CF Industries Holdings Inc.
05/07/2026 | Press release | Distributed by Public on 05/07/2026 11:21
Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
You should read the following discussion and analysis in conjunction with our annual consolidated financial statements and related notes and our discussion and analysis of financial condition and results of operations that were included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission (SEC) on February 25, 2026, as well as Item 1. Financial Statements in Part I of this Quarterly Report on Form 10-Q. All references to "CF Holdings," "we," "us," "our" and "the Company" refer to CF Industries Holdings, Inc. and its subsidiaries, except where the context makes clear that the reference is to CF Industries Holdings, Inc. only and not its subsidiaries. All references to "CF Industries" refer to CF Industries, Inc., a 100% owned subsidiary of CF Industries Holdings, Inc. References to tons refer to short tons. Notes referenced in this discussion and analysis refer to the notes to our unaudited interim consolidated financial statements in Item 1. Financial Statements in Part I of this Quarterly Report on Form 10-Q. The following is an outline of the discussion and analysis included herein:
•Overview of CF Holdings
•Market Conditions and Current Developments
•Financial Executive Summary
•Items Affecting Comparability of Results
•Consolidated Results of Operations
•Operating Results by Business Segment
•Liquidity and Capital Resources
•Critical Accounting Estimates
•Recent Accounting Pronouncement
•Forward-Looking Statements
Overview of CF Holdings
Our Company
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 low-carbon hydrogen and nitrogen products for energy, fertilizer, emissions abatement, and other industrial activities. Our value chain consists of 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. In July 2025, we completed a significant decarbonization project at our Donaldsonville, Louisiana, complex to enable the production of ammonia with a lower carbon intensity than that of ammonia produced through traditional processes ("low-carbon ammonia"). Additionally, we are executing further decarbonization projects in our existing network and constructing a greenfield low-carbon ammonia plant at our Blue Point complex to drive our strategy to leverage our unique capabilities to accelerate the world's transition to clean energy.
Our principal customers are cooperatives, retailers, independent fertilizer distributors, traders, wholesalers and industrial users. Our core product is anhydrous ammonia (ammonia), which contains 82% nitrogen and 18% hydrogen. Products derived from ammonia that are most often used as nitrogen fertilizers include granular urea, urea ammonium nitrate solution (UAN) and ammonium nitrate (AN). AN is also used extensively by the commercial explosives industry as a component of explosives. Products derived from ammonia that are sold primarily to industrial customers include diesel exhaust fluid (DEF), urea liquor, nitric acid and aqua ammonia. In addition, our low-carbon ammonia products are expected to be used for existing and new applications, such as power generation and steel production in Japan, and to help customers reduce the economic impact of European regulations on the price of carbon.
Our principal assets as of March 31, 2026 include:
•six U.S. manufacturing facilities located in: Donaldsonville, Louisiana (the largest ammonia production complex in the world); Sergeant Bluff, Iowa (our Port Neal complex); Yazoo City, Mississippi; Claremore, Oklahoma (our Verdigris complex); Woodward, Oklahoma; and Waggaman, Louisiana. The Waggaman facility is wholly owned by us, and the other five U.S. manufacturing facilities are wholly owned directly or indirectly by CF Industries Nitrogen, LLC (CFN), of which we own approximately 90% and CHS Inc. (CHS) owns the remainder (see Note 15-Noncontrolling Interests for additional information on our strategic venture with CHS);
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•two Canadian manufacturing facilities located in: Medicine Hat, Alberta (the largest ammonia production complex in Canada); and Courtright, Ontario;
•a United Kingdom manufacturing facility located in Billingham;
•an extensive system of terminals and associated transportation equipment located primarily in the Midwestern United States;
•a 50% interest in Point Lisas Nitrogen Limited (PLNL), an ammonia production joint venture located in Trinidad and Tobago that we account for under the equity method; and
•a 40% interest in Blue Point Number One, LLC, a joint venture formed on April 8, 2025 (the Blue Point joint venture), to construct an ammonia manufacturing plant at our Blue Point complex located in Modeste, Louisiana. The joint venture entity is a variable interest entity (VIE) of which we are the primary beneficiary. As a result, we consolidate this entity in our consolidated financial statements, with the combined 60% equity interest owned by our joint venture partners recorded as noncontrolling interests. See "Our Strategy-Blue Point joint venture," below, for additional information.
Our Strategy
At our core, CF Industries is a producer of ammonia. We use the Haber-Bosch process to fix atmospheric nitrogen with hydrogen from natural gas to produce anhydrous ammonia, whose chemical composition is NH3. We sell the ammonia itself or upgrade it to products such as granular urea, UAN and DEF. A majority of the ammonia and ammonia-derived products we manufacture are used as fertilizer, as the nitrogen content provides energy essential for crop growth. Other important uses of our products include emissions control.
Our strategy is to leverage our unique capabilities to accelerate the world's transition to clean energy. Our unique capabilities include: advantaged production, unmatched distribution and logistics network, operational excellence and disciplined capital stewardship.
Our leadership in ammonia production enables us to drive continued operational excellence in our underlying business while investing in decarbonization technologies to produce low-carbon ammonia. These investments allow us to pursue demand for low-carbon ammonia and upgraded products for both traditional and new applications. Traditional applications include agriculture, where low-carbon nitrogen products can be used to reduce the carbon footprint of food production and the life cycle carbon intensity of ethanol production. New growth opportunities include hard-to-abate industries like power generation and marine shipping, for which low-carbon ammonia offers a path to significantly lower carbon footprints as it does not emit carbon when combusted.
Decarbonizing our existing network
At our Donaldsonville and Yazoo City complexes, our decarbonization projects are leveraging carbon capture and sequestration (CCS) to enable us to convert a portion of our existing ammonia production to low-carbon ammonia production. CCS requires the construction of carbon dioxide (CO2) dehydration and compression units to enable process CO2 captured from the ammonia production process to be transported and sequestered, which prevents approximately 60% of the CO2 generated by ammonia production from being emitted to the atmosphere. For each facility we have contracted with ExxonMobil to transport and permanently store the captured CO2.
In July 2025, construction, commissioning and start-up of the dehydration and compression unit at our Donaldsonville complex was completed for a total cost of approximately $200 million. The dehydration and compression unit enables the transportation and permanent geological sequestration of up to 2 million metric tons of CO2 annually, depending on gross ammonia production and consumption of CO2 for upgraded products. This sequestered CO2 would otherwise be emitted into the atmosphere. The project qualifies for tax credits under Section 45Q of the Internal Revenue Code (45Q Tax Credits), which provide a tax credit per metric ton of CO2 captured and disposed of in secure geological storage. As a result of the Donaldsonville CCS project, we have the capacity to produce up to approximately 1.9 million tons of low-carbon ammonia annually at our Donaldsonville complex.
On an interim basis, ExxonMobil is storing CO2 from our Donaldsonville complex in permanent geologic sites through enhanced oil recovery. Upon receipt of Class VI permits issued by the U.S. Environmental Protection Agency (EPA) and authorization from the Railroad Commission of Texas, ExxonMobil plans to transition to dedicated permanent storage, starting with its Rose CCS project (Rose). Rose is one of many dedicated permanent storage sites ExxonMobil is developing along the Gulf Coast to expand its integrated CCS network. In October 2025, the EPA issued the final Class VI permits for Rose.
CF INDUSTRIES HOLDINGS, INC.
Construction of the dehydration and compression unit at our Yazoo City complex is expected to cost approximately $100 million. At Yazoo City, CCS is expected to commence in 2028, following construction, commissioning and start-up, and annually is expected to enable the transportation and sequestration of up to approximately 500,000 metric tons of CO2 that would otherwise have been emitted into the atmosphere. The Yazoo City CCS project is expected to qualify for 45Q Tax Credits, which provide a tax credit per metric ton of CO2 captured and disposed of in secure geological storage.
In the fourth quarter of 2025, we completed a nitric acid plant abatement project at our Verdigris complex. The abatement project is expected to significantly reduce nitrous oxide emissions from the plant, lowering CO2 equivalent emissions by over 600,000 metric tons on an annual basis.
Blue Point joint venture
On April 8, 2025, we announced that we formed a joint venture, Blue Point Number One, LLC, with JERA Co., Inc. (JERA), Japan's largest energy company, and Mitsui & Co., Ltd. (Mitsui), a leading global investment and trading company, to construct a low-carbon ammonia production facility at our Blue Point complex located in Modeste, Louisiana. We hold 40% ownership, JERA holds 35% ownership, and Mitsui holds 25% ownership in the Blue Point joint venture.
The Blue Point joint venture is expected to construct an autothermal reforming (ATR) ammonia production facility with a CO2 dehydration and compression unit to prepare captured CO2 for transportation and sequestration. Engineering, equipment procurement and pre-construction activities at our Blue Point complex began in the second quarter of 2025. Construction of the ammonia production facility is expected to begin in 2026, with low-carbon ammonia production expected to begin in 2029. We are responsible for overseeing and managing the development, construction, operation and maintenance of the ammonia production facility under contracts with the Blue Point joint venture. We, JERA and Mitsui are required to purchase low-carbon ammonia produced by the Blue Point joint venture in accordance with our respective ownership percentages once production commences.
