Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 02, 2021 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
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 $0.01 per share | |
Trading Symbol | CF | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 215,099,967 | |
Entity Central Index Key | 0001324404 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Net sales | $ 1,588 | $ 1,204 | $ 2,636 | $ 2,175 |
Cost of sales | 1,085 | 870 | 1,844 | 1,637 |
Gross margin | 503 | 334 | 792 | 538 |
Selling, general and administrative expenses | 60 | 51 | 115 | 105 |
Other operating—net | 4 | 6 | 2 | 12 |
Total other operating costs and expenses | 64 | 57 | 117 | 117 |
Equity in earnings of operating affiliate | 11 | 3 | 22 | 6 |
Operating earnings | 450 | 280 | 697 | 427 |
Interest expense | 46 | 49 | 94 | 93 |
Interest income | 0 | (17) | 0 | (18) |
Loss on debt extinguishment | 0 | 0 | 6 | 0 |
Other non-operating—net | 2 | (3) | 2 | (3) |
Earnings before income taxes | 402 | 251 | 595 | 355 |
Income tax provision (benefit) | 85 | 33 | 103 | 46 |
Net earnings | 317 | 218 | 492 | 309 |
Less: Net earnings attributable to noncontrolling interest | 71 | 28 | 95 | 51 |
Net earnings attributable to common stockholders | $ 246 | $ 190 | $ 397 | $ 258 |
Net earnings per share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ 1.14 | $ 0.89 | $ 1.84 | $ 1.20 |
Diluted (in dollars per share) | $ 1.14 | $ 0.89 | $ 1.83 | $ 1.20 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 215.5 | 214.5 | 215.2 | 215.2 |
Diluted (in shares) | 216.6 | 214.6 | 216.3 | 215.6 |
Dividends declared per common share (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.60 | $ 0.60 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 317 | $ 218 | $ 492 | $ 309 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment—net of taxes | 10 | 12 | 24 | (71) |
Defined benefit plans—net of taxes | (1) | 2 | 0 | 11 |
Total other comprehensive income | 9 | 14 | 24 | (60) |
Comprehensive income | 326 | 232 | 516 | 249 |
Less: Comprehensive income attributable to noncontrolling interest | 71 | 28 | 95 | 51 |
Comprehensive income attributable to common stockholders | $ 255 | $ 204 | $ 421 | $ 198 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 777 | $ 683 |
Accounts receivable—net | 401 | 265 |
Inventories | 290 | 287 |
Prepaid income taxes | 68 | 97 |
Other current assets | 33 | 35 |
Total current assets | 1,569 | 1,367 |
Property, plant and equipment—net | 7,437 | 7,632 |
Investment in affiliate | 82 | 80 |
Goodwill | 2,378 | 2,374 |
Operating lease right-of-use assets | 228 | 259 |
Other assets | 313 | 311 |
Total assets | 12,007 | 12,023 |
Current liabilities: | ||
Accounts payable and accrued expenses | 545 | 424 |
Customer advances | 9 | 130 |
Current operating lease liabilities | 83 | 88 |
Current maturities of long-term debt | 0 | 249 |
Other current liabilities | 6 | 15 |
Total current liabilities | 643 | 906 |
Long-term debt, net of current maturities | 3,713 | 3,712 |
Deferred Income Tax Liabilities, Net | 1,156 | 1,184 |
Operating lease liabilities | 150 | 174 |
Other liabilities | 387 | 444 |
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, 2021—215,093,493 shares issued and 2020—214,057,701 shares issued | 2 | 2 |
Paid-in capital | 1,357 | 1,317 |
Retained earnings | 2,183 | 1,927 |
Treasury stock—at cost, 2021—5,284 shares and 2020—102,843 shares | 0 | (4) |
Accumulated other comprehensive loss | (296) | (320) |
Total stockholders’ equity | 3,246 | 2,922 |
Noncontrolling interest | 2,712 | 2,681 |
Total equity | 5,958 | 5,603 |
Total liabilities and equity | $ 12,007 | $ 12,023 |
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 | 215,093,493 | 214,057,701 |
Treasury Stock, Shares | 5,284 | 102,843 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
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 | 215,093,493 | 214,057,701 |
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, 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 |
Balance at Dec. 31, 2020 | 5,603 | 2 | (4) | 1,317 | 1,927 | (320) | 2,922 | 2,681 |
Increase (decrease) in equity | ||||||||
Net earnings | 492 | 0 | 0 | 0 | 397 | 0 | 397 | 95 |
Less: Net earnings attributable to noncontrolling interest | 95 | |||||||
Net earnings attributable to common stockholders | 397 | |||||||
Other comprehensive loss | 24 | 0 | 0 | 0 | 0 | 24 | 24 | 0 |
Retirement of treasury stock | 0 | 0 | 13 | (2) | (11) | 0 | 0 | 0 |
Acquisition of treasury stock under employee stock plans | (10) | 0 | (10) | 0 | 0 | 0 | (10) | 0 |
Issuance of $0.01 par value common stock under employee stock plans | 27 | 0 | 1 | 26 | 0 | 0 | 27 | 0 |
Stock-based compensation expense | 16 | 0 | 0 | 16 | 0 | 0 | 16 | 0 |
Cash dividends | (130) | 0 | 0 | 0 | (130) | 0 | (130) | 0 |
Distribution declared to noncontrolling interest | (64) | 0 | 0 | 0 | 0 | 0 | 0 | (64) |
Balance at Jun. 30, 2021 | 5,958 | 2 | 0 | 1,357 | 2,183 | (296) | 3,246 | 2,712 |
Balance at Mar. 31, 2021 | 5,670 | 2 | (14) | 1,333 | 2,013 | (305) | 3,029 | 2,641 |
Increase (decrease) in equity | ||||||||
Net earnings | 317 | 0 | 0 | 0 | 246 | 0 | 246 | 71 |
Less: Net earnings attributable to noncontrolling interest | 71 | |||||||
Net earnings attributable to common stockholders | 246 | |||||||
Other comprehensive loss | 9 | 0 | 0 | 0 | 0 | 9 | 9 | 0 |
Retirement of treasury stock | 0 | 0 | 13 | (2) | (11) | 0 | 0 | 0 |
Issuance of $0.01 par value common stock under employee stock plans | 19 | 0 | 1 | 18 | 0 | 0 | 19 | 0 |
Stock-based compensation expense | 8 | 0 | 0 | 8 | 0 | 0 | 8 | 0 |
Cash dividends | (65) | 0 | 0 | 0 | (65) | 0 | (65) | 0 |
Balance at Jun. 30, 2021 | $ 5,958 | $ 2 | $ 0 | $ 1,357 | $ 2,183 | $ (296) | $ 3,246 | $ 2,712 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2020 | |
Statement of Stockholders' Equity [Abstract] | |||
Common Stock, Par or Stated Value Per Share | $ 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, 2021 | Jun. 30, 2020 | |
Operating Activities: | ||
Net earnings | $ 492 | $ 309 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 447 | 450 |
Deferred income taxes | (31) | (96) |
Stock-based compensation expense | 16 | 13 |
Loss on debt extinguishment | 6 | 0 |
Unrealized net gain on natural gas derivatives | (6) | (12) |
Unrealized loss on embedded derivative | 2 | 1 |
Loss on disposal of property, plant and equipment | 2 | 9 |
Undistributed earnings of affiliate—net of taxes | (4) | (8) |
Changes in: | ||
Accounts receivable—net | (137) | (11) |
Inventories | (9) | 51 |
Accrued and prepaid income taxes | 0 | 190 |
Accounts payable and accrued expenses | 85 | (43) |
Customer advances | (121) | (110) |
Other—net | (36) | (25) |
Net cash provided by operating activities | 706 | 718 |
Investing Activities: | ||
Additions to property, plant and equipment | (181) | (119) |
Insurance proceeds for property, plant and equipment | 0 | 2 |
Purchase of investments held in nonqualified employee benefit trust | (12) | 0 |
Proceeds from sale of investments held in nonqualified employee benefit trust | 12 | 0 |
Other—net | (1) | 0 |
Net cash used in investing activities | (182) | (117) |
Financing Activities: | ||
Proceeds from short-term borrowings | 0 | 500 |
Repayments of Short-term Debt | 0 | (500) |
Repayments of Long-term Debt | (255) | 0 |
Dividends paid on common stock | (130) | (129) |
Distributions to noncontrolling interest | (64) | (88) |
Purchases of treasury stock | 0 | (100) |
Proceeds from issuances of common stock under employee stock plans | 26 | 3 |
Shares withheld for taxes | (10) | (9) |
Net cash provided by (used in) financing activities | (433) | (323) |
Effect of exchange rate changes on cash and cash equivalents | 3 | (2) |
Increase in cash and cash equivalents | 94 | 276 |
Cash and cash equivalents at beginning of period | 683 | 287 |
Cash and cash equivalents at end of period | $ 777 | $ 563 |
Background and Basis of Present
Background and Basis of Presentation | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis of Presentation | Background and Basis of Presentation Our mission is to provide clean energy to feed and fuel the world sustainably. With our employees focused on safe and reliable operations, environmental stewardship, and disciplined capital and corporate management, we are on a path to decarbonize our ammonia production network – the world’s largest – to enable green and blue hydrogen and nitrogen products for energy, fertilizer, emissions abatement and other industrial activities. Our nine manufacturing complexes in the United States, Canada and the United Kingdom, an extensive storage, transportation and distribution network in North America, and logistics capabilities enabling a global reach underpin our strategy to leverage our unique capabilities to accelerate the world’s transition to clean energy. Our principal customers are cooperatives, independent fertilizer distributors, traders, wholesalers and industrial users. Our core product is anhydrous ammonia (ammonia), which contains 82% nitrogen and 18% hydrogen. Our nitrogen products that are upgraded from ammonia are granular urea, urea ammonium nitrate solution (UAN) and ammonium nitrate (AN). Our other nitrogen products include diesel exhaust fluid (DEF), urea liquor, nitric acid and aqua ammonia, which are sold primarily to our industrial customers, and compound fertilizer products (NPKs), which are solid granular fertilizer products for which the nutrient content is a combination of nitrogen, phosphorus and potassium. 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, 2020, 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. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 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, 2021 and 2020: Ammonia Granular Urea UAN AN Other Total (in millions) Three months ended June 30, 2021 North America $ 431 $ 433 $ 403 $ 55 $ 92 $ 1,414 Europe and other 28 — 31 81 34 174 Total revenue $ 459 $ 433 $ 434 $ 136 $ 126 $ 1,588 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 Ammonia Granular Urea UAN AN Other Total (in millions) Six months ended June 30, 2021 North America $ 599 $ 832 $ 625 $ 96 $ 169 $ 2,321 Europe and other 66 — 41 145 63 315 Total revenue $ 665 $ 832 $ 666 $ 241 $ 232 $ 2,636 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 As of June 30, 2021 and December 31, 2020, we had $9 million and $130 million, respectively, in customer advances on our consolidated balance sheets. During the six months ended June 30, 2021 and 2020, substantially all of the customer advances at the beginning of each respective period were recognized as revenue. We offer cash incentives to certain customers generally based on the volume of their purchases over the fertilizer year ending June 30. Our cash incentives do not provide an option to the customer for additional product. As of June 30, 2021 and December 31, 2020, we had $42 million and $24 million, respectively, of customer incentives accrued on our consolidated balance sheet. From time to time, we will enter the marketplace to purchase product in order to satisfy obligations under contracts with our customers. When we purchase product for this purpose, we are the principal in the transaction and recognize revenue on a gross basis. As discussed in Note 7—Equity Method Investment, we have transactions in the normal course of business with Point Lisas Nitrogen Limited (PLNL), reflecting our obligation to purchase 50% of the ammonia produced by PLNL at current market prices. During the three and six months ended June 30, 2021, in addition to products purchased from PLNL, we recognized $36 million and $68 million, respectively, of revenue from sales of granular urea, which we purchased in order to satisfy obligations under contracts with our customers due to lower production experienced as a result of Winter Storm Uri. For the six months ended June 30, 2020, other than products purchased from PLNL, products purchased in the marketplace in order to satisfy obligations under contracts with our customers 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, 2021, 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 $787 million. We expect to recognize approximately 21% of these |
Net Earnings Per Share
Net Earnings Per Share | 6 Months Ended |
Jun. 30, 2021 | |
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 2021 2020 2021 2020 (in millions, except per share amounts) Net earnings attributable to common stockholders $ 246 $ 190 $ 397 $ 258 Basic earnings per common share: Weighted-average common shares outstanding 215.5 214.5 215.2 215.2 Net earnings attributable to common stockholders $ 1.14 $ 0.89 $ 1.84 $ 1.20 Diluted earnings per common share: Weighted-average common shares outstanding 215.5 214.5 215.2 215.2 Dilutive common shares—stock-based awards 1.1 0.1 1.1 0.4 Diluted weighted-average shares outstanding 216.6 214.6 216.3 215.6 Net earnings attributable to common stockholders $ 1.14 $ 0.89 $ 1.83 $ 1.20 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 1.2 million in both the three and six months ended June 30, 2021, and 4.7 million and 3.4 million in the three and six months ended June 30, 2020, respectively. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following: June 30, December 31, (in millions) Finished goods $ 242 $ 246 Raw materials, spare parts and supplies 48 41 Total inventories $ 290 $ 287 |
Property, Plant and Equipment-N
Property, Plant and Equipment-Net | 6 Months Ended |
Jun. 30, 2021 | |
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, (in millions) Land $ 68 $ 68 Machinery and equipment 12,664 12,539 Buildings and improvements 911 895 Construction in progress 380 275 Property, plant and equipment (1) 14,023 13,777 Less: Accumulated depreciation and amortization 6,586 6,145 Property, plant and equipment—net $ 7,437 $ 7,632 _______________________________________________________________________________ (1) As of June 30, 2021 and December 31, 2020, we had property, plant and equipment that was accrued but unpaid of approximately $76 million and $43 million, respectively. 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. Depreciation and amortization related to property, plant and equipment was $239 million and $439 million for the three and six months ended June 30, 2021, respectively, and $235 million and $443 million for the three and six months ended June 30, 2020, respectively. 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 2021 2020 (in millions) Net capitalized turnaround costs: Beginning balance $ 226 $ 246 Additions 89 14 Depreciation (51) (52) Effect of exchange rate changes 1 (4) Ending balance $ 265 $ 204 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, 2021 | |
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, 2021 and December 31, 2020: Ammonia Granular Urea UAN AN Other Total (in millions) Balance as of December 31, 2020 $ 587 $ 828 $ 576 $ 310 $ 73 $ 2,374 Effect of exchange rate changes 1 — — 2 1 4 Balance as of June 30, 2021 $ 588 $ 828 $ 576 $ 312 $ 74 $ 2,378 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, 2021 December 31, 2020 Gross Accumulated Net Gross Accumulated Net (in millions) Customer relationships $ 135 $ (56) $ 79 $ 133 $ (52) $ 81 Trade names 33 (10) 23 32 (9) 23 Total intangible assets $ 168 $ (66) $ 102 $ 165 $ (61) $ 104 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, 2021, respectively, and $2 million and $4 million for the three and six months ended June 30, 2020, 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 2021 and each of the five succeeding fiscal years is as follows: Estimated (in millions) Remainder of 2021 $ 4 2022 9 2023 9 2024 9 2025 9 2026 9 |
Equity Method Investment
Equity Method Investment | 6 Months Ended |
Jun. 30, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investment | Equity Method Investment We have a 50% ownership interest in 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, 2021, the total carrying value of our equity method investment in PLNL was $82 million, $40 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 12 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 $37 million and $63 million for the three and six months ended June 30, 2021, respectively, and $13 million and $23 million for the three and six months ended June 30, 2020, respectively. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Our cash and cash equivalents and other investments consist of the following: June 30, 2021 Cost Basis Unrealized Unrealized Fair Value (in millions) Cash $ 85 $ — $ — $ 85 Cash equivalents: U.S. and Canadian government obligations 672 — — 672 Other debt securities 20 — — 20 Total cash and cash equivalents $ 777 $ — $ — $ 777 Nonqualified employee benefit trusts 17 3 — 20 December 31, 2020 Cost Basis Unrealized Unrealized Fair Value (in millions) Cash $ 108 $ — $ — $ 108 Cash equivalents: U.S. and Canadian government obligations 552 — — 552 Other debt securities 23 — — 23 Total cash and cash equivalents $ 683 $ — $ — $ 683 Nonqualified employee benefit trusts 16 3 — 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, 2021 and December 31, 2020 that are recognized at fair value on a recurring basis, and indicate the fair value hierarchy utilized to determine such fair value: June 30, 2021 Total Fair Quoted Prices Significant Significant (in millions) Cash equivalents $ 692 $ 692 $ — $ — Nonqualified employee benefit trusts 20 20 — — Derivative assets 1 — 1 — Derivative liabilities (1) — (1) — Embedded derivative liability (20) — (20) — December 31, 2020 Total Fair Quoted Prices Significant Significant (in millions) Cash equivalents $ 575 $ 575 $ — $ — Nonqualified employee benefit trusts 19 19 — — Derivative assets 1 — 1 — Derivative liabilities (7) — (7) — Embedded derivative liability (18) — (18) — Cash Equivalents As of June 30, 2021 and December 31, 2020, 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, and changes in fair value are reported in other comprehensive income. Changes in the fair value of available-for-sale equity securities in the trust assets are recognized through earnings. Derivative Instruments The derivative instruments that we use are primarily natural gas fixed price swaps, basis swaps and options traded in the over-the-counter markets with multi-national commercial banks, other major financial institutions or large energy companies. The natural gas derivative contracts represent anticipated natural gas needs for future periods and settlements are scheduled to coincide with anticipated natural gas purchases during those future periods. The natural gas derivative contracts settle using primarily a NYMEX futures price index. To determine the fair value of these instruments, we use quoted market prices from NYMEX and standard pricing models with inputs derived from or corroborated by observable market data such as forward curves supplied by an industry-recognized independent third party. See Note 12—Derivative Financial Instruments for additional information. Embedded Derivative Liability Under the terms of our strategic venture with CHS Inc. (CHS), if our credit rating as determined by two of three specified credit rating