Consolidated Statements of Oper
Consolidated Statements of Operations (USD $) | ||
In Millions, except Per Share data | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Consolidated Statements of Operations | ||
Net sales | 502.4 | 680.6 |
Cost of sales | 373.4 | 518.3 |
Gross margin | 129 | 162.3 |
Selling, general and administrative | 16.2 | 15.4 |
Other operating - net | 139.3 | 23.2 |
Operating earnings (loss) | -26.5 | 123.7 |
Interest expense | 0.4 | 0.4 |
Interest income | -0.3 | -1.3 |
Other non-operating - net | -28.3 | -0.3 |
Earnings before income taxes and equity in earnings (loss) of unconsolidated affiliates | 1.7 | 124.9 |
Income tax provision (benefit) | -4.4 | 41.2 |
Equity in earnings (loss) of unconsolidated affiliates-net of taxes | 0.1 | -0.7 |
Net earnings | 6.2 | 83 |
Less: Net earnings attributable to the noncontrolling interest | 10.6 | 20.3 |
Net earnings (loss) attributable to common stockholders | -4.4 | 62.7 |
Net earnings (loss) per share attributable to common stockholders: | ||
Basic (in dollars per share) | -0.09 | 1.29 |
Diluted (in dollars per share) | -0.09 | 1.28 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 48.6 | 48.4 |
Diluted (in shares) | 48.6 | 49.1 |
Dividends declared per common share (in dollars per share) | 0.1 | 0.1 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (USD $) | ||
In Millions | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Consolidated Statements of Comprehensive Income | ||
Net earnings | 6.2 | $83 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustment | 2 | -1.5 |
Unrealized loss on securities - net of taxes | -12.5 | -4.8 |
Defined benefit plans - net of taxes | 0.3 | 0.5 |
Total other comprehensive income (loss) | -10.2 | -5.8 |
Comprehensive income (loss) | (4) | 77.2 |
Less: Comprehensive income attributable to the noncontrolling interest | 11.4 | 19.6 |
Comprehensive income (loss) attributable to common stockholders | -15.4 | 57.6 |
Consolidated Balance Sheets
Consolidated Balance Sheets (USD $) | ||
In Millions | 3 Months Ended
Mar. 31, 2010 | 12 Months Ended
Dec. 31, 2009 |
Current assets: | ||
Cash and cash equivalents | 1010.5 | 697.1 |
Short-term investments | 25.2 | 185 |
Accounts receivable | 197.5 | 167.4 |
Inventories - net | 287.2 | 207.8 |
Prepaid income taxes | 23 | 14.7 |
Other | 6.4 | 11.1 |
Total current assets | 1549.8 | 1283.1 |
Property, plant and equipment - net | 789.7 | 793.8 |
Goodwill | 0.9 | 0.9 |
Asset retirement obligation escrow account | 40.2 | 36.5 |
Investments in and advances to unconsolidated affiliates | 45.6 | 45.6 |
Investments in auction rate securities | 133 | 133.9 |
Investment in marketable equity securities | 160.2 | |
Other assets | 73.9 | 40.9 |
Total assets | 2633.1 | 2494.9 |
Current liabilities: | ||
Accounts payable and accrued expenses | 181 | 172.5 |
Customer advances | 282.5 | 159.5 |
Deferred income taxes | 57.6 | 52.6 |
Distributions payable to noncontrolling interest | 95.5 | 92.1 |
Other | 16.7 | 3.1 |
Total current liabilities | 633.3 | 479.8 |
Notes payable | 4.9 | 4.7 |
Deferred income taxes | 56 | 68.3 |
Other noncurrent liabilities | 199.9 | 197.2 |
Contingencies (Note 19) | ||
Stockholders' equity: | ||
Preferred stock - $0.01 par value, 50,000,000 shares authorized | 0 | 0 |
Common stock - $0.01 par value, 500,000,000 shares authorized, 2010 - 48,584,884 and 2009 - 48,569,985 shares issued and outstanding | 0.5 | 0.5 |
Paid-in capital | 726 | 723.5 |
Retained earnings | 1038.9 | 1048.1 |
Accumulated other comprehensive loss | -54.2 | -43.2 |
Total stockholders' equity | 1711.2 | 1728.9 |
Noncontrolling interest | 27.8 | 16 |
Total equity | 1,739 | 1744.9 |
Total liabilities and equity | 2633.1 | 2494.9 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | ||
Mar. 31, 2010
| Dec. 31, 2009
| |
Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | 0.01 | 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, par value (in dollars per share) | 0.01 | 0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 48,584,884 | 48,569,985 |
Common stock, shares outstanding | 48,584,884 | 48,569,985 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (USD $) | ||
In Millions | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Operating Activities: | ||
Net earnings | 6.2 | $83 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation, depletion and amortization | 28.3 | 21.9 |
Deferred income taxes | 0.1 | 5.3 |
Stock compensation expense | 1.8 | 1.5 |
Excess tax benefit from stock-based compensation | -0.4 | -0.1 |
Unrealized loss (gain) on derivatives | 11.2 | -48.6 |
Inventory valuation allowance | (6) | |
(Gain) on sale of marketable equity securities | -28.3 | |
Loss on disposal of property, plant and equipment | 0.6 | 1.7 |
Equity in losses (earnings) of unconsolidated affiliates - net of taxes | -0.1 | 0.7 |
Changes in: | ||
Accounts receivable | -26.4 | -13.8 |
Margin deposits | -0.1 | 11.3 |
Inventories | -78.8 | 134 |
Prepaid product and expenses | 1.2 | 1.6 |
Accrued income taxes | -7.9 | 28.8 |
Accounts payable and accrued expenses | 7.9 | -15.2 |
Product exchanges - net | 6 | -5.3 |
Customer advances - net | 123 | 86.8 |
Other - net | 3.2 | 4.7 |
Net cash provided by operating activities | 47.5 | 292.3 |
Investing Activities: | ||
Additions to property, plant and equipment | (29) | -71.9 |
Proceeds from the sale of property, plant and equipment | 6 | 2.8 |
Purchases of short-term securities | -25.4 | -35.2 |
Sales and maturities of short-term and auction rate securities | 187 | 3.2 |
Sale of marketable equity securities | 167.1 | |
Deposit to asset retirement obligation escrow account | -3.7 | -7.5 |
Other - net | 0.2 | |
Net cash provided by (used in) investing activities | 302.2 | -108.6 |
Financing Activities: | ||
Debt issuance costs | -32.1 | |
Dividends paid on common stock | -4.8 | -4.8 |
Issuances of common stock under employee stock plans | 0.3 | 0.2 |
Excess tax benefit from stock-based compensation | 0.4 | 0.1 |
Net cash used in financing activities | -36.2 | -4.5 |
Effect of exchange rate changes on cash and cash equivalents | -0.1 | -0.4 |
Increase in cash and cash equivalents | 313.4 | 178.8 |
Cash and cash equivalents at beginning of period | 697.1 | 625 |
Cash and cash equivalents at end of period | 1010.5 | 803.8 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (USD $) | |||||||
In Millions | Total Stockholders' Equity
| $0.01 Par Value Common Stock
| Paid-In Capital
| Retained Earnings
| Accumulated Other Comprehensive Income (Loss)
| Noncontrolling Interest
| Total
|
Balance at Dec. 31, 2008 | 1338.1 | 0.5 | 709.4 | 703.4 | -75.2 | 12.6 | 1350.7 |
Increase (decrease) in equity | |||||||
Net earnings (loss) | 62.7 | 62.7 | 20.3 | 83 | |||
Other comprehensive income (loss). | |||||||
Foreign currency translation adjustment | -0.8 | -0.8 | -0.7 | -1.5 | |||
Unrealized loss on securities - net of taxes | -4.8 | -4.8 | -4.8 | ||||
Defined benefit plans - net of taxes | 0.5 | 0.5 | 0.5 | ||||