We estimate that the cost of the low-carbon ATR ammonia production facility with CCS technologies will be approximately $3.7 billion. We anticipate that approximately one-third of the estimated cost is related to materials that will be imported to the United States, with the majority of imported materials expected to arrive in Louisiana in 2028. Pursuant to periodic capital calls, the Blue Point joint venture members will fund the cost of the facility's engineering, procurement and construction according to their respective ownership percentages. During the first quarter of 2026, we, JERA and Mitsui made capital contributions of $78 million, $68 million and $49 million, respectively, to the Blue Point joint venture.
The low-carbon ammonia production facility is designed with an annual nameplate capacity of approximately 1.4 million metric tons (approximately 1.5 million tons) and is expected to capture greater than 95% of the CO2 generated from its production of ammonia. The facility is expected to capture, compress and dehydrate approximately 2.3 million metric tons of CO2 annually. Pursuant to a long-term offtake agreement, a joint venture between a subsidiary of Occidental Petroleum Corporation and Enbridge Inc. would then transport the CO2 and permanently sequester it in a Class VI well at its Pelican Sequestration Hub in Louisiana, which is currently under development. The ammonia production facility is expected to qualify for 45Q Tax Credits, which provide a tax credit per metric ton of CO2 captured and disposed of in secure geological storage.
In June 2025, the Blue Point joint venture executed agreements, including a long-term supply agreement, with a subsidiary of Linde plc for them to design, construct, own, operate and maintain an air separation unit (ASU) at our Blue Point complex to supply oxygen and nitrogen to the low-carbon ATR ammonia production facility.
In addition, we plan to invest approximately $550 million to build scalable infrastructure at our Blue Point complex to supply the ammonia production facility with services, including product storage and vessel loading (the "Common Facilities"). We will own and operate the Common Facilities, and the Blue Point joint venture will compensate us for these services.
We determined that the Blue Point joint venture is a VIE of which we are the primary beneficiary. As a result, we consolidate this VIE in our consolidated financial statements, with the combined 60% equity interest owned by JERA and Mitsui recorded as noncontrolling interests. See "Liquidity and Capital Resources-Blue Point Joint Venture," below, and Note 12-Variable Interest Entity, for additional information on the Blue Point joint venture.
Low-carbon ammonia demand
We believe that our decarbonization projects provide us with benefits, including a significant return profile, a differentiated product offering to existing and new customers, and progress toward our long-term emissions reduction goals.
In 2025, we completed our first sales of low-carbon ammonia at a premium to traditional ammonia consumers in Europe and Africa as they began to establish a low-carbon ammonia supply chain. We expect continued demand growth for low-carbon
CF INDUSTRIES HOLDINGS, INC.
ammonia and upgraded products into Europe as customers seek to reduce the additional costs imposed by the European Union's regulations, including the carbon border adjustment mechanism in respect of greenhouse gas emissions associated with the production of imported ammonia and upgraded products.
In 2025, our expectation that there is developing demand for low-carbon ammonia for new applications of our products was confirmed through our joint venture partners, JERA and Mitsui. They have committed low-carbon ammonia volumes from the Blue Point joint venture for power generation and steel production, among other uses, which represent new applications for our products. In December 2025, both JERA and Mitsui were certified as a Supplier of Low-Carbon Hydrogen and its Derivatives by Japan's Ministry of Economy, Trade and Industry (METI). The certifications were granted under the "Support Focusing on the Price Gap" scheme established in accordance with the Hydrogen Society Promotion Act. In addition, in March 2026, METI granted approval for the certification of the Tomakomai Clean Energy Hub, a collaborative project in which Mitsui is a partner, under the Hub Development Support Program within Japan's Hydrogen Society Promotion Act, further evidencing developing demand for low-carbon ammonia.
We continue to engage in discussions with existing and potential customers who have interest in using low-carbon ammonia for traditional applications as well as for the supply of low-carbon ammonia for new applications. We are evaluating and are in various stages of discussions with other companies for long-term offtake and/or potential joint investments related to new and traditional applications for low-carbon ammonia. These discussions continue to advance as we gain greater clarity regarding demand for low-carbon ammonia, including associated carbon intensity requirements, government incentives and regulatory developments.
Market Conditions and Current Developments
Geopolitical Environment
Global selling prices for nitrogen fertilizers are driven by supply and demand dynamics. Beginning in 2025 and continuing into the first quarter of 2026, global nitrogen fertilizer market conditions reflected a tight supply and demand balance. In this period, there was strong global demand for all nitrogen products, particularly in North America, India and Brazil. At the same time, global supply was constrained due in part to supply disruptions in 2025 caused by geopolitical issues, maintenance activity and unexpected production outages in Egypt, Iran and Russia.
Towards the end of the first quarter of 2026, global market conditions were further impacted by the conflict with Iran, which led to additional nitrogen fertilizer global supply constraints and resulting price volatility as trade disruptions in the Middle East continued to unfold. The Middle East is one of the world's largest nitrogen producing and exporting regions due to its low-cost natural gas supply. Nitrogen production in the Middle East accounts for approximately 25-30% of globally traded ammonia and approximately 35-40% of globally traded urea annually, and urea is the most widely used nitrogen fertilizer globally. Safety concerns amid ongoing attacks by Iran and unavailability of war risk insurance coverage on affected vessels brought the flow of vessels to transport fertilizer and other products through the Strait of Hormuz to a halt in March of 2026, which prevented the export of nitrogen fertilizers and resulted in the curtailment or shut down of a significant amount of nitrogen capacity in the region. This supply disruption impacted the global supply demand balance resulting in higher selling prices for nitrogen products.
Liquefied natural gas (LNG) supply out of the Middle East has also been disrupted by the conflict with Iran. In particular, Qatar's LNG exports account for approximately 18% of global LNG trade and its export facilities were taken offline in March. This disruption in LNG supply out of the Middle East is affecting nitrogen producers reliant on imported LNG, such as nitrogen producers in India, Pakistan, and Bangladesh that have been either temporarily shut down or operating at reduced rates, further constraining global nitrogen supply. Damage to LNG facilities as a result of the conflict with Iran will require repairs prior to resumption of operations. Qatar's government has reported it will take multiple years to return its operations to full capacity. Furthermore, it is expected that nitrogen producers in the Middle East that have been impacted by the conflict with Iran, including those impacted by lower LNG supply due to damaged LNG facilities, may also require time to resume production at pre-conflict levels.
As a result of all these factors, global nitrogen fertilizer prices have significantly increased since the start of 2026.
We expect that these recent geopolitical events, including the length and extent of the conflict with Iran, viability of shipping through the Strait of Hormuz, and the extent of damage and time to repair energy infrastructure, will impact the future supply demand balance and future selling prices for nitrogen fertilizer products. The scope and duration of these impacts are currently unknown; however, we believe that these global nitrogen supply constraints, as described above, will persist in the near-term.
CF INDUSTRIES HOLDINGS, INC.
Government Policies
Since January 20, 2025, the Trump administration has imposed, modified and proposed additional tariffs on a range of products from most countries around the world, including global tariffs and tariffs on imports from Canada pursuant to the International Emergency Economic Powers Act (IEEPA). The Trump administration has negotiated and is negotiating tariff and trade agreements that have resulted in, and will continue to result in, changes to existing tariffs and other trade policies in the United States and globally. From March 6, 2025, the United States excluded from IEEPA-based tariffs any products that entered the United States duty-free as a good of Canada pursuant to the United States-Mexico-Canada Agreement, such that U.S. tariffs on Canadian imports were not applicable to our Canadian production. Effective November 13, 2025, the Trump administration exempted most fertilizer products, including urea, UAN and AN, but not ammonia, from IEEPA global tariffs announced on April 5, 2025.
On February 20, 2026, the U.S. Supreme Court ruled that IEEPA does not authorize the president to impose tariffs, including IEEPA-based global tariffs and tariffs on imports from Canada. Invoking other legal authority, the Trump administration responded by imposing a 10% tariff on most products imported into the United States on or after February 24, 2026, which may run for up to 150 days absent further congressional extension. The proclamation imposing the 10% tariff continues the IEEPA tariff exemptions that were applicable to our Canadian production and to most fertilizer products, which are both described above. The Trump administration subsequently launched multiple trade investigations pursuant to section 301 of the Trade Act of 1974 that are expected to result in the imposition of more durable tariffs against a wide range of countries at tariff rates to be determined by the Trump administration after receiving recommendations from the Office of the U.S. Trade Representative. The Supreme Court decision did not modify non-IEEPA tariffs, including tariffs on imports of certain steel and aluminum products and their derivatives which may impact the cost of our capital equipment, including for development and construction at our Blue Point complex. The Trump administration modified the proclamation order regarding metals tariffs on April 2, 2026 with impact that may increase or decrease tariffs on certain products.
Trade agreements that were recently negotiated between the United States and the European Union (EU) and several other countries may be continued or paused, or further negotiations regarding trade agreements may result in changes to the magnitude, timing or other aspects of tariffs between these countries. For example, the EU is continuing discussions with the Trump administration on tariff changes that may be imposed following the U.S. Supreme Court decision as the EU continues to take steps to fully implement the United States-European Union Framework on an Agreement on Reciprocal, Fair, and Balanced Trade, in which the EU committed to eliminate its tariffs on U.S. imports of nitrogen fertilizer products.
There remains ongoing uncertainty regarding tariff developments. Proposed or enacted tariffs and changes to U.S. trading policies may be reinstituted, paused, removed or changed at any time and may also be subject to litigation. Retaliatory tariffs or other imposition of taxes and duties on U.S. exports to trading partners may also be significant and occur at any time. Changes in U.S. trade policy or changes in other countries' trade policies has and may continue to lead to uncertainty in the global marketplace, impact the supply and demand balance in many regions, and increase the cost of capital equipment and other supplies, which could adversely affect our business, financial condition, results of operations and cash flows.
