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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 March 31, ~~2022~~2023





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)

(Registrant’s telephone number, including area code): (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 ☒

~~208,601,720~~194,919,933 shares of the registrant’s common stock, par value $0.01 per share, were outstanding at ~~May 2, 2022.~~April 28, 2023.

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CF INDUSTRIES HOLDINGS, INC.

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CF INDUSTRIES HOLDINGS, INC.

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


		Three months ended March 31,						Three months ended March 31,
			2022		2021				2023		2022
			(in millions, except per share amounts)						(in millions, except per share amounts)
Net sales	Net sales		$	2,868	$	1,048	Net sales		$	2,012	$	2,868
Cost of sales	Cost of sales		1,170		759		Cost of sales		1,149		1,170
Gross margin	Gross margin		1,698		289		Gross margin		863		1,698
Selling, general and administrative expenses	Selling, general and administrative expenses		64		55		Selling, general and administrative expenses		74		64

U.K. operations restructuring							U.K. operations restructuring		2		—
Transaction costs							Transaction costs		13		—
Other operating—net	Other operating—net		2		(2)		Other operating—net		(35)		2
Total other operating costs and expenses	Total other operating costs and expenses		66		53		Total other operating costs and expenses		54		66

Equity in earnings of operating affiliate	Equity in earnings of operating affiliate		26		11		Equity in earnings of operating affiliate		17		26
Operating earnings	Operating earnings		1,658		247		Operating earnings		826		1,658
Interest expense	Interest expense		241		48		Interest expense		40		241
Interest income	Interest income		(36)		—		Interest income		(30)		(36)
Loss on debt extinguishment			—		6

Other non-operating—net	Other non-operating—net		1		—		Other non-operating—net		(3)		1
Earnings before income taxes	Earnings before income taxes		1,452		193		Earnings before income taxes		819		1,452
Income tax provision	Income tax provision		401		18		Income tax provision		169		401

Net earnings	Net earnings		1,051		175		Net earnings		650		1,051
Less: Net earnings attributable to noncontrolling interest	Less: Net earnings attributable to noncontrolling interest		168		24		Less: Net earnings attributable to noncontrolling interest		90		168
Net earnings attributable to common stockholders	Net earnings attributable to common stockholders		$	883	$	151	Net earnings attributable to common stockholders		$	560	$	883
Net earnings per share attributable to common stockholders:	Net earnings per share attributable to common stockholders:						Net earnings per share attributable to common stockholders:
Basic	Basic		$	4.23	$	0.70	Basic		$	2.86	$	4.23
Diluted	Diluted		$	4.21	$	0.70	Diluted		$	2.85	$	4.21
Weighted-average common shares outstanding:	Weighted-average common shares outstanding:						Weighted-average common shares outstanding:
Basic	Basic		208.6		214.9		Basic		196.2		208.6
Diluted	Diluted		209.9		216.0		Diluted		196.9		209.9
Dividends declared per common share	Dividends declared per common share		$	0.30	$	0.30	Dividends declared per common share		$	0.40	$	0.30

See accompanying Notes to Unaudited Consolidated Financial Statements.

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CF INDUSTRIES HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


		Three months ended March 31,						Three months ended March 31,
			2022		2021				2023		2022
			(in millions)						(in millions)
Net earnings	Net earnings		$	1,051	$	175	Net earnings		$	650	$	1,051
Other comprehensive (loss) income:
Other comprehensive income (loss):							Other comprehensive income (loss):
Foreign currency translation adjustment—net of taxes	Foreign currency translation adjustment—net of taxes		(13)		14		Foreign currency translation adjustment—net of taxes		7		(13)

Defined benefit plans—net of taxes	Defined benefit plans—net of taxes		4		1		Defined benefit plans—net of taxes		(1)		4
			(9)		15				6		(9)
Comprehensive income	Comprehensive income		1,042		190		Comprehensive income		656		1,042
Less: Comprehensive income attributable to noncontrolling interest	Less: Comprehensive income attributable to noncontrolling interest		168		24		Less: Comprehensive income attributable to noncontrolling interest		90		168
Comprehensive income attributable to common stockholders	Comprehensive income attributable to common stockholders		$	874	$	166	Comprehensive income attributable to common stockholders		$	566	$	874

See accompanying Notes to Unaudited Consolidated Financial Statements.

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CF INDUSTRIES HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS


		(Unaudited)					(Unaudited)
		March 31, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(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	$	2,617	$	1,628	Cash and cash equivalents	$	2,825	$	2,323

Accounts receivable—net	Accounts receivable—net	679		497		Accounts receivable—net	482		582
Inventories	Inventories	488		408		Inventories	430		474

Prepaid income taxes	Prepaid income taxes	—		4		Prepaid income taxes	69		215
Other current assets	Other current assets	42		56		Other current assets	42		79
Total current assets	Total current assets	3,826		2,593		Total current assets	3,848		3,673
Property, plant and equipment—net	Property, plant and equipment—net	6,906		7,081		Property, plant and equipment—net	6,294		6,437
Investment in affiliate	Investment in affiliate	84		82		Investment in affiliate	81		74
Goodwill	Goodwill	2,091		2,091		Goodwill	2,089		2,089
Operating lease right-of-use assets	Operating lease right-of-use assets	236		243		Operating lease right-of-use assets	288		254
Other assets	Other assets	639		285		Other assets	798		786
Total assets	Total assets	$	13,782	$	12,375	Total assets	$	13,398	$	13,313
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	$	629	$	565	Accounts payable and accrued expenses	$	452	$	575
Income taxes payable	Income taxes payable	408		24		Income taxes payable	10		3
Customer advances	Customer advances	598		700		Customer advances	284		229
Current operating lease liabilities	Current operating lease liabilities	88		89		Current operating lease liabilities	104		93
Current maturities of long-term debt		499		—

Other current liabilities	Other current liabilities	6		54		Other current liabilities	12		95
Total current liabilities	Total current liabilities	2,228		1,432		Total current liabilities	862		995
Long-term debt, net of current maturities		2,963		3,465
Long-term debt						Long-term debt	2,966		2,965
Deferred income taxes	Deferred income taxes	1,028		1,029		Deferred income taxes	933		958
Operating lease liabilities	Operating lease liabilities	152		162		Operating lease liabilities	182		167
Other liabilities	Other liabilities	658		251		Other liabilities	365		375
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—210,569,780 shares issued and 2021—207,603,940 shares issued		2		2
Common stock—$0.01 par value, 500,000,000 shares authorized, 2023—196,237,302 shares issued and 2022—195,604,404 shares issued						Common stock—$0.01 par value, 500,000,000 shares authorized, 2023—196,237,302 shares issued and 2022—195,604,404 shares issued	2		2
Paid-in capital	Paid-in capital	1,482		1,375		Paid-in capital	1,424		1,412
Retained earnings	Retained earnings	2,907		2,088		Retained earnings	4,348		3,867
Treasury stock—at cost, 2022—1,563,679 shares and 2021—27,962 shares		(123)		(2)
Treasury stock—at cost, 2023—1,319,380 shares and 2022—0 shares						Treasury stock—at cost, 2023—1,319,380 shares and 2022—0 shares	(97)		—
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(266)		(257)		Accumulated other comprehensive loss	(224)		(230)
Total stockholders’ equity	Total stockholders’ equity	4,002		3,206		Total stockholders’ equity	5,453		5,051
Noncontrolling interest	Noncontrolling interest	2,751		2,830		Noncontrolling interest	2,637		2,802
Total equity	Total equity	6,753		6,036		Total equity	8,090		7,853
Total liabilities and equity	Total liabilities and equity	$	13,782	$	12,375	Total liabilities and equity	$	13,398	$	13,313

See accompanying Notes to Unaudited Consolidated Financial Statements.

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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 December 31, 2021 $ 2 $ (2) $ 1,375 $ 2,088 $ (257) $ 3,206 $ 2,830 $ 6,036
Net earnings — — — 883 — 883 168 1,051
Other comprehensive loss — — — — (9) (9) — (9)
Purchases of treasury stock — (100) — — — (100) — (100)
Retirement of treasury stock — 2 — — — 2 — 2
Acquisition of treasury stock under employee stock plans — (23) — — — (23) — (23)
Issuance of $0.01 par value common stock under employee stock plans — — 97 — — 97 — 97
Stock-based compensation expense — — 10 — — 10 — 10
Cash dividends ($0.30 per share) — — — (64) — (64) — (64)
Distribution declared to noncontrolling interest — — — — — — (247) (247)
Balance as of March 31, 2022 $ 2 $ (123) $ 1,482 $ 2,907 $ (266) $ 4,002 $ 2,751 $ 6,753


	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 December 31, 2022	$	2	$	—	$	1,412	$	3,867	$	(230)	$	5,051	$	2,802	$	7,853
Net earnings	—		—		—		560		—		560		90		650
Other comprehensive income	—		—		—		—		6		6		—		6
Purchases of treasury stock	—		(75)		—		—		—		(75)		—		(75)

Acquisition of treasury stock under employee stock plans	—		(22)		—		—		—		(22)		—		(22)


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

Dividends and dividend equivalents ($0.40 per share)	—		—		—		(79)		—		(79)		—		(79)



Distribution declared to noncontrolling interest	—		—		—		—		—		—		(255)		(255)

Balance as of March 31, 2023	$	2	$	(97)	$	1,424	$	4,348	$	(224)	$	5,453	$	2,637	$	8,090

Balance as of December 31, 2020 $ 2 $ (4) $ 1,317 $ 1,927 $ (320) $ 2,922 $ 2,681 $ 5,603
Net earnings — — — 151 — 151 24 175
Other comprehensive income — — — — 15 15 — 15
Acquisition of treasury stock under employee stock plans — (10) — — — (10) — (10)
Issuance of $0.01 par value common stock under employee stock plans — — 8 — — 8 — 8
Stock-based compensation expense — — 8 — — 8 — 8
Cash dividends ($0.30 per share) — — — (65) — (65) — (65)
Distribution declared to noncontrolling interest — — — — — — (64) (64)
Balance as of March 31, 2021 $ 2 $ (14) $ 1,333 $ 2,013 $ (305) $ 3,029 $ 2,641 $ 5,670

























Balance as of December 31, 2021	$	2	$	(2)	$	1,375	$	2,088	$	(257)	$	3,206	$	2,830	$	6,036



Net earnings	—		—		—		883		—		883		168		1,051
Other comprehensive loss	—		—		—		—		(9)		(9)		—		(9)
Purchases of treasury stock	—		(100)		—		—		—		(100)		—		(100)
Retirement of treasury stock	—		2		—		—		—		2		—		2
Acquisition of treasury stock under employee stock plans	—		(23)		—		—		—		(23)		—		(23)
Issuance of $0.01 par value common stock under employee stock plans	—		—		97		—		—		97		—		97

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

Dividends and dividend equivalents ($0.30 per share)	—		—		—		(64)		—		(64)		—		(64)



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

Balance as of March 31, 2022	$	2	$	(123)	$	1,482	$	2,907	$	(266)	$	4,002	$	2,751	$	6,753

See accompanying Notes to Unaudited Consolidated Financial Statements.

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CF INDUSTRIES HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


		Three months ended March 31,					Three months ended March 31,
		2022		2021			2023		2022
		(in millions)					(in millions)
Operating Activities:	Operating Activities:					Operating Activities:
Net earnings	Net earnings	$	1,051	$	175	Net earnings	$	650	$	1,051
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	208		204		Depreciation and amortization	206		208
Deferred income taxes	Deferred income taxes	(2)		(12)		Deferred income taxes	(26)		(2)
Stock-based compensation expense	Stock-based compensation expense	10		8		Stock-based compensation expense	12		10

Loss on debt extinguishment		—		6

Unrealized net gain on natural gas derivatives	Unrealized net gain on natural gas derivatives	(33)		(6)		Unrealized net gain on natural gas derivatives	(72)		(33)

Loss on disposal of property, plant and equipment		—		1
Gain on sale of emission credits						Gain on sale of emission credits	(35)		—

Undistributed earnings of affiliate—net of taxes	Undistributed earnings of affiliate—net of taxes	(2)		(12)		Undistributed earnings of affiliate—net of taxes	(7)		(2)
Changes in:	Changes in:					Changes in:
Accounts receivable—net	Accounts receivable—net	(185)		(7)		Accounts receivable—net	101		(185)
Inventories	Inventories	(66)		(88)		Inventories	39		(66)
Accrued and prepaid income taxes	Accrued and prepaid income taxes	387		78		Accrued and prepaid income taxes	153		387
Accounts payable and accrued expenses	Accounts payable and accrued expenses	76		36		Accounts payable and accrued expenses	(135)		76
Customer advances	Customer advances	(102)		211		Customer advances	55		(102)
Other—net	Other—net	49		(16)		Other—net	6		49
Net cash provided by operating activities	Net cash provided by operating activities	1,391		578		Net cash provided by operating activities	947		1,391
Investing Activities:	Investing Activities:					Investing Activities:
Additions to property, plant and equipment	Additions to property, plant and equipment	(63)		(71)		Additions to property, plant and equipment	(69)		(63)
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

Purchase of U.K. emission credits		(9)		—
Proceeds from sale of EU emission credits		9		—
Purchase of emission credits						Purchase of emission credits	—		(9)
Proceeds from sale of emission credits						Proceeds from sale of emission credits	35		9

Net cash used in investing activities	Net cash used in investing activities	(62)		(71)		Net cash used in investing activities	(34)		(62)
Financing Activities:	Financing Activities:					Financing Activities:

Payments of long-term borrowings		—		(255)

Financing fees	Financing fees	(4)		—		Financing fees	—		(4)
Dividends paid on common stock		(64)		(65)
Dividends paid						Dividends paid	(79)		(64)

Distributions to noncontrolling interest	Distributions to noncontrolling interest	(247)		(64)		Distributions to noncontrolling interest	(255)		(247)
Purchases of treasury stock	Purchases of treasury stock	(98)		—		Purchases of treasury stock	(54)		(98)
Proceeds from issuances of common stock under employee stock plans	Proceeds from issuances of common stock under employee stock plans	97		7		Proceeds from issuances of common stock under employee stock plans	—		97
Cash paid for shares withheld for taxes	Cash paid for shares withheld for taxes	(23)		(10)		Cash paid for shares withheld for taxes	(22)		(23)

Net cash used in financing activities	Net cash used in financing activities	(339)		(387)		Net cash used in financing activities	(410)		(339)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(1)		1		Effect of exchange rate changes on cash and cash equivalents	(1)		(1)
Increase in cash and cash equivalents	Increase in cash and cash equivalents	989		121		Increase in cash and cash equivalents	502		989
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	2,323		1,628
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	2,617	$	804	Cash and cash equivalents at end of period	$	2,825	$	2,617

See accompanying Notes to Unaudited Consolidated Financial Statements.

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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,~~2022, 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,~~2022, filed with the SEC on February ~~24, 2022.~~23, 2023. 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~~emission 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 ~~valuation reserves, allowances for doubtful accounts receivable,~~ the ~~measurement~~assessment of the ~~fair values~~realizability of ~~investments for which markets are not active, assumptions used in~~deferred tax assets, 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.

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CF INDUSTRIES HOLDINGS, INC.

2. Revenue Recognition

We track our revenue by product and by geography. See Note ~~17—~~14—Segment Disclosures for the revenue of each of our ~~revenue by~~ reportable ~~segment,~~segments, 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 months ended March 31, ~~2022~~2023 and ~~2021:~~2022:


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

Three months ended March 31, 2022
Three months ended March 31, 2023														Three months ended March 31, 2023
North America	North America	$	583	$	736	$	1,013	$	83	$	153	$	2,568	North America	$	330	$	575	$	519	$	74	$	126	$	1,624
Europe and other	Europe and other	57		29		2		140		72		300		Europe and other	94		36		148		85		25		388

Total revenue	Total revenue	$	640	$	765	$	1,015	$	223	$	225	$	2,868	Total revenue	$	424	$	611	$	667	$	159	$	151	$	2,012
Three months ended March 31, 2021
Three months ended March 31, 2022														Three months ended March 31, 2022
North America	North America	$	168	$	399	$	222	$	41	$	77	$	907	North America	$	583	$	736	$	1,013	$	83	$	153	$	2,568
Europe and other	Europe and other	38		—		10		64		29		141		Europe and other	57		29		2		140		72		300
Total revenue	Total revenue	$	206	$	399	$	232	$	105	$	106	$	1,048	Total revenue	$	640	$	765	$	1,015	$	223	$	225	$	2,868

As of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, we had ~~$598~~$284 million and ~~$700~~$229 million, respectively, in customer advances on our consolidated balance sheets. The revenue recognized during the three months ended March 31, ~~2022~~2023 and ~~2021~~2022 that was included in our customer advances at the beginning of each respective period amounted to approximately $160 million and $560 million, ~~and $85 million,~~ respectively.

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 March 31, ~~2022~~2023 and December 31, ~~2021~~2022 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 March 31, ~~2022,~~2023, 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 ~~are~~were approximately ~~$750 million.~~$1.0 billion. We expect to recognize approximately ~~36%~~34% of these performance obligations as revenue in the remainder of ~~2022,~~2023, approximately ~~57%~~33% as revenue during ~~2023-2024,~~2024-2026, approximately 5%15% as revenue during ~~2025-2026,~~2027-2029, 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, iswas approximately ~~$140~~$280 million as of March 31, ~~2022.~~2023. Other than the performance obligations described above, any performance obligations with our customers that were unfulfilled or partially fulfilled at December 31, ~~2021~~2022 will be satisfied in ~~2022.~~2023.

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CF INDUSTRIES HOLDINGS, INC.

