Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549


FORM			10-Q


(Mark One)
☒						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2022





OR
☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission file number 001-32597

CF INDUSTRIES HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware

20-2697511

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

4 Parkway North

60015

Deerfield,

Illinois

(Zip Code)

(Address of principal executive offices)

(847) 405-2400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

common stock, par value $0.01 per share

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

~~199,260,535~~196,189,463 shares of the registrant’s common stock, par value $0.01 per share, were outstanding at ~~July 28,~~October 31, 2022.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

TABLE OF CONTENTS

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


		Three months ended June 30,				Six months ended June 30,					Three months ended September 30,				Nine months ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
		(in millions, except per share amounts)									(in millions, except per share amounts)
Net sales	Net sales	$	3,389	$	1,588	$	6,257	$	2,636	Net sales	$	2,321	$	1,362	$	8,578	$	3,998
Cost of sales	Cost of sales	1,398		1,085		2,568		1,844		Cost of sales	1,405		922		3,973		2,766
Gross margin	Gross margin	1,991		503		3,689		792		Gross margin	916		440		4,605		1,232
Selling, general and administrative expenses	Selling, general and administrative expenses	73		60		137		115		Selling, general and administrative expenses	66		52		203		167

U.K. goodwill impairment										U.K. goodwill impairment	—		259		—		259
U.K. long-lived and intangible asset impairment										U.K. long-lived and intangible asset impairment	87		236		239		236

U.K. operations restructuring	U.K. operations restructuring	162		—		162		—		U.K. operations restructuring	8		—		18		—
Other operating—net	Other operating—net	6		4		8		2		Other operating—net	25		5		33		7
Total other operating costs and expenses	Total other operating costs and expenses	241		64		307		117		Total other operating costs and expenses	186		552		493		669

Equity in earnings of operating affiliate	Equity in earnings of operating affiliate	28		11		54		22		Equity in earnings of operating affiliate	20		15		74		37
Operating earnings		1,778		450		3,436		697
Operating earnings (loss)										Operating earnings (loss)	750		(97)		4,186		600
Interest expense	Interest expense	82		46		323		94		Interest expense	46		46		369		140
Interest income	Interest income	(8)		—		(44)		—		Interest income	(12)		—		(56)		—
Loss on debt extinguishment	Loss on debt extinguishment	8		—		8		6		Loss on debt extinguishment	—		13		8		19
Other non-operating—net	Other non-operating—net	—		2		1		2		Other non-operating—net	23		(19)		24		(17)
Earnings before income taxes		1,696		402		3,148		595
Income tax provision		357		85		758		103
Earnings (loss) before income taxes										Earnings (loss) before income taxes	693		(137)		3,841		458
Income tax provision (benefit)										Income tax provision (benefit)	155		(46)		913		57

Net earnings		1,339		317		2,390		492
Net earnings (loss)										Net earnings (loss)	538		(91)		2,928		401
Less: Net earnings attributable to noncontrolling interest	Less: Net earnings attributable to noncontrolling interest	174		71		342		95		Less: Net earnings attributable to noncontrolling interest	100		94		442		189
Net earnings attributable to common stockholders		$	1,165	$	246	$	2,048	$	397
Net earnings per share attributable to common stockholders:
Net earnings (loss) attributable to common stockholders										Net earnings (loss) attributable to common stockholders	$	438	$	(185)	$	2,486	$	212
Net earnings (loss) per share attributable to common stockholders:										Net earnings (loss) per share attributable to common stockholders:
Basic	Basic	$	5.59	$	1.14	$	9.83	$	1.84	Basic	$	2.19	$	(0.86)	$	12.09	$	0.99
Diluted	Diluted	$	5.58	$	1.14	$	9.78	$	1.83	Diluted	$	2.18	$	(0.86)	$	12.04	$	0.98
Weighted-average common shares outstanding:	Weighted-average common shares outstanding:									Weighted-average common shares outstanding:
Basic	Basic	208.2		215.5		208.4		215.2		Basic	200.2		214.9		205.6		215.3
Diluted	Diluted	208.9		216.6		209.4		216.3		Diluted	200.9		214.9		206.5		216.4
Dividends declared per common share	Dividends declared per common share	$	0.40	$	0.30	$	0.70	$	0.60	Dividends declared per common share	$	0.40	$	0.30	$	1.10	$	0.90

See accompanying Notes to Unaudited Consolidated Financial Statements.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)


		Three months ended June 30,				Six months ended June 30,					Three months ended September 30,				Nine months ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
		(in millions)									(in millions)
Net earnings		$	1,339	$	317	$	2,390	$	492
Net earnings (loss)										Net earnings (loss)	$	538	$	(91)	$	2,928	$	401
Other comprehensive (loss) income:	Other comprehensive (loss) income:									Other comprehensive (loss) income:
Foreign currency translation adjustment—net of taxes	Foreign currency translation adjustment—net of taxes	(27)		10		(40)		24		Foreign currency translation adjustment—net of taxes	(9)		(26)		(49)		(2)

Defined benefit plans—net of taxes	Defined benefit plans—net of taxes	8		(1)		12		—		Defined benefit plans—net of taxes	24		6		36		6
		(19)		9		(28)		24			15		(20)		(13)		4
Comprehensive income		1,320		326		2,362		516
Comprehensive income (loss)										Comprehensive income (loss)	553		(111)		2,915		405
Less: Comprehensive income attributable to noncontrolling interest	Less: Comprehensive income attributable to noncontrolling interest	174		71		342		95		Less: Comprehensive income attributable to noncontrolling interest	100		94		442		189
Comprehensive income attributable to common stockholders		$	1,146	$	255	$	2,020	$	421
Comprehensive income (loss) attributable to common stockholders										Comprehensive income (loss) attributable to common stockholders	$	453	$	(205)	$	2,473	$	216

See accompanying Notes to Unaudited Consolidated Financial Statements.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS


		(Unaudited)					(Unaudited)
		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
		(in millions, except share and per share amounts)					(in millions, except share and per share amounts)
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	2,370	$	1,628	Cash and cash equivalents	$	2,192	$	1,628

Accounts receivable—net	Accounts receivable—net	724		497		Accounts receivable—net	721		497
Inventories	Inventories	497		408		Inventories	500		408

Prepaid income taxes	Prepaid income taxes	72		4		Prepaid income taxes	179		4
Other current assets	Other current assets	75		56		Other current assets	88		56
Total current assets	Total current assets	3,738		2,593		Total current assets	3,680		2,593
Property, plant and equipment—net	Property, plant and equipment—net	6,622		7,081		Property, plant and equipment—net	6,500		7,081
Investment in affiliate	Investment in affiliate	79		82		Investment in affiliate	86		82
Goodwill	Goodwill	2,090		2,091		Goodwill	2,088		2,091
Operating lease right-of-use assets	Operating lease right-of-use assets	227		243		Operating lease right-of-use assets	274		243
Other assets	Other assets	667		285		Other assets	652		285
Total assets	Total assets	$	13,423	$	12,375	Total assets	$	13,280	$	12,375
Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Current liabilities:	Current liabilities:					Current liabilities:

Accounts payable and accrued expenses	Accounts payable and accrued expenses	$	806	$	565	Accounts payable and accrued expenses	$	711	$	565
Income taxes payable	Income taxes payable	103		24		Income taxes payable	25		24
Customer advances	Customer advances	72		700		Customer advances	511		700
Current operating lease liabilities	Current operating lease liabilities	87		89		Current operating lease liabilities	96		89

Other current liabilities	Other current liabilities	29		54		Other current liabilities	38		54
Total current liabilities	Total current liabilities	1,097		1,432		Total current liabilities	1,381		1,432
Long-term debt	Long-term debt	2,964		3,465		Long-term debt	2,965		3,465
Deferred income taxes	Deferred income taxes	1,025		1,029		Deferred income taxes	1,010		1,029
Operating lease liabilities	Operating lease liabilities	147		162		Operating lease liabilities	185		162
Other liabilities	Other liabilities	676		251		Other liabilities	642		251
Equity:	Equity:					Equity:
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Preferred stock—$0.01 par value, 50,000,000 shares authorized	Preferred stock—$0.01 par value, 50,000,000 shares authorized	—		—		Preferred stock—$0.01 par value, 50,000,000 shares authorized	—		—
Common stock—$0.01 par value, 500,000,000 shares authorized, 2022—207,498,604 shares issued and 2021—207,603,940 shares issued		2		2
Common stock—$0.01 par value, 500,000,000 shares authorized, 2022—207,597,269 shares issued and 2021—207,603,940 shares issued						Common stock—$0.01 par value, 500,000,000 shares authorized, 2022—207,597,269 shares issued and 2021—207,603,940 shares issued	2		2
Paid-in capital	Paid-in capital	1,474		1,375		Paid-in capital	1,488		1,375
Retained earnings	Retained earnings	3,729		2,088		Retained earnings	4,087		2,088
Treasury stock—at cost, 2022—3,753,372 shares and 2021—27,962 shares		(331)		(2)
Treasury stock—at cost, 2022—9,851,898 shares and 2021—27,962 shares						Treasury stock—at cost, 2022—9,851,898 shares and 2021—27,962 shares	(863)		(2)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(285)		(257)		Accumulated other comprehensive loss	(270)		(257)
Total stockholders’ equity	Total stockholders’ equity	4,589		3,206		Total stockholders’ equity	4,444		3,206
Noncontrolling interest	Noncontrolling interest	2,925		2,830		Noncontrolling interest	2,653		2,830
Total equity	Total equity	7,514		6,036		Total equity	7,097		6,036
Total liabilities and equity	Total liabilities and equity	$	13,423	$	12,375	Total liabilities and equity	$	13,280	$	12,375

See accompanying Notes to Unaudited Consolidated Financial Statements.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)


																		Common Stockholders
																		$0.01 Par Value Common Stock		Treasury Stock		Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity		Noncontrolling Interest		Total Equity
																		(in millions, except per share amounts)
Balance as of June 30, 2022																	Balance as of June 30, 2022	$	2	$	(331)	$	1,474	$	3,729	$	(285)	$	4,589	$	2,925	$	7,514
Net earnings																	Net earnings	—		—		—		438		—		438		100		538
Other comprehensive income																	Other comprehensive income	—		—		—		—		15		15		—		15
Purchases of treasury stock																	Purchases of treasury stock	—		(532)		—		—		—		(532)		—		(532)

Issuance of $0.01 par value common stock under employee stock plans																	Issuance of $0.01 par value common stock under employee stock plans	—		—		4		—		—		4		—		4

Stock-based compensation expense																	Stock-based compensation expense	—		—		10		—		—		10		—		10

Cash dividends ($0.40 per share)																	Cash dividends ($0.40 per share)	—		—		—		(80)		—		(80)		—		(80)

Distribution declared to noncontrolling interest																	Distribution declared to noncontrolling interest	—		—		—		—		—		—		(372)		(372)

Balance as of September 30, 2022																	Balance as of September 30, 2022	$	2	$	(863)	$	1,488	$	4,087	$	(270)	$	4,444	$	2,653	$	7,097

	Common Stockholders
	$0.01 Par Value Common Stock		Treasury Stock		Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity		Noncontrolling Interest		Total Equity
	(in millions, except per share amounts)

Balance as of March 31, 2022	$	2	$	(123)	$	1,482	$	2,907	$	(266)	$	4,002	$	2,751	$	6,753
Net earnings	—		—		—		1,165		—		1,165		174		1,339
Other comprehensive loss	—		—		—		—		(19)		(19)		—		(19)
Purchases of treasury stock	—		(490)		—		—		—		(490)		—		(490)
Retirement of treasury stock	—		281		(23)		(260)		—		(2)		—		(2)

Issuance of $0.01 par value common stock under employee stock plans	—		1		3		—		—		4		—		4

Stock-based compensation expense	—		—		12		—		—		12		—		12

Cash dividends ($0.40 per share)	—		—		—		(83)		—		(83)		—		(83)

Balance as of June 30, 2022	$	2	$	(331)	$	1,474	$	3,729	$	(285)	$	4,589	$	2,925	$	7,514


Balance as of December 31, 2021	Balance as of December 31, 2021	$	2	$	(2)	$	1,375	$	2,088	$	(257)	$	3,206	$	2,830	$	6,036	Balance as of December 31, 2021	$	2	$	(2)	$	1,375	$	2,088	$	(257)	$	3,206	$	2,830	$	6,036
Net earnings	Net earnings	—		—		—		2,048		—		2,048		342		2,390		Net earnings	—		—		—		2,486		—		2,486		442		2,928
Other comprehensive loss	Other comprehensive loss	—		—		—		—		(28)		(28)		—		(28)		Other comprehensive loss	—		—		—		—		(13)		(13)		—		(13)
Purchases of treasury stock	Purchases of treasury stock	—		(590)		—		—		—		(590)		—		(590)		Purchases of treasury stock	—		(1,122)		—		—		—		(1,122)		—		(1,122)
Retirement of treasury stock	Retirement of treasury stock	—		283		(23)		(260)		—		—		—		—		Retirement of treasury stock	—		283		(23)		(260)		—		—		—		—
Acquisition of treasury stock under employee stock plans	Acquisition of treasury stock under employee stock plans	—		(23)		—		—		—		(23)		—		(23)		Acquisition of treasury stock under employee stock plans	—		(23)		—		—		—		(23)		—		(23)
Issuance of $0.01 par value common stock under employee stock plans	Issuance of $0.01 par value common stock under employee stock plans	—		1		100		—		—		101		—		101		Issuance of $0.01 par value common stock under employee stock plans	—		1		104		—		—		105		—		105

Stock-based compensation expense	Stock-based compensation expense	—		—		22		—		—		22		—		22		Stock-based compensation expense	—		—		32		—		—		32		—		32

Cash dividends ($0.70 per share)		—		—		—		(147)		—		(147)		—		(147)
Cash dividends ($1.10 per share)																		Cash dividends ($1.10 per share)	—		—		—		(227)		—		(227)		—		(227)

Distribution declared to noncontrolling interest		—		—		—		—		—		—		(247)		(247)
Distributions declared to noncontrolling interest																		Distributions declared to noncontrolling interest	—		—		—		—		—		—		(619)		(619)

Balance as of June 30, 2022		$	2	$	(331)	$	1,474	$	3,729	$	(285)	$	4,589	$	2,925	$	7,514
Balance as of September 30, 2022																		Balance as of September 30, 2022	$	2	$	(863)	$	1,488	$	4,087	$	(270)	$	4,444	$	2,653	$	7,097

(Continued)

CONSOLIDATED STATEMENTS OF EQUITY

(Continued) (Unaudited)


		Common Stockholders																	Common Stockholders
		$0.01 Par Value Common Stock		Treasury Stock		Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity		Noncontrolling Interest		Total Equity			$0.01 Par Value Common Stock		Treasury Stock		Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity		Noncontrolling Interest		Total Equity
		(in millions, except per share amounts)																	(in millions, except per share amounts)

Balance as of March 31, 2021		$	2	$	(14)	$	1,333	$	2,013	$	(305)	$	3,029	$	2,641	$	5,670
Balance as of June 30, 2021																		Balance as of June 30, 2021	$	2	$	—	$	1,357	$	2,183	$	(296)	$	3,246	$	2,712	$	5,958

Net earnings		—		—		—		246		—		246		71		317
Other comprehensive income		—		—		—		—		9		9		—		9
Net (loss) earnings																		Net (loss) earnings	—		—		—		(185)		—		(185)		94		(91)
Other comprehensive loss																		Other comprehensive loss	—		—		—		—		(20)		(20)		—		(20)
Purchases of treasury stock																		Purchases of treasury stock	—		(50)		—		—		—		(50)		—		(50)

Retirement of treasury stock		—		13		(2)		(11)		—		—		—		—

Acquisition of treasury stock under employee stock plans																		Acquisition of treasury stock under employee stock plans	—		(1)		—		—		—		(1)		—		(1)
Issuance of $0.01 par value common stock under employee stock plans	Issuance of $0.01 par value common stock under employee stock plans	—		1		18		—		—		19		—		19		Issuance of $0.01 par value common stock under employee stock plans	—		—		6		—		—		6		—		6

Stock-based compensation expense	Stock-based compensation expense	—		—		8		—		—		8		—		8		Stock-based compensation expense	—		—		7		—		—		7		—		7

Cash dividends ($0.30 per share)	Cash dividends ($0.30 per share)	—		—		—		(65)		—		(65)		—		(65)		Cash dividends ($0.30 per share)	—		—		—		(65)		—		(65)		—		(65)

Distribution declared to noncontrolling interest																		Distribution declared to noncontrolling interest	—		—		—		—		—		—		(130)		(130)

Balance as of June 30, 2021		$	2	$	—	$	1,357	$	2,183	$	(296)	$	3,246	$	2,712	$	5,958
Balance as of September 30, 2021																		Balance as of September 30, 2021	$	2	$	(51)	$	1,370	$	1,933	$	(316)	$	2,938	$	2,676	$	5,614


Balance as of December 31, 2020	Balance as of December 31, 2020	$	2	$	(4)	$	1,317	$	1,927	$	(320)	$	2,922	$	2,681	$	5,603	Balance as of December 31, 2020	$	2	$	(4)	$	1,317	$	1,927	$	(320)	$	2,922	$	2,681	$	5,603

Net earnings	Net earnings	—		—		—		397		—		397		95		492		Net earnings	—		—		—		212		—		212		189		401
Other comprehensive income	Other comprehensive income	—		—		—		—		24		24		—		24		Other comprehensive income	—		—		—		—		4		4		—		4

Purchases of treasury stock																		Purchases of treasury stock	—		(50)		—		—		—		(50)		—		(50)
Retirement of treasury stock	Retirement of treasury stock	—		13		(2)		(11)		—		—		—		—		Retirement of treasury stock	—		13		(2)		(11)		—		—		—		—
Acquisition of treasury stock under employee stock plans	Acquisition of treasury stock under employee stock plans	—		(10)		—		—		—		(10)		—		(10)		Acquisition of treasury stock under employee stock plans	—		(11)		—		—		—		(11)		—		(11)
Issuance of $0.01 par value common stock under employee stock plans	Issuance of $0.01 par value common stock under employee stock plans	—		1		26		—		—		27		—		27		Issuance of $0.01 par value common stock under employee stock plans	—		1		32		—		—		33		—		33

Stock-based compensation expense	Stock-based compensation expense	—		—		16		—		—		16		—		16		Stock-based compensation expense	—		—		23		—		—		23		—		23

Cash dividends ($0.60 per share)		—		—		—		(130)		—		(130)		—		(130)
Cash dividends ($0.90 per share)																		Cash dividends ($0.90 per share)	—		—		—		(195)		—		(195)		—		(195)

Distribution declared to noncontrolling interest		—		—		—		—		—		—		(64)		(64)
Distributions declared to noncontrolling interest																		Distributions declared to noncontrolling interest	—		—		—		—		—		—		(194)		(194)

Balance as of June 30, 2021		$	2	$	—	$	1,357	$	2,183	$	(296)	$	3,246	$	2,712	$	5,958
Balance as of September 30, 2021																		Balance as of September 30, 2021	$	2	$	(51)	$	1,370	$	1,933	$	(316)	$	2,938	$	2,676	$	5,614

See accompanying Notes to Unaudited Consolidated Financial Statements.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


		Six months ended June 30,					Nine months ended September 30,
		2022		2021			2022		2021
		(in millions)					(in millions)
Operating Activities:	Operating Activities:					Operating Activities:
Net earnings	Net earnings	$	2,390	$	492	Net earnings	$	2,928	$	401
Adjustments to reconcile net earnings to net cash provided by operating activities:	Adjustments to reconcile net earnings to net cash provided by operating activities:					Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	431		447		Depreciation and amortization	652		650
Deferred income taxes	Deferred income taxes	—		(31)		Deferred income taxes	(7)		(25)
Stock-based compensation expense	Stock-based compensation expense	22		16		Stock-based compensation expense	32		23

Loss on debt extinguishment	Loss on debt extinguishment	8		6		Loss on debt extinguishment	8		19
Unrealized net gain on natural gas derivatives	Unrealized net gain on natural gas derivatives	(50)		(6)		Unrealized net gain on natural gas derivatives	(39)		(18)
Unrealized loss on embedded derivative	Unrealized loss on embedded derivative	—		2		Unrealized loss on embedded derivative	—		2

U.K. operations restructuring asset impairment		152		—
U.K. goodwill impairment						U.K. goodwill impairment	—		259
U.K. long-lived and intangible asset impairment						U.K. long-lived and intangible asset impairment	239		236
Pension settlement loss						Pension settlement loss	24		—
Gain on sale of emission credits	Gain on sale of emission credits	(3)		—		Gain on sale of emission credits	(6)		(20)
Loss on disposal of property, plant and equipment	Loss on disposal of property, plant and equipment	—		2		Loss on disposal of property, plant and equipment	1		3
Undistributed earnings of affiliate—net of taxes	Undistributed earnings of affiliate—net of taxes	(3)		(4)		Undistributed earnings of affiliate—net of taxes	(10)		(15)
Changes in:	Changes in:					Changes in:
Accounts receivable—net	Accounts receivable—net	(239)		(137)		Accounts receivable—net	(245)		(115)
Inventories	Inventories	(99)		(9)		Inventories	(131)		(120)
Accrued and prepaid income taxes	Accrued and prepaid income taxes	12		—		Accrued and prepaid income taxes	(168)		(132)
Accounts payable and accrued expenses	Accounts payable and accrued expenses	223		85		Accounts payable and accrued expenses	111		69
Customer advances	Customer advances	(628)		(121)		Customer advances	(188)		245
Other—net	Other—net	64		(36)		Other—net	69		(69)
Net cash provided by operating activities	Net cash provided by operating activities	2,280		706		Net cash provided by operating activities	3,270		1,393
Investing Activities:	Investing Activities:					Investing Activities:
Additions to property, plant and equipment	Additions to property, plant and equipment	(129)		(181)		Additions to property, plant and equipment	(319)		(382)
Proceeds from sale of property, plant and equipment	Proceeds from sale of property, plant and equipment	1		—		Proceeds from sale of property, plant and equipment	1		—

Distributions received from unconsolidated affiliate	Distributions received from unconsolidated affiliate	4		—		Distributions received from unconsolidated affiliate	4		—

Purchase of investments held in nonqualified employee benefit trust	Purchase of investments held in nonqualified employee benefit trust	(1)		(12)		Purchase of investments held in nonqualified employee benefit trust	(1)		(13)
Proceeds from sale of investments held in nonqualified employee benefit trust	Proceeds from sale of investments held in nonqualified employee benefit trust	1		12		Proceeds from sale of investments held in nonqualified employee benefit trust	1		13
Purchase of emission credits	Purchase of emission credits	(9)		—		Purchase of emission credits	(9)		(10)
Proceeds from sale of emission credits	Proceeds from sale of emission credits	12		—		Proceeds from sale of emission credits	15		10
Other—net	Other—net	—		(1)		Other—net	—		(1)
Net cash used in investing activities	Net cash used in investing activities	(121)		(182)		Net cash used in investing activities	(308)		(383)
Financing Activities:	Financing Activities:					Financing Activities:

Payments of long-term borrowings	Payments of long-term borrowings	(507)		(255)		Payments of long-term borrowings	(507)		(518)
Financing fees	Financing fees	(4)		—		Financing fees	(4)		—
Dividends paid on common stock	Dividends paid on common stock	(147)		(130)		Dividends paid on common stock	(227)		(195)

Distributions to noncontrolling interest	Distributions to noncontrolling interest	(247)		(64)		Distributions to noncontrolling interest	(619)		(194)
Purchases of treasury stock	Purchases of treasury stock	(577)		—		Purchases of treasury stock	(1,096)		(50)
Proceeds from issuances of common stock under employee stock plans	Proceeds from issuances of common stock under employee stock plans	101		26		Proceeds from issuances of common stock under employee stock plans	106		32
Cash paid for shares withheld for taxes	Cash paid for shares withheld for taxes	(23)		(10)		Cash paid for shares withheld for taxes	(23)		(11)

Net cash used in financing activities	Net cash used in financing activities	(1,404)		(433)		Net cash used in financing activities	(2,370)		(936)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(13)		3		Effect of exchange rate changes on cash and cash equivalents	(28)		—
Increase in cash and cash equivalents	Increase in cash and cash equivalents	742		94		Increase in cash and cash equivalents	564		74
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	1,628		683		Cash and cash equivalents at beginning of period	1,628		683
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	2,370	$	777	Cash and cash equivalents at end of period	$	2,192	$	757

See accompanying Notes to Unaudited Consolidated Financial Statements.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Background and Basis of Presentation

Our mission is to provide clean energy to feed and fuel the world sustainably. With our employees focused on safe and reliable operations, environmental stewardship, and disciplined capital and corporate management, we are on a path to decarbonize our ammonia production network – the world’s largest – to enable green and blue hydrogen and nitrogen products for energy, fertilizer, emissions abatement and other industrial activities. Our ~~nine~~ nitrogen manufacturing complexes in the United States, Canada and the United Kingdom, an extensive storage, transportation and distribution network in North America, and logistics capabilities enabling a global reach underpin our strategy to leverage our unique capabilities to accelerate the world’s transition to clean energy. Our principal customers are cooperatives, independent fertilizer distributors, traders, wholesalers and industrial users. Our core product is anhydrous ammonia (ammonia), which contains 82% nitrogen and 18% hydrogen. Our nitrogen products that are upgraded from ammonia are granular urea, urea ammonium nitrate solution (UAN) and ammonium nitrate (AN). Our other nitrogen products include diesel exhaust fluid (DEF), urea liquor, nitric acid and aqua ammonia, which are sold primarily to our industrial ~~customers, and compound fertilizer products (NPKs), which are solid granular fertilizer products for which the nutrient content is a combination of nitrogen, phosphorus and potassium.~~customers.

All references to “CF Holdings,” “the Company,” “we,” “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.

The accompanying unaudited interim consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements for the year ended December 31, 2021, in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial reporting. In the opinion of management, these statements reflect all adjustments, consisting only of normal and recurring adjustments, that are necessary for the fair representation of the information for the periods presented. The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Operating results for any period presented apply to that period only and are not necessarily indicative of results for any future period.

The accompanying unaudited interim consolidated financial statements should be read in conjunction with our audited consolidated financial statements and related disclosures included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on February 24, 2022. The preparation of the unaudited interim consolidated financial statements requires us to make use of estimates and assumptions that may significantly affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the unaudited consolidated financial statements and the reported revenues and expenses for the periods presented. Such estimates and assumptions are used for, but are not limited to, net realizable value of inventories, environmental remediation liabilities, environmental and litigation contingencies, plant closure and asset retirement obligations, the cost of carbon credits required to meet environmental regulations, the cost of customer incentives, the cost to fulfill contractual commitments to our customers, useful lives of property and identifiable intangible assets, the assumptions used in the evaluation of potential impairments of property, investments, identifiable intangible assets and goodwill, income tax reserves and the assessment of the realizability of deferred tax assets, assumptions used in the determination of the funded status and annual expense of defined benefit pension and other postretirement benefit plans and the valuation of stock-based compensation awards granted to employees.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

2. Revenue Recognition

We track our revenue by product and by geography. See Note ~~17—~~18—Segment Disclosures for our revenue by reportable segment, which are Ammonia, Granular Urea, UAN, AN and Other. The following table summarizes our revenue by product and by geography (based on destination of our shipment) for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021:


		Ammonia		Granular Urea		UAN		AN		Other		Total			Ammonia		Granular Urea		UAN		AN		Other		Total
		(in millions)													(in millions)

Three months ended June 30, 2022
Three months ended September 30, 2022														Three months ended September 30, 2022
North America	North America	$	987	$	816	$	877	$	76	$	180	$	2,936	North America	$	367	$	571	$	531	$	70	$	132	$	1,671
Europe and other	Europe and other	128		17		99		177		32		453		Europe and other	164		118		205		110		53		650

Total revenue	Total revenue	$	1,115	$	833	$	976	$	253	$	212	$	3,389	Total revenue	$	531	$	689	$	736	$	180	$	185	$	2,321
Three months ended June 30, 2021
Three months ended September 30, 2021														Three months ended September 30, 2021
North America	North America	$	431	$	433	$	403	$	55	$	92	$	1,414	North America	$	279	$	386	$	324	$	48	$	94	$	1,131
Europe and other	Europe and other	28		—		31		81		34		174		Europe and other	65		—		66		70		30		231
Total revenue	Total revenue	$	459	$	433	$	434	$	136	$	126	$	1,588	Total revenue	$	344	$	386	$	390	$	118	$	124	$	1,362

Six months ended June 30, 2022
Nine months ended September 30, 2022														Nine months ended September 30, 2022
North America	North America	$	1,570	$	1,552	$	1,890	$	159	$	333	$	5,504	North America	$	1,937	$	2,123	$	2,421	$	229	$	465	$	7,175
Europe and other	Europe and other	185		46		101		317		104		753		Europe and other	349		164		306		427		157		1,403

Total revenue	Total revenue	$	1,755	$	1,598	$	1,991	$	476	$	437	$	6,257	Total revenue	$	2,286	$	2,287	$	2,727	$	656	$	622	$	8,578
Six months ended June 30, 2021
Nine months ended September 30, 2021														Nine months ended September 30, 2021
North America	North America	$	599	$	832	$	625	$	96	$	169	$	2,321	North America	$	878	$	1,218	$	949	$	144	$	263	$	3,452
Europe and other	Europe and other	66		—		41		145		63		315		Europe and other	131		—		107		215		93		546
Total revenue	Total revenue	$	665	$	832	$	666	$	241	$	232	$	2,636	Total revenue	$	1,009	$	1,218	$	1,056	$	359	$	356	$	3,998

As of ~~June~~September 30, 2022 and December 31, 2021, we had ~~$72~~$511 million and $700 million, respectively, in customer advances on our consolidated balance sheets. During the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, substantially all of the customer advances at the beginning of each respective period were recognized as revenue.

We offer cash incentives to certain customers generally based on the volume of their purchases over the fertilizer year ending June 30. Our cash incentives do not provide an option to the customer for additional product. The balances of customer incentives accrued as of ~~June~~September 30, 2022 and December 31, 2021 were not material.