agencies is below certain levels, we are required to make a non-refundable yearly payment of $5 million to CHS. Since 2016, our credit ratings have been below certain levels and, as a result, we made an annual payment of $5 million to CHS in the fourth quarter of each year. These payments will continue on a yearly basis until the earlier of the date that our credit rating is upgraded to or above certain levels by two of the three specified credit rating agencies or February 1, 2026. This obligation is recognized on our consolidated balance sheets as an embedded derivative and is included within other current liabilities and other liabilities. As of June 30, 2021 and December 31, 2020, the embedded derivative liability was $20 million and $18 million, respectively. Included in other operating—net in our consolidated statement of operations for the six months ended June 30, 2021 and 2020 is a net loss of $2 million and $1 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, 2021 December 31, 2020 Carrying Fair Value Carrying Fair Value (in millions) Long-term debt, including current maturities $ 3,713 $ 4,367 $ 3,961 $ 4,731 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, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended June 30, 2021, we recorded an income tax provision of $85 million on pre-tax income of $402 million, or an effective tax rate of 21.2%, compared to an income tax provision of $33 million on pre-tax income of $251 million, or an effective tax rate of 13.4%, for the three months ended June 30, 2020. 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, 2021, we recorded an income tax provision of $103 million on pre-tax income of $595 million, or an effective tax rate of 17.4%, compared to an income tax provision of $46 million on pre-tax income of $355 million, or an effective tax rate of 13.1%, for the six months ended June 30, 2020. For the six months ended June 30, 2021, our income tax provision includes a $22 million benefit reflecting the impact of agreement on certain issues related to U.S. federal income tax audits. 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. 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, 2021 of 21.2%, which is based on pre-tax income of $402 million, including $71 million attributable to the noncontrolling interest, would be 4.6 percentage points higher if based on pre-tax income exclusive of the $71 million 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 six months ended June 30, 2021 of 17.4%, which is based on pre-tax income of $595 million, including $95 million attributable to the noncontrolling interest, would be 3.3 percentage points higher if based on pre-tax income exclusive of the $95 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. See Note 13—Noncontrolling Interest for additional information. 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 2013, the Internal Revenue Service (IRS) commenced an examination of the U.S. tax aspects of the Amended Tax Returns. In the second quarter of 2020, we received IRS notices indicating the amount of tax and interest to be refunded and received with respect to the income tax and withholding tax returns. As a result, we recognized $16 million of interest income ($13 million, net of tax) and $19 million of additional income tax benefit. In addition, in the second quarter of 2020, we received U.S. Federal income tax refunds, including interest, of $108 million relating to these matters. In July 2020, we received an additional $2 million, which finalized these matters with the IRS. In 2017, we made a Voluntary Disclosures Program filing with the Canada Revenue Agency (CRA) with respect to the Canadian tax aspects of this matter and paid additional Canadian taxes due. In late 2020, the CRA settled with us the voluntary disclosure matter, and, in the first quarter of 2021, we received approximately $20 million of withholding tax refunds, including interest, from the CRA. These amounts were previously recorded in our consolidated balance sheet as of December 31, 2020. |
Interest Expense
Interest Expense | 6 Months Ended |
Jun. 30, 2021 | |
Interest Expense [Abstract] | |
Interest Expense | Interest Expense Details of interest expense are as follows: Three months ended Six months ended 2021 2020 2021 2020 (in millions) Interest on borrowings (1) $ 44 $ 47 $ 90 $ 93 Fees on financing agreements (1) 2 2 4 4 Interest on tax liabilities (2) — — — (4) Total interest expense $ 46 $ 49 $ 94 $ 93 _______________________________________________________________________________ (1) See Note 11—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, 2021 | |
Debt Disclosure [Abstract] | |
Financing Agreements | Financing Agreements Revolving Credit Agreement We have a senior secured revolving credit agreement (the Revolving Credit Agreement), which provides for a revolving credit facility of up to $750 million with a maturity of December 5, 2024. The Revolving Credit Agreement includes a letter of credit sub-limit of $125 million. Borrowings under the Revolving Credit Agreement may be used for working capital, capital expenditures, acquisitions, share repurchases and other general corporate purposes. Borrowings under the Revolving Credit Agreement may be denominated in U.S. dollars, Canadian dollars, euros and British pounds, and bear interest at a per annum rate equal to, at our option, an applicable eurocurrency rate or base rate plus, in either case, a specified margin. We are required to pay an undrawn commitment fee on the undrawn portion of the commitments under the Revolving Credit Agreement and customary letter of credit fees. The specified margin and the amount of the commitment fee depend on CF Holdings’ credit rating at the time. 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, 2021, we had unused borrowing capacity under the Revolving Credit Agreement of $750 million and no outstanding letters of credit. There were no borrowings outstanding under the Revolving Credit Agreement as of June 30, 2021 or December 31, 2020, or during the six months ended June 30, 2021. 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%. Borrowings under the Revolving Credit Agreement as of March 31, 2020 were repaid in full in April 2020. The Revolving Credit Agreement contains representations and warranties and affirmative and negative covenants, including financial covenants. As of June 30, 2021, we were in compliance with all covenants under the Revolving Credit Agreement. Letters of Credit In addition to the letters of credit that may be issued under the Revolving Credit Agreement, as described above, we have also entered into a bilateral agreement with capacity to issue up to $250 million of letters of credit. As of June 30, 2021, approximately $222 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, 2021 and December 31, 2020 consisted of the following debt securities issued by CF Industries: Effective Interest Rate June 30, 2021 December 31, 2020 Principal Carrying Amount (1) Principal Carrying Amount (1) (in millions) Public Senior Notes: 3.450% due June 2023 3.562% $ 750 $ 748 $ 750 $ 748 5.150% due March 2034 5.279% 750 741 750 741 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 4.500% due December 2026 4.759% 750 741 750 740 Total long-term debt $ 3,750 $ 3,713 $ 4,000 $ 3,961 Less: Current maturities of long-term debt — — 250 249 Long-term debt, net of current maturities $ 3,750 $ 3,713 $ 3,750 $ 3,712 _______________________________________________________________________________ (1) Carrying amount is net of unamortized debt discount and deferred debt issuance costs. Total unamortized debt discount was $9 million as of both June 30, 2021 and December 31, 2020, and total deferred debt issuance costs were $28 million and $30 million as of June 30, 2021 and December 31, 2020, 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 indenture governing the 4.500% senior secured notes due December 2026 (the 2026 Notes) identified in the table above, the 2026 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 2026 Notes currently consist of CFE, CFS, CF USA and CFIDF. On March 20, 2021, we redeemed in full all of the remaining $250 million outstanding principal amount of the 3.400% senior secured notes due December 2021 (the 2021 Notes), in accordance with the optional redemption provisions in the indenture governing the 2021 Notes. The total aggregate redemption price paid on the 2021 Notes in connection with the redemption was $258 million, including accrued interest. As a result, we recognized a loss on debt extinguishment of $6 million, primarily consisting of a premium paid on the early redemption of the notes. Interest on the Public Senior Notes and the 2026 Notes is payable semiannually, and the Public Senior Notes and the 2026 Notes are redeemable at our option, in whole at any time or in part from time to time, at specified make-whole redemption prices. See Note 17—Subsequent Event for additional information regarding the 3.450% senior notes due June 2023. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure | 12. Derivative Financial Instruments We use derivative financial instruments to reduce our exposure to changes in prices for natural gas that will be purchased in the future. Natural gas is the largest and most volatile component of our manufacturing cost for nitrogen-based products. From time to time, we may also use derivative financial instruments to reduce our exposure to changes in foreign currency exchange rates. The derivatives that we use to reduce our exposure to changes in prices for natural gas are primarily natural gas fixed price swaps, basis swaps and options traded in the over-the-counter markets. These natural gas derivatives settle using primarily a NYMEX futures price index, which represents the basis for fair value at any given time. We enter into natural gas derivative contracts with respect to natural gas to be consumed by us in the future, and settlements of those derivative contracts are scheduled to coincide with our anticipated purchases of natural gas used to manufacture nitrogen products during those future periods. We use natural gas derivatives as an economic hedge of natural gas price risk, but without the application of hedge accounting. As a result, changes in fair value of these contracts are recognized in earnings. As of June 30, 2021, we had natural gas derivative contracts covering certain periods through March 2022. As of June 30, 2021, our open natural gas derivative contracts consisted of natural gas basis swaps for 6.8 million MMBtus. As of December 31, 2020, we had open natural gas derivative contracts consisting of natural gas fixed price swaps and basis swaps for 34.1 million MMBtus of natural gas. For the six months ended June 30, 2021, we used derivatives to cover approximately 13% of our natural gas consumption. The effect of derivatives in our consolidated statements of operations is shown in the table below. Gain (loss) recognized in income Three months ended June 30, Six months ended June 30, Location 2021 2020 2021 2020 (in millions) Unrealized net gains on natural gas derivatives Cost of sales $ — $ — $ 6 $ 12 Realized net losses on natural gas derivatives Cost of sales — — (3) (16) Gain on net settlement of natural gas derivatives due to Winter Storm Uri Cost of sales — — 112 — Net derivative gains (losses) $ — $ — $ 115 $ (4) Gain on net settlement of natural gas derivatives due to Winter Storm Uri We also enter into supply agreements to facilitate the availability of natural gas to operate our plants. When we purchase natural gas under these agreements, we intend to take physical delivery for use in our plants. Certain of these supply agreements allow us to fix the price of the deliveries for the following month using an agreed upon first of month price. We utilize the Normal Purchase Normal Sales (NPNS) derivative scope exception for these fixed price contracts and therefore, we do not account for them as derivatives. In February 2021, the central portion of the United States experienced extreme and unprecedented cold weather due to the impact of Winter Storm Uri. Certain natural gas suppliers and natural gas pipelines declared force majeure events due to natural gas well freeze-offs or frozen equipment. This occurred at the same time as large increases in natural gas demand were occurring due to the extreme cold temperatures. Due to these unprecedented factors, several states declared a state of emergency and natural gas was redirected for residential usage. We net settled certain natural gas contracts with our suppliers and received prevailing market prices, which were in excess of our cost. We no longer qualified for the NPNS derivative scope exception for the natural gas that was net settled with our suppliers due to the impact of Winter Storm Uri. As a result, we recognized a gain of $112 million from the net settlement of these natural gas contracts, which is reflected in cost of sales in our consolidated statement of operations for the six months ended June 30, 2021. The fair values of derivatives on our consolidated balance sheets are shown below. As of June 30, 2021 and December 31, 2020, none of our derivative instruments were designated as hedging instruments. See Note 8—Fair Value Measurements for additional information on derivative fair values. Asset Derivatives Liability Derivatives Balance Sheet Location June 30, 2021 December 31, 2020 Balance Sheet Location June 30, December 31, 2020 (in millions) (in millions) Natural gas derivatives Other current assets $ 1 $ 1 Other current liabilities $ (1) $ (7) Most of our International Swaps and Derivatives Association (ISDA) agreements contain credit-risk-related contingent features such as cross default provisions. In the event of certain defaults or termination events, our counterparties may request early termination and net settlement of certain derivative trades or, under certain ISDA agreements, may require us to collateralize derivatives in a net liability position. The Revolving Credit Agreement, at any time when it is secured, provides a cross collateral feature for those of our derivatives that are with counterparties that are party to, or affiliates of parties to, the Revolving Credit Agreement so that no separate collateral would be required for those counterparties in connection with such derivatives. In the event the Revolving Credit Agreement becomes unsecured, separate collateral could be required in connection with such derivatives. As of June 30, 2021 and December 31, 2020, the aggregate fair value of the derivative instruments with credit-risk-related contingent features in net liability positions was zero and $6 million, respectively, which also approximates the fair value of the maximum amount of additional collateral that may need to be posted or assets that may be needed to settle the obligations if the credit-risk-related contingent features were triggered at the reporting dates. As of June 30, 2021 and December 31, 2020, we had no cash collateral on deposit with counterparties for derivative contracts. The credit support documents executed in connection with certain of our ISDA agreements generally provide us and our counterparties the right to set off collateral against amounts owing under the ISDA agreements upon the occurrence of a default or a specified termination event. The following table presents amounts relevant to offsetting of our derivative assets and liabilities as of June 30, 2021 and December 31, 2020: Amounts presented in consolidated balance sheets (1) Gross amounts not offset in consolidated balance sheets Financial Cash collateral received (pledged) Net (in millions) June 30, 2021 Total derivative assets $ 1 $ — $ — $ 1 Total derivative liabilities (1) — — (1) Net derivative liabilities $ — $ — $ — $ — December 31, 2020 Total derivative assets $ 1 $ — $ — $ 1 Total derivative liabilities (7) — — (7) Net derivative liabilities $ (6) $ — $ — $ (6) _______________________________________________________________________________ (1) We report the fair values of our derivative assets and liabilities on a gross basis on our consolidated balance sheets. As a result, the gross amounts recognized and net amounts presented are the same. We do not believe the contractually allowed netting, close-out netting or setoff of amounts owed to, or due from, the counterparties to our ISDA agreements would have a material effect on our financial position. |
Noncontrolling Interest
Noncontrolling Interest | 6 Months Ended |
Jun. 30, 2021 | |
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. 2021 2020 (in millions) Noncontrolling interest: Balance as of January 1 $ 2,681 $ 2,740 Earnings attributable to noncontrolling interest 95 51 Declaration of distributions payable (64) (88) Balance as of June 30 $ 2,712 $ 2,703 Distributions payable to noncontrolling interest: Balance as of January 1 $ — $ — Declaration of distributions payable 64 88 Distributions to noncontrolling interest (64) (88) 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 8—Fair Value Measurements for additional information. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Treasury Stock 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. Since the 2019 Share Repurchase Program was announced in February 2019, we have repurchased approximately 10.2 million shares for $437 million, including 2.6 million shares repurchased during the first quarter of 2020 for $100 million. No shares have been repurchased since the first quarter of 2020 under the 2019 Share Repurchase Program. At June 30, 2021, we held 5,284 shares of treasury stock. Accumulated Other Comprehensive Loss Changes to accumulated other comprehensive loss and the impact on other comprehensive income (loss) are as follows: Foreign Unrealized Defined Accumulated (in millions) 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) Balance as of December 31, 2020 $ (144) $ 4 $ (180) $ (320) Loss arising during the period — — (3) (3) Reclassification to earnings (1) — — 5 5 Effect of exchange rate changes and deferred taxes 24 — (2) 22 Balance as of June 30, 2021 $ (120) $ 4 $ (180) $ (296) ____________________________________________________________________________ (1) Reclassifications out of accumulated other comprehensive loss to earnings during the three and six months ended June 30, 2021 and 2020 were not material. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
