Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 03, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-32597 | |
Entity Registrant Name | CF INDUSTRIES HOLDINGS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-2697511 | |
Entity Address, Address Line One | 4 Parkway North, Suite 400 | |
Entity Address, City or Town | Deerfield, | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60015 | |
City Area Code | 847 | |
Local Phone Number | 405-2400 | |
Title of 12(b) Security | common stock, par value $0.01 per share | |
Trading Symbol | CF | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 213,879,941 | |
Entity Central Index Key | 0001324404 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 1,204 | $ 1,502 | $ 2,175 | $ 2,503 |
Cost of sales | 870 | 1,003 | 1,637 | 1,784 |
Gross margin | 334 | 499 | 538 | 719 |
Selling, general and administrative expenses | 51 | 62 | 105 | 120 |
Other operating—net | 6 | (37) | 12 | (33) |
Total other operating costs and expenses | 57 | 25 | 117 | 87 |
Equity in earnings of operating affiliate | 3 | 1 | 6 | 8 |
Operating earnings | 280 | 475 | 427 | 640 |
Interest expense | 49 | 59 | 93 | 119 |
Interest income | (17) | (4) | (18) | (8) |
Other non-operating—net | (3) | (2) | (3) | (3) |
Earnings before income taxes | 251 | 422 | 355 | 532 |
Income tax provision (benefit) | 33 | 102 | 46 | 94 |
Net earnings | 218 | 320 | 309 | 438 |
Less: Net earnings attributable to noncontrolling interest | 28 | 37 | 51 | 65 |
Net earnings attributable to common stockholders | $ 190 | $ 283 | $ 258 | $ 373 |
Net earnings per share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ 0.89 | $ 1.28 | $ 1.20 | $ 1.68 |
Diluted (in dollars per share) | $ 0.89 | $ 1.28 | $ 1.20 | $ 1.67 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 214.5 | 221.1 | 215.2 | 222.2 |
Diluted (in shares) | 214.6 | 222.3 | 215.6 | 223.4 |
Dividends declared per common share (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.60 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 218 | $ 320 | $ 309 | $ 438 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment—net of taxes | 12 | (8) | (71) | 24 |
Defined benefit plans—net of taxes | 2 | 5 | 11 | 3 |
Total other comprehensive income | 14 | (3) | (60) | 27 |
Comprehensive income | 232 | 317 | 249 | 465 |
Less: Comprehensive income attributable to noncontrolling interest | 28 | 37 | 51 | 65 |
Comprehensive income attributable to common stockholders | $ 204 | $ 280 | $ 198 | $ 400 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 563 | $ 287 |
Accounts receivable—net | 250 | 242 |
Inventories | 273 | 351 |
Prepaid income taxes | 20 | 71 |
Other current assets | 30 | 23 |
Total current assets | 1,136 | 974 |
Property, plant and equipment—net | 7,791 | 8,170 |
Investment in affiliate | 94 | 88 |
Goodwill | 2,346 | 2,365 |
Operating lease right-of-use assets | 279 | 280 |
Other assets | 304 | 295 |
Total assets | 11,950 | 12,172 |
Current liabilities: | ||
Accounts payable and accrued expenses | 389 | 437 |
Income taxes payable | 109 | 1 |
Customer advances | 8 | 119 |
Current operating lease liabilities | 92 | 90 |
Other current liabilities | 17 | 18 |
Total current liabilities | 615 | 665 |
Long-term debt | 3,959 | 3,957 |
Deferred Income Tax Liabilities, Net | 1,175 | 1,246 |
Operating lease liabilities | 191 | 193 |
Other liabilities | 434 | 474 |
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, 2020—213,876,921 shares issued and 2019—216,023,826 shares issued | 2 | 2 |
Paid-in capital | 1,300 | 1,303 |
Retained earnings | 1,997 | 1,958 |
Accumulated other comprehensive loss | (426) | (366) |
Total stockholders’ equity | 2,873 | 2,897 |
Noncontrolling interest | 2,703 | 2,740 |
Total equity | 5,576 | 5,637 |
Total liabilities and equity | $ 11,950 | $ 12,172 |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares, Issued | 213,876,921 | 216,023,826 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares, Issued | 213,876,921 | 216,023,826 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Millions | Total | $0.01 Par Value Common Stock | Treasury Stock | Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | Noncontrolling Interest |
Balance at Dec. 31, 2018 | $ 5,731 | $ 2 | $ (504) | $ 1,368 | $ 2,463 | $ (371) | $ 2,958 | $ 2,773 |
Increase (decrease) in equity | ||||||||
Net earnings | 438 | 0 | 0 | 0 | 373 | 0 | 373 | 65 |
Less: Net earnings attributable to noncontrolling interest | 65 | |||||||
Net earnings attributable to common stockholders | 373 | |||||||
Other comprehensive loss | 27 | 0 | 0 | 0 | 0 | 27 | 27 | 0 |
Purchases of treasury stock | (178) | 0 | (178) | 0 | 0 | 0 | (178) | 0 |
Retirement of treasury stock | 0 | 0 | 682 | (90) | (592) | 0 | 0 | 0 |
Acquisition of treasury stock under employee stock plans | (4) | 0 | (4) | 0 | 0 | 0 | (4) | 0 |
Issuance of $0.01 par value common stock under employee stock plans | 6 | 0 | 2 | 4 | 0 | 0 | 6 | 0 |
Stock-based compensation expense | 17 | 0 | 0 | 17 | 0 | 0 | 17 | 0 |
Cash dividends | (133) | 0 | 0 | 0 | (133) | 0 | (133) | 0 |
Distribution declared to noncontrolling interest | (86) | 0 | 0 | 0 | 0 | 0 | 0 | (86) |
Balance at Jun. 30, 2019 | $ 5,818 | 2 | (2) | 1,299 | 2,111 | (344) | 3,066 | 2,752 |
Increase (decrease) in equity | ||||||||
Cash dividends ($0.60 per share) | $ 0.60 | |||||||
Balance at Mar. 31, 2019 | $ 5,670 | 2 | (64) | 1,311 | 2,047 | (341) | 2,955 | 2,715 |
Increase (decrease) in equity | ||||||||
Net earnings | 320 | 0 | 0 | 0 | 283 | 0 | 283 | 37 |
Less: Net earnings attributable to noncontrolling interest | 37 | |||||||
Net earnings attributable to common stockholders | 283 | |||||||
Other comprehensive loss | (3) | 0 | 0 | 0 | 0 | (3) | (3) | 0 |
Purchases of treasury stock | (118) | 0 | (118) | 0 | 0 | 0 | (118) | 0 |
Retirement of treasury stock | 0 | 0 | 178 | (25) | (153) | 0 | 0 | 0 |
Issuance of $0.01 par value common stock under employee stock plans | 4 | 0 | 2 | 2 | 0 | 0 | 4 | 0 |
Stock-based compensation expense | 11 | 0 | 0 | 11 | 0 | 0 | 11 | 0 |
Cash dividends | (66) | 0 | 0 | 0 | (66) | 0 | (66) | 0 |
Balance at Jun. 30, 2019 | $ 5,818 | 2 | (2) | 1,299 | 2,111 | (344) | 3,066 | 2,752 |
Increase (decrease) in equity | ||||||||
Cash dividends ($0.60 per share) | $ 0.30 | |||||||
Common Stock, Par or Stated Value Per Share | 0.01 | |||||||
Common Stock, Par or Stated Value Per Share | $ 0.01 | |||||||
Balance at Dec. 31, 2019 | $ 5,637 | 2 | 0 | 1,303 | 1,958 | (366) | 2,897 | 2,740 |
Increase (decrease) in equity | ||||||||
Net earnings | 309 | 0 | 0 | 0 | 258 | 0 | 258 | 51 |
Less: Net earnings attributable to noncontrolling interest | 51 | |||||||
Net earnings attributable to common stockholders | 258 | |||||||
Other comprehensive loss | (60) | 0 | 0 | 0 | 0 | (60) | (60) | 0 |
Purchases of treasury stock | (100) | 0 | (100) | 0 | 0 | 0 | (100) | 0 |
Retirement of treasury stock | 0 | 0 | 107 | (17) | (90) | 0 | 0 | 0 |
Acquisition of treasury stock under employee stock plans | (9) | 0 | (9) | 0 | 0 | 0 | (9) | 0 |
Issuance of $0.01 par value common stock under employee stock plans | 3 | 0 | 2 | 1 | 0 | 0 | 3 | 0 |
Stock-based compensation expense | 13 | 0 | 0 | 13 | 0 | 0 | 13 | 0 |
Cash dividends | (129) | 0 | 0 | 0 | (129) | 0 | (129) | 0 |
Distribution declared to noncontrolling interest | (88) | 0 | 0 | 0 | 0 | 0 | 0 | (88) |
Balance at Jun. 30, 2020 | 5,576 | 2 | 0 | 1,300 | 1,997 | (426) | 2,873 | 2,703 |
Balance at Mar. 31, 2020 | 5,403 | 2 | (108) | 1,313 | 1,961 | (440) | 2,728 | 2,675 |
Increase (decrease) in equity | ||||||||
Net earnings | 218 | 0 | 0 | 0 | 190 | 0 | 190 | 28 |
Less: Net earnings attributable to noncontrolling interest | 28 | |||||||
Net earnings attributable to common stockholders | 190 | |||||||
Other comprehensive loss | 14 | 0 | 0 | 0 | 0 | 14 | 14 | 0 |
Retirement of treasury stock | 0 | 0 | 107 | (17) | (90) | 0 | 0 | 0 |
Acquisition of treasury stock under employee stock plans | (1) | 0 | (1) | 0 | 0 | 0 | (1) | 0 |
Issuance of $0.01 par value common stock under employee stock plans | 0 | 0 | 2 | (2) | 0 | 0 | 0 | 0 |
Stock-based compensation expense | 6 | 0 | 0 | 6 | 0 | 0 | 6 | 0 |
Cash dividends | (64) | 0 | 0 | 0 | (64) | 0 | (64) | 0 |
Balance at Jun. 30, 2020 | $ 5,576 | $ 2 | $ 0 | $ 1,300 | $ 1,997 | $ (426) | $ 2,873 | $ 2,703 |
Increase (decrease) in equity | ||||||||
Cash dividends ($0.60 per share) | $ 0.30 | |||||||
Common Stock, Par or Stated Value Per Share | $ 0.01 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 |
Cash dividends ($0.60 per share) | $ 0.30 | $ 0.30 | $ 0.60 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating Activities: | ||
Net earnings | $ 309 | $ 438 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 450 | 440 |
Deferred income taxes | (96) | 85 |
Stock-based compensation expense | 13 | 17 |
Unrealized net (gain) loss on natural gas derivatives | (12) | 1 |
Unrealized loss on embedded derivative | 1 | 2 |
Loss (gain) on disposal of property, plant and equipment | 9 | (45) |
Undistributed earnings of affiliate—net of taxes | (8) | (10) |
Changes in: | ||
Accounts receivable—net | (11) | (78) |
Inventories | 51 | 21 |
Accrued and prepaid income taxes | 190 | 35 |
Accounts payable and accrued expenses | (43) | (94) |
Customer advances | (110) | (128) |
Other—net | (25) | 9 |
Net cash provided by operating activities | 718 | 693 |
Investing Activities: | ||
Additions to property, plant and equipment | (119) | (154) |
Proceeds from sale of property, plant and equipment | 0 | 63 |
Insurance proceeds for property, plant and equipment | 2 | 0 |
Net cash used in investing activities | (117) | (91) |
Financing Activities: | ||
Proceeds from short-term borrowings | 500 | 0 |
Repayments of Short-term Debt | (500) | 0 |
Dividends paid on common stock | (129) | (133) |
Distributions to noncontrolling interest | (88) | (86) |
Purchases of treasury stock | (100) | (209) |
Issuances of common stock under employee stock plans | 3 | 6 |
Shares withheld for taxes | (9) | (4) |
Net cash provided by (used in) financing activities | (323) | (426) |
Effect of exchange rate changes on cash and cash equivalents | (2) | 0 |
Increase in cash and cash equivalents | 276 | 176 |
Cash and cash equivalents at beginning of period | 287 | 682 |
Cash and cash equivalents at end of period | $ 563 | $ 858 |
Background and Basis of Present