We have certain customer contracts with performance obligations under which, if the customer does not take the required amount of product specified in the contract, then the customer is required to make a payment to us, the amount of which payment may vary based upon the terms and conditions of the applicable contract. As of ~~June~~September 30, 2022, excluding contracts with original durations of less than one year, and based on the minimum product tonnage to be sold and current market price estimates, our remaining performance obligations under these contracts were approximately ~~$790 million.~~$1.3 billion. We expect to recognize approximately ~~28%~~10% of these performance obligations as revenue in the remainder of 2022, approximately ~~65%~~63% as revenue during ~~2023-2024,~~2023-2025, approximately 5%11% as revenue during ~~2025-2026,~~2026-2028, and the remainder thereafter. Subject to the terms and conditions of the applicable contracts, if the customers do not satisfy their purchase obligations under such contracts, the minimum amount that they would be required to pay to us under such contracts, in the aggregate, was approximately ~~$120~~$355 million as of ~~June~~September 30, 2022. Other than the performance obligations described above, any performance obligations with our customers that were unfulfilled or partially fulfilled at December 31, 2021 will be satisfied in 2022.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

3. Net Earnings (Loss) Per Share

Net earnings (loss) per share were computed as follows:

Three months ended
June 30, Six months ended
June 30,
2022 2021 2022 2021
(in millions, except per share amounts)
Net earnings attributable to common stockholders $ 1,165 $ 246 $ 2,048 $ 397
Basic earnings per common share:
Weighted-average common shares outstanding 208.2 215.5 208.4 215.2
Net earnings attributable to common stockholders $ 5.59 $ 1.14 $ 9.83 $ 1.84
Diluted earnings per common share:
Weighted-average common shares outstanding 208.2 215.5 208.4 215.2
Dilutive common shares—stock-based awards 0.7 1.1 1.0 1.1
Diluted weighted-average common shares outstanding 208.9 216.6 209.4 216.3
Net earnings attributable to common stockholders $ 5.58 $ 1.14 $ 9.78 $ 1.83


	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
	(in millions, except per share amounts)
Net earnings (loss) attributable to common stockholders	$	438	$	(185)	$	2,486	$	212
Basic earnings (loss) per common share:
Weighted-average common shares outstanding	200.2		214.9		205.6		215.3
Net earnings (loss) attributable to common stockholders	$	2.19	$	(0.86)	$	12.09	$	0.99
Diluted earnings (loss) per common share:
Weighted-average common shares outstanding	200.2		214.9		205.6		215.3
Dilutive common shares—stock-based awards	0.7		—		0.9		1.1
Diluted weighted-average common shares outstanding	200.9		214.9		206.5		216.4
Net earnings (loss) attributable to common stockholders	$	2.18	$	(0.86)	$	12.04	$	0.98

Diluted earnings (loss) per common share is calculated using weighted-average common shares outstanding, including the dilutive effect of stock-based awards as determined under the treasury stock method. In the computation of diluted earnings (loss) per common share, potentially dilutive stock-based awards are excluded if the effect of their inclusion is anti-dilutive. Shares for anti-dilutive stock-based awards not included in the computation of diluted earnings (loss) per common share were ~~0 for the three and six months ended June 30, 2022, and 1.2 million~~zero in both the three and ~~six~~nine months ended ~~June~~September 30, ~~2021.~~2022, and 3.5 million and 1.2 million in the three and nine months ended September 30, 2021, respectively.

4. Inventories

Inventories consist of the following:


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
		(in millions)					(in millions)
Finished goods	Finished goods	$	455	$	358	Finished goods	$	464	$	358
Raw materials, spare parts and supplies	Raw materials, spare parts and supplies	42		50		Raw materials, spare parts and supplies	36		50
Total inventories	Total inventories	$	497	$	408	Total inventories	$	500	$	408

5. United Kingdom Operations ~~Proposed~~ Restructuring and Impairment Charges

~~During~~Starting in the third quarter of 2021 the United Kingdom began experiencing an energy crisis that included a substantial increase in the price of natural gas. The following summarizes the impairment and restructuring charges that have been recognized as a result of the U.K. energy crisis.

2021 Impairment

The U.K. energy crisis necessitated evaluations in the third and fourth quarters of 2021 of the long-lived assets, including definite-lived intangible assets, and goodwill of our U.K. operations to determine if their fair value had declined to below their carrying value. ~~The~~These evaluations in 2021 resulted in total goodwill impairment charges of $285 million, of which $259 million was recorded in the third quarter of 2021, and total long-lived and intangible asset impairment charges of $236 million, which were recorded in the third quarter of 2021. As of December 31, 2021, after the recognition of the goodwill impairment charges, no goodwill related to our U.K. ~~operations~~reporting units remained.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

2022 Impairment and Restructuring

First quarter 2022 — During the first quarter of 2022, we concluded that the continued impacts of the U.K. energy crisis, including further increases and volatility in natural gas prices due in part to geopolitical events as a result of Russia’s invasion of Ukraine in February 2022, triggered an additional long-lived asset impairment test. The results of this test indicated that no additional long-lived asset impairment existed as the undiscounted estimated future cash flows were in excess of the carrying values for each of the U.K. asset groups. The U.K. asset groups consist of U.K. Ammonia, U.K. AN and U.K. Other.

Second quarter 2022 — In ~~June~~the second quarter of 2022, we approved and announced our proposed plan to restructure our U.K. operations, ~~which includes our manufacturing complexes in Ince and Billingham. This plan includes permanently closing~~including the permanent closure of the Ince facility and ~~optimizing~~optimization of the remaining manufacturing operations at the Billingham facility. The Ince facility ~~has~~had been idled since September 15, 2021. As a result, in the ~~three months ended June 30,~~second quarter of 2022, we recorded total charges of $162 million as follows:

~~Table of Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

•asset impairment charges totaling $152 million, which are included in the U.K. long-lived and intangible asset impairment line item in our consolidated statement of operations, consisting of the following:

◦an impairment charge of $135 million related to property, plant and equipment that has been classified as held for abandonment at the Ince facility, including a liability of approximately $9 million for the costs of certain asset retirement activities related to the Ince site;

◦an intangible asset impairment charge of $8 million related to trade names; and

◦an impairment charge of $9 million related to the write-down of spare parts and certain raw materials at the Ince facility;

and

•a charge for post-employment benefits totaling $10 million, which is included in the U.K. operations restructuring line item in our consolidated statements of operations, related to contractual and statutory obligations due to employees whose employment would be terminated in the proposed plan.

These amounts are included in the U.K. operations restructuring line item in our consolidated statements of operations for the three and six months ended June 30, 2022. We are working with customers, vendors, regulators and others to finalize closure plans, and we expect substantially all of the restructuring activities will be completed within the next twelve months.

As a result of the proposed restructuring of our U.K. operations, we concluded that an additional impairment test was triggered in the second quarter of 2022 for the asset groups that comprise the continuing U.K. operations, consisting of U.K. Ammonia, U.K. AN and U.K. Other. The results of this long-lived asset impairment test indicated that no additional asset impairment ~~should be recorded~~existed as the undiscounted estimated future cash flows for the continuing U.K. operations were in excess of the carrying values for each of the U.K. asset groups.

Third quarter 2022 — In the third quarter of 2022, the United Kingdom continued to experience extremely high and volatile natural gas prices. Russian natural gas pipeline flows to Europe via the Nord Stream 1 pipeline ceased, causing the United Kingdom to experience unprecedented natural gas prices. In addition, the European Union announced a desire to cap the price that Europe would pay Russia for natural gas deliveries, further contributing to the uncertainty in European energy markets. Given these factors and the lack of a corresponding increase in global nitrogen product market prices, in September 2022, we temporarily idled ammonia production at our Billingham complex. As a result, we concluded that an additional impairment test was triggered for the asset groups that comprise the continuing U.K. operations. The results of our impairment test indicated that the carrying values for our U.K. Ammonia and U.K. AN asset groups exceeded the undiscounted estimated future cash flows. As a result, we recognized asset impairment charges of $87 million, primarily related to property, plant and equipment and definite-lived intangible assets, which are included in the U.K. long-lived and intangible asset impairment line item in our consolidated statement of operations. The expected cash flows used in the long-lived asset impairment analysis reflected assumptions about product selling prices and natural gas costs, as well as estimates of future production and sales volumes, operating rates, operating expenses, inflation, tax rates and capital spending. The fair value of our property, plant and equipment utilized in the long-lived asset impairment analysis was estimated using the indirect method of the cost approach by determining the reproduction cost new of the assets and applying appropriate adjustments for depreciation including an inutility adjustment based on the cash flows expected to be generated by those asset groups.

In August 2022, the final restructuring plan for our U.K. operations was approved, and decommissioning activities were initiated. As a result, in the third quarter of 2022, we incurred additional charges related to our U.K. restructuring of $8 million, primarily related to one-time termination benefits, which is included in the U.K. operations restructuring line item in our consolidated statement of operations.

We are working with customers, vendors, regulators and others to finalize closure plans of our Ince facility, and we expect substantially all of these restructuring activities will be completed within the next twelve months.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

6. Property, Plant and Equipment—Net

Property, plant and equipment—net consists of the following:


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
		(in millions)					(in millions)
Land	Land	$	66	$	68	Land	$	112	$	68
Machinery and equipment(1)	Machinery and equipment(1)	12,590		12,757		Machinery and equipment(1)	12,523		12,757
Buildings and improvements(1)	Buildings and improvements(1)	912		915		Buildings and improvements(1)	910		915
Construction in progress(1)	Construction in progress(1)	225		148		Construction in progress(1)	166		148
Property, plant and equipment(2)	Property, plant and equipment(2)	13,793		13,888		Property, plant and equipment(2)	13,711		13,888
Less: Accumulated depreciation and amortization	Less: Accumulated depreciation and amortization	7,171		6,807		Less: Accumulated depreciation and amortization	7,211		6,807
Property, plant and equipment—net	Property, plant and equipment—net	$	6,622	$	7,081	Property, plant and equipment—net	$	6,500	$	7,081

(1)As of ~~June~~September 30, 2022, machinery and equipment, buildings and improvements, and construction in progress include cumulative impairment charges of ~~$297~~$354 million, $7 million and ~~$13~~$25 million, respectively, which include impairment charges related to our U.K. operations of $135 million and $69 million recorded in the second quarter and third quarter of 2022, respectively, and $182 million recorded in 2021. As of December 31, 2021, machinery and equipment, buildings and improvements, and construction in progress include cumulative impairment charges related to our U.K. operations of $169 million, $5 million and $8 million, respectively, which were recorded in the third quarter of 2021.

(2)As of ~~June~~September 30, 2022 and December 31, 2021, we had property, plant and equipment that was accrued but unpaid of approximately ~~$51~~$60 million and $35 million, respectively. As of ~~June~~September 30, 2021 and December 31, 2020, we had property, plant and equipment that was accrued but unpaid of approximately ~~$76~~$78 million and $43 million, respectively.

Depreciation and amortization related to property, plant and equipment was $219 million and ~~$424~~$643 million for the three and ~~six~~nine months ended ~~June~~September 30, 2022, respectively, and ~~$239~~$198 million and ~~$439~~$637 million for the three and ~~six~~nine months ended ~~June~~September 30, 2021, respectively.

In June 2022, we approved and announced our proposed plan to restructure our U.K. ~~operations. This plan includes permanently closing~~operations, including the permanent closure of our Ince facility and ~~optimizing~~optimization of the remaining manufacturing operations at the Billingham facility. As a result, in the second quarter of 2022, we recorded ~~total charges of $162 million, including~~ an asset impairment charge of $135 million to write down the property, plant and equipment at the Ince facility to its estimated salvage ~~value, which are reflected in the line “U.K. operations restructuring” in our consolidated statements of operations for the three and six months ended June 30, 2022.~~value. The asset impairment consisted of $128 million related to machinery and equipment, $2 million relating to buildings and improvements,

~~Table of Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

and $5 million related to construction in progress.

In the third quarter of 2022, the United Kingdom continued to experience extremely high and volatile natural gas prices. Given the increase in the price of natural gas in the United Kingdom and the lack of a corresponding increase in global nitrogen product market prices, in September 2022, we temporarily idled ammonia production at our Billingham complex. As a result, we concluded that an additional impairment test was triggered for the asset groups that comprise the continuing U.K. operations. The results of our impairment test indicated that the carrying values for our U.K. Ammonia and U.K. AN asset groups exceeded the undiscounted estimated future cash flows. As a result, we recognized asset impairment charges of $87 million, of which $69 million related to property, plant and equipment, consisting of $57 million related to machinery and equipment and $12 million related to construction in progress. See Note 5—United Kingdom Operations ~~Proposed~~ Restructuring and Impairment Charges for additional information.

Plant turnarounds—Scheduled inspections, replacements and overhauls of plant machinery and equipment at our continuous process manufacturing facilities during a full plant shutdown are referred to as plant turnarounds. The expenditures related to turnarounds are capitalized in property, plant and equipment when incurred.

Scheduled replacements and overhauls of plant machinery and equipment during a plant turnaround include the dismantling, repair or replacement and installation of various components including piping, valves, motors, turbines, pumps, compressors and heat exchangers and the replacement of catalysts when a full plant shutdown occurs. Scheduled inspections, including required safety inspections which entail the disassembly of various components such as steam boilers, pressure vessels and other equipment requiring safety certifications, are also conducted during full plant shutdowns. Internal employee costs and overhead amounts are not considered turnaround costs and are not capitalized.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

The following is a summary of capitalized plant turnaround costs:


		Six months ended June 30,					Nine months ended September 30,
		2022		2021			2022		2021
		(in millions)					(in millions)
Net capitalized turnaround costs:	Net capitalized turnaround costs:					Net capitalized turnaround costs:
Beginning balance		$	355	$	226
Balance as of January 1						Balance as of January 1	$	355	$	226
Additions	Additions	26		89		Additions	84		215
Depreciation	Depreciation	(70)		(51)		Depreciation	(101)		(84)
Impairment	Impairment	(7)		—		Impairment	(21)		—
Effect of exchange rate changes	Effect of exchange rate changes	(4)		1		Effect of exchange rate changes	(7)		—
Ending balance		$	300	$	265
Balance as of September 30						Balance as of September 30	$	310	$	357

7. Goodwill and Other Intangible Assets

The following table shows the carrying amount of goodwill by reportable segment as of ~~June~~September 30, 2022 and December 31, 2021:


		Ammonia(1)		Granular Urea		UAN		AN(1)		Other(1)		Total			Ammonia(1)		Granular Urea		UAN		AN(1)		Other(1)		Total
		(in millions)													(in millions)
Balance as of December 31, 2021	Balance as of December 31, 2021	$	579	$	828	$	576	$	69	$	39	$	2,091	Balance as of December 31, 2021	$	579	$	828	$	576	$	69	$	39	$	2,091

Effect of exchange rate changes	Effect of exchange rate changes	(1)		—		—		—		—		(1)		Effect of exchange rate changes	(3)		—		—		—		—		(3)
Balance as of June 30, 2022		$	578	$	828	$	576	$	69	$	39	$	2,090
Balance as of September 30, 2022														Balance as of September 30, 2022	$	576	$	828	$	576	$	69	$	39	$	2,088

(1)At both ~~June~~September 30, 2022 and December 31, 2021, the carrying amount of goodwill includes accumulated impairment losses in our Ammonia, AN and Other segments of $9 million, $241 million and $35 million, ~~respectively.~~respectively, which consist of impairment charges related to our U.K. operations.

All of our identifiable intangible assets have definite lives and are presented in other assets on our consolidated balance sheets at gross carrying amount, net of accumulated amortization, as follows:


		June 30, 2022						December 31, 2021							September 30, 2022						December 31, 2021
		Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net			Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
		(in millions)													(in millions)

Customer relationships(1)	Customer relationships(1)	$	81	$	(58)	$	23	$	84	$	(60)	$	24	Customer relationships(1)	$	50	$	(35)	$	15	$	84	$	(60)	$	24
Trade names(2)	Trade names(2)	20		(10)		10		31		(10)		21		Trade names(2)	—		—		—		31		(10)		21

Total intangible assets	Total intangible assets	$	101	$	(68)	$	33	$	115	$	(70)	$	45	Total intangible assets	$	50	$	(35)	$	15	$	115	$	(70)	$	45

_______________________________________________________________________________

(1)~~At both June~~As of September 30, 2022, the gross carrying amount for customer relationships includes cumulative impairment charges related to our U.K. operations of $55 million, of which $6 million was recorded in the third quarter of 2022 and $49 million was recorded in 2021. As of December 31, 2021, the gross carrying amount for customer relationships includes cumulative impairment charges of $49 million, which were recorded in 2021.

~~Table of Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

(2)~~At June~~As of September 30, 2022, ~~the gross carrying amount for~~ trade names, ~~includes~~which are related to our U.K. operations, had been written down to zero as a result of cumulative impairment charges of $18 million, including $9 million ~~including~~recorded in the third quarter of 2022, $8 million recorded in the second quarter of 2022, and $1 million recorded in 2021. At December 31, 2021, the gross carrying amount for trade names includes cumulative impairment charges of $1 million, which were recorded in 2021.

Our customer relationships ~~and trade names~~ are being amortized over a weighted-average life of approximately 2018 years. Amortization expense of our identifiable intangible assets was $1 million and $2$3 million for the three and ~~six~~nine months ended ~~June~~September 30, 2022, respectively, and $2 million and $4$6 million for the three and ~~six~~nine months ended ~~June~~September 30, 2021, respectively. ~~The gross carrying amount and accumulated amortization of our intangible assets are also impacted by the effect of exchange rate changes.~~ Total estimated amortization expense for the remainder of 2022 is $2less than $1 million and for each of the fiscal years 2023-2027 is $4approximately $3 million.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

In the third quarter of 2022, the United Kingdom continued to experience extremely high and volatile natural gas prices. Given the increase in the price of natural gas in the United Kingdom and the lack of a corresponding increase in global nitrogen product market prices, in September 2022, we temporarily idled ammonia production at our Billingham complex. As a result, we concluded that an additional impairment test was triggered for the asset groups that comprise the continuing U.K. operations, which resulted in asset impairment charges of $87 million in our U.K. Ammonia and U.K. AN asset groups, of which $15 million related to intangible assets, consisting of $6 million related to customer relationships and $9 million related to trade names. After the impairment charge, intangible assets related to our U.K. operations were fully written off. See Note 5—United Kingdom Operations ~~Proposed~~ Restructuring and Impairment Charges for additional information.

8. Equity Method Investment

We have a 50% ownership interest in Point Lisas Nitrogen Limited (PLNL), which operates an ammonia production facility in the Republic of Trinidad and Tobago. We include our share of the net earnings from this equity method investment as an element of earnings from operations because PLNL provides additional production to our operations and is integrated with our other supply chain and sales activities in the Ammonia segment.

As of ~~June~~September 30, 2022, the total carrying value of our equity method investment in PLNL was ~~$79~~$86 million, ~~$37~~$36 million more than our share of PLNL’s book value. The excess is attributable to the purchase accounting impact of our acquisition of the investment in PLNL and reflects the revaluation of property, plant and equipment. The increased basis for property, plant and equipment is being amortized over a remaining period of approximately 11 years. Our equity in earnings of PLNL is different from our ownership interest in income reported by PLNL due to amortization of this basis difference.

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 ~~$77~~$61 million and ~~$151~~$212 million for the three and ~~six~~nine months ended ~~June~~September 30, 2022, respectively, and ~~$37~~$30 million and ~~$63~~$93 million for the three and ~~six~~nine months ended ~~June~~September 30, 2021, respectively.

9. Fair Value Measurements

Our cash and cash equivalents and other investments consist of the following:


		June 30, 2022									September 30, 2022
		Cost Basis		Unrealized Gains		Unrealized Losses		Fair Value			Cost Basis		Unrealized Gains		Unrealized Losses		Fair Value
		(in millions)									(in millions)
Cash	Cash	$	210	$	—	$	—	$	210	Cash	$	157	$	—	$	—	$	157
Cash equivalents:	Cash equivalents:									Cash equivalents:
U.S. and Canadian government obligations	U.S. and Canadian government obligations	1,942		—		—		1,942		U.S. and Canadian government obligations	1,813		—		—		1,813
Other debt securities	Other debt securities	218		—		—		218		Other debt securities	222		—		—		222
Total cash and cash equivalents	Total cash and cash equivalents	$	2,370	$	—	$	—	$	2,370	Total cash and cash equivalents	$	2,192	$	—	$	—	$	2,192

Nonqualified employee benefit trusts	Nonqualified employee benefit trusts	16		1		—		17		Nonqualified employee benefit trusts	16		—		—		16


	December 31, 2021
	Cost Basis		Unrealized Gains		Unrealized Losses		Fair Value
	(in millions)
Cash	$	121	$	—	$	—	$	121
Cash equivalents:
U.S. and Canadian government obligations	1,452		—		—		1,452
Other debt securities	55		—		—		55
Total cash and cash equivalents	$	1,628	$	—	$	—	$	1,628

Nonqualified employee benefit trusts	17		3		—		20

1112

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

December 31, 2021
Cost Basis Unrealized
Gains Unrealized
Losses Fair Value
(in millions)
Cash $ 121 $ — $ — $ 121
Cash equivalents:
U.S. and Canadian government obligations 1,452 — — 1,452
Other debt securities 55 — — 55
Total cash and cash equivalents $ 1,628 $ — $ — $ 1,628
Nonqualified employee benefit trusts 17 3 — 20

Under our short-term investment policy, we may invest our 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. Securities issued by governmental entities 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.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present assets and liabilities included in our consolidated balance sheets as of ~~June~~September 30, 2022 and December 31, 2021 that are recognized at fair value on a recurring basis, and indicate the fair value hierarchy utilized to determine such fair value:


		June 30, 2022									September 30, 2022
		Total Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			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)
Cash equivalents	Cash equivalents	$	2,160	$	2,160	$	—	$	—	Cash equivalents	$	2,035	$	2,035	$	—	$	—

Nonqualified employee benefit trusts	Nonqualified employee benefit trusts	17		17		—		—		Nonqualified employee benefit trusts	16		16		—		—
Derivative assets	Derivative assets	22		—		22		—		Derivative assets	26		—		26		—
Derivative liabilities	Derivative liabilities	(3)		—		(3)		—		Derivative liabilities	(20)		—		(20)		—
Embedded derivative liability	Embedded derivative liability	(15)		—		(15)		—		Embedded derivative liability	(15)		—		(15)		—


	December 31, 2021
	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	$	1,507	$	1,507	$	—	$	—

Nonqualified employee benefit trusts	20		20		—		—
Derivative assets	16		—		16		—
Derivative liabilities	(47)		—		(47)		—
Embedded derivative liability	(15)		—		(15)		—

Cash Equivalents

As of ~~June~~September 30, 2022 and December 31, 2021, our 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.

~~Table of Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

Nonqualified Employee Benefit Trusts

We maintain trusts associated with certain nonqualified supplemental pension plans. The fair values of the trust assets are based on daily quoted prices in an active market, which represents the net asset values of the shares held in the trusts, and are included on our consolidated balance sheets in other assets. Debt securities are accounted for as available-for-sale securities, and changes in fair value are reported in other comprehensive income. Changes in the fair value of available-for-sale equity securities in the trust assets are recognized through earnings.

Derivative Instruments

The derivative instruments that we use are primarily natural gas fixed price swaps, basis swaps and options traded in the over-the-counter markets with multi-national commercial banks, other major financial institutions or large energy companies. The natural gas derivative 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 natural gas derivative contracts settle using primarily a NYMEX futures price index. 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

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

curves supplied by an industry-recognized independent third party. See Note ~~13—~~14—Derivative Financial Instruments for additional information.

Embedded Derivative Liability

Under the terms of our strategic venture with CHS Inc. (CHS), if our credit rating as determined by two of three specified credit rating agencies is below certain levels, we are required to make a non-refundable yearly payment of $5 million to ~~CHS. Since~~CHS until the earlier of the date that our credit rating is upgraded to or above such levels by two of the three specified credit rating agencies or February 1, 2026. Beginning in 2016, our credit ratings ~~have been~~were below ~~certain~~such levels and, as a result, we made an annual payment of $5 million to CHS in the fourth quarter of each year. These payments will continue on a yearly basis until the earlier of the date that our credit rating is upgraded to or above certain levels by two of the three specified credit rating agencies or February 1, 2026.year from 2016 through 2021. This obligation ishas been recognized on our consolidated balance sheets as an embedded derivative and ishas been included within other current liabilities and other liabilities. As of both ~~June~~September 30, 2022 and December 31, 2021, the embedded derivative liability was $15 million.

The inputs into the fair value measurement with respect to the embedded derivative liability include the probability of future upgrades and downgrades of our credit rating based on historical credit rating movements of other public companies and the discount 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 Level 2.

Our credit rating was upgraded above certain levels in July 2022 by one of the specified credit rating agencies and subsequent to the end of the third quarter, in October 2022, by a second specified rating agency. As a result of these upgrades, we are not required to make a $5 million annual payment to CHS in the fourth quarter of 2022.

See Note ~~14—~~15—Noncontrolling Interest for additional information regarding our strategic venture with CHS.

Financial Instruments

The carrying amount and estimated fair value of our financial instruments are as follows:

June 30, 2022 December 31, 2021
Carrying
Amount Fair Value Carrying
Amount Fair Value
(in millions)
Long-term debt $ 2,964 $ 2,881 $ 3,465 $ 4,113


	September 30, 2022				December 31, 2021
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(in millions)
Long-term debt	$	2,965	$	2,643	$	3,465	$	4,113

The fair value of our long-term debt was based on quoted prices for identical or similar liabilities in markets that are not active or valuation models in which all significant inputs and value drivers are observable and, as a result, they are classified as Level 2 inputs.

The carrying amounts of cash and cash equivalents, as well as instruments included in other current assets and other current liabilities that meet the definition of financial instruments, approximate fair values because of their short-term maturities.

~~Table of Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

We also have assets and liabilities that may be measured at fair value on a nonrecurring basis; that is, the assets and liabilities are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment, when there is allocation of purchase price in an acquisition or when a new liability is being established that requires fair value measurement. These include long-lived assets, goodwill and other intangible assets and investments in unconsolidated subsidiaries, such as equity method investments, which may be written down to fair value as a result of impairment. In the case of property, plant and equipment held for abandonment, as described in Note 5—United Kingdom Operations ~~Proposed~~ Restructuring and Impairment Charges, fair value was measured as the estimated salvage value of such assets, which was immaterial. The fair value measurements related to each of these rely primarily on Company-specific inputs and the Company’s assumptions about the use of the assets. Since certain of the Company’s assumptions would involve inputs that are not observable, these fair values would reside within Level 3 of the fair value hierarchy.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

10. Income Taxes

For the three months ended ~~June~~September 30, 2022, we recorded an income tax provision of ~~$357~~$155 million on pre-tax income of ~~$1.70 billion, or an effective tax rate of 21.1%, compared to an income tax provision of $85 million on pre-tax income of $402~~$693 million, or an effective tax rate of ~~21.2%~~22.3%, compared to an income tax benefit of $46 million on pre-tax loss of $137 million, or an effective tax rate of 34.3%, for the three months ended ~~June~~September 30, 2021.

For the ~~six~~three months ended ~~June~~September 30, 2022, our income tax provision includes $18 million of income tax expense to record a valuation allowance in the United Kingdom due to the uncertainty surrounding the realization of the deferred tax assets as a result of the impairment described in Note 5—United Kingdom Operations Restructuring and Impairment Charges.

For the nine months ended September 30, 2022, we recorded an income tax provision of ~~$758~~$913 million on pre-tax income of ~~$3.15~~$3.84 billion, or an effective tax rate of ~~24.1%~~23.8%, compared to an income tax provision of ~~$103~~$57 million on pre-tax income of ~~$595~~$458 million, or an effective tax rate of ~~17.4%~~12.3%, for the ~~six~~nine months ended ~~June~~September 30, 2021.

For the ~~six~~nine months ended ~~June~~September 30, 2022, our income tax provision includes $18 million of income tax expense to record a valuation allowance in the United Kingdom, $22 million of income tax benefit due to share-based compensation activity and $78 million of income tax provision related to the Canada Revenue Agency Competent Authority Matter, as discussed below.

For the ~~six~~nine months ended ~~June~~September 30, 2021, we did not record an income tax benefit related to the goodwill impairment described in Note 5—United Kingdom Operations Restructuring and Impairment Charges, above, as the impairment is non-deductible for income tax purposes. For the nine months ended September 30, 2021, our income tax provision includes a ~~$22~~$36 million benefit reflecting the impact of agreement on certain issues related to U.S. federal income tax ~~audits.~~audits, including the reversal of an accrual for unrecognized tax benefits.

Our effective tax rate is also impacted by earnings attributable to the noncontrolling interest in CF Industries Nitrogen, LLC (CFN), as our consolidated income tax provision does not include a tax provision on the earnings attributable to the noncontrolling interest. Our effective tax rate for the three months ended ~~June~~September 30, 2022 of ~~21.1%~~22.3%, which is based on pre-tax income of ~~$1.70 billion,~~$693 million, including ~~$174~~$100 million of earnings attributable to the noncontrolling interest, would be ~~2.4~~3.7 percentage points higher if based on pre-tax income exclusive of the ~~$174~~$100 million of earnings attributable to the noncontrolling interest. Our effective tax rate for the three months ended ~~June~~September 30, 2021 of ~~21.2%~~34.3%, which is based on pre-tax ~~income~~loss of ~~$402~~$137 million, including ~~$71~~$94 million of earnings attributable to the noncontrolling interest, would be ~~4.6~~14.0 percentage points ~~higher~~lower if based on pre-tax ~~income~~loss exclusive of the ~~$71~~$94 million of earnings attributable to the noncontrolling interest.

Our effective tax rate for the ~~six~~nine months ended ~~June~~September 30, 2022 of ~~24.1%~~23.8%, which is based on pre-tax income of ~~$3.15~~$3.84 billion, including ~~$342~~$442 million of earnings attributable to the noncontrolling interest, would be ~~2.9~~3.1 percentage points higher if based on pre-tax income exclusive of the ~~$342~~$442 million of earnings attributable to the noncontrolling interest. Our effective tax rate for the ~~six~~nine months ended ~~June~~September 30, 2021 of ~~17.4%~~12.3%, which is based on pre-tax income of ~~$595~~$458 million, including ~~$95~~$189 million of earnings attributable to the noncontrolling interest, would be ~~3.3~~8.7 percentage points higher if based on pre-tax income exclusive of the ~~$95~~$189 million of earnings attributable to the noncontrolling interest.

Canada Revenue Agency Competent Authority Matter

In 2016, the Canada Revenue Agency (CRA) and Alberta Tax and Revenue Administration (Alberta TRA) issued Notices of Reassessment for tax years 2006 through 2009 to one of our Canadian affiliates asserting a disallowance of certain patronage deductions. We filed Notices of Objection with respect to the Notices of Reassessment with the CRA and Alberta TRA and posted letters of credit in lieu of paying the additional tax liability assessed. The letters of credit serve as security until the matter is resolved. In 2018, the matter, including the related transfer pricing topic regarding the allocation of profits between Canada and the United States, was accepted for consideration under the bilateral settlement provisions of the U.S.-Canada tax treaty (the Treaty) by the United States and Canadian competent authorities, and included tax years 2006 through 2011. In the second quarter of 2021, the Company submitted the transfer pricing aspect of the matter into the arbitration process under the terms of the Treaty.

~~Table of Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

In February 2022, we were informed that a decision was reached by the arbitration panel for tax years 2006 through 2011. In March 2022, we received further details of the results of the arbitration proceedings and the settlement provisions between the United States and Canadian competent authorities, and we accepted the decision of the arbitration panel. Under the terms of the arbitration decision, additional income for tax years 2006 through 2011 ~~will be~~is subject to tax in Canada, resulting in our having additional Canadian tax liability for those tax years of approximately $129 million, based on current estimates. ~~We expect~~In the third quarter of 2022, $81 million of this ~~resulting Canadian~~ tax liability ~~plus~~and $66 million of related interest ~~of approximately $103 million, will be~~was assessed inand paid. As a result, the ~~second half of 2022 and that payment of those amounts, aggregating to approximately $232 million, based on current estimates, will be due in the second half of 2022. The~~ letters of credit we had posted in lieu of paying the additional tax liability assessed by the Notices of Reassessment were cancelled. We expect the remaining tax liability and related interest will be ~~cancelled upon payment~~assessed and paid in the fourth quarter of ~~the additional tax and interest to Canada.~~2022. Due primarily

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

to the availability of additional foreign tax credits to offset in part the increased Canadian tax referenced above, the Company will then file amended tax returns in the United States to request a refund of tax overpaid.