3. Net Earnings Per Share

Net earnings per share were computed as follows:


		Three months ended March 31,						Three months ended March 31,
			2022		2021				2023		2022
			(in millions, except per share amounts)						(in millions, except per share amounts)
Net earnings attributable to common stockholders	Net earnings attributable to common stockholders		$	883	$	151	Net earnings attributable to common stockholders		$	560	$	883
Basic earnings per common share:	Basic earnings per common share:						Basic earnings per common share:
Weighted-average common shares outstanding	Weighted-average common shares outstanding		208.6		214.9		Weighted-average common shares outstanding		196.2		208.6
Net earnings attributable to common stockholders	Net earnings attributable to common stockholders		$	4.23	$	0.70	Net earnings attributable to common stockholders		$	2.86	$	4.23
Diluted earnings per common share:	Diluted earnings per common share:						Diluted earnings per common share:
Weighted-average common shares outstanding	Weighted-average common shares outstanding		208.6		214.9		Weighted-average common shares outstanding		196.2		208.6
Dilutive common shares—stock-based awards	Dilutive common shares—stock-based awards		1.3		1.1		Dilutive common shares—stock-based awards		0.7		1.3
Diluted weighted-average common shares outstanding	Diluted weighted-average common shares outstanding		209.9		216.0		Diluted weighted-average common shares outstanding		196.9		209.9
Net earnings attributable to common stockholders	Net earnings attributable to common stockholders		$	4.21	$	0.70	Net earnings attributable to common stockholders		$	2.85	$	4.21

Diluted earnings 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 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 per common share were ~~1.2 million~~zero in both the three months ended March 31, ~~2021.~~2023 and 2022.

4. Inventories

Inventories consist of the following:


		March 31, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(in millions)					(in millions)
Finished goods	Finished goods	$	436	$	358	Finished goods	$	393	$	437
Raw materials, spare parts and supplies	Raw materials, spare parts and supplies	52		50		Raw materials, spare parts and supplies	37		37
Total inventories	Total inventories	$	488	$	408	Total inventories	$	430	$	474

5. ~~United Kingdom Energy Crisis and Impairment Charges~~

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. 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. After certain agreements were finalized, 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 the second half of 2021, the U.K. energy crisis necessitated evaluations of the goodwill and long-lived assets, including definite-lived intangible assets, of our U.K. operations to determine if their fair value had declined to below their carrying value. Based on these analyses, we concluded that declines in fair value had occurred, and we recognized impairment charges of $521 million in 2021, consisting of long-lived and intangible asset impairment charges of $236 million and goodwill impairment charges of $285 million. As a result, we had no remaining goodwill related to our U.K. operations on our consolidated balance sheet as of December 31, 2021.

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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 recent 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 the interim impairment 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, consisting of U.K. Ammonia, U.K. AN and U.K. Other.

6. Property, Plant and Equipment—Net

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


		March 31, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(in millions)					(in millions)
Land	Land	$	67	$	68	Land	$	113	$	113
Machinery and equipment~~(1)~~	Machinery and equipment~~(1)~~	12,763		12,757		Machinery and equipment~~(1)~~	12,672		12,633
Buildings and improvements~~(1)~~	Buildings and improvements~~(1)~~	916		915		Buildings and improvements~~(1)~~	920		914
Construction in progress~~(1)~~	Construction in progress~~(1)~~	179		148		Construction in progress~~(1)~~	226		203
Property, plant and equipment~~(2)~~(1)	Property, plant and equipment~~(2)~~(1)	13,925		13,888		Property, plant and equipment~~(2)~~(1)	13,931		13,863
Less: Accumulated depreciation and amortization	Less: Accumulated depreciation and amortization	7,019		6,807		Less: Accumulated depreciation and amortization	7,637		7,426
Property, plant and equipment—net	Property, plant and equipment—net	$	6,906	$	7,081	Property, plant and equipment—net	$	6,294	$	6,437

(1)~~At both~~As of March 31, ~~2022~~2023 and December 31, ~~2021, machinery~~2022, we had property, plant and equipment ~~buildings and improvements, and construction in progress include cumulative impairment charges~~that was accrued but unpaid of ~~$169 million, $5~~approximately $45 million and $8$53 million, ~~respectively, which were recorded in 2021.~~

~~(2)~~respectively. As of March 31, 2022 and December 31, 2021, we had property, plant and equipment that was accrued but unpaid of approximately $22 million and $35 million, respectively. As

Table of ~~March 31, 2021 and December 31, 2020, we had property, plant and equipment that was accrued but unpaid of approximately $33 million and $43 million, respectively.~~Contents

CF INDUSTRIES HOLDINGS, INC.

Depreciation and amortization related to property, plant and equipment was ~~$205~~$204 million and ~~$200~~$205 million for the three months ended March 31, 2023 and 2022, ~~and 2021,~~ respectively.

In 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 recent geopolitical events, triggered an impairment test of the long-lived assets in our U.K. asset groups. This test indicated that no 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. Long-lived assets on our consolidated balance sheet as of March 31, 2022 include approximately $400 million, approximately $360 million of which consists of property, plant and equipment, related to the U.K. asset groups. See Note 5—United Kingdom Energy Crisis 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. ~~The following is a summary of capitalized plant turnaround costs:~~
Three months ended
March 31,
2022 2021
(in millions)
Net capitalized turnaround costs:
Beginning balance $ 355 $ 226
Additions 5 10
Depreciation (36) (25)
Effect of exchange rate changes (1) —
Ending balance $ 323 $ 211

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~~CF INDUSTRIES HOLDINGS, INC.~~

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.

~~7. Goodwill and Other Intangible Assets~~

The following ~~table shows the carrying amount~~is a summary of ~~goodwill by reportable segment as of March 31, 2022 and December 31, 2021:~~

Ammonia(1)
Granular Urea UAN
AN(1)
Other(1)
Total
(in millions)
Balance as of December 31, 2021 $ 579 $ 828 $ 576 $ 69 $ 39 $ 2,091
Effect of exchange rate changes — — — — — —
Balance as of March 31, 2022 $ 579 $ 828 $ 576 $ 69 $ 39 $ 2,091

~~(1)~~capitalized plant turnaround costs:~~At both March 31, 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.~~

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:

March 31, 2022 December 31, 2021
Gross
Carrying
Amount Accumulated
Amortization Net Gross
Carrying
Amount Accumulated
Amortization Net
(in millions)
Customer relationships(1)
$ 83 $ (59) $ 24 $ 84 $ (60) $ 24
Trade names(1)
30 (10) 20 31 (10) 21
Total intangible assets $ 113 $ (69) $ 44 $ 115 $ (70) $ 45
~~_______________________________________________________________________________~~

~~(1)At both March 31, 2022~~ ~~and~~ December 31, 2021, the gross carrying amount for customer relationships and trade names includes cumulative impairment charges of $49 million and $1 million, respectively, which were recorded in 2021.

Our customer relationships and trade names are being amortized over a weighted-average life of approximately 20 years. Amortization expense of our identifiable intangible assets was $1 million and $2 million for the three months ended March 31, 2022 and 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 $3 million and for each of the fiscal years 2023-2027 is $4 million.

In 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 recent geopolitical events, triggered an impairment test of the long-lived assets in our U.K. asset groups. This test indicated that no 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. See Note 5—United Kingdom Energy Crisis and Impairment Charges for additional information. Long-lived assets on our consolidated balance sheet as of March 31, 2022 include approximately $400 million, $25 million of which consists of customer relationships and trade names, related to the U.K. asset groups.


	Three months ended March 31,
	2023		2022
	(in millions)
Net capitalized turnaround costs as of January 1	$	312	$	355
Additions	7		5
Depreciation	(31)		(36)

Effect of exchange rate changes	—		(1)
Net capitalized turnaround costs as of March 31	$	288	$	323

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8.6. 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 March 31, ~~2022,~~2023, the total carrying value of our equity method investment in PLNL was ~~$84~~$81 million, ~~$38~~$34 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 1110 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 ~~$74~~$59 million and ~~$26~~$74 million for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively.

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7. Fair Value Measurements

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


		March 31, 2022									March 31, 2023
		Cost Basis		Unrealized Gains		Unrealized Losses		Fair Value			Cost Basis		Unrealized Gains		Unrealized Losses		Fair Value
		(in millions)									(in millions)
Cash	Cash	$	207	$	—	$	—	$	207	Cash	$	217	$	—	$	—	$	217
Cash equivalents:	Cash equivalents:									Cash equivalents:
U.S. and Canadian government obligations	U.S. and Canadian government obligations	2,324		—		—		2,324		U.S. and Canadian government obligations	2,314		—		—		2,314
Other debt securities	Other debt securities	86		—		—		86		Other debt securities	294		—		—		294
Total cash and cash equivalents	Total cash and cash equivalents	$	2,617	$	—	$	—	$	2,617	Total cash and cash equivalents	$	2,825	$	—	$	—	$	2,825

Nonqualified employee benefit trusts	Nonqualified employee benefit trusts	17		2		—		19		Nonqualified employee benefit trusts	16		1		—		17


		December 31, 2021									December 31, 2022
		Cost Basis		Unrealized Gains		Unrealized Losses		Fair Value			Cost Basis		Unrealized Gains		Unrealized Losses		Fair Value
		(in millions)									(in millions)
Cash	Cash	$	121	$	—	$	—	$	121	Cash	$	153	$	—	$	—	$	153
Cash equivalents:	Cash equivalents:									Cash equivalents:
U.S. and Canadian government obligations	U.S. and Canadian government obligations	1,452		—		—		1,452		U.S. and Canadian government obligations	1,902		—		—		1,902
Other debt securities	Other debt securities	55		—		—		55		Other debt securities	268		—		—		268
Total cash and cash equivalents	Total cash and cash equivalents	$	1,628	$	—	$	—	$	1,628	Total cash and cash equivalents	$	2,323	$	—	$	—	$	2,323

Nonqualified employee benefit trusts	Nonqualified employee benefit trusts	17		3		—		20		Nonqualified employee benefit trusts	16		—		—		16

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.

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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 March 31, ~~2022~~2023 and December 31, ~~2021~~2022 that are recognized at fair value on a recurring basis, and indicate the fair value hierarchy utilized to determine such fair value:


		March 31, 2022									March 31, 2023
		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	$	2,410	$	2,410	$	—	$	—	Cash equivalents	$	2,608	$	2,608	$	—	$	—

Nonqualified employee benefit trusts	Nonqualified employee benefit trusts	19		19		—		—		Nonqualified employee benefit trusts	17		17		—		—
Derivative assets	Derivative assets	3		—		3		—		Derivative assets	4		—		4		—
Derivative liabilities										Derivative liabilities	(5)		—		(5)		—

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) —

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CF INDUSTRIES HOLDINGS, INC.


	December 31, 2022
	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	$	2,170	$	2,170	$	—	$	—

Nonqualified employee benefit trusts	16		16		—		—
Derivative assets	12		—		12		—
Derivative liabilities	(85)		—		(85)		—

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. As of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, 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.

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~~represent 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 curves supplied by an industry-recognized independent third party. See Note ~~13—~~11—Derivative Financial Instruments for additional information.

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~~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 2016, our credit ratings have been below certain 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. This obligation is recognized on our consolidated balance sheets as an embedded derivative and is included within other current liabilities and other liabilities. As of both March 31, 2022 and December 31, 2021, the embedded derivative liability was $15 million.

The inputs into the fair value measurement include the probability of future upgrades and downgrades of our credit rating based on historical credit rating movements of other public companies and the 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.

~~See Note 14—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:

March 31, 2022 December 31, 2021
Carrying
Amount Fair Value Carrying
Amount Fair Value
(in millions)
Long-term debt, including current maturities $ 3,462 $ 3,781 $ 3,465 $ 4,113


	March 31, 2023				December 31, 2022
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(in millions)
Long-term debt	$	2,966	$	2,770	$	2,965	$	2,764

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.

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

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CF INDUSTRIES HOLDINGS, INC.

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. 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.

~~10.~~8. Income Taxes

For the three months ended March 31, ~~2022,~~2023, we recorded an income tax provision of $169 million on pre-tax income of $819 million, or an effective tax rate of 20.6%, compared to an income tax provision of $401 million on pre-tax income of $1.45 billion, or an effective tax rate of 27.6%, ~~compared to an income tax provision of $18 million on pre-tax income of $193 million, or an effective tax rate of 9.3%,~~ for the three months ended March 31, ~~2021.~~

For the three months ended March 31, 2022, our income tax provision includes $20 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 and certain transfer pricing reserves recorded in the period, as discussed below. For the three months ended March 31, 2021, our income tax provision includes a $22 million benefit reflecting the impact of agreement on certain issues related to U.S. federal income tax audits.2022.

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

~~Table~~ noncontrolling interest. Our effective tax rate for the three months ended March 31, 2023 of ~~Contents~~

~~CF INDUSTRIES HOLDINGS, INC.~~

20.6%, which is based on pre-tax income of $819 million, including $90 million of earnings attributable to the noncontrolling interest, would be 2.6 percentage points higher if based on pre-tax income exclusive of the $90 million of earnings attributable to the noncontrolling interest. Our effective tax rate for the three months ended March 31, 2022 of 27.6%, which is based on pre-tax income of $1.45 billion, including $168 million of earnings attributable to the noncontrolling interest, would be 3.7 percentage points higher if based on pre-tax income exclusive of the $168 million of earnings attributable to the noncontrolling interest. ~~Our effective tax rate~~

In addition, for the three months ended March 31, ~~2021 of 9.3%, which is based on pre-tax~~2022, our income ~~of $193 million, including $24~~tax provision includes $20 million of ~~earnings attributable~~income tax benefit due to share-based compensation activity and $78 million of income tax provision related to the ~~noncontrolling interest, would be 1.3 percentage points higher if based on pre-tax income exclusive of~~Canada Revenue Agency Competent Authority Matter and certain transfer pricing reserves recorded in the ~~$24 million of earnings attributable to the noncontrolling interest.~~period, as discussed below.

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~~served as security until the matter ~~is resolved.~~was resolved, as discussed below. 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.

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~~was subject to tax in Canada, resulting in our having additional Canadian tax liability for those tax years of approximately $127 million, based on current estimates. We expect this resulting Canadian tax liability, plus interest of approximately $98 million, will be assessed in the second quarter of 2022 and that payment of those amounts, aggregating to approximately $225 million, based on current estimates, will be due in the third quarter of 2022. The letters of credit we had posted in lieu of paying the additional tax liability assessed by the Notices of Reassessment will be cancelled upon payment of the additional tax and interest to Canada. Due primarily to the availability of additional foreign tax credits to offset in part the increased Canadian tax referenced above, the Company will file amended tax returns in the United States to request a refund of tax overpaid.years.

In the three months ended March 31, 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 $76 million, reflecting the net impact of $127 million of accrued income taxes payable to Canada for tax years 2006 tothrough 2011, partially offset by net income tax receivables of approximately $51 million in the United States, and we accrued net interest of $99 million, primarily reflecting the impact of estimated interest payable to Canada.

In the second half of 2022, this tax liability and the related interest were assessed and paid, resulting in total payments of $224 million, which also reflect the impact of changes in foreign currency exchange rates. As a result, the letters of credit we had posted in lieu of paying the additional tax liability assessed by the Notices of Reassessment were cancelled. Due primarily to the availability of additional foreign tax credits to offset in part the increased Canadian tax referenced above, the Company has filed amended tax returns in the United States to request a refund of taxes paid.

Transfer pricing ~~reserves~~positions

AsIn the first quarter of 2022, as a result of the outcome of the arbitration decision discussed above, we ~~have~~ also evaluated our transfer pricing positions between Canada and the United States for open years 2012 and after. Based on this evaluation for the three months ended March 31, 2022, we recorded the following:

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•liabilities for unrecognized tax benefits of approximately $319 million, with a corresponding income tax provision, and accrued interest of approximately $91 million related to the liabilities for unrecognized tax benefits, and

•noncurrent income tax receivables of approximately $329 million, with a corresponding income tax benefit, and accrued interest income of approximately $28 million related to the noncurrent income tax receivables.

In the three months ended March 31, 2022, the impact on our consolidated statement of operations of the amounts recorded as a result of this evaluation of transfer pricing positions, ~~on our consolidated statement of operations,~~ including a $12 million deferred income tax provision for other transfer pricing tax effects, was a $2 million income tax provision and $63 million of net interest expense before tax ($69 million after tax).

As of March 31, 2022, as a result of recording these transfer pricing reserves, the total amount of our unrecognized tax benefits was $349 million, and the total amounts accrued for interest and penalties related to income taxes included in other liabilities was $96 million. 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 the 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.

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~~11.~~9. 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 March 31, ~~2022,~~2023, 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 March 31, ~~2022~~2023 or December 31, ~~2021,~~2022, or during the three months ended March 31, ~~2022.~~2023.

The Revolving Credit Agreement contains representations and warranties and affirmative and negative covenants, including financial covenants. As of March 31, ~~2022,~~2023, 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 ~~$250~~$350 million of letters of credit. As of March 31, ~~2022,~~2023, approximately ~~$197~~$201 million of letters of credit were outstanding under this agreement.

Senior Notes

Long-term debt presented on our consolidated balance sheets as of March 31, ~~2022~~2023 and December 31, ~~2021~~2022 consisted of the following debt securities issued by CF Industries:


		Effective Interest Rate	March 31, 2022				December 31, 2021					Effective Interest Rate	March 31, 2023				December 31, 2022
			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(2)		3.665%	$	500	$	499	$	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		740
Senior Secured Notes:	Senior Secured Notes:										Senior Secured Notes:

4.500% due December 2026~~(3)~~(2)	4.500% due December 2026~~(3)~~(2)	4.783%	750		741		750		742		4.500% due December 2026~~(3)~~(2)	4.783%	750		743		750		742
Total long-term debt	Total long-term debt		$	3,500	$	3,462	$	3,500	$	3,465	Total long-term debt		$	3,000	$	2,966	$	3,000	$	2,965

Less: Current maturities of long-term debt			500		499		—		—
Long-term debt, net of current maturities			$	3,000	$	2,963	$	3,500	$	3,465

(1)Carrying amount is net of unamortized debt discount and deferred debt issuance costs. Total unamortized debt discount was $8$7 million as of both March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, and total deferred debt issuance costs were ~~$30~~$27 million and ~~$27~~$28 million as of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively.

