. 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 disturbedrevolving credit agreement (as amended, including 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 $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 earningsan amendment effective July 29, 2016 (the July 2016 Credit Agreement Amendment) 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 recordedCF INDUSTRIES HOLDINGS, INC.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. The $13.0 million change in estimate in 2013 relates primarily to changes in mining and reclamation plans at our Hardee County, Florida phosphate rock mine and changes in the timing of closure activities at the Plant City, Florida phosphate facility. Of this amount, $14.6 million was recorded as an increase in property, plant and equipment partially offset by a $1.6 million decrease to cost of sales. In addition to various operational and environmental regulations related to our phosphate segment, we are also subject to financial assurance obligations 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. These financial assurance obligations result from two requirements. The first is a 2010 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). The second is State of Florida financial assurance regulations (Florida Financial Assurance) that 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 maintain 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 sheets, these are collectively referred to as "Asset retirement obligation funds" (ARO funds) and at December 31, 2013, these assets were recorded as assets held for sale. The trust for the Plant City Consent Decree is fully funded, and we expect the remaining $1.0 million will be funded 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 would be required in the future if increases in cost estimates exceed investment earnings in the trust or escrow accounts. At December 31, 2013 and 2012, the balance in the ARO funds was $203.7 million and $200.8 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, water treatment, long-term maintenance, and monitoring costs for the phosphogypsum stack system at our closed Bartow phosphate complex.CF INDUSTRIES HOLDINGS, INC. 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 2013 dollars is $53.0 million. We have not recorded a liability for these conditional AROs at December 31, 2013 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, 2013 2012 2011 (in millions) $ 2,155.4 $ 2,629.0 $ 2,502.0 54.3 200.5 143.6 $ 2,209.7 $ 2,829.5 $ 2,645.6 The components of the income tax provision are as follows: Year ended December 31, 2013 2012 2011 (in millions) $ 641.5 $ 915.4 $ 811.4 8.6 56.0 31.5 70.7 131.2 116.5 720.8 1,102.6 959.4 (6.5 ) (130.2 ) (63.0 ) (6.7 ) (4.5 ) (2.8 ) (21.1 ) (3.7 ) 32.9 (34.3 ) (138.4 ) (32.9 ) $ 686.5 $ 964.2 $ 926.5 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, 2013 2012 2011 (in millions, except percentages) $ 2,209.7 $ 2,829.5 $ 2,645.6 773.4 35.0 % 990.3 35.0 % 925.9 35.0 % 32.0 1.4 % 82.9 2.9 % 88.6 3.3 % (23.9 ) (1.1 )% (26.2 ) (0.9 )% (77.6 ) (2.9 )% (47.0 ) (2.1 )% (47.0 ) (1.7 )% (39.0 ) (1.5 )% (11.5 ) (0.5 )% (43.3 ) (1.5 )% 5.8 0.2 % (24.2 ) (1.1 )% (8.0 ) (0.3 )% (8.6 ) (0.3 )% 26.8 1.2 % 16.5 0.6 % 29.8 1.1 % — — % 0.2 — % 0.6 — % (50.1 ) (2.2 )% — — % — — % 11.0 0.5 % (1.2 ) — % 1.0 0.1 % $ 686.5 31.1 % $ 964.2 34.1 % $ 926.5 35.0 % CF INDUSTRIES HOLDINGS, INC. Deferred tax assets and deferred tax liabilities are as follows: December 31, 2013 2012 (in millions) $ — $ 94.3 96.0 70.8 71.5 92.1 — 31.8 — 0.2 115.3 — 43.7 — 70.5 56.7 397.0 345.9 (109.2 ) (176.1 ) 287.8 169.8 (921.0 ) (968.0 ) (35.4 ) (24.4 ) — (1.7 ) (45.9 ) (46.7 ) (14.6 ) (3.3 ) (44.1 ) (55.0 ) (1,061.0 ) (1,099.1 ) (773.2 ) (929.3 ) 60.0 9.5 $ (833.2 ) $ (938.8 ) We consider the earnings of certain of our Canadian subsidiaries 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, 2013, we have recorded a deferred income tax liability of approximately $35 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, 2013, we have approximately $1 billion 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—We file 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 2008 and thereafter.CF INDUSTRIES HOLDINGS, INC. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: December 31, 2013 2012 (in millions) $ 154.4 $ 137.1 9.6 17.3 25.0 — (1.3 ) — (84.0 ) — $ 103.7 $ 154.4 Unrecognized tax benefits decreased in 2013 by $50.7 million principally for settlements with tax jurisdictions and increased by $17.3 million in 2012 as the result of tax return positions taken in prior years. Our effective tax rate would be affected by $103.7 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 weamendment entered into a net operating loss agreement (NOLon October 31, 2016 and effective November 21, 2016 (the November 2016 Credit Agreement Amendment), the Revolving Credit 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. Our income tax provision in 2013 includes a $75.8 million tax benefit for the effect of a Closing Agreement with the IRS related to the utilization of our pre-IPO net operating losses (NOLs) that was finalized in March 2013. This tax benefit is partially offset by a $55.2 million expense, recorded in Other non-operating-net, reflecting the amount of this tax benefit that is payable to our pre-IPO owners. In our balance sheet at December 31, 2013, $10.2 million is included in accounts payable and accrued expenses for the current portion of the tax savings payable to the pre-IPO owners and $32.7 million is included in other noncurrent liabilities for the portion of the tax savings payable to the pre-IPO owners in future years. The terms of the Closing Agreement resulted in the tax benefits associated with the pre-IPO NOL being realized as a tax deduction over five tax years, commencing with the 2012 tax year. In addition, we have reversed the net operating loss carryforward in the schedule of deferred tax assets and deferred tax liabilities and the valuation allowance associated with the pre-IPO NOLs. As a result of the settlement our unrecognized tax benefits have decreased by $86.7 million in 2013. Valuation Allowance—the tax benefit associated with of our Closing Agreement with the IRS resulted in a $94.3 million reduction to the valuation allowance that had previously been recorded for the pre-IPO NOL. A foreign subsidiary of the Company has net operating loss carryovers of $318.2 million that are indefinitely available in the foreign jurisdiction. As the future realization of these losses is not anticipated, a valuation allowance of $93.0 million has been recorded. Of this amount, $26.8 million and $16.5 million were recorded as valuation allowances for the years ended December 31, 2013 and 2012, respectively.CF INDUSTRIES HOLDINGS, INC. Interest expense and penalties of $13.6 million, $1.3 million, and $13.9 million were recorded for the years ended December 31, 2013, 2012 and 2011, respectively. Amounts recognized in our consolidated balance sheets for accrued interest and penalties related to income taxes of $24.9 million and $30.4 million are included in other noncurrent liabilities as of December 31, 2013 and 2012, respectively. Prior to April 30, 2013 CFL operated as a cooperative for Canadian income tax purposes and distributed all of its earnings as patronage dividends to its customers, including CFI. The patronage dividends were deductible for Canadian income tax purposes for tax years preceding April 29, 2013. As a result of the August 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 no longer permitted to deduct the dividends it distributes to CFI. As a result, CFL has recorded an income tax provision in the years subsequent to 2011. No CFL income tax provision was recorded in 2011. 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 impacts our tax liabilities for prior years. Under the provisions of this legislation we expect to change our tax methods of accounting related to certain routine repairs periodically conducted at our U.S. manufacturing and distribution locations. The impact of the legislation is not material and has been reflected in our financial statements for the period ending December 31, 2013.12. Assets and Liabilities Held for Sale In October 2013, we entered into a definitive agreement with Mosaic to sell our entire phosphate mining and manufacturing business, which is located in Florida, for a purchase price of approximately $1.4 billion in cash, subject to adjustment as provided in the agreement, and entered into two agreements to supply ammonia to Mosaic. The first agreement, which is not conditioned upon completion of the phosphate business sale transaction, provides for us to supply between 600,000 and 800,000 tons of ammonia per year from our Donaldsonville, Louisiana nitrogen complex beginning no later than 2017. The second agreement provides for us to supply approximately 300,000 tons of ammonia per year sourced from our Point Lisas Nitrogen Limited (PLNL) joint venture beginning at the closing of the phosphate business sale transaction. The phosphate mining and manufacturing business assets we are selling in the phosphate business sale transaction include the Hardee County Phosphate Rock Mine; the Plant City Phosphate Complex; an ammonia terminal, phosphate warehouse and dock at the Port of Tampa; and the site of the former Bartow Phosphate Complex. In addition, Mosaic is assuming certain liabilities related to the phosphate mining and manufacturing business, including responsibility for closure, water treatment and long term maintenance and monitoring of the phosphogypsum stacks at the Plant City and Bartow complexes. We are also transferring to Mosaic the value of the phosphate mining and manufacturing business's asset retirement obligation trust and escrow funds totaling approximately $200 million. The closing of the phosphate business sale transaction is subject to various conditions, including the expiration or termination of the waiting period under the HSR Act, approvals under applicable foreign antitrust laws, receipt of other governmental and third party consents and other customary closing conditions. In January 2014, we were notified that the U.S. Department of Justice closed its review and terminated the waiting period under the HSR Act relating to the phosphate business sale transaction. The phosphate business sale transaction is expected to close in the first half of 2014.CF INDUSTRIES HOLDINGS, INC. The assets and liabilities of our phosphate business segment being sold to Mosaic comprise a disposal group that is classified on our December 31, 2013 Consolidated Balance Sheet as assets or liabilities held for sale. The accounts receivable, and accounts payable pertaining to the phosphate mining and manufacturing business and certain phosphate inventory held in distribution facilities will not be sold to Mosaic in the phosphate business sale transaction and will be retained by us and settled in the ordinary course. These retained assets and liabilities of our phosphate segment are not included in assets or liabilities held for sale. Effective November 1, 2013, depreciation ceased on amounts in property, plant and equipment classified as held for sale. The depreciation that would have been recorded for November and December 2013 is estimated at approximately $8.1 million. The contract to supply ammonia to the disposed business from our PLNL joint venture represents the continuation, following the sale of the phosphate mining and manufacturing business, of a supply arrangement that historically has been maintained between the phosphate mining and manufacturing business and other operations of the Company and its subsidiaries. Because of the significance of this continuing supply arrangement, in accordance with U.S. generally accepted accounting principles, the phosphate mining and manufacturing business is not reported as discontinued operations in our consolidated statement of operations. The following table summarizes the classes of assets and liabilities held for sale at December 31, 2013: December 31,
2013 $ 74.3 74.3
467.2 203.7 0.9 7.2 $ 753.3 14.7 $ 12.1 26.8
154.5 $ 181.3 13. Accounts Receivable—Net Accounts receivable—net consist of the following: December 31, 2013 2012 (in millions) $ 225.0 $ 213.2 5.9 4.2 $ 230.9 $ 217.4 Trade accounts receivable includes amounts due from related parties. For additional information, see Note 30—Related Party Transactions and Note 16—Equity Method Investments. Trade accountsCF INDUSTRIES HOLDINGS, INC.receivable is net of a $0.4 million and $1.1 million allowance for doubtful accounts at December 31, 2013 and 2012, respectively.14. Inventories—Net Inventories—net consist of the following: December 31, 2013 2012 (in millions) $ 251.0 $ 212.2 23.3 65.7 $ 274.3 $ 277.9 15. Other Current Assets and Other Current Liabilities Other current assets consist of the following: December 31, 2013 2012 (in millions) $ 19.1 $ 13.9 72.7 10.1 0.6 3.8 — 0.1 $ 92.4 $ 27.9 Other current liabilities consist of the following: December 31, 2013 2012 (in millions) $ 43.0 $ — 0.2 5.6 0.3 — $ 43.5 $ 5.6 At December 31, 2013, we had received financial advances necessary to complete certain investment transactions that were repaid to the financial institution after the end of the year.16. Equity Method Investments Equity method investments consist of the following: December 31, 2013 2012 (in millions) $ 379.7 $ 394.2 546.3 541.4 $ 926.0 $ 935.6 CF INDUSTRIES HOLDINGS, INC.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, 2013 2012 2011 (in millions) $ 323.7 $ 320.9 $ 347.2 $ 102.7 $ 97.3 $ 117.5 $ 41.7 $ 47.0 $ 50.2
December 31,