Background and Basis of Presentation | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis of Presentation | Background and Basis of Presentation We are a leading global manufacturer and distributor of nitrogen products for fertilizer, emissions abatement and other industrial applications. We operate manufacturing complexes in the United States, Canada and the United Kingdom, which are among the most cost-advantaged, efficient and flexible in the world, and an extensive storage, transportation and distribution network in North America. Our 3,000 employees focus on safe and reliable operations, environmental stewardship and disciplined capital and corporate management, driving our strategy to leverage and sustainably grow our nitrogen and chemicals platform to serve customers and create long-term shareholder value. Our principal customers are cooperatives, independent fertilizer distributors, traders, wholesalers and industrial users. Our principal nitrogen fertilizer products are anhydrous ammonia (ammonia), 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 granular fertilizer products for which the nutrient content is a combination of nitrogen, phosphorus and potassium. 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, 2019, 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, 2019, filed with the SEC on February 24, 2020. The preparation of the unaudited interim consolidated financial statements requires us to make use of estimates and assumptions that 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. Significant estimates and assumptions are used for, but are not limited to, net realizable value of inventories, environmental remediation liabilities, environmental and litigation contingencies, the cost of customer incentives, 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 and valuation reserves, allowances for doubtful accounts receivable, the measurement of the fair values of investments for which markets are not active, assumptions used in the determination of the funded status and annual expense of defined benefit pension and other postretirement benefit plans and the assumptions used in the valuation of stock-based compensation awards granted to employees. |
New Accounting Standards
New Accounting Standards | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
New Accounting Standards | 2. New Accounting Standards On January 1, 2020, we adopted Accounting Standards Update (ASU) No. 2018-15—Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This ASU does not affect the accounting for the service element of a hosting arrangement that is a service contract. We adopted this ASU prospectively. The adoption of this ASU did not have a material impact on our consolidated financial statements; however, it could have an effect on future financial results if significant new software involving a cloud computing agreement is implemented. In this case, a certain portion of the implementation costs would be deferred and expensed over the term of the cloud computing arrangement. In December 2019, the Financial Accounting Standards Board (FASB) issued ASU No. 2019-12—Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU adds new guidance to simplify accounting for income taxes, changes the accounting for certain income tax transactions and makes minor improvements to the codification. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption of this ASU is permitted. We do not expect the adoption of this ASU will have a material effect on our consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer | 3. Revenue Recognition We track our revenue by product and by geography. See Note 16—Segment Disclosures for our revenue by reportable segment, which are ammonia, granular urea, UAN, AN and Other. The following table summarizes our revenue by product and by geography (based on destination of our shipment) for the three and six months ended June 30, 2020 and 2019: Ammonia Granular Urea UAN AN Other Total (in millions) Three months ended June 30, 2020 North America $ 344 $ 312 $ 288 $ 51 $ 56 $ 1,051 Europe and other 20 17 20 67 29 153 Total revenue $ 364 $ 329 $ 308 $ 118 $ 85 $ 1,204 Three months ended June 30, 2019 North America $ 443 $ 413 $ 346 $ 54 $ 68 $ 1,324 Europe and other 30 20 23 72 33 178 Total revenue $ 473 $ 433 $ 369 $ 126 $ 101 $ 1,502 Ammonia Granular UAN AN Other Total (in millions) Six months ended June 30, 2020 North America $ 498 $ 643 $ 518 $ 97 $ 115 $ 1,871 Europe and other 59 23 25 137 60 304 Total revenue $ 557 $ 666 $ 543 $ 234 $ 175 $ 2,175 Six months ended June 30, 2019 North America $ 603 $ 748 $ 588 $ 100 $ 127 $ 2,166 Europe and other 57 28 37 153 62 337 Total revenue $ 660 $ 776 $ 625 $ 253 $ 189 $ 2,503 As of June 30, 2020 and December 31, 2019, we had $8 million and $119 million, respectively, in customer advances on our consolidated balance sheets. During the six months ended June 30, 2020 and 2019, substantially all of the customer advances on our consolidated balance sheet at the beginning of each respective period were recognized as revenue. We offer cash incentives to certain customers that do not provide an option to the customer for additional product. The balances of customer incentives accrued at June 30, 2020 and December 31, 2019 were not material. We have certain customer contracts with performance obligations where 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, which may vary based upon the terms and conditions of the applicable contract. As of June 30, 2020, 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 approximately $980 million. We expect to recognize approximately 19% of these performance obligations as revenue in the remainder of 2020, approximately 46% as revenue during 2021 and 2022, and approximately 35% as revenue during 2023 and 2024. Subject to the terms and conditions of the applicable contracts, if these customers do not satisfy their purchase obligations under such contracts, the minimum amount that they would be required to pay to us under these contracts, in the aggregate, is approximately $230 million as of June 30, 2020. We monitor the ability of our customers to meet their purchase obligations, which could be impacted by the ongoing COVID-19 pandemic. Other than the performance obligations described above, any performance obligations with our customers that were unfulfilled or partially filled at December 31, 2019 will be satisfied in 2020. |
Net Earnings Per Share
Net Earnings Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Net Earnings Per Share | Net Earnings Per Share Net earnings per share were computed as follows: Three months ended Six months ended 2020 2019 2020 2019 (in millions, except per share amounts) Net earnings attributable to common stockholders $ 190 $ 283 $ 258 $ 373 Basic earnings per common share: Weighted-average common shares outstanding 214.5 221.1 215.2 222.2 Net earnings attributable to common stockholders $ 0.89 $ 1.28 $ 1.20 $ 1.68 Diluted earnings per common share: Weighted-average common shares outstanding 214.5 221.1 215.2 222.2 Dilutive common shares—stock-based awards 0.1 1.2 0.4 1.2 Diluted weighted-average shares outstanding 214.6 222.3 215.6 223.4 Net earnings attributable to common stockholders $ 0.89 $ 1.28 $ 1.20 $ 1.67 Diluted earnings per 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 4.7 million and 3.4 million in the three and six months ended June 30, 2020, respectively, and 1.5 million in each of the three and six months ended June 30, 2019. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following: June 30, December 31, 2019 (in millions) Finished goods $ 229 $ 311 Raw materials, spare parts and supplies 44 40 Total inventories $ 273 $ 351 |
Property, Plant and Equipment-N
Property, Plant and Equipment-Net | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment, Net [Abstract] | |
Property, Plant and Equipment-Net | Property, Plant and Equipment—Net Property, plant and equipment—net consists of the following: June 30, December 31, 2019 (in millions) Land $ 70 $ 71 Machinery and equipment 12,322 12,338 Buildings and improvements 889 890 Construction in progress 240 236 Property, plant and equipment (1) 13,521 13,535 Less: Accumulated depreciation and amortization 5,730 5,365 Property, plant and equipment—net $ 7,791 $ 8,170 _______________________________________________________________________________ (1) As of both June 30, 2020 and December 31, 2019, we had property, plant and equipment that was accrued but unpaid of approximately $42 million. As of June 30, 2019 and December 31, 2018, we had property, plant and equipment that was accrued but unpaid of $43 million and $48 million, respectively. Depreciation and amortization related to property, plant and equipment was $235 million and $443 million for the three and six months ended June 30, 2020, respectively, and $247 million and $430 million for the three and six months ended June 30, 2019, respectively. During the first quarter of 2019, we entered into an agreement to sell our Pine Bend dry bulk storage and logistics facility in Minnesota. In April 2019, we completed the sale, received proceeds of $55 million and recognized a pre-tax gain of $45 million. The gain is reflected in other operating—net in our consolidated statement of operations for the three and six months ended June 30, 2019. 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: Six months ended 2020 2019 (in millions) Net capitalized turnaround costs: Beginning balance $ 246 $ 252 Additions 14 22 Depreciation (52) (57) Effect of exchange rate changes (4) 2 Ending balance $ 204 $ 219 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 catalysts when a full plant shutdown occurs. Scheduled inspections are also conducted during full plant shutdowns, including required safety inspections which entail the disassembly of various components such as steam boilers, pressure vessels and other equipment requiring safety certifications. Internal employee costs and overhead amounts are not considered turnaround costs and are not capitalized. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The following table shows the carrying amount of goodwill by reportable segment as of June 30, 2020 and December 31, 2019: Ammonia Granular Urea UAN AN Other Total (in millions) Balance as of December 31, 2019 $ 587 $ 828 $ 576 $ 302 $ 72 $ 2,365 Effect of exchange rate changes (1) (1) — (15) (2) (19) Balance as of June 30, 2020 $ 586 $ 827 $ 576 $ 287 $ 70 $ 2,346 All of our identifiable intangible assets have definite lives and are presented in other assets on our consolidated balance sheets at gross carrying amount, net of accumulated amortization, as follows: June 30, 2020 December 31, 2019 Gross Accumulated Net Gross Accumulated Net (in millions) Customer relationships $ 125 $ (47) $ 78 $ 131 $ (45) $ 86 Trade names 30 (7) 23 31 (7) 24 Total intangible assets $ 155 $ (54) $ 101 $ 162 $ (52) $ 110 Our intangible assets are being amortized over a weighted-average life of approximately 20 years. Amortization expense of our identifiable intangible assets was $2 million and $4 million for the three and six months ended June 30, 2020, respectively, and $2 million and $4 million for the three and six months ended June 30, 2019, 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 2020 and each of the five succeeding fiscal years is as follows: Estimated (in millions) Remainder of 2020 $ 4 2021 8 2022 8 2023 8 2024 8 2025 8 |