President Trump signed an Executive Order (EO) on December 6, 2025, on competitive activity in the food supply chain. The EO directs the Attorney General and the Federal Trade Commission to each establish a Food Supply Chain Security Task Force to investigate price-fixing and anti-competitive practices across the sector, including fertilizer, and take action as necessary, including bringing enforcement actions and proposing new regulatory approaches. In addition, following the closure of the Strait of Hormuz and the resulting increase in fertilizer selling prices, as discussed above under "-Geopolitical Environment," the Trump administration and Congress have increased their scrutiny of the fertilizer industry, and the Trump administration has announced intentions to improve fertilizer costs for farmers. The impact on our business and operations of any actions that the Trump administration or Congress could take to address fertilizer prices is uncertain.
Nitrogen Selling Prices
Our nitrogen products are globally traded commodities with selling prices that fluctuate in response to global market conditions, changes in supply and demand, and other cost factors including domestic and local conditions. Intense global competition-reflected in import volumes and prices-strongly influences delivered prices for nitrogen fertilizers. In general, the prevailing global prices for nitrogen products must be at a level to incent the high-cost marginal producer to produce product at a breakeven or above price, or else they would cease production and leave a portion of global demand unsatisfied.
In the first quarter of 2026, the average selling price for our products was $424 per ton, or 28% higher, compared to $332 per ton in the first quarter of 2025. This resulted in an increase in net sales of approximately $401 million for the first quarter of 2026 compared to the first quarter of 2025. Average selling prices for all of our major products were higher in the first quarter of 2026 than in the first quarter of 2025 due primarily to a tighter global nitrogen supply and demand balance driven by strong
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global demand and global supply constraints that were further impacted by the conflict with Iran. See "Geopolitical Environment," above.
Nitrogen Sales Volume
Sales volume was 4.7 million tons in the first quarter of 2026 compared to 5.0 million tons in the first quarter of 2025. Lower sales volume resulted in a decrease in net sales of approximately $78 million. The decrease in sales volume was due primarily to lower sales volumes for our AN segment as a result of the idled Yazoo City plant. See "Yazoo City Incident," below, for additional information. The decrease in sales volume also reflects lower sales volumes for our UAN segment, partially offset by higher sales volumes for our Granular Urea segment due to higher beginning inventory entering 2026 and a production mix that favored granular urea over UAN compared to the first quarter of 2025.
Natural Gas
Natural gas is the principal raw material used to produce our nitrogen products. Natural gas is both a chemical feedstock and a fuel used to produce nitrogen products. Natural gas is the largest and most volatile cost component of the manufacturing cost for our nitrogen products, representing approximately 39% and 34%, respectively, of our production costs in the first three months of 2026 and the year ended December 31, 2025. All of our ammonia manufacturing facilities are located in the United States and Canada. As a result, the price of natural gas in North America, which has historically been volatile, directly impacts a substantial portion of our operating expenses.
Early in the first quarter of 2026, natural gas prices in North America declined as warmer-than-normal weather reduced heating demand. However, prices rose sharply due to extreme weather, supply disruptions, and structurally tighter balances, with the main impact concentrated in late January. The primary catalyst was a winter storm that delivered prolonged, below-freezing temperatures from Texas through the Midwest and the Northeast. Residential and commercial heating demand surged, with total U.S. gas demand reaching record levels. Daily prices at the Henry Hub, the most heavily-traded natural gas pricing point in North America, spiked dramatically, with spot prices briefly reaching all-time highs. U.S. LNG feedgas demand was running near record levels entering the winter storm, limiting system flexibility. At the same time demand surged, supply fell sharply due to weather-related production curtailments impacting multiple basins. The combination of surging demand and falling production triggered unprecedented storage withdrawals. Following the winter storm, a return to more typical weather eased demand and pulled prices lower for the remainder of the first quarter.
The following table presents the average daily market price of natural gas at the Henry Hub and our cost of natural gas used for production, which includes the impact of realized natural gas derivatives:
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2026 | 2025 |
2026 v. 2025
|
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| Average daily market price of natural gas at the Henry Hub (per MMBtu) | $ | 4.90 | $ | 4.28 | $ | 0.62 | 14 | % | ||||||||||||||||||
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Cost of natural gas used for production in cost of sales(1) (per MMBtu)
|
4.57 | 3.68 | 0.89 | 24 | % | |||||||||||||||||||||
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(1)Includes the cost of natural gas used for production and related transportation that is included in cost of sales during the period under the first-in, first-out inventory cost method.
In the first quarter of 2026, our cost of natural gas used for production, which includes the impact of realized natural gas derivatives, increased 24% to $4.57 per MMBtu from $3.68 per MMBtu in the first quarter of 2025. This increase in natural gas costs resulted in a decrease in gross margin of $76 million compared to the first quarter of 2025.
Yazoo City Incident
In November 2025, we experienced an incident in the AN upgrade area at our Yazoo City complex. The facility's ammonia plant and other upgrade units were not damaged by the incident. However, the incident required us to temporarily idle all production at the site. Lower sales volumes for our AN segment in the three months ended March 31, 2026, were due primarily to the idled Yazoo City plant. Management is determining the required equipment and installation timeline to rebuild and does not expect production to resume until late in the fourth quarter of 2026 at the earliest based on time required for fabrication and delivery of certain required equipment.
As a result of the property damage incurred and based on estimates and assumptions of a preliminary review of the impact, in the fourth quarter of 2025, we recorded an impairment of certain fixed assets within our North American AN asset group of $25 million, which primarily consisted of machinery and equipment. See "Items Affecting Comparability of Results-Insurance recoveries-property damage," below, for additional information.
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Financial Executive Summary
We reported net earnings attributable to common stockholders of $615 million for the three months ended March 31, 2026 compared to $312 million for the three months ended March 31, 2025, an increase in net earnings of $303 million, or 97%. The increase in net earnings for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was due primarily to an increase in gross margin of $174 million, a litigation settlement gain of approximately $170 million, insurance recoveries of $25 million and $24 million of 45Q Tax Credits earned in the three months ended March 31, 2026. The litigation settlement gain and insurance recoveries are discussed further below in "Items Affecting Comparability of Results." These factors that increased net earnings attributable to common stockholders were partially offset by a higher income tax provision in the first quarter of 2026 compared to the first quarter of 2025.
Gross margin increased by $174 million, or 30%, to $746 million for the three months ended March 31, 2026 compared to $572 million for the three months ended March 31, 2025. The increase in gross margin was due primarily to a 28% increase in average selling prices to $424 per ton in the first quarter of 2026 from $332 per ton in the first quarter of 2025, as discussed above in "Nitrogen Selling Prices," which increased gross margin by $401 million. The increase in gross margin due to higher average selling prices was partially offset by higher costs associated with maintenance activity, including certain unabsorbed fixed costs as a result of plant downtime, including at our Yazoo City complex, higher natural gas costs, including the impact of realized derivatives, which decreased gross margin by $76 million, and lower sales volume, which decreased gross margin by $34 million.
Diluted net earnings per share attributable to common stockholders increased $2.13 per share, or 115%, to $3.98 per share in the first quarter of 2026 compared to $1.85 per share in the first quarter of 2025, due to higher net earnings and lower weighted-average common shares outstanding as a result of shares repurchased under our share repurchase programs. Diluted weighted-average common shares outstanding were 154.5 million shares for the three months ended March 31, 2026, a decrease of 8% compared to diluted weighted-average common shares outstanding of 168.8 million shares for the three months ended March 31, 2025.
Items Affecting Comparability of Results
For the three months ended March 31, 2026 and 2025, we reported net earnings attributable to common stockholders of $615 million and $312 million, respectively. In addition to the impact of market conditions and current developments, discussed above, certain items affected the comparability of our financial results for the three months ended March 31, 2026 and 2025. The following table and related discussion outline these items and their impact on the comparability of our financial results for these periods. The descriptions of items below that refer to amounts in the table refer to the pre-tax amounts unless otherwise noted.
| Three Months Ended March 31, | |||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| Pre-Tax | After-Tax | Pre-Tax | After-Tax | ||||||||||||||
| (in millions) | |||||||||||||||||
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives(1)
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$ | (3) | $ | (2) | $ | 2 | $ | 1 | |||||||||
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Loss on foreign currency transactions(2)(3)
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3 | 3 | 2 | 1 | |||||||||||||
| Litigation settlement gain | (170) | (129) | - | - | |||||||||||||
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Insurance recoveries-property damage(2)
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(25) | (19) | - | - | |||||||||||||
|
45Q Tax Credits(2)
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(24) | (24) | - | - | |||||||||||||
|
Blue Point joint venture development costs(2)(3)
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2 | 2 | - | - | |||||||||||||
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Loss on sale of Ince facility(4)
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- | - | 23 | 21 | |||||||||||||
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(1)Included in cost of sales in our consolidated statements of operations.
(2)Included in other operating (income) expense-net in our consolidated statements of operations.
(3)Includes results related to the Blue Point joint venture, of which we have a 40% equity interest. The after-tax impact for amounts related to the Blue Point joint venture does not include a tax provision on the 60% attributable to noncontrolling interests.