~~(2)These notes were redeemed in full on April 21, 2022.~~Table of Contents

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~~(3)~~(2)Effective August 23, 2021, these notes are no longer secured, in accordance with the terms of the applicable indenture.

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~~As of March 31, 2022, under~~Under the indentures (including the applicable supplemental indentures) governing the senior notes due ~~2023,~~ 2034, 2043 and 2044 identified in the table above (the Public Senior Notes), each series of Public Senior Notes ~~was~~is guaranteed by CF Holdings.

~~As of March 31, 2022, under~~ 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~~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.

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 2021 Notes prior to their scheduled maturity.

On March 21, 2022, we announced that CF Industries elected to redeem in full all of the $500 million outstanding principal amount of the 3.450% senior notes due June 2023 (the 2023 Notes) on April 21, 2022, in accordance with the optional redemption provisions in the indenture governing the 2023 Notes. See Note 18—Subsequent Events for additional information.

Interest on the ~~outstanding~~ Public Senior Notes and the 2026 Notes is payable semiannually, and the ~~outstanding~~ 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.~~10. Interest Expense

Details of interest expense are as follows:


		Three months ended March 31,						Three months ended March 31,
			2022		2021				2023		2022
			(in millions)						(in millions)
Interest on borrowings(1)	Interest on borrowings(1)		$	42	$	46	Interest on borrowings(1)		$	37	$	42
Fees on financing agreements(1)	Fees on financing agreements(1)		2		2		Fees on financing agreements(1)		2		2
Interest on tax liabilities(2)	Interest on tax liabilities(2)		198		—		Interest on tax liabilities(2)		2		198
Interest capitalized	Interest capitalized		(1)		—		Interest capitalized		(1)		(1)
Total interest expense	Total interest expense		$	241	$	48	Total interest expense		$	40	$	241

(1)See Note ~~11—~~9—Financing Agreements for additional information.

(2)See Note ~~10—~~8—Income Taxes for additional information.

~~13.~~11. 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 March 31, ~~2022,~~2023, we had natural gas derivative contracts covering certain periods through March ~~2023.~~2024.

As of March 31, ~~2022,~~2023, our open natural gas derivative contracts consisted of natural gas fixed price swaps, ~~and~~ basis swaps and options for ~~2.9~~18.9 million ~~MMBtus.~~MMBtus of natural gas. As of December 31, ~~2021,~~2022, we had open natural gas derivative contracts consisting of natural gas fixed price swaps, basis swaps and options for 66.3 million MMBtus of natural gas. For the three months ended March 31, 2023, we used derivatives to cover approximately 69% of our natural gas consumption.

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gas fixed price swaps, basis swaps and options for 60.0 million MMBtus of natural gas. For the three months ended March 31, 2022, we used derivatives to cover approximately 45% of our natural gas consumption.

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

Gain (loss) recognized in income
Three months ended
March 31,
Location 2022 2021
(in millions)
Unrealized net gains on natural gas derivatives Cost of sales $ 33 $ 6
Realized net gains (losses) on natural gas derivatives Cost of sales 17 (3)
Gain on net settlement of natural gas derivatives due to Winter Storm Uri Cost of sales — 112
Net derivative gains $ 50 $ 115


	Gain (loss) recognized in income
		Three months ended March 31,
	Location		2023		2022
			(in millions)


Unrealized net gains on natural gas derivatives	Cost of sales		$	72	$	33
Realized net (losses) gains on natural gas derivatives	Cost of sales		(118)		17

Net derivative (losses) gains			$	(46)	$	50

~~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 three months ended March 31, 2021.

The fair values of derivatives on our consolidated balance sheets are shown below. As of March 31, ~~2022~~2023 and December 31, ~~2021, NaN~~2022, none of our derivative instruments were designated as hedging instruments. See Note 9—7—Fair Value Measurements for additional information on derivative fair values.

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

Asset Derivatives

Liability Derivatives

Balance Sheet Location

March 31,
2023

December 31, 2022

Balance Sheet
Location

March 31,
2023

December 31, 2022

(in millions)

Natural gas derivatives

Other current assets

Other current liabilities

(5)

(85)

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 March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, the aggregate fair value of the derivative instruments with credit-risk-related contingent features in net liability positions was ~~zero~~$1 million and ~~$31~~$73 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 March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, we had 0no cash collateral on deposit with counterparties for derivative contracts.

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The following table presents amounts relevant to offsetting of our derivative assets and liabilities as of March 31, ~~2022~~2023 and December 31, ~~2021:~~2022:


		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)
March 31, 2022
Total derivative assets		$	3	$	—	$	—	$	3
Total derivative liabilities		—		—		—		—
Net derivative assets		$	3	$	—	$	—	$	3
December 31, 2021
March 31, 2023										March 31, 2023
Total derivative assets	Total derivative assets	$	16	$	—	$	—	$	16	Total derivative assets	$	4	$	—	$	—	$	4
Total derivative liabilities	Total derivative liabilities	(47)		—		—		(47)		Total derivative liabilities	(5)		—		—		(5)
Net derivative liabilities	Net derivative liabilities	$	(31)	$	—	$	—	$	(31)	Net derivative liabilities	$	(1)	$	—	$	—	$	(1)
December 31, 2022										December 31, 2022
Total derivative assets										Total derivative assets	$	12	$	—	$	—	$	12
Total derivative liabilities										Total derivative liabilities	(85)		—		—		(85)
Net derivative liabilities										Net derivative liabilities	$	(73)	$	—	$	—	$	(73)

(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.~~

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12. Noncontrolling Interest

We have a strategic venture with CHS Inc. (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
(in millions)
Noncontrolling interest:
Balance as of January 1 $ 2,830 $ 2,681
Earnings attributable to noncontrolling interest 168 24
Declaration of distributions payable (247) (64)
Balance as of March 31 $ 2,751 $ 2,641
Distributions payable to noncontrolling interest:
Balance as of January 1 $ — $ —
Declaration of distributions payable 247 64
Distributions to noncontrolling interest (247) (64)
Balance as of March 31 $ — $ —

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	2023		2022

	(in millions)
Noncontrolling interest:
Balance as of January 1	$	2,802	$	2,830

Earnings attributable to noncontrolling interest	90		168
Declaration of distributions payable	(255)		(247)


Balance as of March 31	$	2,637	$	2,751
Distributions payable to noncontrolling interest:
Balance as of January 1	$	—	$	—
Declaration of distributions payable	255		247
Distributions to noncontrolling interest	(255)		(247)

Balance as of March 31	$	—	$	—

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

~~15.~~13. Stockholders’ Equity

~~Treasury~~Common 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~~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). Repurchases under these programs 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 three months ended March 31, 2023, we repurchased approximately 1.1 million shares under the 2021 Share Repurchase Program for $75 million, of which $21 million was accrued and unpaid as of March 31, 2023. As of March 31, 2023, there was approximately $80 million of authorization remaining under the 2021 Share Repurchase Program.

In the three months ended March 31, 2022, we repurchased approximately 1.3 million shares under the 2021 Share Repurchase Program for $100 ~~million. In the three months ended March 31, 2022,~~million and we retired 27,962 shares of repurchased stock, including shares repurchased under the share repurchase program that expired on December 31, 2021. ~~At March 31, 2022, we held 1,563,679 shares~~

Table of ~~treasury stock.~~Contents

CF INDUSTRIES HOLDINGS, INC.

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)
(in millions)
Balance as of December 31, 2020 $ (144) $ 4 $ (180) $ (320)
Reclassification to earnings(1)
— — 2 2
Effect of exchange rate changes and deferred taxes 14 — (1) 13
Balance as of March 31, 2021 $ (130) $ 4 $ (179) $ (305)
Balance as of December 31, 2021 $ (141) $ 4 $ (120) $ (257)
Reclassification to earnings(1)
— — 1 1
Effect of exchange rate changes and deferred taxes (13) — 3 (10)
Balance as of March 31, 2022 $ (154) $ 4 $ (116) $ (266)

~~(1)Reclassifications out of accumulated other comprehensive loss to the consolidated statements of operations during the three months ended March 31, 2022 and 2021 were not material.~~


	Foreign Currency Translation Adjustment		Unrealized Gain on Derivatives		Defined Benefit Plans		Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance as of December 31, 2021	$	(141)	$	4	$	(120)	$	(257)



Reclassification to earnings	—		—		1		1

Effect of exchange rate changes and deferred taxes	(13)		—		3		(10)
Balance as of March 31, 2022	$	(154)	$	4	$	(116)	$	(266)

Balance as of December 31, 2022	$	(179)	$	3	$	(54)	$	(230)






Effect of exchange rate changes and deferred taxes	7		—		(1)		6
Balance as of March 31, 2023	$	(172)	$	3	$	(55)	$	(224)

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~~16. 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.

~~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. A 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 3 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.

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~~17.~~14. 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 months ended March 31, ~~2022~~2023 and ~~2021~~2022 are presented in the table below.


		Ammonia(1)		Granular Urea(2)		UAN(2)		AN(2)		Other(2)		Consolidated			Ammonia		Granular Urea(1)		UAN(1)		AN(1)		Other(1)		Consolidated
		(in millions)													(in millions)

Three months ended March 31, 2022
Three months ended March 31, 2023														Three months ended March 31, 2023
Net sales	Net sales	$	640	$	765	$	1,015	$	223	$	225	$	2,868	Net sales	$	424	$	611	$	667	$	159	$	151	$	2,012
Cost of sales	Cost of sales	280		270		345		171		104		1,170		Cost of sales	280		327		346		104		92		1,149
Gross margin	Gross margin	$	360	$	495	$	670	$	52	$	121	1,698		Gross margin	$	144	$	284	$	321	$	55	$	59	863
Total other operating costs and expenses	Total other operating costs and expenses											66		Total other operating costs and expenses											54
Equity in earnings of operating affiliate	Equity in earnings of operating affiliate											26		Equity in earnings of operating affiliate											17
Operating earnings	Operating earnings											$	1,658	Operating earnings											$	826
Three months ended March 31, 2021
Three months ended March 31, 2022														Three months ended March 31, 2022
Net sales	Net sales	$	206	$	399	$	232	$	105	$	106	$	1,048	Net sales	$	640	$	765	$	1,015	$	223	$	225	$	2,868
Cost of sales	Cost of sales	80		264		230		95		90		759		Cost of sales	280		270		345		171		104		1,170
Gross margin	Gross margin	$	126	$	135	$	2	$	10	$	16	289		Gross margin	$	360	$	495	$	670	$	52	$	121	1,698
Total other operating costs and expenses												53
Total other operating costs and expense														Total other operating costs and expense											66

Equity in earnings of operating affiliate	Equity in earnings of operating affiliate											11		Equity in earnings of operating affiliate											26
Operating earnings	Operating earnings											$	247	Operating earnings											$	1,658

_______________________________________________________________________________

(1)Cost of sales and gross margin for the Ammonia segment for the three months ended March 31, 2021 include a $112 million gain on the net settlement of certain natural gas contracts with our suppliers. See Note 13—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.

~~18. Subsequent Events~~

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 approximately $513 million, including accrued interest. As a result, we will recognize a loss on debt extinguishment of approximately $8 million in the second quarter of 2022. See Note 11—Financing Agreements for additional information.

On April 27, 2022, the Board declared a quarterly dividend of $0.40 per common share, representing an increase from the quarterly dividend of $0.30 per common share that was declared and paid in the first quarter of 2022. The dividend will be paid on May 31, 2022 to stockholders of record as of May 16, 2022.

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15. Agreement To Purchase Ammonia Production Facility

On March 20, 2023, we entered into an asset purchase agreement with Dyno Nobel Louisiana Ammonia, LLC (DNLA), a U.S. subsidiary of Australian-based Incitec Pivot Limited (IPL), and IPL. Under the terms of the agreement, we will purchase DNLA’s ammonia production complex located in Waggaman, Louisiana for a purchase price of $1.675 billion, subject to adjustment. The facility has a nameplate capacity of 880,000 tons of ammonia annually. The parties will allocate $425 million of the purchase price to a long-term ammonia offtake agreement providing for us to supply up to 200,000 tons of ammonia per year to IPL’s Dyno Nobel, Inc. subsidiary. We expect to fund the balance of the purchase price, representing the $1.675 billion purchase price, as adjusted, less $425 million, with cash on hand.

The consummation of the transaction is subject to the satisfaction or waiver of customary conditions, including, among others, the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The agreement includes certain customary termination rights, including the right of either party to terminate the agreement if the closing has not occurred by March 20, 2025. We have agreed to pay a termination fee of $75 million if the agreement is terminated in certain circumstances and certain regulatory approvals are not obtained.

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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 ~~which~~that were included in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021,~~2022, filed with the Securities and Exchange Commission (SEC) on February ~~24, 2022,~~23, 2023, 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 ~~only~~ to CF Industries Holdings, Inc. ~~itself~~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~~Agreement to Purchase Ammonia Production Facility

◦~~Our Commitment to a Clean Energy Economy~~

◦•Market Conditions ~~and Current Developments~~

◦•Financial Executive Summary

◦•Items Affecting Comparability of Results

•Consolidated Results of Operations

•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 March 31, ~~2022~~2023 include:

•five U.S. nitrogen manufacturing facilities located in Donaldsonville, Louisiana (the largest nitrogen complex in the world); Sergeant Bluff, Iowa (our Port Neal ~~Iowa;~~complex); Yazoo City, Mississippi; Claremore, Oklahoma (our Verdigris ~~Oklahoma;~~complex); 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~~remainder (see Note ~~14—~~12—Noncontrolling Interest for additional information on our strategic venture with ~~CHS;~~CHS);

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

•~~two~~a United Kingdom nitrogen manufacturing ~~facilities~~facility located in ~~Billingham and Ince;~~Billingham;

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

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•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.

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 byproduct 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 late 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.~~America at the time of its startup.

In July 2022, we and Mitsui & Co., Ltd. (Mitsui) signed a joint development agreement for the companies’ proposed plans to construct an export-oriented blue ammonia facility. We and Mitsui continue to progress a front-end engineering and design (FEED) study for the project, and expect to make a final investment decision on the proposed facility in the second half of 2023. Should the companies agree to move forward, the ammonia facility would be constructed at our new Blue Point complex. We own the land for the complex, which is located on the west bank of the Mississippi river in Ascension Parish, Louisiana. Construction and commissioning of a new world-scale ammonia plant typically takes approximately four years from the time construction begins.

In the ~~third~~first quarter of ~~2021,~~2023, we signed a memorandum of understanding (MOU) with ~~Mitsui &~~JERA Co., ~~Ltd. (Mitsui)~~Inc. (JERA), Japan’s largest energy generator, regarding the long-term supply of up to 500,000 tonnes per year of clean ammonia beginning in 2027. The execution of the MOU was the result of a supplier comparison and evaluation process for the procurement of clean ammonia that JERA initiated in February 2022 for the world’s first commercial scale ammonia co-firing operations that JERA is ~~guiding~~developing. The MOU establishes a framework for JERA and us to assess how we would best supply JERA with clean ammonia, which will be required to be produced with at least 60% lower carbon emissions than conventionally produced ammonia, under a long-term offtake agreement. We and JERA expect to evaluate a range of potential supply options, including JERA making an equity investment with us to develop a clean ammonia facility in Louisiana and a supplementary long-term offtake agreement.

In the first quarter of 2023, we signed an MOU with LOTTE CHEMICAL Corporation (LOTTE), a global chemicals company in South Korea. The MOU will guide LOTTE and us in a joint exploration of the development of ~~blue~~clean ammonia ~~projects~~production in the United ~~States. On May 3, 2022, we~~States, in addition to the quantification of expected clean ammonia demand in South Korea and ~~Mitsui announced our intention to jointly develop a greenfield~~long-term clean ammonia production facility to produce blue ammonia in the United States. We anticipate that a front-end engineering design (FEED) study will commence shortly with a final investment decision on constructing the blue ammonia production facility expected in 2023.offtake volumes into South Korea.

We ~~have~~are also ~~announced steps~~pursuing opportunities to produce blue ammonia from our existing ammonia production network. InWe are currently executing a project with an estimated cost of $200 million to construct a CO2 dehydration and compression facility at our Donaldsonville complex to enable the ~~fourth quarter of 2021, our Board of Directors (the Board) authorized projects within our existing network that we believe will enable the~~transport and permanent sequestration of ~~up to 2.5 million tons of carbon emissions each year and~~ the ~~annual production of approximately 2 million tons of blue~~ ammonia which is equivalent to 1.25 million tons of net-zero carbon ammonia, starting in 2024. The projects will involve constructing units at our Donaldsonville and Yazoo City complexes that dehydrate and compressprocess CO2~~, a process essential~~byproduct. Engineering activities and procurement of major equipment for CO2 ~~transport via pipeline~~the facility are in progress, and modification of the site’s existing equipment to ~~sequestration sites. Management expects that, once~~allow integration with existing operations has begun. Once the ~~units are~~dehydration and compression unit is in service and sequestration is initiated, we ~~could sequester~~expect that the Donaldsonville complex will have the capacity to dehydrate and compress up to ~~2.5~~2 million tons per year of CO2 ~~per year (2 million tons at Donaldsonville~~, enabling the production of blue ammonia. In October 2022, we announced that we had entered into a definitive CO2 offtake agreement with ExxonMobil to transport and ~~500,000 tons at Yazoo City).~~permanently sequester CO2 from Donaldsonville. Start-up for the project is planned for 2025. Under current regulations, the ~~projects~~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.