Equity Method Investment
Equity Method Investment | 6 Months Ended |
Jun. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investment | Equity Method Investment We have a 50% ownership interest in Point Lisas Nitrogen Limited (PLNL), which operates an ammonia production facility in the Republic of Trinidad and Tobago. We include our share of the net earnings from this equity method investment as an element of earnings from operations because PLNL provides additional production to our operations and is integrated with our other supply chain and sales activities in the ammonia segment. As of June 30, 2020, the total carrying value of our equity method investment in PLNL was $94 million, $44 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 13 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 $13 million and $23 million for the three and six months ended June 30, 2020, respectively, and $12 million and $34 million for the three and six months ended June 30, 2019, respectively. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Our cash and cash equivalents and other investments consist of the following: June 30, 2020 Cost Basis Unrealized Unrealized Fair Value (in millions) Cash $ 79 $ — $ — $ 79 Cash equivalents: U.S. and Canadian government obligations 464 — — 464 Other debt securities 20 — — 20 Total cash and cash equivalents $ 563 $ — $ — $ 563 Nonqualified employee benefit trusts 16 3 — 19 December 31, 2019 Cost Basis Unrealized Unrealized Fair Value (in millions) Cash $ 59 $ — $ — $ 59 Cash equivalents: U.S. and Canadian government obligations 211 — — 211 Other debt securities 17 — — 17 Total cash and cash equivalents $ 287 $ — $ — $ 287 Nonqualified employee benefit trusts 17 2 — 19 Under our short-term investment policy, we may invest our cash balances, either directly or through mutual funds, in several types of investment-grade securities, including notes and bonds issued by governmental entities or corporations. Securities issued by governmental entities include those issued directly by the U.S. and Canadian federal governments; those issued by state, local or other governmental entities; and those guaranteed by entities affiliated with governmental entities. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following tables present assets and liabilities included in our consolidated balance sheets as of June 30, 2020 and December 31, 2019 that are recognized at fair value on a recurring basis, and indicate the fair value hierarchy utilized to determine such fair value: June 30, 2020 Total Fair Quoted Prices Significant Significant (in millions) Cash equivalents $ 484 $ 484 $ — $ — Nonqualified employee benefit trusts 19 19 — — Embedded derivative liability (21) — (21) — December 31, 2019 Total Fair Quoted Prices Significant Significant (in millions) Cash equivalents $ 228 $ 228 $ — $ — Nonqualified employee benefit trusts 19 19 — — Derivative liabilities (12) — (12) — Embedded derivative liability (20) — (20) — Cash Equivalents As of June 30, 2020 and December 31, 2019, 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 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. Changes in the fair value of equity securities in the trust assets are recognized through earnings. Derivative Instruments The derivative instruments that we may 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. 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. As of June 30, 2020 and December 31, 2019, the embedded derivative liability of $21 million and $20 million, respectively, is included in other current liabilities and other liabilities on our consolidated balance sheets. Included in other operating—net in our consolidated statements of operations for the six months ended June 30, 2020 and 2019 is a net loss of $1 million and $2 million, respectively. 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 13—Noncontrolling Interest for additional information regarding our strategic venture with CHS. Financial Instruments The carrying amount and estimated fair value of our financial instruments are as follows: June 30, 2020 December 31, 2019 Carrying Fair Value Carrying Fair Value (in millions) Long-term debt $ 3,959 $ 4,282 $ 3,957 $ 4,295 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 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended June 30, 2020, we recorded an income tax provision of $33 million on pre-tax income of $251 million, or an effective tax rate of 13.4%, compared to an income tax provision of $102 million on pre-tax income of $422 million, or an effective tax rate of 24.2%, for the three months ended June 30, 2019. For the three months ended June 30, 2020, our income tax provision includes a $19 million benefit related to the settlement of the audit of the Terra amended tax returns, which is further described below. For the six months ended June 30, 2020, we recorded an income tax provision of $46 million on pre-tax income of $355 million, or an effective tax rate of 13.1%, compared to an income tax provision of $94 million on pre-tax income of $532 million, or an effective tax rate of 17.7%, for the six months ended June 30, 2019. For the six months ended June 30, 2020, our income tax provision includes a $25 million benefit related to the settlement of certain U.S. and foreign income tax audits, which primarily related to the settlement of the audit of the Terra amended tax returns, which is further described below. For the six months ended June 30, 2019, our income tax provision included an incentive tax credit from the State of Louisiana of $30 million, net of federal income tax, related to certain capital projects at our Donaldsonville, Louisiana complex. Our effective tax rate is also impacted by earnings attributable to the noncontrolling interest in CF Industries Nitrogen, LLC (CFN), as our consolidated income tax provision does not include a tax provision on the earnings attributable to the noncontrolling interest. Our effective tax rate for the three months ended June 30, 2020 of 13.4%, which is based on pre-tax income of $251 million, including $28 million attributable to the noncontrolling interest, would be 1.6 percentage points higher if based on pre-tax income exclusive of the $28 million attributable to the noncontrolling interest. Our effective tax rate for the three months ended June 30, 2019 of 24.2%, which is based on pre-tax income of $422 million, including $37 million attributable to the noncontrolling interest, would be 2.3 percentage points higher if based on pre-tax income exclusive of the $37 million attributable to the noncontrolling interest. Our effective tax rate for the six months ended June 30, 2020 of 13.1%, which is based on pre-tax income of $355 million, including $51 million attributable to the noncontrolling interest, would be 2.1 percentage points higher if based on pre-tax income exclusive of the $51 million attributable to the noncontrolling interest. Our effective tax rate for the six months ended June 30, 2019 of 17.7%, which is based on pre-tax income of $532 million, including $65 million attributable to the noncontrolling interest, would be 2.4 percentage points higher if based on pre-tax income exclusive of the $65 million attributable to the noncontrolling interest. See Note 13—Noncontrolling Interest for additional information. In March 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act). The CARES Act includes, among other things (i) a five-year net operating loss (NOL) carryback (including a related technical correction to the 2017 Tax Cuts and Jobs Act) for tax losses incurred in tax years 2018 through 2020; (ii) a change in interest deduction limitations for tax years 2019 and 2020, increasing the annual interest limitation from 30% to 50% of adjusted taxable income; and (iii) increased refundability of corporate alternative minimum tax (AMT) credits. These provisions have limited applicability to the Company as (i) the Company does not expect to have a NOL in tax year 2020 and did not have a tax loss in 2018 or 2019 which would be eligible for carryback; (ii) the Company was not limited by the interest deduction limitations for tax years 2019 and 2020 prior to changes made by the CARES Act; and (iii) the Company utilized all of its AMT credits in 2019. The Company continues to monitor and assess the impact of the CARES Act and other related governmental actions in response to the coronavirus impacts as more information becomes available. Terra Amended Tax Returns We completed the acquisition of Terra Industries Inc. (Terra) in April 2010. After the acquisition, we determined that the manner in which Terra reported the repatriation of cash from foreign affiliates to its U.S. parent for U.S. and foreign income tax purposes was not appropriate. As a result, in 2012 we amended certain tax returns, including Terra’s income and withholding tax returns, back to 1999 (the Amended Tax Returns) and paid additional income and withholding taxes, and related interest and penalties. In early 2013, the Internal Revenue Service (IRS) commenced an examination of the U.S. tax aspects of the Amended Tax Returns. In early 2019, the IRS completed its examination of the Amended Tax Returns and submitted its audit reports and related refund claims to the Joint Committee on Taxation of the U.S. Congress (the Joint Committee). For purposes of its review, the Joint Committee separated the IRS audit reports into two separate matters: (i) an income tax related matter and (ii) a withholding tax matter. In December 2019, we received notification that the Joint Committee had approved the IRS audit reports and related income tax refunds relating to the income tax related matter. Therefore, we expected to receive cash refunds in 2020. In addition, as a result of this settlement and the finalization of carryover impacts of this audit settlement on other tax periods, we reduced our liability for unrecognized tax benefits by $19 million and recorded a corresponding deferred income tax liability in the first quarter of 2020. In the second quarter of 2020, we received notification that the Joint Committee approved the IRS audit report and related withholding tax refunds relating to the withholding tax matter and we received IRS Notices indicating the amount of tax and interest to be refunded and received with respect to the withholding tax matter and the income tax matter. As a result of these events, in the second quarter of 2020, we recognized $16 million of interest income and $16 million of income tax benefit, which consisted of the following: • additional interest income of $16 million ($13 million, net of tax) related to both the income tax matter and the withholding tax matter, • a reduction in our liabilities for unrecognized tax benefits of $12 million with a corresponding reduction in income tax expense related to the withholding tax matter, and • an additional income tax benefit of $7 million related to the income tax matter. We received income tax refunds, including interest, of $108 million relating to these matters in the second quarter of 2020, consisting of $68 million related to the income tax matter and $40 million related to the withholding tax matter. In July 2020, we received an additional $2 million related to the withholding tax matter, which finalizes these matters with the IRS. As a result of the finalization of the income tax matter and the withholding tax matter, all U.S. federal tax years commencing before January 1, 2012 are now closed. |