2013 2012 (in millions) $ 84.3 $ 93.9 147.3 164.8 $ 231.6 $ 258.7 $ 36.5 $ 45.9 25.0 26.0 170.1 186.8 $ 231.6 $ 258.7 The carrying value of these investments at December 31, 2013 was $379.7 million, which was $294.6 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 and goodwill. The increased basis for property, plant and equipment and the gas contract are being amortized over a remaining period of approximately 20 years and 10 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 these basis differences. We have 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 $151.0 million, $145.7 million and $161.9 million in 2013, 2012 and 2011, respectively.CF INDUSTRIES HOLDINGS, INC.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, 2013 2012 2011 (in millions) $ 2,489.1 $ 2,751.6 $ 2,841.9 $ 43.0 $ 141.9 $ 117.4 $ 9.6 $ 58.1 $ 41.9 December 31, 2013 2012 (in millions) $ 540.3 $ 595.0 319.3 293.4 $ 859.6 $ 888.4 $ 310.6 $ 385.6 168.9 147.3 380.1 355.5 $ 859.6 $ 888.4 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, 2013 and 2012, the amount of the outstanding advances to Keytrade on our consolidated balance sheets was $12.4 million. For the twelve months ended December 31, 2013, 2012 and 2011, we recognized interest income on advances to Keytrade of $0.2 million. The carrying value of our advances to Keytrade approximates fair value. Excluding the advances to Keytrade, the carrying value of our non-operating equity method investments at December 31, 2013 was $534.0 million, which was $343.9 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 up to 12 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, 2013, the amount of our consolidated retained earnings that represents our undistributed earnings of non-operating equity method investments is $24.6 million.CF INDUSTRIES HOLDINGS, INC.17. Property, Plant and Equipment—Net Property, plant and equipment—net consist of the following: December 31, 2013 2012 (in millions) $ 37.9 $ 60.2 — 202.6 5,046.8 5,388.6 159.4 537.1 1,099.1 469.1 6,343.2 6,657.6 2,241.5 2,757.1 $ 4,101.7 $ 3,900.5 In the fourth quarter of 2013, we announced the sale of our phosphate mining and manufacturing business. As a result, the phosphate business' property, plant and equipment are included in noncurrent assets held for sale at December 31, 2013 and are not included in the 2013 amounts in the table above. See further information in Note 12—Assets and Liabilities Held for Sale. 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 2013, 2012 and 2011: Year ended December 31, 2013 2012 2011 (in millions) $ 82.1 $ 54.8 $ 66.8 78.6 56.6 16.2 (40.8 ) (29.6 ) (27.9 ) (0.1 ) 0.3 (0.3 ) $ 119.8 $ 82.1 $ 54.8 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.18. Goodwill and Other Intangible Assets The following table shows the carrying amount of goodwill by business segment at December 31, 2013 and 2012: Nitrogen Phosphate Total (in millions) $ 2,063.6 $ 0.9 $ 2,064.5 32.2 — 32.2 — (0.9 ) (0.9 ) $ 2,095.8 $ — $ 2,095.8 During the fourth quarter of 2013, we acquired three ammonia terminals in Canada for an aggregate purchase price of $72.5 million. These facilities increase our distribution capabilities to customers in Western Canada. The acquired assets were recorded at the acquisition date fair value and are being depreciated in accordance with our existing depreciation policy over their remaining economic useful lives. The Company recognized $32.2 million of goodwill that represents the excess of the purchase price over the net fair value of the assets acquired, which is not deductible for income tax purposes. 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, 2013 December 31, 2012 Gross
Carrying
Amount Accumulated
Amortization Net Gross
Carrying
Amount Accumulated
Amortization Net (in millions) $ 50.0 $ (10.4 ) $ 39.6 $ 50.0 $ (7.6 ) $ 42.4 10.0 (3.8 ) 6.2 10.0 (2.8 ) 7.2 $ 60.0 $ (14.2 ) $ 45.8 $ 60.0 $ (10.4 ) $ 49.6 Amortization expense of our identifiable intangibles was $3.8 million, $3.8 million and $3.8 million for 2013, 2012 and 2011, respectively. Total estimated amortization expense for the five succeeding fiscal years is as follows: Estimated
Amortization
Expense (in millions) $ 4.0 4.0 4.0 4.0 4.0 $ 20.0 CF INDUSTRIES HOLDINGS, INC.19. Other Assets Other assets consist of the following: December 31, 2013 2012 (in millions) $ 47.8 $ 44.7 69.2 72.7 13.1 26.0 45.8 49.6 22.4 21.7 37.9 29.8 9.3 13.4 $ 245.5 $ 257.9 Deferred financing fees include amounts associated with our senior notes issued in connection with our credit agreement. See Note 21—Financing Agreements, for additional information. Our intangible assets are customer relationships and a trademark. See Note 18—Goodwill and Other Intangible Assets for additional information.20. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of the following: December 31, 2013 2012 (in millions) $ 169.0 $ 117.3 86.0 80.8 71.8 63.1 55.4 — 40.3 — 24.0 22.6 — 12.3 117.6 70.4 $ 564.1 $ 366.5 Payroll and employee related costs include accrued salaries and wages, vacation, incentive plans and payroll taxes. Accrued expansion project costs include equipment costs and contracted services for the engineering and procurement related to our capacity expansion projects. Accrued interest on debt includes interest payable on our outstanding unsecured senior notes. For further details, see Note 21—Financing Agreements. The current portion of the asset retirement obligations for the current year is included in current liabilities held for sale as a result of the announced transaction to sell our phosphate mining and manufacturing business. For additional information, see Note 12—Assets and Liabilities Held for Sale.CF INDUSTRIES HOLDINGS, INC. Other includes accrued utilities, property taxes, sales incentives and other credits, maintenance and professional services.21. Financing Agreements Long-term debt consisted of the following: December 31, 2013 2012 (in millions) $ 800.0 $ 800.0 800.0 800.0 749.3 — 748.8 — $ 3,098.1 $ 1,600.0 — — $ 3,098.1 $ 1,600.0 Credit Agreement In the second quarter of 2012, CF Holdings, as a guarantor, and CF Industries, as borrower, entered into a $500 million senior unsecured credit agreement, dated May 1, 2012 (the Credit Agreement), which providedproviding for a revolving credit facility of up to $500$750 million (reflecting a reduction from $1.5 billion as effected by the November 2016 Credit Agreement Amendment) with a maturity of five years. On April 22, 2013, theSeptember 18, 2020. The Revolving Credit Agreement was amended and restated to increase theincludes a letter of credit facility from $500 million to $1.0 billion and extend its maturity an additional year to May 1, 2018. 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. CF Industries may designate as borrowers one or more wholly owned subsidiaries that are organized in the United States or any state thereof or the District of Columbia.Company maintainRevolving Credit Agreement. Subject to specified exceptions, the Revolving Credit Agreement requires a minimumgrant of a first priority security interest coverage ratioin substantially all of the assets of the Loan Parties, including a pledge by CFS of its equity interests in CF Industries Nitrogen, LLC (CFN) and not exceed a maximum total leverage ratio, and includes other customary terms and conditions, including customary eventsmortgages over certain material fee-owned domestic real properties, to secure the obligations of default and covenants. Allthe Loan Parties thereunder.are unsecured. Currentlythe Loan Parties also guarantee the obligations under any (i) letter of credit facilities, letter of credit reimbursement agreements, letters of credit, letters of guaranty, surety bonds or similar arrangements in an aggregate amount up to $300 million and (ii) interest rate or other hedging arrangements, in each case between CF Holdings or certain of its subsidiaries, on the one hand, and any person that is a lender or the only guarantoradministrative agent under the Revolving Credit Agreement or an affiliate of such person, on the other hand, that are designated by CF Industries'Industries as Secured Bilateral LC Facilities or Secured Swap Agreements (each as defined in the Revolving Credit Agreement), as applicable, pursuant to the terms of the Revolving Credit Agreement (such additional obligations, the Additional Guaranteed Obligations). Obligations under Secured Bilateral LC Facilities in an aggregate amount up to $300 million and obligations under Secured Swap Agreements are secured by the same security interest that secures the obligations under the Revolving Credit Agreement. CertainIndustries' material domesticHoldings to incur indebtedness and limited the ability of CF Holdings and its subsidiaries to grant liens, merge or consolidate with other entities and sell, lease or transfer all or substantially all of the assets of CF Holdings and its subsidiaries to another entity, in each case, subject to specified exceptions. The November 2016 Credit Agreement Amendment modified the negative covenants in the Revolving Credit Agreement to limit further the ability of CF Holdings and its subsidiaries to grant liens and add limitations on the ability of CF Holdings and its subsidiaries to incur debt, pay dividends, voluntarily prepay certain debt, make investments and dispose of assets, in each case, subject to specified exceptions (such further and additional limitations, the Additional Negative Covenants).(i) restrict the ratio of total secured debt to EBITDA (as defined in the Revolving Credit Agreement) for the period of four consecutive fiscal quarters most recently ended to a maximum of 3.75:1.00, (ii) require the ratio of EBITDA for the period of four consecutive fiscal quarters most recently ended to consolidated interest expense (as defined in the Revolving Credit Agreement) for the period of four consecutive fiscal quarters most recently ended to be a minimum of 1.20:1.00 for the fiscal quarters ending on or prior to December 31, 2018, and 1.50:1.00 thereafter, and (iii) require the ratio of total debt to total capitalization as of the last day of any fiscal quarter to be less than or equal to 0.60:1.00. become guarantorsguarantee the Additional Guaranteed Obligations and grant a first priority security interest in substantially all of each Loan Party’s assets, including a pledge by CFS of its equity interests in CFN and mortgages over certain material fee-owned domestic real properties, subject to certain exceptions, to secure the obligations under the Revolving Credit Agreement, if such subsidiary werethe Secured Bilateral LC Facilities and the Secured Swap Agreements.guarantee other debtnon-payment of principal, interest or fees; inaccuracy of representations and warranties in any material respect; and failure to comply with specified covenants. Upon the occurrence and during the continuance of an event of default under the Revolving Credit Agreement and after any applicable cure period, subject to specified exceptions, the administrative agent may, and at the request of the Companyrequisite lenders is required to, accelerate the loans under the Revolving Credit Agreement or CF Industries in excessterminate the lenders’ commitments under the Revolving Credit Agreement. $350 million. Currently, no such subsidiary guarantees any debt. At December 31, 2013, there was $995.1 million of available credit2016, we had excess borrowing capacity under the Revolving Credit Agreement of $695 million (net of outstanding letters of credit), and therecredit of $55 million). There were no borrowings outstanding.due 2018(unsecured), Senior Secured Notes and 2020Private Senior Notes (unsecured): Effective Interest Rate December 31,
2016 December 31,
2015 Principal Principal (in millions) Public Senior Notes: 6.875% due 2018 7.344% $ 800 $ 795 $ 800 $ 792 7.125% due 2020 7.529% 800 791 800 788 3.450% due 2023 3.562% 750 745 750 745 5.150% due 2034 5.279% 750 739 750 739 4.950% due 2043 5.031% 750 741 750 741 5.375% due 2044 5.465% 750 741 750 740 Senior Secured Notes: 3.400% due 2021 3.784% 500 491 — — 4.500% due 2026 4.760% 750 735 — — Private Senior Notes: 4.490% due 2022 4.664% — — 250 248 4.930% due 2025 5.061% — — 500 496 5.030% due 2027 5.145% — — 250 248 Total long-term debt $ 5,850 $ 5,778 $ 5,600 $ 5,537 On April 23, 2010, CF Industries issued $800 million aggregate principal amount of 6.875%Carrying amount is net of unamortized debt discount and deferred debt issuance costs. Total unamortized debt discount was $12 million and $7 million as of December 31, 2016 and December 31, 2015, respectively, and total deferred debt issuance costs were $60 million and $56 million as of December 31, 2016 and December 31, 2015, respectively. May 1, 2018, 2020, 2023, 2034, 2043 and $800 million aggregate principal amount2044 identified in the table above (the Public Senior Notes), each series of 7.125% senior notes due May 1, 2020 (the 2018/2020 Notes).Public Senior Notes is guaranteed by CF Holdings. Interest on the Public Senior Notes is paidpayable semiannually, on May 1 and November 1 and the 2018/2020Public 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.CF INDUSTRIES HOLDINGS, INC.2018/2020Public Senior Notes contain customary events of default (including cross-default triggered by acceleration of, or a principal payment default that is not cured within an applicable grace period under, other debt having a principal amount of $150 million or more) and covenants that limit, among other things, the ability of 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 the 2018/2020each 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 2018/2020 Notes, the 2018/2020 Notes are guaranteed by CF Holdings. In addition, in the event that a subsidiary of the Company,CF Holdings, 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 2018/2020 Notes. At December 31, 2013,Public Senior Notes, provided that such requirement will no longer apply with respect to the carrying value of the 2018/2020 Notes was $1.6 billion and the fair value was approximately $1.9 billion.2043May 23, 2013,November 21, 2016, in connection with the effectiveness of the November 2016 Credit Agreement Amendment, CFE and CFS became subsidiary guarantors of the Public Senior Notes.$750$500 million aggregate principal amount of 3.450%3.400% senior secured notes due June 1, 20232021 (the 2021 Notes) and $750 million aggregate principal amount of 4.950%4.500% senior secured notes due 2026 (the 2026 Notes, and together with the 2021 Notes, the Senior Secured Notes). The net proceeds, after deducting discounts and offering expenses, from the issuance and sale of the Notes were approximately $1.23 billion. CF Industries used approximately $1.18 billion of the net proceeds for the prepayment (including payment of a make-whole amount of approximately $170 million and accrued interest) in full of the outstanding $1.0 billion aggregate principal amount of the Private Senior Notes. See "—Private Senior Notes," below. The Company intends that the remainder of the net proceeds be used for general corporate purposes.2043 (the 2023/2043 Notes). Interest is paid semiannuallybeginning on June 1, and December 12017, and the 2023/2043Senior Secured Notes are redeemable at our option, in whole at any time or in part from time to time, at specified make-whole redemption prices. We received net proceeds fromissuance and saleterms of the 2023/2043applicable indenture, the Senior Secured Notes of each series are fully and unconditionally guaranteed on a senior secured basis, jointly and severally, by CF Holdings and each current and future domestic subsidiary of CF Holdings (other than CF Industries) that from time to time is a borrower, or guarantees indebtedness, under the Revolving Credit Agreement. The requirement for any subsidiary of CF Holdings to guarantee the Senior Secured Notes of a series will apply only until, and the subsidiary guarantees of the Senior Secured Notes of a series will be automatically released upon, the latest to occur of (a) CF Holdings having an investment grade corporate rating, with a stable or better outlook, from two of three selected ratings agencies and there being no default or event of default under the applicable Indenture, (b) the retirement, discharge or legal or covenant defeasance of, or satisfaction and discharge of the supplemental indenture governing, the Public Senior Notes due 2018 or the subsidiaries of CF Holdings (other than CF Industries) otherwise becoming no longer subject to the requirement, described in the second paragraph under "—Public Senior Notes," above, to guarantee the Public Senior Notes due 2018 and (c) the retirement, discharge or legal or covenant defeasance of, or satisfaction and discharge of the supplemental indenture governing, the Public Senior Notes due 2020 or the subsidiaries of CF Holdings (other than CF Industries) otherwise becoming no longer subject to the requirement, described in the second paragraph under "—Public Senior Notes," above, to guarantee the Public Senior Notes due 2020. In accordance