In the ~~six~~nine months ended ~~June~~September 30, 2022, as a result of the impact of these events on our Canadian and U.S. federal and state income taxes, we recognized an income tax provision of $78 million, reflecting the net impact of $129 million of accrued income taxes payable to Canada for tax years 2006 to 2011, partially offset by net income tax receivables of approximately $51 million in the United States, and we accrued net interest of ~~$104~~$103 million, primarily reflecting the impact of estimated interest payable to Canada. Of the $78 million of income tax provision and ~~$104~~$103 million of net interest expense recognized in the ~~six~~nine months ended ~~June~~September 30, 2022, ~~$2 million~~a reduction of ~~income tax provision and $5~~$1 million of net interest expense was recognized in the three months ended ~~June~~September 30, 2022.

Transfer pricing ~~reserves~~positions

As a result of the outcome of the arbitration decision discussed above, we also evaluated our transfer pricing positions between Canada and the United States for open years 2012 and after. Based on this evaluation, ~~and our evaluation during the three months ended June 30, 2022,~~ we recorded the following in the ~~six~~nine months ended ~~June~~September 30, 2022:

•liabilities for unrecognized tax benefits of approximately $314 million with a corresponding income tax provision, and accrued interest of approximately ~~$116~~$123 million related to the liabilities for unrecognized tax benefits, and

•noncurrent income tax receivables of approximately $359 million with a corresponding income tax benefit, and accrued interest income of approximately ~~$30~~$33 million related to the noncurrent income tax receivables.

In the ~~six~~nine months ended ~~June~~September 30, 2022, the impact of these evaluations of transfer pricing positions on our consolidated statement of operations, including ~~$26~~$29 million of net deferred income tax provision for other transfer pricing tax effects, was ~~$19~~$16 million of income tax benefit and ~~$86~~$90 million of net interest expense before tax ($9398 million after tax).

Of the ~~$19~~$16 million of income tax benefit and ~~$86~~$90 million of net interest expense recognized in the ~~six~~nine months ended ~~June~~September 30, 2022, ~~$21~~$3 million of income tax ~~benefit~~provision and ~~$23~~$4 million of net interest expense ($245 million after tax) was recognized in the three months ended ~~June~~September 30, 2022.

Unrecognized tax benefits

As of ~~June~~September 30, 2022, the total amount of our unrecognized tax benefits was ~~$351~~$329 million, and the total amounts accrued for interest and penalties related to income taxes included in other liabilities was ~~$125~~$123 million, which primarily reflects the impacts of the evaluation of our transfer pricing positions. As of December 31, 2021, the total amount of our unrecognized tax benefits was $27 million and the total amounts accrued for interest and penalties related to income taxes was $4 million. We expect that the ultimate outcome of these unrecognized tax benefits related to transfer pricing ~~reserves~~ will not have a material net impact on our results of operations, financial condition or cash flows. However, we can provide no assurance as to the ultimate outcome. Based on the information currently available, we believe we have adequately reserved for the open tax years.

11. Pension Retiree Annuity Purchase

On July 15, 2022, we entered into an agreement with an insurance company to purchase a non-participating group annuity contract and transfer approximately $375 million of our primary U.S. defined benefit pension plan’s projected benefit obligation, subject to customary closing conditions. The transaction closed on July 22, 2022 and was funded with plan assets. Under the transaction, the insurance company assumed responsibility for pension benefits and annuity administration for approximately 4,000 retirees or their beneficiaries. As a result of this transaction, in the third quarter of 2022, we remeasured the plan's projected benefit obligation and plan assets, and we recognized a non-cash pre-tax pension settlement loss of $24 million, reflecting the unamortized net unrecognized postretirement benefit costs related to the settled obligations, with a corresponding offset to accumulated other comprehensive loss.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

~~11.~~12. Financing Agreements

Revolving Credit Agreement

We have a senior unsecured revolving credit agreement (the Revolving Credit Agreement), which provides for a revolving credit facility of up to $750 million with a maturity of December 5, 2024. 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, capital expenditures, acquisitions, share repurchases and other general corporate purposes.

Borrowings under the Revolving Credit Agreement may be denominated in U.S. dollars, Canadian dollars, euros and British pounds, and bear interest at a per annum rate equal to, at our option, an applicable eurocurrency rate or base rate plus, in either case, a specified margin. We are required to pay an undrawn commitment fee on the undrawn portion of the commitments under the Revolving Credit Agreement and customary letter of credit fees. The specified margin and the amount of the commitment fee depend on CF Holdings’ credit rating at the time.

As of ~~June~~September 30, 2022, we had unused borrowing capacity under the Revolving Credit Agreement of $750 million and no outstanding letters of credit. There were no borrowings outstanding under the Revolving Credit Agreement as of ~~June~~September 30, 2022 or December 31, 2021, or during the ~~six~~nine months ended ~~June~~September 30, 2022.

The Revolving Credit Agreement contains representations and warranties and affirmative and negative covenants, including financial covenants. As of ~~June~~September 30, 2022, we were in compliance with all covenants under the Revolving Credit Agreement.

Letters of Credit

In addition to the letters of credit that may be issued under the Revolving Credit Agreement, as described above, we have also entered into a bilateral agreement with capacity to issue up to $350 million of letters of credit, reflecting an increase of $100 million in May 2022. As of ~~June~~September 30, 2022, approximately ~~$275~~$197 million of letters of credit were outstanding under this agreement.

Senior Notes

Long-term debt presented on our consolidated balance sheets as of ~~June~~September 30, 2022 and December 31, 2021 consisted of the following debt securities issued by CF Industries:


		Effective Interest Rate	June 30, 2022				December 31, 2021					Effective Interest Rate	September 30, 2022				December 31, 2021
			Principal		Carrying Amount(1)		Principal		Carrying Amount(1)				Principal		Carrying Amount(1)		Principal		Carrying Amount(1)
			(in millions)										(in millions)
Public Senior Notes:	Public Senior Notes:										Public Senior Notes:

3.450% due June 2023	3.450% due June 2023	3.665%	$	—	$	—	$	500	$	499	3.450% due June 2023	3.665%	$	—	$	—	$	500	$	499
5.150% due March 2034	5.150% due March 2034	5.293%	750		741		750		741		5.150% due March 2034	5.293%	750		741		750		741
4.950% due June 2043	4.950% due June 2043	5.040%	750		741		750		742		4.950% due June 2043	5.040%	750		742		750		742
5.375% due March 2044	5.375% due March 2044	5.478%	750		740		750		741		5.375% due March 2044	5.478%	750		740		750		741
Senior Secured Notes:	Senior Secured Notes:										Senior Secured Notes:

4.500% due December 2026(2)	4.500% due December 2026(2)	4.783%	750		742		750		742		4.500% due December 2026(2)	4.783%	750		742		750		742
Total long-term debt	Total long-term debt		$	3,000	$	2,964	$	3,500	$	3,465	Total long-term debt		$	3,000	$	2,965	$	3,500	$	3,465

(1)Carrying amount is net of unamortized debt discount and deferred debt issuance costs. Total unamortized debt discount was $7 million and $8 million as of ~~both June~~September 30, 2022 and December 31, 2021, respectively, and total deferred debt issuance costs were $28 million and $27 million as of ~~June~~September 30, 2022 and December 31, 2021, respectively.

(2)Effective August 23, 2021, these notes are no longer secured, in accordance with the terms of the applicable indenture.

As of ~~June~~September 30, 2022, under the indentures (including the applicable supplemental indentures) governing the senior notes due 2034, 2043 and 2044 identified in the table above (the Public Senior Notes), each series of Public Senior Notes was guaranteed by CF Holdings.

1617

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

As of ~~June~~September 30, 2022, under the terms of the indenture governing the 4.500% senior secured notes due December 2026 (the 2026 Notes) identified in the table above, the 2026 Notes were guaranteed by CF Holdings. Until August 23, 2021, the 2026 Notes were guaranteed by certain subsidiaries of CF Industries. The requirement for subsidiary guarantees of the 2026 Notes was eliminated, and all subsidiary guarantees were automatically released, as a result of an investment grade rating event under the terms of the indenture governing the 2026 Notes on August 23, 2021.

On April 21, 2022, we redeemed in full all of the $500 million outstanding principal amount of the 3.450% senior notes due June 2023 (the 2023 Notes) in accordance with the optional redemption provisions in the indenture governing the 2023 Notes. The total aggregate redemption price paid in connection with the redemption of the 2023 Notes, which was funded with cash on hand, was $513 million, including accrued interest. As a result, we recognized a loss on debt extinguishment of $8 million, consisting primarily of the premium paid on the redemption of the $500 million principal amount of the 2023 Notes prior to their scheduled maturity.

On September 10, 2021, we redeemed $250 million principal amount, representing one-third of the $750 million principal amount outstanding immediately prior to such redemption, of the 2023 Notes, in accordance with the optional redemption provisions in the indenture governing the 2023 Notes. The total aggregate redemption price paid in connection with the redemption of the 2023 Notes, which was funded with cash on hand, was approximately $265 million, including accrued interest. As a result, we recognized a loss on debt extinguishment of $13 million in the third quarter of 2021, consisting primarily of a premium paid on the redemption of the $250 million principal amount of the 2023 Notes prior to their scheduled maturity.

On March 20, 2021, we redeemed in full all of the $250 million outstanding principal amount of the 3.400% senior secured notes due December 2021 (the 2021 Notes) in accordance with the optional redemption provisions in the indenture governing the 2021 Notes. The total aggregate redemption price paid in connection with the redemption of the 2021 Notes, which was funded with cash on hand, was $258 million, including accrued interest. As a result, we recognized a loss on debt extinguishment of $6 million, consisting primarily of the premium paid on the redemption of the ~~2021 Notes prior to their scheduled maturity.~~

~~On April 21, 2022, we redeemed in full all of the $500~~$250 million ~~outstanding~~ principal amount of the 3.450% senior notes due June 2023 (the 2023 Notes) in accordance with the optional redemption provisions in the indenture governing the 2023 Notes. The total aggregate redemption price paid in connection with the redemption of the 2023 Notes was $513 million, including accrued interest. As a result, we recognized a loss on debt extinguishment of $8 million, consisting primarily of the premium paid on the redemption of the 20232021 Notes prior to their scheduled maturity.

Interest on the Public Senior Notes and the 2026 Notes is payable semiannually, and the Public Senior Notes and the 2026 Notes are redeemable at our option, in whole at any time or in part from time to time, at specified make-whole redemption prices.

~~12.~~13. Interest Expense

Details of interest expense are as follows:


		Three months ended June 30,				Six months ended June 30,					Three months ended September 30,				Nine months ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
		(in millions)									(in millions)
Interest on borrowings(1)	Interest on borrowings(1)	$	38	$	44	$	80	$	90	Interest on borrowings(1)	$	38	$	43	$	118	$	133
Fees on financing agreements(1)	Fees on financing agreements(1)	2		2		4		4		Fees on financing agreements(1)	2		3		6		7
Interest on tax liabilities(2)	Interest on tax liabilities(2)	42		—		240		—		Interest on tax liabilities(2)	6		—		246		—
Interest capitalized	Interest capitalized	—		—		(1)		—		Interest capitalized	—		—		(1)		—
Total interest expense	Total interest expense	$	82	$	46	$	323	$	94	Total interest expense	$	46	$	46	$	369	$	140

(1)See Note ~~11—~~12—Financing Agreements for additional information.

(2)See Note 10—Income Taxes for additional information.

~~13.~~

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

14. Derivative Financial Instruments

We 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 products. From time to time, we may also use derivative financial instruments to reduce our exposure to changes in foreign currency exchange rates. The derivatives that we use to reduce our exposure to changes in prices for natural gas are primarily natural gas fixed price swaps, basis swaps and options traded in the over-the-counter markets. These natural gas derivatives settle using primarily a NYMEX futures price index, which represents the basis for fair value at any given time. We enter into natural gas derivative contracts with respect to natural gas to be consumed by us in the future, and settlements of those derivative contracts are scheduled to coincide with our anticipated purchases of natural gas 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. As a result, changes in fair value of these contracts are recognized in earnings. As of ~~June~~September 30, 2022, we had natural gas derivative contracts covering certain periods through March 2023.

As of ~~June~~September 30, 2022, our open natural gas derivative contracts consisted of natural gas fixed price swaps, ~~and~~ basis swaps and options for ~~11.2~~48.2 million ~~MMBtus.~~MMBtus of natural gas. As of December 31, 2021, we had open natural gas derivative contracts consisting of natural gas fixed price swaps, basis swaps and options for 60.0 million MMBtus of natural gas. For the ~~six~~nine months ended ~~June~~September 30, 2022, we used derivatives to cover approximately ~~24%~~16% of our natural gas consumption.

~~Table of Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

The effect of derivatives in our consolidated statements of operations is shown in the table below.


		Gain (loss) recognized in income									Gain (loss) recognized in income
			Three months ended June 30,				Six months ended June 30,						Three months ended September 30,			Nine months ended September 30,
		Location	2022		2021		2022		2021				Location	2022		2021		2022		2021
			(in millions)										(in millions)

Unrealized net gains on natural gas derivatives		Cost of sales	$	17	$	—	$	50	$	6
Realized net (losses) gains on natural gas derivatives		Cost of sales	(9)		—		8		(3)
Unrealized net (losses) gains on natural gas derivatives												Unrealized net (losses) gains on natural gas derivatives	Cost of sales	$	(11)	$	12	$	39	$	18
Realized net gains (losses) on natural gas derivatives												Realized net gains (losses) on natural gas derivatives	Cost of sales	12		—		20		(3)
Gain on net settlement of natural gas derivatives due to Winter Storm Uri	Gain on net settlement of natural gas derivatives due to Winter Storm Uri	Cost of sales	—		—		—		112			Gain on net settlement of natural gas derivatives due to Winter Storm Uri	Cost of sales	—		—		—		112
Net derivative gains	Net derivative gains		$	8	$	—	$	58	$	115		Net derivative gains		$	1	$	12	$	59	$	127

Gain on net settlement of natural gas derivatives due to Winter Storm Uri

We also enter into supply agreements to facilitate the availability of natural gas to operate our plants. When we purchase natural gas under these agreements, we intend to take physical delivery for use in our plants. Certain of these supply agreements allow us to fix the price of the deliveries for the following month using an agreed upon first of month price. We utilize the Normal Purchase Normal Sales (NPNS) derivative scope exception for these fixed price contracts and therefore, we do not account for them as derivatives.

In the first quarter of 2021, the central portion of the United States experienced extreme and unprecedented cold weather due to the impact of Winter Storm Uri. Certain natural gas suppliers and natural gas pipelines declared force majeure events due to frozen equipment. This occurred at the same time as large increases in natural gas demand were occurring due to the extreme cold temperatures. Due to these unprecedented factors, several states declared a state of emergency and natural gas was redirected for residential usage. We net settled certain natural gas contracts with our suppliers and received prevailing market prices, which were in excess of our cost. We no longer qualified for the NPNS derivative scope exception for the natural gas that was net settled with our suppliers due to the impact of Winter Storm Uri. As a result, we recognized a gain of $112 million from the net settlement of these natural gas contracts, which is reflected in cost of sales in our consolidated statement of operations for the ~~six~~nine months ended ~~June~~September 30, 2021.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

The fair values of derivatives on our consolidated balance sheets are shown below. As of ~~June~~September 30, 2022 and December 31, 2021, ~~NaN~~none of our derivative instruments were designated as hedging instruments. See Note 9—Fair Value Measurements for additional information on derivative fair values.

Asset Derivatives Liability Derivatives
Balance Sheet Location June 30,
2022 December 31, 2021 Balance Sheet
Location June 30,
2022 December 31, 2021
(in millions) (in millions)
Natural gas derivatives Other current assets $ 22 $ 16 Other current liabilities $ (3) $ (47)

Asset Derivatives

Liability Derivatives

Balance Sheet Location

September 30,
2022

December 31, 2021

Balance Sheet
Location

September 30,
2022

December 31, 2021

(in millions)

Natural gas derivatives

Other current assets

Other current liabilities

(20)

(47)

Most of our International Swaps and Derivatives Association (ISDA) agreements contain credit-risk-related contingent features such as cross default provisions. In the event of certain defaults or termination events, our counterparties may request early termination and net settlement of certain derivative trades, or under certain ISDA agreements, may require us to collateralize derivatives in a net liability position. As of ~~June~~September 30, 2022 and December 31, 2021, the aggregate fair value of the derivative instruments with credit-risk-related contingent features in net liability positions was zero and $31 million, respectively, which also approximates the fair value of the assets that may be needed to settle the obligations if the credit-risk-related contingent features were triggered at the reporting dates. The credit support documents executed in connection with certain of our ISDA agreements generally provide us and our counterparties the right to set off collateral against amounts owing under the ISDA agreements upon the occurrence of a default or a specified termination event. As of ~~June~~September 30, 2022 and December 31, 2021, we had 0no cash collateral on deposit with counterparties for derivative contracts.

The following table presents amounts relevant to offsetting of our derivative assets and liabilities as of ~~June~~September 30, 2022 and December 31, 2021:

~~Table of Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~


		Amounts presented in consolidated balance sheets(1)		Gross amounts not offset in consolidated balance sheets							Amounts presented in consolidated balance sheets(1)		Gross amounts not offset in consolidated balance sheets
				Financial instruments		Cash collateral received (pledged)		Net amount					Financial instruments		Cash collateral received (pledged)		Net amount
		(in millions)									(in millions)
June 30, 2022
September 30, 2022										September 30, 2022
Total derivative assets	Total derivative assets	$	22	$	—	$	—	$	22	Total derivative assets	$	26	$	—	$	—	$	26
Total derivative liabilities	Total derivative liabilities	(3)		—		—		(3)		Total derivative liabilities	(20)		—		—		(20)
Net derivative assets	Net derivative assets	$	19	$	—	$	—	$	19	Net derivative assets	$	6	$	—	$	—	$	6
December 31, 2021	December 31, 2021									December 31, 2021
Total derivative assets	Total derivative assets	$	16	$	—	$	—	$	16	Total derivative assets	$	16	$	—	$	—	$	16
Total derivative liabilities	Total derivative liabilities	(47)		—		—		(47)		Total derivative liabilities	(47)		—		—		(47)
Net derivative liabilities	Net derivative liabilities	$	(31)	$	—	$	—	$	(31)	Net derivative liabilities	$	(31)	$	—	$	—	$	(31)

(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.

We do not believe the contractually allowed netting, close-out netting or setoff of amounts owed to, or due from, the counterparties to our ISDA agreements would have a material effect on our financial position.

~~14.~~

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

15. Noncontrolling Interest

We have a strategic venture with CHS under which CHS owns an equity interest in CFN, a subsidiary of CF Holdings, which represents approximately 11% of the membership interests of CFN. We own the remaining membership interests. Under the terms of CFN’s limited liability company agreement, each member’s interest will reflect, over time, the impact of the profitability of CFN, any member contributions made to CFN and withdrawals and distributions received from CFN. For financial reporting purposes, the assets, liabilities and earnings of the strategic venture are consolidated into our financial statements. CHS’ interest in the strategic venture is recorded in noncontrolling interest in our consolidated financial statements.

A reconciliation of the beginning and ending balances of noncontrolling interest and distributions payable to noncontrolling interest in our consolidated balance sheets is provided below.


		2022		2021			2022		2021

		(in millions)					(in millions)
Noncontrolling interest:	Noncontrolling interest:					Noncontrolling interest:
Balance as of January 1	Balance as of January 1	$	2,830	$	2,681	Balance as of January 1	$	2,830	$	2,681

Earnings attributable to noncontrolling interest	Earnings attributable to noncontrolling interest	342		95		Earnings attributable to noncontrolling interest	442		189
Declaration of distributions payable	Declaration of distributions payable	(247)		(64)		Declaration of distributions payable	(619)		(194)

Balance as of June 30		$	2,925	$	2,712
Balance as of September 30						Balance as of September 30	$	2,653	$	2,676
Distributions payable to noncontrolling interest:	Distributions payable to noncontrolling interest:					Distributions payable to noncontrolling interest:
Balance as of January 1	Balance as of January 1	$	—	$	—	Balance as of January 1	$	—	$	—
Declaration of distributions payable	Declaration of distributions payable	247		64		Declaration of distributions payable	619		194
Distributions to noncontrolling interest	Distributions to noncontrolling interest	(247)		(64)		Distributions to noncontrolling interest	(619)		(194)

Balance as of June 30		$	—	$	—
Balance as of September 30						Balance as of September 30	$	—	$	—

CHS also receives deliveries pursuant to a 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 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. Additionally, under the terms of the strategic

~~Table of Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

venture, we recognized an embedded derivative related to our credit rating. See Note 9—Fair Value Measurements for additional information.

On July 31, 2022, the CFN Board of Managers approved semi-annual distribution payments for the distribution period ended June 30, 2022 in accordance with CFN’s limited liability company agreement. On August 1, 2022, CFN distributed $371 million to CHS for the distribution period ended June 30, 2022.

~~15.~~16. Stockholders’ Equity

2022 Equity and Incentive Plan

In May 2022, our shareholders approved the CF Industries Holdings, Inc. 2022 Equity and Incentive Plan (the Plan), including 2.5 million new shares of the Company’s common stock available for grant thereunder as part of our pay-for-performance compensation program, which we use to provide incentives that are aligned with the interests of our shareholders. The Plan replaced the CF Industries Holdings, Inc. 2014 Equity and Incentive Plan and permits grants of stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards, which in each case may be conditioned on performance criteria, to employees and certain consultants of the Company and its subsidiaries and non-employee directors of the Company.

Treasury Stock

On November 3, 2021, our Board of Directors (the Board) authorized the repurchase of up to $1.5 billion of CF Holdings common stock through December 31, 2024 (the 2021 Share Repurchase Program). Repurchases under the 2021 Share Repurchase Program may be made from time to time in the open market, through privately negotiated transactions, through block transactions or otherwise. The manner, timing and amount of repurchases will be determined by our management based on the evaluation of market conditions, stock price, and other factors. See Note 19—Subsequent Event for additional information.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

In the ~~six~~nine months ended ~~June~~September 30, 2022, we repurchased approximately ~~6.6~~12.7 million shares under the 2021 Share Repurchase Program for ~~$590 million,~~$1.12 billion, of which ~~$14~~$27 million was accrued and unpaid as of ~~June~~September 30, 2022.

In the ~~six~~nine months ended ~~June~~September 30, 2022, we retired approximately 3.2 million shares of repurchased stock, and we held approximately ~~3.8~~9.9 million shares of treasury stock as of ~~June~~September 30, 2022.

Accumulated Other Comprehensive Loss

Changes to accumulated other comprehensive loss and the impact on other comprehensive income (loss) are as follows:


		Foreign Currency Translation Adjustment		Unrealized Gain on Derivatives		Defined Benefit Plans			Accumulated Other Comprehensive Income (Loss)			Foreign Currency Translation Adjustment		Unrealized Gain on Derivatives		Defined Benefit Plans		Accumulated Other Comprehensive Income (Loss)
		(in millions)						(in millions)
Balance as of December 31, 2020	Balance as of December 31, 2020	$	(144)	$	4	$	(180)		$	(320)	Balance as of December 31, 2020	$	(144)	$	4	$	(180)	$	(320)

Loss arising during the period	Loss arising during the period	—		—		(3)			(3)		Loss arising during the period	—		—		(4)		(4)
Reclassification to earnings(1)	Reclassification to earnings(1)	—		—		5			5		Reclassification to earnings(1)	—		—		9		9

Effect of exchange rate changes and deferred taxes	Effect of exchange rate changes and deferred taxes	24		—		(2)			22		Effect of exchange rate changes and deferred taxes	(2)		—		1		(1)
Balance as of June 30, 2021		$	(120)	$	4	$	(180)		$	(296)
Balance as of September 30, 2021											Balance as of September 30, 2021	$	(146)	$	4	$	(174)	$	(316)

Balance as of December 31, 2021	Balance as of December 31, 2021	$	(141)	$	4	$	(120)		$	(257)	Balance as of December 31, 2021	$	(141)	$	4	$	(120)	$	(257)

Gain arising during the period	Gain arising during the period	—		—		3			3		Gain arising during the period	—		—		3		3

Reclassification to earnings(1)		—		—		2			2
Reclassification to earnings(2)											Reclassification to earnings(2)	—		—		26		26

Effect of exchange rate changes and deferred taxes	Effect of exchange rate changes and deferred taxes	(40)		—		7			(33)		Effect of exchange rate changes and deferred taxes	(49)		—		7		(42)
Balance as of June 30, 2022		$	(181)	$	4	$	(108)		$	(285)
Balance as of September 30, 2022											Balance as of September 30, 2022	$	(190)	$	4	$	(84)	$	(270)

(1)Reclassifications out of accumulated other comprehensive loss to the consolidated statements of operations during the three and ~~six~~nine months ended ~~June~~September 30, ~~2022 and~~ 2021 were not material.

(2)Reclassifications out of accumulated other comprehensive loss to the consolidated statements of operations during the three and nine months ended September 30, 2022 include anon-cash pre-tax pension settlement loss of $24 million. See Note 11—Pension Retiree Annuity Purchase for additional information.

~~Table of Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

~~16.~~17. Contingencies

Litigation

West Fertilizer Co.

On April 17, 2013, there was a fire and explosion at the West Fertilizer Co. fertilizer storage and distribution facility in West, Texas. According to published reports, 15 people were killed and approximately 200 people were injured in the incident, and the fire and explosion damaged or destroyed a number of homes and buildings around the facility. Various subsidiaries of CF Industries Holdings, Inc. (the CF Entities) were 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 were 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 did not own or operate the facility or directly sell our products to West Fertilizer Co., products that the CF Entities manufactured and sold to others were delivered to the facility and may have been stored at the West facility at the time of the incident.

All but two of the claims, including all wrongful death and personal injury claims, have been resolved pursuant to confidential settlements that have been or we expect will be fully funded by insurance. The two remaining subrogation and statutory indemnification claims have not yet been set for trial. We believe we have strong legal and factual defenses and intend to continue defending the CF Entities vigorously in the remaining lawsuits. Based upon currently available information, we expect any potential loss to be immaterial and fully indemnified by insurance.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

Other Litigation

From time to time, we are subject to ordinary, routine legal proceedings related to the usual conduct of our business, including proceedings regarding public utility and transportation rates, environmental matters, taxes and permits relating to the operations of our various plants and facilities. Based on the information available as of the date of this filing, we believe that the ultimate outcome of these routine matters will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Environmental

From time to time, we receive notices from governmental agencies or third parties alleging that we are a potentially responsible party at certain cleanup sites under the Comprehensive Environmental Response, Compensation, and Liability Act or other environmental cleanup laws. In 2011, we received a notice from the Idaho Department of Environmental Quality (IDEQ) that alleged that we were a potentially responsible party for the cleanup of a former phosphate mine site we owned in the late 1950s and early 1960s located in Georgetown Canyon, Idaho. The current owner of the property and a former mining contractor received similar notices for the site. In 2014, we and the current property owner entered into a Consent Order with IDEQ and the U.S. Forest Service to conduct a remedial investigation and feasibility study of the site. AThe remedial investigation was submitted to the agencies in 2021. The next step will be a risk assessment, followed by a feasibility study. In 2015, we and several other parties received a notice that the U.S. Department of the Interior and other trustees intended to undertake a natural resource damage assessment for 18 former phosphate mines and 3three former processing facilities in southeast Idaho. The Georgetown Canyon former mine and processing facility was included in the group of former mines and processing facilities identified by the trustees. In June 2021, we received another notice from the U.S. Department of the Interior that the natural resource damage trustees were commencing a ‘subsequent’ phase of the natural resource damage assessment, but no further details were provided with respect to said assessment. Because the former Georgetown Canyon mine site is still in the risk assessment and feasibility study stage, we are not able to estimate at this time our potential liability, if any, with respect to the cleanup of the site or a possible claim for natural resource damages. However, based on the results of the site investigation conducted to date, we do not expect the remedial or financial obligations to which we may be subject involving this or other cleanup sites will have a material adverse effect on our consolidated financial position, results of operations or cash flows.

2123

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

~~17.~~18. Segment Disclosures

Our reportable segments consist of Ammonia, Granular Urea, UAN, AN and Other. 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 primarily of selling, general and administrative expenses and other operating—net) and non-operating expenses (consisting primarily of interest and income taxes) are centrally managed and are not included in the measurement of segment profitability reviewed by management.

Our assets, with the exception of goodwill, are not monitored by or reported to our chief operating decision maker by segment; therefore, we do not present total assets by segment. Goodwill by segment is presented in Note 7—Goodwill and Other Intangible Assets. Segment data for sales, cost of sales and gross margin for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 are presented in the table below.


		Ammonia(1)		Granular Urea(2)		UAN(2)		AN(2)		Other(2)		Consolidated			Ammonia(1)		Granular Urea(2)		UAN(2)		AN(2)		Other(2)		Consolidated
		(in millions)													(in millions)
Three months ended June 30, 2022
Three months ended September 30, 2022														Three months ended September 30, 2022
Net sales	Net sales	$	1,115	$	833	$	976	$	253	$	212	$	3,389	Net sales	$	531	$	689	$	736	$	180	$	185	$	2,321
Cost of sales	Cost of sales	442		360		343		151		102		1,398		Cost of sales	353		394		414		136		108		1,405
Gross margin	Gross margin	$	673	$	473	$	633	$	102	$	110	1,991		Gross margin	$	178	$	295	$	322	$	44	$	77	916
Total other operating costs and expenses(3)	Total other operating costs and expenses(3)											241		Total other operating costs and expenses(3)											186
Equity in earnings of operating affiliate	Equity in earnings of operating affiliate											28		Equity in earnings of operating affiliate											20
Operating earnings	Operating earnings											$	1,778	Operating earnings											$	750
Three months ended June 30, 2021
Three months ended September 30, 2021														Three months ended September 30, 2021
Net sales	Net sales	$	459	$	433	$	434	$	136	$	126	$	1,588	Net sales	$	344	$	386	$	390	$	118	$	124	$	1,362
Cost of sales	Cost of sales	333		241		296		120		95		1,085		Cost of sales	262		200		233		122		105		922
Gross margin	Gross margin	$	126	$	192	$	138	$	16	$	31	503		Gross margin	$	82	$	186	$	157	$	(4)	$	19	440
Total other operating costs and expenses												64
Total other operating costs and expenses(3)														Total other operating costs and expenses(3)											552
Equity in earnings of operating affiliate	Equity in earnings of operating affiliate											11		Equity in earnings of operating affiliate											15
Operating earnings												$	450
Operating loss														Operating loss											$	(97)

Six months ended June 30, 2022
Nine months ended September 30, 2022														Nine months ended September 30, 2022
Net sales	Net sales	$	1,755	$	1,598	$	1,991	$	476	$	437	$	6,257	Net sales	$	2,286	$	2,287	$	2,727	$	656	$	622	$	8,578
Cost of sales	Cost of sales	722		630		688		322		206		2,568		Cost of sales	1,075		1,024		1,102		458		314		3,973
Gross margin	Gross margin	$	1,033	$	968	$	1,303	$	154	$	231	3,689		Gross margin	$	1,211	$	1,263	$	1,625	$	198	$	308	4,605
Total other operating costs and expenses(3)	Total other operating costs and expenses(3)											307		Total other operating costs and expenses(3)											493
Equity in earnings of operating affiliate	Equity in earnings of operating affiliate											54		Equity in earnings of operating affiliate											74
Operating earnings	Operating earnings											$	3,436	Operating earnings											$	4,186
Six months ended June 30, 2021
Nine months ended September 30, 2021														Nine months ended September 30, 2021
Net sales	Net sales	$	665	$	832	$	666	$	241	$	232	$	2,636	Net sales	$	1,009	$	1,218	$	1,056	$	359	$	356	$	3,998
Cost of sales	Cost of sales	413		505		526		215		185		1,844		Cost of sales	675		705		759		337		290		2,766
Gross margin	Gross margin	$	252	$	327	$	140	$	26	$	47	792		Gross margin	$	334	$	513	$	297	$	22	$	66	1,232
Total other operating costs and expenses												117
Total other operating costs and expense(3)														Total other operating costs and expense(3)											669

Equity in earnings of operating affiliate	Equity in earnings of operating affiliate											22		Equity in earnings of operating affiliate											37
Operating earnings	Operating earnings											$	697	Operating earnings											$	600

_______________________________________________________________________________

(1)Cost of sales and gross margin for the Ammonia segment for the ~~six~~nine months ended ~~June~~September 30, 2021 include a $112 million gain on the net settlement of certain natural gas contracts with our suppliers. See Note ~~13—~~14—Derivative Financial Instruments for additional information.