Comprehensive income (loss) | 57.6 | 19.6 | 77.2 | ||||
Issuance of $0.01 par value common stock under employee stock plans | 0.2 | 0.2 | 0.2 | ||||
Stock-based compensation expense | 1.5 | 1.5 | 1.5 | ||||
Excess tax benefit from stock-based compensation | 0.1 | 0.1 | 0.1 | ||||
Cash dividends ($0.10 per share) | -4.8 | -4.8 | -4.8 | ||||
Effect of exchange rates changes | -0.3 | -0.3 | |||||
Balance at Mar. 31, 2009 | 1392.7 | 0.5 | 711.2 | 761.3 | -80.3 | 31.9 | 1424.6 |
Balance at Dec. 31, 2009 | 1728.9 | 0.5 | 723.5 | 1048.1 | -43.2 | 16 | 1744.9 |
Increase (decrease) in equity | |||||||
Net earnings (loss) | -4.4 | -4.4 | 10.6 | 6.2 | |||
Other comprehensive income (loss). | |||||||
Foreign currency translation adjustment | 1.2 | 1.2 | 0.8 | 2 | |||
Unrealized loss on securities - net of taxes | -12.5 | -12.5 | -12.5 | ||||
Defined benefit plans - net of taxes | 0.3 | 0.3 | 0.3 | ||||
Comprehensive income (loss) | -15.4 | 11.4 | (4) | ||||
Issuance of $0.01 par value common stock under employee stock plans | 0.3 | 0.3 | 0.3 | ||||
Stock-based compensation expense | 1.8 | 1.8 | 1.8 | ||||
Excess tax benefit from stock-based compensation | 0.4 | 0.4 | 0.4 | ||||
Cash dividends ($0.10 per share) | -4.8 | -4.8 | -4.8 | ||||
Effect of exchange rates changes | 0.4 | 0.4 | |||||
Balance at Mar. 31, 2010 | 1711.2 | 0.5 | $726 | 1038.9 | -54.2 | 27.8 | $1,739 |
1_Consolidated Statements of St
Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $) | ||
3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 | |
Consolidated Statement of Equity | ||
Cash dividends (in dollars per share) | 0.1 | 0.1 |
Background and Basis of Present
Background and Basis of Presentation | |
3 Months Ended
Mar. 31, 2010 | |
Background and Basis of Presentation | |
Background and Basis of Presentation | 1.Background and Basis of Presentation All references to "CFHoldings," "the Company," "we," "us" and "our" refer to CFIndustries Holdings,Inc. and its subsidiaries, including CFIndustries,Inc., except where the context makes clear that the reference is only to CFHoldings itself and not its subsidiaries. We are one of the largest manufacturers and distributors of nitrogen and phosphate fertilizer products in the world. Our operations are organized into two business segmentsthe nitrogen segment and the phosphate segment. Our principal products in the nitrogen segment are ammonia, urea, urea ammonium nitrate solution, or UAN, and ammonium nitrate, or AN. Our other nitrogen products include diesel exhaust fluid, or DEF, and aqua ammonia, which are sold primarily to our environmental and industrial customers. Our principal products in the phosphate segment are diammonium phosphate, or DAP, and monoammonium phosphate, or MAP. Our core market and distribution facilities are concentrated in the Midwestern U.S. grain-producing states and other major agricultural areas of the United States and Canada. We also serve global markets from our joint-venture production facilities in Trinidad and the United Kingdom, as well as through exports of nitrogen fertilizer products from our Donaldsonville manufacturing facilities and phosphate fertilizer products from our Florida phosphate operations through our Tampa port facility. The principal customers for both our nitrogen and phosphate fertilizers are cooperatives and independent fertilizer distributors. In April 2010, we completed the acquisition of Terra IndustriesInc. (Terra), a leading North American producer and marketer of nitrogen products. Our consolidated results for the first quarter of 2010 do not include Terra's results. Terra's results will be included in our consolidated results for the second quarter of 2010. See Note22Acquisition of Terra IndustriesInc. and Other Subsequent Events. The accompanying unaudited interim consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements for the year ended December31, 2009, in accordance with accounting principles generally accepted in the United States 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 unaudited interim consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles 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. These statements should be read in conjunction with our annual consolidated financial statements and related notes included in our Current Report on |
Summary of Significant Accounti
Summary of Significant Accounting Policies | |
3 Months Ended
Mar. 31, 2010 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2.Summary of Significant Accounting Policies For a complete discussion of the Company's significant accounting policies, refer to the notes to our audited consolidated financial statements included in our Current Report on Form8-K, filed with the SEC on April15, 2010. |
New Accounting Standards
New Accounting Standards | |
3 Months Ended
Mar. 31, 2010 | |
New Accounting Standards | |
New Accounting Standards | 3.New Accounting Standards Following are summaries of accounting pronouncements that were either recently adopted or may become applicable to our consolidated financial statements. It should be noted that the accounting standards references provided below reflect the Financial Accounting Standards Board's (FASB) Accounting Standards Codification (ASC) that was effective for periods ending after September15, 2009, and related Accounting Standards Updates (ASU). Recently Adopted Pronouncements In June 2009, the FASB issued an accounting standard that revises the rules for consolidating variable interest entities (ASU No.2009-17). This standard changes how a reporting entity determines when to consolidate an entity that is insufficiently capitalized or is not controlled through voting (or similar rights). The determination is based on, among other things, the other entity's purpose and design and the reporting entity's ability to direct the activities of the other entity that most significantly impact the other entity's economic performance. The standard also requires a company to provide additional disclosures about its involvement with variable interest entities and any significant changes in risk exposure due to that involvement. We adopted this standard as of January1, 2010. The adoption of this standard did not have a material impact on our consolidated financial statements. In June 2009, the FASB issued a standard that amends the requirements for transfers of financial assets (ASU No.2009-16). This standard removes the concept of a qualifying special-purpose entity and removes the exception from applying these rules to qualifying special purpose entities. It also changes the requirements for derecognizing financial assets and requires additional disclosures about a transferor's continuing involvement in financial assets. We adopted this standard as of January1, 2010. The adoption of this standard did not have a material impact on our consolidated financial statements. In January 2010, the FASB issued