with the applicable indenture, CFE and CFS, in addition to CF Holdings, guaranteed the Senior Secured Notes of each series upon the initial issuance of the Senior Secured Notes.deducting underwriting discountsthe initial issuance of the Senior Secured Notes CF Holdings has an investment grade corporate rating, with a stable or better outlook, from two of three selected ratings agencies and offering expenses,there is no default or event of approximately $1.48 billion. We intend to usedefault under the net proceeds fromapplicable indenture. offering to fund our capacity expansion projects and working capital and for other general corporate purposes, including share repurchases. The indentures governing the 2023/2043Senior Secured Notes, contain customary events of default and covenants that limit, among other things, the ability of the Company and its subsidiaries, including CF Industries, to incur liens on certain properties to secure debt. In the event of specified changes of control involving CF Holdings or CF Industries, they also requirewhen accompanied by a ratings downgrade, as defined with respect to the applicable series of Senior Secured Notes, constitute change of control repurchase events. Upon the occurrence of a change of control repurchase event with respect to the 2021 Notes or the 2026 Notes, as applicable, unless CF Industries has exercised its option to redeem such Senior Secured Notes, CF Industries will be required to offer to repurchase the 2023/2043 Notesthem at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest. Underinterest, if any, to, but not including, the supplementaldate of repurchase.2023/2043Senior Secured Notes contain covenants that limit, among other things, the 2023/2043ability of CF Holdings and its subsidiaries, including CF Industries, to incur liens on certain assets to secure debt, to engage in sale and leaseback transactions, to sell or transfer Collateral, to merge or consolidate with other entities and to sell, lease or transfer all or substantially all of the assets of CF Holdings and its subsidiaries to another entity. Each of the indentures governing the Senior Secured Notes areprovides for customary events of default, which include (subject in certain cases to customary grace and cure periods), among others, nonpayment of principal or interest on the applicable Senior Secured Notes; failure to comply with other covenants or agreements under the indenture; certain defaults on other indebtedness; the failure of CF Holdings' or certain subsidiaries’ guarantees of the applicable Senior Secured Notes to be enforceable; lack of validity or perfection of any lien securing the obligations under the Senior Secured Notes and the guarantees with respect to Collateral having an aggregate fair market value equal to or greater than a specified amount; and specified events of bankruptcy or insolvency. Under each indenture governing the Senior Secured Notes, in the case of an event of default arising from one of the specified events of bankruptcy or insolvency, the applicable Senior Secured Notes would become due and payable immediately, and, in the case ofIn addition,All obligations under the Note Purchase Agreement were unsecured.event thatoutstanding $1.0 billion aggregate principal amount of our Private Senior Notes. The prepayment of $1.18 billion included the payment of a subsidiarymake-whole amount of approximately $170 million and accrued interest. Loss on debt extinguishment of $167 million on our consolidated statement of operations excludes $3 million of the Company, other thanmake-whole payment, which was accounted for as a modification and recognized on our consolidated balance sheet as deferred financing fees, a reduction of long-term debt, and is being amortized using the effective interest rate method over the term of the Senior Secured Notes.becomesentered into a borrower or a guarantorsenior unsecured 364-Day Bridge Credit Agreement (as amended, the Bridge Credit Agreement). Upon the termination of the Combination Agreement on May 22, 2016, the lenders’ commitments under the Bridge Credit Agreement (or any renewal, replacement or refinancing thereof), such subsidiary would be required to become a guarantorterminated automatically. There were no borrowings under the Bridge Credit Agreement. See Note 13—Interest Expense for additional information.the 2023/2043 Notes, provided that such requirement will no longer apply following the repayment of both issues of the 2018/2020 Notes or the subsidiaries of the Company, other than CF Industries, otherwise become no longer subject to such a requirement to guarantee the 2018/2020 Notes. At December 31, 2013, the carrying value of the 2023/2043 Notes was $1.5 billion and the fair value was approximately $1.4 billion.22. Leases We have operating leases for certain property and equipment under various noncancelable agreements, the most significant of whichinterest expense 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 two to seven years. We also have terminal and warehouse storage agreements for our distribution system, some of which contain minimum throughputas follows: Year ended December 31, 2016 2015 2014 (in millions) $ 303 $ 267 $ 238 59 17 11 Interest on tax liabilities 4 3 3 Interest capitalized (166 ) (154 ) (74 ) Interest expense $ 200 $ 133 $ 178 See Note 12—Financing Agreements for additional information. Fees on financing agreements for the year ended December 31, 2016 includes $28 million of fees related to the termination of the tranche B commitment under the bridge credit agreement as a result of the termination of the Combination Agreement. Fees on financing agreements for the year ended December 31, 2015 includes $6 million of accelerated amortization of deferred fees related to the termination in September 2015 of the tranche A commitment under the bridge credit agreement. See Note 4—Acquisitions and Divestitures additional information. Fees on financing agreements for the year ended December 31, 2016 includes $9 million of accelerated amortization of deferred fees related to the payment of the Private Senior Notes in November 2016, $2 million of accelerated amortization of deferred fees related to the July 2016 Credit Agreement Amendment, which reduced the Revolving Credit Facility to $1.5 billion from $2.0 billion, and $4 million of accelerated amortization of deferred fees related to the November 2016 Credit Agreement Amendment, which reduced the Revolving Credit Facility to $750 million from $1.5 billion. See Note 12—Financing Agreements for additional information. requirements. The storage agreements contain minimum terms generally ranging from one to three years and commonly contain automatic annual renewal provisions thereafter unless canceled by either party. Future minimum payments under noncancelable operating leases, including barge charters and storage agreements at December 31, 2013 are shown below. Operating
Lease Payments (in millions) $ 88.8 81.5 76.1 58.7 42.3 91.0 $ 438.4 Total rent expense for cancelable and noncancelable operating leases was $98.9 million for 2013, $89.7 million for 2012 and $81.0 million for 2011.23.Noncurrent Liabilities Other noncurrent liabilities consistOperating—Net the following: December 31, 2013 2012 (in millions) $ — $ 145.0 — 12.3 — 132.7 156.1 209.1 81.8 38.5 70.5 — 4.3 4.0 12.9 11.4 $ 325.6 $ 395.7 Asset retirement obligations are for phosphogypsum stack closure, mine reclamation and other obligations (see Note 10—Asset Retirement Obligations). As a result of the announced phosphate mining and manufacturing business sale, our asset retirement obligations are included in noncurrent liabilities held for sale at December 31, 2013 (see Note 12—Assets and Liabilities Held for Sale). 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). Capacity expansion project costs consist of amounts due to contractors with delayed payment terms that will be paid upon completion of the project. 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). Year ended December 31, 2016 2015 2014 (in millions) Loss on disposal of property, plant and equipment—net $ 10 $ 21 $ 4 73 51 30 — 22 38 93 (8 ) (15 ) 23 — — Closed facilities costs — — 1 Other 9 6 (5 ) Other operating—net $ 208 $ 92 $ 53 Expansion project costs that did not qualify for capitalization include amounts related to administrative and consulting services for our capacity expansion projects in Port Neal, Iowa and Donaldsonville, Louisiana. See Note 15—Derivative Financial Instruments for additional information. Loss (gain) on foreign currency transactions primarily relates to the unrealized foreign currency exchange rate impact on intercompany debt that has not been permanently invested. The loss on embedded derivative consists of unrealized and realized losses related to a provision of our strategic venture with CHS. See Note 9—Fair Value Measurements for additional information. 24.fertilizers.products. 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.instruments. The derivatives that we use for this purpose are primarily natural gas fixed price swaps and callnatural gas options traded in the over-the-counter (OTC)OTC markets. These natural gas derivatives settle using primarily a NYMEX futures price index, which represents the basis for fair value at any given time. TheWe enter into natural gas derivative contracts are entered into 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 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.20132016, we have natural gas derivative contracts covering periods through the end of 2018.2012,2015, we had open natural gas derivative contracts for 76.3183.0 million MMBtus and 58.9431.5 million MMBtus, respectively. For the year ended December 31, 2013,2016, we used derivatives to cover approximately 90%84% of our natural gas consumption. Infourth quarter of 2012,costs for our Board of Directors authorized the expenditure of $3.8 billion to construct new ammonia and urea/UAN plantscapacity expansion projects at our Donaldsonville, Louisiana complex and new ammonia and urea plants at our Port Neal, Iowa complex. A portion of the project costs are Euro-denominated.complex were 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 Euro denominatedeuro-denominated payments through early 2015the end of 2016 using foreign currency forward exchange contracts. At2013,2015, the notional amount of our open foreign currency derivatives was $636.3€89 million. Of this amount none wasNone of these open foreign currency derivatives were designated as hedging instruments for accounting purposes. At December 31, 2013, the Company elected to de-designate the remaining cash flow hedging instruments related to our capacity expansion projects. We did not utilizeAll of these foreign currency derivatives settled in 2011. No reclassification from AOCI to income occurred in 2013, 2012 or 2011, and none is expected within the next twelve months. The AOCI2016.ourthe foreign currency derivatives that were originally designated as cash flow hedges. The hedges were de-designated as of December 31, 2013. The remaining balance in AOCL is expected to bebeing reclassified into income over the depreciable lives of the fixed assetsproperty, plant and equipment associated with the capacity expansion projects.CF INDUSTRIES HOLDINGS, INC.tablestable below: Gain (loss) recognized
in OCI Gain (loss) reclassified from AOCI into income Year ended December 31, Year ended December 31,
as cash flow hedges 2013 2012 2011 Location 2013 2012 2011 (in millions) (in millions) $ 3.0 $ 7.2 $ — Other operating—net $ — $ — $ — Gain (loss) recognized in income Year ended December 31, Location 2013 2012 2011 (in millions) Other operating—net(1) $ (1.8 ) $ 1.8 $ — Gain (loss) recognized in income Year ended December 31,
designated as hedges Location 2013 2012 2011 (in millions) Cost of sales $ 52.9 $ 66.5 $ (77.3 ) Other operating—net 14.8 6.3 — $ 67.7 $ 72.8 $ (77.3 ) Gain (loss) in income Year ended December 31, 2013 2012 2011 (in millions) $ 67.7 $ 72.8 $ (77.3 ) (1.8 ) 1.8 — 65.9 74.6 (77.3 ) 1.8 (144.4 ) �� (54.5 ) $ 67.7 $ (69.8 ) $ (131.8 ) (1)For derivatives designated as cash flow hedges, the amount reported as gain (loss) recognized in income represents the amount excluded from hedge effectiveness. Gain (loss) in income Year ended December 31, Location 2016 2015 2014 (in millions) Natural gas derivatives Cost of sales $ 260 $ (176 ) $ (79 ) Foreign exchange contracts Other operating—net — 22 (44 ) Unrealized gains (losses) recognized in income 260 (154 ) (123 ) Realized (losses) gains (133 ) (114 ) 64 Net derivative gains (losses) $ 127 $ (268 ) $ (59 ) ForAs of December 31, 2016 and 2015, none of our derivative instruments were designated as hedging instruments. See Note 9—Fair Value Measurements for additional information on derivative fair values, see Note 5—Fair Value Measurements.values. Asset Derivatives Liability Derivatives December 31, December 31, Balance Sheet
Location Balance Sheet
Location 2013 2012 2013 2012 (in millions) (in millions) $ — $ 4.2 $ — $ — — 4.8 — — $ — $ 9.0 $ — $ — $ 27.3 $ 3.9 $ — $ — 1.6 2.4 — — 45.4 2.0 (0.2 ) (5.5 ) — — — (0.1 ) $ 74.3 $ 8.3 $ (0.2 ) $ (5.6 ) $ 74.3 $ 17.3 $ (0.2 ) $ (5.6 ) $ 72.7 $ 10.1 $ (0.2 ) $ (5.5 ) 1.6 7.2 — (0.1 ) $ 74.3 $ 17.3 $ (0.2 ) $ (5.6 ) Asset Derivatives Liability Derivatives December 31, December 31, 2016 2015 2016 2015 (in millions) (in millions) Natural gas derivatives Other current assets $ 52 $ — Other current liabilities $ — $ (130 ) Natural gas derivatives Other assets 4 — Other liabilities (6 ) (81 ) Total derivatives $ 56 $ — $ (6 ) $ (211 ) largemultinational commercial banks, major financial institutions and large oil and gasenergy companies. Our derivatives are executed with several counterparties, generally under International Swaps and Derivatives 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:•• accelerate and terminate all or some transactions outstanding under the ISDA agreement. The values of all terminated transactions and certain other payments under the ISDA agreement are netted, resulting in a single net close-out amount payable to or by the non-defaulting party. Termination values may be determined using a mark-to-market approach or based on a party's good faith estimate of its loss. If the final net close-out amount is payable by the non-defaulting party, that party's obligation to make the payment may be conditioned on factors such as the termination of allCF INDUSTRIES HOLDINGS, INC.•setoff,set off, against the final net close-out payment, other matured and contingent amounts payable between us and our counterparties under the ISDA agreement or otherwise. Typically, these setoff rights arise upon the early termination of all transactions outstanding under an ISDA agreement following a default or specified termination event.with sliding-scalesuch as cross default provisions and credit support thresholdsthresholds. 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 collateralize derivatives in a net liability position. The Revolving Credit Agreement, at any time when it is secured, provides a cross collateral feature for those of our derivatives that are dependent uponwith counterparties that are party to, or affiliates of parties to, the ratings assigned to our long-termRevolving Credit Agreement so that no separate collateral would be required for those counterparties in connection with such derivatives. In the event the Revolving Credit Agreement becomes unsecured, debt by certain credit rating agencies. Downgradesseparate collateral could be required in our credit ratings would cause the applicable threshold levels to decrease and improvements in those ratings could cause the threshold levels to increase. If our net liability positions exceed the threshold amounts, the counterparties could require cash collateral, some other formconnection with such derivatives. As of credit support, or daily cash settlement of unrealized losses. At December 31, 20132016 and 2012,2015, the aggregate fair value of the derivative instruments with credit-risk-related contingent features in net liability positions was $0.2 millionzero and $0.9$211 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. AtAs of December 31, 20132016 and 2012,2015, we had no cash collateral on deposit with counterparties for derivative contracts. The credit support documents executed in connection with certain of our ISDA agreements generally provide us and our counterparties the right to setoffset off collateral against amounts owing under the ISDA agreements upon the occurrence of a default or a specified termination event.atas of December 31, 20132016 and 2012.2015: Gross amounts not offset in consolidated balance sheets (in millions) December 31, 2016 Total derivative assets $ 56 $ 6 $ — $ 50 Total derivative liabilities 6 6 — — Net derivative assets $ 50 $ — $ — $ 50 December 31, 2015 Total derivative assets $ — $ — $ — $ — Total derivative liabilities 211 — — 211 Net derivative liabilities $ (211 ) $ — $ — $ (211 ) Gross amounts