(4)Included in U.K. operations restructuring in our consolidated statement of operations.
Unrealized net mark-to-market (gain) loss on natural gas derivatives
Natural gas is the largest and most volatile single component of the manufacturing cost for our nitrogen-based products. At certain times, we have managed the risk of changes in natural gas prices through the use of derivative financial instruments.
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The derivatives that we use for this purpose are primarily natural gas fixed price swaps, basis swaps and options. We use natural gas derivatives as an economic hedge of natural gas price risk, but without the application of hedge accounting. This can result in volatility in reported earnings due to the unrealized mark-to-market adjustments that occur from changes in the value of the derivatives, which are reflected in cost of sales in our consolidated statements of operations. In the three months ended March 31, 2026, we recognized an unrealized net mark-to-market gain on natural gas derivatives of $3 million compared to a loss of $2 million in the three months ended March 31, 2025.
Loss on foreign currency transactions
In the three months ended March 31, 2026, we recognized a loss on foreign currency transactions of $3 million compared to a loss of $2 million in the three months ended March 31, 2025. Loss on foreign currency transactions consists of foreign currency exchange rate impacts on foreign currency denominated transactions, including cash held in a foreign currency.
Litigation settlement gain
In March 2026, CF Industries Sales, LLC and CF Industries Nitrogen, LLC, both subsidiaries of CF Holdings, signed an agreement to settle litigation with Orica International Pte Ltd and certain other affiliates of Orica Limited (Orica) and Nelson Brothers Inc. and Nelson Brothers LLC. In connection with the resolution of the litigation pursuant to the settlement, Orica agreed to pay us approximately $170 million in cash no later than April 30, 2026, and issued a press release confirming the settlement terms and Orica's funding source. The settlement also provided for the termination of the AN purchase agreements entered into in February 2014 between the parties.
Upon execution of the settlement agreement, we concluded that the settlement payment was unconditional and legally enforceable, thus the gain contingency was considered realized during the first quarter of 2026. Accordingly, we recognized a gain of approximately $170 million, which is reflected in litigation settlement gain in our consolidated statement of operations for the three months ended March 31, 2026.
On April 30, 2026, we received the cash payment from Orica.
Insurance recoveries-property damage
In November 2025, we experienced an incident in the AN upgrade area at our Yazoo City complex. The facility's ammonia plant and other upgrade units were not damaged by the incident. However, the incident required us to temporarily idle all production at the site. As a result of the property damage incurred and based on estimates and assumptions of a preliminary review of the impact, in the fourth quarter of 2025, we recorded an impairment of certain fixed assets within our North American AN asset group of $25 million, which primarily consisted of machinery and equipment.
In the first quarter of 2026, we recognized $25 million of insurance recoveries related to property damage incurred in connection with the Yazoo City incident. The recoveries are included in other operating (income) expense-net in our consolidated statement of operations. See Note 6-Property, Plant and Equipment-Net for additional information.
45Q Tax Credits
In July 2025, construction, commissioning and start-up of the dehydration and compression unit at our Donaldsonville complex was completed. As a result, in the first quarter of 2026, we earned approximately $24 million of 45Q Tax Credits, which is recorded in other operating income (expense)-net in our consolidated statement of operations for the three months ended March 31, 2026.
Blue Point joint venture development costs
In the three months ended March 31, 2026, the Blue Point joint venture incurred development costs that were not eligible for capitalization of approximately $2 million related to the construction of the low-carbon ammonia production facility at our Blue Point complex. See "Overview of CF Holdings-Our Strategy-Blue Point joint venture," above, and Note 12-Variable Interest Entity, for additional information on the Blue Point joint venture.
Loss on sale of Ince facility
In the first quarter of 2025, our previously decommissioned Ince, U.K. facility was sold, including certain liabilities assumed by the buyer. As a result, we recognized a loss of $23 million, which was reflected in U.K. operations restructuring in our consolidated statement of operations for the three months ended March 31, 2025.
CF INDUSTRIES HOLDINGS, INC.
Consolidated Results of Operations
The following table presents our consolidated results of operations and certain supplemental data for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2026 | 2025 | 2026 v. 2025 | ||||||||||||||||||||||||
| (dollars in millions, except per share and per MMBtu amounts) | ||||||||||||||||||||||||||
| Net sales | $ | 1,986 | $ | 1,663 | $ | 323 | 19 | % | ||||||||||||||||||
| Cost of sales (COS) | 1,240 | 1,091 | 149 | 14 | % | |||||||||||||||||||||
| Gross margin | 746 | 572 | 174 | 30 | % | |||||||||||||||||||||
| Gross margin percentage | 37.6 | % | 34.4 | % | 3.2 | % | ||||||||||||||||||||
| Selling, general and administrative expenses | 103 | 84 | 19 | 23 | % | |||||||||||||||||||||
| U.K. operations restructuring | - | 23 | (23) | (100) | % | |||||||||||||||||||||
| Litigation settlement gain | (170) | - | (170) | N/M | ||||||||||||||||||||||
| Other operating (income) expense-net | (44) | 14 | (58) | N/M | ||||||||||||||||||||||
| Total other operating (income) expense-net | (111) | 121 | (232) | N/M | ||||||||||||||||||||||
| Equity in earnings of operating affiliate | 6 | 4 | 2 | 50 | % | |||||||||||||||||||||
| Operating earnings | 863 | 455 | 408 | 90 | % | |||||||||||||||||||||
| Interest expense | 39 | 37 | 2 | 5 | % | |||||||||||||||||||||
| Interest income | (20) | (17) | (3) | (18) | % | |||||||||||||||||||||
| Other non-operating expense (income)-net | - | (2) | 2 | 100 | % | |||||||||||||||||||||
| Earnings before income taxes | 844 | 437 | 407 | 93 | % | |||||||||||||||||||||
| Income tax provision | 168 | 86 | 82 | 95 | % | |||||||||||||||||||||
| Net earnings | 676 | 351 | 325 | 93 | % | |||||||||||||||||||||
| Less: Net earnings attributable to noncontrolling interests | 61 | 39 | 22 | 56 | % | |||||||||||||||||||||
| Net earnings attributable to common stockholders | $ | 615 | $ | 312 | $ | 303 | 97 | % | ||||||||||||||||||
|
Diluted net earnings per share attributable to common stockholders
|
$ | 3.98 | $ | 1.85 | $ | 2.13 | 115 | % | ||||||||||||||||||
|
Diluted weighted-average common shares outstanding
|
154.5 | 168.8 | (14.3) | (8) | % | |||||||||||||||||||||
| Dividends declared per common share | $ | 0.50 | $ | 0.50 | $ | - | - | % | ||||||||||||||||||
| Natural gas supplemental data (per MMBtu) | ||||||||||||||||||||||||||
|
Natural gas costs in COS(1)
|
$ | 4.95 | $ | 3.69 | $ | 1.26 | 34 | % | ||||||||||||||||||
|
Realized derivatives gain in COS(2)
|
(0.38) | (0.01) | (0.37) | N/M | ||||||||||||||||||||||
| Cost of natural gas used for production in COS | $ | 4.57 | $ | 3.68 | $ | 0.89 | 24 | % | ||||||||||||||||||
| Average daily market price of natural gas at the Henry Hub | $ | 4.90 | $ | 4.28 | $ | 0.62 | 14 | % | ||||||||||||||||||
| Unrealized net mark-to-market (gain) loss on natural gas derivatives | $ | (3) | $ | 2 | $ | (5) | N/M | |||||||||||||||||||
| Depreciation and amortization | $ | 228 | $ | 221 | $ | 7 | 3 | % | ||||||||||||||||||
|
Capital expenditures
|
$ | 223 | $ | 132 | $ | 91 | 69 | % | ||||||||||||||||||
| Sales volume by product tons (000s) | 4,683 | 5,004 | (321) | (6) | % | |||||||||||||||||||||
| Production volume by product tons (000s): | ||||||||||||||||||||||||||
|
Ammonia(3)
|
2,457 | 2,617 | (160) | (6) | % | |||||||||||||||||||||
| Granular urea | 1,151 | 1,110 | 41 | 4 | % | |||||||||||||||||||||
|
UAN (32%)(4)
|
1,525 | 1,856 | (331) | (18) | % | |||||||||||||||||||||
| AN | 105 | 322 | (217) | (67) | % | |||||||||||||||||||||
N/M-Not Meaningful
(1)Includes the cost of natural gas used for production and related transportation that is included in cost of sales during the period under the first-in, first-out inventory cost method.
(2)Includes realized gains and losses on natural gas derivatives settled during the period. Excludes unrealized mark-to-market gains and losses on natural gas derivatives.
(3)Gross ammonia production, including amounts subsequently upgraded on-site into granular urea, UAN, or AN.
(4)UAN product tons assume a 32% nitrogen content basis for production volume.
CF INDUSTRIES HOLDINGS, INC.
First Quarter of 2026 Compared to First Quarter of 2025
Net Sales
Our total net sales increased $323 million, or 19%, to $1.99 billion in the first quarter of 2026 compared to $1.66 billion in the first quarter of 2025, due primarily to higher average selling prices, partially offset by lower sales volume.
Our average selling price was $424 per ton in the first quarter of 2026 compared to $332 per ton in the first quarter of 2025. Average selling prices for all of our major products were higher in the first quarter of 2026 than in the first quarter of 2025 due primarily to a tighter global nitrogen supply and demand balance driven by strong global demand and global supply constraints that were further impacted by the conflict with Iran. See "Market Conditions and Current Developments-Geopolitical Environment," above. The impact of higher average selling prices was an increase in net sales of approximately $401 million for the first quarter of 2026 compared to the first quarter of 2025.