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. Nearly all of the cases, including all wrongful death and personal injury claims, have been resolved pursuant to confidential settlements that have been or we expect will be fully funded by insurance. The remaining subrogation and statutory indemnification claims total approximately $37 million, before prejudgment interest, and are in various stages of discovery and pre-trial proceedings. The remaining claims are expected to be set for trial in 2022. We believe we have strong legal and factual defenses and intend to continue defending the CF Entities vigorously in the remaining 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, we expect any potential loss to be fully indemnified by insurance and 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 intended to undertake a natural resource damage assessment for 18 former phosphate mines and three former processing facilities in southeast Idaho, which includes the Georgetown Canyon former mine and processing facility. In June 2021, we received another notice from the U.S. Department of the Interior that the natural resource damage trustees were commencing a ‘subsequent’ phase of the natural resource damage assessment, but no further details were provided with respect to said assessment. Because the former 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, 2021 | |
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 6—Goodwill and Other Intangible Assets. Segment data for sales, cost of sales and gross margin for the three and six months ended June 30, 2021 and 2020 are presented in the tables below. Ammonia Granular Urea (1) UAN (1) AN (1) Other (1) Consolidated (in millions) Three months ended June 30, 2021 Net sales $ 459 $ 433 $ 434 $ 136 $ 126 $ 1,588 Cost of sales 333 241 296 120 95 1,085 Gross margin $ 126 $ 192 $ 138 $ 16 $ 31 503 Total other operating costs and expenses 64 Equity in earnings of operating affiliate 11 Operating earnings $ 450 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 Ammonia (2) Granular Urea (1) UAN (1) AN (1) Other (1) Consolidated (in millions) Six months ended June 30, 2021 Net sales $ 665 $ 832 $ 666 $ 241 $ 232 $ 2,636 Cost of sales 413 505 526 215 185 1,844 Gross margin $ 252 $ 327 $ 140 $ 26 $ 47 792 Total other operating costs and expenses 117 Equity in earnings of operating affiliate 22 Operating earnings $ 697 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 _______________________________________________________________________________ (1) The cost of the products that are upgraded into other products is transferred at cost into the upgraded product results. (2) Cost of sales and gross margin for the ammonia segment in the six months ended June 30, 2021, include the $112 million gain on the net settlement of certain natural gas contracts with our suppliers. See Note 12—Derivative Financial Instruments for additional information. |
Subsequent Event
Subsequent Event | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Event | 17. Subsequent Event On August 9, 2021, we announced that CF Industries has elected to redeem on September 10, 2021, $250 million principal amount, representing one-third of the currently outstanding $750 million principal amount, of the 3.450% senior notes due 2023 (2023 Notes), in accordance with the optional redemption provisions provided in the indenture governing the 2023 Notes. We estimate, based on market interest rates on August 2, 2021, the total amount for the partial redemption of the 2023 Notes will be approximately $265 million, including accrued interest. The partial redemption of the 2023 Notes will be funded with cash on hand. See Note 11—Financing Agreements for additional information. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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, 2021 and 2020: Ammonia Granular Urea UAN AN Other Total (in millions) Three months ended June 30, 2021 North America $ 431 $ 433 $ 403 $ 55 $ 92 $ 1,414 Europe and other 28 — 31 81 34 174 Total revenue $ 459 $ 433 $ 434 $ 136 $ 126 $ 1,588 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 Ammonia Granular Urea UAN AN Other Total (in millions) Six months ended June 30, 2021 North America $ 599 $ 832 $ 625 $ 96 $ 169 $ 2,321 Europe and other 66 — 41 145 63 315 Total revenue $ 665 $ 832 $ 666 $ 241 $ 232 $ 2,636 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 |
Net Earnings Per Share (Tables)
Net Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Summary of net earnings per share | Net earnings per share were computed as follows: Three months ended Six months ended 2021 2020 2021 2020 (in millions, except per share amounts) Net earnings attributable to common stockholders $ 246 $ 190 $ 397 $ 258 Basic earnings per common share: Weighted-average common shares outstanding 215.5 214.5 215.2 215.2 Net earnings attributable to common stockholders $ 1.14 $ 0.89 $ 1.84 $ 1.20 Diluted earnings per common share: Weighted-average common shares outstanding 215.5 214.5 215.2 215.2 Dilutive common shares—stock-based awards 1.1 0.1 1.1 0.4 Diluted weighted-average shares outstanding 216.6 214.6 216.3 215.6 Net earnings attributable to common stockholders $ 1.14 $ 0.89 $ 1.83 $ 1.20 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories consist of the following: June 30, December 31, (in millions) Finished goods $ 242 $ 246 Raw materials, spare parts and supplies 48 41 Total inventories $ 290 $ 287 |
Property, Plant and Equipment_2
Property, Plant and Equipment-Net (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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, (in millions) Land $ 68 $ 68 Machinery and equipment 12,664 12,539 Buildings and improvements 911 895 Construction in progress 380 275 Property, plant and equipment (1) 14,023 13,777 Less: Accumulated depreciation and amortization 6,586 6,145 Property, plant and equipment—net $ 7,437 $ 7,632 _______________________________________________________________________________ |
Summary of plant turnaround activity | The following is a summary of capitalized plant turnaround costs: Six months ended 2021 2020 (in millions) Net capitalized turnaround costs: Beginning balance $ 226 $ 246 Additions 89 14 Depreciation (51) (52) Effect of exchange rate changes 1 (4) Ending balance $ 265 $ 204 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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, 2021 and December 31, 2020: Ammonia Granular Urea UAN AN Other Total (in millions) Balance as of December 31, 2020 $ 587 $ 828 $ 576 $ 310 $ 73 $ 2,374 Effect of exchange rate changes 1 — — 2 1 4 Balance as of June 30, 2021 $ 588 $ 828 $ 576 $ 312 $ 74 $ 2,378 |
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, 2021 December 31, 2020 Gross Accumulated Net Gross Accumulated Net (in millions) Customer relationships $ 135 $ (56) $ 79 $ 133 $ (52) $ 81 Trade names 33 (10) 23 32 (9) 23 Total intangible assets $ 168 $ (66) $ 102 $ 165 $ (61) $ 104 |
Schedule of estimated future amortization expense | Total estimated amortization expense for the remainder of 2021 and each of the five succeeding fiscal years is as follows: Estimated (in millions) Remainder of 2021 $ 4 2022 9 2023 9 2024 9 2025 9 2026 9 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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, 2021 Cost Basis Unrealized Unrealized Fair Value (in millions) Cash $ 85 $ — $ — $ 85 Cash equivalents: U.S. and Canadian government obligations 672 — — 672 Other debt securities 20 — — 20 Total cash and cash equivalents $ 777 $ — $ — $ 777 Nonqualified employee benefit trusts 17 3 — 20 December 31, 2020 Cost Basis Unrealized Unrealized Fair Value (in millions) Cash $ 108 $ — $ — $ 108 Cash equivalents: U.S. and Canadian government obligations 552 — — 552 Other debt securities 23 — — 23 Total cash and cash equivalents $ 683 $ — $ — $ 683 Nonqualified employee benefit trusts 16 3 — 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, 2021 and December 31, 2020 that are recognized at fair value on a recurring basis, and indicate the fair value hierarchy utilized to determine such fair value: June 30, 2021 Total Fair Quoted Prices Significant Significant (in millions) Cash equivalents $ 692 $ 692 $ — $ — Nonqualified employee benefit trusts 20 20 — — Derivative assets 1 — 1 — Derivative liabilities (1) — (1) — Embedded derivative liability (20) — (20) — December 31, 2020 Total Fair Quoted Prices Significant Significant (in millions) Cash equivalents $ 575 $ 575 $ — $ — Nonqualified employee benefit trusts 19 19 — — Derivative assets 1 — 1 — Derivative liabilities (7) — (7) — Embedded derivative liability (18) — (18) — |
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, 2021 December 31, 2020 Carrying Fair Value Carrying Fair Value (in millions) Long-term debt, including current maturities $ 3,713 $ 4,367 $ 3,961 $ 4,731 |
Interest Expense (Tables)
Interest Expense (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Interest Expense [Abstract] | |
Schedule of interest expense | Interest Expense Details of interest expense are as follows: Three months ended Six months ended 2021 2020 2021 2020 (in millions) Interest on borrowings (1) $ 44 $ 47 $ 90 $ 93 Fees on financing agreements (1) 2 2 4 4 Interest on tax liabilities (2) — — — (4) Total interest expense $ 46 $ 49 $ 94 $ 93 _______________________________________________________________________________ (1) See Note 11—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, 2021 | |
Debt Disclosure [Abstract] | |