Interest Expense
Interest Expense | 6 Months Ended |
Jun. 30, 2020 | |
Interest Expense [Abstract] | |
Interest Expense | Interest Expense Details of interest expense are as follows: Three months ended Six months ended 2020 2019 2020 2019 (in millions) Interest on borrowings (1) $ 47 $ 57 $ 93 $ 114 Fees on financing agreements (1) 2 3 4 6 Interest on tax liabilities (2) — — (4) — Interest capitalized — (1) — (1) Total interest expense $ 49 $ 59 $ 93 $ 119 _______________________________________________________________________________ (1) See Note 12—Financing Agreements for additional information. (2) Interest on tax liabilities for the six months ended June 30, 2020 consists of a reduction in interest accrued on the reserve for unrecognized tax benefits. |
Financing Agreements
Financing Agreements | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Financing Agreements | Financing Agreements Revolving Credit Agreement On December 5, 2019, CF Holdings and CF Industries entered into a senior secured Fourth Amended and Restated Credit Agreement (the Revolving Credit Agreement), which amended and restated our Third Amended and Restated Revolving Credit Agreement, as previously amended (referred to herein, as in effect from time to time, as the Prior Credit Agreement), that was scheduled to mature September 18, 2020. The Revolving Credit Agreement 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, and 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. The guarantors under the Revolving Credit Agreement are currently comprised of CF Holdings and CF Holdings’ wholly owned subsidiaries CF Industries Enterprises, LLC (CFE), CF Industries Sales, LLC (CFS), CF USA Holdings, LLC (CF USA) and CF Industries Distribution Facilities, LLC (CFIDF). As of June 30, 2020, 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 December 31, 2019. In March 2020, we borrowed $500 million under the Revolving Credit Agreement to ensure we maintained ample financial flexibility in light of the uncertainty in the global markets caused by the COVID-19 pandemic, which we repaid in April 2020. Maximum borrowings under the Revolving Credit Agreement during the six months ended June 30, 2020 were $500 million. The weighted-average annual interest rate of borrowings under the Revolving Credit Agreement during the six months ended June 30, 2020 was 2.05%. There were no borrowings under the Prior Credit Agreement during the six months ended June 30, 2019. The Revolving Credit Agreement contains representations and warranties and affirmative and negative covenants, including financial covenants. As of June 30, 2020, we were in compliance with all covenants under the Revolving Credit Agreement. Letters of Credit In addition to the letter of credit capacity under the Revolving Credit Agreement, as described above, we have also entered into a bilateral agreement providing for up to $145 million of letters of credit. As of June 30, 2020, approximately $126 million of letters of credit were outstanding under this agreement. Senior Notes Long-term debt presented on our consolidated balance sheets as of June 30, 2020 and December 31, 2019 consisted of the following debt securities issued by CF Industries: Effective Interest Rate June 30, 2020 December 31, 2019 Principal Carrying Amount (1) Principal Carrying Amount (1) (in millions) Public Senior Notes: 3.450% due June 2023 3.562% $ 750 $ 748 $ 750 $ 747 5.150% due March 2034 5.279% 750 740 750 740 4.950% due June 2043 5.031% 750 742 750 742 5.375% due March 2044 5.465% 750 741 750 741 Senior Secured Notes: 3.400% due December 2021 3.782% 250 249 250 248 4.500% due December 2026 4.759% 750 739 750 739 Total long-term debt $ 4,000 $ 3,959 $ 4,000 $ 3,957 _______________________________________________________________________________ (1) Carrying amount is net of unamortized debt discount and deferred debt issuance costs. Total unamortized debt discount was $9 million and $10 million as of June 30, 2020 and December 31, 2019, respectively, and total deferred debt issuance costs were $32 million and $33 million as of June 30, 2020 and December 31, 2019, respectively. 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 is guaranteed by CF Holdings. Under the terms of the applicable indenture, the 3.400% senior secured notes due December 2021 (the 2021 Notes) and the 4.500% senior secured notes due December 2026 (the 2026 Notes) identified in the table above (together, the Senior Secured Notes) are guaranteed on a senior secured basis, jointly and severally, by CF Holdings and each current and future domestic subsidiary of CF Holdings (other than CF Industries) that from time to time is a borrower, or guarantees indebtedness, under the Revolving Credit Agreement. The subsidiary guarantors of the Senior Secured Notes currently consist of CFE, CFS, CF USA and CFIDF. On November 13, 2019, we redeemed in full all of the remaining $500 million outstanding principal amount of the 7.125% senior notes due May 2020 (the 2020 Notes), in accordance with the optional redemption provisions in the indenture governing the 2020 Notes. On December 13, 2019, we redeemed $250 million principal amount, representing 50% of the $500 million principal amount outstanding immediately prior to such redemption, of the 2021 Notes in accordance with the optional redemption provisions in the indenture governing the 2021 Notes. |
Noncontrolling Interest
Noncontrolling Interest | 6 Months Ended |
Jun. 30, 2020 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest | Noncontrolling Interest We have a strategic venture with CHS under which they own 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. 2020 2019 (in millions) Noncontrolling interest: Balance as of January 1 $ 2,740 $ 2,773 Earnings attributable to noncontrolling interest 51 65 Declaration of distributions payable (88) (86) Balance as of June 30 $ 2,703 $ 2,752 Distributions payable to noncontrolling interest: Balance as of January 1 $ — $ — Declaration of distributions payable 88 86 Distributions to noncontrolling interest (88) (86) Balance as of June 30 $ — $ — CHS also receives deliveries pursuant to a supply agreement under which CHS has the right to purchase annually from CFN up to approximately 1.1 million tons of granular urea and 580,000 tons of UAN at market prices. As a result of its equity interest in CFN, CHS is entitled to semi-annual cash distributions from CFN. We are also entitled to semi-annual cash distributions from CFN. The amounts of distributions from CFN to us and CHS are based generally on the profitability of CFN and determined based on the volume of granular urea and UAN sold by CFN to us and CHS pursuant to supply agreements, less a formula driven amount based primarily on the cost of natural gas used to produce the granular urea and UAN, and adjusted for the allocation of items such as operational efficiencies and overhead amounts. Additionally, under the terms of the strategic venture, we recognized an embedded derivative related to our credit rating. See Note 9—Fair Value Measurements for additional information. On July 31, 2020, the CFN Board of Managers approved semi-annual distribution payments for the distribution period ended June 30, 2020 in accordance with CFN’s limited liability company agreement. On July 31, 2020, CFN distributed $86 million to CHS for the distribution period ended June 30, 2020. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Treasury Stock On August 1, 2018, our Board of Directors (the Board) authorized the repurchase of up to $500 million of CF Holdings common stock through June 30, 2020 (the 2018 Share Repurchase Program). In 2018, we completed the 2018 Share Repurchase Program with the repurchase of 10.9 million shares for $500 million, of which $33 million was accrued and unpaid at December 31, 2018 and was paid in the first quarter of 2019. In February 2019, we retired all 10.9 million shares that were repurchased under the 2018 Share Repurchase Program. On February 13, 2019, the Board authorized the repurchase of up to $1 billion of CF Holdings common stock through December 31, 2021 (the 2019 Share Repurchase Program). Repurchases under the 2019 Share Repurchase Program may be made from time to time in the open market, through privately negotiated transactions, block transactions or otherwise. The manner, timing and amount of repurchases will be determined by our management based on the evaluation of market conditions, stock price, and other factors. In the six months ended June 30, 2020, we repurchased approximately 2.6 million shares of CF Holdings common stock for $100 million. No shares were repurchased in the three months ended June 30, 2020. In the six months ended June 30, 2019, we repurchased approximately 4.2 million shares for $178 million, of which $2 million was accrued and unpaid at June 30, 2019. In the second quarter of 2020, we retired the approximately 2.6 million shares that were repurchased during the first quarter of 2020 under the 2019 Share Repurchase Program. The following table summarizes the share repurchases under the 2019 Share Repurchase Program. Shares Amounts (in millions) Shares repurchased in 2019: First quarter 1.5 $ 60 Second quarter 2.7 118 Third quarter 1.5 72 Fourth quarter 1.9 87 Total shares repurchased in 2019 7.6 337 Shares repurchased in 2020: First quarter 2.6 100 Second quarter — — Total shares repurchased in 2020 2.6 100 Shares repurchased as of June 30, 2020 10.2 $ 437 Accumulated Other Comprehensive Income (Loss) Changes to accumulated other comprehensive income (loss) are as follows: Foreign Unrealized Defined Accumulated (in millions) Balance as of December 31, 2018 $ (250) $ 5 $ (126) $ (371) Gain arising during the period — — 5 5 Reclassification to earnings (1) — — (1) (1) Effect of exchange rate changes and deferred taxes 24 — (1) 23 Balance as of June 30, 2019 $ (226) $ 5 $ (123) $ (344) Balance as of December 31, 2019 $ (188) $ 5 $ (183) $ (366) Gain arising during the period — — 1 1 Reclassification to earnings (1) — — 3 3 Effect of exchange rate changes and deferred taxes (71) — 7 (64) Balance as of June 30, 2020 $ (259) $ 5 $ (172) $ (426) ____________________________________________________________________________ (1) Reclassifications out of accumulated other comprehensive income (loss) to earnings during the three and six months ended June 30, 2020 and 2019 were not material. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | 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 do 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. The Court granted in part and denied in part the CF Entities’ Motions for Summary Judgment in August 2015. Over three hundred cases have been resolved pursuant to confidential settlements that have been or we expect will be fully funded by insurance. The remaining cases are in various stages of discovery and pre-trial proceedings. The next group of cases is expected to be set for trial in 2021. We believe we have strong legal and factual defenses and intend to continue defending the CF Entities vigorously in the pending lawsuits. The Company cannot provide a range of reasonably possible loss due to the uncertain nature of this litigation, including uncertainties around the potential allocation of responsibility by a jury to other defendants or responsible third parties. The recognition of a potential loss in the future in the West Fertilizer Co. litigation could negatively affect our results in the period of recognition. However, based upon currently available information, including available insurance coverage, we do not believe that this litigation will have a material adverse effect on our consolidated financial position, results of operations or cash flows. 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. In 2015, we and several other parties received a notice that the U.S. Department of the Interior and other trustees intend to undertake a natural resource damage assessment for 17 former phosphate mines in southeast Idaho, one of which is the former Georgetown Canyon mine. Because the former mine site is still in the remedial investigation 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. |
Segment Disclosures
Segment Disclosures | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Disclosures | 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 of selling, general and administrative expenses and other operating—net) and non-operating expenses (interest and income taxes) are centrally managed and are not included in the measurement of segment profitability reviewed by management. Our assets, with the exception of goodwill, are not monitored by or reported to our chief operating decision maker by segment; therefore, we do not present total assets by segment. Goodwill by segment is presented in Note 7—Goodwill and Other Intangible Assets. Segment data for sales, cost of sales and gross margin for the three and six months ended June 30, 2020 and 2019 are presented in the tables below. Ammonia Granular Urea (1) UAN (1) AN (1) Other (1) Consolidated (in millions) Three months ended June 30, 2020 Net sales $ 364 $ 329 $ 308 $ 118 $ 85 $ 1,204 Cost of sales 262 205 245 91 67 870 Gross margin $ 102 $ 124 $ 63 $ 27 $ 18 334 Total other operating costs and expenses 57 Equity in earnings of operating affiliate 3 Operating earnings $ 280 Three months ended June 30, 2019 Net sales $ 473 $ 433 $ 369 $ 126 $ 101 $ 1,502 Cost of sales 300 251 277 94 81 1,003 Gross margin $ 173 $ 182 $ 92 $ 32 $ 20 499 Total other operating costs and expenses 25 Equity in earnings of operating affiliate 1 Operating earnings $ 475 Ammonia Granular Urea (1) UAN (1) AN (1) Other (1) Consolidated (in millions) Six months ended June 30, 2020 Net sales $ 557 $ 666 $ 543 $ 234 $ 175 $ 2,175 Cost of sales 435 429 438 194 141 1,637 Gross margin $ 122 $ 237 $ 105 $ 40 $ 34 538 Total other operating costs and expenses 117 Equity in earnings of operating affiliate 6 Operating earnings $ 427 Six months ended June 30, 2019 Net sales $ 660 $ 776 $ 625 $ 253 $ 189 $ 2,503 Cost of sales 466 479 472 208 159 1,784 Gross margin $ 194 $ 297 $ 153 $ 45 $ 30 719 Total other operating costs and expenses 87 Equity in earnings of operating affiliate 8 Operating earnings $ 640 _______________________________________________________________________________ (1) The cost of the products that are upgraded into other products is transferred at cost into the upgraded product results. |
New Accounting Standards (Polic
New Accounting Standards (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Recently Adopted Pronouncements | On January 1, 2020, we adopted Accounting Standards Update (ASU) No. 2018-15—Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This ASU does not affect the accounting for the service element of a hosting arrangement that is a service contract. We adopted this ASU prospectively. The adoption of this ASU did not have a material impact on our consolidated financial statements; however, it could have an effect on future financial results if significant new software involving a cloud computing agreement is implemented. In this case, a certain portion of the implementation costs would be deferred and expensed over the term of the cloud computing arrangement. In December 2019, the Financial Accounting Standards Board (FASB) issued ASU No. 2019-12—Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU adds new guidance to simplify accounting for income taxes, changes the accounting for certain income tax transactions and makes minor improvements to the codification. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption of this ASU is permitted. We do not expect the adoption of this ASU will have a material effect on our consolidated financial statements. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes our revenue by product and by geography (based on destination of our shipment) for the three and six months ended June 30, 2020 and 2019: Ammonia Granular Urea UAN AN Other Total (in millions) Three months ended June 30, 2020 North America $ 344 $ 312 $ 288 $ 51 $ 56 $ 1,051 Europe and other 20 17 20 67 29 153 Total revenue $ 364 $ 329 $ 308 $ 118 $ 85 $ 1,204 Three months ended June 30, 2019 North America $ 443 $ 413 $ 346 $ 54 $ 68 $ 1,324 Europe and other 30 20 23 72 33 178 Total revenue $ 473 $ 433 $ 369 $ 126 $ 101 $ 1,502 Ammonia Granular UAN AN Other Total (in millions) Six months ended June 30, 2020 North America $ 498 $ 643 $ 518 $ 97 $ 115 $ 1,871 Europe and other 59 23 25 137 60 304 Total revenue $ 557 $ 666 $ 543 $ 234 $ 175 $ 2,175 Six months ended June 30, 2019 North America $ 603 $ 748 $ 588 $ 100 $ 127 $ 2,166 Europe and other 57 28 37 153 62 337 Total revenue $ 660 $ 776 $ 625 $ 253 $ 189 $ 2,503 |
Net Earnings Per Share (Tables)
Net Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Summary of net earnings per share | Net earnings per share were computed as follows: Three months ended Six months ended 2020 2019 2020 2019 (in millions, except per share amounts) Net earnings attributable to common stockholders $ 190 $ 283 $ 258 $ 373 Basic earnings per common share: Weighted-average common shares outstanding 214.5 221.1 215.2 222.2 Net earnings attributable to common stockholders $ 0.89 $ 1.28 $ 1.20 $ 1.68 Diluted earnings per common share: Weighted-average common shares outstanding 214.5 221.1 215.2 222.2 Dilutive common shares—stock-based awards 0.1 1.2 0.4 1.2 Diluted weighted-average shares outstanding 214.6 222.3 215.6 223.4 Net earnings attributable to common stockholders $ 0.89 $ 1.28 $ 1.20 $ 1.67 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories consist of the following: June 30, December 31, 2019 (in millions) Finished goods $ 229 $ 311 Raw materials, spare parts and supplies 44 40 Total inventories $ 273 $ 351 |
Property, Plant and Equipment_2
Property, Plant and Equipment-Net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment, Net [Abstract] | |
Components of property, plant and equipment-net | Property, plant and equipment—net consists of the following: June 30, December 31, 2019 (in millions) Land $ 70 $ 71 Machinery and equipment 12,322 12,338 Buildings and improvements 889 890 Construction in progress 240 236 Property, plant and equipment (1) 13,521 13,535 Less: Accumulated depreciation and amortization 5,730 5,365 Property, plant and equipment—net $ 7,791 $ 8,170 _______________________________________________________________________________ |
Summary of plant turnaround activity | The following is a summary of capitalized plant turnaround costs: Six months ended 2020 2019 (in millions) Net capitalized turnaround costs: Beginning balance $ 246 $ 252 Additions 14 22 Depreciation (52) (57) Effect of exchange rate changes (4) 2 Ending balance $ 204 $ 219 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of carrying amount of goodwill by business segment | The following table shows the carrying amount of goodwill by reportable segment as of June 30, 2020 and December 31, 2019: Ammonia Granular Urea UAN AN Other Total (in millions) Balance as of December 31, 2019 $ 587 $ 828 $ 576 $ 302 $ 72 $ 2,365 Effect of exchange rate changes (1) (1) — (15) (2) (19) Balance as of June 30, 2020 $ 586 $ 827 $ 576 $ 287 $ 70 $ 2,346 |
Schedule of the identifiable intangibles and their carrying values presented in other noncurrent assets on consolidated balance sheet | All of our identifiable intangible assets have definite lives and are presented in other assets on our consolidated balance sheets at gross carrying amount, net of accumulated amortization, as follows: June 30, 2020 December 31, 2019 Gross Accumulated Net Gross Accumulated Net (in millions) Customer relationships $ 125 $ (47) $ 78 $ 131 $ (45) $ 86 Trade names 30 (7) 23 31 (7) 24 Total intangible assets $ 155 $ (54) $ 101 $ 162 $ (52) $ 110 |