Our total sales volume was 4.7 million product tons in the first quarter of 2026 compared to 5.0 million product tons in the first quarter of 2025, as lower sales volume in our UAN, AN, Ammonia and Other segments was partially offset by higher sales volume in our Granular Urea segment. The impact of lower sales volume was a decrease in net sales of approximately $78 million.
Cost of Sales
Our total cost of sales increased $149 million, or 14%, to $1.24 billion in the first quarter of 2026 from $1.09 billion in the first quarter of 2025. The increase in our cost of sales primarily reflects higher costs in the first quarter of 2026 associated with maintenance activity, including certain unabsorbed fixed costs as a result of plant downtime, including at our Yazoo City complex, and higher costs for natural gas, including the impact of realized derivatives, which increased cost of sales by $76 million, partially offset by a decrease in sales volume, which decreased cost of sales by $45 million.
Cost of sales averaged $265 per ton in the first quarter of 2026, a 22% increase compared to $218 per ton in the first quarter of 2025. Our cost of natural gas, including the impact of realized derivatives, increased $0.89 per MMBtu, or 24%, to $4.57 per MMBtu in the first quarter of 2026 from $3.68 per MMBtu in the first quarter of 2025. See "Market Conditions and Current Developments-Natural Gas," above, for additional information about the factors impacting natural gas prices.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $19 million to $103 million in the first quarter of 2026 compared to $84 million in the first quarter of 2025. The increase was due primarily to higher incentive compensation due to strong operating performance and higher costs for certain corporate initiatives.
U.K. Operations Restructuring
In the first quarter of 2025, our previously decommissioned Ince, U.K. facility was sold, including certain liabilities assumed by the buyer. As a result, we recognized a loss of $23 million for the three months ended March 31, 2025.
Litigation Settlement Gain
During the first quarter of 2026, we recognized a gain of approximately $170 million as a result of litigation settled during the period. See "Items Affecting Comparability of Results-Litigation settlement gain," above, for additional information.
Other Operating (Income) Expense-Net
Other operating (income) expense-net was $44 million of income in the first quarter of 2026 compared to $14 million of expense in the first quarter of 2025. The $44 million of income in the first quarter of 2026 consists primarily of $25 million of insurance recoveries related to the Yazoo City incident and $24 million of 45Q Tax Credits earned as a result of CO2 sequestered. The $14 million of expense in the first quarter of 2025 consists primarily of costs related to front-end engineering and design studies for our clean energy initiatives. See "Our Strategy," above, for additional information related to our clean energy initiatives.
Equity in Earnings of Operating Affiliate
Equity in earnings of operating affiliate was $6 million in the first quarter of 2026 compared to $4 million in the first quarter of 2025. Higher equity in earnings of operating affiliate in the first quarter of 2026 compared to the first quarter of 2025
CF INDUSTRIES HOLDINGS, INC.
reflects an increase in the operating results of PLNL due primarily to higher ammonia selling prices, partially offset by higher natural gas costs.
Interest Expense
Interest expense was $39 million in the first quarter of 2026 compared to $37 million in the first quarter of 2025. The increase in interest expense was due primarily to higher outstanding principal amounts of senior notes outstanding compared to the first quarter of 2025, partially offset by higher capitalized interest. Higher outstanding principal amounts of senior notes outstanding reflects the November 2025 issuance of $1 billion aggregate principal amount of 5.300% senior notes due 2035 partially offset by the December 2025 prepayment in full of the outstanding $750 million aggregate principal amount of 4.500% senior secured notes due 2026. See "Liquidity and Capital Resources-Debt-Senior Notes," below, for additional information on our senior notes.
Interest Income
Interest income was $20 million in the first quarter of 2026 compared to $17 million in the first quarter of 2025. The increase of $3 million was due primarily to returns on higher average cash balances.
Income Tax Provision
For the three months ended March 31, 2026, we recorded an income tax provision of $168 million on pre-tax income of $844 million, or an effective tax rate of 20.0%, compared to an income tax provision of $86 million on pre-tax income of $437 million, or an effective tax rate of 19.8%, for the three months ended March 31, 2025.
Our effective tax rate is impacted by earnings attributable to noncontrolling interests as our consolidated income tax provision does not include a tax provision on the earnings attributable to noncontrolling interests. Our effective tax rate for the three months ended March 31, 2026 of 20.0%, which is based on pre-tax income of $844 million, including $61 million of earnings attributable to noncontrolling interests, would be 1.5 percentage points higher, or 21.5%, if based on pre-tax income exclusive of the earnings attributable to noncontrolling interests of $61 million. Our effective tax rate for the three months ended March 31, 2025 of 19.8%, which is based on pre-tax income of $437 million, including $39 million of earnings attributable to noncontrolling interests, would be 1.9 percentage points higher, or 21.7%, if based on pre-tax income exclusive of the earnings attributable to noncontrolling interests of $39 million.
Net Earnings Attributable to Noncontrolling Interests
Net earnings attributable to noncontrolling interests increased $22 million to $61 million in the three months ended March 31, 2026 compared to $39 million in the three months ended March 31, 2025 due primarily to higher earnings of CFN driven by higher average selling prices, partially offset by higher natural gas costs and higher costs associated with maintenance activity. The increase in net earnings attributable to higher earnings of CFN was partially offset by the loss attributable to the noncontrolling interests in the Blue Point joint venture, which was formed in the second quarter of 2025. See "Overview of CF Holdings-Our Strategy-Blue Point joint venture," above, Note 12-Variable Interest Entity and Note 15-Noncontrolling Interests for additional information on the Blue Point joint venture.
Diluted Net Earnings Per Share Attributable to Common Stockholders
Diluted net earnings per share attributable to common stockholders increased $2.13, or 115%, to $3.98 per share in the first three months of 2026 from $1.85 per share in the first three months of 2025. This increase was due primarily to higher net earnings driven by an increase in gross margin and lower weighted-average common shares outstanding as a result of common shares repurchased under our share repurchase programs. Diluted weighted-average common shares outstanding declined 8% from 168.8 million shares for the three months ended March 31, 2025 to 154.5 million shares for the three months ended March 31, 2026.
CF INDUSTRIES HOLDINGS, INC.
Operating Results by Business Segment
Our reportable segments consist of Ammonia, Granular Urea, UAN, AN and Other. These segments are differentiated by products. Our management uses gross margin to evaluate segment performance and allocate resources. Other operating costs and expenses (consisting primarily of selling, general and administrative expenses and other operating (income) expense-net) and non-operating expenses (consisting primarily of interest and income taxes), are centrally managed and are not included in the measurement of segment profitability reviewed by management. The following table presents summary operating results by business segment:
| Ammonia |
Granular Urea(1)
|
UAN(1)
|
AN(1)
|
Other(1)
|
Consolidated | ||||||||||||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||||||||||||||
| Three months ended March 31, 2026 | |||||||||||||||||||||||||||||||||||
| Net sales | $ | 627 | $ | 590 | $ | 583 | $ | 58 | $ | 128 | $ | 1,986 | |||||||||||||||||||||||
| Cost of sales | 400 | 335 | 333 | 69 | 103 | 1,240 | |||||||||||||||||||||||||||||
| Gross margin | $ | 227 | $ | 255 | $ | 250 | $ | (11) | $ | 25 | $ | 746 | |||||||||||||||||||||||
| Gross margin percentage | 36.2 | % | 43.2 | % | 42.9 | % | (19.0) | % | 19.5 | % | 37.6 | % | |||||||||||||||||||||||
| Three months ended March 31, 2025 | |||||||||||||||||||||||||||||||||||
| Net sales | $ | 520 | $ | 439 | $ | 470 | $ | 101 | $ | 133 | $ | 1,663 | |||||||||||||||||||||||
| Cost of sales | 334 | 266 | 328 | 85 | 78 | 1,091 | |||||||||||||||||||||||||||||
| Gross margin | $ | 186 | $ | 173 | $ | 142 | $ | 16 | $ | 55 | $ | 572 | |||||||||||||||||||||||
| Gross margin percentage | 35.8 | % | 39.4 | % | 30.2 | % | 15.8 | % | 41.4 | % | 34.4 | % | |||||||||||||||||||||||
(1)The cost of ammonia and other products that are upgraded in the production of Granular Urea, UAN, AN and Other products is transferred at cost into the results of those products.
CF INDUSTRIES HOLDINGS, INC.
Ammonia Segment
Our Ammonia segment produces anhydrous ammonia (ammonia), which is the base product that we manufacture, containing 82% nitrogen and 18% hydrogen. The results of our Ammonia segment consist of sales of ammonia to external customers for its nitrogen content as a fertilizer, in emissions control and in other industrial applications. In addition, we upgrade ammonia into other nitrogen products such as granular urea, UAN and AN.