Components of long-term debt | Long-term debt presented on our consolidated balance sheets as of June 30, 2021 and December 31, 2020 consisted of the following debt securities issued by CF Industries: Effective Interest Rate June 30, 2021 December 31, 2020 Principal Carrying Amount (1) Principal Carrying Amount (1) (in millions) Public Senior Notes: 3.450% due June 2023 3.562% $ 750 $ 748 $ 750 $ 748 5.150% due March 2034 5.279% 750 741 750 741 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 4.500% due December 2026 4.759% 750 741 750 740 Total long-term debt $ 3,750 $ 3,713 $ 4,000 $ 3,961 Less: Current maturities of long-term debt — — 250 249 Long-term debt, net of current maturities $ 3,750 $ 3,713 $ 3,750 $ 3,712 _______________________________________________________________________________ (1) Carrying amount is net of unamortized debt discount and deferred debt issuance costs. Total unamortized debt discount was $9 million as of both June 30, 2021 and December 31, 2020, and total deferred debt issuance costs were $28 million and |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments, Gain (Loss) | The effect of derivatives in our consolidated statements of operations is shown in the table below. Gain (loss) recognized in income Three months ended June 30, Six months ended June 30, Location 2021 2020 2021 2020 (in millions) Unrealized net gains on natural gas derivatives Cost of sales $ — $ — $ 6 $ 12 Realized net losses on natural gas derivatives Cost of sales — — (3) (16) Gain on net settlement of natural gas derivatives due to Winter Storm Uri Cost of sales — — 112 — Net derivative gains (losses) $ — $ — $ 115 $ (4) |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair values of derivatives on our consolidated balance sheets are shown below. As of June 30, 2021 and December 31, 2020, none of our derivative instruments were designated as hedging instruments. See Note 8—Fair Value Measurements for additional information on derivative fair values. Asset Derivatives Liability Derivatives Balance Sheet Location June 30, 2021 December 31, 2020 Balance Sheet Location June 30, December 31, 2020 (in millions) (in millions) Natural gas derivatives Other current assets $ 1 $ 1 Other current liabilities $ (1) $ (7) |
Offsetting Liabilities | The following table presents amounts relevant to offsetting of our derivative assets and liabilities as of June 30, 2021 and December 31, 2020: Amounts presented in consolidated balance sheets (1) Gross amounts not offset in consolidated balance sheets Financial Cash collateral received (pledged) Net (in millions) June 30, 2021 Total derivative assets $ 1 $ — $ — $ 1 Total derivative liabilities (1) — — (1) Net derivative liabilities $ — $ — $ — $ — December 31, 2020 Total derivative assets $ 1 $ — $ — $ 1 Total derivative liabilities (7) — — (7) Net derivative liabilities $ (6) $ — $ — $ (6) _______________________________________________________________________________ (1) We report the fair values of our derivative assets and liabilities on a gross basis on our consolidated balance sheets. As a result, the gross amounts recognized and net amounts presented are the same. |
Offsetting Assets | The following table presents amounts relevant to offsetting of our derivative assets and liabilities as of June 30, 2021 and December 31, 2020: Amounts presented in consolidated balance sheets (1) Gross amounts not offset in consolidated balance sheets Financial Cash collateral received (pledged) Net (in millions) June 30, 2021 Total derivative assets $ 1 $ — $ — $ 1 Total derivative liabilities (1) — — (1) Net derivative liabilities $ — $ — $ — $ — December 31, 2020 Total derivative assets $ 1 $ — $ — $ 1 Total derivative liabilities (7) — — (7) Net derivative liabilities $ (6) $ — $ — $ (6) _______________________________________________________________________________ (1) We report the fair values of our derivative assets and liabilities on a gross basis on our consolidated balance sheets. As a result, the gross amounts recognized and net amounts presented are the same. |
Noncontrolling Interest (Tables
Noncontrolling Interest (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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. 2021 2020 (in millions) Noncontrolling interest: Balance as of January 1 $ 2,681 $ 2,740 Earnings attributable to noncontrolling interest 95 51 Declaration of distributions payable (64) (88) Balance as of June 30 $ 2,712 $ 2,703 Distributions payable to noncontrolling interest: Balance as of January 1 $ — $ — Declaration of distributions payable 64 88 Distributions to noncontrolling interest (64) (88) Balance as of June 30 $ — $ — |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Schedule of changes to AOCI | Changes to accumulated other comprehensive loss and the impact on other comprehensive income (loss) are as follows: Foreign Unrealized Defined Accumulated (in millions) 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) Balance as of December 31, 2020 $ (144) $ 4 $ (180) $ (320) Loss arising during the period — — (3) (3) Reclassification to earnings (1) — — 5 5 Effect of exchange rate changes and deferred taxes 24 — (2) 22 Balance as of June 30, 2021 $ (120) $ 4 $ (180) $ (296) ____________________________________________________________________________ (1) Reclassifications out of accumulated other comprehensive loss to earnings during the three and six months ended June 30, 2021 and 2020 were not material. |
Segment Disclosures (Tables)
Segment Disclosures (Tables) | 3 Months Ended |
Jun. 30, 2021 | |
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, 2021 and 2020 are presented in the tables below. Ammonia Granular Urea (1) UAN (1) AN (1) Other (1) Consolidated (in millions) Three months ended June 30, 2021 Net sales $ 459 $ 433 $ 434 $ 136 $ 126 $ 1,588 Cost of sales 333 241 296 120 95 1,085 Gross margin $ 126 $ 192 $ 138 $ 16 $ 31 503 Total other operating costs and expenses 64 Equity in earnings of operating affiliate 11 Operating earnings $ 450 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 Ammonia (2) Granular Urea (1) UAN (1) AN (1) Other (1) Consolidated (in millions) Six months ended June 30, 2021 Net sales $ 665 $ 832 $ 666 $ 241 $ 232 $ 2,636 Cost of sales 413 505 526 215 185 1,844 Gross margin $ 252 $ 327 $ 140 $ 26 $ 47 792 Total other operating costs and expenses 117 Equity in earnings of operating affiliate 22 Operating earnings $ 697 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 _______________________________________________________________________________ (1) The cost of the products that are upgraded into other products is transferred at cost into the upgraded product results. (2) Cost of sales and gross margin for the ammonia segment in the six months ended June 30, 2021, include the $112 million gain on the net settlement of certain natural gas contracts with our suppliers. See Note 12—Derivative Financial Instruments for additional information. |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |||||
Net sales | $ 1,588 | $ 1,204 | $ 2,636 | $ 2,175 | |
Customer advances | 9 | 9 | $ 130 | ||
Contract with customer, asset, accrued customer incentive | $ 42 | $ 42 | $ 24 |
Revenue Recognition - Revenue b
Revenue Recognition - Revenue by Product and by Geography (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 1,588 | $ 1,204 | $ 2,636 | $ 2,175 |
Winter Storm Uri | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 36 | 68 | ||
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,414 | 1,051 | 2,321 | 1,871 |
Europe and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 174 | 153 | 315 | 304 |
Ammonia | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 459 | 364 | 665 | 557 |
Ammonia | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 431 | 344 | 599 | 498 |
Ammonia | Europe and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 28 | 20 | 66 | 59 |
Granular Urea | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 433 | 329 | 832 | 666 |
Granular Urea | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 433 | 312 | 832 | 643 |
Granular Urea | Europe and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 17 | 0 | 23 |
UAN | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 434 | 308 | 666 | 543 |
UAN | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 403 | 288 | 625 | 518 |
UAN | Europe and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 31 | 20 | 41 | 25 |
AN | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 136 | 118 | 241 | 234 |
AN | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 55 | 51 | 96 | 97 |
AN | Europe and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 81 | 67 | 145 | 137 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 126 | 85 | 232 | 175 |
Other | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 92 | 56 | 169 | 115 |
Other | Europe and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 34 | $ 29 | $ 63 | $ 60 |
Revenue Recognition - Performan
Revenue Recognition - Performance Obligations (Details) $ in Millions | Jun. 30, 2021USD ($) |
Revenue from Contract with Customer [Abstract] | |
Amount of remaining performance obligation | $ 787 |
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 | $ 161 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Percent | 21.00% |
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 | 49.00% |
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 | 49.00% |
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 | 26.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Percent | 26.00% |
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, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Earnings Per Share [Abstract] | ||||
Net earnings attributable to common stockholders | $ 246 | $ 190 | $ 397 | $ 258 |
Basic earnings per common share: | ||||
Weighted-average common shares outstanding | 215.5 | 214.5 | 215.2 | 215.2 |
Net earnings attributable to common stockholders (in dollars per share) | $ 1.14 | $ 0.89 | $ 1.84 | $ 1.20 |
Diluted earnings per common share: | ||||
Weighted-average common shares outstanding | 215.5 | 214.5 | 215.2 | 215.2 |
Dilutive common shares—stock options (in shares) | 1.1 | 0.1 | 1.1 | 0.4 |
Diluted weighted-average shares outstanding | 216.6 | 214.6 | 216.3 | 215.6 |