Schedule of estimated future amortization expense | Total estimated amortization expense for the remainder of 2020 and each of the five succeeding fiscal years is as follows: Estimated (in millions) Remainder of 2020 $ 4 2021 8 2022 8 2023 8 2024 8 2025 8 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of cash and cash equivalents and other investments reconciliation from adjusted cost to fair value | Our cash and cash equivalents and other investments consist of the following: June 30, 2020 Cost Basis Unrealized Unrealized Fair Value (in millions) Cash $ 79 $ — $ — $ 79 Cash equivalents: U.S. and Canadian government obligations 464 — — 464 Other debt securities 20 — — 20 Total cash and cash equivalents $ 563 $ — $ — $ 563 Nonqualified employee benefit trusts 16 3 — 19 December 31, 2019 Cost Basis Unrealized Unrealized Fair Value (in millions) Cash $ 59 $ — $ — $ 59 Cash equivalents: U.S. and Canadian government obligations 211 — — 211 Other debt securities 17 — — 17 Total cash and cash equivalents $ 287 $ — $ — $ 287 Nonqualified employee benefit trusts 17 2 — 19 |
Schedule of assets and liabilities measured at fair value on a recurring basis | The following tables present assets and liabilities included in our consolidated balance sheets as of June 30, 2020 and December 31, 2019 that are recognized at fair value on a recurring basis, and indicate the fair value hierarchy utilized to determine such fair value: June 30, 2020 Total Fair Quoted Prices Significant Significant (in millions) Cash equivalents $ 484 $ 484 $ — $ — Nonqualified employee benefit trusts 19 19 — — Embedded derivative liability (21) — (21) — December 31, 2019 Total Fair Quoted Prices Significant Significant (in millions) Cash equivalents $ 228 $ 228 $ — $ — Nonqualified employee benefit trusts 19 19 — — Derivative liabilities (12) — (12) — Embedded derivative liability (20) — (20) — |
Schedule of carrying amounts and estimated fair values of financial instruments | The carrying amount and estimated fair value of our financial instruments are as follows: June 30, 2020 December 31, 2019 Carrying Fair Value Carrying Fair Value (in millions) Long-term debt $ 3,959 $ 4,282 $ 3,957 $ 4,295 |
Interest Expense (Tables)
Interest Expense (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Interest Expense [Abstract] | |
Schedule of interest expense | Interest Expense Details of interest expense are as follows: Three months ended Six months ended 2020 2019 2020 2019 (in millions) Interest on borrowings (1) $ 47 $ 57 $ 93 $ 114 Fees on financing agreements (1) 2 3 4 6 Interest on tax liabilities (2) — — (4) — Interest capitalized — (1) — (1) Total interest expense $ 49 $ 59 $ 93 $ 119 _______________________________________________________________________________ (1) See Note 12—Financing Agreements for additional information. (2) Interest on tax liabilities for the six months ended June 30, 2020 consists of a reduction in interest accrued on the reserve for unrecognized tax benefits. |
Financing Agreements (Tables)
Financing Agreements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Components of long-term debt | Long-term debt presented on our consolidated balance sheets as of June 30, 2020 and December 31, 2019 consisted of the following debt securities issued by CF Industries: Effective Interest Rate June 30, 2020 December 31, 2019 Principal Carrying Amount (1) Principal Carrying Amount (1) (in millions) Public Senior Notes: 3.450% due June 2023 3.562% $ 750 $ 748 $ 750 $ 747 5.150% due March 2034 5.279% 750 740 750 740 4.950% due June 2043 5.031% 750 742 750 742 5.375% due March 2044 5.465% 750 741 750 741 Senior Secured Notes: 3.400% due December 2021 3.782% 250 249 250 248 4.500% due December 2026 4.759% 750 739 750 739 Total long-term debt $ 4,000 $ 3,959 $ 4,000 $ 3,957 _______________________________________________________________________________ (1) Carrying amount is net of unamortized debt discount and deferred debt issuance costs. Total unamortized debt discount was $9 million and $10 million as of June 30, 2020 and December 31, 2019, respectively, and total deferred debt issuance costs were $32 million and |
Noncontrolling Interest (Tables
Noncontrolling Interest (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest | 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. 2020 2019 (in millions) Noncontrolling interest: Balance as of January 1 $ 2,740 $ 2,773 Earnings attributable to noncontrolling interest 51 65 Declaration of distributions payable (88) (86) Balance as of June 30 $ 2,703 $ 2,752 Distributions payable to noncontrolling interest: Balance as of January 1 $ — $ — Declaration of distributions payable 88 86 Distributions to noncontrolling interest (88) (86) Balance as of June 30 $ — $ — |
Schedule of interest expense | Interest Expense Details of interest expense are as follows: Three months ended Six months ended 2020 2019 2020 2019 (in millions) Interest on borrowings (1) $ 47 $ 57 $ 93 $ 114 Fees on financing agreements (1) 2 3 4 6 Interest on tax liabilities (2) — — (4) — Interest capitalized — (1) — (1) Total interest expense $ 49 $ 59 $ 93 $ 119 _______________________________________________________________________________ (1) See Note 12—Financing Agreements for additional information. (2) Interest on tax liabilities for the six months ended June 30, 2020 consists of a reduction in interest accrued on the reserve for unrecognized tax benefits. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Class of Treasury Stock | The following table summarizes the share repurchases under the 2019 Share Repurchase Program. Shares Amounts (in millions) Shares repurchased in 2019: First quarter 1.5 $ 60 Second quarter 2.7 118 Third quarter 1.5 72 Fourth quarter 1.9 87 Total shares repurchased in 2019 7.6 337 Shares repurchased in 2020: First quarter 2.6 100 Second quarter — — Total shares repurchased in 2020 2.6 100 Shares repurchased as of June 30, 2020 10.2 $ 437 |
Schedule of changes to AOCI | Changes to accumulated other comprehensive income (loss) are as follows: Foreign Unrealized Defined Accumulated (in millions) Balance as of December 31, 2018 $ (250) $ 5 $ (126) $ (371) Gain arising during the period — — 5 5 Reclassification to earnings (1) — — (1) (1) Effect of exchange rate changes and deferred taxes 24 — (1) 23 Balance as of June 30, 2019 $ (226) $ 5 $ (123) $ (344) Balance as of December 31, 2019 $ (188) $ 5 $ (183) $ (366) Gain arising during the period — — 1 1 Reclassification to earnings (1) — — 3 3 Effect of exchange rate changes and deferred taxes (71) — 7 (64) Balance as of June 30, 2020 $ (259) $ 5 $ (172) $ (426) ____________________________________________________________________________ (1) Reclassifications out of accumulated other comprehensive income (loss) to earnings during the three and six months ended June 30, 2020 and 2019 were not material. |
Segment Disclosures (Tables)
Segment Disclosures (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Summary of segment data for sales, cost of sales and gross margin | Segment data for sales, cost of sales and gross margin for the three and six months ended June 30, 2020 and 2019 are presented in the tables below. Ammonia Granular Urea (1) UAN (1) AN (1) Other (1) Consolidated (in millions) Three months ended June 30, 2020 Net sales $ 364 $ 329 $ 308 $ 118 $ 85 $ 1,204 Cost of sales 262 205 245 91 67 870 Gross margin $ 102 $ 124 $ 63 $ 27 $ 18 334 Total other operating costs and expenses 57 Equity in earnings of operating affiliate 3 Operating earnings $ 280 Three months ended June 30, 2019 Net sales $ 473 $ 433 $ 369 $ 126 $ 101 $ 1,502 Cost of sales 300 251 277 94 81 1,003 Gross margin $ 173 $ 182 $ 92 $ 32 $ 20 499 Total other operating costs and expenses 25 Equity in earnings of operating affiliate 1 Operating earnings $ 475 Ammonia Granular Urea (1) UAN (1) AN (1) Other (1) Consolidated (in millions) Six months ended June 30, 2020 Net sales $ 557 $ 666 $ 543 $ 234 $ 175 $ 2,175 Cost of sales 435 429 438 194 141 1,637 Gross margin $ 122 $ 237 $ 105 $ 40 $ 34 538 Total other operating costs and expenses 117 Equity in earnings of operating affiliate 6 Operating earnings $ 427 Six months ended June 30, 2019 Net sales $ 660 $ 776 $ 625 $ 253 $ 189 $ 2,503 Cost of sales 466 479 472 208 159 1,784 Gross margin $ 194 $ 297 $ 153 $ 45 $ 30 719 Total other operating costs and expenses 87 Equity in earnings of operating affiliate 8 Operating earnings $ 640 _______________________________________________________________________________ (1) The cost of the products that are upgraded into other products is transferred at cost into the upgraded product results. |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |||||
Net sales | $ 1,204 | $ 1,502 | $ 2,175 | $ 2,503 | |
Customer advances | $ 8 | $ 8 | $ 119 |
Revenue Recognition - Revenue b
Revenue Recognition - Revenue by Product and by Geography (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 1,204 | $ 1,502 | $ 2,175 | $ 2,503 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,051 | 1,324 | 1,871 | 2,166 |
Europe and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 153 | 178 | 304 | 337 |
Ammonia | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 364 | 473 | 557 | 660 |
Ammonia | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 344 | 443 | 498 | 603 |
Ammonia | Europe and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 20 | 30 | 59 | 57 |
Granular Urea | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 329 | 433 | 666 | 776 |
Granular Urea | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 312 | 413 | 643 | 748 |
Granular Urea | Europe and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 17 | 20 | 23 | 28 |
UAN | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 308 | 369 | 543 | 625 |
UAN | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 288 | 346 | 518 | 588 |
UAN | Europe and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 20 | 23 | 25 | 37 |
AN | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 118 | 126 | 234 | 253 |
AN | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 51 | 54 | 97 | 100 |
AN | Europe and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 67 | 72 | 137 | 153 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 85 | 101 | 175 | 189 |
Other | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 56 | 68 | 115 | 127 |
Other | Europe and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 29 | $ 33 | $ 60 | $ 62 |
Revenue Recognition - Performan