The following table presents summary operating data for our Ammonia segment:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | 2026 v. 2025 | |||||||||||||||||||||
| (dollars in millions, except per ton amounts) | |||||||||||||||||||||||
| Net sales | $ | 627 | $ | 520 | $ | 107 | 21 | % | |||||||||||||||
| Cost of sales | 400 | 334 | 66 | 20 | % | ||||||||||||||||||
| Gross margin | $ | 227 | $ | 186 | $ | 41 | 22 | % | |||||||||||||||
| Gross margin percentage | 36.2 | % | 35.8 | % | 0.4 | % | |||||||||||||||||
| Sales volume by product tons (000s) | 1,103 | 1,146 | (43) | (4) | % | ||||||||||||||||||
|
Sales volume by nutrient tons (000s)(1)
|
905 | 940 | (35) | (4) | % | ||||||||||||||||||
| Average selling price per product ton | $ | 568 | $ | 454 | $ | 114 | 25 | % | |||||||||||||||
|
Average selling price per nutrient ton(1)
|
$ | 693 | $ | 553 | $ | 140 | 25 | % | |||||||||||||||
| Gross margin per product ton | $ | 206 | $ | 162 | $ | 44 | 27 | % | |||||||||||||||
|
Gross margin per nutrient ton(1)
|
$ | 251 | $ | 198 | $ | 53 | 27 | % | |||||||||||||||
| Depreciation and amortization | $ | 61 | $ | 48 | $ | 13 | 27 | % | |||||||||||||||
| Unrealized net mark-to-market (gain) loss on natural gas derivatives | $ | (1) | $ | 1 | $ | (2) | N/M | ||||||||||||||||
_______________________________________________________________________________
N/M-Not Meaningful
(1)Ammonia represents 82% nitrogen content. Nutrient tons represent the tons of nitrogen within the product tons.
First Quarter of 2026 Compared to First Quarter of 2025
Net Sales. Net sales in our Ammonia segment increased by $107 million, or 21%, to $627 million in the three months ended March 31, 2026 from $520 million in the three months ended March 31, 2025. The increase in our net sales reflects a 25% increase in average selling prices, partially offset by a 4% decrease in sales volume. Average selling prices increased to $568 per ton in the three months ended March 31, 2026 compared to $454 per ton in the three months ended March 31, 2025 due primarily to a tighter global nitrogen supply and demand balance driven by strong global demand and global supply constraints that were further impacted by the conflict with Iran. See "Market Conditions and Current Developments-Geopolitical Environment," above.
Ammonia sales volume in the three months ended March 31, 2026 was 1.10 million tons, a decrease of 4% compared to 1.15 million tons in the three months ended March 31, 2025. The decrease in sales volume was driven by lower supply availability as a result of lower beginning inventory entering 2026 compared to inventory levels entering 2025.
Cost of Sales. Cost of sales in our Ammonia segment averaged $362 per ton in the three months ended March 31, 2026, a 24% increase from $292 per ton in the three months ended March 31, 2025. The increase was due primarily to higher costs associated with maintenance activity, including certain unabsorbed fixed costs as a result of plant downtime, and higher realized natural gas costs, including the impact of realized derivatives, in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
Gross Margin. Gross margin in our Ammonia segment increased by $41 million, or 22%, to $227 million in the three months ended March 31, 2026 from $186 million in the three months ended March 31, 2025, and our gross margin percentage was 36.2% in the three months ended March 31, 2026 compared to 35.8% in the three months ended March 31, 2025. The increase in gross margin was due primarily to a 25% increase in average selling prices, which increased gross margin by $139 million. The increase in gross margin due to higher average selling prices was partially offset by a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $52 million, an increase in realized natural gas costs, including the impact of realized derivatives, which reduced gross margin by $32 million, and a 4% decrease in sales volume, which decreased gross margin by $16 million. Gross margin also includes the impact of a $1 million unrealized net
CF INDUSTRIES HOLDINGS, INC.
mark-to-market gain on natural gas derivatives in the three months ended March 31, 2026 compared to a loss of $1 million in the three months ended March 31, 2025.
Granular Urea Segment
Our Granular Urea segment produces granular urea, which contains 46% nitrogen. Produced from ammonia and carbon dioxide, it has the highest nitrogen content of any of our solid nitrogen fertilizers. Granular urea is produced at our Donaldsonville, Port Neal and Medicine Hat complexes.
The following table presents summary operating data for our Granular Urea segment:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | 2026 v. 2025 | |||||||||||||||||||||
| (dollars in millions, except per ton amounts) | |||||||||||||||||||||||
| Net sales | $ | 590 | $ | 439 | $ | 151 | 34 | % | |||||||||||||||
| Cost of sales | 335 | 266 | 69 | 26 | % | ||||||||||||||||||
| Gross margin | $ | 255 | $ | 173 | $ | 82 | 47 | % | |||||||||||||||
| Gross margin percentage | 43.2 | % | 39.4 | % | 3.8 | % | |||||||||||||||||
| Sales volume by product tons (000s) | 1,291 | 1,125 | 166 | 15 | % | ||||||||||||||||||
|
Sales volume by nutrient tons (000s)(1)
|
594 | 517 | 77 | 15 | % | ||||||||||||||||||
| Average selling price per product ton | $ | 457 | $ | 390 | $ | 67 | 17 | % | |||||||||||||||
|
Average selling price per nutrient ton(1)
|
$ | 993 | $ | 849 | $ | 144 | 17 | % | |||||||||||||||
| Gross margin per product ton | $ | 198 | $ | 154 | $ | 44 | 29 | % | |||||||||||||||
|
Gross margin per nutrient ton(1)
|
$ | 429 | $ | 335 | $ | 94 | 28 | % | |||||||||||||||
| Depreciation and amortization | $ | 76 | $ | 71 | $ | 5 | 7 | % | |||||||||||||||
| Unrealized net mark-to-market gain on natural gas derivatives | $ | (1) | $ | - | $ | (1) | N/M | ||||||||||||||||
_______________________________________________________________________________
N/M-Not Meaningful
(1)Granular urea represents 46% nitrogen content. Nutrient tons represent the tons of nitrogen within the product tons.
First Quarter of 2026 Compared to First Quarter of 2025
Net Sales. Net sales in our Granular Urea segment increased $151 million, or 34%, to $590 million in the three months ended March 31, 2026 from $439 million in the three months ended March 31, 2025. The increase in our net sales reflects a 17% increase in average selling prices, and a 15% increase in sales volume. Average selling prices increased to $457 per ton in the three months ended March 31, 2026 compared to $390 per ton in the three months ended March 31, 2025 due primarily to a tighter global nitrogen supply and demand balance driven by strong global demand and global supply constraints that were further impacted by the conflict with Iran. See "Market Conditions and Current Developments-Geopolitical Environment," above. The increase in sales volume was due primarily to increased supply availability resulting from (i) higher beginning inventory entering 2026 compared to the prior year period and (ii) a production mix that favored granular urea production in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
Cost of Sales. Cost of sales in our Granular Urea segment averaged $259 per ton in the three months ended March 31, 2026, a 10% increase from $236 per ton in the three months ended March 31, 2025. The increase was due primarily to higher realized natural gas costs, including the impact of realized derivatives, in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
Gross Margin. Gross margin in our Granular Urea segment increased by $82 million, or 47%, to $255 million in the three months ended March 31, 2026 from $173 million in the three months ended March 31, 2025, and our gross margin percentage was 43.2% in the three months ended March 31, 2026 compared to 39.4% in the three months ended March 31, 2025. The increase in gross margin was due primarily to a 17% increase in average selling prices, which increased gross margin by $85 million, and a 15% increase in sales volume, which increased gross margin by $27 million. This increase in gross margin was partially offset by an increase in realized natural gas costs, including the impact of realized derivatives, which decreased gross margin by $21 million, and a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $10 million. Gross margin also includes the impact of a $1 million unrealized net mark-to-market gain on natural gas derivatives in the three months ended March 31, 2026.
CF INDUSTRIES HOLDINGS, INC.
UAN Segment
Our UAN segment produces urea ammonium nitrate solution (UAN). UAN, a liquid fertilizer product with a nitrogen content that typically ranges from 28% to 32%, is produced by combining urea and ammonium nitrate. UAN is produced at our Courtright, Donaldsonville, Port Neal, Verdigris, Woodward, and Yazoo City complexes.
The following table presents summary operating data for our UAN segment:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | 2026 v. 2025 | |||||||||||||||||||||
| (dollars in millions, except per ton amounts) | |||||||||||||||||||||||
| Net sales | $ | 583 | $ | 470 | $ | 113 | 24 | % | |||||||||||||||
| Cost of sales | 333 | 328 | 5 | 2 | % | ||||||||||||||||||
| Gross margin | $ | 250 | $ | 142 | $ | 108 | 76 | % | |||||||||||||||
| Gross margin percentage | 42.9 | % | 30.2 | % | 12.7 | % | |||||||||||||||||
| Sales volume by product tons (000s) | 1,671 | 1,875 | (204) | (11) | % | ||||||||||||||||||
|
Sales volume by nutrient tons (000s)(1)
|
526 | 593 | (67) | (11) | % | ||||||||||||||||||
| Average selling price per product ton | $ | 349 | $ | 251 | $ | 98 | 39 | % | |||||||||||||||
|
Average selling price per nutrient ton(1)
|
$ | 1,108 | $ | 793 | $ | 315 | 40 | % | |||||||||||||||
| Gross margin per product ton | $ | 150 | $ | 76 | $ | 74 | 97 | % | |||||||||||||||
|
Gross margin per nutrient ton(1)
|
$ | 475 | $ | 239 | $ | 236 | 99 | % | |||||||||||||||
| Depreciation and amortization | $ | 64 | $ | 73 | $ | (9) | (12) | % | |||||||||||||||
| Unrealized net mark-to-market (gain) loss on natural gas derivatives | $ | (1) | $ | 1 | $ | (2) | N/M | ||||||||||||||||
_______________________________________________________________________________
N/M-Not Meaningful
(1)UAN represents between 28% and 32% of nitrogen content, depending on the concentration specified by the customer. Nutrient tons represent the tons of nitrogen within the product tons.