(2)The cost of the products that are upgraded into other products is transferred at cost into the upgraded product results.

(3)Total other operating costs and expenses for the three and ~~six~~nine months ended ~~June~~September 30, 2022 include ~~$162~~$95 million and $257 million, respectively, of asset impairment and restructuring charges related to our U.K. operations. Total other operating costs and expenses for the three and nine months ended September 30, 2021 include $495 million of ~~restructuring~~asset impairment charges related to our U.K. operations. See Note 5—United Kingdom Operations ~~Proposed~~ Restructuring and Impairment Charges for additional information.

2224

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

~~18.~~19. Subsequent Event

On ~~July 15,~~November 2, 2022, ~~we entered into an agreement with an insurance company~~the Board authorized the repurchase of up to ~~purchase a non-participating group annuity contract~~$3 billion of CF Holdings common stock commencing upon completion of the 2021 Share Repurchase Program and ~~transfer approximately $375 million of our primary U.S. defined benefit pension plan’s projected benefit obligation, subject~~effective through December 31, 2025 (the 2022 Share Repurchase Program). Repurchases under the 2022 Share Repurchase Program may be made from time to customary closing conditions. The transaction closed on July 22, 2022 and was funded with plan assets. Under the transaction, the insurance company will assume responsibility for pension benefits and annuity administration for approximately 4,000 retirees or their beneficiaries. As a result of this transaction,time in the ~~third quarter~~open market, through privately negotiated transactions, block transactions or otherwise. The manner, timing and amount of ~~2022, we~~repurchases will ~~remeasure the plan's projected benefit obligation and plan assets and we expect to recognize a non-cash pre-tax pension settlement loss of approximately $25 million,~~be determined by our management based on ~~current interest rates, reflecting~~ the ~~unamortized net unrecognized postretirement benefit costs~~evaluation of market conditions, stock price, and other factors. See Note 16—Stockholders’ Equity for information related to the ~~settled obligations, with a corresponding offset to accumulated other comprehensive loss.~~

2021 Share Repurchase Program, which expires on December 31, 2024.

2325

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

You should read the following discussion and analysis in conjunction with our annual consolidated financial statements and related notes and our discussion and analysis of financial condition and results of operations that were included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the Securities and Exchange Commission (SEC) on February 24, 2022, as well as Item 1. Financial Statements in Part I of this Quarterly Report on Form 10-Q. 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 to CF Industries Holdings, Inc. only 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, and references to tonnes refer to metric tons. Notes referenced in this discussion and analysis refer to the notes to our unaudited interim consolidated financial statements in Item 1. Financial Statements in Part I of this Quarterly Report on Form 10-Q. The following is an outline of the discussion and analysis included herein:

•Overview of CF Holdings

◦Our Company

◦Our Commitment to a Clean Energy Economy

•Market Conditions and Current Developments

•Financial Executive Summary

•Items Affecting Comparability of Results

•Consolidated Results of Operations

◦~~Second~~Third Quarter of 2022 Compared to ~~Second~~Third Quarter of 2021

◦~~Six~~Nine Months Ended ~~June~~September 30, 2022 Compared to ~~Six~~Nine Months Ended ~~June~~September 30, 2021

•Operating Results by Business Segment

•Liquidity and Capital Resources

•Critical Accounting Estimates

•Forward-Looking Statements

Overview of CF Holdings

Our Company

Our principal assets as of ~~June~~September 30, 2022 include:

•five U.S. nitrogen manufacturing facilities located in Donaldsonville, Louisiana (the largest nitrogen complex in the world); Port Neal, Iowa; Yazoo City, Mississippi; Verdigris, Oklahoma; and Woodward, Oklahoma. These facilities are wholly owned directly or indirectly by CF Industries Nitrogen, LLC (CFN), of which we own approximately 89% and CHS Inc. (CHS) owns the remainder (see Note ~~14—~~15—Noncontrolling Interest for additional information on our strategic venture with CHS);

•two Canadian nitrogen manufacturing facilities located in Medicine Hat, Alberta (the largest nitrogen complex in Canada) and Courtright, Ontario;

•a United Kingdom nitrogen manufacturing facility located in Billingham;

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

•two United Kingdom nitrogen manufacturing facilities located in Billingham and Ince (see “Market Conditions and Current Developments—United Kingdom Operations, Proposed Restructuring and Impairment Charges,” below for information regarding the proposed restructuring of our U.K. operations that was announced in June 2022);

•an extensive system of terminals and associated transportation equipment located primarily in the Midwestern United States; and

•a 50% interest in Point Lisas Nitrogen Limited (PLNL), an ammonia production joint venture located in the Republic of Trinidad and Tobago (Trinidad) that we account for under the equity method.

We previously operated a United Kingdom nitrogen manufacturing facility located in Ince. In June 2022, we approved and announced our proposed plan to restructure our U.K. operations, including the permanent closure of our Ince facility. In August 2022, the final restructuring plan was approved, and decommissioning activities were initiated. See “Market Conditions and Current Developments—United Kingdom Operations,” below for more information.

Our Commitment to a Clean Energy Economy

We are taking significant steps to support a global hydrogen and clean fuel economy, through the production of green and blue ammonia. Since ammonia is one of the most efficient ways to transport and store hydrogen and is also a fuel in its own right, we believe that the Company, as the world’s largest producer of ammonia with an unparalleled manufacturing and distribution network and deep technical expertise, is uniquely positioned to fulfill anticipated demand for hydrogen and ammonia from green and blue sources. Our approach includes green ammonia production, which refers to ammonia produced through a carbon-free process, and blue ammonia production, which relates to ammonia produced by conventional processes but with CO2 removed through carbon capture and sequestration (CCS) and other certified carbon abatement projects.

In October 2020, we announced an initial green ammonia project at our Donaldsonville complex. In April 2021, we signed an engineering and procurement contract with thyssenkrupp to supply a 20 MW alkaline water electrolysis plant to produce green hydrogen at our Donaldsonville complex. Construction and installation, which is being managed by us, began in the fourth quarter of 2021 and is expected to finish in 2023, with an estimated total cost of approximately $100 million. The cost of the project is expected to fit within our annual capital expenditure budgets. We will integrate the green hydrogen generated by the electrolysis plant into existing ammonia synthesis loops to enable the production of approximately 20,000 tons per year of green ammonia. We believe that, when completed in 2023, the Donaldsonville green ammonia project will be the largest of its kind in North America.

In July 2022, we and Mitsui & Co., Ltd. signed a joint development agreement for the companies’ proposed plans for an export-oriented greenfield ammonia production facility in the southeastern United States to produce blue ammonia. ~~The companies~~In September 2022, we acquired the land for the project. We expect to commence during the ~~second half~~fourth quarter of 2022 a front-end engineering design (FEED) study, which typically takes nine to twelve months ~~from the start date~~ to complete. A final investment decision as to whether to move forward with construction of the facility is expected to occur in the second half of 2023. Construction and commissioning of a new world-scale capacity ammonia plant typically takes approximately four years from the time construction begins.

We have also announced steps to produce blue ammonia from our existing ammonia production network, including a project to construct a CO2 dehydration and compression facility at our Donaldsonville complex to enable the transport and sequestration of the ammonia process byproduct. Engineering activities and procurement of major equipment for the facility are in progress, and modification of the site’s existing equipment to allow integration with existing operations has begun. Construction of the dehydration and compression units at the Donaldsonville complex is expected to begin in 2023, with an estimated total cost of $200 million. Once the units are in service and sequestration is initiated, we expect that the Donaldsonville complex will have the capacity to dehydrate and compress up to 2 million tons per year of CO2 ~~and will be able to produce up to 1.7 million tons~~enabling the production of blue ~~ammonia per year. Construction of the dehydration~~ammonia. In October 2022, we announced that we had entered into a definitive CO2 offtake agreement with ExxonMobil to transport and compression units at the Donaldsonville complex is expected to begin in 2023 and to be completed in 2024, with an estimated total cost of $200 million. In addition, we are currently in advanced discussions with several parties regarding transportation and sequestration ofpermanently sequester CO2 from Donaldsonville. Start-up for the project is scheduled for early 2025. Under current regulations, the project would be expected to qualify for tax credits under Section 45Q of the Internal Revenue Code, which provides a credit per tonne of CO2 sequestered.

Market Conditions and Current Developments

Geopolitical Environment

Russia’s invasion of Ukraine in February 2022, and the resulting war between Russia and Ukraine, has disrupted global markets for certain commodities, including natural gas, nitrogen fertilizers and certain commodity grains, leading to production curtailments, export reductions and logistical complications involving these commodities. Additionally, energy, financial and transportation sanctions have been announced by U.S., Canadian, European and other governments in response to the war. Market participants are adjusting trade flows and manufacturers are adjusting production levels in response to these factors. Continued market disruption is expected given the uncertainty of the situation. As of the date of this filing, nitrogen fertilizers have been explicitly exempted from sanctions by the United States and certain other governments.

2527

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

As further described below, natural gas is the principal raw material used to produce our nitrogen products. Natural gas is also a globally traded commodity that experiences price fluctuations based on supply demand balances and has been impacted by the recent geopolitical events. ~~As a result of Europe’s dependence on Russia for~~European energy markets, which have historically sourced a substantial portion of ~~its~~their natural gas supply from Russia, have been disrupted by Russia’s invasion of Ukraine ~~has disrupted European energy markets~~ and ~~threatened security~~the subsequent reduction of Russian natural gas supply ~~into that region.~~to Europe. This has led to further increases in natural gas prices and natural gas price volatility, which in turn have led to disruptions in manufacturing and distribution activities at other nitrogen manufacturers and suppliers in our industry, resulting in changes in nitrogen product trade flows and reductions in global fertilizer supply. In addition, as discussed under “Market Conditions and Current Developments—United Kingdom Operations,” below, in September 2022, we temporarily idled ammonia production at our Billingham complex due to the high price of natural gas. Several European governments, including the United Kingdom, and the European Union (EU) are seeking to address energy market supply and volatility with certain proposed government programs and policy changes. The scope of these proposed programs and policy changes, and their impact on us, are unknown at the present time.

The geopolitical developments relating to the war in Ukraine have also led to some supply chain disruptions for Russian producers of fertilizer, contributing to reduced global nitrogen fertilizer supply. Prior to the invasion, Russia in recent years had been a significant supplier of nitrogen fertilizer products to North America and Europe and a leading exporter of nitrogen fertilizer products globally. In addition, Russia and Ukraine have been large exporters of commodity grains such as wheat, corn and soybeans. The direct and indirect impacts of the war in Ukraine, and the related uncertainty, have resulted in reduced commodity grain supply from Russia and Ukraine, causing increased prices for grains globally. The increase in commodity grain prices in turn ~~created conditions for greater~~has supported strong demand for nitrogen fertilizer in the first ~~half~~nine months of 2022.

These events have further contributed to an already tight global supply demand balance for nitrogen fertilizers. These factors are causing changes in global trade flows as both manufacturers and customers react to the changing market dynamics. As a result, global nitrogen fertilizer prices have remained ~~higher than recent historical levels~~high and have also experienced significant volatility in 2022.

We expect that the recent geopolitical events, and any further government-imposed sanctions or other government ~~responses~~actions affecting food or energy security, will continue to have an impact on the ~~future~~ supply demand balance of nitrogen fertilizer products globally and ~~future~~ selling prices for our nitrogen fertilizer products, but the scope and duration of these impacts are unknown at the present time.

Nitrogen Selling Prices

Our nitrogen products are globally traded commodities with selling prices that fluctuate in response to global market conditions, changes in supply and demand, and other cost factors including domestic and local conditions. Intense global competition—reflected in import volumes and prices—strongly influences delivered prices for nitrogen fertilizers. In general, the prevailing global prices for nitrogen products must be at a level to incent the high cost marginal producer to produce product at a breakeven or above price, or else they would cease production and leave a portion of global demand unsatisfied.

In the ~~second~~third quarter of 2022, the average selling price for our products was ~~$701~~$527 per ton, an increase of ~~128%~~46%, compared to ~~$307~~$360 per ton in the ~~second~~third quarter of 2021, reflecting higher average selling prices across all our segments, which drove an increase in net sales of approximately ~~$1.88 billion~~$717 million for the ~~second~~third quarter of 2022 compared to the ~~second~~third quarter of 2021. The increase in our average selling price was caused by a tighter global nitrogen supply and demand balance resulting from strong global demand as well as a decrease in global supply availability as higher global energy costs continued to drive lower global operating rates, and exacerbated by the geopolitical environment described above. In the ~~six~~nine months ended ~~June~~September 30, 2022, the average selling price for our products was ~~$661~~$619 per ton, or ~~144%~~109% higher compared to ~~$271~~$296 per ton in the ~~six~~nine months ended ~~June~~September 30, 2021. This resulted in an increase in net sales of approximately ~~$3.72~~$4.43 billion for the ~~six~~nine months ended ~~June~~September 30, 2022 compared to the ~~six~~nine months ended ~~June~~September 30, 2021. As the second quarter of 2022 ended, average selling prices began to show seasonal weakness that typically occurs at the end of the fertilizer application period after the spring planting season in the Northern hemisphere.

Natural Gas

Natural gas is the principal raw material used to produce our nitrogen products. Natural gas is both a chemical feedstock and a fuel used to produce nitrogen products. Natural gas is a significant cost component of our manufactured nitrogen products, representing approximately 50% of our production costs in the first ~~six~~nine months of 2022 and 40% of our production costs in 2021.

The following table presents the average daily market price of natural gas at the Henry Hub, the most heavily-traded natural gas pricing point in North America, and the National Balancing Point (NBP), the major trading point for natural gas in the United Kingdom:

2628

Table of Contents

CF INDUSTRIES HOLDINGS, INC.


		Three Months Ended June 30,								Six Months Ended June 30,									Three Months Ended September 30,								Nine Months Ended September 30,
		2022		2021		2022 v. 2021				2022		2021		2022 v. 2021					2022		2021		2022 v. 2021				2022		2021		2022 v. 2021

Natural gas supplemental data (per MMBtu)	Natural gas supplemental data (per MMBtu)																	Natural gas supplemental data (per MMBtu)

Average daily market price of natural gas Henry Hub (Louisiana)	Average daily market price of natural gas Henry Hub (Louisiana)	$	7.40	$	2.88	$	4.52	157	%	$	6.01	$	3.13	$	2.88	92	%	Average daily market price of natural gas Henry Hub (Louisiana)	$	7.96	$	4.27	$	3.69	86	%	$	6.66	$	3.52	$	3.14	89	%
Average daily market price of natural gas National Balancing Point (United Kingdom)	Average daily market price of natural gas National Balancing Point (United Kingdom)	$	16.00	$	8.90	$	7.10	80	%	$	23.06	$	7.90	$	15.16	192	%	Average daily market price of natural gas National Balancing Point (United Kingdom)	$	32.54	$	15.98	$	16.56	104	%	$	26.26	$	10.63	$	15.63	147	%

Most of our nitrogen manufacturing facilities are located in the United States and Canada. As a result, the price of natural gas in North America directly impacts a substantial portion of our operating expenses. North American natural gas prices during the first ~~six~~nine months of 2022 were higher on average than the first ~~six~~nine months of 2021 due to ~~tight~~tighter supply and demand conditions within the market. ~~During~~Natural gas prices increased steadily through the first half of 2022 as demand growth ~~in demand for North American natural gas~~from both ~~for domestic use~~power generation and ~~for~~ liquefied natural gas (LNG) exports ~~outpaced~~exceeded production ~~growth. As a result, North American gas withdrawals from storage were larger than normal, leading to end-of-June~~increases. Late in the second quarter of 2022, ~~storage levels below both end-of-June 2021 storage levels and five-year average storage levels. North American~~ prices ~~began to decrease from their mid-June 2022 highs after~~declined as the Freeport LNG ~~liquefaction terminal along the Texas Gulf Coast experienced an unplanned~~facility outage ~~reducing the capacity for North American LNG exports by approximately 15%. Partially offsetting the impact of this event on North American natural gas prices was strong~~reduced natural gas demand ~~for power generation, as much of~~and allowed natural gas injections to refill storage at an accelerated pace. Record high temperatures in the United States ~~experienced a warmer-than-average start to summer~~in the third quarter of 2022 and the limited substitution to coal generation ~~was limited~~ due to high coal prices and available coal ~~supply.~~

~~The~~supply increased demand for natural gas in the electricity sector, raising natural gas prices to over $9.00 per MMBtu. Natural gas prices decreased late in the third quarter of 2022 due to increasing production, cooler temperatures and above average ~~daily market price at~~storage injections. For October 2022, the Henry Hub for the three months ended June 30, 2022 was $7.40 per MMBtu compared to $2.88 per MMBtu for the three months ended June 30, 2021, an increase of 157%. The average daily market price at the Henry Hub for the six months ended June 30, 2022 was $6.01 per MMBtu compared to $3.13 per MMBtu for the six months ended June 30, 2021, an increase of 92%. The average daily market price of natural gas at the Henry Hub ~~for the first four weeks of July 2022~~ was ~~$6.94~~$5.69 per MMBtu.

In the first quarter of 2021, the central portion of the United States experienced extreme and unprecedented cold weather due to the impact of Winter Storm Uri. Certain natural gas suppliers and natural gas pipelines declared force majeure events due to frozen equipment. This occurred at the same time as large increases in natural gas demand were occurring due to the cold temperatures. Due to these unprecedented factors, several states declared a state of ~~emergency.~~emergency, and natural gas was redirected for residential use. At certain of our manufacturing locations, we reduced our natural gas consumption, and, as a consequence, our plants at these locations either operated at reduced rates or temporarily suspended operations. We net settled certain natural gas contracts with our suppliers and received prevailing market prices, which were in excess of our cost. As a result, we recognized a gain of $112 million, which is reflected in cost of sales in our consolidated statement of operations for the ~~six~~nine months ended ~~June~~September 30, 2021.

Our Billingham U.K. nitrogen manufacturing ~~facilities located in the United Kingdom are~~facility is subject to fluctuations associated with the price of natural gas in Europe. The price of natural gas in the United Kingdom declined during the second quarter of 2022 compared to the record high prices seen during the first quarter of 2022. Elevated natural gas prices in Europe continued to support increased European LNG imports. Although the RussianRussia’s invasion of Ukraine ~~in late~~on February 24, 2022 disrupted European energy markets and threatened security of supply, driving natural gas prices in Europe upward to unprecedented levels. During the second quarter of 2022, the price of natural gas in the United Kingdom declined as Russian natural gas flows via pipeline to Europe generally remained steady ~~for much of~~despite the ~~second quarter.~~ongoing war in Ukraine. European natural gas prices began to increase late in ~~mid-June~~the second quarter of 2022 after the unplanned outage of the Freeport LNG liquefaction terminal ~~which reduced~~impacted global LNG supply. In the ~~number~~third quarter of ~~LNG cargoes available~~2022, prices continued to ~~meet global demand. At the same time,~~increase when Russian natural gas pipeline flows to Europe via the Nord Stream 1 pipeline ceased. Natural gas prices began to decrease ~~further reducing~~late in the third quarter of 2022 as natural gas ~~supply~~storage levels in ~~Europe. The NBP was partially protected from some of~~continental Europe built to robust levels, although prices remained elevated compared to historical price levels. For the ~~higher prices registered in mainland Europe, as the U.K. is not as reliant on Russian pipeline flows and benefited from reduced domestic industrial demand and availability of LNG import capacity.~~

~~The average daily market price of natural gas at the NBP for the three~~nine months ended June 30, 2022 was $16.00 per MMBtu compared to $8.90 per MMBtu for the three months ended June 30, 2021, an increase of 80%. The average daily market price of natural gas at the NBP for the six months ended June 30, 2022 was $23.06 per MMBtu compared to $7.90 per MMBtu for the six months ended June 30, 2021, an increase of 192%. For the six months ended JuneSeptember 30, 2022, the daily closing price at the NBP reached a low of $1.23 per MMBtu on June 10, 2022 and a high of $67.08 per MMBtu on March 8, 2022. ~~The~~For October 2022, the average daily market price of natural gas at the NBP ~~for the first four weeks of July 2022~~ was ~~$25.94~~$11.68 per MMBtu.

In the ~~second~~third quarter of 2022, the cost of natural gas used for production, which includes the impact of realized natural gas derivatives, increased ~~117%~~98% to ~~$7.05~~$8.35 per MMBtu from ~~$3.25~~$4.21 per MMBtu in the ~~second~~third quarter of 2021. This increase in natural gas costs resulted in a decrease in gross margin of approximately ~~$352~~$358 million. In the first ~~half~~nine months of 2022, the cost of natural gas used for production, which includes the impact of realized natural gas derivatives, increased ~~110%~~107% to ~~$6.79~~$7.28 per MMBtu from ~~$3.24~~$3.51 per MMBtu in the first ~~half~~nine months of 2021. The cost of natural gas used for production of ~~$3.24~~$3.51 per MMBtu in the

~~Table of Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

first ~~half~~nine months of 2021 does not include the $112 million gain from the net settlement of certain natural gas contracts in February 2021. This increase in natural gas costs for the first nine months of 2022 compared to the first nine months of 2021 resulted in a decrease in gross margin of approximately ~~$623~~$981 million.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

United Kingdom Operations ~~Proposed Restructuring and Impairment Charges~~

~~During~~Starting in the third quarter of 2021 the United Kingdom began experiencing an energy crisis that included a substantial increase in the price of natural gas, which impacted our U.K. operations. The energy crisis and the geopolitical environment, as discussed above, have continued to evolve since the third quarter of 2021. As a result of these factors, management has taken certain actions relating to our U.K. operations. The table below summarizes the charges that have been recognized pertaining to our U.K. operations since the third quarter of 2021, which are further described following the table.


	Three Months Ended
	September 30, 2021		December 31, 2021		March 31, 2022		June 30, 2022		September 30, 2022		Total
	(in millions)
U.K. goodwill impairment	$	259	$	26	$	—	$	—	$	—	$	285
U.K. long-lived and intangible asset impairment	236		—		—		152		87		$	475
U.K. operations restructuring	—		—		—		10		8		$	18
Total	$	495	$	26	$	—	$	162	$	95	$	778

2021 Impairment

In the first half of 2021, natural gas prices had increased to levels that were considered high compared to historical prices, and prices then more than doubled within the third quarter of 2021. On September 15, 2021, we announced the halt of operations at both our Ince and Billingham manufacturing facilities in the United Kingdom due to negative profitability driven by the high cost of natural gas. Shortly thereafter, our Billingham facility resumed operations. ~~As of the filing of this report, production continues at our Billingham facility and continues to be idled at our Ince facility.~~

2022 Impairment and Restructuring

First quarter 2022 — During the first quarter of 2022, we concluded that the continued impacts of the U.K. energy crisis, including higher natural gas prices due in part to the geopolitical environment described above, triggered an additional long-lived asset impairment test. The results of this ~~long-lived asset impairment~~ test indicated that no additional long-lived asset impairment ~~should be recorded~~existed as the undiscounted estimated future cash flows were in excess of the carrying values for each of the U.K. asset groups.

~~During~~Second quarter 2022 — In the second quarter of 2022, the long-term outlook deteriorated for nitrogen producers in regions that rely on LNG imports to satisfy natural gas demand. As further described above, natural gas represents a substantial portion of the cost to produce nitrogen products. Natural gas forward prices suggested that nitrogen facilities in the United Kingdom and mainland Europe would be the world’s high-cost marginal producers for the foreseeable future, presenting a constant challenge to the sustainability of our U.K. operations.

In June 2022, due in large part to the nitrogen industry conditions described above, we approved and announced our proposed plan to restructure our U.K. ~~operations. This plan includes permanently closing~~operations, including the permanent closure of our Ince facility and ~~optimizing~~optimization of the remaining manufacturing operations at the Billingham facility. As a result, in the ~~three months ended June 30,~~second quarter of 2022, we recorded total charges of $162 million as follows:

•asset impairment charges of $152 million, which are included in the U.K. long-lived and intangible asset impairment line item in our consolidated statement of operations, consisting of the following:

◦an impairment charge of $135 million related to property, plant and equipment at the Ince facility that has been classified as held for abandonment, including a liability of approximately $9 million for the costs of certain asset retirement activities at the site;

◦an intangible asset impairment charge of $8 million related to trade names; and

◦a charge of $9 million related to the write-down of spare parts and certain raw materials at the Ince facility;

and

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

•a charge for post-employment benefits of $10 million, which is included in the U.K. operations restructuring line item in our consolidated statements of operations, related to contractual and statutory obligations due to employees whose employment would be terminated in the proposed plan.

As a result of the proposed restructuring of our U.K. operations, we concluded that an additional impairment test was triggered in the second quarter of 2022 for the asset groups that comprise the continuing U.K. operations, consisting of U.K. Ammonia, U.K. AN and U.K. Other. The results of this long-lived asset impairment test indicated that no additional asset impairment should be recorded as the undiscounted estimated future cash flows for the continuing U.K. operations were in excess of the carrying values for each of the U.K. asset groups.

~~Table~~Third quarter 2022 — In the third quarter of ~~Contents~~2022, the United Kingdom continued to experience extremely high and volatile natural gas prices. Russian natural gas pipeline flows to Europe via the Nord Stream 1 pipeline ceased, causing the United Kingdom to experience unprecedented natural gas prices. In addition, the European Union announced a desire to cap the price that Europe would pay Russia for natural gas deliveries, further contributing to the uncertainty in European energy markets. Given these factors and the lack of a corresponding increase in global nitrogen product market prices, in September 2022, we temporarily idled ammonia production at our Billingham complex. As a result, we concluded that an additional impairment test was triggered for the asset groups that comprise the continuing U.K. operations, which resulted in asset impairment charges of $87 million, primarily related to property, plant and equipment and definite-lived intangible assets, which are included in the U.K. long-lived and intangible asset impairment line item in our consolidated statement of operations.

~~CF INDUSTRIES HOLDINGS, INC.~~In August 2022, the final restructuring plan for our U.K. operations was approved, and decommissioning activities were initiated. As a result, in the third quarter of 2022, we incurred additional charges related to our U.K. restructuring of $8 million, primarily related to one-time termination benefits, which are included in the U.K. operations restructuring line item in our consolidated statement of operations.

The following table summarizes the total impact of these factors for the three and nine months ending September 30, 2022 and 2021.


	Three Months Ended September 30,								Nine Months Ended September 30,
	2022		2021		2022 v. 2021				2022		2021		2022 v. 2021
	(in millions)
U.K. goodwill impairment	$	—	$	259	$	(259)	(100)	%	$	—	$	259	$	(259)	(100)	%
U.K. long-lived and intangible asset impairment	87		236		(149)		(63)	%	239		236		3		1	%
U.K. operations restructuring	8		—		8		N/M		18		—		18		N/M
Total	$	95	$	495	$	(400)	(81)	%	$	257	$	495	$	(238)	(48)	%

N/M—Not Meaningful

We are working with customers, vendors, regulators and others to finalize closure plans of our Ince complex, and we expect substantially all of these restructuring activities will be completed within the next twelve months.

The results of our U.K. operations are included in our Ammonia, AN and Other segments, and account for a small portion of our consolidated gross margin. For the ~~six~~nine months ended ~~June~~September 30, 2022, gross margin generated by our U.K. operations represented approximately 3% of our consolidated gross margin. For the year ended December 31, 2021, our U.K. operations generated negative gross margin representing approximately 1% of our consolidated gross margin.

Financial Executive Summary

We reported net earnings attributable to common stockholders of ~~$1.17 billion for the three months ended June 30, 2022 compared to $246~~$438 million for the three months ended ~~June~~September 30, 2022 compared to a net loss attributable to common stockholders of $185 million for the three months ended September 30, 2021, an increase in net earnings of ~~374%, or $919~~$623 million. The loss of $185 million in the three months ended September 30, 2021, was due primarily to impairment charges related to our U.K. operations of $495 million that are more fully described above under “Market Conditions and Current Developments—United Kingdom Operations.” The three months ended September 30, 2022 also includes impairment and restructuring charges of $95 million pertaining to our U.K. operations. The increase in net earnings for the three months ended September 30, 2022 compared to the three months ended September 30, 2021 reflects an increase of $476 million in gross margin to $916 million for the three months ended September 30, 2022. The increase in gross margin was due primarily to higher average selling prices and higher sales volumes, partially offset by higher natural gas prices. Diluted net earnings per share attributable to common stockholders increased ~~$4.44~~$3.04 per share, to ~~$5.58~~$2.18 per share, in the ~~second~~third quarter of 2022 compared to ~~$1.14~~a loss of $0.86 per share in the ~~second~~third quarter of 2021. ~~These increases were due primarily to an increase~~

Table of $1.49 billion in gross margin to $1.99 billion for the three months ended June 30, 2022, which was driven by higher average selling prices, partially offset by higher natural gas prices. Partially offsetting the increase in gross margin was the U.K. operations restructuring charge, an increase in the income tax provision due primarily to increased profitability, and an increase in net earnings attributable to noncontrolling interest. See “Items Affecting Comparability of Results,” below, for further information on the U.K. operations restructuring charge.Contents

CF INDUSTRIES HOLDINGS, INC.

Average selling prices increased ~~128%~~46% to ~~$701~~$527 per ton in the ~~second~~third quarter of 2022 from ~~$307~~$360 per ton in the ~~second~~third quarter of 2021, which increased gross margin by ~~$1.88 billion.~~$717 million. Our total sales volume of 4.4 million product tons in the third quarter of 2022 was 16% higher compared to 3.8 million product tons in the third quarter of 2021, which increased gross margin by $165 million. The impact of higher average selling prices and higher sales volume was partially offset by an increase in natural gas costs. The cost of natural gas used for production increased ~~117%~~98% to ~~$7.05~~$8.35 per MMBtu in the ~~second~~third quarter of 2022 from ~~$3.25~~$4.21 per MMBtu in the ~~second~~third quarter of 2021, which reduced gross margin by ~~$352~~$358 million.

Partially offsetting the increase in gross margin was an increase in the income tax provision due primarily to increased profitability.

Items Affecting Comparability of Results

For the three months ended ~~June~~September 30, 2022, we reported net earnings attributable to common stockholders of $438 million compared to a net loss attributable to common stockholders of $185 million for the three months ended September 30, 2021. For the nine months ended September 30, 2022 and 2021, we reported net earnings attributable to common stockholders of ~~$1.17~~$2.49 billion and ~~$246 million, respectively. For the six months ended June 30, 2022 and 2021, we reported net earnings attributable to common stockholders of $2.05 billion and $397~~$212 million, respectively. In addition to the impact of market conditions discussed above, certain items impacted the comparability of our financial results for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021. The following table and related discussion outline these items that impacted the comparability of our financial results for these periods. The descriptions of items below that refer to amounts in the table refer to the pre-tax amounts unless otherwise noted.