a standard pertaining to fair value disclosures (ASU No.2010-6) that requires a reporting entity to disclose separately the amounts of significant transfers in and out of Level1 and Level2, to describe the reasons for the transfers, and to disclose separately certain additional information about purchases, sales, issuances, and settlements of Level3 items. This standard also requires an entity to provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements for Level2 and Level3 items. The standard is effective for interim and annual reporting periods beginning after December15, 2009, except for the Level3 disclosure of activity, which is effective for fiscal years beginning after December15, 2010. We adopted the effective portions of this standard as of March31, 2010. The adoption of the effective portions of this standard did not have a material impact on our consolidated financial statements. In February 2010, the FASB issued a standard that removed the requirement for an SEC filer to disclose a date through which subsequent events hav |
Canadian Fertilizers Limited
Canadian Fertilizers Limited | |
3 Months Ended
Mar. 31, 2010 | |
Canadian Fertilizers Limited | |
Canadian Fertilizers Limited | 4.Canadian Fertilizers Limited Canadian Fertilizers Limited (CFL) owns a nitrogen fertilizer complex in Medicine Hat, Alberta, Canada and supplies fertilizer products to CFIndustries,Inc. and ViterraInc. (Viterra). CFIndustries,Inc. owns 49% of CFL's voting common shares and 66% of CFL's nonvoting preferred shares. Viterra owns 34% of the voting common stock and non-voting preferred stock of CFL. The remaining 17% of the voting common stock is owned by GROWMARK,Inc. and La Coop fdre. CFL is a variable interest entity which we consolidate in our financial statements. CFL's Medicine Hat complex is the largest nitrogen fertilizer complex in Canada, with two world-scale ammonia plants, a world-scale urea plant and on-site storage facilities for both ammonia and urea. CFL's sales revenue for the three months ended March31, 2010 and 2009 were $97.4million and $120.9million, respectively. CFL's assets and liabilities at March31, 2010 were $396.6million and $347.3million, respectively and at December31, 2009 were $356.6million and $309.0million, respectively. CFIndustries,Inc. operates the Medicine Hat facility pursuant to a management agreement and purchases approximately 66% of the facility's ammonia and urea production pursuant to a product purchase agreement. Both the management agreement and the product purchase agreement can be terminated by either CFIndustries,Inc. or CFL upon a twelve-month notice. Viterra has the right, but not the obligation, to purchase the remaining 34% of the facility's ammonia and urea production under a similar product purchase agreement. To the extent that Viterra does not purchase its 34% of the facility's production, CFIndustries,Inc. is obligated to purchase any remaining amounts. However, since 1995, Viterra has purchased at least 34% of the facility's production each year. Under the product purchase agreements, both CFIndustries,Inc. and Viterra pay the greater of operating cost or market price for purchases. The product purchase agreements also provide that CFL will distribute its net earnings to CFIndustries,Inc. and Viterra annually based on their respective quantities of product purchased from CFL. The distributions to Viterra are reported as financing activities in the consolidated statements of cash flows, as we consider these payments to be similar to dividends. While general creditors of CFL do not have direct recourse to the general credit of CFIndustries,Inc., the product purchase agreement does require CFIndustries,Inc. to advance funds to CFL in the event that CFL is unable to meet its debts as they become due. The amount of each advance would be at least 66% of the deficiency and would be more in any year in which CFIndustries,Inc. purchased more than 66% of Medicine Hat's production. A similar obligation also exists for Viterra. CFIndustries,Inc. and Viterra currently manage CFL such that each party is responsible for its share of CFL's fixed costs and that CFL's production volume is managed to meet the parties' combined requirements. Based on the contractual arrangements, CFIndustries,Inc. is the primary beneficiary of CFL as CFIndustries,Inc. receives at least 66% of the economic ri |
Fair Value Measurements
Fair Value Measurements | |
3 Months Ended
Mar. 31, 2010 | |
Fair Value Measurements | |
Fair Value Measurements | 5.Fair Value Measurements Our cash and cash equivalents, short-term investments and other investments consist of the following: March31, 2010 December31, 2009 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Adjusted Cost Unrealized Gains Unrealized Losses Fair Value (in millions) Cash $ 29.5 $ $ $ 29.5 $ 17.0 $ $ $ 17.0 U.S. federal government obligations 972.0 972.0 658.2 658.2 Other debt securities 9.0 9.0 21.9 21.9 Total cash and cash equivalents $ 1,010.5 $ $ $ 1,010.5 $ 697.1 $ $ $ 697.1 Short-term investments 25.2 25.2 185.0 185.0 Investment in marketable equity securities 138.8 21.4 160.2 Investments in auction rate securities 136.4 (3.4 ) 133.0 138.4 (4.5 ) 133.9 Asset retirement obligation escrow account 40.2 40.2 36.5 36.5 Nonqualified employee benefit trust 8.9 (1.2 ) 7.7 9.8 (1.2 ) 8.6 Under our short-term investment policy, we can invest our cash balances in several types of securities, including notes and bonds issued by governmental entities or corporations, and money market funds. Securities issued by governmental entities include those issued directly by the Federal government; those issued by state, local or other governmental entities; and those guaranteed by entities affiliated with governmental entities. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table presents assets and liabilities included in our consolidated balance sheet that are recognized at fair value on a recurring basis, and indicates the fair value hierarchy utilized to determine such fair value. Balance as of March31, 2010 Quoted Prices in Active Markets (Level1) Significant Other Observable Inputs (Level2) Significant Unobservable Inputs (Level3) (in millions) Cash and cash equivalents $ 1,010.5 $ 1,010.5 $ $ Available-for-sale short-term investments 25.2 25.2 Asset retirement obligation escrow account 40.2 40.2 Investments in auction rate securities 133.0 133.0 Nonqualified employee benefit trust 7.7 7.7 Total assets at fair value $ 1,216.6 $ 1,083.6 $ $ 133.0 Unrealized losses on natural gas derivatives $ 8.3 $ $ 8.3 $ Total liabilities at fair value $ 8.3 $ $ 8.3 $ Following is a summary of the valuation techniques for assets and liabilities recorded in our consolidated balance sheet at fair value on a recurring basis: Cash and Cash Equivalents As of March31, 2010, our cash and cash equivalents consisted primarily of U.S. Treasury Bills with original maturities of three months or less and money market mutual funds t |