not offset in
consolidated
balance sheet Gross and net
amounts
presented in
consolidated
balance
sheet(1) Financial
instruments Cash
collateral
received
(pledged) Net
amount (in millions) $ 74.3 $ 0.2 $ — $ 74.1 — — — — $ 74.3 $ 0.2 $ — $ 74.1 $ 17.3 $ 4.6 $ — $ 12.7 5.6 4.6 — 1.0 $ 11.7 $ — $ — $ 11.7 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 herein are the same. (1)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. Our exposure to credit loss from nonperformance by counterparties was approximately $74.1 million and $12.7 million at December 31, 2013 and 2012, respectively. We do not believe the contractually allowed netting, close-out netting or set-offsetoff of amounts owed to, or due from, the counterparties to our ISDA agreements would have a material effect on our financial position. December 31, 2016 2015 (in millions) Trade $ 227 $ 210 Other 9 57 Accounts receivable—net $ 236 $ 267 December 31, 2016 2015 (in millions) Finished goods $ 279 $ 286 Raw materials, spare parts and supplies 60 35 Total inventories $ 339 $ 321 December 31, 2016 2015 (in millions) Accounts payable $ 81 $ 97 Capacity expansion project costs 185 416 Accrued natural gas costs 111 70 Payroll and employee-related costs 46 49 Accrued interest 53 60 Other 162 226 Accounts payable and accrued expenses $ 638 $ 918 25.As of December 31, 2015, other current liabilities consists of unrealized losses on natural gas and foreign currency derivatives amounting to $130 million. See Note 15—Derivative Financial Instruments for additional information. December 31, 2016 2015 (in millions) Benefit plans and deferred compensation $ 393 $ 343 Tax-related liabilities 103 118 Unrealized losses on derivatives 6 81 Unrealized loss on embedded derivative 21 — Capacity expansion project costs — 55 Environmental and related costs 8 7 Other 14 24 Other liabilities $ 545 $ 628 Year ended December 31, 2016 2015 2014 CFN TNCLP Total TNCLP TNCLP (in millions) Noncontrolling interests: Beginning balance $ — $ 352 $ 352 $ 363 $ 362 Issuance of noncontrolling interest in CFN 2,792 — 2,792 — — Earnings attributable to noncontrolling interests 93 26 119 34 47 Declaration of distributions payable (79 ) (40 ) (119 ) (45 ) (46 ) Ending balance $ 2,806 $ 338 $ 3,144 $ 352 $ 363 Distributions payable to noncontrolling interests: Beginning balance $ — $ — $ — $ — $ — Declaration of distributions payable 79 40 119 45 46 Distributions to noncontrolling interests (79 ) (40 ) (119 ) (45 ) (46 ) Ending balance $ — $ — $ — $ — $ — In the third quarter of 2011, oura programcertain programs to repurchase up 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, and in the second quarter of 2012, we repurchased 3.1 million shares of CF Holdingsour common 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. In the third quarterstock. Each of 2012, our Board of Directors authorized a programthese programs has permitted repurchases 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 in the open market, in privately negotiatedthrough privately-negotiated transactions, through block transactions or otherwise. TheOur management has determined the manner, timing and amount of any repurchases are determined by our managementunder these programs based on the evaluation of market conditions, stock price and other factors. During 2013, we repurchased 7.3 million shares for $1.4which $40.3the common stock of CF Holdings through December 31, 2016 (the 2012 Program). The repurchases under the 2012 Program were completed in the second quarter of 2014. On August 6, 2014, the Board authorized a program to repurchase up to $1 billion of the common stock of CF Holdings through December 31, 2016 (the 2014 Program). 2014 Program 2012 Program Shares Amounts Shares Amounts (in millions) Shares repurchased in 2013 — $ — 36.7 $ 1,449 Shares repurchased in 2014: First quarter — $ — 16.0 $ 794 Second quarter — — 15.4 757 Third quarter — — — — Fourth quarter 7.0 373 — — Total shares repurchased in 2014 7.0 373 31.4 1,551 7.0 $ 373 68.1 $ 3,000 Shares repurchased in 2015: First quarter 4.1 $ 237 Second quarter 4.5 268 Third quarter 0.3 22 Fourth quarter — — Total shares repurchased in 2015 8.9 527 Shares repurchased as of December 31, 2015 15.9 $ 900 at December 31, 2013. was zero.the year2016 and 2015, we retired 6.42.4 million shares and 10.7 million shares of repurchased stock. Atstock, respectively. The retired shares were returned to the status of authorized but unissued shares. As part of the retirements, we reduced our treasury stock, paid-in capital, and retained earnings balances for 2016 by $150 million, $14 million, and $136 million, respectively, and for 2015 by $597 million, $62 million, and $535 million, respectively. As of December 31, 20132016 and 2015, we held in treasury approximately 0.928 thousand shares and 2.4 million shares of repurchased stock. Subsequent to December 31, 2013, we repurchased an additional 1.2 million shares for $294.9 million, bringing the total repurchased shares to date under this program to 8.5 million at an aggregate expenditurestock, respectively. Year ended December 31, 2016 2015 2014 Beginning balance 233,081,556 241,673,050 279,240,970 Exercise of stock options 17,600 274,705 942,560 44,941 40,673 20,875 Forfeitures of restricted stock (10,000 ) — (65,680 ) (19,928 ) (8,906,872 ) (38,465,675 ) Ending balance 233,114,169 233,081,556 241,673,050 Includes shares issued from treasury. Includes shares withheld to pay employee tax obligations upon the vesting of restricted stock. Year ended December 31, 2013 2012 2011 62,950,688 65,419,989 71,267,185 226,303 569,490 638,926 30,074 25,662 32,867 (1,570 ) (2,170 ) (3,140 ) (7,340,682 ) (3,062,283 ) (6,515,849 ) 55,864,813 62,950,688 65,419,989 (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.Stockholder Rights Plan We have adopted a stockholder rights plan (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 to 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 aCF INDUSTRIES HOLDINGS, INC.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 are 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, between us and Mellon Investor Services, LLC (as successor to the Bank of New York), as Rights Agent. We areand restated certificate of incorporation authorizes ourthe Board, of Directors, without any further stockholder action or approval, to issue these shares in one or more classes or series, and (except in the case of our Series A Junior Participating Preferred Stock, 500,000 shares of which are authorized and the terms of which were specified in the original certificate of incorporation of CF Holdings) 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 Rightsthe Plan (as defined below), 500,000 shares of preferred stock have been designated as Series B Junior Participating Preferred Stock. The Series A junior participating preferred stock.Junior Participating Preferred Stock had been established in CF Holdings’ original certificate of incorporation in connection with our former stockholder rights plan that expired in 2015. No shares of preferred stock have been issued. (Loss)(loss)(AOCI) and the impact on other comprehensive loss are as follows: Foreign
Currency
Translation
Adjustment Unrealized
Gain (Loss)
on
Securities Unrealized
Gain (Loss)
on
Derivatives Defined
Benefit
Plans Accumulated
Other
Comprehensive
Income (Loss) (in millions) $ 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 ) — 4.3 7.2 — 11.5 — (0.6 ) — 11.5 10.9 — — — (1.0 ) (1.0 ) 46.0 (1.1 ) (2.6 ) (14.0 ) 28.3 61.4 (0.4 ) 4.6 (115.2 ) (49.6 ) — 2.1 3.0 — 5.1 — (0.6 ) — 12.2 11.6 — — — 46.2 46.2 (29.5 ) (0.5 ) (1.1 ) (24.8 ) (55.9 ) $ 31.9 $ 0.6 $ 6.5 $ (81.6 ) $ (42.6 ) (in millions) Balance as of December 31, 2013 $ 31 $ 1 $ 7 $ (82 ) $ (43 ) Reclassification to earnings — — (3 ) 33 30 Loss arising during the period — — — (106 ) (106 ) Effect of exchange rate changes and deferred taxes (72 ) — 1 30 (41 ) Balance as of December 31, 2014 (41 ) 1 5 (125 ) (160 ) Reclassification to earnings — 1 — 6 7 Impact of CF Fertilisers UK acquisition 9 — — 38 47 Gain arising during the period — — — 24 24 Effect of exchange rate changes and deferred taxes (166 ) (1 ) — (1 ) (168 ) Balance as of December 31, 2015 (198 ) 1 5 (58 ) (250 ) Unrealized loss — (1 ) — — (1 ) Reclassification to earnings — 1 — 1 2 Loss arising during the period — — — (97 ) (97 ) Effect of exchange rate changes and deferred taxes (74 ) — — 22 (52 ) Balance as of December 31, 2016 $ (272 ) $ 1 $ 5 $ (132 ) $ (398 ) The $1.0 million defined benefit plan loss arising during 2012 is net of a $13.4 million curtailment gain pertaining to retiree medical benefits recognized in the third quarter of 2012. For additional information, refer to Note 7—Pension and Other Postretirement Benefits.statementstatements of operations for the yearyears ended December 31, 20132016, 2015 and 2014 were as follows: Year ended December 31, 2016 2015 2014 (in millions) Foreign Currency Translation Adjustment $ — $ 9 $ — Total before tax — 9 — Tax effect — — — Net of tax $ — $ 9 $ — Unrealized Gain (Loss) on Securities $ 1 $ 1 $ — Total before tax 1 1 — Tax effect — (1 ) — Net of tax $ 1 $ — $ — Unrealized Gain (Loss) on Derivatives $ — $ — $ (3 ) Total before tax — — (3 ) Tax effect — — 1 Net of tax $ — $ — $ (2 ) Defined Benefit Plans $ — $ 38 $ — (1 ) (1 ) — 2 7 33 Total before tax 1 44 33 Tax effect — (2 ) (12 ) Net of tax $ 1 $ 42 $ 21 Total reclassifications for the period $ 2 $ 51 $ 19 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. Amount
Reclassified
from AOCI Affected line item in
consolidated statement of operations (in millions) $ (0.6 ) Interest income (0.6 ) 0.2 $ (0.4 ) $ — (1) 0.3 (1) 11.9 (1) 12.2 (4.3 ) $ 7.9 $ 7.5 (1)These AOCI components are included in the computation26.2009 We grant stock-based compensation awards underPlan (the Plan).Plan. Under the 2014 Equity and Incentive 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 2014 Equity and Incentive Plan is to provide an incentive for our employees, officers, consultants and non-employee directors that is aligned with the interests of our stockholders.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 2014 Equity and Incentive 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 2014 Equity and Incentive 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 2014 Equity and Incentive Plan. AtAs of December 31, 2013,2016, we had 2.911.7 million shares availableCF INDUSTRIES HOLDINGS, INC.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.Black- ScholesBlack-Scholes option valuation model. Key assumptions used and resulting grant date fair values are shown in the following table. 2013 2012 2011 35% 50% 53% 4.4 Years 4.5 Years 4.7 Years 1.4% 0.7% 0.9% 0.8% 0.8% 1.1% $53.82 $80.59 $56.60 2016 2015 2014 Weighted-average assumptions: Expected volatility 39% 31% 33% Expected term of stock options 4.3 Years 4.3 Years 4.3 Years Risk-free interest rate 1.2% 1.5% 1.3% Expected dividend yield 3.3% 1.9% 1.6% Weighted-average grant date fair value $8.97 $13.99 $12.77 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, 20132016 is presented below: Shares Weighted-
Average
Exercise Price 766,607 $ 100.34 212,420 188.73 (226,303 ) 44.93 (15,192 ) 170.38 737,532 141.76 406,687 102.53 Shares Outstanding as of December 31, 2015 3,654,318 $ 41.79 Granted 1,415,920 36.14 Exercised (17,600 ) 9.09 Forfeited (93,446 ) 44.22 Expired (53,920 ) 45.78 Outstanding as of December 31, 2016 4,905,272 40.18 Exercisable as of December 31, 2016 2,765,940 37.25 2013 2012 2011 2016 2015 2014 (in millions) (in millions) $ 10.3 $ 14.6 $ 15.5 $ — $ 8 $ 18 $ 11.9 $ 36.9 $ 30.0 $ — $ 2 $ 10 $ 38.6 $ 95.2 $ 79.4 $ — $ 8 $ 31 CF INDUSTRIES HOLDINGS, INC.at December 31, 2013: 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) 24,000 1.9 $ 15.86 $ 5.2 24,000 1.9 $ 15.86 $ 5.2 234,003 5.9 76.50 36.6 234,003 5.9 76.50 36.6 479,529 8.4 179.86 25.5 148,684 6.9 157.50 11.2 737,532 7.4 141.76 $ 67.3 406,687 6.0 102.53 $ 53.0
2016:(1)The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $233.04 as of December 31, 2013, 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 $ 8.83 - $20.00 570,080 2.9 $ 14.75 $ 9 570,080 2.9 $ 14.75 $ 9 $20.01 - $62.25 4,335,192 7.5 43.53 1 2,195,860 6.2 43.09 1 4,905,272 6.9 40.18 $ 10 2,765,940 5.6 37.25 $ 10 The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $31.48 as of December 31, 2016, 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 vestsgenerally vest 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 ourthe 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.underduring the plan atyear ended December 31, 20132016 is presented below: Shares Weighted-
Average
Grant-Date