First Quarter of 2026 Compared to First Quarter of 2025
Net Sales. Net sales in our UAN segment increased $113 million, or 24%, to $583 million in the three months ended March 31, 2026 from $470 million in the three months ended March 31, 2025 due primarily to a 39% increase in average selling prices, partially offset by an 11% decrease in sales volume. Average selling prices increased to $349 per ton in the three months ended March 31, 2026 compared to $251 per ton in the three months ended March 31, 2025 due primarily to a tighter global nitrogen supply and demand balance driven by strong global demand and global supply constraints, including the impacts of geopolitical events. See "Market Conditions and Current Developments-Geopolitical Environment," above. The decrease in sales volume was due primarily to a production mix that favored granular urea production in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
Cost of Sales. Cost of sales in our UAN segment averaged $199 per ton in the three months ended March 31, 2026, a 14% increase from $175 per ton in three months ended March 31, 2025, due primarily to higher realized natural gas costs, including the impact of realized derivatives, and higher costs associated with maintenance activity in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
Gross Margin. Gross margin in our UAN segment increased by $108 million, or 76%, to $250 million in the three months ended March 31, 2026 from $142 million in the three months ended March 31, 2025, and our gross margin percentage was 42.9% in the three months ended March 31, 2026 compared to 30.2% in the three months ended March 31, 2025. The increase in gross margin was due primarily to a 39% increase in average selling prices, which increased gross margin by $161 million. The increase in gross margin due to higher average selling prices was partially offset by an 11% decrease in sales volume, which decreased gross margin by $20 million, an increase in realized natural gas costs, including the impact of realized derivatives, which decreased gross margin by $19 million, and a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $16 million. Gross margin also includes the impact of a $1 million unrealized net mark-to-market gain on natural gas derivatives in the three months ended March 31, 2026 compared to a loss of $1 million in the three months ended March 31, 2025.
CF INDUSTRIES HOLDINGS, INC.
AN Segment
Our AN segment produces ammonium nitrate (AN). AN, which has a nitrogen content between 29% and 35%, is produced by combining anhydrous ammonia and nitric acid. AN is used as nitrogen fertilizer and is also used extensively by the commercial explosives industry as a component of explosives. AN is produced at our Yazoo City and Billingham complexes.
The following table presents summary operating data for our AN segment:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | 2026 v. 2025 | |||||||||||||||||||||
| (dollars in millions, except per ton amounts) | |||||||||||||||||||||||
| Net sales | $ | 58 | $ | 101 | $ | (43) | (43) | % | |||||||||||||||
| Cost of sales | 69 | 85 | (16) | (19) | % | ||||||||||||||||||
| Gross margin | $ | (11) | $ | 16 | $ | (27) | N/M | ||||||||||||||||
| Gross margin percentage | (19.0) | % | 15.8 | % | (34.8) | % | |||||||||||||||||
| Sales volume by product tons (000s) | 130 | 328 | (198) | (60) | % | ||||||||||||||||||
|
Sales volume by nutrient tons (000s)(1)
|
45 | 113 | (68) | (60) | % | ||||||||||||||||||
| Average selling price per product ton | $ | 446 | $ | 308 | $ | 138 | 45 | % | |||||||||||||||
|
Average selling price per nutrient ton(1)
|
$ | 1,289 | $ | 894 | $ | 395 | 44 | % | |||||||||||||||
| Gross margin per product ton | $ | (85) | $ | 49 | $ | (134) | N/M | ||||||||||||||||
|
Gross margin per nutrient ton(1)
|
$ | (244) | $ | 142 | $ | (386) | N/M | ||||||||||||||||
| Depreciation and amortization | $ | 3 | $ | 8 | $ | (5) | (63) | % | |||||||||||||||
| Unrealized net mark-to-market (gain) loss on natural gas derivatives | $ | - | $ | - | $ | - | - | % | |||||||||||||||
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N/M-Not Meaningful
(1)AN represents between 29% and 35% of nitrogen content. Nutrient tons represent the tons of nitrogen within the product tons.
Yazoo City Incident
In November 2025, we experienced an incident in the AN upgrade area at our Yazoo City complex. The facility's ammonia plant and other upgrade units were not damaged by the incident. However, the incident required us to temporarily idle all production at the site. Management is determining the required equipment and installation timeline to rebuild and does not expect production to resume until late in the fourth quarter of 2026 at the earliest based on time required for fabrication and delivery of certain required equipment. See "Market Conditions and Current Developments-Yazoo City Incident," above, for additional information. The Yazoo City incident does not impact AN production at our Billingham complex.
First Quarter of 2026 Compared to First Quarter of 2025
Net Sales. Net sales in our AN segment decreased $43 million, or 43%, to $58 million in the three months ended March 31, 2026 from $101 million in the three months ended March 31, 2025 due to a 60% decrease in sales volume, partially offset by a 45% increase in average selling prices. Average selling prices increased to $446 per ton in the three months ended March 31, 2026 compared to $308 per ton in the three months ended March 31, 2025 due primarily to a tighter global nitrogen supply and demand balance driven by strong global demand and global supply constraints, including the impacts of geopolitical events. See "Market Conditions and Current Developments-Geopolitical Environment," above. Higher average selling prices also reflect a higher proportion of AN sales in the United Kingdom compared to the first quarter of 2025. The decrease in sales volume was due primarily to lower supply availability due to lower production in the first quarter of 2026 as a result of the idled Yazoo City plant described above.
Cost of Sales. Cost of sales in our AN segment averaged $531 per ton in the three months ended March 31, 2026, a 105% increase from $259 per ton in the three months ended March 31, 2025. The increase was due primarily to (i) higher costs associated with maintenance activity, including certain unabsorbed fixed costs resulting from our idled Yazoo City plant, in the three months ended March 31, 2026 compared to the three months ended March 31, 2025, and (ii) a higher proportion of AN sales in the United Kingdom compared to the first quarter of 2025, which include higher costs per ton due to purchasing ammonia for upgrade to AN compared to the cost of natural gas used to produce ammonia.
Gross Margin. Gross margin in our AN segment decreased $27 million to $(11) million in the three months ended March 31, 2026 from $16 million in the three months ended March 31, 2025, and our gross margin percentage was (19.0)% in
CF INDUSTRIES HOLDINGS, INC.
the three months ended March 31, 2026 compared to 15.8% in the three months ended March 31, 2025. The decrease in gross margin was due primarily to a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $19 million, and a 60% decrease in sales volume, which decreased gross margin by $18 million. The decrease in gross margin was partially offset by a 45% increase in average selling prices, which increased gross margin by $10 million.
Other Segment
Our Other segment primarily includes the following products:
•diesel exhaust fluid (DEF), an aqueous urea solution typically made with 32.5% or 50% high-purity urea and the remainder deionized water;
•urea liquor, a liquid product that we sell in concentrations of 40%, 50% and 70% high-purity urea as a chemical intermediate; and
•nitric acid, a nitrogen-based mineral acid that is used in the production of nitrate-based fertilizers, nylon precursors and other specialty chemicals.
The following table presents summary operating data for our Other segment:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | 2026 v. 2025 | |||||||||||||||||||||
| (dollars in millions, except per ton amounts) | |||||||||||||||||||||||
| Net sales | $ | 128 | $ | 133 | $ | (5) | (4) | % | |||||||||||||||
| Cost of sales | 103 | 78 | 25 | 32 | % | ||||||||||||||||||
| Gross margin | $ | 25 | $ | 55 | $ | (30) | (55) | % | |||||||||||||||
| Gross margin percentage | 19.5 | % | 41.4 | % | (21.9) | % | |||||||||||||||||
| Sales volume by product tons (000s) | 488 | 530 | (42) | (8) | % | ||||||||||||||||||
|
Sales volume by nutrient tons (000s)(1)
|
96 | 106 | (10) | (9) | % | ||||||||||||||||||
| Average selling price per product ton | $ | 262 | $ | 251 | $ | 11 | 4 | % | |||||||||||||||
|
Average selling price per nutrient ton(1)
|
$ | 1,333 | $ | 1,255 | $ | 78 | 6 | % | |||||||||||||||
| Gross margin per product ton | $ | 51 | $ | 104 | $ | (53) | (51) | % | |||||||||||||||
|
Gross margin per nutrient ton(1)
|
$ | 260 | $ | 519 | $ | (259) | (50) | % | |||||||||||||||
| Depreciation and amortization | $ | 16 | $ | 13 | $ | 3 | 23 | % | |||||||||||||||
| Unrealized net mark-to-market (gain) loss on natural gas derivatives | $ | - | $ | - | $ | - | - | % | |||||||||||||||
(1)Nutrient tons represent the tons of nitrogen within the product tons.
First Quarter of 2026 Compared to First Quarter of 2025
Net Sales. Net sales in our Other segment decreased by $5 million, or 4%, to $128 million in the three months ended March 31, 2026 from $133 million in the three months ended March 31, 2025 due to an 8% decrease in sales volume, partially offset by a 4% increase in average selling prices. The decrease in sales volume was due primarily to lower DEF sales volume due in part to the ongoing outage at our Yazoo City complex. See "AN Segment-Yazoo City Incident," above, for additional information. Average selling prices increased by 4% due primarily to a tighter global nitrogen supply and demand balance and the impacts of geopolitical events. See "Market Conditions and Current Developments-Geopolitical Environment," above.