Net Earnings
Net Earnings (Loss) Per Share | |
3 Months Ended
Mar. 31, 2010 | |
Net Earnings (Loss) Per Share | |
Net Earnings (Loss) Per Share | 6.Net Earnings (Loss) Per Share Net earnings (loss) per share were computed as follows: Three months ended March31, 2010 2009 (in millions, except per share amounts) Net earnings (loss) attributable to common stockholders $ (4.4 ) $ 62.7 Basic earnings (loss) per common share: Weighted average common shares outstanding 48.6 48.4 Net earnings attributable to common stockholders $ (0.09 ) $ 1.29 Diluted earnings (loss) per common share: Weighted average common shares outstanding 48.6 48.4 Dilutive common sharesStock options 0.7 Diluted weighted average shares outstanding 48.6 49.1 Net earnings (loss) attributable to common stockholders $ (0.09 ) $ 1.28 In the computation of diluted net loss per common share for the three months ended March31, 2010, 0.8million potentially dilutive stock options were excluded because the effect of their inclusion would have been anti-dilutive. In the computation of diluted net earnings per common share for the three months ended March31, 2009, approximately 0.3million potentially dilutive stock options were excluded because the effect of their inclusion would have been anti-dilutive. |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | |
3 Months Ended
Mar. 31, 2010 | |
Pension and Other Postretirement Benefits | |
Pension and Other Postretirement Benefits | 7.Pension and Other Postretirement Benefits CF Industries,Inc. and its Canadian subsidiary both maintain noncontributory, defined-benefit pension plans. The U.S. pension plan is a closed plan. We also provide group insurance to our retirees. Until age 65, retirees are eligible to continue to receive the same Company-subsidized medical coverage provided to active employees. When a retiree reaches age 65, medical coverage ceases. Net periodic benefit cost included the following components: Three months ended March31, 2010 2009 (in millions) Pension Plans Service cost for benefits earned during the period $ 1.7 $ 1.5 Interest cost on projected benefit obligation 4.2 4.0 Expected return on plan assets (4.3 ) (3.8 ) Amortization of actuarial loss 0.8 0.4 Net periodic benefit cost $ 2.4 $ 2.1 Retiree Medical Service cost for benefits earned during the period $ 0.5 $ 0.4 Interest cost on projected benefit obligation 0.6 0.6 Amortization of transition obligation 0.1 0.1 Amortization of actuarial loss 0.1 Net periodic benefit cost $ 1.3 $ 1.1 Our 2010 consolidated pension funding contributions are estimated to be approximately $9.6million. In addition to our qualified defined benefit pension plans, we also maintain nonqualified supplemental pension plans for highly compensated employees as defined under federal law. The expense recognized for these plans for the three months ended March31, 2010 and 2009 was insignificant. |
Other Operating - Net
Other Operating - Net | |
3 Months Ended
Mar. 31, 2010 | |
Other Operating - Net | |
Other Operating - Net | 8.Other OperatingNet Details of other operating costs are as follows: Three months ended March31, 2010 2009 (in millions) Business combination costs $ 136.1 $ 16.1 Peru project development costs 2.7 3.9 Bartow costs 0.9 1.0 Fixed asset disposals 0.7 1.7 Other (1.1 ) 0.5 $ 139.3 $ 23.2 Business combination costs include expenses associated with the Terra acquisition including the $123million termination fee that was paid on behalf of Terra to Yara International ASA. See Note22Acquisition of Terra IndustriesInc. and Other Subsequent Event for additional discussion of these events. Bartow costs consist of provisions for asset retirement obligations (ARO) and site maintenance costs at this closed facility. The AROs involve costs of closure and post-closure maintenance and monitoring for the phosphogypsum stack and cooling pond, and water treatment costs. |
Other Non-Operating - Net
Other Non-Operating - Net | |
3 Months Ended
Mar. 31, 2010 | |
Other Non-Operating - Net | |
Other Non-Operating - Net | 9.Other Non-OperatingNet Details of other non-operating costs are as follows: Three months ended March31, 2010 2009 (in millions) Gain on sale of marketable equity securities $ (28.3 ) $ Other income (0.3 ) $ (28.3 ) $ (0.3 ) In January 2010, we sold approximately 5.0million shares of Terra common stock. As a result of these sales, we reported a pre-tax gain of $28.3million. See Note22Acquisition of Terra IndustriesInc. and Other Subsequent Events for additional discussion of these events. |
Income Taxes
Income Taxes | |
3 Months Ended
Mar. 31, 2010 | |
Income Taxes | |
Income Taxes | 10.Income Taxes In connection with our initial public offering (IPO) in August 2005, CF Industries,Inc. (CFI) ceased to be a non-exempt cooperative for income tax purposes, and we entered into a net operating loss agreement (NOL Agreement) with CFI's pre-IPO owners relating to the future utilization of the pre-IPO net operating loss carryforwards (NOLs). Under the NOL Agreement, if it is finally determined that the NOLs can be utilized to offset applicable post-IPO taxable income, we will pay the pre-IPO owners amounts equal to the resulting federal and state income taxes actually saved. In the first quarter of 2010, we took tax return positions utilizing a portion of the NOLs. As the result of these return positions, our unrecognized tax benefits increased from $89.1million at December31, 2009 to $93.6million at March31, 2010. For additional information concerning these unrecognized tax benefits, see Note14Income Taxes, to our audited consolidated financial statements included in our Current Report on Form8-K filed with the SEC on April15, 2010. |
Inventories
Inventories | |
3 Months Ended
Mar. 31, 2010 | |
Inventories | |
Inventories | 11.Inventories Inventories consist of the following: March31, 2010 December31, 2009 (in millions) Fertilizer $ 238.0 $ 157.3 Raw materials, spare parts and supplies 49.2 50.5 $ 287.2 $ 207.8 |
Property, Plant and Equipment -
Property, Plant and Equipment - Net | |
3 Months Ended
Mar. 31, 2010 | |
Property, Plant and Equipment - Net | |