Fair Value 98,284 $ 129.05 30,074 189.42 (52,785 ) 87.67 (1,570 ) 137.99 74,003 200.11 Restricted Stock Awards Restricted Stock Units Performance Share Units Shares Shares Shares Weighted-Average Grant-Date Fair Value Outstanding as of December 31, 2015 84,918 $ 51.34 74,523 $ 55.87 47,940 $ 83.74 Granted 41,645 27.85 92,050 36.00 60,030 40.62 Restrictions lapsed (vested) (74,918 ) 43.79 (3,296 ) 53.51 — — Forfeited (10,000 ) 38.02 (4,554 ) 56.71 (1,255 ) 84.15 Outstanding as of December 31, 2016 41,645 27.85 158,723 44.38 106,715 59.48 per share of restricted stock granted in 2013, 2012for RSAs was $27.85, $61.54, and 2011$49.76, for RSUs was $189.42, $201.22$36.00, $61.60, and $150.64,$51.16, and for PSUs was $40.62, $91.13, and $77.65, respectively.Year ended December 31, 2013 2012 2011 2016 2015 2014 (in millions) (in millions) $ 3.4 $ 2.9 $ 1.7 $ 1 $ 1 $ 3 $ 10.0 $ 7.6 $ 4.4 $ 2 $ 5 $ 9 CF INDUSTRIES HOLDINGS, INC.expense.expenses. The following table summarizes stock-based compensation costs and related income tax benefits. Year ended December 31, 2016 2015 (in millions) Stock-based compensation expense $ 19 $ 17 $ 17 Income tax benefit (7 ) (6 ) (6 ) Stock-based compensation expense, net of income taxes $ 12 $ 11 $ 11 Includes incremental compensation expense of $2 million related to the modification of 299,950 stock options and 80,495 RSAs. Year ended December 31, 2013 2012 2011 (in millions) $ 12.6 $ 11.1 $ 9.9 (4.6 ) (4.0 ) (3.7 ) $ 8.0 $ 7.1 $ 6.2 (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 zero, $0.8 million and $0.7 million for the years ended December 31, 2013, 2012 and 2011 respectively. Stock compensation expense reported in our consolidated statements of operations and consolidated statements of cash flows includes this phantom unit expense.2013,2016, pre-tax unrecognized compensation cost net of estimated forfeitures, was $14.9$12 million for stock options, which will be recognized over a weighted averageweighted-average period of 2.11.8 years, and $7.2$4 million for restricted stock,RSAs and RSUs, which will be recognized over a weighted averageweighted-average period of 2.11.7 years, and $3 million for PSUs, which will be recognized over a weighted-average period of 1.8 years. An excessbenefit is generated when thebenefits realized tax benefit from the vesting of restricted stock or a stock option exercise, exceeds the previouslyexercises are recognized deferredas an income tax asset. Excess tax benefitsbenefit in our consolidated statements of operations and are required to be reported as a financingan operating cash inflow rather than a reduction of taxes paid. The excess tax benefits in 2013, 20122016, 2015 and 2011 totaled $13.5 million, $36.12014 were zero, $2 million, and $47.2$9 million, respectively.27. Other Financial Statement Data The following provides additional information relating to cash flow activities: Year ended December 31, 2013 2012 2011 (in millions) $ 162.0 $ 113.1 $ 126.7 847.4 1,073.7 819.2 28. InWeVarious subsidiaries of CF Industries Holdings, Inc. (the CF Entities) have been named as defendants along with other companies in lawsuits filed in 2013, 2014 and 2015 in the District Court of McLennan County, Texas by the City of West, individual residents of the County and other parties seeking recovery for damages allegedly sustained as a resultCF INDUSTRIES HOLDINGS, INC.productproducts to West Fertilizer Co., products wethat the CF Entities have manufactured and sold to others have been delivered to the facility and may have been stored at the West facility at the time of the incident. Basedthe initial analysis of the pending lawsuits,April 3, 2017. While we believe that we have strong legal and factual defenses to the claims and intend to defend ourselvescontinue defending the CF Entities vigorously in the pending lawsuits, including in any appeals that may follow, we have concluded based on continuing developments in the case that some loss is probable for a subset of the outstanding claims. We have made an accrual for this subset of the outstanding claims, which is not material to the Consolidated Financial Statements. Beyond the amounts accrued, the Company cannot provide a range of reasonably possible loss due to the lack of damages discovery for the remaining claims and anythe uncertain nature of this litigation, including uncertainties around the potential allocation of responsibility by a jury to other claims brought against usdefendants or responsible third parties. The recognition of a potential loss in connection with the incident.Florida Environmental MattersClean Air Act Notice of Violation The Company received a Notice of Violation (NOV) from the EPA by letter dated June 16, 2010, alleging that 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. 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 Notice of Violation By letter dated July 6, 2010, the EPA issued a NOV to the Company alleging 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. The NOV also included an allegation that the Company violated Section 304 of EPCRA and Section 103 of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) by failing to file a timely notification relating to the release of hydrogen fluoride above applicable reportable quantities. 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 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 federal district court (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. Subsequently, the Florida Department of Environmental Protection (FDEP) adopted its own nitrogen and phosphorous criteria for surface waters and related implementation standards. On November 30, 2012, the EPA approved Florida's nutrient criteria and, on June 27, 2013, the EPA approved new water quality standards submitted by the FDEP relating to the scope of coverage of the FDEP's numeric nutrient criteria for surface waters. On January 7, 2014, the U.S. District Court for the Northern District of Florida granted the EPA's motion to amend the 2009 consent decree. As a result, the EPA is no longer required by the consent decree to promulgate numeric nitrogen and phosphorous criteria for certain surface waters that the FDEP had determined were more properly regulated by the state's narrative standard. The Court's order allows the EPA to withdraw its federal numeric nutrient criteria, after which the FDEP's regulations will become effective. The 2009 consent decree also required the EPA to develop numeric nutrient criteria for Florida coastal and estuarine waters. Although the EPA proposed such criteria in 2012, the FDEP submitted to the EPA new numeric nutrient water quality standards for those waters on July 31 and August 1, 2013. On September 26, 2013, the EPA approved Florida's new and revised nutrient water quality standards for estuaries and coastal waters and informed the Court that as a result, it was not required to finalize the federal criteria that it had proposed. There is continuing regulatory uncertainty because the EPA's approval of the FDEP nutrient water quality standards is still subject to challenge. Nonetheless, numeric nutrient water quality criteria for Florida waters, whether federal or state, 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.CF INDUSTRIES HOLDINGS, INC.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.1- hour1-hour standard through permanent and enforceable emissions reductions. The EPA's approval of the Louisiana air program revision became effective on August 8, 2011. However, a recent decision by the federal D.C. Circuit Court of Appeals struck down a similar, but perhaps distinguishable, EPA guidance document regarding alternatives to Section 185 fees. At this time, the viability of EPA's approval of Louisiana's elimination of Section 185 fees is uncertain. Regardless of the approach ultimately adopted by the EPA, we expect that it is likely to be challenged by the environmental community, the states, and/or affected industries. Therefore, the costs associated with compliance with the Act cannot be determined at this time, and we cannot reasonably estimate the impact on 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.mine site. In 2014, we and the current property owner entered into a Consent Order with IDEQ requested that each party indicate its willingnessand the U.S. Forest Service to enter into negotiations forconduct a remedial investigation and feasibility study of the site. The current owner indicatedIn 2015, we and several other parties received a willingnessnotice that the U.S. Department of the Interior and other trustees intend to negotiate. While reserving all rights and not admitting liability, we also indicatedundertake a willingness to negotiate. Negotiations are continuing.natural resource damage assessment for a group of former phosphate mines in southeast Idaho, including the former Georgetown Canyon mine. We are not able to estimate at this time our potential liability, if any, with respect to the cleanup of the site.site or a possible claim for natural resource damages. However, based on currently available information, we do not expect that anythe 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,consolidated financial condition,position, results of operations or cash flows.29. 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 chief operating decision maker (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—Summary of Significant Accounting Policies.7—Goodwill and Other Intangible Assets. net sales, cost of sales and gross margin depreciation, depletionfor 2016, 2015 and amortization, capital expenditures, and assets for 2013, 2012 and 20112014 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) $ 1,437.9 $ — $ 1,437.9 924.6 — 924.6 1,935.1 — 1,935.1 215.1 — 215.1 — 600.6 600.6 — 196.3 196.3 165.1 — 165.1 4,677.8 796.9 5,474.7 2,232.5 722.0 2,954.5 $ 2,445.3 $ 74.9 $ 2,520.2 150.2 41.7 $ 2,411.7
$ 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 Ammonia Phosphate Consolidated (in millions) Year ended December 31, 2016 Net sales $ 981 $ 831 $ 1,196 $ 411 $ 266 $ — $ 3,685 Cost of sales 715 584 920 409 217 — 2,845 Gross margin $ 266 $ 247 $ 276 $ 2 $ 49 $ — 840 Total other operating costs and expenses 561 Equity in losses of operating affiliates (145 ) Operating earnings $ 134 Year ended December 31, 2015 Net sales $ 1,523 $ 788 $ 1,480 $ 294 $ 223 $ — $ 4,308 Cost of sales 884 469 955 291 162 — 2,761 Gross margin $ 639 $ 319 $ 525 $ 3 $ 61 $ — 1,547 Total other operating costs and expenses 319 Equity in losses of operating affiliates (35 ) Operating earnings $ 1,193 Year ended December 31, 2014 Net sales $ 1,576 $ 915 $ 1,670 $ 243 $ 171 $ 168 $ 4,743 Cost of sales 983 517 998 189 120 158 2,965 Gross margin $ 593 $ 398 $ 672 $ 54 $ 51 $ 10 1,778 Total other operating costs and expenses 205 Gain on sale of phosphate business 750 Equity in earnings of operating affiliates 43 Operating earnings $ 2,366 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 and amortization Year ended December 31, 2016 $ 96 $ 112 $ 247 $ 93 $ 46 $ — $ 84 $ 678 Year ended December 31, 2015 $ 95 $ 51 $ 192 $ 66 $ 35 $ — $ 41 $ 480 Year ended December 31, 2014 $ 69 $ 37 $ 179 $ 47 $ 20 $ — $ 41 $ 393 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) $ 328.4 $ 42.3 $ 39.9 $ 410.6 $ 334.6 $ 43.5 $ 41.7 $ 419.8 $ 316.3 $ 50.7 $ 49.2 416.2
$ 759.5 $ 59.0 $ 5.3 $ 823.8 $ 431.3 $ 64.4 $ 27.8 $ 523.5 $ 177.0 $ 52.0 $ 18.2 247.2
$ 6,913.8 $ 817.6 $ 2,946.7 $ 10,678.1 $ 5,991.5 $ 795.2 $ 3,380.2 $ 10,166.9 Year ended December 31, 2013 2012 2011 (in millions) $ 4,497.8 $ 5,260.9 $ 5,175.9 508.5 446.4 492.1 468.4 396.7 429.9 $ 5,474.7 $ 6,104.0 $ 6,097.9 Year ended December 31, 2016 2015 2014 (in millions) Sales by geographic region (based on destination of shipments): United States $ 2,728 $ 3,485 $ 3,994 Foreign: Canada 349 490 544 United Kingdom 394 153 — Other foreign 214 180 205 Total foreign 957 823 749 Consolidated $ 3,685 $ 4,308 $ 4,743 December 31, 2013 2012 (in millions) $ 3,528.8 $ 3,327.8 572.9 572.7 $ 4,101.7 $ 3,900.5 December 31, 2016 2015 2014 (in millions) Property, plant and equipment—net by geographic region: United States $ 8,444 $ 7,202 $ 4,987 Foreign: Canada 523 497 539 United Kingdom 685 840 — Total foreign 1,208 1,337 539 Consolidated $ 9,652 $ 8,539 $ 5,526 Thefor our nitrogen and phosphate fertilizers are cooperatives, and independent fertilizer distributors.distributors and industrial users. In 2016, CHS accounted for approximately 12% of our consolidated net sales. See Note 17—Noncontrolling Interests for additional information. None of our customers in 2013 accounted for more than ten percent of our consolidated sales.30. Related Party TransactionsKEYTRADE AG Year ended December 31, 2016 2015 2014 (in millions) Cash paid during the year for Interest—net of interest capitalized $ 144 $ 100 $ 141 Income taxes—net of refunds (110 ) 435 781 Supplemental disclosure of noncash investing and financing activities: Change in capitalized expenditures in accounts payable and accrued expenses (263 ) 258 72 Change in capitalized expenditures in other liabilities (55 ) 6 (22 ) Change in noncontrolling interests in other liabilities 8 — — Change in accrued share repurchases — (29 ) (11 ) own 50%have 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 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. The most recent estimate of the common sharesaggregate cost of Keytrade,these AROs expressed in 2016 dollars is $72 million. We have not recorded a global fertilizer trading company headquartered near Zurich, Switzerland. We utilize Keytradeliability for these conditional AROs as our exclusive exporter of phosphate fertilizers from North America. Profits resulting from sales with Keytrade are eliminated until realized by Keytrade. Our sales to Keytrade were $423.5 million, $397.4 million and $396.2 million for 2013, 2012 and 2011, respectively. As of December 31, 20132016 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 2012, Keytrade had a $42.2storage 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. (in millions) 2017 $ 89 2018 83 2019 65 2020 51 2021 41 Thereafter 92 $ 421 $17.6$93 million accounts receivable balance, respectively. See Note 16—Equity Method Investments, for additional information on Keytrade.2014.31.2013.2016. 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 in 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. Three months ended, March 31 June 30 September 30 December 31 Full Year (in millions, except per share amounts) 2016 Net sales $ 1,004 $ 1,134 $ 680 $ 867 $ 3,685 Gross margin 217 527 2 94 840 (21 ) 211 (21 ) 91 260 26 47 (30 ) (320 ) (277 ) 0.11 0.20 (0.13 ) (1.38 ) (1.19 ) 0.11 0.20 (0.13 ) (1.38 ) (1.19 ) 2015 Net sales $ 954 $ 1,311 $ 928 $ 1,115 $ 4,308 Gross margin 416 686 165 280 1,547 28 19 (126 ) (97 ) (176 ) 231 352 90 27 700 0.96 1.50 0.39 0.11 2.97 0.96 1.49 0.39 0.11 2.96 Three months ended March 31 June 30 September 30 December 31 Full Year (in millions, except per share amounts) $ 1,336.5 $ 1,714.9 $ 1,097.0 $ 1,326.3 $ 5,474.7 675.1 865.2 386.1 593.8 2,520.2 8.8 (14.4 ) 15.7 55.8 65.9 406.5 498.2 234.1 325.8 1,464.6 6.53 8.43 4.09 5.73 24.87 6.47 8.38 4.07 5.71 24.74