		Three Months Ended June 30,								Six Months Ended June 30,									Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021					2022				2021				2022				2021
		Pre-Tax		After-Tax		Pre-Tax		After-Tax		Pre-Tax		After-Tax		Pre-Tax		After-Tax			Pre-Tax		After-Tax		Pre-Tax		After-Tax		Pre-Tax		After-Tax		Pre-Tax		After-Tax
		(in millions)																	(in millions)

Unrealized net mark-to-market gain on natural gas derivatives(1)		$	(17)	$	(13)	$	—	$	—	$	(50)	$	(38)	$	(6)	$	(5)
Unrealized net mark-to-market loss (gain) on natural gas derivatives(1)																		Unrealized net mark-to-market loss (gain) on natural gas derivatives(1)	$	11	$	7	$	(12)	$	(9)	$	(39)	$	(31)	$	(18)	$	(14)

Loss on foreign currency transactions, including intercompany loans(2)	Loss on foreign currency transactions, including intercompany loans(2)	5		3		3		3		11		8		3		3		Loss on foreign currency transactions, including intercompany loans(2)	27		21		2		1		38		29		5		4

U.K. operations:																		U.K. operations:
U.K. goodwill impairment(3)																		U.K. goodwill impairment(3)	—		—		259		219		—		—		259		219
U.K. long-lived and intangible asset impairment(3)																		U.K. long-lived and intangible asset impairment(3)	87		66		236		184		239		181		236		184
U.K. operations restructuring																		U.K. operations restructuring	8		6		—		—		18		13		—		—

U.K. operations restructuring		162		123		—		—		162		123		—		—
Pension settlement loss(4)																		Pension settlement loss(4)	24		18		—		—		24		18		—		—

Canada Revenue Agency Competent Authority Matter and Transfer pricing reserves:
Canada Revenue Agency Competent Authority Matter and Transfer pricing positions:																		Canada Revenue Agency Competent Authority Matter and Transfer pricing positions:
Interest expense	Interest expense	30		30		—		—		228		226		—		—		Interest expense	6		6		—		—		234		232		—		—
Interest income	Interest income	(2)		(1)		—		—		(38)		(29)		—		—		Interest income	(3)		(2)		—		—		(41)		(31)		—		—
Income tax (benefit) provision(3)		—		(20)		—		—		—		52		—		—
Income tax provision(5)																		Income tax provision(5)	—		2		—		—		—		54		—		—

Loss on debt extinguishment	Loss on debt extinguishment	8		6		—		—		8		6		6		5		Loss on debt extinguishment	—		—		13		10		8		6		19		15

(1)Included in cost of sales in our consolidated statements of operations.

(2)Included in other operating—net in our consolidated statements of operations.

(3)The after-tax impact of goodwill impairment and long-lived and intangible asset impairment charges reflects the amount of income tax benefit recognized in accordance with guidance on accounting for income taxes in interim reporting periods.

(4)Included in other non-operating—net in our consolidated statements of operations.

(5)For the three months ended ~~June~~September 30, 2022, the after-tax income tax ~~benefit~~provision amount of ~~$20~~$2 million reflects ~~an income tax benefit~~the $3 million of ~~$19 million, consisting of the $2 million~~ income tax provision referenced below under ~~“Canada Revenue Agency Competent Authority Matter” and the $21 million of income tax benefit referenced below under~~ “Transfer pricing ~~reserves,~~positions,” net of $1 million of income tax provision that is reflected in the after-tax interest income amount shown in this table. For the ~~six~~nine months ended ~~June~~September 30, 2022, the after-tax income tax provision amount of ~~$52~~$54 million reflects an income tax provision of ~~$59~~$62 million, consisting of the $78 million income tax provision referenced below under “Canada Revenue Agency Competent Authority Matter” and the ~~$19~~$16 million of income tax benefit referenced below under “Transfer pricing ~~reserves,~~positions,” net of $7$8 million of income tax provision that is reflected in the after-tax interest expense and interest income amounts shown in this table.

2932

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

Unrealized net mark-to-market (loss) gain on natural gas derivatives

Natural gas is the largest and most volatile single component of the manufacturing cost for our nitrogen-based products. At certain times, we have managed the risk of changes in natural gas prices through the use of derivative financial instruments. The derivatives that we use for this purpose are primarily natural gas fixed price swaps, basis swaps and options. We use natural gas derivatives as an economic hedge of natural gas price risk, but without the application of hedge accounting. This can result in volatility in reported earnings due to the unrealized mark-to-market adjustments that occur from changes in the value of the derivatives, which are reflected in cost of sales in our consolidated statements of operations. In the three months ended ~~June~~September 30, 2022 and 2021, we recognized an unrealized net mark-to-market loss of $11 million and a gain of ~~$17 million.~~$12 million, respectively. In the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, we recognized unrealized net mark-to-market gains of ~~$50~~$39 million and $6$18 million, respectively.

Loss on foreign currency transactions, including intercompany loans

In the ~~six~~three months ended ~~June~~September 30, 2022 and 2021, we recognized losses on foreign currency transactions of ~~$11~~$27 million and $3$2 million, ~~respectively, which~~respectively. In the nine months ended September 30, 2022 and 2021, we recognized losses on foreign currency transactions of $38 million and $5 million, respectively. Loss on foreign currency transactions consists of foreign currency exchange rate impacts on foreign currency denominated transactions, including the impact of changes in foreign currency exchange rates on intercompany loans that were not permanently invested.

U.K. operations ~~restructuring~~

In the three and nine months ended ~~June~~September 30, 2022, we recognized total charges related to our U.K. operations of ~~$162~~$95 million and $257 million, respectively, consisting ~~of $152 million~~primarily of asset impairment charges ~~primarily~~ related to property, plant and equipment at our Billingham and Ince ~~U.K. facility~~facilities and ~~$10 million of post-employment benefits related to contractual and statutory obligations.~~definite-lived intangible assets. See “Market Conditions and Current Developments—United Kingdom Operations, ~~Proposed Restructuring and Impairment Charges,~~” above, for further discussion.

In the third quarter of 2021, we recognized impairment charges of $495 million, including a goodwill impairment charge of $259 million and long-lived and intangible asset impairment charges of $236 million. See Note 5—United Kingdom Operations Restructuring and Impairment Charges, Note 6—Property, Plant and Equipment—Net and Note 7—Goodwill and Other Intangible Assets for further information.

Pension settlement loss

Canada Revenue Agency Competent Authority Matter

Table of approximately $103 million, will be assessed in the second half of 2022 and that payment of those amounts, aggregating to approximately $232 million, based on current estimates, will be due in the second half of 2022. The letters Contents

CF INDUSTRIES HOLDINGS, INC.

of credit we had posted in lieu of paying the additional tax liability assessed by the Notices of Reassessment were cancelled. We expect the remaining tax liability and related interest will be ~~cancelled upon payment~~assessed and paid in the fourth quarter of ~~the additional tax and interest to Canada.~~2022. Due primarily to the availability of additional foreign tax credits to offset in part the increased Canadian tax referenced above, the Company will then file amended tax returns in the United States to request a refund of tax overpaid.

Of the $78 million of income tax provision and ~~$104~~$103 million of net interest expense recognized in the ~~six~~nine months ended ~~June~~September 30, 2022, ~~$2 million~~a reduction of ~~income tax provision and $5~~$1 million of net interest expense was recognized in the three months ended ~~June~~September 30, 2022.

~~Table of Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

Transfer pricing ~~reserves~~positions

•liabilities for unrecognized tax benefits of $314 million with a corresponding income tax provision, and accrued interest of ~~$116~~$123 million related to the liabilities for unrecognized tax benefits, and

•noncurrent income tax receivables of $359 million with a corresponding income tax benefit, and accrued interest income of ~~$30~~$33 million related to the noncurrent income tax receivables.

Loss on debt extinguishment

On April 21, 2022, we redeemed in full all of the $500 million outstanding principal amount of the 3.450% senior notes due June 2023 (the 2023 Notes) in accordance with the optional redemption provisions in the indenture governing the 2023 Notes. The total aggregate redemption price paid in connection with the redemption of the 2023 Notes was $513 million, including accrued interest. As a result, we recognized a loss on debt extinguishment of $8 million, consisting primarily of the premium paid on the redemption of the $500 million principal amount of the 2023 Notes prior to their scheduled maturity.

On September 10, 2021, we redeemed $250 million principal amount, representing one-third of the $750 million principal amount outstanding immediately prior to such redemption, of the 2023 Notes, in accordance with the optional redemption provisions in the indenture governing the 2023 Notes. The total aggregate redemption price paid on the 2023 Notes was approximately $265 million, including accrued interest. As a result, we recognized a loss on debt extinguishment of $13 million in the third quarter of 2021, consisting primarily of a premium paid on the redemption of the $250 million principal amount of the 2023 Notes prior to their scheduled maturity.

On March 20, 2021, we redeemed in full all of the $250 million outstanding principal amount of the 3.400% senior secured notes due December 2021 (the 2021 Notes) in accordance with the optional redemption provisions in the indenture governing the 2021 Notes. The total aggregate redemption price paid in connection with the redemption of the 2021 Notes was $258 million, including accrued interest. As a result, we recognized a loss on debt extinguishment of $6 million, consisting primarily of the premium paid on the redemption of the $250 million principal amount of the 2021 Notes prior to their scheduled maturity.

3134

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

Consolidated Results of Operations

The following table presents our consolidated results of operations and supplemental data:


		Three Months Ended June 30,											Six Months Ended June 30,												Three Months Ended September 30,											Nine Months Ended September 30,
		2022			2021			2022 v. 2021					2022			2021			2022 v. 2021						2022			2021			2022 v. 2021					2022			2021			2022 v. 2021
		(in millions, except per share and per MMBtu)																							(in millions, except per share and per MMBtu)
Net sales	Net sales	$	3,389		$	1,588		$	1,801		113	%	$	6,257		$	2,636		$	3,621		137	%	Net sales	$	2,321		$	1,362		$	959		70	%	$	8,578		$	3,998		$	4,580		115	%
Cost of sales	Cost of sales	1,398			1,085			313			29	%	2,568			1,844			724			39	%	Cost of sales	1,405			922			483			52	%	3,973			2,766			1,207			44	%
Gross margin	Gross margin	1,991			503			1,488			296	%	3,689			792			2,897			366	%	Gross margin	916			440			476			108	%	4,605			1,232			3,373			274	%
Gross margin percentage	Gross margin percentage	58.7		%	31.7		%	27.0		%			59.0		%	30.0		%	29.0		%			Gross margin percentage	39.5		%	32.3		%	7.2		%			53.7		%	30.8		%	22.9		%
Selling, general and administrative expenses	Selling, general and administrative expenses	73			60			13			22	%	137			115			22			19	%	Selling, general and administrative expenses	66			52			14			27	%	203			167			36			22	%

U.K. goodwill impairment																								U.K. goodwill impairment	—			259			(259)			(100)	%	—			259			(259)			(100)	%
U.K. long-lived and intangible asset impairment																								U.K. long-lived and intangible asset impairment	87			236			(149)			(63)	%	239			236			3			1	%

U.K. operations restructuring	U.K. operations restructuring	162			—			162			N/M		162			—			162			N/M		U.K. operations restructuring	8			—			8			N/M		18			—			18			N/M
Other operating—net	Other operating—net	6			4			2			50	%	8			2			6			300	%	Other operating—net	25			5			20			400	%	33			7			26			371	%
Total other operating costs and expenses	Total other operating costs and expenses	241			64			177			277	%	307			117			190			162	%	Total other operating costs and expenses	186			552			(366)			(66)	%	493			669			(176)			(26)	%

Equity in earnings of operating affiliate	Equity in earnings of operating affiliate	28			11			17			155	%	54			22			32			145	%	Equity in earnings of operating affiliate	20			15			5			33	%	74			37			37			100	%
Operating earnings		1,778			450			1,328			295	%	3,436			697			2,739			393	%
Operating earnings (loss)																								Operating earnings (loss)	750			(97)			847			N/M		4,186			600			3,586			N/M
Interest expense—net	Interest expense—net	74			46			28			61	%	279			94			185			197	%	Interest expense—net	34			46			(12)			(26)	%	313			140			173			124	%
Loss on debt extinguishment	Loss on debt extinguishment	8			—			8			N/M		8			6			2			33	%	Loss on debt extinguishment	—			13			(13)			(100)	%	8			19			(11)			(58)	%
Other non-operating—net	Other non-operating—net	—			2			(2)			(100)	%	1			2			(1)			(50)	%	Other non-operating—net	23			(19)			42			N/M		24			(17)			41			N/M
Earnings before income taxes		1,696			402			1,294			322	%	3,148			595			2,553			429	%
Income tax provision		357			85			272			320	%	758			103			655			N/M
Earnings (loss) before income taxes																								Earnings (loss) before income taxes	693			(137)			830			N/M		3,841			458			3,383			N/M
Income tax provision (benefit)																								Income tax provision (benefit)	155			(46)			201			N/M		913			57			856			N/M

Net earnings		1,339			317			1,022			322	%	2,390			492			1,898			386	%
Net earnings (loss)																								Net earnings (loss)	538			(91)			629			N/M		2,928			401			2,527			N/M
Less: Net earnings attributable to noncontrolling interest	Less: Net earnings attributable to noncontrolling interest	174			71			103			145	%	342			95			247			260	%	Less: Net earnings attributable to noncontrolling interest	100			94			6			6	%	442			189			253			134	%
Net earnings attributable to common stockholders		$	1,165		$	246		$	919		374	%	$	2,048		$	397		$	1,651		416	%
Diluted net earnings per share attributable to common stockholders		$	5.58		$	1.14		$	4.44		389	%	$	9.78		$	1.83		$	7.95		434	%
Net earnings (loss) attributable to common stockholders																								Net earnings (loss) attributable to common stockholders	$	438		$	(185)		$	623		N/M		$	2,486		$	212		$	2,274		N/M
Diluted net earnings (loss) per share attributable to common stockholders																								Diluted net earnings (loss) per share attributable to common stockholders	$	2.18		$	(0.86)		$	3.04		N/M		$	12.04		$	0.98		$	11.06		N/M
Diluted weighted-average common shares outstanding	Diluted weighted-average common shares outstanding	208.9			216.6			(7.7)			(4)	%	209.4			216.3			(6.9)			(3)	%	Diluted weighted-average common shares outstanding	200.9			214.9			(14.0)			(7)	%	206.5			216.4			(9.9)			(5)	%
Dividends declared per common share	Dividends declared per common share	$	0.40		$	0.30		$	0.10		33	%	$	0.70		$	0.60		$	0.10		17	%	Dividends declared per common share	$	0.40		$	0.30		$	0.10		33	%	$	1.10		$	0.90		$	0.20		22	%
Natural gas supplemental data (per MMBtu)	Natural gas supplemental data (per MMBtu)																							Natural gas supplemental data (per MMBtu)

Cost of natural gas used for production in cost of sales(1)	Cost of natural gas used for production in cost of sales(1)	$	7.05		$	3.25		$	3.80		117	%	$	6.79		$	3.24		$	3.55		110	%	Cost of natural gas used for production in cost of sales(1)	$	8.35		$	4.21		$	4.14		98	%	$	7.28		$	3.51		$	3.77		107	%

Average daily market price of natural gas Henry Hub (Louisiana)	Average daily market price of natural gas Henry Hub (Louisiana)	$	7.40		$	2.88		$	4.52		157	%	$	6.01		$	3.13		$	2.88		92	%	Average daily market price of natural gas Henry Hub (Louisiana)	$	7.96		$	4.27		$	3.69		86	%	$	6.66		$	3.52		$	3.14		89	%
Average daily market price of natural gas National Balancing Point (United Kingdom)	Average daily market price of natural gas National Balancing Point (United Kingdom)	$	16.00		$	8.90		$	7.10		80	%	$	23.06		$	7.90		$	15.16		192	%	Average daily market price of natural gas National Balancing Point (United Kingdom)	$	32.54		$	15.98		$	16.56		104	%	$	26.26		$	10.63		$	15.63		147	%
Unrealized net mark-to-market gain on natural gas derivatives		$	(17)		$	—		$	(17)		N/M		$	(50)		$	(6)		$	(44)		N/M
Unrealized net mark-to-market loss (gain) on natural gas derivatives																								Unrealized net mark-to-market loss (gain) on natural gas derivatives	$	11		$	(12)		$	23		N/M		$	(39)		$	(18)		$	(21)		(117)	%
Depreciation and amortization	Depreciation and amortization	$	223		$	243		$	(20)		(8)	%	$	431		$	447		$	(16)		(4)	%	Depreciation and amortization	$	221		$	203		$	18		9	%	$	652		$	650		$	2		—	%
Capital expenditures	Capital expenditures	$	66		$	110		$	(44)		(40)	%	$	129		$	181		$	(52)		(29)	%	Capital expenditures	$	190		$	201		$	(11)		(5)	%	$	319		$	382		$	(63)		(16)	%
Sales volume by product tons (000s)	Sales volume by product tons (000s)	4,835			5,174			(339)			(7)	%	9,459			9,738			(279)			(3)	%	Sales volume by product tons (000s)	4,408			3,784			624			16	%	13,867			13,522			345			3	%
Production volume by product tons (000s):	Production volume by product tons (000s):																							Production volume by product tons (000s):
Ammonia(2)	Ammonia(2)	2,470			2,232			238			11	%	5,083			4,711			372			8	%	Ammonia(2)	2,283			2,186			97			4	%	7,366			6,897			469			7	%
Granular urea	Granular urea	1,157			968			189			20	%	2,231			2,152			79			4	%	Granular urea	1,187			987			200			20	%	3,418			3,139			279			9	%
UAN (32%)	UAN (32%)	1,633			1,628			5			—	%	3,498			3,317			181			5	%	UAN (32%)	1,381			1,311			70			5	%	4,879			4,628			251			5	%
AN	AN	399			449			(50)			(11)	%	804			924			(120)			(13)	%	AN	358			332			26			8	%	1,162			1,256			(94)			(7)	%

N/M—Not Meaningful

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

(1)Includes the cost of natural gas used for production and related transportation that is included in cost of sales during the period under the first-in, first-out inventory cost method. Includes realized gains and losses on natural gas derivatives settled during the period.

~~Table of Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

Excludes unrealized mark-to-market gains and losses on natural gas derivatives. For the ~~six~~nine months ended ~~June~~September 30, 2021, excludes the $112 million gain on net settlement of certain natural gas contracts with our suppliers due to Winter Storm Uri.

(2)Gross ammonia production, including amounts subsequently upgraded on-site into granular urea, UAN, or AN.

~~Second~~Third Quarter of 2022 Compared to ~~Second~~Third Quarter of 2021

Net Sales

Our total net sales increased ~~$1.80 billion~~$959 million or ~~113%~~70%, to ~~$3.39~~$2.32 billion in the ~~second~~third quarter of 2022 compared to ~~$1.59~~$1.36 billion in the ~~second~~third quarter of 2021 due ~~primarily~~ to an increase in average selling prices ~~partially offset by a decrease~~and an increase in sales volume.

Our average selling price was ~~$701~~$527 per ton in the ~~second~~third quarter of 2022, or ~~128%~~46% higher, compared to ~~$307~~$360 per ton in the ~~second~~third quarter of 2021 due to higher average selling prices across all of our segments, primarily driven by the impact of a tighter global nitrogen supply and demand balance, as a result of strong global demand as well as decreased global supply availability as higher global energy costs and geopolitical events drove lower global operating rates. See “Market Conditions and Current Developments—Geopolitical Environment,” above, for further discussion.

Our total sales volume of ~~4.8~~4.4 million product tons in the ~~second~~third quarter of 2022 was ~~7% lower~~16% higher compared to ~~5.2~~3.8 million product tons in the ~~second~~third quarter of 2021, as ~~lower sales volume in our UAN, AN and Other segments was partially offset by~~ higher sales volume in our Granular Urea ~~segment.~~and UAN segments was partially offset by lower sales volume in our Other, Ammonia and AN segments.

Cost of Sales

Our total cost of sales increased ~~$313~~$483 million, or ~~29%~~52%, to ~~$1.40~~$1.41 billion in the ~~second~~third quarter of 2022 from ~~$1.09 billion~~$922 million in the ~~second~~third quarter of 2021. The increase in our cost of sales was due primarily to higher costs for natural gas, which increased cost of sales by ~~$352~~$358 million, and ~~higher costs for ammonia purchased from PLNL, our joint venture in Trinidad, partially offset by a decline~~an increase in sales volume of 7%16% that ~~decreased~~increased cost of sales by ~~$84~~$77 million.

Cost of sales also includes the impact of a ~~$17~~$11 million unrealized net mark-to-market ~~gain~~loss on natural gas derivatives in the ~~second~~third quarter of ~~2022.~~2022 compared to a $12 million gain in the third quarter of 2021.

Cost of sales averaged ~~$289~~$319 per ton in the ~~second~~third quarter of 2022, a ~~38%~~31% increase from ~~$210~~$244 per ton in the ~~second~~third quarter of 2021. The cost of natural gas used for production, including the impact of realized derivatives, increased ~~117%~~98% to ~~$7.05~~$8.35 per MMBtu in the ~~second~~third quarter of 2022 from ~~$3.25~~$4.21 per MMBtu in the ~~second~~third quarter of 2021.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased ~~$13~~$14 million to ~~$73~~$66 million in the ~~second~~third quarter of 2022 as compared to ~~$60~~$52 million in the ~~second~~third quarter of 2021. The increase was due primarily to higher costs associated with corporate initiatives, including costs related to the development of ana new enterprise resource planning system ~~that we will be implementing~~(ERP) for our North American ~~operations.~~operations and higher incentive compensation costs.

U.K. Operations ~~Restructuring~~

In the three months ended ~~June~~September 30, 2022, we recognized total charges related to our U.K. operations of ~~$162~~$95 million, consisting of ~~$152~~$87 million of asset impairment charges primarily related to property, plant and equipment at our ~~Ince, U.K.~~Billingham facility and ~~$10~~definite-lived intangible assets and $8 million of ~~post-employment benefits~~restructuring charges primarily related to ~~contractual~~one-time termination benefits. In the three months ended September 30, 2021, we recognized total charges related to our U.K. operations of $495 million, consisting of goodwill impairment of $259 million and ~~statutory obligations.~~ long-lived and intangible asset impairment charges of $236 million.

See “Market Conditions and Current Developments—United Kingdom Operations, ~~Proposed~~” above; Note 5—United Kingdom Operations Restructuring and Impairment ~~Charges,” above,~~Charges; Note 6—Property, Plant and Equipment—Net; and Note 7—Goodwill and Other Intangible Assets for further ~~discussion.~~information.

Other Operating—Net

Other operating—net was $25 million of expense in the third quarter of 2022 compared to $5 million of expense in the third quarter of 2021. The $25 million of expense in the third quarter of 2022 includes a loss on foreign currency transactions of $27 million, which consists of foreign currency exchange rate impacts on foreign currency denominated transactions, including the impact of changes in foreign currency exchange rates on intercompany loans that were not permanently invested.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

Equity in Earnings of Operating Affiliate

Equity in earnings of operating affiliate was ~~$28~~$20 million in the ~~second~~third quarter of 2022 compared to ~~$11~~$15 million in the ~~second~~third quarter of 2021. The increase in the ~~second~~third quarter of 2022 was due primarily to an increase in the operating results of PLNL as a result of higher ammonia selling prices partially offset by higher natural gas costs.

Interest Expense—Net

Net interest expense was ~~$74~~$34 million in the ~~second~~third quarter of 2022 compared to $46 million in the ~~second~~third quarter of 2021. The net ~~increase~~decrease of ~~$28~~$12 million was due primarily to ~~net~~higher interest ~~expense of $37 million recorded in the second quarter of 2022 related to~~ income ~~tax matters, which are more fully described under “Items Affecting Comparability of Results—Canada Revenue Agency Competent Authority Matter”~~on investments and ~~“Items Affecting Comparability of Results—Transfer pricing reserves,” above. This increase was partially offset by a $6 million decrease in~~lower interest expense on borrowings due to the redemption of ~~senior~~

~~Table~~$500 million principal amount of ~~Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

~~notes~~the 2023 Notes in April ~~2022.~~2022 prior to their scheduled maturity.

Loss on Debt Extinguishment

On ~~April 21, 2022,~~September 10, 2021, we redeemed ~~in full all~~$250 million principal amount, representing one-third of the ~~$500~~$750 million ~~outstanding~~ principal amount outstanding immediately prior to such redemption, of the 2023 Notes, in accordance with the optional redemption provisions in the indenture governing the 2023 Notes. The total aggregate redemption price paid ~~in connection with the redemption of~~on the 2023 Notes was ~~$513~~approximately $265 million, including accrued interest. As a result, we recognized a loss on debt extinguishment of $8$13 million, consisting primarily of ~~the~~a premium paid on the redemption of the $250 million principal amount of the 2023 Notes prior to their scheduled maturity.

Other Non-Operating—Net

Other non-operating—net was $23 million of expense in the third quarter of 2022 compared to $19 million of income in the third quarter of 2021. The $23 million of expense in the third quarter of 2022 was due primarily to a pension settlement loss of $24 million related to the purchase of a non-participating group annuity contract to settle retiree obligations under our primary U.S. defined benefit pension plan, which is more fully described under “Items Affecting Comparability of Results—Pension settlement loss,” above. The $19 million of income in the third quarter of 2021 was due primarily to a gain of $20 million on the sale of EU carbon credits that, due to the exit of the United Kingdom from the EU (Brexit), could no longer be utilized by our U.K. plants for carbon emission obligations in the United Kingdom.

Income Taxes

For the three months ended ~~June~~September 30, 2022, we recorded an income tax provision of ~~$357~~$155 million on pre-tax income of ~~$1.70 billion, or an effective tax rate of 21.1%, compared to an income tax provision of $85 million on pre-tax income of $402~~$693 million, or an effective tax rate of ~~21.2%~~22.3%, compared to an income tax benefit of $46 million on a pre-tax loss of $137 million, or an effective tax rate of 34.3%, for the three months ended ~~June~~September 30, 2021.

For the three months ended September 30, 2022, our income tax provision includes $18 million of income tax expense to record a valuation allowance in the United Kingdom due to the uncertainty surrounding the realization of the deferred tax assets as a result of the impairment described in Note 5—United Kingdom Operations Restructuring and Impairment Charges.

Our effective tax rate is impacted by earnings attributable to the noncontrolling interest in CFN, as our consolidated income tax provision does not include a tax provision on the earnings attributable to the noncontrolling interest. Our effective tax rate for the three months ended ~~June~~September 30, 2022 of ~~21.1%~~22.3%, which is based on pre-tax income of ~~$1.70 billion,~~$693 million, including ~~$174~~$100 million of earnings attributable to the noncontrolling interest, would be ~~2.4~~3.7 percentage points higher, or ~~23.5%~~26.0%, if based on pre-tax income exclusive of the ~~$174~~$100 million of earnings attributable to the noncontrolling interest. Our effective tax rate for the three months ended ~~June~~September 30, 2021 of ~~21.2%~~34.3%, which is based on a pre-tax ~~income~~loss of ~~$402~~$137 million, including ~~$71~~$94 million of earnings attributable to the noncontrolling interest, would be ~~4.6~~14.0 percentage points ~~higher,~~lower, or ~~25.8%~~20.3%, if based on pre-tax income exclusive of the ~~$71~~$94 million of earnings attributable to the noncontrolling interest. See Note 10—Income Taxes and Note ~~14—~~15—Noncontrolling Interest for additional information.

Net Earnings Attributable to Noncontrolling Interest

Net earnings attributable to noncontrolling interest increased ~~$103~~$6 million to ~~$174~~$100 million in the ~~second~~third quarter of 2022 as compared to ~~$71~~$94 million in the ~~second~~third quarter of 2021 due to higher earnings of CFN driven by higher average selling prices as described above under “Net Sales.”

Diluted Net Earnings (Loss) Per Share Attributable to Common Stockholders

Net earnings per share attributable to common stockholders increased ~~$4.44~~$3.04 to ~~$5.58~~$2.18 per diluted share in the ~~second~~third quarter of 2022 from ~~$1.14~~a net loss of $0.86 per diluted share in the ~~second~~third quarter of 2021. This increase was due primarily to an increase in

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

gross margin, driven by higher average selling prices and higher sales volume, and a decrease in charges related to our U.K. operations. These increases were partially offset by ~~an increase in~~higher natural gas costs ~~the U.K. operations restructuring charge,~~and an increase in the income tax provision due primarily to increased ~~profitability, and an increase in net earnings attributable to noncontrolling interest.~~profitability. Additionally, net earnings per diluted share increased due to a 4%7% reduction in the diluted weighted-average common shares outstanding, which declined from ~~216.6~~214.9 million shares for the three months ended ~~June~~September 30, 2021 to ~~208.9~~200.9 million shares for the three months ended ~~June~~September 30, 2022, due primarily to repurchases of common shares under our share repurchase programs.

~~Six~~Nine Months Ended ~~June~~September 30, 2022 Compared to ~~Six~~Nine Months Ended ~~June~~September 30, 2021

Net Sales

Our total net sales increased ~~$3.62~~$4.58 billion, or ~~137%~~115%, to ~~$6.26~~$8.58 billion in the first ~~six~~nine months of 2022 as compared to ~~$2.64~~$4.00 billion in the first ~~six~~nine months of 2021 due primarily to an increase in average selling prices ~~partially offset by a decrease~~and an increase in sales volume.

Average selling prices were ~~$661~~$619 per ton in the first ~~six~~nine months of 2022, or ~~144%~~109% higher compared to ~~$271~~$296 per ton in the first ~~six~~nine months of 2021, due to higher average selling prices across all of our segments, primarily driven by the impact of a tighter global nitrogen supply and demand balance, as a result of strong global demand as well as decreased global supply availability as higher global energy costs and geopolitical events drove lower global operating rates. See “Market Conditions and Current Developments—Geopolitical Environment,” above, for further discussion.

Our total sales volume of ~~9.5~~13.9 million product tons in the first ~~six~~nine months of 2022 was 3% ~~lower~~higher compared to ~~9.7~~13.5 million product tons in the first ~~six~~nine months of 2021 as a result of higher sales volume in our UAN and Granular Urea segments partially offset by lower sales volume in our ~~Granular Urea,~~ Other, AN and ~~AN segments partially offset by higher sales volume in our~~ Ammonia ~~segment.~~

~~Table of Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

segments.

Cost of Sales

Our total cost of sales increased ~~$724 million,~~approximately $1.21 billion, or ~~39%~~44%, to ~~$2.57~~$3.97 billion in the first ~~six~~nine months of 2022 as compared to ~~$1.84~~$2.77 billion in the first ~~six~~nine months of 2021. The increase in our cost of sales was due primarily to higher costs for natural gas, including the impact of realized derivatives, which increased cost of sales by ~~$623~~$981 million, and higher costs for ammonia purchased from PLNL, our joint venture in Trinidad. In addition, in the first ~~six~~nine months of 2021, ~~we recognized~~cost of sales includes a gain of $112 million ~~which is included in cost of sales, as a result of~~on the net settlement of certain natural gas contracts with our suppliers as a result of Winter Storm Uri. Partially offsetting these increases in cost of sales was a 3% decline in sales volume in the first six months of 2022 compared to the first six months of 2021, which reduced cost of sales by $117 million.

Cost of sales also includes the impact of a ~~$50~~$39 million unrealized net mark-to-market gain on natural gas derivatives in the first ~~six~~nine months of 2022 compared to a $6$18 million gain in the first ~~six~~nine months of 2021.