Net earnings attributable to common stockholders diluted (in dollars per share) | $ 1.14 | $ 0.89 | $ 1.83 | $ 1.20 |
Antidilutive securities excluded from computation of EPS (in shares) | 1.2 | 4.7 | 1.2 | 3.4 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 242 | $ 246 |
Raw materials, spare parts and supplies | 48 | 41 |
Total inventories | $ 290 | $ 287 |
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, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | |
Property, Plant and Equipment-Net | |||||||
Gross property plant and equipment | $ 14,023 | $ 14,023 | $ 13,777 | ||||
Less: Accumulated depreciation and amortization | 6,586 | 6,586 | 6,145 | ||||
Net property, plant and equipment | 7,437 | 7,437 | 7,632 | ||||
Construction in progress expenditures incurred but not yet paid | $ 43 | 76 | $ 42 | $ 42 | |||
Depreciation and amortization | 239 | $ 235 | 439 | 443 | |||
Land | |||||||
Property, Plant and Equipment-Net | |||||||
Gross property plant and equipment | 68 | 68 | 68 | ||||
Machinery and equipment | |||||||
Property, Plant and Equipment-Net | |||||||
Gross property plant and equipment | 12,664 | 12,664 | 12,539 | ||||
Changes in plant turnaround activity | |||||||
Balance at the beginning of the period | $ 226 | 226 | 246 | ||||
Additions | 89 | 14 | |||||
Depreciation | (51) | (52) | |||||
Effect of exchange rate changes | 1 | (4) | |||||
Balance at the end of the period | 265 | $ 204 | 265 | $ 204 | $ 246 | ||
Buildings and improvements | |||||||
Property, Plant and Equipment-Net | |||||||
Gross property plant and equipment | 911 | 911 | 895 | ||||
Construction in progress | |||||||
Property, Plant and Equipment-Net | |||||||
Gross property plant and equipment | $ 380 | $ 380 | $ 275 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Goodwill | |
Goodwill, Beginning Balance | $ 2,374 |
Effect of exchange rate changes | 4 |
Goodwill, Ending Balance | 2,378 |
Ammonia | |
Goodwill | |
Goodwill, Beginning Balance | 587 |
Effect of exchange rate changes | 1 |
Goodwill, Ending Balance | 588 |
Granular Urea | |
Goodwill | |
Goodwill, Beginning Balance | 828 |
Effect of exchange rate changes | 0 |
Goodwill, Ending Balance | 828 |
UAN | |
Goodwill | |
Goodwill, Beginning Balance | 576 |
Effect of exchange rate changes | 0 |
Goodwill, Ending Balance | 576 |
AN | |
Goodwill | |
Goodwill, Beginning Balance | 310 |
Effect of exchange rate changes | 2 |
Goodwill, Ending Balance | 312 |
Other | |
Goodwill | |
Goodwill, Beginning Balance | 73 |
Effect of exchange rate changes | 1 |
Goodwill, Ending Balance | $ 74 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Details 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Identifiable intangibles | |||||
Gross Carrying Amount | $ 168 | $ 168 | $ 165 | ||
Accumulated Amortization | (66) | (66) | (61) | ||
Net | 102 | $ 102 | 104 | ||
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 2021 | 4 | 4 | |||
2022 | 9 | 9 | |||
2023 | 9 | 9 | |||
2024 | 9 | 9 | |||
2025 | 9 | 9 | |||
2026 | 9 | 9 | |||
Customer relationships | |||||
Identifiable intangibles | |||||
Gross Carrying Amount | 135 | 135 | 133 | ||
Accumulated Amortization | (56) | (56) | (52) | ||
Net | 79 | 79 | 81 | ||
Trade names | |||||
Identifiable intangibles | |||||
Gross Carrying Amount | 33 | 33 | 32 | ||
Accumulated Amortization | (10) | (10) | (9) | ||
Net | $ 23 | $ 23 | $ 23 |
Equity Method Investment-Narrat
Equity Method Investment-Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
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 | 12 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 | $ 82 | $ 82 | ||
Carrying value of investments in excess of the entity's share of the affiliates' book value | 40 | 40 | ||
Purchases of ammonia from PLNL | $ 37 | $ 13 | $ 63 | $ 23 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Schedule of Investments [Line Items] | ||
Cash | $ 85 | $ 108 |
Cash equivalents: | ||
Cash and cash equivalents, adjusted cost | 777 | 683 |
Cash and cash equivalents, fair value disclosure | 777 | 683 |
U.S. and Canadian government obligations | ||
Cash equivalents: | ||
Cash equivalents, adjusted cost | 672 | 552 |
Cash equivalents, fair value | 672 | 552 |
Other debt securities | ||
Cash equivalents: | ||
Cash equivalents, adjusted cost | 20 | 23 |
Cash equivalents, fair value | 20 | 23 |
Nonqualified employee benefit trusts | ||
Cash equivalents: | ||
Available-for-sale securities, adjusted cost | 17 | 16 |
Available-for-sale securities, gross unrealized gain | 3 | 3 |
Available-for-sale securities, gross unrealized loss | 0 | 0 |
Available-for-sale securities, fair value | $ 20 | $ 19 |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2021 | Jun. 30, 2020 | |
Assets and liabilities measured at fair value on a recurring basis | |||||||
Payments for Strategic Venture Compliance | $ 5 | $ 5 | $ 5 | $ 5 | $ 5 | $ 5 | |
Unrealized Loss on Embedded Derivative Instrument | 2 | $ 1 | |||||
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 | 4,731 | 4,367 | |||||
Reported Value Measurement | |||||||
Assets and liabilities measured at fair value on a recurring basis | |||||||
Fair value of long-term debt, including current portion | 3,961 | 3,713 | |||||
Recurring basis | |||||||
Assets and liabilities measured at fair value on a recurring basis | |||||||
Cash equivalents | 575 | 692 | |||||
Nonqualified employee benefit trusts | 19 | 20 | |||||
Derivative Liability | 7 | 1 | |||||
Embedded derivative liability | (18) | (20) | |||||
Derivative Asset | 1 | 1 | |||||
Recurring basis | Quoted Prices in Active Markets (Level 1) | |||||||
Assets and liabilities measured at fair value on a recurring basis | |||||||
Cash equivalents | 575 | 692 | |||||
Nonqualified employee benefit trusts | 19 | 20 | |||||
Derivative Liability | 0 | 0 | |||||
Embedded derivative liability | 0 | 0 | |||||
Derivative Asset | 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 | 7 | 1 | |||||
Embedded derivative liability | (18) | (20) | |||||
Derivative Asset | 1 | 1 | |||||
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 | 0 | |||||
Embedded derivative liability | 0 | 0 | |||||
Derivative Asset | $ 0 | $ 0 |
Income Taxes Incomes Taxes (Det
Income Taxes Incomes Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Mar. 31, 2021 | Jul. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | ||||||
Effective Income Tax Rate Reconciliation, Percent | 21.20% | 13.40% | 17.40% | 13.10% | ||
Effective Income Tax Rate Reconciliation, Tax Settlement, Amount | $ 22 | $ 25 | ||||
Income tax provision (benefit) | $ (85) | $ (33) | (103) | (46) | ||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest | 402 | 251 | 595 | 355 | ||
Less: Net earnings attributable to noncontrolling interest | $ 71 | $ 28 | $ 95 | $ 51 | ||
Effective Income Tax Rate Reconciliation, period increase/(decrease) due to noncontrolling interest | 460.00% | 160.00% | 3.30% | 2.10% | ||
Income Tax Examination, Interest Income, Net of Tax | $ 13 | |||||
Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities | $ 19 | |||||
Income Tax Examination, Liability (Refund) Adjustment from Settlement with Taxing Authority | 108 | $ 108 | ||||
Income Tax Examination, Liability (Refund) Adjustment from Settlement with Taxing Authority, Withholding Tax Matter | $ 20 | $ 2 | ||||
Domestic Tax Authority [Member] | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Income Tax Examination, Interest Income | $ 16 |
Interest Expense (Details)
Interest Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Interest Expense [Abstract] | ||||
Interest on borrowings(1) | $ 44 | $ 47 | $ 90 | $ 93 |
Fees on financing agreements(1) | 2 | 2 | 4 | 4 |
Interest on tax liabilities(2) | 0 | 0 | 0 | (4) |
Interest expense | $ 46 | $ 49 | $ 94 | $ 93 |
Financing Agreements (Details)
Financing Agreements (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
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 | $ 3,750 | $ 4,000 |
Carrying amount | 3,713 | 3,961 |
Current Maturities of long-term debt | 0 | 250 |
Current maturities of long-term debt | 0 | 249 |
Long-term debt, net of current maturities | 3,713 | 3,712 |
Long-term debt, net of current maturities | 3,750 | 3,750 |
CF Industries | ||
Debt Instruments | ||
Unamortized debt discount | 9 | 9 |
Total deferred debt issuance costs | $ 28 | $ 30 |
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 | $ 748 |
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 | $ 741 | $ 741 |
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 | $ 0 | $ 250 |
Carrying amount | $ 0 | $ 249 |
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 | $ 741 | $ 740 |
Financing Agreements - Narrativ
Financing Agreements - Narrative (Details) - USD ($) | Mar. 20, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 05, 2019 | Jul. 29, 2016 |
Letter of Credit | Letter of Credit | |||||
Financing agreements | |||||
Maximum borrowing capacity | $ 250,000,000 | ||||
Line of Credit Facility, Fair Value of Amount Outstanding | 222,000,000 | ||||
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% | |||
Early Repayment of Senior Debt | $ 250,000,000 | ||||
Extinguishment of Debt, Amount | $ 258,000,000 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | $ 0 | $ 0 | $ 115 | $ (4) |
Winter Storm Uri | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (Loss) on Sale of Derivatives | 0 | 0 | 112 | 0 |
Energy Related Derivative | Not Designated as Hedging Instrument | Cost of Sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized Gain (Loss) on Derivatives | 0 | 0 | 6 | 12 |
Gain (Loss) on Sale of Derivatives | $ 0 | $ 0 | $ (3) | $ (16) |