Revenue Recognition - Performance Obligations (Details) $ in Millions | Jun. 30, 2020USD ($) |
Revenue from Contract with Customer [Abstract] | |
Amount of remaining performance obligation | $ 980 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Performance Obligation, description of returns and other similar obligations, unfulfilled minimum contractual right of payment | $ 230 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Percent | 19.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Percent | 46.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Percent | 46.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Percent | 35.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Percent | 35.00% |
Net Earnings Per Share (Details
Net Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Net earnings attributable to common stockholders | $ 190 | $ 283 | $ 258 | $ 373 |
Basic earnings per common share: | ||||
Weighted-average common shares outstanding | 214.5 | 221.1 | 215.2 | 222.2 |
Net earnings attributable to common stockholders (in dollars per share) | $ 0.89 | $ 1.28 | $ 1.20 | $ 1.68 |
Diluted earnings per common share: | ||||
Weighted-average common shares outstanding | 214.5 | 221.1 | 215.2 | 222.2 |
Dilutive common shares—stock options (in shares) | 0.1 | 1.2 | 0.4 | 1.2 |
Diluted weighted-average shares outstanding | 214.6 | 222.3 | 215.6 | 223.4 |
Net earnings attributable to common stockholders diluted (in dollars per share) | $ 0.89 | $ 1.28 | $ 1.20 | $ 1.67 |
Antidilutive securities excluded from computation of EPS (in shares) | 4.7 | 1.5 | 3.4 | 1.5 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 229 | $ 311 |
Raw materials, spare parts and supplies | 44 | 40 |
Total inventories | $ 273 | $ 351 |
Property, Plant and Equipment_3
Property, Plant and Equipment-Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment-Net | ||||||
Gross property plant and equipment | $ 13,521 | $ 13,521 | $ 13,535 | |||
Less: Accumulated depreciation and amortization | 5,730 | 5,730 | 5,365 | |||
Net property, plant and equipment | 7,791 | 7,791 | 8,170 | |||
Construction in progress expenditures incurred but not yet paid | 42 | $ 43 | 42 | $ 48 | ||
Depreciation and amortization | 235 | $ 247 | 443 | 430 | ||
Changes in plant turnaround activity | ||||||
Proceeds from Sale of Other Assets | 55 | |||||
Gain (Loss) on Disposition of Property Plant Equipment | 45 | (9) | 45 | |||
Land | ||||||
Property, Plant and Equipment-Net | ||||||
Gross property plant and equipment | 70 | 70 | 71 | |||
Machinery and equipment | ||||||
Property, Plant and Equipment-Net | ||||||
Gross property plant and equipment | 12,322 | 12,322 | 12,338 | |||
Changes in plant turnaround activity | ||||||
Balance at the beginning of the period | 246 | 252 | 252 | |||
Additions | 14 | 22 | ||||
Depreciation | (52) | (57) | ||||
Effect of exchange rate changes | (4) | 2 | ||||
Balance at the end of the period | 204 | $ 219 | 204 | $ 219 | 246 | $ 252 |
Buildings and improvements | ||||||
Property, Plant and Equipment-Net | ||||||
Gross property plant and equipment | 889 | 889 | 890 | |||
Construction in progress | ||||||
Property, Plant and Equipment-Net | ||||||
Gross property plant and equipment | $ 240 | $ 240 | $ 236 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Goodwill | |
Goodwill, Beginning Balance | $ 2,365 |
Effect of exchange rate changes | (19) |
Goodwill, Ending Balance | 2,346 |
Ammonia | |
Goodwill | |
Goodwill, Beginning Balance | 587 |
Effect of exchange rate changes | (1) |
Goodwill, Ending Balance | 586 |
Granular Urea | |
Goodwill | |
Goodwill, Beginning Balance | 828 |
Effect of exchange rate changes | (1) |
Goodwill, Ending Balance | 827 |
UAN | |
Goodwill | |
Goodwill, Beginning Balance | 576 |
Effect of exchange rate changes | 0 |
Goodwill, Ending Balance | 576 |
AN | |
Goodwill | |
Goodwill, Beginning Balance | 302 |
Effect of exchange rate changes | (15) |
Goodwill, Ending Balance | 287 |
Other | |
Goodwill | |
Goodwill, Beginning Balance | 72 |
Effect of exchange rate changes | (2) |
Goodwill, Ending Balance | $ 70 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Details 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Identifiable intangibles | |||||
Gross Carrying Amount | $ 155 | $ 155 | $ 162 | ||
Accumulated Amortization | (54) | (54) | (52) | ||
Net | 101 | $ 101 | 110 | ||
Finite-Lived Intangible Asset, Useful Life | 20 years | ||||
Amortization expense | 2 | $ 2 | $ 4 | $ 4 | |
Total estimated amortization expense for the five succeeding fiscal years | |||||
Remainder of 2020 | 4 | 4 | |||
2021 | 8 | 8 | |||
2022 | 8 | 8 | |||
2023 | 8 | 8 | |||
2024 | 8 | 8 | |||
2025 | 8 | 8 | |||
Customer relationships | |||||
Identifiable intangibles | |||||
Gross Carrying Amount | 125 | 125 | 131 | ||
Accumulated Amortization | (47) | (47) | (45) | ||
Net | 78 | 78 | 86 | ||
Trade names | |||||
Identifiable intangibles | |||||
Gross Carrying Amount | 30 | 30 | 31 | ||
Accumulated Amortization | (7) | (7) | (7) | ||
Net | $ 23 | $ 23 | $ 24 |
Equity Method Investment-Narrat
Equity Method Investment-Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Equity method investments | ||||
Obligation to purchase ammonia (as a percent) | 50.00% | |||
Operating equity method investments | Maximum | Property, plant and equipment | ||||
Equity method investments | ||||
Number of years that the increased basis for property, plant and equipment and identifiable intangibles will be amortized | 13 years | |||
Point Lisas Nitrogen Limited (PLNL) | Operating equity method investments | ||||
Equity method investments | ||||
Ownership interest (as a percent) | 50.00% | 50.00% | ||
Equity Method Investment | $ 94 | $ 94 | ||
Carrying value of investments in excess of the entity's share of the affiliates' book value | 44 | 44 | ||
Purchases of ammonia from PLNL | $ 13 | $ 12 | $ 23 | $ 34 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Schedule of Investments [Line Items] | ||
Cash | $ 79 | $ 59 |
Cash equivalents: | ||
Cash and cash equivalents, adjusted cost | 563 | 287 |
Cash and cash equivalents, fair value disclosure | 563 | 287 |
U.S. and Canadian government obligations | ||
Cash equivalents: | ||
Cash equivalents, adjusted cost | 464 | 211 |
Cash equivalents, fair value | 464 | 211 |
Other debt securities | ||
Cash equivalents: | ||
Cash equivalents, adjusted cost | 20 | 17 |
Cash equivalents, fair value | 20 | 17 |
Nonqualified employee benefit trusts | ||
Cash equivalents: | ||
Available-for-sale securities, adjusted cost | 16 | 17 |
Available-for-sale securities, gross unrealized gain | 3 | 2 |
Available-for-sale securities, gross unrealized loss | 0 | 0 |
Available-for-sale securities, fair value | $ 19 | $ 19 |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2020 | Jun. 30, 2019 | |
Assets and liabilities measured at fair value on a recurring basis | ||||||
Payments for Strategic Venture Compliance | $ 5 | $ 5 | $ 5 | $ 5 | $ 5 | |
Unrealized Loss on Embedded Derivative Instrument | 1 | $ 2 | ||||
Estimate of Fair Value Measurement | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Fair value of long-term debt, including current portion | 4,295 | 4,282 | ||||
Reported Value Measurement | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Fair value of long-term debt, including current portion | 3,957 | 3,959 | ||||
Recurring basis | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Cash equivalents | 228 | 484 | ||||
Nonqualified employee benefit trusts | 19 | 19 | ||||
Derivative Liability | 12 | |||||
Embedded derivative liability | (20) | (21) | ||||
Recurring basis | Quoted Prices in Active Markets (Level 1) | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Cash equivalents | 228 | 484 | ||||
Nonqualified employee benefit trusts | 19 | 19 | ||||
Derivative Liability | 0 | |||||
Embedded derivative liability | 0 | 0 | ||||
Recurring basis | Significant Other Observable Inputs (Level 2) | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Cash equivalents | 0 | 0 | ||||
Nonqualified employee benefit trusts | 0 | 0 | ||||
Derivative Liability | 12 | |||||
Embedded derivative liability | (20) | (21) | ||||
Recurring basis | Fair Value, Inputs (Level 3) | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Cash equivalents | 0 | 0 | ||||
Nonqualified employee benefit trusts | 0 | 0 | ||||
Derivative Liability | 0 | |||||
Embedded derivative liability | $ 0 | $ 0 |
Income Taxes Incomes Taxes (Det
Income Taxes Incomes Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jul. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||||
Effective Income Tax Rate Reconciliation, Percent | 13.40% | 24.20% | 13.10% | 17.70% | |
Effective Income Tax Rate Reconciliation, Tax Settlement, Amount | $ 19 | $ 25 | |||
Income tax provision (benefit) | (33) | $ (102) | (46) | $ (94) | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest | 251 | 422 | 355 | 532 | |
Less: Net earnings attributable to noncontrolling interest | 28 | $ 37 | 51 | $ 65 | |
Income Tax Examination, Liability (Refund) Adjustment from Settlement with Taxing Authority | 108 | 108 | |||
Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities | 12 | 19 | |||
Unrecognized Tax Benefits, Decrease Resulting from Prior Period Tax Positions | 7 | ||||
Income Tax Examination, Liability (Refund) Adjustment from Settlement with Taxing Authority, Withholding Tax Matter | 40 | 40 | |||
Income Tax Examination, Liability (Refund) Adjustment from Settlement with Taxing Authority, Income Tax Matter | (68) | $ (68) | |||
Income Tax Examination, Interest Income, Net of Tax | $ 13 | ||||
Effective Income Tax Rate Reconciliation, period increase/(decrease) due to noncontrolling interest | 1.60% | 2.30% | 2.10% | 2.40% | |
Foreign Currency Translation Adjustment | |||||
Operating Loss Carryforwards [Line Items] | |||||
Other Comprehensive Income Pension and Other Postretirement Benefit Plans Arising During Period Before Tax | $ 0 | $ 0 | |||
Domestic Tax Authority [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Income tax provision (benefit) | $ 16 | ||||
Income Tax Examination, Interest Income | $ 16 | ||||
LOUISIANA | State and Local Jurisdiction | |||||
Operating Loss Carryforwards [Line Items] | |||||
Effective Income Tax Rate Reconciliation, Tax Credit, Investment, Amount | $ (30) | ||||
Subsequent Event [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Income Tax Examination, Liability (Refund) Adjustment from Settlement with Taxing Authority, Withholding Tax Matter | $ 2 |
Interest Expense (Details)
Interest Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Interest Expense [Abstract] | ||||