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Agreement to Purchase Ammonia Production Facility

On March 20, 2023, we entered into an asset purchase agreement with Dyno Nobel Louisiana Ammonia, LLC (DNLA), a U.S. subsidiary of Australian-based Incitec Pivot Limited (IPL), and IPL. Under the terms of the ~~units at~~agreement, we will purchase DNLA’s ammonia production complex located in Waggaman, Louisiana for a purchase price of $1.675 billion, subject to adjustment. The facility has a nameplate capacity of 880,000 tons of ammonia annually. The parties will allocate $425 million of the ~~Donaldsonville complex~~purchase price to a long-term ammonia offtake agreement providing for us to supply up to 200,000 tons of ammonia per year to IPL’s Dyno Nobel, Inc. subsidiary. We expect to fund the balance of the purchase price, representing the $1.675 billion purchase price, as adjusted, less $425 million, with cash on hand.

The consummation of the transaction is ~~expected~~subject to ~~begin~~the satisfaction or waiver of customary conditions, including, among others, the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The agreement includes certain customary termination rights, including the right of either party to terminate the agreement if the closing has not occurred by March 20, 2025. We have agreed to pay a termination fee of $75 million if the agreement is terminated in ~~2022~~certain circumstances and ~~to be completed in 2024, with an estimated total cost of $200 million. The Yazoo City project will be timed to coincide with CO~~2 ~~transport pipeline construction. Once started, the Yazoo City project is expected to be completed in three years with an estimated total cost of $85 million. In addition, we~~certain regulatory approvals are ~~currently in advanced discussions with several parties regarding transportation and sequestration of CO~~2 ~~from Donaldsonville.~~not obtained.

Market Conditions ~~and Current Developments~~

Geopolitical Environment

Changes in the geopolitical environment can have significant effects on our financial results. Russia’s invasion of Ukraine in February 2022, and the resulting war between Russia and Ukraine, ~~has led to disruptions in the~~disrupted global markets for certain ~~crop~~ commodities, including natural gas, nitrogen fertilizers and ~~nitrogen fertilizer. In recent weeks, we have seen effects in particular from~~certain commodity grains, leading to production curtailments, export reductions ~~from the region;~~and logistical complications involving these commodities. Additionally, energy, financial and transportation sanctions were announced by U.S., Canadian, European and other ~~governments;~~governments against Russia in response to the war. During 2022 and ~~shipping~~continuing into 2023, market participants adjusted trade flows and ~~logistical complications.~~manufacturers adjusted production levels in response to these factors. As of the date of filing of this report, nitrogen fertilizers have largely been explicitly exempted from Russian sanctions by the United States and certain other governments.

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 and demand balances and has been impacted by geopolitical events relating to the ~~recent geopolitical events. As~~war between Russia and Ukraine. European energy markets, which have historically sourced a ~~result of Europe’s dependence on Russia for a~~substantial portion of ~~its~~their natural gas ~~supply,~~from Russia, were disrupted by Russia’s invasion of Ukraine ~~disrupted European energy markets~~ and ~~threatened security~~the subsequent reduction of Russian natural gas ~~supply.~~supply to Europe during 2022. This led to further increases in natural gas prices and natural gas price volatility, which in turn 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 to reductions in global fertilizer supply. In September 2022, in response to the high prices for natural gas in the United Kingdom, we temporarily idled ammonia production at our Billingham complex and since that time have been importing ammonia from one of our North American manufacturing facilities or from purchases in the open market for upgrade into AN and other nitrogen products at that location.

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~~These~~The geopolitical developments ~~have~~relating to the war in Ukraine also led to some supply chain disruptions for Russian producers of ~~fertilizer.~~fertilizer, contributing to reduced global nitrogen fertilizer supply. Prior to ~~the~~its February 2022 invasion ~~Russia had been the largest exporter~~ of ~~nitrogen fertilizer globally, and~~Ukraine, Russia in recent years had been a significant supplier of nitrogen fertilizer products to North America and ~~Europe.~~Europe and a leading exporter of nitrogen fertilizer products globally. Since that invasion, the closure of a pipeline historically transporting ammonia from Russia through Ukraine for export has been a large contributor to reduced global exportable ammonia supply. In addition, Russia and Ukraine ~~are~~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 ~~an expectation that~~reduced commodity grain supply from ~~this region will be reduced,~~Russia and Ukraine, causing increased prices for grains globally. The increase in commodity grain prices ~~has~~ in turn ~~driven a greater~~supported strong demand for nitrogen ~~fertilizer.~~

~~These events have~~fertilizer in 2022. All of these geopolitical developments further contributed to an already tight global supply and demand balance for nitrogen ~~fertilizers and even led to shortages of certain products in some international locations.~~fertilizers. These factors ~~are causing~~caused changes in global trade flows as both manufacturers and customers ~~react~~reacted to the changing market dynamics. As a result, global nitrogen fertilizer prices ~~have significantly~~remained high and also experienced significant volatility in 2022.

As Russian-sourced natural gas supply declined due to geopolitical factors, European purchasers of natural gas increased ~~since~~imports from the ~~start~~liquified natural gas (LNG) market to build storage levels leading up to the winter 2022/2023 peak demand season. As storage levels of ~~2022.~~natural gas increased due to the increased LNG imports, in conjunction with a warmer than expected winter in Europe, prices for natural gas first stabilized and then fell as the first quarter of 2023 progressed. As natural gas prices decreased, certain nitrogen producers restarted previously idled production, leading to an increase in global nitrogen production operating rates. The increased nitrogen product supply availability resulting from the increase in operating rates, in

~~We expect that the recent geopolitical events, including any further government-imposed sanctions, will have~~

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addition to new global production coming on line and an ~~impact on the future supply demand balance and future~~increase in Russian imports into North America, resulted in lower average selling prices ~~for our nitrogen fertilizer products, but~~in the ~~scope and duration~~first quarter of ~~these impacts are unknown at the present time.~~2023 compared to average selling prices realized in 2022.

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 around the world, including in the United States.~~fertilizers. In general, the prevailing global prices for nitrogen products must be at a level to incent the high ~~enough in order for the~~cost marginal ~~producers in the world with the highest input costs~~producer to produce product at ~~least break even over the long term,~~a breakeven or above price, or else they would cease production and leave a portion of global demand unsatisfied.

In the first quarter of ~~2022,~~2023, the average selling price for our products was ~~$620~~$444 per ton, ~~an increase~~a decrease of ~~170%,~~28% compared to ~~$230~~$620 per ton in the first quarter of ~~2021,~~2022, reflecting ~~higher~~lower average selling prices across all our segments, which ~~primarily~~ drove ~~the increase~~a decrease in net sales of approximately ~~$1.82 billion, as sales volume in tons in~~$804 million for the first quarter of ~~2022 was essentially unchanged~~2023 compared to the first quarter of ~~2021.~~2022. The ~~increase~~decrease 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~~prices reflects the impact of an increase in global supply availability as ~~higher~~lower global energy costs ~~continued to drive lower~~drove higher global operating ~~rates, and exacerbated~~rates. In addition, higher average selling prices in 2022 were driven in part by the geopolitical environment experienced in 2022, as described above.

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 both the first ~~quarter~~three months of ~~2022~~2023 and ~~40% of our production costs~~ in ~~2021.~~ the year ended December 31, 2022.

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:


		Three Months Ended March 31,						Three Months Ended March 31,
			2022	2021		2022 v. 2021								2023	2022	2023 v. 2022

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)			$	4.60	$	3.38		$	1.22	36	%	Average daily market price of natural gas Henry Hub (Louisiana)			$	2.68	$	4.60	$	(1.92)	(42)	%
Average daily market price of natural gas National Balancing Point (United Kingdom)	Average daily market price of natural gas National Balancing Point (United Kingdom)			$	30.20	$	6.90		$	23.30	338	%	Average daily market price of natural gas National Balancing Point (United Kingdom)			$	16.20	$	30.20	$	(14.00)	(46)	%

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 were lower on average during the first three months of ~~2022 were higher on average~~2023 than during the first three months of ~~2021 due to tight supply and demand conditions within the market. After a warm start to the winter season at the end of 2021, colder~~2022. Warmer-than-normal temperatures in the first quarter of ~~2022~~2023 drove ~~higher~~lower heating ~~demand.~~demand for natural gas, while North American supply ~~failed~~remained strong, as there were few weather-related disruptions. In addition, although the higher cost for natural gas outside of North America incentivized liquefaction facilities in the United States to ~~keep pace and did not sustain production levels achieved in late 2021, due to well freeze-offs and continued producer capital discipline hindering growth.~~export domestic natural gas during the first quarter of 2023, the ongoing outage at the Freeport LNG facility limited total gas exports, supporting domestic supply. As a result, North American gas withdrawals from storage during the first quarter of ~~2022~~2023 were ~~larger~~lower than normal, leading to end-of-quarter storage levels ~~below both last~~that were 32% higher than one year ago and 20% higher than the five-year average. ~~In addition, record high global gas prices and newly commissioned liquefaction facilities in North America led to record liquefied natural gas (LNG) exports from the United States throughout~~For the first ~~quarter~~three weeks of ~~2022.~~

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~~The average daily market price at~~April 2023, the ~~Henry Hub for the three months ended March 31, 2022 was $4.60 per MMBtu compared to $3.38 per MMBtu for the three months ended March 31, 2021, an increase of 36%. The~~ average daily market price of natural gas at the Henry Hub ~~for April 2022~~ was ~~$6.48~~$2.11 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. 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 three months ended March 31, 2021.

Our ~~two~~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 continued to reach record high prices during the first quarter of 2022. Europe began the year with record low storage levels, but a large increase in LNG import vessels along with milder weather started to ease concerns. However, Russia’s invasion of Ukraine onin February ~~24,~~ 2022 disrupted European energy markets and threatened security of supply, driving natural gas prices in Europe upward to unprecedented ~~levels, further exacerbating an energy crisis that has been impacting our U.K. operations, as further discussed below. Prices subsequently declined in March as Russian supply~~levels. During the first quarter of 2023, Europe benefited from warmer-than-normal temperatures along with increased LNG imports, which were used to fill local storage capacity, decreasing the risk of natural gas ~~continued~~shortage. This resulted in lower natural gas prices in the United Kingdom during the first quarter of 2023, despite lower European natural gas imports from Russia. Throughout the first quarter of 2023, storage levels remained well above historical averages, putting the market in a strong position to ~~flow, albeit with~~refill stocks in preparation for the ~~possibility~~next winter season and contributing to lower prices. For the three months ended March 31, 2023, the daily closing price at the NBP reached a low of ~~total supply disruption still~~$11.00 per MMBtu on March 21, 2023 and a ~~concern.~~

~~The~~high of $21.51 per MMBtu on two consecutive days in January 2023. For the first three weeks of April 2023, the average daily market price of natural gas at the NBP ~~for the three months ended March 31, 2022~~ was $30.20 per MMBtu compared to $6.90 per MMBtu for the three months ended March 31, 2021, an increase of 338%. For the three months ended March 31, 2022, the daily closing price at NBP reached a low of $15.37 per MMBtu on January 3, 2022 and a high of $67.08 per MMBtu on March 8, 2022. The average daily market price of natural gas at the NBP for April 2022 was $21.75$12.84 per MMBtu.

In the first quarter of ~~2022, the~~2023, our cost of natural gas used for production, which includes the impact of realized natural gas derivatives, increased ~~101%~~2% to ~~$6.48~~$6.62 per MMBtu from ~~$3.22~~$6.48 per MMBtu in the ~~three months ended March 31, 2021.~~first quarter of 2022. This increase in natural gas costs resulted in a decrease in gross margin of approximately ~~$271 million.~~

~~United Kingdom Energy Crisis~~

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. In the first half of 2021, natural gas prices had increased to levels that were considered high$28 million 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.

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

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 three months ended March 31, 2022, gross margin generated by our U.K. operations represented approximately 2% 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.

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natural gas reflects the impact of losses realized on natural gas derivatives that settled during the first quarter of 2023.

In 2022, in response to high North American natural gas prices and continued price volatility, we entered into certain natural gas derivatives in order to reduce our exposure to further natural gas price volatility in the winter of 2022/2023.

Financial Executive Summary

We reported net earnings attributable to common stockholders of $560 million for the three months ended March 31, 2023 compared to $883 million for the three months ended March 31, 2022, a decrease in net earnings of $323 million. The decrease in net earnings for the three months ended March 31, 2023 compared to ~~$151~~the three months ended March 31, 2022 reflects a decrease of $835 million in gross margin to $863 million for the three months ended March 31, ~~2021, an increase~~2023. The decrease in ~~net~~gross margin was due primarily to a decrease of 28% in average selling prices to $444 per ton in the first quarter of 2023 from $620 per ton in the first quarter of 2022, which decreased gross margin by $804 million. Lower gross margin was partially offset by a decrease in interest expense of $201 million due primarily to interest expense on tax liabilities related to Canadian-U.S. transfer pricing matters in the first quarter of 2022 that did not recur in 2023 and a decrease in the income tax provision of $232 million due primarily to lower earnings in the first quarter of ~~485%, or $732 million.~~ 2023.

Diluted net earnings per share attributable to common stockholders ~~increased $3.51~~decreased $1.36 per share, to $2.85 per share, in the first quarter of 2023 compared to $4.21 per share in the first quarter of 2022 ~~compared to $0.70 per share in the first quarter of 2021. These increases were~~ due primarily to ~~an increase in gross margin driven by higher average selling prices,~~lower net earnings, partially offset by higher natural gas prices, and an increase in interest expense and income tax provision related to the Canada Revenue Agency Competent Authority Matter, discussed below under “Items Affecting Comparability of Results.”

Gross margin increased by $1.41 billion in the first quarter of 2022 to $1.70 billion as compared to $289 million in the first quarter of 2021. Average selling prices increased 170% to $620 per ton in the first quarter of 2022 from $230 per ton in the first quarter of 2021, which increased gross margin by $1.83 billion. The impact of higher average selling prices was partially offset by an increase in natural gas costs. The cost of natural gas used for production increased 101% to $6.48 per MMBtu in the first quarter of 2022 from $3.22 per MMBtu in the first quarter of 2021, which reduced gross margin by $271 million. In the first quarter of 2021, we recognized a gain of $112 millionlower weighted-average common shares outstanding as a result of ~~the net settlement of certain natural gas contracts with~~shares repurchased under our ~~suppliers as a result of Winter Storm Uri.~~share repurchase program.

Items Affecting Comparability of Results

For the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, we reported net earnings attributable to common stockholders of ~~$883~~$560 million and ~~$151~~$883 million, respectively. In addition to the impact of market conditions discussed above, certain items ~~impacted~~affected the comparability of our financial results for the three months ended March 31, ~~2022~~2023 and ~~2021.~~2022. The following table and related discussion outline these items and ~~how they impacted~~their impact on 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 March 31,								Three Months Ended March 31,
			2022			2021								2023	2022
				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)	Unrealized net mark-to-market gain on natural gas derivatives(1)			$	(33)	$	(25)	$	(6)		$	(5)	Unrealized net mark-to-market gain on natural gas derivatives(1)			$	(72)	$	(55)	$	(33)	$	(25)

(Gain) loss on foreign currency transactions, including intercompany loans(2)													(Gain) loss on foreign currency transactions, including intercompany loans(2)			(1)		(1)		6		5

U.K. operations restructuring													U.K. operations restructuring			2		2		—		—

Loss on foreign currency transactions, including intercompany loans(2)				6		5		—			—
Canada Revenue Agency Competent Authority Matter and Transfer pricing reserves:

Transaction costs related to acquisition agreement													Transaction costs related to acquisition agreement			13		10		—		—

Canada Revenue Agency Competent Authority Matter and transfer pricing positions:													Canada Revenue Agency Competent Authority Matter and transfer pricing positions:
Interest expense	Interest expense			198		196		—			—		Interest expense			—		—		198		196
Interest income	Interest income			(36)		(28)							Interest income			—		—		(36)		(28)
Income tax provision(3)	Income tax provision(3)			—		72		—			—		Income tax provision(3)			—		—		—		72

Loss on debt extinguishment				—		—		6			5

(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~~For the three months ended March 31, 2022, the after-tax income tax provision amount of $72 million ~~for the three months ended March 31, 2022~~ reflects an income tax provision of $78 million, consisting of the $76 million income tax provision referenced below under “Canada Revenue Agency Competent Authority Matter” and the $2 million of income tax provision referenced below under “Transfer pricing ~~reserves,~~positions,” net of $6 million of income tax provision that is reflected in the after-tax interest expense and interest income amounts shown in this ~~table for the three months ended March 31, 2022.~~table.

Unrealized net mark-to-market 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 March 31, ~~2022~~2023 and ~~2021,~~2022, we recognized unrealized net mark-to-market gains of ~~$33~~$72 million and $6$33 million, respectively.

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CF INDUSTRIES HOLDINGS, INC.

~~Loss~~(Gain) loss on foreign currency transactions, including intercompany loans

In the three months ended March 31, 2023 and 2022, we recognized a (gain) loss on foreign currency transactions of $(1) million and $6 million, ~~which consists~~respectively. Gains and losses on foreign currency transactions consist 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 months ended March 31, 2023, we incurred restructuring costs of $2 million related to the permanent closure of our Ince facility.

Transaction costs related to acquisition agreement

On March 20, 2023, we entered into an asset purchase agreement with DNLA and IPL to acquire DNLA’s ammonia production complex located in Waggaman, Louisiana, as described above under “Agreement to Purchase Ammonia Production Facility.” In the three months ended March 31, 2023, we incurred $13 million of transaction costs related to the acquisition agreement.

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~~served as security until the matter iswas 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.