Cost of sales averaged ~~$271~~$287 per ton in the first ~~six~~nine months of 2022, a ~~43%~~40% increase from ~~$189~~$205 per ton in the first ~~six~~nine months of 2021. The cost of natural gas used for production, including the impact of realized derivatives, increased ~~110%~~107% to ~~$6.79~~$7.28 per MMBtu in the first ~~six~~nine months of 2022 from ~~$3.24~~$3.51 per MMBtu in the first ~~six~~nine months of 2021. The cost of natural gas used for production of ~~$3.24~~$3.51 per MMBtu in the first ~~six~~nine months of 2021 does not include the $112 million gain from the net settlement of certain natural gas contracts in February 2021.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased ~~$22~~$36 million to ~~$137~~$203 million in the first ~~six~~nine months of 2022 as compared to ~~$115~~$167 million in the first ~~six~~nine months of 2021. The increase was due primarily to higher costs associated with certain corporate initiatives, including costs related to the development of ana new enterprise resource planning system ~~that we will be implementing~~(ERP) for our North American ~~operations.~~operations and higher incentive compensation costs.

U.K. Operations ~~Restructuring~~

In the ~~six~~nine months ended ~~June~~September 30, 2022, we recognized total charges related to our U.K. operations of ~~$162~~$257 million, consisting of ~~$152~~$239 million of asset impairment charges primarily related to property, plant and equipment at our Billingham and Ince ~~U.K. facility~~facilities and ~~$10~~definite-lived intangible assets and $18 million of restructuring charges primarily related to post-employment benefits related to contractual and statutory ~~obligations.~~ obligations and one-time termination benefits. In the nine months ended September 30, 2021, we recognized total charges related to our U.K. operations of $495 million, consisting of goodwill impairment of $259 million and long-lived and intangible asset impairment charges of $236 million.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

Other Operating—Net

Other operating—net was $33 million of expense in the first nine months of 2022 compared to $7 million of expense in the first nine months of 2021. The $33 million of expense in the first nine months of 2022 includes a loss on foreign currency transactions of $38 million, which consists of foreign currency exchange rate impacts on foreign currency denominated transactions, including the impact of changes in foreign currency exchange rates on intercompany loans that were not permanently invested.

Equity in Earnings of Operating Affiliate

Equity in earnings of operating affiliate was ~~$54~~$74 million in the first ~~six~~nine months of 2022 compared to ~~$22~~$37 million in the first ~~six~~nine months of 2021. The increase was due primarily to an increase in the operating results of PLNL as a result of higher ammonia selling prices partially offset by higher natural gas costs.

Interest Expense—Net

Net interest expense increased by ~~$185~~$173 million to ~~$279~~$313 million in the first ~~six~~nine months of 2022 compared to ~~$94~~$140 million in the first ~~six~~nine months of 2021. The increase was due primarily to ~~$199~~$193 million of net interest expense recorded in the first ~~six~~nine months of 2022 related to income tax matters, which are more fully described under “Items Affecting Comparability of Results—Canada Revenue Agency Competent Authority Matter” and “Items Affecting Comparability of Results—Transfer pricing ~~reserves,~~positions,” above. This increase was partially offset by a ~~$10~~$15 million decrease in interest on borrowings due to the redemption of senior notes in April 2022, September 2021 and March 2021.

Loss on Debt Extinguishment

On April 21, 2022, we redeemed in full all of the $500 million outstanding principal amount of the 2023 Notes in accordance with the optional redemption provisions in the indenture governing the 2023 Notes. The total aggregate redemption price paid in connection with the redemption of the 2023 Notes was $513 million, including accrued interest. As a result, we recognized a loss on debt extinguishment of $8 million, consisting primarily of the premium paid on the redemption of the $500 million principal amount of the 2023 Notes prior to their scheduled maturity.

On September 10, 2021, we redeemed $250 million principal amount, representing one-third of the $750 million principal amount outstanding immediately prior to such redemption, of the 2023 Notes, in accordance with the optional redemption provisions in the indenture governing the 2023 Notes. The total aggregate redemption price paid on the 2023 Notes was approximately $265 million, including accrued interest. As a result, we recognized a loss on debt extinguishment of $13 million, consisting primarily of a premium paid on the redemption of the $250 million principal amount of the 2023 Notes prior to their scheduled maturity.

On March 20, 2021, we redeemed in full all of the ~~remaining~~ $250 million outstanding principal amount of the 2021 Notes in accordance with the optional redemption provisions in the indenture governing the 2021 Notes. The total aggregate redemption price paid on the 2021 Notes in connection with the redemption was $258 million, including accrued interest. As a result, we recognized a loss on debt extinguishment of $6 million, consisting primarily ~~consisting~~ of athe premium paid on the ~~early~~ redemption of the ~~notes.~~$250 million principal amount of the 2021 Notes prior to their scheduled maturity.

Other Non-Operating—Net

Other non-operating—net was $24 million of expense in the first nine months of 2022 compared to $17 million of income in the first nine months of 2021. The $24 million of expense in the first nine months of 2022 was due primarily to a pension settlement loss of $24 million related to the purchase of a non-participating group annuity contract to settle retiree obligations under our primary U.S. defined benefit pension plan, which is more fully described under “Items Affecting Comparability of Results—Pension settlement loss,” above. The $17 million of income in the first nine months of 2021 was due primarily to a gain of $20 million on the sale of EU carbon credits that, due to Brexit, could no longer be utilized by our U.K. plants for carbon emission obligations in the United Kingdom.

Income Taxes

For the nine months ended September 30, 2022, we recorded an income tax provision of $913 million on pre-tax income of $3.84 billion, or an effective tax rate of 23.8%, compared to an income tax provision of $57 million on pre-tax income of $458 million, or an effective tax rate of 12.3%, for the nine months ended September 30, 2021.

For the nine months ended September 30, 2022, our income tax provision includes $18 million of income tax expense to record a valuation allowance in the United Kingdom, $22 million of income tax benefit for the excess tax benefit related to

3539

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

~~Income Taxes~~

~~For the six months ended June 30, 2022, we recorded an~~certain share-based compensation activity and $78 million of income tax provision of $758 million on pre-tax income of $3.15 billion, or an effective tax rate of 24.1%, compared to an income tax provision of $103 million on pre-tax income of $595 million, or an effective tax rate of 17.4%, for the six months ended June 30, 2021.

~~For the six months ended June 30, 2022, our income tax provision includes $78 million of tax expense~~ related to the Canada Revenue Agency Competent Authority Matter, which is further described above under “Items Affecting Comparability of Results.”~~Additionally, for~~

For the ~~six~~nine months ended ~~June~~September 30, ~~2022,~~2021, we ~~recognizeda $22 million~~did not record an income ~~tax benefit for the excess~~ tax benefit related to ~~certain share-based compensation activity.~~

~~For~~ the ~~six months ended June 30, 2021,~~goodwill impairment described in Note 5—United Kingdom Operations Restructuring and Impairment Charges, above, as the impairment is non-deductible for income tax purposes. In addition, our income tax provision includes a ~~$22~~$36 million benefit reflecting the impact of agreement on certain issues related to U.S. federal income tax audits.

Our effective tax rate is also impacted by earnings attributable to the noncontrolling interest in CFN, as our consolidated income tax provision does not include a tax provision on the earnings attributable to the noncontrolling interest. Our effective tax rate for the ~~six~~nine months ended ~~June~~September 30, 2022 of ~~24.1%~~23.8%, which is based on pre-tax income of ~~$3.15~~$3.84 billion, including ~~$342~~$442 million of earnings attributable to the noncontrolling interest, would be ~~2.9~~3.1 percentage points higher, or ~~27.0%~~26.9%, if based on pre-tax income exclusive of the ~~$342~~$442 million of earnings attributable to the noncontrolling interest. Our effective tax rate for the ~~six~~nine months ended ~~June~~September 30, 2021 of ~~17.4%~~12.3%, which is based on pre-tax income of ~~$595~~$458 million, including ~~$95~~$189 million of earnings attributable to the noncontrolling interest, would be ~~3.3~~8.7 percentage points higher, or ~~20.7%~~21.0%, if based on pre-tax income exclusive of the ~~$95~~$189 million of earnings attributable to the noncontrolling interest. See Note 10—Income Taxes and Note ~~14—~~15—Noncontrolling Interest for additional information.

Net Earnings Attributable to Noncontrolling Interest

Net earnings attributable to noncontrolling interest increased ~~260%~~134% to ~~$342~~$442 million in the first ~~six~~nine months of 2022 from ~~$95~~$189 million in the first ~~six~~nine months of 2021 due to higher earnings of CFN driven by higher average selling prices due primarily to a tighter global nitrogen supply and demand balance as higher global energy costs drove lower global operating rates.

Diluted Net Earnings Per Share Attributable to Common Stockholders

Net earnings per share attributable to common stockholders increased ~~434%~~$11.06 per diluted share to ~~$9.78~~$12.04 per diluted share in the first ~~six~~nine months of 2022 from ~~$1.83~~$0.98 per diluted share in the first ~~six~~nine months of 2021. This increase is due primarily to an increase in gross margin, driven by higher average selling prices and higher sales volume, and a decrease in charges related to our U.K. operations. These factors that increased net earnings were partially offset by ~~increases in~~higher natural gas costs, ~~the U.K. operations restructuring charge,~~ an increase in the income tax provision due primarily to increased profitability, and an increase in net earnings attributable to noncontrolling interest. Additionally, net earnings per diluted share increased due to a 3%5% reduction in the diluted weighted-average common shares outstanding, which declined from ~~216.3~~216.4 million shares for the ~~six~~nine months ended ~~June~~September 30, 2021 to ~~209.4~~206.5 million shares for the ~~six~~nine months ended ~~June~~September 30, 2022, due primarily to repurchases of common shares under our share repurchase programs.

3640

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

Operating Results by Business Segment

Our reportable segments consist of Ammonia, Granular Urea, UAN, AN and Other. 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 primarily of selling, general and administrative expenses and other operating—net) and non-operating expenses (consisting primarily of interest and income taxes), are centrally managed and are not included in the measurement of segment profitability reviewed by management. The following tables present summary operating results by business segment:


		Ammonia(1)			Granular Urea(2)			UAN(2)			AN(2)			Other(2)			Consolidated				Ammonia(1)			Granular Urea(2)			UAN(2)			AN(2)			Other(2)			Consolidated
		(in millions)																			(in millions)
Three months ended June 30, 2022
Three months ended September 30, 2022																				Three months ended September 30, 2022
Net sales	Net sales	$	1,115		$	833		$	976		$	253		$	212		$	3,389		Net sales	$	531		$	689		$	736		$	180		$	185		$	2,321
Cost of sales	Cost of sales	442			360			343			151			102			1,398			Cost of sales	353			394			414			136			108			1,405
Gross margin	Gross margin	$	673		$	473		$	633		$	102		$	110		$	1,991		Gross margin	$	178		$	295		$	322		$	44		$	77		$	916
Gross margin percentage	Gross margin percentage	60.4		%	56.8		%	64.9		%	40.3		%	51.9		%	58.7		%	Gross margin percentage	33.5		%	42.8		%	43.8		%	24.4		%	41.6		%	39.5		%
Three months ended June 30, 2021
Three months ended September 30, 2021																				Three months ended September 30, 2021
Net sales	Net sales	$	459		$	433		$	434		$	136		$	126		$	1,588		Net sales	$	344		$	386		$	390		$	118		$	124		$	1,362
Cost of sales	Cost of sales	333			241			296			120			95			1,085			Cost of sales	262			200			233			122			105			922
Gross margin	Gross margin	$	126		$	192		$	138		$	16		$	31		$	503		Gross margin	$	82		$	186		$	157		$	(4)		$	19		$	440
Gross margin percentage	Gross margin percentage	27.5		%	44.3		%	31.8		%	11.8		%	24.6		%	31.7		%	Gross margin percentage	23.8		%	48.2		%	40.3		%	(3.4)		%	15.3		%	32.3		%
Six months ended June 30, 2022
Nine months ended September 30, 2022																				Nine months ended September 30, 2022
Net sales	Net sales	$	1,755		$	1,598		$	1,991		$	476		$	437		$	6,257		Net sales	$	2,286		$	2,287		$	2,727		$	656		$	622		$	8,578
Cost of sales	Cost of sales	722			630			688			322			206			2,568			Cost of sales	1,075			1,024			1,102			458			314			3,973
Gross margin	Gross margin	$	1,033		$	968		$	1,303		$	154		$	231		$	3,689		Gross margin	$	1,211		$	1,263		$	1,625		$	198		$	308		$	4,605
Gross margin percentage	Gross margin percentage	58.9		%	60.6		%	65.4		%	32.4		%	52.9		%	59.0		%	Gross margin percentage	53.0		%	55.2		%	59.6		%	30.2		%	49.5		%	53.7		%
Six months ended June 30, 2021
Nine months ended September 30, 2021																				Nine months ended September 30, 2021
Net sales	Net sales	$	665		$	832		$	666		$	241		$	232		$	2,636		Net sales	$	1,009		$	1,218		$	1,056		$	359		$	356		$	3,998
Cost of sales	Cost of sales	413			505			526			215			185			1,844			Cost of sales	675			705			759			337			290			2,766
Gross margin	Gross margin	$	252		$	327		$	140		$	26		$	47		$	792		Gross margin	$	334		$	513		$	297		$	22		$	66		$	1,232
Gross margin percentage	Gross margin percentage	37.9		%	39.3		%	21.0		%	10.8		%	20.3		%	30.0		%	Gross margin percentage	33.1		%	42.1		%	28.1		%	6.1		%	18.5		%	30.8		%

_______________________________________________________________________________

(1)Cost of sales and gross margin for the Ammonia segment in the ~~six~~nine months ended ~~June~~September 30, 2021 include a $112 million gain on the net settlement of certain natural gas contracts with our suppliers. See Note ~~13—~~14—Derivative Financial Instruments for additional information.

(2)The cost of the products that are upgraded into other products is transferred at cost into the upgraded product results.

3741

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

Ammonia Segment

Our Ammonia segment produces anhydrous ammonia (ammonia), which is our most concentrated nitrogen product. Ammonia contains 82% nitrogen and 18% hydrogen. The results of our Ammonia segment consist of sales of ammonia to external customers. In addition, ammonia is the base nitrogen product that we upgrade into other nitrogen products such as granular urea, UAN and AN. We produce ammonia at all of our nitrogen manufacturing complexes.

The following table presents summary operating data for our Ammonia segment:


		Three Months Ended June 30,											Six Months Ended June 30,												Three Months Ended September 30,											Nine Months Ended September 30,
		2022			2021			2022 v. 2021					2022			2021			2022 v. 2021						2022			2021			2022 v. 2021					2022			2021			2022 v. 2021
		(dollars in millions, except per ton amounts)																							(dollars in millions, except per ton amounts)
Net sales	Net sales	$	1,115		$	459		$	656		143	%	$	1,755		$	665		$	1,090		164	%	Net sales	$	531		$	344		$	187		54	%	$	2,286		$	1,009		$	1,277		127	%
Cost of sales	Cost of sales	442			333			109			33	%	722			413			309			75	%	Cost of sales	353			262			91			35	%	1,075			675			400			59	%
Gross margin	Gross margin	$	673		$	126		$	547		434	%	$	1,033		$	252		$	781		310	%	Gross margin	$	178		$	82		$	96		117	%	$	1,211		$	334		$	877		263	%
Gross margin percentage	Gross margin percentage	60.4		%	27.5		%	32.9		%			58.9		%	37.9		%	21.0		%			Gross margin percentage	33.5		%	23.8		%	9.7		%			53.0		%	33.1		%	19.9		%
Sales volume by product tons (000s)	Sales volume by product tons (000s)	1,035			1,036			(1)			—	%	1,762			1,719			43			3	%	Sales volume by product tons (000s)	643			690			(47)			(7)	%	2,405			2,409			(4)			—	%
Sales volume by nutrient tons (000s)(1)	Sales volume by nutrient tons (000s)(1)	849			850			(1)			—	%	1,445			1,410			35			2	%	Sales volume by nutrient tons (000s)(1)	528			566			(38)			(7)	%	1,973			1,976			(3)			—	%
Average selling price per product ton	Average selling price per product ton	$	1,077		$	443		$	634		143	%	$	996		$	387		$	609		157	%	Average selling price per product ton	$	826		$	499		$	327		66	%	$	951		$	419		$	532		127	%
Average selling price per nutrient ton(1)	Average selling price per nutrient ton(1)	$	1,313		$	540		$	773		143	%	$	1,215		$	472		$	743		157	%	Average selling price per nutrient ton(1)	$	1,006		$	608		$	398		65	%	$	1,159		$	511		$	648		127	%
Gross margin per product ton	Gross margin per product ton	$	650		$	122		$	528		433	%	$	586		$	147		$	439		299	%	Gross margin per product ton	$	277		$	119		$	158		133	%	$	504		$	139		$	365		263	%
Gross margin per nutrient ton(1)	Gross margin per nutrient ton(1)	$	793		$	148		$	645		436	%	$	715		$	179		$	536		299	%	Gross margin per nutrient ton(1)	$	337		$	145		$	192		132	%	$	614		$	169		$	445		263	%
Depreciation and amortization	Depreciation and amortization	$	50		$	61		$	(11)		(18)	%	$	84		$	97		$	(13)		(13)	%	Depreciation and amortization	$	35		$	41		$	(6)		(15)	%	$	119		$	138		$	(19)		(14)	%
Unrealized net mark-to-market gain on natural gas derivatives		$	(2)		$	—		$	(2)		N/M		$	(10)		$	(2)		$	(8)		(400)	%
Unrealized net mark-to-market loss (gain) on natural gas derivatives																								Unrealized net mark-to-market loss (gain) on natural gas derivatives	$	4		$	(4)		$	8		N/M		$	(6)		$	(6)		$	—		—	%

N/M—Not Meaningful

(1)Ammonia represents 82% nitrogen content. Nutrient tons represent the tons of nitrogen within the product tons.

~~Second~~In September 2022, due to the unprecedented high price of natural gas in the United Kingdom, we temporarily idled ammonia production at our Billingham, U.K. complex. The Billingham complex has continued to produce upgraded products, including AN, by utilizing ammonia on hand and ammonia that has been imported from our Donaldsonville, Louisiana complex.

Third Quarter of 2022 Compared to ~~Second~~Third Quarter of 2021

Net Sales. Net sales in our Ammonia segment increased by ~~$656~~$187 million, or ~~143%~~54%, to ~~$1.12 billion~~$531 million in the ~~second~~third quarter of 2022 from ~~$459~~$344 million in the ~~second~~third quarter of 2021 due primarily to a ~~143%~~66% increase in average selling prices, partially offset by a 7% decrease in sales volume. Average selling prices increased to $826 per ton in the third quarter of 2022 compared to $499 per ton in the third quarter of 2021 due primarily to the impact of a tighter global nitrogen supply and demand balance, reflecting in part the geopolitical factors described above under “Market Conditions and Current Developments—Geopolitical Environment.” Sales volume was lower due primarily to lower supply availability from inventory and net production.

Cost of Sales. Cost of sales in our Ammonia segment averaged $549 per ton in the third quarter of 2022, a 44% increase from $380 per ton in the third quarter of 2021. The increase was due primarily to higher realized natural gas costs and a higher cost per ton for purchased ammonia from PLNL, our joint venture in Trinidad.

Gross Margin. Gross margin in our Ammonia segment increased by $96 million to $178 million in the third quarter of 2022 from $82 million in the third quarter of 2021, and our gross margin percentage was 33.5% in the third quarter of 2022 compared to 23.8% in the third quarter of 2021. The increase in gross margin was due primarily to a 66% increase in average selling prices, which increased gross margin by $214 million. The impact of the increase in average selling prices was partially offset by an increase in realized natural gas costs, which reduced gross margin by $91 million, a 7% decrease in sales volume, which reduced gross margin by $10 million, and a $9 million net increase in manufacturing, maintenance and other costs. Gross margin also includes the impact of a $4 million unrealized net mark-to-market loss on natural gas derivatives in the third quarter of 2022 compared to a $4 million gain in the third quarter of 2021.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021

Net Sales. Net sales in our Ammonia segment increased by $1.28 billion, or 127%, to $2.29 billion in the nine months ended September 30, 2022 from $1.01 billion in the nine months ended September 30, 2021 due primarily to a 127% increase in average selling prices. ~~Average~~The increase in average selling prices ~~increased to $1,077 per ton in the second quarter of 2022 compared to $443 per ton in the second quarter of 2021~~was due primarily to the impact of a tighter global nitrogen supply and demand balance, reflecting in part the geopolitical factors described above under “Market Conditions and Current Developments—Geopolitical Environment.”

Cost of Sales. Cost of sales in our Ammonia segment averaged ~~$427~~$447 per ton in the ~~second quarter of~~nine months ended September 30, 2022, a ~~33%~~60% increase from ~~$321~~$280 per ton in the second quarter of 2021. The increase was due primarily to higher realized natural gas costs, and a higher cost per ton for purchased ammonia from our joint venture in Trinidad, partially offset by lower manufacturing and maintenance costs.

~~Gross Margin~~. Gross margin in our Ammonia segment increased by $547 million to $673 million in the second quarter of 2022 from $126 million in the second quarter of 2021, and our gross margin percentage was 60.4% in the second quarter of 2022 compared to 27.5% in the second quarter of 2021~~. The increase in gross margin was due primarily to a 143%~~ ~~increase~~ ~~in average selling prices, which~~ ~~increased~~ gross margin by $662 million, a $35 million net decrease in manufacturing, maintenance and other costs, and an increase in gross margin of $5 million due primarily to favorable location product mix. These increases were offset by an increase in realized natural gas costs, which reduced gross margin by $98 million, and higher purchased product costs, which reduced gross margin by $59 million. Gross margin also includes ~~the impact of a~~ ~~$2 million~~ ~~unrealized net mark-to-market gain on natural gas derivatives in the second quarter of 2022.~~

~~Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021~~

~~Net Sales.~~ ~~Net sales in our Ammonia segment increased by $1.09 billion, or 164%, to $1.76 billion in the six~~nine months ended June 30, 2022 from $665 million in the six months ended June 30, 2021 due primarily to a 157% increase in average selling prices and a 3% increase in sales volume. The increase in average selling prices was due primarily to the impact of a tighter global nitrogen supply and demand balance, reflecting in part the geopolitical factors described above under “Market

~~Table of Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

~~Conditions and Current Developments—Geopolitical Environment.” Sales volume was higher due primarily to higher supply availability resulting from higher production.~~

~~Cost of Sales.~~ ~~Cost of sales in our Ammonia segment averaged $410 per ton in the six months ended June 30, 2022, a 71% increase from $240 per ton in the six months ended June~~September 30, 2021. The increase is due primarily to higher realized natural gas costs, a higher cost per ton for purchased ammonia from our joint venture in Trinidad and the impact of the $112 million gain on the net settlement of certain natural gas contracts in February 2021. See “Market Conditions and Current Developments—Natural Gas” above, for additional information on the operational impact of Winter Storm Uri. ~~These increases in cost of sales were partially offset by lower manufacturing and maintenance costs.~~

Gross Margin. Gross margin in our Ammonia segment increased by ~~$781~~$877 million to ~~$1.03~~$1.21 billion in the ~~six~~nine months ended ~~June~~September 30, 2022 from ~~$252~~$334 million in the ~~six~~nine months ended ~~June~~September 30, 2021, and our gross margin percentage was ~~58.9%~~53.0% in the ~~six~~nine months ended ~~June~~September 30, 2022 compared to ~~37.9%~~33.1% in the ~~six~~nine months ended ~~June~~September 30, 2021. The increase in gross margin was due primarily to a ~~157%~~127% increase in average selling prices, which increased gross margin by ~~$1.08~~$1.29 billion, ~~a $48 million net decrease in manufacturing, maintenance~~ and ~~other costs, and a 3% increase in sales volume,~~favorable location product mix, which increased gross margin by ~~$22~~$12 million. These increases were partially offset by an increase in realized natural gas costs, which decreased gross margin by ~~$150~~$241 million, and ~~higher purchased product~~a net increase in manufacturing, maintenance and other costs, which ~~reduced~~decreased gross margin by ~~$110~~$71 million. In addition, the impact of the $112 million gain on the net settlement of certain natural gas contracts is included in the ~~six~~nine months ended June 30, 2021. Gross margin also includes the impact of a $10 million unrealized net mark-to-market gain on natural gas derivatives in the six months ended June 30, 2022 compared to a $2 million gain in the six months ended JuneSeptember 30, 2021.

Granular Urea Segment

Our Granular Urea segment produces granular urea, which contains 46% nitrogen. Produced from ammonia and carbon dioxide, it has the highest nitrogen content of any of our solid nitrogen fertilizers. Granular urea is produced at our Donaldsonville, Louisiana; Medicine Hat, Alberta; and Port Neal, Iowa, nitrogen complexes.

The following table presents summary operating data for our Granular Urea segment:


		Three Months Ended June 30,											Six Months Ended June 30,												Three Months Ended September 30,											Nine Months Ended September 30,
		2022			2021			2022 v. 2021					2022			2021			2022 v. 2021						2022			2021			2022 v. 2021					2022			2021			2022 v. 2021
		(dollars in millions, except per ton amounts)																							(dollars in millions, except per ton amounts)
Net sales	Net sales	$	833		$	433		$	400		92	%	$	1,598		$	832		$	766		92	%	Net sales	$	689		$	386		$	303		78	%	$	2,287		$	1,218		$	1,069		88	%
Cost of sales	Cost of sales	360			241			119			49	%	630			505			125			25	%	Cost of sales	394			200			194			97	%	1,024			705			319			45	%
Gross margin	Gross margin	$	473		$	192		$	281		146	%	$	968		$	327		$	641		196	%	Gross margin	$	295		$	186		$	109		59	%	$	1,263		$	513		$	750		146	%
Gross margin percentage	Gross margin percentage	56.8		%	44.3		%	12.5		%			60.6		%	39.3		%	21.3		%			Gross margin percentage	42.8		%	48.2		%	(5.4)		%			55.2		%	42.1		%	13.1		%
Sales volume by product tons (000s)	Sales volume by product tons (000s)	1,181			1,092			89			8	%	2,277			2,412			(135)			(6)	%	Sales volume by product tons (000s)	1,262			860			402			47	%	3,539			3,272			267			8	%
Sales volume by nutrient tons (000s)(1)	Sales volume by nutrient tons (000s)(1)	544			502			42			8	%	1,048			1,109			(61)			(6)	%	Sales volume by nutrient tons (000s)(1)	580			396			184			46	%	1,628			1,505			123			8	%
Average selling price per product ton	Average selling price per product ton	$	705		$	397		$	308		78	%	$	702		$	345		$	357		103	%	Average selling price per product ton	$	546		$	449		$	97		22	%	$	646		$	372		$	274		74	%
Average selling price per nutrient ton(1)	Average selling price per nutrient ton(1)	$	1,531		$	863		$	668		77	%	$	1,525		$	750		$	775		103	%	Average selling price per nutrient ton(1)	$	1,188		$	975		$	213		22	%	$	1,405		$	809		$	596		74	%
Gross margin per product ton	Gross margin per product ton	$	401		$	176		$	225		128	%	$	425		$	136		$	289		213	%	Gross margin per product ton	$	234		$	216		$	18		8	%	$	357		$	157		$	200		127	%
Gross margin per nutrient ton(1)	Gross margin per nutrient ton(1)	$	869		$	382		$	487		127	%	$	924		$	295		$	629		213	%	Gross margin per nutrient ton(1)	$	509		$	470		$	39		8	%	$	776		$	341		$	435		128	%
Depreciation and amortization	Depreciation and amortization	$	70		$	55		$	15		27	%	$	134		$	121		$	13		11	%	Depreciation and amortization	$	79		$	58		$	21		36	%	$	213		$	179		$	34		19	%
Unrealized net mark-to-market gain on natural gas derivatives		$	(1)		$	—		$	(1)		N/M		$	(8)		$	(2)		$	(6)		(300)	%
Unrealized net mark-to-market loss (gain) on natural gas derivatives																								Unrealized net mark-to-market loss (gain) on natural gas derivatives	$	4		$	(3)		$	7		N/M		$	(4)		$	(5)		$	1		20	%

N/M—Not Meaningful

(1)Granular urea represents 46% nitrogen content. Nutrient tons represent the tons of nitrogen within the product tons.

~~Second~~Third Quarter of 2022 Compared to ~~Second~~Third Quarter of 2021

Net Sales. Net sales in our Granular Urea segment increased ~~$400~~$303 million, or ~~92%~~78%, to ~~$833~~$689 million in the ~~second~~third quarter of 2022 from ~~$433~~$386 million in the ~~second~~third quarter of 2021 due primarily to a ~~78%~~47% increase in sales volume and a 22% increase in average selling prices. Sales volume was higher due primarily to higher supply availability resulting from higher production. Average selling prices increased to $546 per ton in the third quarter of 2022 compared to $449 per ton in the third quarter of

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

2021 due primarily to the impact of a tighter global nitrogen supply and demand balance, reflecting in part the geopolitical factors described above under “Market Conditions and Current Developments—Geopolitical Environment.”

Cost of Sales. Cost of sales in our Granular Urea segment averaged $312 per ton in the third quarter of 2022, a 34% increase from $233 per ton in the third quarter of 2021, due primarily to higher realized natural gas costs.

Gross Margin. Gross margin in our Granular Urea segment increased by $109 million to $295 million in the third quarter of 2022 from $186 million in the third quarter of 2021, and our gross margin percentage was 42.8% in the third quarter of 2022 compared to 48.2% in the third quarter of 2021. The increase in gross margin was due primarily to a 22% increase in average selling prices, which increased gross margin by $120 million, a 47% increase in sales volume, which increased gross margin by $95 million, and a $3 million net decrease in manufacturing, maintenance and other costs. These factors were partially offset by an increase in realized natural gas costs, which reduced gross margin by $96 million. Gross margin also includes the impact of a $4 million unrealized net mark-to-market loss on natural gas derivatives in the third quarter of 2022 compared to a $3 million gain in the third quarter of 2021.

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021

Net Sales. Net sales in our Granular Urea segment increased $1.07 billion, or 88%, to $2.29 billion in the nine months ended September 30, 2022 from $1.22 billion in the nine months ended September 30, 2021 due primarily to a 74% increase in average selling prices and an 8% increase in sales volume. Average selling prices increased to ~~$705~~$646 per ton in the ~~second quarter of~~nine months ended September 30, 2022 compared to ~~$397~~$372 per ton in the ~~second quarter of~~nine months ended September 30, 2021 due primarily to the impact of a tighter global nitrogen supply and demand balance, reflecting in part the geopolitical factors described above under “Market Conditions and Current Developments—Geopolitical Environment.” Sales volume was higher due primarily to higher supply availability resulting from higher production.

~~Table of Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

Cost of Sales. Cost of sales in our Granular Urea segment averaged ~~$304~~$289 per ton in the ~~second quarter of~~nine months ended September 30, 2022, a ~~38%~~34% increase from ~~$221~~$215 per ton in the ~~second quarter of 2021, due primarily to higher realized natural gas costs.~~

~~Gross Margin~~. Gross margin in our Granular Urea segment increased by $281 million to $473 million in the second quarter of 2022 from $192 million in the second quarter of 2021, and our gross margin percentage was 56.8% in the second quarter of 2022 compared to 44.3% in the second quarter of 2021. The increase in gross margin was due primarily to a 78% increase in average selling prices, which increased gross margin by $363 million, and an 8% increase in sales volume, which increased gross margin by ~~$31 million. These factors were partially offset by an increase in realized natural gas costs, which reduced gross margin by $92 million,~~ and a $22 million net increase in manufacturing, maintenance and other costs. Gross margin also includes the impact of a $1 million unrealized net mark-to-market gain on natural gas derivatives in the second quarter of 2022.