Property, Plant and Equipment - Net | 12.Property, Plant and EquipmentNet Property, plant and equipmentnet consist of the following: March31, 2010 December31, 2009 (in millions) Land $ 36.5 $ 36.5 Mineral properties 196.7 196.7 Manufacturing plants and equipment 2,160.6 2,141.7 Distribution facilities and other 230.2 228.3 Construction in progress 129.1 117.9 2,753.1 2,721.1 Less: Accumulated depreciation, depletion and amortization 1,963.4 1,927.3 $ 789.7 $ 793.8 Plant turnaroundsScheduled inspections, replacements and overhauls of plant machinery and equipment at our continuous process manufacturing facilities are referred to as plant turnarounds. The expenditures related to turnarounds are capitalized into property, plant and equipment when incurred and are included in the table above in the line entitled, "Manufacturing plants and equipment." The following is a summary of plant turnaround activity for the three months ended March31, 2010 and 2009: Three months ended March31, 2010 2009 (in millions) Net capitalized turnaround costs: Beginning balance $ 57.4 $ 40.6 Additions 3.0 11.8 Depreciation (7.3 ) (6.2 ) Effect of exchange rate changes 0.4 (0.2 ) Ending balance $ 53.5 $ 46.0 Scheduled replacements and overhauls of plant machinery and equipment include the dismantling, repair or replacement and installation of various components including piping, valves, motors, turbines, pumps, compressors, heat exchangers and the replacement of catalyst when a full plant shutdown occurs. Scheduled inspections are also conducted during full plant shutdowns, including required safety inspections which entail the disassembly of various components such as steam boilers, pressure vessels and other equipment requiring safety certifications. Capitalized turnaround costs have been applied consistently in the periods presented. Internal employee costs and overhead are not considered turnaround costs and are not capitalized. |
Investments in and Advances to
Investments in and Advances to Unconsolidated Affiliates | |
3 Months Ended
Mar. 31, 2010 | |
Investments in and Advances to Unconsolidated Affiliates | |
Investments in and Advances to Unconsolidated Affiliates | 13.Investments in and Advances to Unconsolidated Affiliates We own 50% of the common shares of KEYTRADE AG (Keytrade), a global fertilizer trading company headquartered near Zurich, Switzerland. We also own certain non-voting preferred shares of Keytrade and have provided additional subordinated financing. Keytrade purchases fertilizer products from various manufacturers around the world and resells them in approximately 60 countries through a network of seven offices. Keytrade is our exclusive exporter of phosphate fertilizer products from North America and our exclusive importer of UAN products into North America. We account for our investment in Keytrade under the equity method. Our investment in and advances to Keytrade consist of the following: March31, 2010 December31, 2009 (in millions) Equity investment in Keytrade $ 33.2 $ 33.2 Advances to Keytrade 12.4 12.4 $ 45.6 $ 45.6 For the three months ended March31, 2010 and 2009, we recognized in our consolidated statements of operations equity in earnings (loss) of Keytrade of $0.1million and ($0.7) million, respectively. At March31, 2010, the amount of our consolidated retained earnings that represents our undistributed earnings of Keytrade is $4.1million. The advances to Keytrade are subordinated notes that mature on September30, 2017 and bear interest at LIBOR plus 1.00percent. For the three months ended March31, 2010 and 2009, we recognized interest income on advances to Keytrade of $0.1million and $0.1million, respectively. The carrying value of our advances to Keytrade approximates fair value. |
Asset Retirement Obligations
Asset Retirement Obligations | |
3 Months Ended
Mar. 31, 2010 | |
Asset Retirement Obligations | |
Asset Retirement Obligations | 14.Asset Retirement Obligations Asset retirement obligations (AROs) are legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development or normal operation of such assets. Our AROs are primarily associated with phosphogypsum stack systems and mine reclamation in Florida. The changes in our AROs from December31, 2009 to March31, 2010 are summarized below: (in millions) Obligation at December31, 2009 $ 103.7 Accretion expense 1.9 Liabilities incurred 0.4 Expenditures (2.0 ) Obligation at March31, 2010 $ 104.0 Our phosphate operations in Florida are subject to regulations governing the construction, operation, closure and long-term maintenance of phosphogypsum stack systems and regulations concerning site reclamation for phosphate rock mines. Our liability for phosphogypsum stack costs includes the cost of stack closure at Plant City and the costs of cooling pond closure, post-closure monitoring, and ongoing water treatment at both Bartow and Plant City. The actual amounts to be spent will depend on factors such as the timing of activities, refinements in scope, technological developments, cost inflation and changes in regulations. It is possible that these factors could change at any time and impact the estimates. In addition to reclamation AROs arising from normal mining activity, AROs may increase in the future upon expansion of the Plant City phosphogypsum stack. AROs are reported in accrued expenses and other noncurrent liabilities on our consolidated balance sheet, as follows: March31, 2010 December31, 2009 (in millions) Current portion $ 11.1 $ 11.1 Noncurrent portion 92.9 92.6 $ 104.0 $ 103.7 Florida regulations require phosphate fertilizer companies to demonstrate financial assurance for the closure of phosphogypsum stack systems, for mine reclamation activities, and for wetland and other surface water mitigation measures. In the first quarters of 2010 and 2009, we made annual contributions of $3.7million and $7.5million, respectively, to an escrow account established for the benefit of the Florida Department of Environmental Protection as a means of complying with Florida's regulations governing financial assurance related to the closure and maintenance of phosphogypsum stack systems. Based on the predetermined funding formula as prescribed by the state of Florida and an assumed rate of return of 2% on invested funds, we estimate that over the subsequent 23years, our contributions will average approximately $5million per year and may range up to $10million in the later years. The balance in the fund is estimated to peak at $210million in 2033 and then decline over the next five decades as closure and post-closure work is completed and the funds are used to complete settlement of the AROs. No expense is recognized upon the funding of the account; therefore, contributions to the account will differ from amounts recognized as expense in our financial statements. The balance in the escrow account is reported as an a |
Financing Agreements
Financing Agreements | |
3 Months Ended
Mar. 31, 2010 | |
Financing Agreements | |