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~~was subject to tax in Canada, resulting in our having additional Canadian tax liability for those tax years of approximately $127 million, based on current estimates. We expect this resulting Canadian tax liability, plus interest of approximately $98 million, will be assessed in the second quarter of 2022 and that payment of those amounts, aggregating to approximately $225 million, based on current estimates, will be due in the third quarter of 2022. The letters of credit we had posted in lieu of paying theyears. See Note 8—Income Taxesfor additional tax liability assessed by the Notices of Reassessment will be cancelled upon payment of the additional tax and interest to Canada. Due primarily to the availability of additional foreign tax credits to offset in part the increased Canadian tax referenced above, the Company will file amended tax returns in the United States to request a refund of tax overpaid.information.

Transfer pricing ~~reserves~~positions

AsIn the first quarter of 2022, as a result of the outcome of the arbitration decision discussed above, we ~~have~~ also evaluated our transfer pricing positions between Canada and the United States for open years 2012 and after. Based on this evaluation, ~~for the three months ended March 31, 2022,~~ we recorded the following:

•liabilities for unrecognized tax benefits of $319 million, with a corresponding income tax provision, and accrued interest of $91 million related to the liabilities for unrecognized tax benefits, and

•noncurrent income tax receivables of $329 million, with a corresponding income tax benefit, and accrued interest income of $28 million related to the noncurrent income tax receivables.

In the three months ended March 31, 2022, the impact of this evaluation of transfer pricing positions on our consolidated statement of operations, including a $12 million deferred income tax provision for other transfer pricing tax effects, was a $2 million income tax provision and $63 million of net interest expense before tax ($69 million after tax).

~~Loss on debt extinguishment~~

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Consolidated Results of Operations

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


		Three Months Ended March 31,								Three Months Ended March 31,
			2022	2021			2022 v. 2021										2023	2022	2023 v. 2022
				(in millions, except per share and per MMBtu)															(in millions, except per share and per MMBtu)
Net sales	Net sales			$	2,868		$	1,048			$	1,820		174	%	Net sales			$	2,012		$	2,868		$	(856)		(30)	%
Cost of sales	Cost of sales			1,170			759				411			54	%	Cost of sales			1,149			1,170			(21)			(2)	%
Gross margin	Gross margin			1,698			289				1,409			488	%	Gross margin			863			1,698			(835)			(49)	%
Gross margin percentage	Gross margin percentage			59.2		%	27.6		%		31.6		%			Gross margin percentage			42.9		%	59.2		%	(16.3)		%
Selling, general and administrative expenses	Selling, general and administrative expenses			64			55				9			16	%	Selling, general and administrative expenses			74			64			10			16	%
U.K. operations restructuring																U.K. operations restructuring			2			—			2			N/M

Transaction costs																Transaction costs			13			—			13			N/M

Other operating—net	Other operating—net			2			(2)				4			N/M		Other operating—net			(35)			2			(37)			N/M
Total other operating costs and expenses	Total other operating costs and expenses			66			53				13			25	%	Total other operating costs and expenses			54			66			(12)			(18)	%

Equity in earnings of operating affiliate	Equity in earnings of operating affiliate			26			11				15			136	%	Equity in earnings of operating affiliate			17			26			(9)			(35)	%
Operating earnings	Operating earnings			1,658			247				1,411			N/M		Operating earnings			826			1,658			(832)			(50)	%
Interest expense—net	Interest expense—net			205			48				157			327	%	Interest expense—net			10			205			(195)			(95)	%
Loss on debt extinguishment				—			6				(6)			(100)	%

Other non-operating—net	Other non-operating—net			1			—				1			N/M		Other non-operating—net			(3)			1			(4)			N/M
Earnings before income taxes	Earnings before income taxes			1,452			193				1,259			N/M		Earnings before income taxes			819			1,452			(633)			(44)	%
Income tax provision	Income tax provision			401			18				383			N/M		Income tax provision			169			401			(232)			(58)	%

Net earnings	Net earnings			1,051			175				876			N/M		Net earnings			650			1,051			(401)			(38)	%
Less: Net earnings attributable to noncontrolling interest	Less: Net earnings attributable to noncontrolling interest			168			24				144			N/M		Less: Net earnings attributable to noncontrolling interest			90			168			(78)			(46)	%
Net earnings attributable to common stockholders	Net earnings attributable to common stockholders			$	883		$	151			$	732		485	%	Net earnings attributable to common stockholders			$	560		$	883		$	(323)		(37)	%
Diluted net earnings per share attributable to common stockholders	Diluted net earnings per share attributable to common stockholders			$	4.21		$	0.70			$	3.51		N/M		Diluted net earnings per share attributable to common stockholders			$	2.85		$	4.21		$	(1.36)		(32)	%
Diluted weighted-average common shares outstanding	Diluted weighted-average common shares outstanding			209.9			216.0				(6.1)			(3)	%	Diluted weighted-average common shares outstanding			196.9			209.9			(13.0)			(6)	%
Dividends declared per common share	Dividends declared per common share			$	0.30		$	0.30			$	—		—	%	Dividends declared per common share			$	0.40		$	0.30		$	0.10		33	%
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)				$	6.48		$	3.22			$	3.26		101	%
Natural gas costs in cost of sales(1)																Natural gas costs in cost of sales(1)			$	5.14		$	6.70		$	(1.56)		(23)	%
Realized derivatives loss (gain) in cost of sales(2)																Realized derivatives loss (gain) in cost of sales(2)			1.48			(0.22)			1.70			N/M
Cost of natural gas used for production in cost of sales																Cost of natural gas used for production in cost of sales			$	6.62		$	6.48		$	0.14		2	%

Average daily market price of natural gas Henry Hub (Louisiana)	Average daily market price of natural gas Henry Hub (Louisiana)			$	4.60		$	3.38			$	1.22		36	%	Average daily market price of natural gas Henry Hub (Louisiana)			$	2.68		$	4.60		$	(1.92)		(42)	%
Average daily market price of natural gas National Balancing Point (United Kingdom)	Average daily market price of natural gas National Balancing Point (United Kingdom)			$	30.20		$	6.90			$	23.30		338	%	Average daily market price of natural gas National Balancing Point (United Kingdom)			$	16.20		$	30.20		$	(14.00)		(46)	%
Unrealized net mark-to-market gain on natural gas derivatives	Unrealized net mark-to-market gain on natural gas derivatives			$	(33)		$	(6)			$	(27)		(450)	%	Unrealized net mark-to-market gain on natural gas derivatives			$	(72)		$	(33)		$	(39)		(118)	%
Depreciation and amortization	Depreciation and amortization			$	208		$	204			$	4		2	%	Depreciation and amortization			$	206		$	208		$	(2)		(1)	%
Capital expenditures	Capital expenditures			$	63		$	71			$	(8)		(11)	%	Capital expenditures			$	69		$	63		$	6		10	%
Sales volume by product tons (000s)	Sales volume by product tons (000s)			4,624			4,564				60			1	%	Sales volume by product tons (000s)			4,535			4,624			(89)			(2)	%
Production volume by product tons (000s):	Production volume by product tons (000s):															Production volume by product tons (000s):
Ammonia(2)				2,613			2,479				134			5	%
Ammonia(3)																Ammonia(3)			2,359			2,613			(254)			(10)	%
Granular urea	Granular urea			1,074			1,184				(110)			(9)	%	Granular urea			1,211			1,074			137			13	%
UAN (32%)	UAN (32%)			1,865			1,689				176			10	%	UAN (32%)			1,598			1,865			(267)			(14)	%
AN	AN			405			475				(70)			(15)	%	AN			388			405			(17)			(4)	%

N/M—Not Meaningful

(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.

(2)Includes realized gains and losses on natural gas derivatives settled during the period. Excludes unrealized mark-to-market gains and losses on natural gas derivatives. ~~For the three months ended March 31, 2021, excludes the $112 million gain on net settlement of certain natural gas contracts with our suppliers due to Winter Storm Uri.~~

~~(2)~~(3)Gross ammonia production, including amounts subsequently upgraded on-site into granular urea, UAN, or AN.

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First Quarter of ~~2022~~2023 Compared to First Quarter of ~~2021~~

2022

Net Sales

Our total net sales ~~increased $1.82~~decreased $856 million, or 30%, to $2.01 billion ~~or 174%,~~in the first quarter of 2023 compared to $2.87 billion in the first quarter of 2022 ~~compared~~due to ~~$1.05 billion~~decreases in average selling prices and sales volume.

Our average selling price was $444 per ton in the first quarter of ~~2021 due primarily~~2023, or 28% lower compared to ~~an increase in average selling prices.~~

~~Our average selling price was~~ $620 per ton in the first quarter of 2022, ~~or 170% higher, compared to $230 per ton in the first quarter of 2021~~ due to ~~higher~~lower 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~~an increase in global supply availability as ~~higher~~lower global energy costs ~~and geopolitical events~~ drove ~~lower~~higher global operating rates. ~~See “Market Conditions and Current Developments—Geopolitical Environment,” above, for further discussion.~~

Our total sales volume of 4.5 million product tons in the first quarter of 2023 was 2% lower compared to 4.6 million product tons in the first quarter of 2022, ~~was essentially unchanged compared to the first quarter of 2021,~~ as ~~higher~~lower sales volume in our UAN, Ammonia, AN and ~~Ammonia~~Other segments was partially offset by ~~lower~~higher sales volume in our Granular Urea ~~Other and AN segments.~~segment.

Cost of Sales

Our total cost of sales ~~increased $411~~decreased $21 million, or ~~54%~~2%, to $1.15 billion in the first quarter of 2023 from $1.17 billion in the first quarter of ~~2022 from $759 million in the first quarter of 2021.~~2022. The ~~increase~~decrease in our cost of sales was due primarily to a decrease in sales volume of 2%, which decreased cost of sales by $30 million, and lower costs for ammonia purchased from PLNL, our joint venture in Trinidad. The factors that decreased cost of sales were partially offset by higher costs for natural gas, including the impact of realized derivatives, which increased cost of sales by ~~$271~~$28 million, and higher costs for imported ammonia ~~purchased from~~for our ~~joint venture~~operations in ~~Trinidad. In addition,~~the United Kingdom. Higher costs for natural gas were due primarily to losses on natural gas derivatives settled in the first quarter of ~~2021, we recognized a gain of $112 million, which is included in cost of sales, as a result of the net settlement of certain~~2023, partially offset by lower costs for natural gas ~~contracts with our suppliers~~in the United Kingdom as ~~a result of Winter Storm Uri.~~we imported ammonia for upgrading to AN.

Cost of sales also includes the impact of a ~~$33~~$72 million unrealized net mark-to-market gain on natural gas derivatives in the first quarter of ~~2022~~2023 compared to a $6$33 million gain in the first quarter of ~~2021.~~2022.

Cost of sales averaged $254 per ton in the first quarter of 2023 compared to $253 per ton in the first quarter of ~~2022, a 51% increase from $167 per ton in the first quarter of 2021.~~2022. The cost of natural gas used for production ~~including~~includes the impact of ~~realized~~natural gas derivatives used to reduce the volatility of natural gas prices. The cost of natural gas increased ~~101%~~2% to $6.62 per MMBtu in the first quarter of 2023 from $6.48 per MMBtu in the first quarter of ~~2022 from $3.22 per MMBtu in~~2022. The higher cost of natural gas reflects the impact of losses realized on natural gas derivatives that settled during the first quarter of ~~2021. The cost of~~2023.In 2022, in response to high North American natural gas ~~used for production of $3.22 per MMBtu in the first quarter of 2021 does not include the $112 million gain from the net settlement of~~prices and continued price volatility, we entered into certain natural gas ~~contracts discussed above.~~derivatives in order to reduce our exposure to further natural gas price volatility in the winter of 2022/2023.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $9$10 million to $74 million in the first quarter of 2023 as compared to $64 million in the first quarter of ~~2022 as compared to $55 million in the first quarter of 2021.~~2022. The increase was due primarily to higher costs ~~associated~~related to certain corporate initiatives, including amortization of our recently implemented enterprise resource planning (ERP) system, and higher salaries and incentive compensation.

Transaction Costs

On March 20, 2023, we entered into an asset purchase agreement with ~~corporate initiatives.~~DNLA and IPL to acquire DNLA’s ammonia production complex located in Waggaman, Louisiana, as described above under “Agreement to Purchase Ammonia Production Facility.” In the three months ended March 31, 2023, we incurred $13 million of transaction costs related to the acquisition agreement.

Other Operating—Net

Other operating—net was $35 million of income in the first quarter of 2023 compared to $2 million of expense in the first quarter of 2022. The $35 million of income in the first quarter of 2023 consists primarily of a gain on sales of emission credits.

Equity in Earnings of Operating Affiliate

Equity in earnings of operating affiliate was $17 million in the first quarter of 2023 compared to $26 million in the first quarter of ~~2022 compared to $11 million in the first quarter of 2021.~~2022. The ~~increase in the first quarter of 2022~~decrease was due primarily to ~~an increase~~a decrease in the operating results of PLNL as a result of ~~higher~~lower ammonia selling prices, partially offset by ~~higher~~lower natural gas costs.

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CF INDUSTRIES HOLDINGS, INC.

Interest Expense—Net

Net interest expense was $10 million in the first quarter of 2023 compared to $205 million in the first quarter of ~~2022 compared to $48 million in the first quarter~~2022. The decrease of ~~2021. The increase of $157~~$195 million was due primarily to $162 million of net interest expense recorded in the first 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” and “Items Affecting Comparability of Results—Transfer pricing ~~reserves,~~positions,” above.

~~Loss~~ In addition, the decrease in net interest expense was due to higher interest income on ~~Debt Extinguishment~~

~~On March 20, 2021, we redeemed in full all~~investments and lower interest expense on borrowings due to the redemption of ~~the $250~~$500 million ~~outstanding~~ principal amount of ~~the 2021 Notes~~3.450% senior notes due June 2023 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 2021 NotesApril 2022 prior to their scheduled maturity.

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~~CF INDUSTRIES HOLDINGS, INC.~~

Income Taxes

For the three months ended March 31, ~~2022,~~2023, we recorded an income tax provision of $169 million on pre-tax income of $819 million, or an effective tax rate of 20.6%, compared to an income tax provision of $401 million on a pre-tax income of $1.45 billion, or an effective tax rate of 27.6%, ~~compared to an income tax provision of $18 million on pre-tax income of $193 million, or an effective tax rate of 9.3%,~~ for the three months ended March 31, ~~2021.~~

For the three months ended March 31, 2022, our income tax provision includes $78 million of tax expense related to the Canada Revenue Agency Competent Authority Matter and certain transfer pricing reserves recorded in the period, which are further described above under “Items Affecting Comparability of Results.” ~~Additionally, for the three months ended March 31, 2022, we recognizeda $20 million income tax benefit for the excess tax benefit related to certain share-based compensation activity.~~

~~For the three months ended March 31, 2021, our income tax provision includes a $22 million benefit reflecting the impact of agreement on certain issues related to U.S. federal income tax audits.~~2022.

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 three months ended March 31, 2023 of 20.6%, which is based on pre-tax income of $819 million, including $90 million of earnings attributable to the noncontrolling interest, would be 2.6 percentage points higher, or 23.2%, if based on pre-tax income exclusive of the $90 million of earnings attributable to the noncontrolling interest. Our effective tax rate for the three months ended March 31, 2022 of 27.6%, which is based on pre-tax income of $1.45 billion, including $168 million of earnings attributable to the noncontrolling interest, would be 3.7 percentage points higher, or 31.3%, if based on pre-tax income exclusive of the $168 million of earnings attributable to the noncontrolling interest. ~~Our effective tax rate~~See Note 12—Noncontrolling Interest for additional information.

In addition, for the three months ended March 31, ~~2021 of 9.3%, which is based on pre-tax~~2022, our income ~~of $193 million, including $24~~tax provision includes $20 million of ~~earnings attributable~~income tax benefit due to share-based compensation activity and $78 million of income tax provision related to the ~~noncontrolling interest, would be 1.3 percentage points higher, or 10.6%, if based on pre-tax income exclusive~~Canada Revenue Agency Competent Authority Matter and certain transfer pricing reserves recorded in the period, which are described above under “Items Affecting Comparability of ~~the $24 million of earnings attributable to the noncontrolling interest. See Note 10—Income Taxes and Note 14—Noncontrolling Interest for additional information.~~Results.”

Net Earnings Attributable to Noncontrolling Interest

Net earnings attributable to noncontrolling interest ~~increased $144~~decreased $78 million to $90 million in the first quarter of 2023 compared to $168 million in the first quarter of 2022 ~~as compared to $24 million in the first quarter of 2021~~ due to ~~higher~~lower earnings of CFN driven by ~~higher~~lower average selling prices as described above under “Net Sales.”

Diluted Net Earnings Per Share Attributable to Common Stockholders

Net earnings per share attributable to common stockholders ~~increased $3.51~~decreased $1.36 to $2.85 per diluted share in the first quarter of 2023 from $4.21 per diluted share in the first quarter of ~~2022 from $0.70 per diluted share in the first quarter of 2021.~~2022. This ~~increase~~decrease was due primarily to ~~an increase~~a decrease in gross margin, driven by ~~higher~~lower average selling ~~prices, partially offset by increases in natural gas costs. The increase in~~prices. Lower gross margin was partially offset by ~~increases~~a decrease in interest expense due primarily to interest expense on tax liabilities in the first quarter of 2022 related to Canadian-U.S. transfer pricing matters and a decrease in the income tax provision ~~which are described above, and an increase in net earnings attributable to noncontrolling interest.~~resulting from lower profitability. Additionally, ~~net earnings per diluted share increased due to a 3% reduction in the~~ diluted weighted-average common shares outstanding ~~which~~ declined 6% from ~~216.0 million shares at March 31, 2021 to~~ 209.9 million shares atfor the three months ended March 31, 2022 to 196.9 million shares for the three months ended March 31, 2023, due primarily to repurchases of common shares under our share repurchase ~~programs.~~program.