~~Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021~~

~~Net Sales.~~ ~~Net sales in our Granular Urea segment increased $766 million, or 92%, to $1.60 billion in the six~~nine months ended June 30, 2022 from $832 million in the six months ended June 30, 2021 due primarily to a 103% increase in average selling prices, partially offset by a 6% decrease in sales volume. Average selling prices increased to $702 per ton in the six months ended June 30, 2022 compared to $345 per ton in the six months ended June 30, 2021 due primarily to the impact of a tighter global nitrogen supply and demand balance, reflecting in part the geopolitical factors described above under “Market Conditions and Current Developments—Geopolitical Environment.” Sales volume was lower due primarily to lower purchases of granular urea partially offset by higher production in the first half of 2022 compared to the first half of 2021.

~~Cost of Sales.~~ ~~Cost of sales in our Granular Urea segment averaged $277 per ton in the six months ended June 30, 2022, a 33% increase from $209 per ton in the six months ended June~~September 30, 2021, due primarily to higher realized natural gas costs.

Gross Margin. Gross margin in our Granular Urea segment increased by ~~$641~~$750 million to ~~$968~~$1.26 billion in the nine months ended September 30, 2022 from $513 million in the ~~six~~nine months ended ~~June 30, 2022 from $327 million in the six months ended June~~September 30, 2021, and our gross margin percentage was ~~60.6%~~55.2% in the ~~six~~nine months ended ~~June~~September 30, 2022 compared to ~~39.3%~~42.1% in the ~~six~~nine months ended ~~June~~September 30, 2021. The increase in gross margin was due primarily to a ~~103%~~74% increase in average selling prices, which increased gross margin by ~~$797 million. Gross~~$917 million, an 8% increase in sales volume, which increased gross margin ~~was also impacted~~by $112 million, and a $42 million net decrease in manufacturing, maintenance and other costs. These factors were partially offset by higher realized natural gas costs, which decreased gross margin by ~~$140~~$236 million a $39 million net increase in manufacturing, maintenance and other costs, and an increase in urea production as compared to urea purchased for resale in 2021 from winter storm outages, which increased gross margin b~~y $17 million.~~. Gross margin also includes the impact of ~~an $8~~a $4 million unrealized net mark-to-market gain on natural gas derivatives in the ~~six~~nine months ended ~~June~~September 30, 2022 compared to a $2$5 million gain in the ~~six~~nine months ended ~~June~~September 30, 2021.

4044

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

UAN Segment

Our UAN segment produces urea ammonium nitrate solution (UAN). UAN, a liquid fertilizer product with a nitrogen content that typically ranges from 28% to 32%, is produced by combining urea and ammonium nitrate. UAN is produced at our nitrogen complexes in Courtright, Ontario; Donaldsonville, Louisiana; Port Neal, Iowa; Verdigris, Oklahoma; Woodward, Oklahoma; and Yazoo City, Mississippi.

The following table presents summary operating data for our UAN segment:


		Three Months Ended June 30,											Six Months Ended June 30,												Three Months Ended September 30,											Nine Months Ended September 30,
		2022			2021			2022 v. 2021					2022			2021			2022 v. 2021						2022			2021			2022 v. 2021					2022			2021			2022 v. 2021
		(dollars in millions, except per ton amounts)																							(dollars in millions, except per ton amounts)
Net sales	Net sales	$	976		$	434		$	542		125	%	$	1,991		$	666		$	1,325		199	%	Net sales	$	736		$	390		$	346		89	%	$	2,727		$	1,056		$	1,671		158	%
Cost of sales	Cost of sales	343			296			47			16	%	688			526			162			31	%	Cost of sales	414			233			181			78	%	1,102			759			343			45	%
Gross margin	Gross margin	$	633		$	138		$	495		359	%	$	1,303		$	140		$	1,163		N/M		Gross margin	$	322		$	157		$	165		105	%	$	1,625		$	297		$	1,328		447	%
Gross margin percentage	Gross margin percentage	64.9		%	31.8		%	33.1		%			65.4		%	21.0		%	44.4		%			Gross margin percentage	43.8		%	40.3		%	3.5		%			59.6		%	28.1		%	31.5		%
Sales volume by product tons (000s)	Sales volume by product tons (000s)	1,626			1,949			(323)			(17)	%	3,454			3,463			(9)			—	%	Sales volume by product tons (000s)	1,644			1,283			361			28	%	5,098			4,746			352			7	%
Sales volume by nutrient tons (000s)(1)	Sales volume by nutrient tons (000s)(1)	515			612			(97)			(16)	%	1,091			1,088			3			—	%	Sales volume by nutrient tons (000s)(1)	519			405			114			28	%	1,610			1,493			117			8	%
Average selling price per product ton	Average selling price per product ton	$	600		$	223		$	377		169	%	$	576		$	192		$	384		200	%	Average selling price per product ton	$	448		$	304		$	144		47	%	$	535		$	223		$	312		140	%
Average selling price per nutrient ton(1)	Average selling price per nutrient ton(1)	$	1,895		$	709		$	1,186		167	%	$	1,825		$	612		$	1,213		198	%	Average selling price per nutrient ton(1)	$	1,418		$	963		$	455		47	%	$	1,694		$	707		$	987		140	%
Gross margin per product ton	Gross margin per product ton	$	389		$	71		$	318		448	%	$	377		$	40		$	337		N/M		Gross margin per product ton	$	196		$	122		$	74		61	%	$	319		$	63		$	256		406	%
Gross margin per nutrient ton(1)	Gross margin per nutrient ton(1)	$	1,229		$	225		$	1,004		446	%	$	1,194		$	129		$	1,065		N/M		Gross margin per nutrient ton(1)	$	620		$	388		$	232		60	%	$	1,009		$	199		$	810		407	%
Depreciation and amortization	Depreciation and amortization	$	65		$	76		$	(11)		(14)	%	$	135		$	132		$	3		2	%	Depreciation and amortization	$	73		$	56		$	17		30	%	$	208		$	188		$	20		11	%
Unrealized net mark-to-market gain on natural gas derivatives		$	—		$	—		$	—		—	%	$	(8)		$	(2)		$	(6)		(300)	%
Unrealized net mark-to-market loss (gain) on natural gas derivatives																								Unrealized net mark-to-market loss (gain) on natural gas derivatives	$	4		$	(3)		$	7		N/M		$	(4)		$	(5)		$	1		20	%

N/M—Not Meaningful

(1)UAN represents between 28% and 32% of nitrogen content. Nutrient tons represent the tons of nitrogen within the product tons.

~~Second~~Third Quarter of 2022 Compared to ~~Second~~Third Quarter of 2021

Net Sales. Net sales in our UAN segment increased ~~$542~~$346 million, or ~~125%~~89%, to ~~$976~~$736 million in the ~~second~~third quarter of 2022 from ~~$434~~$390 million in the ~~second~~third quarter of 2021 due to a ~~169%~~47% increase in average selling prices ~~partially offset by~~and a ~~17% decrease~~28% increase in sales volume. Average selling prices increased to ~~$600~~$448 per ton in the ~~second~~third quarter of 2022 compared to ~~$223~~$304 per ton in the ~~second~~third quarter of 2021 due primarily to the impact of a tighter global nitrogen supply and demand balance, reflecting in part the geopolitical factors described above under “Market Conditions and Current Developments—Geopolitical Environment.” Sales volume was ~~lower~~higher due primarily to greater supply availability as a result of higher production, as well as a delay in fertilizer application from the second quarter of 2022 into the third quarter of 2022 due to delayed crop planting ~~and fertilizer application driven by~~as a result of unfavorable weather conditions.

Cost of Sales. Cost of sales in our UAN segment averaged ~~$211~~$252 per ton in the ~~second~~third quarter of 2022, a ~~39%~~38% increase from ~~$152~~$182 per ton in the ~~second~~third quarter of 2021, due primarily to the impact of higher realized natural gas costs and higher freight costs due primarily to ~~ship UAN to meet demand on both the east and west coasts of the United States.~~an increase in exports.

Gross Margin. Gross margin in our UAN segment increased by ~~$495~~$165 million to ~~$633~~$322 million in the ~~second~~third quarter of 2022 from ~~$138~~$157 million in the ~~second~~third quarter of 2021, and our gross margin percentage was ~~64.9%~~43.8% in the ~~second~~third quarter of 2022 compared to ~~31.8%~~40.3% in the ~~second~~third quarter of 2021. The increase in gross margin was due primarily to a ~~169%~~47% increase in average selling prices, which increased gross margin by ~~$616~~$235 million, and a 28% increase in sales volume, which increased gross margin by $61 million. ~~The impact of higher average selling prices was~~These increases were partially offset by an increase in realized natural gas costs, which reduced gross margin by ~~$65 million, a 17% decrease in sales volume, which decreased gross margin by $34~~$90 million, and a ~~$22 million~~ net increase in manufacturing, maintenance and other costs, which reduced gross margin by $34 million.Gross margin also includes the impact of a $4 million unrealized net mark-to-market loss on natural gas derivatives in the third quarter of 2022 compared to a $3 million gain in the third quarter of 2021.

~~Six~~Nine Months Ended ~~June~~September 30, 2022 Compared to ~~Six~~Nine Months Ended ~~June~~September 30, 2021

Net Sales. Net sales in our UAN segment increased ~~$1.33~~$1.67 billion, or ~~199%~~158%, to ~~$1.99~~$2.73 billion in the ~~six~~nine months ended ~~June~~September 30, 2022 from ~~$666 million~~$1.06 billion in the ~~six~~nine months ended ~~June~~September 30, 2021 due primarily to a ~~200%~~140% increase in average selling ~~prices.~~prices and a 7% increase in sales volume. Average selling prices increased to ~~$576~~$535 per ton in the ~~six~~nine months

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

ended ~~June~~September 30, 2022 compared to ~~$192~~$223 per ton in the ~~six~~nine months ended ~~June~~September 30, 2021, due primarily to the impact of a tighter global nitrogen supply and demand balance, reflecting in part the geopolitical factors described above under “Market Conditions and Current Developments—Geopolitical Environment.”

~~Table of Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

Sales volume was higher due primarily to increased production.

Cost of Sales. Cost of sales in our UAN segment averaged ~~$199~~$216 per ton in the ~~six~~nine months ended ~~June~~September 30, 2022, a ~~31%~~35% increase from ~~$152~~$160 per ton in the ~~six~~nine months ended ~~June~~September 30, 2021. The increase was due primarily to the impact of higher realized natural gas costs and higher freight costs due primarily to ~~ship UAN to meet demand on both the east and west coasts of the United States.~~an increase in exports.

Gross Margin. Gross margin in our UAN segment increased by ~~$1.16~~$1.33 billion to ~~$1.30~~$1.63 billion in the ~~six~~nine months ended ~~June~~September 30, 2022 from ~~$140~~$297 million in the ~~six~~nine months ended ~~June~~September 30, 2021, and our gross margin percentage was ~~65.4%~~59.6% in the ~~six~~nine months ended ~~June~~September 30, 2022 compared to ~~21.0%~~28.1% in the ~~six~~nine months ended ~~June~~September 30, 2021. The increase in gross margin was due primarily to a ~~200%~~140% increase in average selling prices, which increased gross margin by ~~$1.35 billion. The impact of higher average selling prices was~~$1.59 billion, and a 7% increase in sales volume, which increased gross margin by $39 million. These increases were partially offset by higher realized natural gas costs, which decreased gross margin by ~~$130~~$220 million, and a ~~$43~~$77 million net increase in manufacturing, maintenance and other ~~costs, and a nominal decrease in sales volume, which decreased gross margin by $22 million.~~costs. Gross margin also includes the impact of ~~an $8~~a net $4 million unrealized net mark-to-market gain on natural gas derivatives in the ~~six~~nine months ended ~~June~~September 30, 2022 compared to a $2$5 million gain in the ~~six~~nine months ended ~~June~~September 30, 2021.

Antidumping and Countervailing Duty Investigations

On June 30, 2021, we filed petitions with the U.S. Department of Commerce (Commerce) and the U.S. International Trade Commission (ITC) requesting the initiation of antidumping and countervailing duty investigations on imports of UAN from Russia and Trinidad. Preliminary affirmative determinations were announced by the ITC on August 13, 2021 and by Commerce on November 30, 2021 and January 27, 2022.

On June 21, 2022, Commerce announced final affirmative determinations finding that imports from Russia are dumped (i.e., sold at less than fair value) at rates ranging from 8.16% to 122.93% and unfairly subsidized at rates ranging from 6.27% to 9.66%. In addition, Commerce found that imports from Trinidad are dumped at a rate of 111.71% and unfairly subsidized at a rate of 1.83%.

On July 18, 2022, the ITC announced that it had determined that such unfairly traded imports from Russia and Trinidad did not materially injure or threaten material injury to the domestic UAN industry. ~~Typically, as a result of such determinations, cash deposits collected on such imports would be refunded and no duties would be imposed.~~

On July 19, 2022, we requested that Commerce proceed to issue a countervailing duty order on UAN imports from Russia, notwithstanding the negative injury determination. The Commerce Department rejected that request on August 5, 2022. CF ~~has~~did not ~~made~~make a similar request with respect to an antidumping duty order on UAN from Russia, or any duty order on UAN from Trinidad. ~~At this time, we cannot predict~~

The ITC published a notice of its negative determination on August 10, 2022, resulting in the ~~outcome~~termination of the ~~proceeding, including whether final countervailing~~Antidumping and Countervailing Duties (AD/CVD) investigations. Accordingly, AD/CVD cash deposits collected on imports during the pendency of the investigations are being refunded, and no further duties will be ~~imposed on UAN imports from Russia. In addition, the deadlines for appealing the agencies’ final determinations have not yet elapsed.~~

imposed.

4246

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

AN Segment

Our AN segment produces ammonium nitrate (AN). AN, which has a nitrogen content between 29% and 35%, is produced by combining anhydrous ammonia and nitric acid. AN is used as nitrogen fertilizer and is also used by industrial customers for commercial explosives and blasting systems. AN is produced at our nitrogen complexes in Yazoo City, Mississippi and ~~Ince and~~ Billingham, United Kingdom.

The following table presents summary operating data for our AN segment:


		Three Months Ended June 30,											Six Months Ended June 30,												Three Months Ended September 30,											Nine Months Ended September 30,
		2022			2021			2022 v. 2021					2022			2021			2022 v. 2021						2022			2021			2022 v. 2021					2022			2021			2022 v. 2021
		(dollars in millions, except per ton amounts)																							(dollars in millions, except per ton amounts)
Net sales	Net sales	$	253		$	136		$	117		86	%	$	476		$	241		$	235		98	%	Net sales	$	180		$	118		$	62		53	%	$	656		$	359		$	297		83	%
Cost of sales	Cost of sales	151			120			31			26	%	322			215			107			50	%	Cost of sales	136			122			14			11	%	458			337			121			36	%
Gross margin	Gross margin	$	102		$	16		$	86		N/M		$	154		$	26		$	128		492	%	Gross margin	$	44		$	(4)		$	48		N/M		$	198		$	22		$	176		N/M
Gross margin percentage	Gross margin percentage	40.3		%	11.8		%	28.5		%			32.4		%	10.8		%	21.6		%			Gross margin percentage	24.4		%	(3.4)		%	27.8		%			30.2		%	6.1		%	24.1		%
Sales volume by product tons (000s)	Sales volume by product tons (000s)	436			501			(65)			(13)	%	864			939			(75)			(8)	%	Sales volume by product tons (000s)	363			407			(44)			(11)	%	1,227			1,346			(119)			(9)	%
Sales volume by nutrient tons (000s)(1)	Sales volume by nutrient tons (000s)(1)	149			171			(22)			(13)	%	295			318			(23)			(7)	%	Sales volume by nutrient tons (000s)(1)	124			137			(13)			(9)	%	419			455			(36)			(8)	%
Average selling price per product ton	Average selling price per product ton	$	580		$	271		$	309		114	%	$	551		$	257		$	294		114	%	Average selling price per product ton	$	496		$	290		$	206		71	%	$	535		$	267		$	268		100	%
Average selling price per nutrient ton(1)	Average selling price per nutrient ton(1)	$	1,698		$	795		$	903		114	%	$	1,614		$	758		$	856		113	%	Average selling price per nutrient ton(1)	$	1,452		$	861		$	591		69	%	$	1,566		$	789		$	777		98	%
Gross margin per product ton	Gross margin per product ton	$	234		$	32		$	202		N/M		$	178		$	28		$	150		N/M		Gross margin per product ton	$	121		$	(10)		$	131		N/M		$	161		$	16		$	145		N/M
Gross margin per nutrient ton(1)	Gross margin per nutrient ton(1)	$	685		$	94		$	591		N/M		$	522		$	82		$	440		N/M		Gross margin per nutrient ton(1)	$	355		$	(29)		$	384		N/M		$	473		$	48		$	425		N/M
Depreciation and amortization	Depreciation and amortization	$	17		$	22		$	(5)		(23)	%	$	34		$	41		$	(7)		(17)	%	Depreciation and amortization	$	14		$	20		$	(6)		(30)	%	$	48		$	61		$	(13)		(21)	%
Unrealized net mark-to-market gain on natural gas derivatives	Unrealized net mark-to-market gain on natural gas derivatives	$	(11)		$	—		$	(11)		N/M		$	(17)		$	—		$	(17)		N/M		Unrealized net mark-to-market gain on natural gas derivatives	$	(1)		$	(1)		$	—		—	%	$	(18)		$	(1)		$	(17)		N/M

N/M—Not Meaningful

(1)AN represents between 29% and 35% of nitrogen content. Nutrient tons represent the tons of nitrogen within the product tons.

~~Second~~Third Quarter of 2022 Compared to ~~Second~~Third Quarter of 2021

On September 15, 2021, we announced the halt of operations at both our Ince and Billingham manufacturing facilities in the United Kingdom due to negative profitability driven by the high cost of natural gas. Shortly thereafter, we restarted production at our Billingham facility. In June 2022, we approved and announced our proposed plan to restructure our U.K. operations, ~~which includes~~including the permanent closure of our Ince facility. In August 2022, the final restructuring plan was approved, and decommissioning activities were initiated. See the discussion under “Market Conditions and Current Developments—United Kingdom Operations, ~~Proposed Restructuring and Impairment Charges,~~” above, for further information.

Net Sales. Net sales in our AN segment increased ~~$117~~$62 million, or ~~86%~~53%, to ~~$253~~$180 million in the ~~second~~third quarter of 2022 from ~~$136~~$118 million in the ~~second~~third quarter of 2021 due to a ~~114%~~71% increase in average selling prices, partially offset by a ~~13%~~11% decrease in sales volume. Average selling prices increased to ~~$580~~$496 per ton in the ~~second~~third quarter of 2022 compared to ~~$271~~$290 per ton in the ~~second~~third quarter of 2021 due primarily to the impact of a tighter global nitrogen supply and demand balance, reflecting in part the geopolitical factors described above under “Market Conditions and Current Developments—Geopolitical Environment.” Sales volume declined due primarily to lower supply availability as a result of ~~idled operations at~~ our Ince ~~facility.~~facility closure.

Cost of Sales. Cost of sales in our AN segment averaged ~~$346~~$375 per ton in the ~~second~~third quarter of 2022, a ~~45%~~25% increase from ~~$239~~$300 per ton in the ~~second~~third quarter of 2021. The increase was due primarily to higher realized natural gas costs. Natural gas costs increased in both the United States and the United Kingdom in the second quarter of 2022. As measured by the average daily market price at the Henry Hub, natural gas prices in the United States increased to $7.40 per MMBtu in the second quarter of 2022 from $2.88 per MMBtu in the second quarter of 2021. In the United Kingdom, the average daily market price of natural gas at the NBP increased to $16.00 per MMBtu in the second quarter of 2022 from $8.90 per MMBtu in the second quarter of 2021. See the discussion under “Market Conditions and Current Developments—Natural Gas,” above, for further information.

Gross Margin. Gross margin in our AN segment increased ~~$86~~$48 million to ~~$102~~$44 million in the ~~second~~third quarter of 2022 from ~~$16~~a loss of $4 million in the ~~second~~third quarter of 2021, and our gross margin percentage was ~~40.3%~~24.4% in the ~~second~~third quarter of 2022 compared to (3.4)% in the third quarter of 2021. The increase in gross margin was due primarily to a 71% increase in average selling prices, which increased gross margin by $77 million, favorable location product mix, which increased gross margin by $18 million, and a net decrease of $8 million in manufacturing, maintenance and other costs. These factors that increased gross margin were partially offset by an increase in realized natural gas costs, which reduced gross margin by $55 million.

4347

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

compared to 11.8% in the second quarter of 2021. The increase in gross margin was due primarily to a 114% increase in average selling prices, which increased gross margin by $137 million, a net decrease of $5 million in manufacturing, maintenance and other costs, and an increase in gross margin of $2 million due primarily to favorable location product mix. These increases were partially offset by an increase in realized natural gas costs, which reduced gross margin by $69 million. ~~Gross margin also includes the impact of~~ ~~an $11 million~~ ~~unrealized net mark-to-market gain on natural gas derivatives in the~~ ~~second quarter of 2022.~~

~~Six~~Nine Months Ended ~~June~~September 30, 2022 Compared to ~~Six~~Nine Months Ended ~~June~~September 30, 2021

Net Sales. Net sales in our AN segment increased ~~$235~~$297 million, or ~~98%~~83%, to ~~$476~~$656 million in the ~~six~~nine months ended ~~June~~September 30, 2022 from ~~$241~~$359 million in the ~~six~~nine months ended ~~June~~September 30, 2021 due primarily to a ~~114%~~100% increase in average selling prices, partially offset by a 8%9% decrease in sales volume. Average selling prices increased to ~~$551~~$535 per ton in the ~~six~~nine months ended ~~June~~September 30, 2022 compared to ~~$257~~$267 per ton in the ~~six~~nine months ended ~~June~~September 30, 2021 due primarily to the impact of a tighter global nitrogen supply and demand balance, reflecting in part the geopolitical factors described above under “Market Conditions and Current Developments—Geopolitical Environment.” The decrease in sales volume was due primarily to lower supply availability as a result of ~~idled operations at~~ our Ince ~~facility.~~facility closure.

Cost of Sales. Cost of sales in our AN segment averaged ~~$373~~$374 per ton in the ~~six~~nine months ended ~~June~~September 30, 2022, a ~~63%~~49% increase from ~~$229~~$251 per ton in the ~~six~~nine months ended ~~June~~September 30, 2021. The increase was due primarily to higher realized natural gas costs.

Gross Margin. Gross margin in our AN segment increased by ~~$128~~$176 million ~~or 492%,~~ to ~~$154~~$198 million in the ~~six~~nine months ended ~~June~~September 30, 2022 from ~~$26~~$22 million in the ~~six~~nine months ended ~~June~~September 30, 2021, and our gross margin percentage was ~~32.4%~~30.2% in the ~~six~~nine months ended ~~June~~September 30, 2022 compared to ~~10.8%~~6.1% in the ~~six~~nine months ended ~~June~~September 30, 2021. The increase in gross margin was due primarily ~~due~~ to a ~~114%~~100% increase in average selling prices, which increased gross margin by ~~$259~~$336 million, and ~~an increase~~favorable location product mix, which increased gross margin by $23 million. These increases in gross margin ~~of $5 million due primarily to favorable location product mix. The impact of these increases was~~were partially offset by an increase in realized natural gas costs, which decreased gross margin by ~~$146~~$201 million, and a net increase of $7$1 million in manufacturing, maintenance and other costs. Gross margin also includes the impact of a ~~$17~~$18 million unrealized net mark-to-market gain on natural gas derivatives in the ~~six~~nine months ended ~~June~~September 30, ~~2022.~~2022 compared to a $1 million gain in the nine months ended September 30, 2021.

~~Table of Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

Other Segment

Our Other segment primarily includes the following products:

•Diesel exhaust fluid (DEF) is an aqueous urea solution typically made with 32.5% or 50% high-purity urea and the remainder deionized water.

•Urea liquor is a liquid product that we sell in concentrations of 40%, 50% and 70% urea as a chemical intermediate.

•Nitric acid is a nitrogen-based mineral acid that is used in the production of nitrate-based fertilizers, nylon precursors and other specialty chemicals.

•~~Compound fertilizer products (NPKs) are granular fertilizer products for which the nutrient content is a combination of nitrogen, phosphorus and potassium.~~

The following table presents summary operating data for our Other segment:


		Three Months Ended June 30,											Six Months Ended June 30,												Three Months Ended September 30,											Nine Months Ended September 30,
		2022			2021			2022 v. 2021					2022			2021			2022 v. 2021						2022			2021			2022 v. 2021					2022			2021			2022 v. 2021
		(dollars in millions, except per ton amounts)																							(dollars in millions, except per ton amounts)
Net sales	Net sales	$	212		$	126		$	86		68	%	$	437		$	232		$	205		88	%	Net sales	$	185		$	124		$	61		49	%	$	622		$	356		$	266		75	%
Cost of sales	Cost of sales	102			95			7			7	%	206			185			21			11	%	Cost of sales	108			105			3			3	%	314			290			24			8	%
Gross margin	Gross margin	$	110		$	31		$	79		255	%	$	231		$	47		$	184		391	%	Gross margin	$	77		$	19		$	58		305	%	$	308		$	66		$	242		367	%
Gross margin percentage	Gross margin percentage	51.9		%	24.6		%	27.3		%			52.9		%	20.3		%	32.6		%			Gross margin percentage	41.6		%	15.3		%	26.3		%			49.5		%	18.5		%	31.0		%
Sales volume by product tons (000s)	Sales volume by product tons (000s)	557			596			(39)			(7)	%	1,102			1,205			(103)			(9)	%	Sales volume by product tons (000s)	496			544			(48)			(9)	%	1,598			1,749			(151)			(9)	%
Sales volume by nutrient tons (000s)(1)	Sales volume by nutrient tons (000s)(1)	110			119			(9)			(8)	%	214			241			(27)			(11)	%	Sales volume by nutrient tons (000s)(1)	99			106			(7)			(7)	%	313			347			(34)			(10)	%
Average selling price per product ton	Average selling price per product ton	$	381		$	211		$	170		81	%	$	397		$	193		$	204		106	%	Average selling price per product ton	$	373		$	228		$	145		64	%	$	389		$	204		$	185		91	%
Average selling price per nutrient ton(1)	Average selling price per nutrient ton(1)	$	1,927		$	1,059		$	868		82	%	$	2,042		$	963		$	1,079		112	%	Average selling price per nutrient ton(1)	$	1,869		$	1,170		$	699		60	%	$	1,987		$	1,026		$	961		94	%
Gross margin per product ton	Gross margin per product ton	$	197		$	52		$	145		279	%	$	210		$	39		$	171		438	%	Gross margin per product ton	$	155		$	35		$	120		343	%	$	193		$	38		$	155		408	%
Gross margin per nutrient ton(1)	Gross margin per nutrient ton(1)	$	1,000		$	261		$	739		283	%	$	1,079		$	195		$	884		453	%	Gross margin per nutrient ton(1)	$	778		$	179		$	599		335	%	$	984		$	190		$	794		418	%
Depreciation and amortization	Depreciation and amortization	$	17		$	23		$	(6)		(26)	%	$	36		$	45		$	(9)		(20)	%	Depreciation and amortization	$	17		$	22		$	(5)		(23)	%	$	53		$	67		$	(14)		(21)	%
Unrealized net mark-to-market gain on natural gas derivatives	Unrealized net mark-to-market gain on natural gas derivatives	$	(3)		$	—		$	(3)		N/M		$	(7)		$	—		$	(7)		N/M		Unrealized net mark-to-market gain on natural gas derivatives	$	—		$	(1)		$	1		100	%	$	(7)		$	(1)		$	(6)		N/M

_______________________________________________________________________________

N/M—Not Meaningful

(1)Nutrient tons represent the tons of nitrogen within the product tons.

~~Second~~

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

Third Quarter of 2022 Compared to ~~Second~~Third Quarter of 2021

In June 2022, we approved and announced our proposed plan to restructure our U.K. operations, ~~which includes~~including the permanent closure of our Ince facility. In August 2022, the final restructuring plan was approved, and decommissioning activities were initiated. We ~~produce NPKs~~produced compound fertilizer products (NPKs), which are solid granular fertilizer products for which the nutrient content is a combination of nitrogen, phosphorus and potassium, only at our Ince facility, and closure of this facility ~~would result~~has resulted in our discontinuation of ~~this product.~~the NPK product line. Total sales of NPK products were $15 million in the first ~~six~~nine months of 2022 and $47 million in the year ended December 31, 2021. See the discussion under “Market Conditions and Current Developments—United Kingdom Operations, ~~Proposed Restructuring and Impairment Charges,~~” above, for further information.

Net Sales. Net sales in our Other segment increased by ~~$86~~$61 million, or ~~68%~~49%, to ~~$212~~$185 million in the ~~second~~third quarter of 2022 from ~~$126~~$124 million in the ~~second~~third quarter of 2021 due to ~~an 81%~~a 64% increase in average selling prices, partially offset by a 7%9% decrease in sales volume. The increase in average selling prices was due primarily to the impact of a tighter global nitrogen supply and demand balance, reflecting in part the geopolitical factors described above under “Market Conditions and Current Developments—Geopolitical Environment.” The decrease in sales volume was due primarily to lower nitric acid and NPK sales volumes in the ~~second~~third quarter of 2022, as operations at our Ince manufacturing plant have ~~been idled, and lower urea liquor sales volumes,~~ceased, partially offset by higher DEF sales volumes.

Cost of Sales. Cost of sales in our Other segment averaged ~~$184~~$218 per ton in the ~~second~~third quarter of 2022, a ~~16%~~13% increase from ~~$159~~$193 per ton in the ~~second~~third quarter of 2021, due primarily to higher realized natural gas costs.

Gross Margin. Gross margin in our Other segment increased by ~~$79~~$58 million to ~~$110~~$77 million in the ~~second~~third quarter of 2022 from ~~$31~~$19 million in the ~~second~~third quarter of 2021, and our gross margin percentage was ~~51.9%~~41.6% in the ~~second~~third quarter of 2022 compared to ~~24.6%~~15.3% in the ~~second~~third quarter of 2021. The increase in gross margin was due primarily to ~~an 81%~~a 64% increase in average selling prices, which increased gross margin by ~~$101~~$71 million, ~~an increase of $2 million due to favorable product mix and~~ a net decrease of $1$13 million in manufacturing, maintenance and other ~~costs.~~costs, and an increase of $1 million due to favorable product mix. These ~~increases~~factors that increased gross margin were partially offset by an increase in realized

~~Table of Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

natural gas costs, which reduced gross margin by ~~$28~~$26 million. Gross margin also includes the impact of a $3$1 million ~~unrealized net mark-to-market~~ gain ~~on natural gas derivatives~~ in the ~~second~~third quarter of ~~2022.~~2021.