Financing Agreements | 15.Financing Agreements Bridge Loan Agreement On April5, 2010, CFIndustries Holdings,Inc. (the Company or CFHoldings), as a guarantor, and CFIndustries, Inc. (CFIndustries), as borrower, entered into a $1.75billion senior bridge loan agreement, with certain lenders, Morgan Stanley Senior Funding,Inc. (MSSF), as agent for such lenders and as collateral agent (the Bridge Agents), and MSSF as lead arranger and book runner (in such capacity, the Bridge Lead Arranger; such agreement, the Bridge Loan Agreement), which provided for multiple-draw bridge loans (Bridge Loans) of up to $1.75billion. The $1.75billion proceeds of the Bridge Loans were borrowed by CFIndustries and used to finance, in part, the exchange offer, as described in Note22Acquisition of Terra IndustriesInc. and Other Subsequent Events (the Exchange Offer), and the acquisition of Terra through additional share purchases to complete the merger of Terra with and into CFHoldings (the Merger); to refinance certain existing indebtedness of the Company, Terra and their respective subsidiaries; and to pay associated fees and expenses. We used the net proceeds from the issuance of CFHoldings common stock described in Note22 to repay Bridge Loans on April21, 2010. We used net proceeds from the issuance of CFIndustries senior notes described in Note22 and this Note15 to repay the remaining Bridge Loans, approximately $645million, and we terminated the Bridge Loan Agreement, on April23, 2010. Former Credit Agreement Until April5, 2010, we had a senior secured revolving credit facility (the JP Morgan Chase credit facility) with a bank syndicate led by JPMorgan Chase that provided CFIndustries with up to $250million, subject to a borrowing base, for working capital and general corporate purposes, including up to $50million for the issuance of letters of credit. As of March31, 2010, there were no borrowings outstanding under the JP Morgan Chase credit facility, and the facility was terminated on April5, 2010 upon the purchase of Terra common shares following the Exchange Offer. New Credit Agreement On April5, 2010, the Company, as a guarantor, and CFIndustries, as borrower, entered into a $2.3billion senior Credit Agreement, with certain lenders from time to time and MSSF, as agent for such lenders and as collateral agent (the Credit Agreement), which provided for multiple-draw term loans (Term Loans) of up to $2.0billion (collectively, the Term Facility) and for a revolving credit facility of up to $500million (the Revolving Credit Facility). All loans outstanding under the Credit Agreement must be repaid by April5, 2015. CFIndustries is required to make minimum quarterly scheduled amortization payments of the Term Loans prior to the maturity of the Term Facility in an amount equal to 0.25% of the principal amount of the Term Loans borrowed. The $500million Revolving Credit Facility provides for a $50million swingline subfacility and a $75million letter of credit subfacility (which may be increased to up to $125million in certain circumstances). Proceeds of loans under the Revolving Credit Facility are available for working capital and general corporate purposes of the C |
Derivative Financial Instrument
Derivative Financial Instruments | |
3 Months Ended
Mar. 31, 2010 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | 16.Derivative Financial Instruments We use natural gas in the manufacture of nitrogen fertilizer products. We manage the risk of changes in gas prices through the use of physical gas supply contracts and derivative financial instruments covering periods not exceeding three years. We use natural gas derivative instruments primarily to lock in a substantial portion of our margin on sales under the Forward Pricing Program. Our natural gas acquisition policy also allows us to establish derivative positions that are associated with anticipated natural gas requirements unrelated to our Forward Pricing Program. The derivative instruments that we currently use are natural gas swap contracts. These contracts settle using NYMEX futures or AECO price indexes, which represent fair value at any given time. The contracts are entered into with respect to gas to be consumed in the future and settlements are scheduled to coincide with anticipated gas purchases used to manufacture nitrogen products during those future periods. We report derivatives in the consolidated balance sheets at fair value with changes in their fair value recognized immediately in earnings, unless the normal purchase and sale exemption applies. We use natural gas derivatives primarily as an economic hedge of gas price risk, but without the application of hedge accounting. Accordingly, changes in the fair value of the derivatives are recorded in cost of sales as the changes occur. Cash flows related to natural gas derivatives are reported as operating activities. The effect of derivatives in our consolidated statements of operations is shown below. All amounts arise from natural gas derivatives that are not designated as hedging instruments and are recorded in cost of sales. Three months ended March31, 2010 2009 (in millions) Realized losses $ (0.8 ) $ (71.7 ) Unrealized mark-to-market gains (losses) (11.2 ) 48.6 Net derivative losses $ (12.0 ) $ (23.1 ) The fair values of derivatives on our consolidated balance sheets are shown below. All amounts arise from natural gas derivatives that are not designated as hedging instruments. For additional information on derivative fair values, see Note5Fair Value Measurements. March31, 2010 December31, 2009 (in millions) Unrealized gains in other current assets $ $ 3.8 Unrealized losses in other current liabilities (8.3 ) (0.9 ) Net unrealized derivative gains (losses) $ (8.3 ) $ 2.9 As of March31, 2010 and December31, 2009, we had open derivative contracts for 5.6million MMBtus and 11.0million MMBtus, respectively, of natural gas. For the three months ended March31, 2010, we used derivatives to cover approximately 40% of our natural gas consumption at Donaldsonville and approximately 37% of our two-thirds share of gas consumption at Medicine Hat. Natural gas derivatives involve the risk of dealing with counterparties and their ability to meet the terms of the contracts. The counterparties to our natural gas derivatives are either large oil and gas companies or larg |
Stock-Based Compensation
Stock-Based Compensation | |
3 Months Ended
Mar. 31, 2010 | |
Stock-Based Compensation | |
Stock-Based Compensation | 17.Stock-Based Compensation We grant stock-based compensation awards under the CFIndustries Holdings,Inc. 2009 Equity and Incentive Plan (Plan). The awards granted to date are nonqualified stock options and restricted stock. The cost of employee services received in exchange for the awards is measured based on the fair value of the award on the grant date and is recognized as expense on a straight-line basis over the period during which the employee is required to provide the services. The following is a summary of outstanding stock options under the Plan: March31, 2010 December31, 2009 (in millions) Outstanding stock options 1.7 1.7 Aggregate intrinsic value $ 107.3 $ 107.7 Exercisable stock options 1.5 1.5 Aggregate intrinsic value $ 103.4 $ 103.8 Stock-based compensation cost is recorded primarily in selling, general, and administrative expense. The following table summarizes stock-based compensation costs and related income tax benefits for the three months ended March31, 2010 and 2009. Three months ended March31, 2010 2009 (in millions) Stock-based compensation expense $ 1.8 $ 1.5 Income tax benefit (0.7 ) (0.6 ) Stock-based compensation expense, net of income taxes $ 1.1 $ 0.9 Unrecognized compensation cost as of March31, 2010 is as follows: Stock Options Restricted Stock Pre-tax unrecognized compensation cost, net of estimated forfeitures (in millions) $ 7.2 $ 3.1 Weighted-average period over which expense will be recognized 1.8years 1.9years An excess tax benefit is generated when the realized tax benefit from the vesting of restricted stock, or a stock option exercise, exceeds the previously recognized deferred tax asset. Excess tax benefits are required to be reported as a financing cash inflow rather than a reduction of taxes paid. Excess tax benefits for the three months ended March31, 2010 and 2009 were $0.4million and $0.1million, respectively. |