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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~~table presents summary operating results by business segment:


		Ammonia(1)			Granular Urea(2)			UAN(2)			AN(2)			Other(2)			Consolidated				Ammonia			Granular Urea(1)			UAN(1)			AN(1)			Other(1)			Consolidated
		(in millions)																			(in millions)

Three months ended March 31, 2023																				Three months ended March 31, 2023
Net sales																				Net sales	$	424		$	611		$	667		$	159		$	151		$	2,012
Cost of sales																				Cost of sales	280			327			346			104			92			1,149
Gross margin																				Gross margin	$	144		$	284		$	321		$	55		$	59		$	863
Gross margin percentage																				Gross margin percentage	34.0		%	46.5		%	48.1		%	34.6		%	39.1		%	42.9		%
Three months ended March 31, 2022	Three months ended March 31, 2022																			Three months ended March 31, 2022
Net sales	Net sales	$	640		$	765		$	1,015		$	223		$	225		$	2,868		Net sales	$	640		$	765		$	1,015		$	223		$	225		$	2,868
Cost of sales	Cost of sales	280			270			345			171			104			1,170			Cost of sales	280			270			345			171			104			1,170
Gross margin	Gross margin	$	360		$	495		$	670		$	52		$	121		1,698			Gross margin	$	360		$	495		$	670		$	52		$	121		$	1,698
Gross margin percentage	Gross margin percentage	56.3		%	64.7		%	66.0		%	23.3		%	53.8		%	59.2		%	Gross margin percentage	56.3		%	64.7		%	66.0		%	23.3		%	53.8		%	59.2		%
Three months ended March 31, 2021
Net sales		$	206		$	399		$	232		$	105		$	106		$	1,048
Cost of sales		80			264			230			95			90			759
Gross margin		$	126		$	135		$	2		$	10		$	16		289
Gross margin percentage		61.2		%	33.8		%	0.9		%	9.5		%	15.1		%	27.6		%

_______________________________________________________________________________

(1)Cost of sales and gross margin for the ammonia segment in the three months ended March 31, 2021 include a $112 million gain on the net settlement of certain natural gas contracts with our suppliers. See Note 13—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.

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Ammonia Segment

Our Ammonia segment produces anhydrous ammonia (ammonia), which is ~~our most concentrated nitrogen product. Ammonia contains~~the base product that we manufacture, containing 82% nitrogen and 18% hydrogen. The results of our Ammonia segment consist of sales of ammonia to external ~~customers.~~customers for its nitrogen content as a fertilizer, in emissions control and in other industrial applications. In addition, ~~ammonia is the base nitrogen product that~~ we upgrade ammonia 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 March 31,								Three Months Ended March 31,
			2022	2021			2022 v. 2021										2023	2022	2023 v. 2022
				(dollars in millions, except per ton amounts)															(dollars in millions, except per ton amounts)
Net sales	Net sales			$	640		$	206			$	434		211	%	Net sales			$	424		$	640		$	(216)		(34)	%
Cost of sales	Cost of sales			280			80				200			250	%	Cost of sales			280			280			—			—	%
Gross margin	Gross margin			$	360		$	126			$	234		186	%	Gross margin			$	144		$	360		$	(216)		(60)	%
Gross margin percentage	Gross margin percentage			56.3		%	61.2		%		(4.9)		%			Gross margin percentage			34.0		%	56.3		%	(22.3)		%
Sales volume by product tons (000s)	Sales volume by product tons (000s)			727			683				44			6	%	Sales volume by product tons (000s)			652			727			(75)			(10)	%
Sales volume by nutrient tons (000s)(1)	Sales volume by nutrient tons (000s)(1)			596			560				36			6	%	Sales volume by nutrient tons (000s)(1)			535			596			(61)			(10)	%
Average selling price per product ton	Average selling price per product ton			$	880		$	302			$	578		191	%	Average selling price per product ton			$	650		$	880		$	(230)		(26)	%
Average selling price per nutrient ton(1)	Average selling price per nutrient ton(1)			$	1,074		$	368			$	706		192	%	Average selling price per nutrient ton(1)			$	793		$	1,074		$	(281)		(26)	%
Gross margin per product ton	Gross margin per product ton			$	495		$	184			$	311		169	%	Gross margin per product ton			$	221		$	495		$	(274)		(55)	%
Gross margin per nutrient ton(1)	Gross margin per nutrient ton(1)			$	604		$	225			$	379		168	%	Gross margin per nutrient ton(1)			$	269		$	604		$	(335)		(55)	%
Depreciation and amortization	Depreciation and amortization			$	34		$	36			$	(2)		(6)	%	Depreciation and amortization			$	31		$	34		$	(3)		(9)	%
Unrealized net mark-to-market gain on natural gas derivatives	Unrealized net mark-to-market gain on natural gas derivatives			$	(8)		$	(2)			$	(6)		(300)	%	Unrealized net mark-to-market gain on natural gas derivatives			$	(21)		$	(8)		$	(13)		(163)	%

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

First Quarter of ~~2022~~2023 Compared to First Quarter of ~~2021~~2022

Net Sales. Net sales in our Ammonia segment ~~increased~~decreased by ~~$434~~$216 million, or ~~211%~~34%, to $424 million in the first quarter of 2023 from $640 million in the first quarter of 2022 ~~from $206 million in the first quarter of 2021~~ due ~~primarily~~ to a ~~191% increase~~26% decrease in average selling prices and a ~~6% increase~~10% decrease in sales volume. Average selling prices ~~increased~~decreased to $650 per ton in the first quarter of 2023 compared to $880 per ton in the first quarter of 2022 due primarily to an increase in global supply availability as lower global energy costs drove higher global operating rates. Sales volume was lower due primarily to lower demand compared to ~~$302 per ton~~a robust ammonia sales environment in the first quarter of 2021 due primarily to the impact of a tighter global nitrogen supply and demand balance, in part due to the geopolitical factors as described above under “Market Conditions and Current Developments—Geopolitical Environment.” Sales volume was higher due primarily to higher supply availability due to increased production.2022.

Cost of Sales. Cost of sales in our Ammonia segment averaged $429 per ton in the first quarter of 2023, an 11% increase from $385 per ton in the first quarter of ~~2022, a 226% increase from $118 per ton in the first quarter of 2021.~~2022. The increase was due primarily to the impact of the $112 million gain on the net settlement of certain natural gas contracts in February 2021, which is more fully described under “Market Conditions and Current Developments” above, and higher realized natural gas costs, ~~and higher costs~~including the impact of realized derivatives, partially offset by a lower cost per ton for purchased ammonia ~~purchased~~ from PLNL, our joint venture in Trinidad. The $112 million gain on the net settlement of certain natural gas contracts reduced cost of sales in the first quarter of 2021 by $164 per ton, and represents 189 percentage points of the 226% increase in cost of sales per ton.

Gross Margin. Gross margin in our Ammonia segment ~~increased~~decreased by ~~$234~~$216 million to $144 million in the first quarter of 2023 from $360 million in the first quarter of 2022, ~~from $126 million~~and our gross margin percentage was 34.0% in the first quarter of ~~2021, and our gross margin percentage was~~2023 compared to 56.3% in the first quarter of 2022 ~~compared to 61.2% in the first quarter of 2021~~. The ~~increase~~decrease in gross margin was due primarily to a ~~191%~~26% ~~increase~~decrease in average selling prices, which ~~increase~~decreasedd gross margin by ~~$413~~$144 million, ~~and~~ a 6% ~~increase~~10% decrease in sales volume, which ~~increase~~ddecreased gross margin by ~~$17 million. These factors were partially offset by~~$63 million, and an increase in realized natural gas costs, including the impact of realized derivatives, which reduced gross margin by ~~$52~~$47 million. The factors that decreased gross margin were partially offset by a $25 million ~~and~~ ~~a $38 million~~net ~~increase~~decrease in manufacturing, maintenance and other costs, driven by ~~higher~~lower purchased product costs. ~~In addition, the first quarter of 2021 includes the impact of the $112 million gain on the net settlement of certain natural gas contracts.~~ Gross margin also includes the impact of ana $821 million unrealized net mark-to-market gain on natural gas derivatives in the first quarter of ~~2022~~2023 compared to aan $28 million gain in the first quarter of ~~2021.~~2022.

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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;~~Port Neal and Medicine Hat ~~Alberta; and Port Neal, Iowa,~~ nitrogen complexes.

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


		Three Months Ended March 31,								Three Months Ended March 31,
			2022	2021			2022 v. 2021										2023	2022	2023 v. 2022
				(dollars in millions, except per ton amounts)															(dollars in millions, except per ton amounts)
Net sales	Net sales			$	765		$	399			$	366		92	%	Net sales			$	611		$	765		$	(154)		(20)	%
Cost of sales	Cost of sales			270			264				6			2	%	Cost of sales			327			270			57			21	%
Gross margin	Gross margin			$	495		$	135			$	360		267	%	Gross margin			$	284		$	495		$	(211)		(43)	%
Gross margin percentage	Gross margin percentage			64.7		%	33.8		%		30.9		%			Gross margin percentage			46.5		%	64.7		%	(18.2)		%
Sales volume by product tons (000s)	Sales volume by product tons (000s)			1,096			1,320				(224)			(17)	%	Sales volume by product tons (000s)			1,323			1,096			227			21	%
Sales volume by nutrient tons (000s)(1)	Sales volume by nutrient tons (000s)(1)			504			607				(103)			(17)	%	Sales volume by nutrient tons (000s)(1)			608			504			104			21	%
Average selling price per product ton	Average selling price per product ton			$	698		$	302			$	396		131	%	Average selling price per product ton			$	462		$	698		$	(236)		(34)	%
Average selling price per nutrient ton(1)	Average selling price per nutrient ton(1)			$	1,518		$	657			$	861		131	%	Average selling price per nutrient ton(1)			$	1,005		$	1,518		$	(513)		(34)	%
Gross margin per product ton	Gross margin per product ton			$	452		$	102			$	350		343	%	Gross margin per product ton			$	215		$	452		$	(237)		(52)	%
Gross margin per nutrient ton(1)	Gross margin per nutrient ton(1)			$	982		$	222			$	760		342	%	Gross margin per nutrient ton(1)			$	467		$	982		$	(515)		(52)	%
Depreciation and amortization	Depreciation and amortization			$	64		$	66			$	(2)		(3)	%	Depreciation and amortization			$	79		$	64		$	15		23	%
Unrealized net mark-to-market gain on natural gas derivatives	Unrealized net mark-to-market gain on natural gas derivatives			$	(7)		$	(2)			$	(5)		(250)	%	Unrealized net mark-to-market gain on natural gas derivatives			$	(20)		$	(7)		$	(13)		(186)	%

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

First Quarter of ~~2022~~2023 Compared to First Quarter of ~~2021~~2022

Net Sales. Net sales in our Granular Urea segment ~~increased $366~~decreased $154 million, or ~~92%~~20%, to $611 million in the first quarter of 2023 from $765 million in the first quarter of 2022 ~~from $399 million in the first quarter of 2021~~ due primarily to a ~~131% increase~~34% decrease in average selling prices, partially offset by a ~~17% decrease~~21% increase in sales volume. Average selling prices ~~increased~~decreased to $462 per ton in the first quarter of 2023 compared to $698 per ton in the first quarter of 2022 ~~compared to $302 per ton in the first quarter of 2021~~ due primarily to ~~the impact of a tighter~~an increase in global ~~nitrogen~~ supply availability as lower global energy costs drove higher global operating rates, and ~~demand balance,~~an increase in ~~part due to the geopolitical factors as described above under “Market Conditions and Current Developments—Geopolitical Environment.” Sales volume was lower due primarily to lower~~global supply availability resulting from ~~lower~~new global production coming online. Sales volume was higher due primarily to greater supply availability resulting from higher production.

Cost of Sales. Cost of sales in our Granular Urea segment averaged $247 per ton in the first quarter of 2023 compared to $246 per ton in the first quarter of 2022, ~~a 23% increase from $200 per ton in the first quarter of 2021, due primarily to~~as higher realized natural gas costs, including the impact of realized derivatives, were partially offset by the impact of lower production costs.

Gross Margin. Gross margin in our Granular Urea segment ~~increased~~decreased by ~~$360~~$211 million to $284 million in the first quarter of 2023 from $495 million in the first quarter of 2022, ~~from $135 million in the first quarter of 2021,~~ and our gross margin percentage was 46.5% in the first quarter of 2023 compared to 64.7% in the first quarter of ~~2022 compared to 33.8% in the first quarter of 2021.~~2022. The ~~increase~~decrease in gross margin was due primarily to a ~~131% increase~~34% decrease in average selling prices, which decreased gross margin by $313 million, and an increase in realized natural gas costs, including the impact of realized derivatives, which reduced gross margin by $19 million. The factors that reduced gross margin were partially offset by a 21% increase in sales volume, which increased gross margin by ~~$426~~$104 million, and a $3$4 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 $48 million, and a 17% decrease in sales volume, which decreased gross margin by $26 million. Gross margin also includes the impact of a $7$20 million unrealized net mark-to-market gain on natural gas derivatives in the first quarter of ~~2022~~2023 compared to a $2$7 million gain in the first quarter of ~~2021.~~2022.

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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.~~nitrogen complexes.

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


		Three Months Ended March 31,								Three Months Ended March 31,
			2022	2021			2022 v. 2021										2023	2022	2023 v. 2022
				(dollars in millions, except per ton amounts)															(dollars in millions, except per ton amounts)
Net sales	Net sales			$	1,015		$	232			$	783		338	%	Net sales			$	667		$	1,015		$	(348)		(34)	%
Cost of sales	Cost of sales			345			230				115			50	%	Cost of sales			346			345			1			—	%
Gross margin	Gross margin			$	670		$	2			$	668		N/M		Gross margin			$	321		$	670		$	(349)		(52)	%
Gross margin percentage	Gross margin percentage			66.0		%	0.9		%		65.1		%			Gross margin percentage			48.1		%	66.0		%	(17.9)		%
Sales volume by product tons (000s)	Sales volume by product tons (000s)			1,828			1,514				314			21	%	Sales volume by product tons (000s)			1,662			1,828			(166)			(9)	%
Sales volume by nutrient tons (000s)(1)	Sales volume by nutrient tons (000s)(1)			576			476				100			21	%	Sales volume by nutrient tons (000s)(1)			524			576			(52)			(9)	%
Average selling price per product ton	Average selling price per product ton			$	555		$	153			$	402		263	%	Average selling price per product ton			$	401		$	555		$	(154)		(28)	%
Average selling price per nutrient ton(1)	Average selling price per nutrient ton(1)			$	1,762		$	487			$	1,275		262	%	Average selling price per nutrient ton(1)			$	1,273		$	1,762		$	(489)		(28)	%
Gross margin per product ton	Gross margin per product ton			$	367		$	1			$	366		N/M		Gross margin per product ton			$	193		$	367		$	(174)		(47)	%
Gross margin per nutrient ton(1)	Gross margin per nutrient ton(1)			$	1,163		$	4			$	1,159		N/M		Gross margin per nutrient ton(1)			$	613		$	1,163		$	(550)		(47)	%
Depreciation and amortization	Depreciation and amortization			$	70		$	56			$	14		25	%	Depreciation and amortization			$	66		$	70		$	(4)		(6)	%
Unrealized net mark-to-market gain on natural gas derivatives	Unrealized net mark-to-market gain on natural gas derivatives			$	(8)		$	(2)			$	(6)		(300)	%	Unrealized net mark-to-market gain on natural gas derivatives			$	(21)		$	(8)		$	(13)		(163)	%

~~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.

First Quarter of ~~2022~~2023 Compared to First Quarter of ~~2021~~2022

Net Sales. Net sales in our UAN segment ~~increased $783~~decreased $348 million, or ~~338%~~34%, to $667 million in the first quarter of 2023 from $1.02 billion in the first quarter of 2022 ~~from $232 million in the first quarter of 2021~~ due to a ~~263% increase~~28% decrease in average selling prices and a ~~21% increase~~9% decrease in sales volume. Average selling prices ~~increased~~decreased to $401 per ton in the first quarter of 2023 compared to $555 per ton in the first quarter of 2022 ~~compared to $153 per ton in the first quarter of 2021~~ due primarily to ~~the impact of a tighter~~an increase in global ~~nitrogen~~ supply ~~and demand balance, in part due to the geopolitical factors~~availability as ~~described above under “Market Conditions and Current Developments—Geopolitical Environment.”~~lower global energy costs drove higher global operating rates. Sales volume was ~~higher~~lower due primarily to ~~higher~~lower supply availability resulting from ~~an increase~~a decrease in production.

Cost of Sales. Cost of sales in our UAN segment averaged $208 per ton in the first quarter of 2023, an 11% increase from $188 per ton in the first quarter of 2022, ~~a 24% increase from $152 per ton in the first quarter of 2021,~~ due primarily to the impact of higher realized natural gas costs, including the impact of realized derivatives, and higher ~~freight and distribution costs to ship UAN to meet demand on both the east and west coasts of the United States.~~production costs.