Interest on borrowings(1) | $ 47 | $ 57 | $ 93 | $ 114 |
Fees on financing agreements(1) | 2 | 3 | 4 | 6 |
Interest on tax liabilities(2) | 0 | 0 | (4) | 0 |
Interest Costs Capitalized | 0 | (1) | 0 | (1) |
Interest expense | $ 49 | $ 59 | $ 93 | $ 119 |
Financing Agreements (Details)
Financing Agreements (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Financing agreements | ||
Line of Credit Facility, Maximum Amount Outstanding During Period | $ 500 | |
Line of Credit Facility, Interest Rate During Period | 2.05% | |
Debt Instruments | ||
Principal | $ 4,000 | $ 4,000 |
Carrying amount | 3,959 | 3,957 |
Long-term debt | 3,959 | 3,957 |
Line of Credit Facility, Fair Value of Amount Outstanding | 500 | |
CF Industries | ||
Debt Instruments | ||
Unamortized debt discount | 9 | 10 |
Total deferred debt issuance costs | $ 32 | $ 33 |
CF Industries | Senior Notes | Senior notes 3.450% due 2023 | ||
Financing agreements | ||
Interest rate (as a percent) | 3.45% | 3.45% |
Debt Instruments | ||
Effective Interest Rate (percent) | 3.562% | 3.562% |
Principal | $ 750 | $ 750 |
Carrying amount | $ 748 | $ 747 |
CF Industries | Senior Notes | Senior notes 5.150% due 2034 | ||
Financing agreements | ||
Interest rate (as a percent) | 5.15% | 5.15% |
Debt Instruments | ||
Effective Interest Rate (percent) | 5.279% | 5.279% |
Principal | $ 750 | $ 750 |
Carrying amount | $ 740 | $ 740 |
CF Industries | Senior Notes | Senior notes 4.950% due 2043 | ||
Financing agreements | ||
Interest rate (as a percent) | 4.95% | 4.95% |
Debt Instruments | ||
Effective Interest Rate (percent) | 5.031% | 5.031% |
Principal | $ 750 | $ 750 |
Carrying amount | $ 742 | $ 742 |
CF Industries | Senior Notes | Senior notes 5.375% due 2044 | ||
Financing agreements | ||
Interest rate (as a percent) | 5.375% | 5.375% |
Debt Instruments | ||
Effective Interest Rate (percent) | 5.465% | 5.465% |
Principal | $ 750 | $ 750 |
Carrying amount | $ 741 | $ 741 |
CF Industries | Senior Notes | Senior Notes 3.400% Due 2021 | ||
Financing agreements | ||
Interest rate (as a percent) | 3.40% | 3.40% |
Debt Instruments | ||
Effective Interest Rate (percent) | 3.782% | 3.782% |
Principal | $ 250 | $ 250 |
Carrying amount | $ 249 | $ 248 |
CF Industries | Senior Notes | Senior Notes 4.500% Due 2026 | ||
Financing agreements | ||
Interest rate (as a percent) | 4.50% | 4.50% |
Debt Instruments | ||
Effective Interest Rate (percent) | 4.759% | 4.759% |
Principal | $ 750 | $ 750 |
Carrying amount | $ 739 | $ 739 |
Financing Agreements - Narrativ
Financing Agreements - Narrative (Details) - USD ($) | Dec. 13, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 05, 2019 | Nov. 13, 2019 | Jul. 29, 2016 |
Financing agreements | ||||||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 500,000,000 | |||||
Letter of Credit | Letter of Credit | ||||||
Financing agreements | ||||||
Maximum borrowing capacity | $ 145,000,000 | |||||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 126,000,000 | |||||
CF Industries | Unsecured Senior Notes 7.125 Percent Due 2020 | Senior Notes | ||||||
Financing agreements | ||||||
Interest rate (as a percent) | 7.125% | |||||
Debt Instrument, Face Amount | $ 500,000,000 | |||||
CF Industries | Credit Agreement | ||||||
Financing agreements | ||||||
Available credit | 750,000,000 | |||||
Outstanding letters of credit | $ 0 | |||||
Long-term Line of Credit | $ 0 | |||||
CF Industries | Amendment No. 4 to the Third Amended and Restated Revolving Credit Agreement | Letter of Credit | Revolving Credit Facility | ||||||
Financing agreements | ||||||
Maximum borrowing capacity | $ 750,000,000 | |||||
CF Industries | July 2016 Credit Agreement Amendment | Letter of Credit | Letter of Credit | ||||||
Financing agreements | ||||||
Maximum borrowing capacity | $ 125,000,000 | |||||
CF Industries | Senior Notes 3.400% Due 2021 | Senior Notes | ||||||
Financing agreements | ||||||
Interest rate (as a percent) | 3.40% | 3.40% | ||||
Debt Instrument, Face Amount | $ 500,000,000 | |||||
Early Repayment of Senior Debt | $ 250,000,000 | |||||
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed | 50.00% |
Noncontrolling Interest (Detail
Noncontrolling Interest (Details) - CF Industries Nitrogen, LLC - T | Jun. 30, 2020 | Feb. 01, 2016 |
Noncontrolling interest | ||
Maximum Annual Granular Urea Tons Eligible for Purchase | 1,100,000 | |
Maximum Annual UAN Tons Eligible for Purchase | 580,000 | |
CHS Inc. | ||
Noncontrolling interest | ||
Percentage of ownership interest held by outside investors | 11.00% |
Noncontrolling Interest (Deta_2
Noncontrolling Interest (Details 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Noncontrolling interest | |||||
Beginning balance | $ 2,703 | $ 2,740 | |||
Earnings attributable to noncontrolling interests | $ 28 | $ 37 | 51 | $ 65 | |
Distribution declared to noncontrolling interest | (88) | (86) | |||
Ending balance | 2,703 | 2,703 | |||
CF Industries Nitrogen, LLC | |||||
Noncontrolling interest | |||||
Beginning balance | 2,703 | 2,740 | 2,773 | ||
Earnings attributable to noncontrolling interests | 51 | 65 | |||
Distribution declared to noncontrolling interest | (88) | (86) | |||
Ending balance | 2,703 | 2,752 | 2,703 | 2,752 | |
Distributions payable to noncontrolling interests: | |||||
Beginning balance | 0 | 0 | 0 | ||
Declaration of distributions payable | 88 | 86 | |||
Distributions to noncontrolling interest | (88) | (86) | |||
Ending balance | $ 0 | $ 0 | $ 0 | $ 0 | |
CF Industries Nitrogen, LLC | Subsequent Event [Member] | |||||
Noncontrolling interest | |||||
Distribution declared to noncontrolling interest | $ (86) |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Changes to accumulated other comprehensive income (loss) | ||
Balance at the beginning of the period | $ (366) | |
Balance at the end of the period | (426) | |
Foreign Currency Translation Adjustment | ||
Changes to accumulated other comprehensive income (loss) | ||
Balance at the beginning of the period | (188) | $ (250) |
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 0 | 0 |
Effect of exchange rate changes and deferred taxes | (71) | 24 |
Balance at the end of the period | (259) | (226) |
Other Comprehensive Income Pension and Other Postretirement Benefit Plans Arising During Period Before Tax | 0 | 0 |
Unrealized Gain on Derivatives | ||
Changes to accumulated other comprehensive income (loss) | ||
Balance at the beginning of the period | 5 | 5 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 0 | 0 |
Effect of exchange rate changes and deferred taxes | 0 | 0 |
Balance at the end of the period | 5 | 5 |
Other Comprehensive Income Pension and Other Postretirement Benefit Plans Arising During Period Before Tax | 0 | 0 |
Defined Benefit Plans | ||
Changes to accumulated other comprehensive income (loss) | ||
Balance at the beginning of the period | (183) | (126) |
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 3 | (1) |
Effect of exchange rate changes and deferred taxes | 7 | (1) |
Balance at the end of the period | (172) | (123) |
Other Comprehensive Income Pension and Other Postretirement Benefit Plans Arising During Period Before Tax | (1) | (5) |
Accumulated Other Comprehensive Loss | ||
Changes to accumulated other comprehensive income (loss) | ||
Balance at the beginning of the period | (371) | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | (3) | 1 |
Effect of exchange rate changes and deferred taxes | (64) | 23 |
Balance at the end of the period | (426) | (344) |
Other Comprehensive Income Pension and Other Postretirement Benefit Plans Arising During Period Before Tax | $ (1) | $ (5) |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | 18 Months Ended | |||||||||
Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2020 | Feb. 13, 2019 | Aug. 01, 2018 | |
Equity [Abstract] | |||||||||||||
Stock Repurchase Program, Authorized Amount | $ 1,000 | $ 500 | |||||||||||
Stock Repurchased and Retired During Period, Shares | 0 | 2,600 | 1,900 | 1,500 | 2,700 | 1,500 | 2,600 | 4,200 | 7,600 | 10,900 | 10,200 | ||
Stock Repurchased and Retired During Period, Value | $ 0 | $ 100 | $ 87 | $ 72 | $ 118 | $ 60 | $ 100 | $ 178 | $ 337 | $ 500 | $ 437 | ||
stock repurchase accrued but unpaid | $ 2 | $ 2 | $ 33 | ||||||||||
Treasury Stock, Shares, Retired | 2,600 | 10,900 |
Contingencies (Details)
Contingencies (Details) | Apr. 17, 2015EntityInsurance_companyPeoplePlaintiff | Apr. 17, 2013People | Mar. 31, 2016mine | Jun. 30, 2020Litigation_case |
Pending Litigation | ||||
Loss Contingencies [Line Items] | ||||
Number of people killed | 15 | |||
Number of people injured | 200 | |||
Number of plaintiffs | Plaintiff | 400 | |||
Number of entities that filed claims | Entity | 9 | |||
Number of people that filed claims | 325 | |||
Number of insurance companies that filed claims | Insurance_company | 80 | |||
Settled Litigation | ||||
Loss Contingencies [Line Items] | ||||
Loss Contingency, Claims Settled, Number | Litigation_case | 300 | |||
IDAHO | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, number of mines | mine | 17 |
Segment Disclosures (Details)
Segment Disclosures (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment data | ||||
Net sales | $ 1,204 | $ 1,502 | $ 2,175 | $ 2,503 |
Cost of sales | 870 | 1,003 | 1,637 | 1,784 |
Gross margin | 334 | 499 | 538 | 719 |
Total other operating costs and expenses | 57 | 25 | 117 | 87 |
Equity in earnings of operating affiliate | 3 | 1 | 6 | 8 |
Operating earnings | 280 | 475 | 427 | 640 |
Ammonia | ||||
Segment data | ||||
Net sales | 364 | 473 | 557 | 660 |
Granular Urea | ||||
Segment data | ||||
Net sales | 329 | 433 | 666 | 776 |
UAN | ||||
Segment data | ||||
Net sales | 308 | 369 | 543 | 625 |
AN | ||||
Segment data | ||||
Net sales | 118 | 126 | 234 | 253 |
Operating Segments | Ammonia | ||||
Segment data | ||||
Net sales | 364 | 473 | 557 | 660 |
Cost of sales | 262 | 300 | 435 | 466 |
Gross margin | 102 | 173 | 122 | 194 |
Operating Segments | Granular Urea | ||||
Segment data | ||||
Net sales | 329 | 433 | 666 | 776 |
Cost of sales | 205 | 251 | 429 | 479 |
Gross margin | 124 | 182 | 237 | 297 |
Operating Segments | UAN | ||||
Segment data | ||||
Net sales | 308 | 369 | 543 | 625 |
Cost of sales | 245 | 277 | 438 | 472 |
Gross margin | 63 | 92 | 105 | 153 |
Operating Segments | AN | ||||
Segment data | ||||
Net sales | 118 | 126 | 234 | 253 |
Cost of sales | 91 | 94 | 194 | 208 |
Gross margin | 27 | 32 | 40 | 45 |
Operating Segments | Other | ||||
Segment data | ||||
Net sales | 85 | 101 | 175 | 189 |
Cost of sales | 67 | 81 | 141 | 159 |
Gross margin | $ 18 | $ 20 | $ 34 | $ 30 |