$ 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)Amounts represent pre-tax unrealized gains (losses) on natural gas derivatives, which are included in gross margin. See Note 15—Derivative Financial Instruments for additional information. For the three months ended September 30, 2016, net loss attributable to common stockholders includes an after-tax loss of $14 million (pre-tax loss of $22 million) resulting from recognizing the value of an embedded derivative liability to reflect our credit evaluation that is included in other operating—net, and net loss per share attributable to common stockholders, basic and diluted, include the per share impact of $0.06. See Note 9—Fair Value Measurements and Note 17—Noncontrolling Interests for additional information. derivativesour equity method investment in PLNL that is included in gross margin.equity in (loss) earnings of operating affiliates, and net loss per share attributable to common stockholders, basic and diluted, include the per share impact of $0.57. See Note 24—Derivative Financial Instruments,8—Equity Method Investments and Note 9—Fair Value Measurements for additional information.(2)Net salesThe sum of the four quarters is not necessarily the same as the total for the year. For the three months ended June 30, 2015, net earnings attributable to common stockholders includes an after-tax loss of $29 million (pre-tax loss of $40 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. gross marginnet earnings per share attributable to common stockholders, basic and diluted, include the per share impact of $0.40. See Note 4—Acquisitions and Divestitures and Note 8—Equity Method Investments for additional information.fourth quarterthree months ended December 31, 2015, net earnings attributable to common stockholders includes an after-tax impairment charge of 2012 reflects a $129.7$62 million reduction relatingon our equity method investment in PLNL that is included in equity in earnings of operating affiliates, and net earnings per share attributable to a modification to CFL's selling prices, as described incommon stockholders, basic and diluted, include the per share impact of $0.26. See Note 4—Noncontrolling Interest.8—Equity Method Investments and Note 9—Fair Value Measurements for additional information.32.Statementsstatements of Guarantorsguarantors and Issuersissuers of Guaranteed Securities Registeredguaranteed securities registered or Being Registeredbeing registered, and relates to (i) the Notessenior notes due 2018, 2020, 2023, 2034, 2043 and 2044 (described in Note 12—Financing Agreements and referred to in this report as the Public Senior Notes) issued by CF Industries, Inc. (CF Industries), a 100% owned subsidiary of CF Industries Holdings, Inc. (Parent), described in Note 21, and guarantees of the full and unconditional guarantee of suchPublic Senior Notes by Parent and toby CFE and CFS (the Subsidiary Guarantors), which are 100% owned subsidiaries of Parent, and (ii) debt securities of CF Industries (Other Debt Securities), and the full and unconditional guaranteeguarantees thereof by Parent and the Subsidiary Guarantors, that may be offered and sold from time to time under the registration statement on Form S-3statements that may be filed by Parent, and CF Industries and the Subsidiary Guarantors with the Securities and Exchange Commission on April 22, 2013. Under the supplemental indentures governing the Notes, the Notes are to be guaranteed by Parent and each of its current and future subsidiaries, other than CFSEC.CF INDUSTRIES HOLDINGS, INC.Industries, that from time to time is a borrower or guarantor under the Credit Agreement, or any renewal, replacement or refinancing thereof. At December 31, 2013, 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 CF Industries, becomes a borrower or a guarantor under the Revolving Credit Agreement it(or any renewal, replacement or refinancing thereof), such subsidiary would be required to become a guarantor of the Notes. Public Senior Notes, provided that such requirement will no longer apply with respect to the Public Senior Notes due 2023, 2034, 2043 and 2044 following the repayment of the Public Senior Notes due 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 2018 and 2020. CFE and CFS became guarantors of the Public Senior Notes as a result of this requirement on November 21, 2016.Other Subsidiaries.Other SubsidiariesNon-Guarantors for the years ended December 31, 2013, 2012,2016, 2015 and 20112014 and condensed consolidating balance sheets for Parent, CF Industries, the Subsidiary Guarantors and the Other Subsidiaries atNon-Guarantors as of December 31, 20132016 and 2012.2015. Prior years have been restated to reflect the Subsidiary Guarantors separately. The condensed consolidating financial information presented below is not necessarily indicative of the financial position, results of operations, comprehensive (loss) income or cash flows of Parent, CF Industries, the Subsidiary Guarantors or the Other SubsidiariesNon-Guarantors on a stand-alone basis.thisthese condensed consolidating financial information,statements, investments in subsidiaries are presented under the equity method, in which our investments are recorded at cost and adjusted for our ownership share of a subsidiary's cumulative results of operations, distributions and other equity changes, and the eliminating entries reflect primarily intercompany transactions such as sales, accounts receivable and accounts payable and the elimination of equity investments and earnings of subsidiaries. The tax provision in the presentation of condensed consolidating financial information has been computed based on the applicable statutory tax rate for the legal entity. Two of our consolidated entities have made elections to be taxed as partnerships for U.S. federal income tax purposes and are included in the non-guarantor column. Due to the partnership tax treatment, these subsidiaries do not record taxes on their financial statements. The tax provision pertaining to the income of these partnerships, plus applicable deferred tax balances are reflected on the financial statements of the parent company owner that is included in the subsidiary guarantors column in the following financial information. Liabilities related to benefit plan obligations are reflected on the legal entity that funds the obligation, while the benefit plan expense is included on the legal entity to which the employee provides services. Year ended December 31, 2013 Parent CF Industries Other
Subsidiaries Eliminations Consolidated (in millions) $ — $ 1,105.8 $ 5,767.5 $ (1,398.6 ) $ 5,474.7 — 886.0 3,463.0 (1,394.5 ) 2,954.5 — 219.8 2,304.5 (4.1 ) 2,520.2 2.7 11.8 151.5 — 166.0 — 7.6 (23.4 ) — (15.8 ) 2.7 19.4 128.1 — 150.2 — — 41.7 — 41.7 (2.7 ) 200.4 2,218.1 (4.1 ) 2,411.7 — 155.1 (1.8 ) (1.1 ) 152.2 — (0.9 ) (4.9 ) 1.1 (4.7 ) (1,466.4 ) (1,423.0 ) — 2,889.4 — — (0.4 ) 54.9 — 54.5 1,463.7 1,469.6 2,169.9 (2,893.5 ) 2,209.7 (0.9 ) 3.0 684.4 — 686.5 — (0.2 ) 9.8 — 9.6 1,464.6 1,466.4 1,495.3 (2,893.5 ) 1,532.8 — — 72.3 (4.1 ) 68.2 $ 1,464.6 $ 1,466.4 $ 1,423.0 $ (2,889.4 ) $ 1,464.6 Year ended December 31, 2016 Parent CF Industries Subsidiary Guarantors Non- Guarantors Eliminations Consolidated (in millions) Net sales $ — $ 362 $ 2,932 $ 2,939 $ (2,548 ) $ 3,685 Cost of sales — 207 2,806 2,380 (2,548 ) 2,845 Gross margin — 155 126 559 — 840 Selling, general and administrative expenses 4 9 105 56 — 174 Transaction costs (46 ) — 223 2 — 179 Other operating—net — 7 30 171 — 208 Total other operating costs and expenses (42 ) 16 358 229 — 561 Equity in loss of operating affiliates — — — (145 ) — (145 ) Operating earnings (losses) 42 139 (232 ) 185 — 134 Interest expense — 347 85 (155 ) (77 ) 200 Interest income — (49 ) (8 ) (25 ) 77 (5 ) Loss on debt extinguishment — 167 — — — 167 Net loss (earnings) of wholly owned subsidiaries 304 92 (315 ) — (81 ) — Other non-operating—net — — — (2 ) — (2 ) (Loss) earnings before income taxes and equity in losses of non-operating affiliates (262 ) (418 ) 6 367 81 (226 ) Income tax provision (benefit) 15 (114 ) 18 13 — (68 ) Net (loss) earnings (277 ) (304 ) (12 ) 354 81 (158 ) Less: Net earnings attributable to noncontrolling interests — — — 119 — 119 Net (loss) earnings attributable to common stockholders $ (277 ) $ (304 ) $ (12 ) $ 235 $ 81 $ (277 ) Year ended December 31, 2016 Parent CF Industries Subsidiary Guarantors Non- Guarantors Eliminations Consolidated (in millions) Net (loss) earnings $ (277 ) $ (304 ) $ (12 ) $ 354 $ 81 $ (158 ) Other comprehensive loss (148 ) (148 ) (68 ) (134 ) 350 (148 ) Comprehensive (loss) income (425 ) (452 ) (80 ) 220 431 (306 ) Less: Comprehensive income attributable to noncontrolling interests — — — 119 — 119 Comprehensive (losses) income attributable to common stockholders $ (425 ) $ (452 ) $ (80 ) $ 101 $ 431 $ (425 ) Year ended December 31, 2015 Parent CF Industries Subsidiary Guarantors Non- Guarantors Eliminations Consolidated (in millions) Net sales $ — $ 462 $ 4,101 $ 2,464 $ (2,719 ) $ 4,308 Cost of sales — 361 3,186 1,933 (2,719 ) 2,761 Gross margin — 101 915 531 — 1,547 Selling, general and administrative expenses 4 8 120 38 — 170 Transaction costs 46 — 7 4 — 57 Other operating—net — (8 ) 29 71 — 92 Total other operating costs and expenses 50 — 156 113 — 319 Equity in earnings of operating affiliates — — — (35 ) — (35 ) Operating (loss) earnings (50 ) 101 759 383 — 1,193 Interest expense — 285 14 (70 ) (96 ) 133 Interest income — (69 ) (25 ) (4 ) 96 (2 ) Net earnings of wholly owned subsidiaries (731 ) (802 ) (403 ) — 1,936 — Other non-operating—net — — 5 (1 ) — 4 Earnings before income taxes and equity in earnings of non-operating affiliates 681 687 1,168 458 (1,936 ) 1,058 Income tax (benefit) provision (19 ) (44 ) 385 74 — 396 Equity in earnings of non-operating affiliates—net of taxes — — 10 62 — 72 Net earnings 700 731 793 446 (1,936 ) 734 Less: Net earnings attributable to noncontrolling interest — — — 34 — 34 Net earnings attributable to common stockholders $ 700 $ 731 $ 793 $ 412 $ (1,936 ) $ 700 Year ended December 31, 2013 Parent CF Industries Other
Subsidiaries Eliminations Consolidated (in millions) $ 1,464.6 $ 1,466.4 $ 1,495.3 $ (2,893.5 ) $ 1,532.8 7.0 7.0 (40.1 ) 32.4 6.3 1,471.6 1,473.4 1,455.2 (2,861.1 ) 1,539.1 — — 72.3 (4.8 ) 67.5 $ 1,471.6 $ 1,473.4 $ 1,382.9 $ (2,856.3 ) $ 1,471.6 Year ended December 31, 2015 Parent CF Industries Subsidiary Guarantors Non- Guarantors Eliminations Consolidated (in millions) Net earnings $ 700 $ 731 $ 793 $ 446 $ (1,936 ) $ 734 Other comprehensive loss (90 ) (90 ) (98 ) (96 ) 284 (90 ) Comprehensive income 610 641 695 350 (1,652 ) 644 Less: Comprehensive income attributable to noncontrolling interest — — — 34 — 34 Comprehensive income attributable to common stockholders $ 610 $ 641 $ 695 $ 316 $ (1,652 ) $ 610 Year ended December 31, 2012 Year ended December 31, 2014 Parent CFI Other
Subsidiaries Eliminations Consolidated Parent CF Industries Subsidiary Guarantors Non- Guarantors Eliminations Consolidated (in millions) (in millions) $ — $ 3,747.9 $ 2,514.5 $ (158.4 ) $ 6,104.0 $ — $ 712 $ 4,780 $ 2,673 $ (3,422 ) $ 4,743 — 1,854.6 1,287.2 (151.1 ) 2,990.7 — 528 3,776 2,083 (3,422 ) 2,965 — 1,893.3 1,227.3 (7.3 ) 3,113.3 — 184 1,004 590 — 1,778 2.5 128.0 21.3 — 151.8 3 13 103 33 — 152 — 24.0 25.1 — 49.1 — (5 ) 26 32 — 53 2.5 152.0 46.4 — 200.9 3 8 129 65 — 205 Gain on sale of phosphate business — 764 (14 ) — — 750 — 4.9 42.1 — 47.0 — — — 43 — 43 (2.5 ) 1,746.2 1,223.0 (7.3 ) 2,959.4 Operating (losses) earnings (3 ) 940 861 568 — 2,366 — 126.8 10.1 (1.6 ) 135.3 — 247 1 (70 ) — 178 — (1.4 ) (4.5 ) 1.6 (4.3 ) — — — (1 ) — (1 ) (1,851.2 ) (792.8 ) — 2,644.0 — Net earnings of wholly owned subsidiaries (1,392 ) (969 ) (579 ) — 2,940 — — — (1.1 ) — (1.1 ) — — 2 — — 2 1,848.7 2,413.6 1,218.5 (2,651.3 ) 2,829.5 1,389 1,662 1,437 639 (2,940 ) 2,187 — 562.2 402.0 — 964.2 — (0.2 ) 58.3 — 58.1 Income tax (benefit) provision (1 ) 270 515 (11 ) — 773 Equity in earnings of non-operating affiliates—net of taxes — — — 23 — 23 1,848.7 1,851.2 874.8 (2,651.3 ) 1,923.4 1,390 1,392 922 673 (2,940 ) 1,437 — — 82.0 (7.3 ) 74.7 — — — 47 — 47 $ 1,848.7 $ 1,851.2 $ 792.8 $ (2,644.0 ) $ 1,848.7 $ 1,390 $ 1,392 $ 922 $ 626 $ (2,940 ) $ 1,390 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 49.6 49.6 23.6 (72.4 ) 50.4 1,898.3 1,900.8 898.4 (2,723.7 ) 1,973.8 — — 82.0 (6.6 ) 75.4 $ 1,898.3 $ 1,900.8 $ 816.4 $ (2,717.1 ) $ 1,898.4 Year ended December 31, 2014 Parent CF Industries Subsidiary Guarantors Non- Guarantors Eliminations Consolidated (in millions) Net earnings $ 1,390 $ 1,392 $ 922 $ 673 $ (2,940 ) $ 1,437 Other comprehensive loss (117 ) (117 ) (98 ) (110 ) 325 (117 ) Comprehensive income 1,273 1,275 824 563 (2,615 ) 1,320 Less: Comprehensive income attributable to noncontrolling interest — — — 47 — 47 Comprehensive income attributable to common stockholders $ 1,273 $ 1,275 $ 824 $ 516 $ (2,615 ) $ 1,273 Statement of Operations
Balance Sheet Year ended December 31, 2011 Parent CFI Other
Subsidiaries Eliminations Consolidated (in millions) $ — $ 3,585.3 $ 3,013.8 $ (501.2 ) $ 6,097.9 — 1,932.1 1,470.1 (199.9 ) 3,202.3 — 1,653.2 1,543.7 (301.3 ) 2,895.6 3.6 99.5 26.9 — 130.0 — 2.0 2.4 — 4.4 — (18.9 ) 39.8 — 20.9 3.6 82.6 69.1 — 155.3 — (1.2 ) 51.4 — 50.2 (3.6 ) 1,569.4 1,526.0 (301.3 ) 2,790.5 — 137.1 10.4 (0.3 ) 147.2 — (0.7 ) (1.3 ) 0.3 (1.7 ) (1,541.5 ) (618.8 ) — 2,160.3 — — (0.1 ) (0.5 ) — (0.6 ) 1,537.9 2,051.9 1,517.4 (2,461.6 ) 2,645.6 (1.3 ) 505.6 422.2 — 926.5 — (4.8 ) 46.7 — 41.9 1,539.2 1,541.5 1,141.9 (2,461.6 ) 1,761.0 — — 523.1 (301.3 ) 221.8 $ 1,539.2 $ 1,541.5 $ 618.8 $ (2,160.3 ) $ 1,539.2 Condensed, Consolidating Statement of Comprehensive Income Year ended December 31, 2011 Parent CFI Other
Subsidiaries Eliminations Consolidated (in millions) $ 1,539.2 $ 1,541.5 $ 1,141.9 $ (2,461.6 ) $ 1,761.0 (45.9 ) (45.9 ) (37.4 ) 82.6 (46.6 ) 1,493.3 1,495.6 1,104.5 (2,379.0 ) 1,714.4 — — 523.1 (301.9 ) 221.2 $ 1,493.3 $ 1,495.6 $ 581.4 $ (2,077.1 ) $ 1,493.2 December 31, 2016 Parent CF Industries Subsidiary Guarantors Non- Guarantors Consolidated (in millions) Assets Current assets: Cash and cash equivalents $ — $ 36 $ 878 $ 250 $ — $ 1,164 Restricted cash — — — 5 — 5 Accounts and notes receivable—net 20 1,259 1,418 495 (2,956 ) 236 Inventories — 164 175 — 339 Prepaid income taxes — — 839 2 — 841 Other current assets — — 59 11 — 70 Total current assets 20 1,295 3,358 938 (2,956 ) 2,655 Property, plant and equipment—net — — 131 9,521 — 9,652 Investments in affiliates 3,711 9,370 6,019 139 (19,100 ) 139 Due from affiliates 571 — — — (571 ) — Goodwill — — 2,064 281 — 2,345 Other assets — 85 101 385 (231 ) 340 Total assets $ 4,302 $ 10,750 $ 11,673 $ 11,264 $ (22,858 ) $ 15,131 Liabilities and Equity Current liabilities: Accounts and notes payable and accrued expenses $ 954 $ 418 $ 1,505 $ 717 $ (2,956 ) $ 638 Income taxes payable — — — 1 — 1 Customer advances — — 42 — — 42 Other current liabilities — — 5 — — 5 Total current liabilities 954 418 1,552 718 (2,956 ) 686 Long-term debt — 5,903 39 67 (231 ) 5,778 Deferred income taxes — 90 1,374 166 — 1,630 Due to affiliates — 571 — — (571 ) — Other liabilities — 59 270 216 — 545 Equity: Stockholders' equity: Preferred stock — — — — — — Common stock 2 — — 4,383 (4,383 ) 2 Paid-in capital 1,380 (13 ) 9,045 2,246 (11,278 ) 1,380 Retained earnings 2,365 4,120 (329 ) 668 (4,459 ) 2,365 Treasury stock (1 ) — — — — (1 ) Accumulated other comprehensive loss (398 ) (398 ) (271 ) (351 ) 1,020 (398 ) Total stockholders' equity 3,348 3,709 8,445 6,946 (19,100 ) 3,348 Noncontrolling interests — — (7 ) 3,151 — 3,144 Total equity 3,348 3,709 8,438 10,097 (19,100 ) 6,492 Total liabilities and equity $ 4,302 $ 10,750 $ 11,673 $ 11,264 $ (22,858 ) $ 15,131 December 31, 2013 December 31, 2015 Parent CF Industries Other
Subsidiaries Eliminations
and
Reclassifications Consolidated Parent CF Industries Subsidiary Guarantors Non- Guarantors Consolidated (in millions) (in millions) $ 0.1 $ 20.4 $ 1,690.3 $ — $ 1,710.8 $ 1 $ — $ 121 $ 164 $ — $ 286 — — 154.0 — 154.0 — — — 23 — 23 — 287.1 1,172.2 (1,228.4 ) 230.9 — 3.3 271.0 — 274.3 Accounts and notes receivable—net 1 2,992 2,674 782 (6,182 ) 267 Inventories — — 153 168 — 321 0.9 — 33.4 (0.9 ) 33.4 — — 181 4 — 185 — — 60.0 — 60.0 — 68.1 6.2 — 74.3 — — 92.4 — 92.4 Other current assets — 24 15 6 — 45 1.0 378.9 3,479.5 (1,229.3 ) 2,630.1 2 3,016 3,144 1,147 (6,182 ) 1,127 — — 4,101.7 — 4,101.7 — — 133 8,406 — 8,539 — 149.7 — (149.7 ) — 5,193.4 8,161.1 925.8 (13,354.3 ) 926.0 Investments in affiliates 4,303 8,148 5,718 298 (18,169 ) 298 570.7 — 1.7 (572.4 ) — 571 — — 1,643 (2,214 ) — — — 2,095.8 — 2,095.8 — — 2,064 326 — 2,390 — 679.0 — — 679.0 — 60.7 184.8 — 245.5 — 19 73 237 — 329 $ 5,765.1 $ 9,429.4 $ 10,789.3 $ (15,305.7 ) $ 10,678.1 $ 4,876 $ 11,183 $ 11,132 $ 12,057 $ (26,565 ) $ 12,683