~~Six~~Nine Months Ended ~~June~~September 30, 2022 Compared to ~~Six~~Nine Months Ended ~~June~~September 30, 2021

Net Sales. Net sales in our Other segment increased by ~~$205~~$266 million, or ~~88%~~75%, to ~~$437~~$622 million in the ~~six~~nine months ended ~~June~~September 30, 2022 from ~~$232~~$356 million in the ~~six~~nine months ended ~~June~~September 30, 2021 due primarily to a ~~106%~~91% increase in average selling prices partially offset by a 9% decrease in sales volume. The increase in average selling prices was due primarily to the impact of a tighter global nitrogen supply and demand balance, reflecting in part the geopolitical factors described above under “Market Conditions and Current Developments—Geopolitical Environment.” The decrease in sales volume was due primarily to lower NPK and nitric acid sales volumes, as operations at our Ince manufacturing plant have ~~been idled,~~ceased, and lower urea liquor sales volumes, partially offset by higher DEF sales volumes.

Cost of Sales. Cost of sales in our Other segment averaged ~~$187~~$196 per ton in the ~~six~~nine months ended ~~June~~September 30, 2022, ~~a 21%~~an 18% increase from ~~$154~~$166 per ton in the ~~six~~nine months ended ~~June~~September 30, 2021, due primarily to higher realized natural gas costs.

Gross Margin. Gross margin in our Other segment increased by ~~$184~~$242 million, or ~~391%~~367%, to ~~$231~~$308 million in the ~~six~~nine months ended ~~June~~September 30, 2022 from ~~$47~~$66 million in the ~~six~~nine months ended ~~June~~September 30, 2021, and our gross margin percentage was ~~52.9%~~49.5% in the ~~six~~nine months ended ~~June~~September 30, 2022 compared to ~~20.3%~~18.5% in the ~~six~~nine months ended ~~June~~September 30, 2021. The increase in gross margin was due to a ~~106%~~91% increase in average selling prices, which increased gross margin by ~~$233~~$304 million, ~~and~~ a net decrease of $1$14 million in manufacturing, maintenance and other ~~costs.~~costs, and a $1 million increase due primarily to favorable product mix. These increases in gross margin were partially offset by an increase in realized natural gas costs, which decreased gross margin by ~~$57~~$83 million. Gross margin also includes the impact of a $7 million unrealized net mark-to-market gain on natural gas derivatives in the ~~six~~nine months ended ~~June~~September 30, ~~2022.~~2022 compared to a $1 million gain in the nine months ended September 30, 2021.

4649

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

Liquidity and Capital Resources

Our primary uses of cash are generally for operating costs, working capital, capital expenditures, debt service, investments, taxes, share repurchases and dividends. Our working capital requirements are affected by several factors, including demand for our products, selling prices, raw material costs, freight costs and seasonal factors inherent in the business. In addition, we may from time to time seek to retire or purchase our outstanding debt through cash purchases, in open market or privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

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 revolving credit agreement.

As of ~~June~~September 30, 2022, our cash and cash equivalents balance was ~~$2.37~~$2.19 billion, an increase of ~~$742~~$564 million from $1.63 billion at December 31, 2021. At ~~June~~September 30, 2022, we were in compliance with all applicable covenant requirements under our revolving credit agreement and senior notes, and unused borrowing capacity under our revolving credit agreement was $750 million.

~~On April 27,~~In the second and third quarter of 2022, ~~the Board declared a~~ quarterly ~~dividend~~dividends of $0.40 per common share were declared and paid, representing a 33% increase from the quarterly dividend of $0.30 per common share that was declared and paid in the first quarter of ~~2022. The dividend was paid on May 31, 2022 to stockholders of record as of May 16,~~ 2022.

Cash Equivalents

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 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. Securities issued by governmental entities 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 ~~Program~~Programs

On November 3, 2021, ~~the~~our Board of Directors (the Board) authorized the repurchase of up to $1.5 billion of CF Holdings common stock through December 31, 2024 (the 2021 Share Repurchase Program). Repurchases under the 2021 Share Repurchase Program may be made from time to time in the open market, through privately negotiated transactions, through block transactions or otherwise. The manner, timing and amount of repurchases will be determined by our management based on the evaluation of market conditions, stock price, and other factors. In the ~~six~~nine months ended ~~June~~September 30, 2022, we repurchased approximately ~~6.6~~12.7 million shares under the 2021 Share Repurchase Program for ~~$590 million,~~$1.12 billion, of which ~~$14~~$27 million was accrued and unpaid as of ~~June~~September 30, 2022.

On November 2, 2022, the Board authorized the repurchase of up to $3 billion of CF Holdings common stock commencing upon completion of the 2021 Share Repurchase Program and effective through December 31, 2025 (the 2022 Share Repurchase Program).

Capital Spending

We make capital expenditures to sustain our asset base, increase our capacity, improve plant efficiency, ~~and~~ comply with various environmental, health and safety ~~requirements.~~requirements, and invest in our clean energy strategy. Capital expenditures totaled ~~$129~~$319 million in the first ~~six~~nine months of 2022 compared to ~~$181~~$382 million in the first ~~six~~nine months of 2021.

We currently anticipate that capital expenditures for the full year of 2022 will be ~~in the range of~~approximately $500 ~~to $550~~ million, which includes capital expenditures at our Donaldsonville complex related to green and blue ammonia projects. Planned capital expenditures are generally subject to change due to delays in regulatory approvals or permitting, unanticipated increases in cost, changes in scope and completion time, performance of third parties, delays in the receipt of equipment, adverse weather, defects in materials and workmanship, labor or material shortages, transportation constraints, acceleration or delays in the timing of the work and other unforeseen difficulties.

4750

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

Canada Revenue Agency Competent Authority Matter and Transfer Pricing

In connection with the matter described above under “Items Affecting Comparability of Results—Canada Revenue Agency Competent Authority Matter,” in the third quarter of 2022, Canada Revenue Agency assessed, and we paid, additional tax and interest for tax years 2006 to 2011 of approximately $147 million. In the fourth quarter of 2022, we expect ~~Canadian~~provincial tax authorities will assess additional tax and interest for tax years 2006 to 2011 of approximately ~~$232~~$80 million, based on current estimates and foreign currency exchange rates, which we expect will be due in the ~~second half~~fourth quarter of 2022, and the Company will then file amended tax returns with U.S. federal and state tax authorities for the relevant tax years, as a result of which we expect to receive net refunds of approximately $50 million, including tax and interest, in the next twelve months. All such amounts have been reflected in our consolidated financial statements.

As described above under “Items Affecting Comparability of Results—Transfer pricing positions,” we have unrecognized tax benefits recorded in connection with certain tax years subsequent to 2011 that have been reassessed for transfer pricing matters by the Canadian tax authorities. Prior to the end of 2022, we expect to make tax payments to the Canadian taxing authorities of approximately $300 million related to these reassessed tax years while we continue to dispute the reassessments. The payments would be recorded as noncurrent income tax receivables and the associated letters of credit would be cancelled. For the amounts ultimately owed and paid to the Canadian tax authorities upon resolution of these tax disputes, the Company would seek refunds of related taxes overpaid in the United States.

United Kingdom Operations ~~Proposed Restructuring and Impairment Charges~~

As discussed under “Market Conditions and Current Developments—United Kingdom Operations, ~~Proposed Restructuring and Impairment Charges,~~” above, during the third quarter of 2021, the United Kingdom began experiencing an energy crisis that included a substantial increase in the price of natural gas, which impacted our U.K. operations. On September 15, 2021, we announced the halt of operations at both our Ince and Billingham manufacturing facilities in the United Kingdom due to negative profitability driven by the high cost of natural gas. Shortly thereafter, our Billingham facility resumed operations. ~~As of the filing of this report, production continues at our Billingham facility and continues to be idled at our Ince facility.~~

In June 2022, we approved and announced our proposed plan to restructure our U.K. ~~operations. This plan includes permanently closing~~operations, including the permanent closure of our Ince facility and ~~optimizing~~optimization of the remaining manufacturing operations at the Billingham facility. As a result, we recognized ~~total charges of $162~~$152 million ~~consisting~~ of asset impairment charges, ~~of $152 million~~ primarily related to property, plant and equipment at the Ince facility, and a $10 million charge for post-employment benefits ~~of $10 million~~ related to contractual and statutory obligations, which are included in the ~~U.K~~U.K. operations restructuring line item in our consolidated statements of ~~operations~~operations. In August 2022, the final restructuring plan was approved, and decommissioning activities were initiated. As a result, in the third quarter of 2022, we incurred additional charges related to our U.K. restructuring of $8 million, primarily related to one-time termination benefits.

In the third quarter of 2022, the United Kingdom continued to experience extremely high and volatile natural gas prices. Russian natural gas pipeline flows to Europe via the Nord Stream 1 pipeline ceased, causing the United Kingdom to experience unprecedented natural gas prices. In addition, the European Union announced a desire to cap the price that Europe would pay Russia for natural gas deliveries, further contributing to the uncertainty in European energy markets. Given these factors and the lack of a corresponding increase in global nitrogen product market prices, in September 2022, we temporarily idled ammonia production at our Billingham complex. As a result, we concluded that an additional impairment test was triggered for the ~~three~~asset groups that comprise the continuing U.K. operations, which resulted in asset impairment charges of $87 million, primarily related to property, plant and ~~six months ended June 30, 2022.~~equipment and definite-lived intangible assets.

The factors that could lead to the resolution of the U.K. energy crisis, and the timing of any such resolution, are unknown to us. Production of AN continues at our Billingham facility using ammonia on site and ammonia that is imported from our other ammonia production sites. Persistence of the current levels of energy costs in the United Kingdom could lead to the continued idling of ammonia production at our Billingham facility. There remains uncertainty regarding the future ~~closure activities~~cost of natural gas and ~~obligations~~electricity, selling prices for the ~~Ince facility. This~~products we produce in the United Kingdom and U.K. government policy, which could result in, among other things, additional funding to support the cash needs of our ~~continuing~~ U.K. operations and recognition of further losses ~~or additional exit or closure costs related to our U.K. operations. Any of these future events~~and could have a material adverse impact on our results of operations and cash flows.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

Debt

Revolving Credit Agreement

Borrowings under the Revolving Credit Agreement may be denominated in U.S. dollars, Canadian dollars, euros and British pounds, and bear interest at a per annum rate equal to an applicable eurocurrency rate or base rate plus, in either case, a specified margin. We are required to pay an undrawn commitment fee on the undrawn portion of the commitments under the Revolving Credit Agreement and customary letter of credit fees. The specified margin and the amount of the commitment fee depend on CF Holdings’ credit rating at the time.

Letters of Credit

~~Table of Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

Senior Notes

Long-term debt presented on our consolidated balance sheets as of ~~June~~September 30, 2022 and December 31, 2021 consisted of the following debt securities issued by CF Industries:


		Effective Interest Rate	June 30, 2022				December 31, 2021					Effective Interest Rate	September 30, 2022				December 31, 2021
			Principal		Carrying Amount(1)		Principal		Carrying Amount(1)				Principal		Carrying Amount(1)		Principal		Carrying Amount(1)
			(in millions)										(in millions)
Public Senior Notes:	Public Senior Notes:										Public Senior Notes:

3.450% due June 2023	3.450% due June 2023	3.665%	$	—	$	—	$	500	$	499	3.450% due June 2023	3.665%	$	—	$	—	$	500	$	499
5.150% due March 2034	5.150% due March 2034	5.293%	750		741		750		741		5.150% due March 2034	5.293%	750		741		750		741
4.950% due June 2043	4.950% due June 2043	5.040%	750		741		750		742		4.950% due June 2043	5.040%	750		742		750		742
5.375% due March 2044	5.375% due March 2044	5.478%	750		740		750		741		5.375% due March 2044	5.478%	750		740		750		741
Senior Secured Notes:	Senior Secured Notes:										Senior Secured Notes:

4.500% due December 2026(2)	4.500% due December 2026(2)	4.783%	750		742		750		742		4.500% due December 2026(2)	4.783%	750		742		750		742
Total long-term debt	Total long-term debt		$	3,000	$	2,964	$	3,500	$	3,465	Total long-term debt		$	3,000	$	2,965	$	3,500	$	3,465

(2)Effective August 23, 2021, these notes are no longer secured, in accordance with the terms of the applicable indenture.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

Public Senior Notes

On April 21, 2022, we redeemed in full all of the $500 million outstanding principal amount of the 2023 Notes in accordance with the optional redemption provisions in the indenture governing the 2023 Notes. The total aggregate redemption price paid in connection with the redemption of the 2023 Notes, which was funded with cash on hand, was $513 million, including accrued interest. As a result, we recognized a loss on debt extinguishment of $8 million, consisting primarily of the premium paid on the redemption of the $500 million principal amount of the 2023 Notes prior to their scheduled maturity.

On September 10, 2021, we redeemed $250 million principal amount, representing one-third of the $750 million principal amount outstanding immediately prior to such redemption, of the 2023 Notes, in accordance with the optional redemption provisions in the ~~second~~indenture governing the 2023 Notes. The total aggregate redemption price paid in connection with the redemption of the 2023 Notes, which was funded with cash on hand, was approximately $265 million, including accrued interest. As a result, we recognized a loss on debt extinguishment of $13 million in the third quarter of ~~2022.~~2021, consisting primarily of a premium paid on the redemption of the $250 million principal amount of the 2023 Notes prior to their scheduled maturity.

Under the indentures (including the applicable supplemental indentures) governing our senior notes due 2034, 2043 and 2044 identified in the table above (the Public Senior Notes), each series of Public Senior Notes is guaranteed by CF Holdings. Interest on the Public Senior Notes is payable semiannually, and the Public Senior Notes are redeemable at our option, in whole at any time or in part from time to time, at specified make-whole redemption prices.

Senior Secured Notes

On March 20, 2021, we redeemed in full all of the $250 million outstanding principal amount of the 2021 Notes in accordance with the optional redemption provisions in the indenture governing the 2021 Notes. The total aggregate redemption price paid on the 2021 Notes in connection with the redemption, which was funded with cash on hand, was $258 million, including accrued interest. As a result, we recognized a loss on debt extinguishment of $6 million, consisting primarily of the premium paid on the redemption of the $250 million principal amount of the 2021 Notes prior to their scheduled maturity.

Under the terms of the indenture governing the 4.500% senior secured notes due 2026 (the 2026 Notes), the 2026 Notes are guaranteed by CF Holdings. Until August 23, 2021, the 2026 Notes were guaranteed by certain subsidiaries of CF Industries. The requirement for subsidiary guarantees of the 2026 Notes was eliminated, and all subsidiary guarantees were automatically released, as a result of an investment grade rating event under the terms of the indenture governing the 2026 Notes on August 23, 2021. Prior to the investment grade rating event, subject to certain exceptions, the obligations under the 2026 Notes and related guarantees were secured by a first priority security interest in collateral consisting of substantially all of the assets of CF Industries, CF Holdings and the subsidiary guarantors. As a result of the investment grade rating event, the liens on the collateral securing the obligations under the 2026 Notes and related guarantees were automatically released on August 23, 2021, and the indenture covenant that had limited dispositions of assets constituting collateral no longer applies.

Interest on the 2026 Notes is payable semiannually, and the 2026 Notes are redeemable at our option, in whole at any time or in part from time to time, at specified make-whole redemption prices.

Forward Sales and Customer Advances

We offer our customers the opportunity to purchase products from us on a forward basis at prices and on delivery dates we propose. Therefore, our reported fertilizer selling prices and margins may differ from market spot prices and margins available at the time of shipment.

Customer advances, which typically represent a portion of the contract’s value, are received shortly after the contract is executed, with any remaining unpaid amount generally being collected by the time control transfers to the customer, thereby reducing or eliminating the accounts receivable related to such sales. Any cash payments received in advance from customers in

~~Table of Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

connection with forward sales contracts are reflected on our consolidated balance sheets as a current liability until control transfers and revenue is recognized. As of ~~June~~September 30, 2022 and December 31, 2021, we had ~~$72~~$511 million and $700 million, respectively, in customer advances on our consolidated balance sheets.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

While customer advances are generally a significant source of liquidity, the level of forward sales contracts is affected by many factors including current market conditions, our customers’ outlook of future market fundamentals and seasonality. During periods of declining prices, customers tend to delay purchasing fertilizer in anticipation that prices in the future will be lower than the current prices. If the level of sales under our forward sales programs were to decrease in the future, our cash received from customer advances would likely decrease and our accounts receivable balances would likely increase. Additionally, borrowing under the Revolving Credit Agreement could become necessary. Due to the volatility inherent in our business and changing customer expectations, we cannot estimate the amount of future forward sales activity.

Under our forward sales programs, a customer may delay delivery of an order due to weather conditions or other factors. These delays generally subject the customer to potential charges for storage or may be grounds for termination of the contract by us. Such a delay in scheduled shipment or termination of a forward sales contract due to a customer’s inability or unwillingness to perform may negatively impact our reported sales.

Derivative Financial Instruments

Defined Benefit Pension Plans

We contributed ~~$14~~$20 million to our pension plans in the ~~six~~nine months ended ~~June~~September 30, 2022. Over the remainder of 2022, we expect to contribute approximately ~~$13~~$6 million to our pension plans, which would result in our making a total of approximately ~~$27~~$26 million of contributions to our pension plans for the full year 2022. In addition, we expect to contribute a total of approximately £50 million (or ~~$61~~$56 million) to our U.K. plans in the three-year period from 2023 to 2025, as agreed with the plans’ trustees.

On July 15, 2022, we entered into an agreement with an insurance company to purchase a non-participating group annuity contract and transfer approximately $375 million of our primary U.S. defined benefit pension plan’s projected benefit obligation, subject to customary closing conditions. The transaction closed on July 22, 2022 and was funded with plan assets. Under the transaction, the insurance company ~~will assume~~assumed responsibility for pension benefits and annuity administration for approximately 4,000 retirees or their beneficiaries. As a result of this transaction, in the third quarter of 2022, we ~~will remeasure~~remeasured the plan's projected benefit obligation and plan assets and ~~we expect to recognize~~recognized a non-cash pre-tax pension settlement loss of ~~approximately $25~~$24 million, ~~based on current interest rates,~~ reflecting the unamortized net unrecognized postretirement benefit costs related to the settled obligations, with a corresponding offset to accumulated other comprehensive loss.

Distribution to Noncontrolling Interest in CFN

On January 31, 2022, CFN distributed $247 million to CHS for the distribution period ended December 31, 2021. On July 31, 2022, the CFN Board of Managers approved semi-annual distribution payments for the distribution period ended June 30, 2022 in accordance with CFN’s limited liability company ~~agreement. On~~agreement, and on August 1, 2022, CFN distributed ~~$371~~approximately $372 million to CHS for this distribution period. The estimate of the partnership distribution ~~period ended June 30, 2022.~~

~~Table~~earned by CHS, but not yet declared, for the third quarter of ~~Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

2022 is approximately $106 million.

Cash Flows

Net cash provided by operating activities during the first ~~six~~nine months of 2022 was ~~$2.28~~$3.27 billion, an increase of ~~$1.57~~$1.88 billion compared to ~~$706 million~~$1.39 billion in the first ~~six~~nine months of 2021. The increase in cash flow from operations was due primarily to higher net earnings, partially offset by changes in net working capital. Net earnings for the first ~~six~~nine months of 2022 was ~~$2.39~~$2.93 billion as compared to ~~$492~~$401 million for the first ~~six~~nine months of 2021, an increase of ~~$1.90~~$2.53 billion. The increase in net earnings was due primarily to an increase in gross margin, driven by higher average selling prices, higher sales volume and a decrease in charges related to our U.K. operations. These increases were partially offset by increases in natural gas costs, ~~the U.K. operations restructuring charge,~~ an increase in the income tax provision and an increase in net earnings attributable to noncontrolling interest. During the first ~~six~~nine months of 2022, net changes in working capital reduced cash flow from operations by ~~$731~~$621 million, while in the first ~~six~~nine months of 2021 net changes in working capital reduced cash flow from operations by ~~$182~~$53 million. The decreased cash flow from working capital changes was attributable primarily ~~attributable~~ to lower cash collections from customer advances and higher levels of accounts receivable ~~partially offset by accrued and prepaid income taxes.~~in the first nine months of 2022 as compared to the first nine months of 2021.

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

Net cash used in investing activities was ~~$121~~$308 million in the first ~~six~~nine months of 2022 as compared to ~~$182~~$383 million in the first ~~six~~nine months of 2021. Capital expenditures totaled ~~$129~~$319 million during the first ~~six~~nine months of 2022 compared to ~~$181~~$382 million in the first ~~six~~nine months of 2021.

Net cash used in financing activities was ~~$1.40~~$2.37 billion in the first ~~six~~nine months of 2022 compared to ~~$433~~$936 million in the first ~~six~~nine months of 2021. The increase was due primarily to share repurchases in the first ~~six~~nine months of 2022 ~~an increase in payments for long-term borrowings,~~ and higher distributions to noncontrolling interest. In the first ~~six~~nine months of 2022, we paid ~~$577 million~~$1.10 billion for share repurchases, including $1 million related to shares repurchased in late 2021 that were paid for in ~~2022. In addition, we paid $507~~2022, compared to $50 million ~~in connection with the redemption of the 2023 Notes~~for share repurchases in the first ~~six months of 2022 compared to $255 million for the redemption of the 2021 Notes in the first six~~nine months of 2021. In the first ~~six~~nine months of 2022, distributions to noncontrolling interest were ~~$247~~$619 million compared to ~~$64~~$194 million in the first ~~six~~nine months of 2021. These increases in financing cash outflows were partially offset by higher proceeds from issuances of common stock under employee stock plans of ~~$101~~$106 million in the first ~~six~~nine months of 2022 compared to ~~$26~~$32 million in the first ~~six~~nine months of 2021.

Critical Accounting Estimates

During the first ~~six~~nine months of 2022, there were no material changes to our critical accounting estimates as described in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

5155

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

Forward-Looking Statements

From time to time, in this Quarterly Report on Form 10-Q as well as in other written reports and oral 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 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. ~~You should~~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-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.

Important factors that could cause actual results to differ materially from our expectations are disclosed under “Risk Factors” in Item 1A in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on February 24, 2022. Such factors include, among others:

•the cyclical nature of our business and the impact of global supply and demand on our selling prices;

•the global commodity nature of our nitrogen products, the conditions in the international market for nitrogen products, and the intense global competition from other producers;

•conditions in the United States, Europe and other agricultural areas, including the influence of governmental policies and technological developments on the demand for agricultural products;

•the volatility of natural gas prices in North America and the United Kingdom;

•weather conditions and the impact of severe adverse weather events;

•the seasonality of the fertilizer business;

•the impact of changing market conditions on our forward sales programs;

•difficulties in securing the supply and delivery of raw materials, increases in their costs or delays or interruptions in their delivery;

•reliance on third party providers of transportation services and equipment;

•our reliance on a limited number of key facilities;

•risks associated with cyber security;

•acts of terrorism and regulations to combat terrorism;

•risks associated with international operations;

•the significant risks and hazards involved in producing and handling our products against which we may not be fully insured;

•our ability to manage our indebtedness and any additional indebtedness that may be incurred;

•our ability to maintain compliance with covenants under our revolving credit agreement and the agreements governing our indebtedness;

•downgrades of our credit ratings;

•risks associated with changes in tax laws and disagreements with taxing authorities;

•risks involving derivatives and the effectiveness of our risk measurement and hedging activities;

•potential liabilities and expenditures related to environmental, health and safety laws and regulations and permitting requirements;

•regulatory restrictions and requirements related to greenhouse gas emissions;

•the development and growth of the market for green and blue (low-carbon) ammonia and the risks and uncertainties relating to the development and implementation of our green and blue ammonia projects;

•risks associated with expansions of our business, including unanticipated adverse consequences and the significant resources that could be required;

•risks associated with the operation or management of the CHS strategic venture, risks and uncertainties relating to the market prices of the fertilizer products that are the subject of our supply agreement with CHS over the life of the supply agreement, and the risk that any challenges related to the CHS strategic venture will harm our other business relationships; and

•the impact of the novel coronavirus disease 2019 (COVID-19) pandemic on our business and operations.

5256

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are exposed to the impact of changes in commodity prices, interest rates and foreign currency exchange rates.

Commodity Prices

Our net sales, cash flows and estimates of future cash flows related to nitrogen-based products are sensitive to changes in selling 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, UAN (32%), and AN by approximately $33, $22, $14 and $16, respectively.

Natural gas is the largest and most volatile component of the manufacturing cost for nitrogen-based products. At certain times, we have managed the risk of changes in natural gas prices through the use of derivative financial instruments. The derivative instruments that we may use for this purpose are primarily natural gas fixed price swaps, basis swaps and options. These derivatives settle using primarily a NYMEX futures price index, which represents the basis for fair value at any given time. The contracts represent anticipated natural gas needs for future periods and settlements are scheduled to coincide with anticipated natural gas purchases during those future periods. As of ~~June~~September 30, 2022, we had natural gas derivative contracts covering certain periods through March 2023.

As of ~~June~~September 30, 2022 and December 31, 2021, we had open derivative contracts for ~~11.2~~48.2 million MMBtus and 60.0 million MMBtus, respectively. A $1.00 per MMBtu increase in the forward curve prices of natural gas at ~~June~~September 30, 2022 would result in a favorable change in the fair value of these derivative positions of approximately ~~$10~~$45 million, and a $1.00 per MMBtu decrease in the forward curve prices of natural gas would change their fair value unfavorably by approximately ~~$10~~$46 million.

From time to time we may purchase nitrogen products on the open market to augment or replace production at our facilities.

Interest Rates

As of ~~June~~September 30, 2022, we had four series of senior notes totaling $3.00 billion of principal outstanding with maturity dates of December 1, 2026, March 15, 2034, June 1, 2043 and March 15, 2044. The senior notes have fixed interest rates. As of ~~June~~September 30, 2022, the carrying value and fair value of our senior notes was approximately ~~$2.96~~$2.97 billion and ~~$2.88~~$2.64 billion, respectively.

Borrowings under the Revolving Credit Agreement bear current market rates of interest and we are subject to interest rate risk on such borrowings. There were no borrowings outstanding under the Revolving Credit Agreement as of ~~June~~September 30, 2022, or December 31, 2021, or during the ~~six~~nine months ended ~~June~~September 30, 2022.

Foreign Currency Exchange Rates

We are directly exposed to changes in the value of the Canadian dollar, the British pound and the euro. We generally do not maintain any exchange rate derivatives or hedges related to these currencies.

5357

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

ITEM 4. CONTROLS AND PROCEDURES.

(a) Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s principal executive officer and 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 officer and principal financial officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective in (i) 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 officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

(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 ~~June~~September 30, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Company is upgrading its enterprise resource planning system (ERP) for its North American operations to SAP S/4HANA. The planned implementation is scheduled for the first quarter of 2023, and the Company expects significant changes in its internal control over financial reporting due to the implementation.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

West Fertilizer Co.

5458

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

The following table sets forth share repurchases, on a trade date basis, for each of the three months of the quarter ended ~~June~~September 30, 2022.

Issuer Purchases of Equity Securities
Period
Total
number
of shares
(or units)
purchased
Average
price paid
per share
(or unit)(1)
Total number of
shares (or units)
purchased as part of
publicly announced
plans or programs(2)
Maximum number (or
approximate dollar
value) of shares (or
units) that may yet be
purchased under the
plans or programs
(in thousands)(2)
April 1, 2022 - April 30, 2022 392,349 $ 102.77 392,349 $ 1,359,678
May 1, 2022 - May 31, 2022 1,216,964 (3) 98.21 1,211,381 1,240,706
June 1, 2022 - June 30, 2022 3,753,372

88.05 3,753,372 910,215
Total 5,362,685

$ 91.43 5,357,102


	Issuer Purchases of Equity Securities
Period	Total number of shares (or units) purchased		Average price paid per share (or unit)(1)		Total number of shares (or units) purchased as part of publicly announced plans or programs(2)	Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs (in thousands)(2)
July 1, 2022 - July 31, 2022	4,584,050	(3)	$	84.38	4,583,403	$	523,466
August 1, 2022 - August 31, 2022	236,586		96.88		236,586	500,545
September 1, 2022 - September 30, 2022	1,277,890	(4)	96.11		1,276,981	377,820
Total	6,098,526		$	87.32	6,096,970

(1)Average price paid per share of CF Industries Holdings, Inc. (CF Holdings) common stock repurchased under the 2021 Share Repurchase Program, as defined below, is the execution price, excluding commissions paid to brokers.

(2)On November 3, 2021, we announced that our Board of Directors authorized the repurchase of up to $1.5 billion of CF Holdings common stock from January 1, 2022 through December 31, 2024 (the 2021 Share Repurchase Program). This program is discussed in Note ~~15—~~16—Stockholders’ Equity, in the notes to the unaudited consolidated financial statements included in Part I.

(3)Includes ~~5,583~~647 shares withheld to pay employee tax obligations upon the lapse of restrictions on restricted stock units.

(4)Includes 909 shares withheld to pay employee tax obligations upon the lapse of restrictions on restricted stock units.

ITEM 6. EXHIBITS.


A list of exhibits filed with this Quarterly Report on Form 10-Q (or incorporated by reference to exhibits previously filed or furnished) is provided in the Exhibit Index on page 5660 of this report.

5559

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

EXHIBIT INDEX


Exhibit No.			Description
























































~~10.1~~			CF Industries Holdings, Inc. 2022 Equity and Incentive Plan (incorporated by reference to Appendix B to CF Industries Holdings, Inc.’s definitive proxy statement on Schedule 14A filed with the SEC on March 30, 2022)
~~10.2~~			Form of Non-Employee Director Restricted Stock Award Agreement under CF Industries Holdings, Inc. 2022 Equity and Incentive Plan (incorporated by reference to Exhibit 10.2 to CF Industries Holdings, Inc.’s ~~Current~~ ~~Report on Form~~ ~~8-K~~ ~~filed with the SEC on May 13, 2022)~~
~~10.3~~			~~Form of Restricted Stock Unit Award Agreement under CF Industries Holdings, Inc. 2022 Equity and Incentive Plan (incorporated by reference to Exhibit 10.3 to CF Industries Holdings, Inc.’s~~ ~~Current~~ ~~Report on Form~~ ~~8-K~~ ~~filed with the SEC on May 13, 2022)~~
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
101			The following financial information from CF Industries Holdings, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended ~~June~~September 30, 2022, formatted in Inline XBRL (eXtensible Business Reporting Language): (1) Consolidated Statements of Operations, (2) Consolidated Statements of Comprehensive Income (Loss), (3) Consolidated Balance Sheets, (4) Consolidated Statements of Equity, (5) Consolidated Statements of Cash Flows, and (6) Notes to Unaudited Consolidated Financial Statements
104			Cover Page Interactive Data File (included in the Exhibit 101 Inline XBRL Document Set)

5660

Table of Contents

CF INDUSTRIES HOLDINGS, INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	CF INDUSTRIES HOLDINGS, INC.
Date: ~~August 2,~~November 3, 2022	By:	/s/ W. ANTHONY WILL
		W. Anthony Will President and Chief Executive Officer (Principal Executive Officer)
Date: ~~August 2,~~November 3, 2022	By:	/s/ CHRISTOPHER D. BOHN
		Christopher D. Bohn Senior Vice President and Chief Financial Officer (Principal Financial Officer)

5761


PART I.	Financial Information
	Item 1.	Financial Statements (unaudited)
		Consolidated Statements of Operations	1
		Consolidated Statements of Comprehensive Income	2
		Consolidated Balance Sheets	3
		Consolidated Statements of Equity	4
		Consolidated Statements of Cash Flows	5
		Notes to Unaudited Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2426
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5357
	Item 4.	Controls and Procedures	5458
PART II.	Other Information
	Item 1.	Legal Proceedings	5458

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5559
	Item 6.	Exhibits	5559