Gross Margin. Gross margin in our UAN segment ~~increased~~decreased by ~~$668~~$349 million to $321 million in the first quarter of 2023 from $670 million in the first quarter of 2022, ~~from $2 million in the first quarter of 2021,~~ and our gross margin percentage was 48.1% in the first quarter of 2023 compared to 66.0% in the first quarter of ~~2022 compared to 0.9% in the first quarter of 2021.~~2022. The ~~increase~~decrease in gross margin was due primarily to a ~~263% increase~~28% decrease in average selling prices, which ~~increased~~decreased gross margin by ~~$736~~$259 million, ~~and~~ a ~~21% increase~~9% decrease in sales volume, which ~~increased~~decreased gross margin by ~~$12 million. These factors were partially offset by~~$63 million, an increase in realized natural gas costs, including the impact of realized derivatives, which reduced gross margin by ~~$65~~$29 million, and a ~~$21 million~~ net increase in manufacturing, maintenance and other costs, which reduced gross margin by $11 million. Gross margin also includes the impact of ~~an $8~~ a $21 million unrealized net mark-to-market gain on natural gas derivatives in the first quarter of ~~2022~~2023 compared to ~~a $2~~an $8 million gain in the first quarter of ~~2021.~~2022.

~~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. On August 13, 2021, the ITC made an affirmative preliminary determination that there is a reasonable indication that the U.S. UAN industry is materially injured by reason of imports of UAN from Russia and Trinidad.

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On November 30, 2021, Commerce announced preliminary countervailing duty determinations finding that UAN imports from Russia are unfairly subsidized at rates ranging from 9.66% to 9.84% and UAN imports from Trinidad are unfairly subsidized at a rate of 1.83%, and imposed preliminary cash deposit requirements on those imports.

On January 27, 2022, Commerce announced preliminary antidumping duty determinations finding that Russian UAN imports are dumped (i.e. sold at less than fair value) into the U.S. market at rates ranging from 9.15% to 127.19%, and that Trinidadian UAN imports are dumped at a rate of 63.08%, and imposed preliminary cash deposit requirements on those imports. Commerce issued a correction to its Trinidad finding on March 8, 2022, finding that Trinidadian UAN imports are dumped at a rate of 111.64% and modified the cash deposit requirements.

Commerce is scheduled to issue final antidumping and countervailing duty determinations later in 2022 and, if any of Commerce’s final determinations are affirmative, the ITC will make final determinations as to whether the unfairly traded imports materially injure or threaten material injury to the U.S. UAN industry. If the ITC makes affirmative final determinations, then Commerce will impose duties equal to the level of dumping and unfair subsidies it finds. At this time, we cannot predict the outcome of the proceedings, including whether final antidumping or countervailing duties will be imposed on imports from either Russia or Trinidad, or the rate of any such duties.

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.~~nitrogen complexes.

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


		Three Months Ended March 31,								Three Months Ended March 31,
			2022	2021			2022 v. 2021										2023	2022	2023 v. 2022
				(dollars in millions, except per ton amounts)															(dollars in millions, except per ton amounts)
Net sales	Net sales			$	223		$	105			$	118		112	%	Net sales			$	159		$	223		$	(64)		(29)	%
Cost of sales	Cost of sales			171			95				76			80	%	Cost of sales			104			171			(67)			(39)	%
Gross margin	Gross margin			$	52		$	10			$	42		420	%	Gross margin			$	55		$	52		$	3		6	%
Gross margin percentage	Gross margin percentage			23.3		%	9.5		%		13.8		%			Gross margin percentage			34.6		%	23.3		%	11.3		%
Sales volume by product tons (000s)	Sales volume by product tons (000s)			428			438				(10)			(2)	%	Sales volume by product tons (000s)			374			428			(54)			(13)	%
Sales volume by nutrient tons (000s)(1)	Sales volume by nutrient tons (000s)(1)			146			147				(1)			(1)	%	Sales volume by nutrient tons (000s)(1)			128			146			(18)			(12)	%
Average selling price per product ton	Average selling price per product ton			$	521		$	240			$	281		117	%	Average selling price per product ton			$	425		$	521		$	(96)		(18)	%
Average selling price per nutrient ton(1)	Average selling price per nutrient ton(1)			$	1,527		$	714			$	813		114	%	Average selling price per nutrient ton(1)			$	1,242		$	1,527		$	(285)		(19)	%
Gross margin per product ton	Gross margin per product ton			$	121		$	23			$	98		426	%	Gross margin per product ton			$	147		$	121		$	26		21	%
Gross margin per nutrient ton(1)	Gross margin per nutrient ton(1)			$	356		$	68			$	288		424	%	Gross margin per nutrient ton(1)			$	430		$	356		$	74		21	%
Depreciation and amortization	Depreciation and amortization			$	17		$	19			$	(2)		(11)	%	Depreciation and amortization			$	11		$	17		$	(6)		(35)	%
Unrealized net mark-to-market gain on natural gas derivatives	Unrealized net mark-to-market gain on natural gas derivatives			$	(6)		$	—			$	(6)		N/M		Unrealized net mark-to-market gain on natural gas derivatives			$	(3)		$	(6)		$	3		50	%

~~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.

First Quarter of ~~2022~~2023 Compared to First Quarter of ~~2021~~2022

OnIn September ~~15, 2021,~~2022, as a result of extremely high and volatile natural gas prices and the lack of a corresponding increase in global nitrogen product market prices, 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 restartedtemporarily idled ammonia production at our Billingham ~~facility; however, production continues to be idled~~complex. Since that time, we have imported ammonia for upgrade into AN and other nitrogen products at ~~our Ince facility. See the discussion under “Market Conditions and Current Developments—United Kingdom Energy Crisis,” above, for further information.~~

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~~CF INDUSTRIES HOLDINGS, INC.~~

that location.

Net Sales. Net sales in our AN segment ~~increased $118~~decreased $64 million, or ~~112%~~29%, to $159 million in the first quarter of 2023 from $223 million in the first quarter of 2022 ~~from $105 million in the first quarter of 2021~~ due to ~~a 117% increase~~an 18% decrease in average selling prices ~~partially offset by~~and a 2%13% decrease in sales volume. Average selling prices ~~increased~~decreased to $425 per ton in the first quarter of 2023 compared to $521 per ton in the first quarter of 2022 ~~compared to $240 per ton in the first quarter of 2021~~ due primarily to ~~the impact of a tighter~~an increase in global ~~nitrogen~~ supply ~~and demand balance, in part due to the geopolitical factors~~availability as ~~described above under “Market Conditions and Current Developments—Geopolitical Environment.”~~lower global energy costs drove higher global operating rates. Sales volume declined due primarily to ~~lower supply availability resulting from lower production.~~weak domestic demand in the United Kingdom.

Cost of Sales. Cost of sales in our AN segment averaged $278 per ton in the first quarter of 2023, a 31% decrease from $400 per ton in the first quarter of ~~2022, an 84% increase from $217 per ton~~2022. The decrease was due primarily to lower production costs in the first quarter of ~~2021. The increase~~2023 as purchased ammonia was ~~due primarily~~used for upgrading into AN as compared to ~~higher realized~~the higher-cost natural gas ~~costs. Natural gas costs increased in both the United States and the United Kingdom~~used to produce ammonia to upgrade into AN in the first quarter of 2022. As measured by the average daily market price at the Henry Hub, natural gas prices in the United States increased to $4.60 per MMBtu in the first quarter of 2022 from $3.38 per MMBtu in the first quarter of 2021. In the United Kingdom, the average daily market price of natural gas at the NBP increased to $30.20 per MMBtu in the first quarter of 2022 from $6.90 per MMBtu in the first 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 ~~$42~~$3 million to $55 million in the first quarter of 2023 from $52 million in the first quarter of 2022, ~~from $10 million in the first quarter of 2021,~~ and our gross margin percentage was 34.6% in the first quarter of 2023 compared to 23.3% in the first quarter of ~~2022 compared to 9.5% in the first quarter of 2021.~~2022. The increase in gross margin ~~was~~reflects the following:

•a decrease in realized natural gas costs, due primarily to ~~a 117% increase in average selling prices,~~the idling of the Billingham ammonia plant, which increased gross margin by ~~$122~~$55 million, ~~and an increase of $3 million due to product mix. This increase was~~ partially offset by ~~an increase in realized natural gas costs, which reduced gross margin by $77 million, and~~ a net increase of ~~$12~~$25 million in manufacturing, maintenance and other ~~costs.~~ costs, driven by the cost for purchased ammonia for upgrade, partially offset by lower production costs;

•~~Gross~~favorable location product mix, which increased gross margin ~~also includes~~ by $2 million;

•a decrease in average selling prices of 18%, which decreased gross margin by $26 million; and

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•the impact of a $6$3 million unrealized net mark-to-market gain on natural gas derivatives in the first quarter of 2023 compared to a $6 million gain in the first quarter of 2022.

Other Segment

Our Other segment primarily includes the following products:

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

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

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

•

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


	Three Months Ended March 31,
		2023	2022			2023 v. 2022
			(dollars in millions, except per ton amounts)
Net sales			$	151		$	225		$	(74)		(33)	%
Cost of sales			92			104			(12)			(12)	%
Gross margin			$	59		$	121		$	(62)		(51)	%
Gross margin percentage			39.1		%	53.8		%	(14.7)		%
Sales volume by product tons (000s)			524			545			(21)			(4)	%
Sales volume by nutrient tons (000s)(1)			103			104			(1)			(1)	%
Average selling price per product ton			$	288		$	413		$	(125)		(30)	%
Average selling price per nutrient ton(1)			$	1,466		$	2,163		$	(697)		(32)	%
Gross margin per product ton			$	113		$	222		$	(109)		(49)	%
Gross margin per nutrient ton(1)			$	573		$	1,163		$	(590)		(51)	%
Depreciation and amortization			$	16		$	19		$	(3)		(16)	%
Unrealized net mark-to-market gain on natural gas derivatives			$	(7)		$	(4)		$	(3)		(75)	%

_______________________________________________________________________________

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

First Quarter of 2023 Compared to First Quarter of 2022

In June 2022, we approved and announced our proposed plan to restructure our U.K. operations, including the planned permanent closure of our Ince facility. In August 2022, the final restructuring plan was approved, and decommissioning activities were initiated. We produced compound fertilizer products (NPKs), which are solid granular fertilizer products for which the nutrient content is a combination of nitrogen, phosphorus and ~~potassium.~~potassium, only at our Ince facility, and closure of this facility resulted in our discontinuation of the NPK product line.

~~The following table presents summary operating data~~In September 2022, as a result of extremely high and volatile natural gas prices and the lack of a corresponding increase in global nitrogen product market prices, we temporarily idled ammonia production at our Billingham complex. Since that time, we have imported ammonia for ~~our Other segment:~~

Three Months Ended March 31,
2022 2021 2022 v. 2021
(dollars in millions, except per ton amounts)
Net sales $ 225 $ 106 $ 119 112 %
Cost of sales 104 90 14 16 %
Gross margin $ 121 $ 16 $ 105 N/M
Gross margin percentage 53.8 % 15.1 % 38.7 %
Sales volume by product tons (000s) 545 609 (64) (11) %
Sales volume by nutrient tons (000s)(1)
104 122 (18) (15) %
Average selling price per product ton $ 413 $ 174 $ 239 137 %
Average selling price per nutrient ton(1)
$ 2,163 $ 869 $ 1,294 149 %
Gross margin per product ton $ 222 $ 26 $ 196 N/M
Gross margin per nutrient ton(1)
$ 1,163 $ 131 $ 1,032 N/M
Depreciation and amortization $ 19 $ 22 $ (3) (14) %
Unrealized net mark-to-market gain on natural gas derivatives $ (4) $ — $ (4) N/M
~~_______________________________________________________________________________~~

~~N/M—Not Meaningful~~

~~(1)Nutrient tons represent the tons of~~upgrade into AN and other nitrogen ~~within the product tons.~~

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~~CF INDUSTRIES HOLDINGS, INC.~~

~~First Quarter of 2022 Compared to First Quarter of 2021~~products at that location.

Net Sales. Net sales in our Other segment ~~increased~~decreased by ~~$119~~$74 million, or ~~112%~~33%, to $151 million in the first quarter of 2023 from $225 million in the first quarter of 2022 ~~from $106 million in the first quarter of 2021~~ due to a ~~137% increase~~30% decrease in average selling prices ~~partially offset by an 11%~~and a 4% decrease in sales volume. The ~~increase~~decrease in average selling prices was due primarily to ~~the impact of a tighter~~an increase in global ~~nitrogen~~ supply ~~and demand balance, in part due to the geopolitical factors~~availability as ~~described above under “Market Conditions and Current Developments—Geopolitical Environment.”~~lower global energy costs drove higher global operating rates. The decrease in sales volume was due primarily to lower nitric acid and NPK sales volumes in the first quarter of ~~2022, as our Ince manufacturing plant continues to be idled, and lower urea liquor~~2023, partially offset by higher DEF sales volumes.

Cost of Sales. Cost of sales in our Other segment averaged $175 per ton in the first quarter of 2023, an 8% decrease from $191 per ton in the first quarter of 2022, ~~a 29% increase from $148 per ton in the first quarter of 2021,~~ due primarily to ~~higher realized natural gas~~the idling of the Billingham ammonia plant and its usage of purchased ammonia for upgrading, and lower other manufacturing costs.

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Gross Margin. Gross margin in our Other segment ~~increased~~decreased by ~~$105~~$62 million to $59 million in the first quarter of 2023 from $121 million in the first quarter of 2022, ~~from $16 million in the first quarter of 2021,~~ and our gross margin percentage was 39.1% in the first quarter of 2023 compared to 53.8% in the first quarter of ~~2022 compared to 15.1% in the first quarter of 2021.~~2022. The ~~increase~~decrease in gross margin ~~was due to~~ reflects the following:

•a ~~137% increase~~decrease in average selling prices of 30%, which decreased gross margin by $62 million;

•a net increase of $13 million in manufacturing, maintenance and other costs, driven by the cost for purchased ammonia for upgrade, partially offset by lower production costs, which net increase was partially offset by a decrease in realized natural gas costs, due primarily to the idling of the Billingham ammonia plant, which increased gross margin by ~~$132 million. The increase in average selling prices was partially offset by an increase in realized natural gas costs, which reduced gross margin by $29 million, and an 11%~~$12 million;

•a decrease in sales volume of 4%, which decreased gross margin by $2 ~~million. Gross margin also includes~~ million; and

•the impact of a $4$7 million unrealized net mark-to-market gain on natural gas derivatives in the first quarter of 2023 compared to a $4 million gain in the first quarter of 2022.

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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. We may also utilize our cash to fund acquisitions. 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 March 31, ~~2022,~~2023, our cash and cash equivalents balance was ~~$2.62~~$2.83 billion, an increase of ~~$989~~$502 million from ~~$1.63~~$2.32 billion at December 31, ~~2021.~~2022. At March 31, ~~2022,~~2023, 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 March 21, 2022, we announced that our wholly owned subsidiary CF Industries, Inc. elected to redeem in full the $500 million outstanding principal amount of its 3.450% senior notes due June 2023 (the 2023 Notes) on April 21, 2022, in accordance with the optional redemption provisions in the indenture governing the 2023 Notes. See the discussion under “Debt,” below, for further information.

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~~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). Repurchases under our share repurchase programs 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. Shares repurchased, including those repurchased under share repurchase programs, are retired as approved by the Board.

In the three months ended March 31, ~~2022,~~2023, we repurchased approximately ~~1.3~~1.1 million shares under the 2021 Share Repurchase Program for ~~$100~~$75 million, of which $3$21 million was accrued and unpaid as of March 31, ~~2022.~~2023. As of March 31, 2023, there was approximately $80 million of authorization remaining under the 2021 Share Repurchase Program.

Capital Spending

We make capital expenditures to sustain our asset base, increase our capacity or capabilities, improve plant efficiency, ~~and~~ comply with various environmental, health and safety ~~requirements.~~requirements, and invest in our clean energy strategy. Capital expenditures totaled $69 million in the first three months of 2023 compared to $63 million in the first three months of ~~2022 compared to $71 million in the first three months of 2021.~~2022.

We currently anticipate that capital expenditures for the full year ~~of 2022~~2023 will be in the range of $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.

Agreement to Purchase Ammonia Production Facility

On March 20, 2023, we entered into an asset purchase agreement with DNLA and IPL. Under the terms of the agreement, we will purchase DNLA’s ammonia production complex located in Waggaman, Louisiana for a purchase price of $1.675 billion, subject to adjustment. The facility has a nameplate capacity of 880,000 tons of ammonia annually. The parties will allocate $425 million of the purchase price to a long-term ammonia offtake agreement providing for us to supply up to

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~~Canada Revenue Agency Competent Authority Matter~~

~~In connection with the matter described above under “Items Affecting Comparability~~200,000 tons of ~~Results—Canada Revenue Agency Competent Authority Matter,” we expect Canadian tax authorities will assess additional tax and interest for tax years 2006~~ammonia per year to 2011 of approximately $225 million, based on current estimates, which we expect will be due in the third quarter of 2022, and the Company will file amended tax returns with U.S. federal and state tax authorities for the relevant tax years, as a result of which weIPL’s Dyno Nobel, Inc. subsidiary. We expect to ~~receive net refunds~~fund the balance of ~~approximately $50~~the purchase price, representing the $1.675 billion purchase price, as adjusted, less $425 million, with cash on hand.

The consummation of the transaction is subject to the satisfaction or waiver of customary conditions, including, ~~tax~~among others, the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The agreement includes certain customary termination rights, including the right of either party to terminate the agreement if the closing has not occurred by March 20, 2025. We have agreed to pay a termination fee of $75 million if the agreement is terminated in certain circumstances and ~~interest, in the next twelve months.~~certain regulatory approvals are not obtained.

United Kingdom ~~Energy Crisis~~Operations

~~As discussed under “Market Conditions and Current Developments—United Kingdom Energy Crisis,” above, during~~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. ~~Management continues to assess these volatile market conditions~~On September 15, 2021, we announced the halt of operations at both our Ince and Billingham manufacturing facilities in the United ~~Kingdom. The factors that could lead~~Kingdom due to negative profitability driven by the ~~resolution~~high cost of natural gas. Shortly thereafter, our Billingham facility resumed operations.