Other Comprehensive Income
Other Comprehensive Income (Loss) | |
3 Months Ended
Mar. 31, 2010 | |
Other Comprehensive Income (Loss) | |
Other Comprehensive Income (Loss) | 18.Other Comprehensive Income (Loss) Changes to accumulated other comprehensive loss and the impact on other comprehensive income (loss) are as follows: Foreign Currency Translation Adjustment Unrealized Gain (Loss) on Securities Defined Benefit Plans Accumulated Other Comprehensive Income (Loss) (in millions) Balance at December31, 2008 $ (4.4 ) $ (14.0 ) $ (56.8 ) $ (75.2 ) Unrealized holding loss on securities (7.6 ) (7.6 ) Reclassification to earnings (0.2 ) 0.6 0.4 Deferred taxes and other changes (0.8 ) 3.0 (0.1 ) 2.1 Balance at March31, 2009 $ (5.2 ) $ (18.8 ) $ (56.3 ) $ (80.3 ) Balance at December31, 2009 $ (0.4 ) $ 9.7 $ (52.5 ) $ (43.2 ) Unrealized holding gain on securities 1.1 1.1 Reclassification to earnings (21.4 ) 1.0 (20.4 ) Deferred taxes and other changes 1.2 7.8 (0.7 ) 8.3 Balance at March31, 2010 $ 0.8 $ (2.8 ) $ (52.2 ) $ (54.2 ) The reclassification to earnings of $21.4million during the three months ended March31, 2010 reflects the portion of the $28.3million pre-tax gain realized in January 2010 on the sale of our investment in marketable equity securities that was unrealized at December31, 2009. The pre-tax unrealized holding loss on securities of $7.6million during the three months ended March31, 2009 relates primarily to our investments in auction rate securities. For additional information on our investments in auction rate securities and investment in marketable equity securities, see Note5Fair Value Measurements and Note22Acquisition of Terra IndustriesInc. and Other Subsequent Events, respectively. |
Contingencies
Contingencies | |
3 Months Ended
Mar. 31, 2010 | |
Contingencies | |
Contingencies | 19.Contingencies 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 matters will not have a material adverse effect on our consolidated financial position or results of operations. Environmental Florida Environmental Matters RCRA Enforcement Initiative.In December 2004 and January 2005, the United States Environmental Protection Agency (EPA) inspected our Plant City, Florida phosphate fertilizer complex to evaluate the facility's compliance with the Resource Conservation and Recovery Act (RCRA), the federal statute that governs the generation, transportation, treatment, storage and disposal of hazardous wastes. This inspection was undertaken as a part of a broad enforcement initiative commenced by the EPA to evaluate whether mineral processing and mining facilities, including, in particular, all wet process phosphoric acid production facilities, are in compliance with RCRA, and the extent to which such facilities' waste management practices have impacted the environment. By letter dated September27, 2005, EPA Region 4 issued to the Company a Notice of Violation (NOV) and Compliance Evaluation Inspection Report. The NOV and Compliance Evaluation Inspection Report alleged a number of violations of RCRA, including violations relating to recordkeeping, the failure to properly make hazardous waste determinations as required by RCRA, and alleged treatment of sulfuric acid waste without a permit. The most significant allegation in the NOV is that the Plant City facility's reuse of phosphoric acid process water (which is otherwise exempt from regulation as a hazardous waste) in the production of ammoniated phosphate fertilizer, and the return of this process water to the facility's process water recirculating system, have resulted in the disposal of hazardous waste into the system without a permit. The Compliance Evaluation Inspection Report indicates that, as a result, the entire process water system, including all pipes, ditches, cooling ponds and gypsum stacks, could be regulated as hazardous waste management units under RCRA. Several of the Company's competitors have received NOVs making this same allegation. This particular recycling of process water is common in the industry and, the Company believes, was authorized by the EPA in 1990. The Company also believes that this allegation is inconsistent with recent case law governing the scope of the EPA's regulatory authority under RCRA. Nonetheless, the Company has conducted a successful pilot test to replace process water as a scrubbing medium at the ammonium phosphate fertilizer plants and maintain compliance with Plant City's air permit. The Company has received a permit from the Florida Department of Environmental Protection that authorizes the Company to make this change for the three ammonium phosphate plant |
Segment Disclosures
Segment Disclosures | |
3 Months Ended
Mar. 31, 2010 | |
Segment Disclosures | |
Segment Disclosures | 20.Segment Disclosures We are organized and managed based primarily on two segments, which are differentiated primarily by their products, the markets they serve and the regulatory environments in which they operate. The two segments are the nitrogen segment and the phosphate segment. The Company's management uses gross margin to evaluate segment performance and allocate resources. Selling, general and administrative expenses; other operating and non-operating expenses; interest; as well as income tax expense, are managed centrally and are not included in the measurement of segment profitability reviewed by management. Segment data for sales, cost of sales and gross margin for the three months ended March31, 2010 and 2009 follows. Nitrogen Phosphate Consolidated (in millions) Three months ended March31, 2010 Net sales Ammonia $ 60.6 $ $ 60.6 Urea 183.0 183.0 UAN 82.9 82.9 DAP 135.2 135.2 MAP 40.2 40.2 Other 0.5 0.5 327.0 175.4 502.4 Cost of sales 229.7 143.7 373.4 Gross margin $ 97.3 $ 31.7 $ 129.0 Three months ended March31, 2009 Net sales Ammonia $ 70.3 $ $ 70.3 Urea 267.5 267.5 UAN 118.2 118.2 DAP 185.7 185.7 MAP 38.2 38.2 Potash 0.5 0.5 Other 0.2 0.2 456.2 224.4 680.6 Cost of sales 286.8 231.5 518.3 Gross margin $ 169.4 $ (7.1 ) $ 162.3 Assets at March31, 2010 and December31, 2009, are presented below. Nitrogen Phosphate Other Consolidated (in millions) Assets March31, 2010 $ 811.2 $ 574.4 $ 1,247.5 $ 2,633.1 December31, 2009 $ 712.7 $ 564.1 $ 1,218.1 $ 2,494.9 The Other category of assets in the table above includes amounts attributable to the corporate headquarters and unallocated corporate assets such as our cash and cash equivalents, short-term investments and other investments. |