$ 40.6 $ 354.2 $ 715.9 $ (546.6 ) $ 564.1 Accounts and notes payable and accrued expenses $ 841 $ 648 $ 1,139 $ 4,472 $ (6,182 ) $ 918 — 29.1 45.1 (0.9 ) 73.3 — — 1 4 — 5 — — 120.6 — 120.6 — — 162 — — 162 — 26.8 — — 26.8 648.4 0.9 84.9 (690.7 ) 43.5 Other current liabilities — — 114 16 — 130 689.0 411.0 966.5 (1,238.2 ) 828.3 841 648 1,416 4,492 (6,182 ) 1,215 — 3,098.1 — — 3,098.1 — 5,537 — — — 5,537 — — 982.9 (149.7 ) 833.2 — 52 672 192 — 916 — 572.4 — (572.4 ) — — 573 1,641 — (2,214 ) — — 154.5 — — 154.5 — — 325.6 — 325.6 Other liabilities — 71 311 246 — 628
— — 16.4 (16.4 ) — — — — 16 (16 ) — 0.6 — 1.1 (1.1 ) 0.6 2 — — 5 (5 ) 2 1,594.3 (12.6 ) 7,823.0 (7,810.4 ) 1,594.3 1,378 (13 ) 7,474 5,741 (13,202 ) 1,378 3,725.6 5,248.6 354.5 (5,603.1 ) 3,725.6 3,058 4,565 (179 ) 1,230 (5,616 ) 3,058 (201.8 ) — — — (201.8 ) (153 ) — — — — (153 ) (42.6 ) (42.6 ) (43.0 ) 85.6 (42.6 ) Accumulated other comprehensive loss (250 ) (250 ) (203 ) (217 ) 670 (250 ) 5,076.1 5,193.4 8,152.0 (13,345.4 ) 5,076.1 4,035 4,302 7,092 6,775 (18,169 ) 4,035 — — 362.3 — 362.3 — — — 352 — 352 5,076.1 5,193.4 8,514.3 (13,345.4 ) 5,438.4 4,035 4,302 7,092 7,127 (18,169 ) 4,387 $ 5,765.1 $ 9,429.4 $ 10,789.3 $ (15,305.7 ) $ 10,678.1 $ 4,876 $ 11,183 $ 11,132 $ 12,057 $ (26,565 ) $ 12,683 Condensed, Consolidating Balance Sheet December 31, 2012 Parent CFI Other
Subsidiaries Eliminations
and
Reclassifications Consolidated (in millions) $ — $ 440.8 $ 1,834.1 $ — $ 2,274.9 — 145.1 1,007.9 (935.6 ) 217.4 — 642.1 — (642.1 ) — — 193.1 84.8 — 277.9 — 9.5 — — 9.5 — 15.4 12.5 — 27.9 — 1,446.0 2,939.3 (1,577.7 ) 2,807.6 — 1,008.1 2,892.4 — 3,900.5 — 50.7 — (50.7 ) — — 200.8 — — 200.8 5,331.5 6,291.4 935.2 (11,622.5 ) 935.6 570.7 — 1.8 (572.5 ) — — 0.9 2,063.6 — 2,064.5 — 136.5 121.4 — 257.9 $ 5,902.2 $ 9,134.4 $ 8,953.7 $ (13,823.4 ) $ 10,166.9
$ — $ 222.6 $ 159.3 $ (15.4 ) $ 366.5 — — 829.2 (642.1 ) 187.1 — 247.9 132.8 — 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 1,152.7 (1,577.5 ) 950.2 — 1,600.0 — — 1,600.0 — — 989.5 (50.7 ) 938.8 — 572.5 — (572.5 ) — — 255.4 140.3 — 395.7
— — 65.3 (65.3 ) — 0.6 — 154.3 (154.3 ) 0.6 2,492.3 739.8 4,493.6 (5,233.3 ) 2,492.4 3,461.2 4,641.3 1,598.3 (6,239.7 ) 3,461.1 (2.3 ) — — — (2.3 ) (49.6 ) (49.6 ) (2.9 ) 52.5 (49.6 ) 5,902.2 5,331.5 6,308.6 (11,640.1 ) 5,902.2 — — 362.6 17.4 380.0 5,902.2 5,331.5 6,671.2 (11,622.7 ) 6,282.2 $ 5,902.2 $ 9,134.4 $ 8,953.7 $ (13,823.4 ) $ 10,166.9 CF INDUSTRIES HOLDINGS, INC. Year ended December 31, 2013 Parent CF Industries Other
Subsidiaries Eliminations Consolidated (in millions) $ 1,464.6 $ 1,466.4 $ 1,495.3 $ (2,893.5 ) $ 1,532.8 — 47.8 362.8 — 410.6 — (21.3 ) (13.0 ) — (34.3 ) 12.6 — — — 12.6 (13.5 ) — — — (13.5 ) — — (59.3 ) — (59.3 ) — — 5.6 — 5.6 (1,466.4 ) (1,427.0 ) (11.4 ) 2,893.5 (11.3 ) 13.5 — (13.5 ) — — — (220.8 ) (293.4 ) 514.6 0.4 — (11.8 ) (68.5 ) — (80.3 ) (0.9 ) 23.6 (176.1 ) — (153.4 ) (2.8 ) 305.4 261.5 (514.6 ) 49.5 — — (260.1 ) — (260.1 ) — — — — — — 3.9 63.6 — 67.5 7.1 166.2 1,293.5 — 1,466.8
— (58.9 ) (764.9 ) — (823.8 ) — — 12.6 — 12.6 — 13.5 — — 13.5 — — (72.5 ) — (72.5 ) — — (154.0 ) — (154.0 ) — (2.9 ) — — (2.9 ) — — 7.8 — 7.8 — (48.3 ) (971.0 ) — (1,019.3 )
— 1,498.0 — — 1,498.0 — (14.5 ) — — (14.5 ) (1,409.1 ) — — — (1,409.1 ) — (364.9 ) (553.8 ) — (918.7 ) (129.1 ) (859.0 ) (129.0 ) 988.0 (129.1 ) — 14.3 (88.0 ) — (73.7 ) 10.3 — — — 10.3 13.5 — — — 13.5 859.0 129.0 — (988.0 ) — 648.4 (941.2 ) 335.8 — 43.0 (7.0 ) (538.3 ) (435.0 ) — (980.3 ) — — (31.3 ) — (31.3 ) 0.1 (420.4 ) (143.8 ) — (564.1 ) — 440.8 1,834.1 — 2,274.9 $ 0.1 $ 20.4 $ 1,690.3 $ — $ 1,710.8 Year ended December 31, 2016 Parent CF Industries Subsidiary Guarantors Non- Guarantors Eliminations Consolidated (in millions) Operating Activities: Net (loss) earnings $ (277 ) $ (304 ) $ (12 ) $ 354 $ 81 $ (158 ) Adjustments to reconcile net (loss) earnings to net cash provided by (used in) operating activities: Depreciation and amortization — 21 55 602 — 678 Deferred income taxes — — 740 (1 ) — 739 Stock-based compensation expense 18 — — 1 — 19 Unrealized net gain on natural gas and foreign currency derivatives — — (225 ) (35 ) — (260 ) Loss on embedded derivative — — 23 — — 23 Impairment of equity method investment in PLNL — — — 134 — 134 Loss on debt extinguishment — 167 — — — 167 Loss on disposal of property, plant and equipment — — 2 8 — 10 Undistributed earnings of affiliates—net 304 92 (315 ) 9 (81 ) 9 Changes in: Intercompany AR/AP—net (4 ) (10 ) 308 (294 ) — — Accounts receivable—net — 44 (11 ) (15 ) — 18 Inventories — — (8 ) 1 — (7 ) Accrued and prepaid income taxes — — (682 ) 6 — (676 ) Accounts and notes payable and accrued expenses (8 ) (63 ) (12 ) 65 — (18 ) Customer advances — — (120 ) — — (120 ) Other—net — (6 ) (17 ) 82 — 59 Net cash provided by (used in) operating activities 33 (59 ) (274 ) 917 — 617 Investing Activities: Additions to property, plant and equipment — — (25 ) (2,186 ) — (2,211 ) Proceeds from sale of property, plant and equipment — — 4 10 — 14 Withdrawals from restricted cash funds — — — 18 — 18 Investments in unconsolidated affiliates — (44 ) (649 ) — 693 — Other—net — 6 — (4 ) — 2 Net cash used in investing activities — (38 ) (670 ) (2,162 ) 693 (2,177 ) Financing Activities: Long-term debt—net — 125 — (125 ) — — Proceeds from long-term borrowings — 1,244 — — — 1,244 Payments of long-term borrowings — (1,170 ) — — — (1,170 ) Short-term debt—net 106 (40 ) (371 ) 305 — — Proceeds from short-term borrowings — 150 — — — 150 Payments of short-term borrowings — (150 ) — — — (150 ) Payment to CHS related to credit provision — — (5 ) — — (5 ) Financing fees — (31 ) — — — (31 ) Dividends paid on common stock (280 ) (140 ) (140 ) (222 ) 502 (280 ) Issuance of noncontrolling interest in CFN — — — 2,800 — 2,800 Distributions to noncontrolling interests — — — (119 ) — (119 ) Distribution received for CHS strategic venture — — 2,000 (2,000 ) — — Dividends to/from affiliates 140 145 217 — (502 ) — Other—net — — — 693 (693 ) — Net cash (used in) provided by financing activities (34 ) 133 1,701 1,332 (693 ) 2,439 Effect of exchange rate changes on cash and cash equivalents — — — (1 ) — (1 ) (Decrease) increase in cash and cash equivalents (1 ) 36 757 86 — 878 Cash and cash equivalents at beginning of period 1 — 121 164 — 286 Cash and cash equivalents at end of period $ — $ 36 $ 878 $ 250 $ — $ 1,164
Condensed Consolidating Statement of Cash Flows 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 Subsidiary Guarantors Non- Guarantors Eliminations Consolidated (in millions) Operating Activities: Net earnings $ 700 $ 731 $ 793 $ 446 $ (1,936 ) $ 734 Adjustments to reconcile net earnings to net cash (used in) provided by operating activities: Depreciation and amortization — 14 19 447 — 480 Deferred income taxes — 17 75 (14 ) — 78 Stock-based compensation expense 16 — — 1 — 17 Unrealized net loss on natural gas and foreign currency derivatives — — 139 24 — 163 Gain on remeasurement of CF Fertilisers UK investment — — — (94 ) — (94 ) Impairment of equity method investment in PLNL — — — 62 — 62 Loss on sale of equity method investments — — — 43 — 43 Loss on disposal of property, plant and equipment — — — 21 — 21 Undistributed earnings of affiliates—net (732 ) (802 ) (402 ) (3 ) 1,936 (3 ) Due to/from affiliates—net 2 1 (135 ) 132 — — Changes in: Intercompany AR/AP—net (1 ) (104 ) 96 9 — — Accounts receivable—net — (45 ) 50 (9 ) — (4 ) Inventories — — (38 ) (33 ) — (71 ) Accrued and prepaid income taxes 2 (11 ) (105 ) (34 ) — (148 ) Accounts and notes payable and accrued expenses 9 61 14 (42 ) — 42 Customer advances — — (164 ) — — (164 ) Other—net — 31 54 (34 ) — 51 Net cash (used in) provided by operating activities (4 ) (107 ) 396 922 — 1,207 Investing Activities: Additions to property, plant and equipment — — (26 ) (2,443 ) — (2,469 ) Proceeds from sale of property, plant and equipment — — — 12 — 12 Proceeds from sale of equity method investment — — — 13 — 13 Purchase of CF Fertilisers UK, net of cash acquired — — — (552 ) — (552 ) Withdrawals from restricted cash funds — — — 63 — 63 Other—net — (82 ) (44 ) 1 82 (43 ) Net cash used in investing activities — (82 ) (70 ) (2,906 ) 82 (2,976 ) Financing Activities: Proceeds from long-term borrowings — 1,000 — — — 1,000 Short-term debt—net 554 (870 ) (1,431 ) 1,747 — — Financing fees — (47 ) — — — (47 ) Purchases of treasury stock (556 ) — — — — (556 ) Dividends paid on common stock (282 ) (282 ) (282 ) (268 ) 832 (282 ) Distributions to noncontrolling interest — — — (45 ) — (45 ) Issuances of common stock under employee stock plans 8 — — — — 8 Shares withheld for taxes (1 ) — — — — (1 ) Dividends to/from affiliates 282 282 268 — (832 ) — Other—net — — — 82 (82 ) — Net cash provided by (used in) financing activities 5 83 (1,445 ) 1,516 (82 ) 77 Effect of exchange rate changes on cash and cash equivalents — — — (19 ) — (19 ) Increase (decrease) in cash and cash equivalents 1 (106 ) (1,119 ) (487 ) — (1,711 ) Cash and cash equivalents at beginning of period — 106 1,240 651 — 1,997 Cash and cash equivalents at end of period $ 1 $ — $ 121 $ 164 $ — $ 286
Condensed Consolidating Statement of Cash Flows Year ended December 31, 2011 Parent CFI Other
Subsidiaries Eliminations Consolidated (in millions) $ 1,539.2 $ 1,541.5 $ 1,141.9 $ (2,461.6 ) $ 1,761.0 — 133.9 282.3 — 416.2 2.2 (65.6 ) 30.5 — (32.9 ) 9.8 — 0.8 — 10.6 (47.2 ) — — — (47.2 ) — 66.5 10.8 — 77.3 — (31.9 ) 40.7 — 8.8 (1,541.5 ) (915.0 ) (18.6 ) 2,461.6 (13.5 ) 975.3 (975.5 ) 0.2 — — — 601.4 (489.4 ) (147.5 ) (35.5 ) — 2.6 (1.2 ) — 1.4 — (36.0 ) (2.5 ) — (38.5 ) — (237.9 ) 339.5 — 101.6 — 337.5 (479.8 ) 147.5 5.2 — (101.1 ) (73.2 ) — (174.3 ) (0.3 ) 5.6 33.4 — 38.7 937.5 326.0 815.4 — 2,078.9
— (139.9 ) (107.3 ) — (247.2 ) — 51.9 2.8 — 54.7 — 34.8 3.1 — 37.9 — (50.4 ) — — (50.4 ) — — 31.2 — 31.2 — (103.6 ) (70.2 ) — (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 (298.7 ) — (145.7 ) 15.5 — — — 15.5 47.2 — — — 47.2 (937.5 ) (263.2 ) (298.7 ) — (1,499.4 ) — 3.3 0.3 — 3.6 — (37.5 ) 446.8 — 409.3 — 136.2 661.5 — 797.7 $ — $ 98.7 $ 1,108.3 $ — $ 1,207.0 Year ended December 31, 2014 Parent CF Industries Subsidiary Guarantors Non- Guarantors Eliminations Consolidated (in millions) Operating Activities: Net earnings $ 1,390 $ 1,392 $ 922 $ 673 $ (2,940 ) $ 1,437 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation, depletion and amortization — 7 16 370 — 393 Deferred income taxes — 136 (69 ) (49 ) — 18 Stock-based compensation expense 17 — — — — 17 Unrealized loss on derivatives — — 103 16 — 119 Gain on sale of phosphate business — (764 ) 14 — — (750 ) Loss on disposal of property, plant and equipment — — — 4 — 4 Undistributed (earnings) loss of affiliates—net (1,392 ) (969 ) (579 ) (12 ) 2,940 (12 ) Due to / from affiliates—net 9 1 (15 ) 5 — — Changes in: Intercompany AR/AP—net — 14 (143 ) 129 — — Accounts receivable—net — 1 (48 ) 86 — 39 Inventories — 4 64 (4 ) — 64 Accrued and prepaid income taxes (1 ) (18 ) (64 ) 26 — (57 ) Accounts and notes payable and accrued expenses — 77 (59 ) (71 ) — (53 ) Customer advances — — 205 — — 205 Other—net — 5 17 (25 ) — (3 ) Net cash provided by (used in) operating activities 23 (114 ) 364 1,148 — 1,421 Investing Activities: Additions to property, plant and equipment — (18 ) (24 ) (1,767 ) — (1,809 ) Proceeds from sale of property, plant and equipment — — — 11 — 11 Proceeds from sale of phosphate business — 911 — 461 — 1,372 Deposits to restricted cash funds — — — (505 ) — (505 ) Withdrawals from restricted cash funds — — — 573 — 573 Sales and maturities of short-term and auction rate securities — 5 — — — 5 Other—net — — 5 4 — 9 Net cash provided by (used in) investing activities — 898 (19 ) (1,223 ) — (344 ) Financing Activities: Proceeds from long-term borrowings — 1,494 — — — 1,494 Short-term debt—net 1,897 (2,176 ) (395 ) 674 — — Financing fees — (16 ) — — — (16 ) Dividends paid on common stock (256 ) (256 ) (256 ) (295 ) 807 (256 ) Dividends to/from affiliates 256 256 295 — (807 ) — Distributions to/from noncontrolling interest — — — (46 ) — (46 ) Purchases of treasury stock (1,935 ) — — — — (1,935 ) Shares withheld for taxes (3 ) — — — — (3 ) Issuances of common stock under employee stock plans 18 — — — — 18 Other—net — (1 ) (27 ) (15 ) — (43 ) Net cash (used in) provided by financing activities (23 ) (699 ) (383 ) 318 — (787 ) Effect of exchange rate changes on cash and cash equivalents — — — (4 ) — (4 ) Increase (decrease) in cash and cash equivalents — 85 (38 ) 239 — 286 Cash and cash equivalents at beginning of period — 21 1,278 412 — 1,711 Cash and cash equivalents at end of period $ — $ 106 $ 1,240 $ 651 $ — $ 1,997 33. Subsequent Event In 2014, we repurchased 1.2 million of the Company's common shares for $294.9 million as part of the $3.0 billion share repurchase program announced in the third quarter of 2012 (see Note 25—Stockholders' Equity). Together with the 7.3 million shares repurchased during 2013, these repurchases bring the total repurchased shares to date under this program to 8.5 million for an aggregate expenditure of $1.7 billion.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, 2013,2016, using the criteria set forth in theInternal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 1992.2013. Based on this assessment, management has concluded that our internal control over financial reporting is effective as of December 31, 2013.2016. 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, 2013,2016, which appears on page 150.the following page.(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, 20132016 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.industriesIndustries Holdings, Inc.'s (the Company) internal control over financial reporting as of December 31, 2013,2016, based on criteria established inInternal Control—Integrated Framework (1992)(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.2013,2016, based on criteria established inInternal Control—Integrated Framework (1992)(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).20132016 and 2012,2015, and the related consolidated statements of operations, comprehensive (loss) income, equity, and cash flows for each of the years in the three-year period ended December 31, 2013,2016, and our report dated February 27, 201423, 2017 expressed an unqualified opinion on those consolidated financial statements.27, 201423, 2017CF 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.our 2009the 2014 Equity and Incentive Plan (Plan).Plan. Under the 2014 Equity and Incentive 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) 637,496 $ 151.70 2,866,621 4,723,387 $ 41.06 11,699,635 100,036 $ 78.35 — 181,885 $ 17.57 — 737,532 $ 141.76 2,866,621 4,905,272 $ 40.18 11,699,635 Forour equity compensation plan, see Note 26—Stock-Based Compensation.the 2014 Equity and Incentive Plan.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.Exhibits Exhibits A list of exhibits filed with this report on Form 10-K (or incorporated by reference to exhibits previously filed or furnished) is provided in the Exhibit Index on page 157 of this report. CF INDUSTRIES HOLDINGS, INC.