In June 2022, we approved and announced our proposed plan to restructure our U.K. operations, including the ~~U.K. energy crisis, and the timing~~permanent closure of ~~any such resolution, are unknown to us. Production continues to be idled at~~ our Ince facility ~~while~~and optimization of the remaining manufacturing operations at the Billingham facility. In August 2022, the final restructuring plan was approved, and decommissioning activities were initiated.

In September 2022, as a result of extremely high and volatile natural gas prices and the lack of a corresponding increase in global nitrogen product market prices, we temporarily idled ammonia production at our Billingham complex.

Production of AN and other nitrogen products continues at our Billingham facility using imported ammonia, a portion of which is ~~currently operating.~~imported from our other ammonia production sites. There remains ~~significant~~ uncertainty regarding ~~future plans for these sites pending greater clarity as to~~ the future cost of natural gas and electricity, selling prices for the products we produce in the United Kingdom and U.K. government policy, which could ~~lead to the continued idling or shutting down of our U.K. facilities. This could result in,~~necessitate, among other things, additional funding to support the cash needs of our U.K. operations and recognition of further losses ~~or further asset impairment charges related to our U.K. operations. Each of these actions~~and could have a material adverse impact on our results of operations and cash flows.

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

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Senior Notes

Long-term debt presented on our consolidated balance sheets as of March 31, ~~2022~~2023 and December 31, ~~2021~~2022 consisted of the following debt securities issued by CF Industries:


		Effective Interest Rate	March 31, 2022				December 31, 2021					Effective Interest Rate	March 31, 2023				December 31, 2022
			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(2)		3.665%	$	500	$	499	$	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		740
Senior Secured Notes:	Senior Secured Notes:										Senior Secured Notes:

4.500% due December 2026~~(3)~~(2)	4.500% due December 2026~~(3)~~(2)	4.783%	750		741		750		742		4.500% due December 2026~~(3)~~(2)	4.783%	750		743		750		742
Total long-term debt	Total long-term debt		$	3,500	$	3,462	$	3,500	$	3,465	Total long-term debt		$	3,000	$	2,966	$	3,000	$	2,965
Less: Current maturities of long-term debt			500		499		—		—
Long-term debt, net of current maturities			$	3,000	$	2,963	$	3,500	$	3,465

(2)~~These notes were redeemed in full on April 21, 2022.~~

~~(3)~~Effective August 23, 2021, these notes are no longer secured, in accordance with the terms of the applicable indenture.

~~Public Senior Notes~~

~~On March 21, 2022, we announced that CF Industries elected to redeem in full all~~Under the terms of ~~the $500 million outstanding principal amount of the 2023 Notes on April 21, 2022, in accordance with the optional redemption provisions in the indenture governing the 2023 Notes.~~

~~Under~~ the indentures (including the applicable supplemental indentures) governing our senior notes due 2034, 2043 and 2044 identified in the table above (the ~~outstanding~~ Public Senior Notes), each series of ~~outstanding~~ Public Senior Notes is guaranteed by CF Holdings. Interest on the outstanding Public Senior Notes is payable semiannually, and the outstanding 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~~

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 CF Holdings and 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 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.

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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 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 March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, we had ~~$598~~$284 million and ~~$700~~$229 million, respectively, in customer advances on our consolidated balance sheets.

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.

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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

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. Volatility in reported quarterly earnings can result from the unrealized mark-to-market adjustments in the value of the derivatives. As of March 31, ~~2022, our open natural gas derivative contracts consisted of natural gas fixed price swaps and basis swaps for 2.9 million MMBtus. As of December 31, 2021,~~2023, our open natural gas derivative contracts consisted of natural gas fixed price swaps, basis swaps and options for ~~60.0~~18.9 million ~~MMBtus.~~MMBtus of natural gas. As of December 31, 2022, our open natural gas derivative contracts consisted of natural gas fixed price swaps, basis swaps and options for 66.3 million MMBtus of natural gas.

Defined Benefit Pension Plans

We contributed $7 million to our pension plans in the three months ended March 31, ~~2022.~~2023. Over the remainder of ~~2022,~~2023, we expect to contribute approximately ~~$21~~$36 million to our pension plans, which would result in our making a total contributions of approximately ~~$28~~$43 million ~~of contributions~~ to our pension plans for the full year ~~2022.~~2023. In addition, in the two-year period from 2024 to 2025, we expect to contribute a total of approximately ~~£50~~£30 million (or ~~$66~~$37 million) to our U.K. plans, ~~in the three-year period from 2023 to 2025,~~ as agreed with the plans’ trustees.

Distribution to Noncontrolling Interest in CFN

On January 31, ~~2022,~~2023, the CFN Board of Managers approved semi-annual distribution payments for the distribution period ended December 31, ~~2021~~2022 in accordance with CFN’s limited liability company agreement. On January 31, ~~2022,~~2023, CFN distributed ~~$247~~$255 million to CHS for the distribution period ended December 31, ~~2021.~~2022. The estimate of the partnership distribution earned by CHS, but not yet declared, for the first quarter of ~~2022~~2023 is approximately ~~$190~~$110 million.

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Cash Flows

Net cash provided by operating activities during the first three months of ~~2022~~2023 was ~~$1.39 billion, an increase~~$947 million, a decrease of ~~$813~~$444 million compared to ~~$578 million~~$1.39 billion in the first three months of ~~2021.~~2022. The ~~increase~~decrease in cash flow from operations was due primarily to ~~higher~~lower net earnings, partially offset by changes in net working capital. Net earnings for the first three months of ~~2022~~2023 was ~~$1.05 billion~~$650 million as compared to ~~$175 million~~$1.05 billion for the first three months of ~~2021.~~2022, a decrease of $401 million. The ~~increase~~decrease in net earnings was due primarily to ~~an increase~~a decrease in gross margin, driven by ~~higher~~lower average selling prices ~~partially offset~~and sales volume. During the first three months of 2023, net changes in working capital increased cash flow from operations by ~~increases~~$213 million, while in natural gas costs. The increase in gross margin was partially offset by an increase in interest expense and income tax provision, and an increase in net earnings attributable to noncontrolling interest. During the first three months of 2022, net changes in working capital ~~contributed $110 million to~~increased cash flow from operations ~~while~~by $110 million. The increase in ~~the first three months of 2021 net changes in working capital contributed $230 million to cash flow from operations. The decreased~~ cash flow from working capital changes was attributable primarily ~~attributable~~ to higher cash collections from customer advances and lower levels of accounts receivable ~~partially offset by accrued and prepaid income taxes.~~in the first three months of 2023 as compared to the first three months of 2022.

Net cash used in investing activities was $34 million in the first three months of 2023 as compared to $62 million in the first three months of ~~2022~~2022. The decrease was due primarily to an increase in proceeds from the sale of emission credits, as ~~compared to $71~~proceeds from the sale of emission credits was $35 million in the first three months of ~~2021.~~2023 compared to $9 million in the first three months of 2022. Capital expenditures totaled ~~$63~~$69 million during the first three months of ~~2022~~2023 compared to ~~$71~~$63 million in the first three months of ~~2021.~~2022.

Net cash used in financing activities was $410 million in the first three months of 2023 compared to $339 million in the first three months of ~~2022 compared~~2022. The increase was due primarily to $387 million in the first three months of 2021. In the first three months of 2021, we paid $255 million in connection with the redemption of the 2021 Notes. In the first three months of 2022, we spent $98 million to repurchase sharesproceeds from issuances of common stock ~~which included $1 million related to shares repurchased in late 2021 that were paid for in 2022. In the first three months~~under employee stock plans of ~~2022, we repurchased approximately 1.3 million shares for $100 million, of which $3 million was accrued and unpaid as of March 31, 2022. Distributions to noncontrolling interest totaled $247~~$97 million in the first three months of 2022 that did not recur in the first three months of 2023. In addition, the increase reflects an increase in dividends, as the dividend declared and paid in the first quarter of 2023 was $0.40 per common share compared to $0.30 per common share in the first quarter of 2022. Dividends paid on common stock was $79 million in the first three months of 2023 compared to $64 million in the first three months of ~~2021. Proceeds from issuances~~2022. These factors were partially offset by a decrease in share repurchases. In the first three months of ~~common stock under employee stock plans were $97~~2023, we paid $54 million for share repurchases compared to $98 million for share repurchases in the first three months of ~~2022 compared to $7 million in~~2022. In the first three months of ~~2021.~~2023, share repurchases totaled $75 million, of which $21 million was accrued and unpaid as of March 31, 2023.

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CF INDUSTRIES HOLDINGS, INC.

Critical Accounting Estimates

During the first three months of ~~2022,~~2023, 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.~~2022.

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~~CF INDUSTRIES HOLDINGS, INC.~~

~~FORWARD-LOOKING STATEMENTS~~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. 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,~~2022, filed with the SEC on February ~~24, 2022.~~23, 2023. Such factors include, among others:

•the risk that regulatory approvals required for the proposed transactions with Incitec Pivot Limited (IPL) are not obtained or that required approvals delay the transactions or cause the parties to abandon the transactions; the risk that other conditions to the closing of the proposed transactions with IPL are not satisfied; risks and uncertainties arising from the length of time necessary to consummate the proposed transactions with IPL and the possibility that the proposed transactions with IPL may be delayed or may not occur; the risk of obstacles to realization of the benefits of the proposed transactions with IPL;

•the risk that the synergies from the proposed transactions with IPL may not be fully realized or may take longer to realize than expected; the risk that the pendency or completion of the proposed transactions with IPL, including integration of the Waggaman ammonia production complex into the Company’s operations, disrupt current operations or harm relationships with customers, employees and suppliers; the risk that integration of the Waggaman ammonia production complex with the Company’s current operations will be more costly or difficult than expected or may otherwise be unsuccessful; diversion of management time and attention to issues relating to the proposed transactions with IPL; unanticipated costs or liabilities associated with the IPL transactions;

•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~~our fertilizer 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;~~cybersecurity;

•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;

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CF INDUSTRIES HOLDINGS, INC.

•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~~management 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; and

•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~~relationships.

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

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~~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,~~$32, $22, $14 and ~~$16,~~$15, 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 March 31, ~~2022,~~2023, we had natural gas derivative contracts covering certain periods through March ~~2023.~~2024.

As of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, we had open derivative contracts for ~~2.9~~18.9 million MMBtus and ~~60.0~~66.3 million MMBtus, respectively. A $1.00 per MMBtu increase in the forward curve prices of natural gas at March 31, ~~2022~~2023 would result in a favorable change in the fair value of these derivative positions of approximately $2$17 million, and a $1.00 per MMBtu decrease in the forward curve prices of natural gas would change their fair value unfavorably by approximately $2$17 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 March 31, ~~2022,~~2023, we had ~~five~~four series of senior notes totaling ~~$3.50~~$3.00 billion of principal outstanding with maturity dates of ~~June 1, 2023,~~ December 1, 2026, March 15, 2034, June 1, 2043 and March 15, 2044. The senior notes have fixed interest rates. As of March 31, ~~2022,~~2023, the carrying value and fair value of our senior notes was approximately ~~$3.46~~$2.97 billion and ~~$3.78~~$2.77 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 March 31, ~~2022, or~~2023, as of December 31, ~~2021,~~2022, or during the three months ended March 31, ~~2022.~~2023.

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.

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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~~Other than changes due to the Company’s implementation of the upgrade of its enterprise resource planning (ERP) system for its North American operations to SAP S/4HANA, 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 March 31, ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II—OTHER INFORMATION

~~ITEM 1. LEGAL PROCEEDINGS.~~

~~West Fertilizer Co.~~

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~~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 March 31, ~~2022.~~2023.

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)
January 1, 2022 - January 31, 2022 591,125 (3) $ 68.89 471,556 $ 1,467,743
February 1, 2022 - February 28, 2022 582,998 (4) 76.48 410,720 1,437,143
March 1, 2022 - March 31, 2022 389,556

95.35 389,556 1,400,000
Total 1,563,679

$ 78.31 1,271,832


	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)
January 1, 2023 - January 31, 2023	108,573	(3)	$	82.27	—	$	3,154,583
February 1, 2023 - February 28, 2023	154,488	(4)	85.89		—	3,154,583
March 1, 2023 - March 31, 2023	1,056,319		71.00		1,056,319	3,079,583
Total	1,319,380		$	73.67	1,056,319

(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.~~brokers and excise taxes.

(2)On November 3, 2021, we announced that our Board of Directors (the Board) 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~~On November 2, 2022, we announced that 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. These share repurchase programs are discussed in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Share Repurchase Programs in Part I of this Quarterly Report on Form 10-Q and in Note ~~15—~~13—Stockholders’ Equity, in the notes to the unaudited consolidated financial statements included in Item 1. Financials Statements in Part I.I of this Quarterly Report on Form 10-Q.

(3)~~Includes 119,569~~Represents shares withheld to pay employee tax obligations upon the lapse of restrictions on restricted stock units.

(4)~~Includes 172,278~~Represents shares withheld to pay employee tax obligations upon the lapse of restrictions on both restricted stock units and performance 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 4742 of this report.

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EXHIBIT INDEX


Exhibit No.			Description



























































~~3.1~~2 .1			~~Fourth Amended and Restated Bylaws of CF Industries Holdings, Inc., effective October 14, 2015, as amended April 20, 2018, as further amended May 4, 2021, as further amended April 13, 2022~~
~~4.1~~			~~Fourth Supplement,~~Asset Purchase Agreement, dated as of ~~January 28, 2022, relating to the First Supplemental Indenture, dated as of May 23, 2013,~~ March 20, 2023, by and among ~~CF Industries, Inc.~~Dyno Nobel Louisiana Ammonia , LLC , CF Industries East Point, LLC, and, solely for the purposes of Ar ticle X, Incitec Pivot Limited and CF Indus tries Holdings, ~~Inc. and Wells Fargo Bank, National Association, as trustee, relating to CF Industries, Inc.’s 3.450% Senior Notes due 2023~~I nc. (incorporated by reference to Exhibit ~~4.1~~2.1 to CF Industries Holdings, Inc.'s’s Current Report on Form 8-K filed with the SEC on ~~February 1, 2022)~~
~~4.2~~			Third Supplemental Indenture, dated as of January 28, 2022, relating to the Indenture, dated as of November 21, 2016, among CF Industries Holdings, Inc., CF Industries, Inc., the Subsidiary Guarantors (as defined therein) party thereto and Wells Fargo Bank, National Association, as trustee and collateral agent, relating to CF Industries, Inc.’s 4.500% Senior Secured Notes due 2026 (incorporated by reference to Exhibit 4.2 to CF Industries Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on February 1, 2022)
~~4.3~~			~~Fourth Supplement, dated as of January 28, 2022, relating to the Third Supplemental Indenture, dated as of~~ March 11, 2014, among CF Industries, Inc., CF Industries Holdings, Inc. and Wells Fargo Bank, National Association, as trustee, relating to CF Industries, Inc.’s 5.150% Senior Notes due 2034 (incorporated by reference to Exhibit 4.3 to CF Industries Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on February 1, 2022)20, 2023
~~4.4~~)			Fourth Supplement, dated as of January 28, 2022, relating to the Second Supplemental Indenture, dated as of May 23, 2013, among CF Industries, Inc., CF Industries Holdings, Inc. and Wells Fargo Bank, National Association, as trustee, relating to CF Industries, Inc.’s 4.950% Senior Notes due 2043 (incorporated by reference to Exhibit 4.4 to CF Industries Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on February 1, 2022)
~~4.5~~			Fourth Supplement, dated as of January 31, 2022, relating to the Fourth Supplemental Indenture, dated as of March 11, 2014, among CF Industries, Inc., CF Industries Holdings, Inc. and Wells Fargo Bank, National Association, as trustee, relating to CF Industries, Inc.’s 5.375% Senior Notes due 2044 (incorporated by reference to Exhibit 4.5 to CF Industries Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on February 1, 2022)
~~10.1~~			Amendment No. 1 to the Fourth Amended and Restated Credit Agreement, dated as of January 27, 2022, among CF Industries Holdings, Inc., CF Industries, Inc., the lenders party thereto, the issuing banks party thereto and Citibank, N.A. as administrative agent (incorporated by reference to Exhibit 4.6 to CF Industries Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on February 1, 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 March 31, ~~2022,~~2023, formatted in Inline XBRL (eXtensible Business Reporting Language): (1) Consolidated Statements of Operations, (2) Consolidated Statements of Comprehensive Income, (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)

* Schedules (or similar attachments) have been omitted pursuant to Item 601(a)(5) of Regulation S-K.

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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: May ~~5, 2022~~2, 2023	By:	/s/ W. ANTHONY WILL
		W. Anthony Will President and Chief Executive Officer (Principal Executive Officer)
Date: May ~~5, 2022~~2, 2023	By:	/s/ CHRISTOPHER D. BOHN
		Christopher D. Bohn Senior Vice President and Chief Financial Officer (Principal Financial Officer)

4843


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	2219
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4440
	Item 4.	Controls and Procedures	4541
PART II.	Other Information
	~~Item 1.~~	~~Legal Proceedings~~	45

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4641
	Item 6.	Exhibits	4641

























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


Net earnings	—		—		—		151		—		151		24		175
Other comprehensive income	—		—		—		—		15		15		—		15


Acquisition of treasury stock under employee stock plans	—		(10)		—		—		—		(10)		—		(10)
Issuance of $0.01 par value common stock under employee stock plans	—		—		8		—		—		8		—		8

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

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



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

Balance as of March 31, 2021	$	2	$	(14)	$	1,333	$	2,013	$	(305)	$	3,029	$	2,641	$	5,670


	March 31, 2022						December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
	(in millions)

Customer relationships(1)	$	83	$	(59)	$	24	$	84	$	(60)	$	24
Trade names(1)	30		(10)		20		31		(10)		21

Total intangible assets	$	113	$	(69)	$	44	$	115	$	(70)	$	45