Condensed Consolidating Financi
Condensed Consolidating Financial Statements | |
3 Months Ended
Mar. 31, 2010 | |
Condensed Consolidating Financial Statements | |
Condensed Consolidating Financial Statements | 21.Condensed Consolidating Financial Statements The following condensed consolidating financial information is presented in accordance with SEC RegulationS-X Rule3-10, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered, in connection with the issuance of debt securities of CF Industries,Inc. ("CFI") and full and unconditional guarantees of such debt securities by CF Industries Holdings,Inc. ("Parent") and certain 100%-owned domestic subsidiaries of CF Industries Holdings,Inc. (the Guarantor Subsidiaries"). The guarantees are joint and several. The subsidiaries of the Parent other than CFI and the Guarantor Subsidiaries are referred to below as "Non-Guarantor Subsidiaries." Presented below are condensed consolidating statements of operations and statements of cash flows for the Parent, CFI, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries for the three months ended March31, 2010 and 2009 and condensed consolidating balance sheets for the Parent, CFI, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries as of March31, 2010 and December31, 2009. The investments in subsidiaries in these consolidating financial statements are presented on the equity method. Under this method, our investments are recorded at cost and adjusted for our ownership share of a subsidiary's cumulative results of operations, distributions and other equity changes. The eliminating entries reflect primarily intercompany transactions such as sales, accounts receivable and accounts payable and the elimination of equity investments and earnings of subsidiaries. The condensed financial information presented below is not necessarily indicative of the financial position, results of operation or cash flow of the Parent, CFI, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries on a stand-alone basis. Condensed, Consolidating Statement of Operations Three Months ended March31, 2010 Parent CFI Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated (in millions) Net sales $ $ 467.4 $ $ 97.4 $ (62.4 ) $ 502.4 Cost of sales 349.6 66.1 (42.3 ) 373.4 Gross margin 117.8 31.3 (20.1 ) 129.0 Selling, general and administrative 0.3 15.6 0.3 16.2 Other operatingnet 136.1 3.2 139.3 Operating earnings (loss) (136.4 ) 99.0 31.0 (20.1 ) (26.5 ) Interest expense 0.3 0.1 0.4 Interest income (0.3 ) (0.3 ) Net (earnings) loss of wholly-owned subsidiaries (65.4 ) (0.2 ) 65.6 Other non-operatingnet (28.3 ) (28.3 ) Earnings before income taxes and equity in loss of unconsolidated affiliates (71.0 ) 127.5 30.9 (85.7 ) 1.7 Income tax provision (benefit) (66.6 ) 62.1 0.1 (4.4 ) Equity in earnings of unconsolidated affiliatesnet of taxes |
Acqusition of Terra Industries
Acqusition of Terra Industries Inc. and Other Subsequent Events | |
3 Months Ended
Mar. 31, 2010 | |
Acqusition of Terra Industries Inc. and Other Subsequent Events | |
Acquisition of Terra Industries Inc. and Other Subsequent Events | 22.Acquisition of Terra IndustriesInc. and Other Subsequent Events During 2009, we made a number of proposals to acquire Terra. In connection with these proposals, we acquired approximately 7.0million shares of Terra common stock, of which we continued to hold approximately 5.0million shares as of December31, 2009. In January 2010, after Terra rejected our December 2009 proposal, we announced that we were withdrawing our proposal to acquire Terra and we sold approximately 5.0million shares of Terra common stock. We received proceeds of $167.1million from these sales and reported a pre-tax gain of $28.3million on the sale of the Terra shares in the first quarter of 2010. On February15, 2010, Terra and Yara International ASA (Yara) announced that on February12, 2010, they had entered into an agreement and plan of merger (Yara/Terra merger agreement) pursuant to which Yara would acquire Terra. The Yara/Terra merger agreement allowed Terra to terminate the agreement to accept a "superior proposal" (as defined in the Yara/Terra merger agreement) subject to certain conditions, including the payment of a cash termination fee of $123.0million to Yara. On March2, 2010, we announced a new offer to acquire Terra, and on March5, 2010, we commenced an exchange offer to acquire all of Terra's outstanding common stock for consideration consisting of $37.15 in cash and 0.0953 of a share of CF Holdings common stock per share of Terra common stock. On March10, 2010, Terra announced that the Terra board of directors had determined that our offer constituted a "superior proposal" under the terms of the Yara/Terra merger agreement, and on March12, 2010, after complying with the procedures to terminate the Yara/Terra merger agreement, Terra entered into a definitive merger agreement with CF Holdings, which provided for the acquisition of Terra by means of an exchange offer followed by a second-step merger (the CF/Terra merger agreement). Under the terms of the CF/Terra merger agreement, in March 2010, we paid (on behalf of Terra) the $123.0million termination fee due to Yara. On March11, 2010, Agrium announced that it would no longer pursue an acquisition of CFHoldings. On April5, 2010, following the initial expiration of the exchange offer, we acquired approximately 79% of Terra's outstanding common stock and commenced a subsequent offering period to acquire the remaining shares of Terra common stock. The subsequent offering period expired April14, 2010, and on April15, 2010, we completed the second-step merger in which one of our subsidiaries merged with and into Terra and Terra became an indirect wholly-owned subsidiary of CF Holdings. In the exchange offer and second-step merger, CF Holdings issued an aggregate of 9.5million shares of its common stock and paid an aggregate of $3.7billion in cash to acquire 100% of Terra's common stock. Total cash requirements in connection with the acquisition of Terra were approximately $4.9billion, consisting primarily of the cash consideration for the Terra IndustriesInc. common stock and stock-based awards. This amount also includes approximately $765million for the redemption of the outstanding 7.75% |
Document and Entity Information
Document and Entity Information | ||
3 Months Ended
Mar. 31, 2010 | Apr. 30, 2010
| |
Document and Entity Information | ||
Entity Registrant Name | CF Industries Holdings, Inc. | |
Entity Central Index Key | 0001324404 | |
Document Type | 10-Q | |
Document Period End Date | 2010-03-31 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 71,051,750 | 71,051,750 |
Document Fiscal Year Focus | 2,010 | |
Document Fiscal Period Focus | Q1 |