Date:
February 23, 2017February 27, 2014
By:By:
/s/ W. ANTHONY WILL Signature Title(s)Date/s/ W. ANTHONY WILLW. Anthony Will President and Chief Executive Officer,Director(Principal Executive Officer)Title(s) February 27, 2014Date/s/ DENNIS P. KELLEHERDennis P. KelleherSenior Vice President andChief Financial Officer(Principal Financial Officer)February 27, 2014/s/ RICHARD A. HOKERRichard A. HokerVice President and Corporate Controller(Principal Accounting Officer)February 27, 2014/s/ STEPHEN R. WILSONStephen R. WilsonNon-Executive Chairman of the BoardFebruary 27, 2014/s/ ROBERT C. ARZBAECHERRobert C. ArzbaecherDirectorFebruary 27, 2014/s/ WILLIAM DAVISSONWilliam DavissonDirectorFebruary 27, 2014/s/ STEPHEN A. FURBACHERStephen A. FurbacherDirectorFebruary 27, 2014/s/ STEPHEN J. HAGGEStephen J. HaggeDirectorFebruary 27, 2014/s/ JOHN D. JOHNSONJohn D. JohnsonDirectorFebruary 27, 2014/s/ ROBERT G. KUHBACHRobert G. KuhbachDirectorFebruary 27, 2014/s/ EDWARD A SCHMITTEdward A. SchmittDirectorFebruary 27, 2014EXHIBIT NO.DESCRIPTION /s/ W. ANTHONY WILL February 23, 2017 W. Anthony Will /s/ DENNIS P. KELLEHER February 23, 2017 Dennis P. Kelleher /s/ RICHARD A. HOKER February 23, 2017 Richard A. Hoker /s/ STEPHEN A. FURBACHER Chairman of the Board February 23, 2017 Stephen A. Furbacher /s/ ROBERT C. ARZBAECHER Director February 23, 2017 Robert C. Arzbaecher /s/ WILLIAM DAVISSON Director February 23, 2017 William Davisson /s/ STEPHEN J. HAGGE Director February 23, 2017 Stephen J. Hagge /s/ JOHN D. JOHNSON Director February 23, 2017 John D. Johnson /s/ ROBERT G. KUHBACH Director February 23, 2017 Robert G. Kuhbach /s/ ANNE P. NOONAN Director February 23, 2017 Anne P. Noonan /s/ EDWARD A SCHMITT Director February 23, 2017 Edward A. Schmitt /s/ THERESA E. WAGLER Director February 23, 2017 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
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)
3.12.5
AmendedCombination Agreement, dated August 6, 2015, by and Restated Certificate of Incorporationamong CF Industries Holdings, Inc., Darwin Holdings Limited, Beagle Merger Company LLC and OCI N.V. (incorporated by reference to Exhibit 4.12.1 to CF Industries Holdings, Inc.'s Registration Statement’s Current Report on Form S-88-K filed with the SEC on August 11, 2005,12, 2015, File No. 333-127422)001-32597)
3.22.6
Certificate of Amendment No. 1 to the AmendedCombination Agreement, dated November 6, 2015, by and Restated Certificate of Incorporation ofamong CF Industries Holdings, Inc. effective as of May 14, 2013, Darwin Holdings Limited, Beagle Merger Company LLC and OCI N.V. (incorporated by reference to Exhibit 3.12.2 to CF B.V.’s Registration Statement on Form S-4 filed with the SEC on November 6, 2015, File No. 333-207847)2.7 Second Amendment to the Combination Agreement, dated December 20, 2015, by and among CF Industries Holdings, Inc., Darwin Holdings Limited, Beagle Merger Company LLC, OCI N.V., CF B.V. and Finch Merger Company LLC (incorporated by reference to Exhibit 2.1 to CF Industries Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on December 23, 2015, File No. 001-32597) 2.8 Termination Agreement, dated as of May 22, 2016, by and among CF Industries Holdings, Inc., OCI N.V. and certain other parties named therein (incorporated by reference to Exhibit 10.1 to CF Industries Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on May 16, 2013,23, 2016, File No. 001-32597)
3.32.9
Second Amended and Restated By-lawsLimited Liability Company Agreement of CF Industries Holdings,Nitrogen, LLC, dated as of December 18, 2015, by and between CF Industries Sales, LLC and CHS Inc., as amended through May 14, 2013 (incorporated by reference to Exhibit 3.32.1 to CF Industries Holdings, Inc.'s QuarterlyCurrent Report on Form 10-Q8-K filed with the SEC on May 9, 2013,December 21, 2015, File No. 001-32597)*
4.13.1
Specimen Common StockSecond Amended and Restated Certificate of Incorporation, as amended (incorporated by reference to Exhibit 4.1 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)4.2Rights Agreement, 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 4.4 to CF Industries Holdings, Inc.'s Registration Statement on Form S-8 filed with the SEC on August 11, 2005, File No. 333-127422)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 4.13.2 to CF Industries Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on September 3, 2010,7, 2016, File No. 001-32597)CF INDUSTRIES HOLDINGS, INC.EXHIBIT NO.DESCRIPTION 4.43.2Fourth Amended and Restated Bylaws of CF Industries Holdings, Inc., effective October 14, 2015 (incorporated by reference to Exhibit 3.1 to CF Industries Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on October 16, 2015, File No. 001-32597) 4.1 Specimen common stock certificate (incorporated by reference to Exhibit 4.2 to CF Industries Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on September 7, 2016, File No. 001-32597) 4.2 Tax Benefits Preservation Plan, dated as of September 6, 2016, between CF Industries Holdings, Inc. and Computershare Trust Company, N.A. (incorporated by reference to Exhibit 3.1 to CF Industries Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on September 7, 2016, File No. 001-32597) 4.3 Indenture, dated as of 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)
4.54.4
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) (the "2018 Notes Supplement") (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)EXHIBIT NO. 4.6
DESCRIPTION 4.5 First Supplement, dated as of November 21, 2016, relating to the 2018 Notes Supplement 4.6 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)(the "2020 Notes Supplement") (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)
4.7
First Supplement, dated as of November 21, 2016, relating to the 2020 Notes Supplement4.8 Indenture, dated as of May 23, 2013, 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 May 23, 2013, File No. 001-32597)
4.84.9
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) (the "2023 Notes Supplement") (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)
4.94.10
First Supplement, dated as of November 21, 2016, relating to the 2023 Notes Supplement4.11 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) (the "2043 Notes Supplement") (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)
10.14.12
Consent DecreeFirst Supplement, dated August 4, 2010as of November 21, 2016, relating to the 2043 Notes Supplement4.13 Third Supplemental Indenture, dated as of March 11, 2014, 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, relating to CF Industries, Inc.'s 5.150% Senior Notes due 2034 (includes form of note) (the "2034 Notes Supplement") (incorporated by reference to Exhibit 10.14.2 to CF Industries Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on August 10, 2010,March 11, 2014, File No. 001-32597)
10.24.14
First Supplement, dated as of November 21, 2016, relating to the 2034 Notes Supplement4.15 Fourth Supplemental Indenture, dated as of March 11, 2014, among CF Industries, Inc., CF Industries Holdings, Inc. and Wells Fargo Bank, National Association, as trustee, relating to CF Industries, Inc.'s 5.375% Senior Notes due 2044 (includes form of note) (the “2044 Notes Supplement”) (incorporated by reference to Exhibit 4.3 to CF Industries Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on March 11, 2014, File No. 001-32597) 4.16 First Supplement, dated as of November 21, 2016, relating to the 2044 Notes Supplement 4.17 Indenture, dated as of November 21, 2016, among CF Industries Holdings, Inc., CF Industries, Inc., the Subsidiary Guarantors (as defined therein) party thereto and Wells Fargo Bank, National Association, as trustee and collateral agent, relating to CF Industries, Inc.’s 3.400% Senior Secured Notes due 2021 (includes form of note) (incorporated by reference to Exhibit 4.1 to CF Industries Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on November 22, 2016, File No. 001-32597) 4.18 Indenture, dated as of November 21, 2016, among CF Industries Holdings, Inc., CF Industries, Inc., the Subsidiary Guarantors (as defined therein) party thereto and Wells Fargo Bank, National Association, as trustee and collateral agent, relating to CF Industries, Inc.’s 4.500% Senior Secured Notes due 2026 (includes form of note) (incorporated by reference to Exhibit 4.2 to CF Industries Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on November 22, 2016, File No. 001-32597) 4.19 Pledge and Security Agreement, dated as of November 21, 2016, among CF Industries Holdings, Inc., CF Industries, Inc., the other Guarantors (as defined therein) party thereto and Wells Fargo Bank, National Association, as collateral agent under the indenture relating to CF Industries, Inc.’s 3.400% Senior Secured Notes due 2021 (incorporated by reference to Exhibit 4.3 to CF Industries Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on November 22, 2016, File No. 001-32597) EXHIBIT NO. DESCRIPTION 4.20 Pledge and Security Agreement, dated as of November 21, 2016, among CF Industries Holdings, Inc., CF Industries, Inc., the Subsidiary Guarantors (as defined therein) party thereto and Wells Fargo Bank, National Association, as collateral agent under the indenture relating to CF Industries, Inc.’s 4.500% Senior Secured Notes due 2026 (incorporated by reference to Exhibit 4.4 to CF Industries Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on November 22, 2016, File No. 001-32597) 4.21 First Lien/First Lien Intercreditor Agreement, dated as of November 21, 2016, among Morgan Stanley Senior Funding, Inc., as authorized representative of the Credit Agreement Secured Parties, Wells Fargo Bank, National Association, as collateral agent in connection with CF Industries, Inc.’s 3.400% Senior Secured Notes due 2021 and 4.500% Senior Secured Notes due 2026 and each additional Authorized Representative from time to time party thereto for the Other First-Priority Secured Parties of the Series with respect to which it is acting in such capacity (incorporated by reference to Exhibit 4.5 to CF Industries Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on November 22, 2016, File No. 001-32597) 4.22 Note 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) 4.23 First Amendment, dated as of December 20, 2015, to the Note Purchase Agreement dated September 24, 2015, among CF Industries Holdings, Inc., CF Industries, Inc. and the noteholders 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 December 21, 2015, File No. 001-32597) 4.24 Second Amendment, dated as of September 7, 2016, to the Note Purchase Agreement, dated as of September 24, 2015, among CF Industries Holdings, Inc., CF Industries, Inc. and the noteholders 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 9, 2016, File No. 001-32597) 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)**
10.310.2
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*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)**CF INDUSTRIES HOLDINGS, INC.EXHIBIT NO.DESCRIPTION 10.410.3 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
Change in Control Severance Agreement, effective as of November 19, 2007 and amended and restated as of March 6, 2009, by and between CF Industries Holdings, Inc. and Richard A. Hoker (incorporated by reference to Exhibit (e)(9) to CF Industries Holdings, Inc.'s Solicitation/Recommendation Statement on Schedule 14D-9 on Form SC 14D9 filed with the SEC on March 23, 2009, File No. 005-80934)**
10.610.5
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 99.2 to CF Industries Holding, Inc.'s Current Report on Form 8-K filed with the SEC on February 20, 2014, File No. 001-32597)001-32597**
10.710.6
Change in Control Severance Agreement, effective as of August 1, 2007 and amended and restated as of March 6, 2009, by and between CF Industries Holdings, Inc. and Wendy S. Jablow Spertus (incorporated by reference to Exhibit (e)(8) to CF Industries Holdings, Inc.'s Solicitation/Recommendation Statement on Schedule 14D-9 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)**
10.910.8
Change in Control Severance Agreement, effective as of April 24, 2007, amended as of July 24, 2007, and amended further and restated as of 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)**
10.10EXHIBIT NO. DESCRIPTION 10.9 Change in Control Severance Agreement, effective as of July 25, 2013, by and between CF Industries Holdings, Inc. and Adam L. Hall**10.11Change 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 Stephen R. WilsonHall (incorporated by reference to Exhibit 10.110.10 to CF Industries Holdings, Inc.'s QuarterlyAnnual Report on Form 10-Q10-K filed with the SEC on November 5, 2007,February 27, 2014, File No. 001-32597)**
10.1210.10
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)**
10.1310.12
CF Industries Holdings, Inc. 2005 Equity and Incentive Plan, amended as of December 13, 2007 (incorporated by reference to Exhibit 10.15 to CF Industries Holdings, Inc.'s Annual Report on Form 10-K filed with the SEC on February 27, 2008, File No. 001-32597)**10.13 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)** CF INDUSTRIES HOLDINGS, INC.EXHIBIT NO.DESCRIPTION 10.14 Amendment, dated as of July 21, 2016, to the CF Industries Holdings, Inc. 2009 Equity and Incentive Plan (incorporated by reference to Exhibit 10.3 to CF Industries Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the SEC on August 4, 2016, File No. 001-32597)** 10.15 CF Industries Holdings, Inc. 2014 Equity and Incentive Plan (incorporated by reference to Appendix C to CF Industries Holdings, Inc.’s Definitive Proxy Statement on Schedule 14A filed with the SEC on April 3, 2014, File No. 001-32597)** 10.16 Amendment, dated as of July 21, 2016, to the CF Industries Holdings, Inc. 2014 Equity and Incentive Plan (incorporated by reference to Exhibit 10.4 to CF Industries Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the SEC on August 4, 2016, File No. 001-32597)** 10.17 CF Industries Holdings, Inc. Supplemental Benefit and Deferral Plan (incorporated by reference to Exhibit 10.1 to CF Industries Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on October 20, 2014, File No. 001-32597)** 10.18 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)**
10.1510.19
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)**
10.1610.20
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)**
10.1710.21
Form of Non-Qualified Stock Option Award Agreement*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)**
10.1810.22
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)**10.23 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 May 7, 2015, File No. 001-32597)** 10.24 Form of Amendment to Non-Qualified Stock Option Award Agreements (incorporated by reference to Exhibit 10.5 to CF Industries Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the SEC on May 7, 2015, File No. 001-32597)** 10.25 Form of Non-Qualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.23 to CF Industries Holdings, Inc.'s Annual Report on Form 10-K filed with the SEC on February 25, 2016, File No. 001-32597)** EXHIBIT NO. DESCRIPTION 10.26 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 4, 2016, File No. 001-32597)** 10.27 Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.7 to CF Industries Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the SEC on August 3, 2009, File No. 001-32597)**
10.1910.28
Form of Restricted Stock Unit Award Agreement*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, 2014, File No. 001-32597)**
10.2010.29
Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.1 to CF Industries Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the SEC on November 6, 2014, File No. 001-32597)**10.30 Form of Restricted Stock Unit Award Agreement (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)** 10.31 Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.28 to CF Industries Holdings, Inc.'s Annual Report on Form 10-K filed with the SEC on February 25, 2016, File No. 001-32597)** 10.32 Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.7 to CF Industries Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the SEC on August 4, 2016, File No. 001-32597)** 10.33 Form of Performance Restricted Stock Unit Award Agreement**10.21Letter Agreement dated as of December 18, 2013, relating(incorporated by reference to the Equity Award Agreements betweenExhibit 10.20 to CF Industries Holdings, Inc. and Stephen R. Wilson*'s Annual Report on Form 10-K filed with the SEC on February 27, 2014, File No. 001-32597)**
10.2210.34
Net Operating LossForm of Performance Restricted Stock Unit Award Agreement dated as of August 16, 2005,(incorporated by and amongreference to Exhibit 10.3 to CF Industries Holdings, Inc.,'s Quarterly Report on Form 10-Q filed with the SEC on November 6, 2014, File No. 001-32597)**10.35 Form of Performance Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.4 to CF Industries Holdings, Inc. and Existing Stockholders's Quarterly Report on Form 10-Q filed with the SEC on May 7, 2015, File No. 001-32597)**10.36 Form of Performance Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.1 to CF Industries Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the SEC on August 6, 2015, File No. 001-32597)** 10.37 Form of Performance Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.33 to CF Industries Holdings, Inc.'s Annual Report on Form 10-K filed with the SEC on February 25, 2016, File No. 001-32597)** 10.38 Form of Performance Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.8 to CF Industries Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the SEC on November 9, 2005,August 4, 2016, File No. 001-32597)**
10.39
Form of Non-Employee Director Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.3 to CF Industries Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the SEC on August 7, 2014, File No. 001-32597)**10.40 Form of Equity Award Amendment Letter Agreement, dated as of July 21, 2016 (incorporated by reference to Exhibit 10.5 to CF Industries Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the SEC on August 4, 2016, File No. 001-32597)** 10.41 Letter Agreement between Philipp P. Koch and CF Industries Holdings, Inc. (incorporated by reference to Exhibit 10.2 to CF Industries Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on December 24, 2015, File No. 001-32597)** 10.42 Commitment Letter, dated August 6, 2015, by and among Morgan Stanley Senior Funding, Inc., Goldman Sachs Bank USA and CF Industries Holdings, Inc. (incorporated by reference to Exhibit 10.1 to CF Industries Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on August 12, 2015, File No. 001-32597) EXHIBIT NO. DESCRIPTION 10.43 Third Amended and Restated Revolving Credit Agreement, dated as of MaySeptember 18, 2015, among CF Industries Holdings, Inc., the borrowers from time to time party thereto, the lenders from time to time party thereto, Morgan Stanley Senior Funding, Inc., as administrative agent, and Morgan Stanley Bank, N.A., Goldman Sachs Bank USA, Bank of Montreal, Royal Bank of Canada, The Bank of Tokyo-Mitsubishi UFJ, Ltd. and Wells Fargo Bank, National Association, as issuing banks (incorporated by reference to Exhibit 10.2 to CF Industries Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on September 23, 2015, File No. 001-32597)10.44 Amendment No. 1, 2012dated as of December 20, 2015, to the Third Amended and Restated Revolving Credit Agreement among CF Industries Holdings, Inc., CF Industries, Inc., the various lenders party thereto, Morgan Stanley Bank, N.A., asthe issuing bank,banks party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent (incorporated by reference to Exhibit 10.110.2 to CF Industries Holding,Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on May 1, 2012,December 21, 2015, File No. 001-32597)
10.2310.45
Amendment No. 2, dated as of July 29, 2016, to the Third Amended and Restated Revolving Credit Agreement dated as of April 22, 2013, among CF Industries Holdings, Inc., CF Industries, Inc., the lenders party thereto, Morgan Stanley Bank, N.A. and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Issuing Banks,the issuing banks party thereto and Morgan Stanley Senior Funding, Inc., as Administrative Agent (incorporated by reference to Exhibit 10.1 to CF Industries Holdings, Inc.'s QuarterlyCurrent Report on Form 10-Q8-K filed with the SEC on May 9, 2013,August 4, 2016, File No. 001-32597)
10.2410.46
FormAmendment No. 3, dated as of Non-Employee Director Restricted Stock AwardOctober 31, 2016, to the Third Amended and Restated Revolving Credit Agreement among CF Industries Holdings, Inc., CF Industries, Inc., Morgan Stanley Senior Funding, Inc., as administrative agent under the Existing Revolving Credit Agreement (as defined therein), the issuing banks under the Existing Revolving Credit Agreement signatory thereto, and the lenders under the Existing Revolving Credit Agreement signatory thereto (incorporated by reference to Exhibit 10.210.1 to CF Industries Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on April 27, 2009,November 3, 2016, File No. 001-32597)**
1210.47
Pledge and Security Agreement, dated as of November 21, 2016, among CF Industries Holdings, Inc., CF Industries, Inc., the Subsidiary Guarantors (as defined therein) party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent (incorporated by reference to Exhibit 10.1 to CF Industries Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on November 22, 2016, File No. 001-32597)10.48 364-Day Bridge Credit Agreement, dated as of September 18, 2015, among CF Industries Holdings, Inc., the borrowers from time to time party thereto, the lenders from time to time party thereto, and Morgan Stanley Senior Funding, Inc., as administrative agent (incorporated by reference to Exhibit 10.1 to CF Industries Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on September 23, 2015, File No. 001-32597) 10.49 10.50 Amended and Restated Nitrogen Fertilizer Purchase Agreement, dated December 18, 2015, by and between CF Industries Nitrogen, LLC and CHS Inc. (incorporated by reference to Exhibit 10.1 to CF Industries Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on 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 firmCF INDUSTRIES HOLDINGS, INC.EXHIBIT NO.DESCRIPTION 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
101
The following financial information from CF Industries Holdings, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 2013,2016, formatted in XBRL (Extensible(eXtensible Business Reporting Language) includes:: (1) Consolidated Statements of Operations, (2) Consolidated Statements of Comprehensive (Loss) 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)* 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.