Derivative Financial Instrume_4
Derivative Financial Instruments (Details 2) MMBTU in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021USD ($)MMBTU | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)MMBTU | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($)MMBTU | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||
Notional Nonmonetary Amount of Price Risk Derivative Instruments Not Designated as Hedging Instruments | MMBTU | 6.8 | 6.8 | 34.1 | ||
Percentage of Consumption Hedged by Derivatives | 13.00% | ||||
Fair values of derivatives on consolidated balance sheets | |||||
Cash collateral on deposit with derivative counterparties | $ 0 | $ 0 | $ 0 | ||
Aggregate fair value of the derivative instruments with credit risk related contingent features in a net liability position | 0 | 0 | 6,000,000 | ||
Cash collateral on deposit with derivative counterparties | 0 | 0 | 0 | ||
Winter Storm Uri | |||||
Fair values of derivatives on consolidated balance sheets | |||||
Gain (Loss) on Sale of Derivatives | 0 | $ 0 | 112,000,000 | $ 0 | |
Not Designated as Hedging Instrument | |||||
Fair values of derivatives on consolidated balance sheets | |||||
Derivative Asset | 1,000,000 | 1,000,000 | 1,000,000 | ||
Derivative Liability | (1,000,000) | (1,000,000) | (7,000,000) | ||
Cash collateral on deposit with derivative counterparties | 0 | 0 | 0 | ||
Cash collateral on deposit with derivative counterparties | 0 | 0 | 0 | ||
Not Designated as Hedging Instrument | Energy Related Derivative | |||||
Fair values of derivatives on consolidated balance sheets | |||||
Derivative Asset | 1,000,000 | 1,000,000 | 1,000,000 | ||
Derivative Liability | 1,000,000 | 1,000,000 | $ 7,000,000 | ||
Designated as Hedging Instrument | |||||
Fair values of derivatives on consolidated balance sheets | |||||
Derivative Asset | $ 0 | $ 0 |
Derivative Financial Instrume_5
Derivative Financial Instruments (Details 3) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Derivative [Line Items] | ||
Cash collateral on deposit with derivative counterparties | $ 0 | $ 0 |
Not Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative Asset | 1,000,000 | 1,000,000 |
Derivative, Collateral, Obligation to Return Securities | 0 | 0 |
Derivative, Collateral, Obligation to Return Cash | 0 | 0 |
Derivative Asset, Fair Value, Offset Against Collateral, Net of Not Subject to Master Netting Arrangement, Policy Election | 1,000,000 | 1,000,000 |
Derivative Liability | (1,000,000) | (7,000,000) |
Derivative Liability, Not Subject to Master Netting Arrangement Deduction | 0 | 0 |
Cash collateral on deposit with derivative counterparties | 0 | 0 |
Derivative Liability, Fair Value, Offset Against Collateral, Net of Not Subject to Master Netting Arrangement, Policy Election | (1,000,000) | (7,000,000) |
Derivative Assets (Liabilities), at Fair Value, Net | 0 | (6,000,000) |
Net Derivative (Asset) Liability, Not Subject to Master Netting Arrangement Deduction | 0 | 0 |
Derivative, Collateral, Obligation to Return Cash (Right to Reclaim Cash) | 0 | 0 |
Net Derivative Asset (Liability), Fair Value, Offset Against Collateral, Net of Not Subject to Master Netting Arrangement, Policy Election | $ 0 | $ (6,000,000) |
Noncontrolling Interest (Detail
Noncontrolling Interest (Details) $ in Millions | Jul. 30, 2021USD ($) | Jun. 30, 2021USD ($)T | Jun. 30, 2020USD ($) | Feb. 01, 2016 |
Noncontrolling interest | ||||
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders | $ 64 | $ 88 | ||
CF Industries Nitrogen, LLC | ||||
Noncontrolling interest | ||||
Maximum Annual Granular Urea Tons Eligible for Purchase | T | 1,100,000 | |||
Maximum Annual UAN Tons Eligible for Purchase | T | 580,000 | |||
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders | $ 64 | $ 88 | ||
CF Industries Nitrogen, LLC | Subsequent Event [Member] | ||||
Noncontrolling interest | ||||
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders | $ 130 | |||
CHS Inc. | CF Industries Nitrogen, LLC | ||||
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 | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Noncontrolling interest | ||||
Beginning balance | $ 2,681 | |||
Earnings attributable to noncontrolling interests | $ 71 | $ 28 | 95 | $ 51 |
Distribution declared to noncontrolling interest | (64) | (88) | ||
Ending balance | 2,712 | 2,712 | ||
CF Industries Nitrogen, LLC | ||||
Noncontrolling interest | ||||
Beginning balance | 2,681 | 2,740 | ||
Earnings attributable to noncontrolling interests | 95 | 51 | ||
Distribution declared to noncontrolling interest | (64) | (88) | ||
Ending balance | 2,712 | 2,703 | 2,712 | 2,703 |
Distributions payable to noncontrolling interests: | ||||
Beginning balance | 0 | 0 | ||
Declaration of distributions payable | 64 | 88 | ||
Distributions to noncontrolling interest | (64) | (88) | ||
Ending balance | $ 0 | $ 0 | $ 0 | $ 0 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Changes to accumulated other comprehensive income (loss) | ||
Balance at the beginning of the period | $ (320) | |
Balance at the end of the period | (296) | |
Foreign Currency Translation Adjustment | ||
Changes to accumulated other comprehensive income (loss) | ||
Balance at the beginning of the period | (144) | $ (188) |
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 0 | 0 |
Effect of exchange rate changes and deferred taxes | 24 | (71) |
Balance at the end of the period | (120) | (259) |
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 | 4 | 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 | 4 | 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 | (180) | (183) |
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 5 | 3 |
Effect of exchange rate changes and deferred taxes | (2) | 7 |
Balance at the end of the period | (180) | (172) |
Other Comprehensive Income Pension and Other Postretirement Benefit Plans Arising During Period Before Tax | (3) | 1 |
Accumulated Other Comprehensive Loss | ||
Changes to accumulated other comprehensive income (loss) | ||
Balance at the beginning of the period | (366) | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | (5) | (3) |
Effect of exchange rate changes and deferred taxes | 22 | (64) |
Balance at the end of the period | (296) | (426) |
Other Comprehensive Income Pension and Other Postretirement Benefit Plans Arising During Period Before Tax | $ (3) | $ 1 |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 27 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2021 | Feb. 13, 2019 | |
Equity [Abstract] | |||
Stock Repurchase Program, Authorized Amount | $ 1,000 | ||
Stock Repurchased and Retired During Period, Shares | 2.6 | 10.2 | |
Stock Repurchased and Retired During Period, Value | $ 100 | $ 437 |
Contingencies (Details)
Contingencies (Details) $ in Millions | Apr. 17, 2015PlaintiffInsurance_companyPeopleEntity | Apr. 17, 2013People | Dec. 31, 2015processingFacilitymine | Jun. 30, 2021USD ($) |
Loss Contingencies [Line Items] | ||||
Loss contingency, number of processing facilities | processingFacility | 3 | |||
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 | |||
Loss Contingency, Estimate of Possible Loss | $ | $ 37 | |||
IDAHO | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, number of mines | mine | 18 |
Segment Disclosures (Details)
Segment Disclosures (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Segment data | ||||
Net sales | $ 1,588 | $ 1,204 | $ 2,636 | $ 2,175 |
Cost of sales | 1,085 | 870 | 1,844 | 1,637 |
Gross margin | 503 | 334 | 792 | 538 |
Total other operating costs and expenses | 64 | 57 | 117 | 117 |
Equity in earnings of operating affiliate | 11 | 3 | 22 | 6 |
Operating earnings | 450 | 280 | 697 | 427 |
Winter Storm Uri | ||||
Segment data | ||||
Net sales | 36 | 68 | ||
Gain on sale of derivatives | 0 | 0 | 112 | 0 |
Ammonia | ||||
Segment data | ||||
Net sales | 459 | 364 | 665 | 557 |
Granular Urea | ||||
Segment data | ||||
Net sales | 433 | 329 | 832 | 666 |
UAN | ||||
Segment data | ||||
Net sales | 434 | 308 | 666 | 543 |
AN | ||||
Segment data | ||||
Net sales | 136 | 118 | 241 | 234 |
Operating Segments | Ammonia | ||||
Segment data | ||||
Net sales | 459 | 364 | 665 | 557 |
Cost of sales | 333 | 262 | 413 | 435 |
Gross margin | 126 | 102 | 252 | 122 |
Operating Segments | Granular Urea | ||||
Segment data | ||||
Net sales | 433 | 329 | 832 | 666 |
Cost of sales | 241 | 205 | 505 | 429 |
Gross margin | 192 | 124 | 327 | 237 |
Operating Segments | UAN | ||||
Segment data | ||||
Net sales | 434 | 308 | 666 | 543 |
Cost of sales | 296 | 245 | 526 | 438 |
Gross margin | 138 | 63 | 140 | 105 |
Operating Segments | AN | ||||
Segment data | ||||
Net sales | 136 | 118 | 241 | 234 |
Cost of sales | 120 | 91 | 215 | 194 |
Gross margin | 16 | 27 | 26 | 40 |
Operating Segments | Other | ||||
Segment data | ||||
Net sales | 126 | 85 | 232 | 175 |
Cost of sales | 95 | 67 | 185 | 141 |
Gross margin | $ 31 | $ 18 | $ 47 | $ 34 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ in Millions | Aug. 09, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Subsequent Event [Line Items] | |||
Principal | $ 3,750 | $ 4,000 | |
CF Industries | Senior notes 3.450% due 2023 | Senior Notes | |||
Subsequent Event [Line Items] | |||
Interest rate (as a percent) | 3.45% | 3.45% | |
Principal | $ 750 | $ 750 | |
Subsequent Event [Member] | CF Industries | Senior notes 3.450% due 2023 | Senior Notes | |||
Subsequent Event [Line Items] | |||
Interest rate (as a percent) | 3.45% | ||
Principal | $ 750 | ||
Early Repayment of Senior Debt | 250 | ||
Extinguishment of Debt, Amount | $ 265 |