Cost of Sales. Cost of sales in our Other segment averaged $211 per ton in the three months ended March 31, 2026, a 44% increase from $147 per ton in the three months ended March 31, 2025, due primarily to higher costs associated with maintenance activity, including certain unabsorbed fixed costs as a result of plant downtime, including at our Yazoo City complex, in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. See "AN Segment-Yazoo City Incident," above, for additional information.
Gross Margin. Gross margin in our Other segment decreased by $30 million, or 55%, to $25 million in the three months ended March 31, 2026 from $55 million in the three months ended March 31, 2025, and our gross margin percentage was 19.5% in the three months ended March 31, 2026 compared to 41.4% in the three months ended March 31, 2025. The decrease in gross margin was due primarily to a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $25 million, an 8% decrease in sales volume, which decreased gross margin by $7 million, and an increase in realized natural gas costs, including the impact of realized derivatives, which decreased gross margin by $4 million. These
CF INDUSTRIES HOLDINGS, INC.
factors that decreased gross margin were partially offset by a 4% increase in average selling prices, which increased gross margin by $6 million.
Liquidity and Capital Resources
Our primary uses of cash are generally for operating costs, working capital, capital expenditures, debt service, investments, taxes, share repurchases, dividends, and our clean energy initiatives. Our working capital requirements are affected by several factors, including demand for our products, selling prices, the level of customer advances, raw material costs, freight costs and seasonal factors inherent in the business. We may also utilize our cash to fund acquisitions. In addition, we may from time to time seek to retire or purchase our outstanding debt through cash purchases, in open market or privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
Generally, our primary source of cash is cash from operations, which includes cash generated by customer advances. We may also from time to time access the capital markets or engage in borrowings under our revolving credit agreement. At March 31, 2026, we were in compliance with all applicable covenant requirements under our revolving credit agreement and senior notes, and unused borrowing capacity under our revolving credit agreement was $750 million.
As of March 31, 2026, our cash and cash equivalents balance was $2.04 billion, an increase of $60 million from $1.98 billion at December 31, 2025, and consisted of the following:
| March 31, 2026 | December 31, 2025 | ||||||||||
| (in millions) | |||||||||||
| Cash and cash equivalents, excluding amounts related to Blue Point Number One, LLC | $ | 1,788 | $ | 1,852 | |||||||
| Cash and cash equivalents-Blue Point Number One, LLC | 254 | 130 | |||||||||
| Total cash and cash equivalents | $ | 2,042 | $ | 1,982 | |||||||
Cash Equivalents
Cash equivalents include highly liquid investments that are readily convertible to known amounts of cash with original maturities of three months or less. Under our short-term investment policy, we may invest our cash balances, either directly or through mutual funds, in several types of investment-grade securities, including notes and bonds issued by governmental entities or corporations. Securities issued by governmental entities include those issued directly by the U.S. and Canadian federal governments; those issued by state, local or other governmental entities; and those guaranteed by entities affiliated with governmental entities.
Blue Point Joint Venture
On April 8, 2025, we formed the Blue Point joint venture with JERA and Mitsui to construct a low-carbon ammonia production facility at our Blue Point complex located in Modeste, Louisiana. We hold 40% ownership, JERA holds 35% ownership, and Mitsui holds 25% ownership in the Blue Point joint venture.
The Blue Point joint venture is expected to construct an ATR ammonia production facility with a CO2 dehydration and compression unit to prepare captured CO2 for transportation and sequestration. Engineering, equipment procurement and pre-construction activities at our Blue Point complex began in the second quarter of 2025. Construction of the ammonia production facility is expected to begin in 2026, with low-carbon ammonia production expected to begin in 2029.
We estimate that the cost of the low-carbon ATR ammonia production facility with CCS technologies will be approximately $3.7 billion. We anticipate that approximately one-third of the estimated cost is related to materials that will be imported to the United States, with the majority of imported materials expected to arrive in Louisiana in 2028. Pursuant to periodic capital calls, the Blue Point joint venture members will fund the cost of the facility's engineering, procurement and construction according to their respective ownership percentages. During the first quarter of 2026, we, JERA and Mitsui made capital contributions of $78 million, $68 million and $49 million, respectively, to the Blue Point joint venture.
In June 2025, the Blue Point joint venture executed agreements, including a long-term supply agreement, with a subsidiary of Linde plc for them to design, construct, own, operate and maintain an air separation unit (ASU) at our Blue Point complex to supply oxygen and nitrogen to the low-carbon ATR ammonia production facility.
In addition, we plan to invest approximately $550 million to build the Common Facilities at our Blue Point complex to supply the ammonia production facility with services, including product storage and vessel loading. The Common Facilities will be constructed with a similar timeline as the ammonia production facility noted above.
CF INDUSTRIES HOLDINGS, INC.
See "Overview of CF Holdings-Our Strategy-Blue Point joint venture," above, and Note 12-Variable Interest Entity, for additional information on the Blue Point joint venture.
Capital Spending
We make capital expenditures to sustain our asset base, increase our capacity or capabilities, improve plant efficiency, comply with various environmental, health and safety requirements, and invest in our clean energy strategy. Capital expenditures totaled $223 million in the first three months of 2026 compared to $132 million in the first three months of 2025.
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| March 31, 2026 |
March 31, 2025 |
||||||||||
| (in millions) | |||||||||||
| Existing operations | $ | 132 | $ | 130 | |||||||
|
Blue Point joint venture(1)
|
65 | - | |||||||||
| Blue Point complex Common Facilities | 20 | - | |||||||||
| Capitalized interest | 6 | 2 | |||||||||
| Total capital expenditures | $ | 223 | $ | 132 | |||||||
(1)Amounts represent 100% of the Blue Point joint venture capital spending, of which 60% is funded by our joint venture partners through capital contributions to the joint venture. See "Overview of CF Holdings-Our Strategy-Blue Point joint venture," above, and Note 12-Variable Interest Entity, for additional information on the Blue Point joint venture.
The Blue Point joint venture is consolidated in our financial statements, including our statements of cash flows. We currently anticipate that our consolidated capital expenditures for the full year 2026 to be approximately $1.3 billion, consisting of approximately $550 million for our existing operations and approximately $600 million representing the Blue Point joint venture's planned capital expenditures related to construction of the low-carbon ATR ammonia production facility at our Blue Point complex. Also, we anticipate our 2026 capital spending will include approximately $150 million related to our construction of the Common Facilities at the Blue Point complex.
Of the Blue Point joint venture's $600 million of planned 2026 capital expenditures, approximately $240 million will be funded by us, representing our 40% equity interest in the Blue Point joint venture, and approximately $360 million will be funded by our partners in the joint venture, representing their combined 60% equity interest in the Blue Point joint venture.
For 2026, we anticipate that our capital expenditures will be funded primarily from available cash, including cash from operations, in addition to contributions received from our Blue Point joint venture partners pursuant to periodic capital calls as discussed under "Blue Point Joint Venture," above.
Planned capital expenditures are generally subject to change due to delays in regulatory approvals or permitting, unanticipated increases in cost, changes in scope and completion time, engineering and construction change orders, performance of third parties, delays in the receipt of equipment, adverse weather, defects in materials and workmanship, labor or material shortages, impact of tariffs, retaliatory measures or other changes in trade policy, transportation constraints, acceleration or delays in the timing of the work and other unforeseen difficulties. Any of these changes in planned capital expenditures, individually or in the aggregate, could have a material impact on our results of operations and cash flows. See "-Forward-Looking Statements" for additional risks related to our planned capital expenditures.
Yazoo City Incident
In November 2025, we experienced an incident in the AN upgrade area at our Yazoo City complex. The facility's ammonia plant and other upgrade units were not damaged by the incident. However, the incident required us to temporarily idle all production at the site. Management is determining the required equipment and installation timeline to rebuild and does not expect production to resume until late in the fourth quarter of 2026 at the earliest based on time required for fabrication and delivery of certain required equipment.
The Yazoo City incident is a covered event under our comprehensive insurance coverage for property damage, business interruption and other insurable exposures applicable to our global manufacturing plants and properties. In the first quarter of 2026, we filed initial insurance claims for both property damage and business interruption related to the Yazoo City incident. We have subsequently received initial acceptance of our claims from the insurance carriers and are continuing to work with the carriers to determine the total value of the claims. We expect to receive insurance proceeds over the rebuilding period of the Yazoo City plant.
CF INDUSTRIES HOLDINGS, INC.
Our projected consolidated capital expenditures for the full year 2026 related to our existing operations of $550 million, as noted under Capital Spending, above, does not include an estimate of the capital expenditures for the rebuild of the Yazoo City plant, which we anticipate will commence in the second quarter of 2026. We expect a significant portion of these capital expenditures will be offset by property insurance proceeds. In April 2026, we received initial proceeds of $75 million.
Share Repurchase Programs
Our Board of Directors (the Board) has authorized certain programs to repurchase shares of our common stock. These programs have generally permitted repurchases to be made from time to time in the open market, through privately-negotiated transactions, through block transactions, through accelerated share repurchase programs 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.
On November 2, 2022, the Board authorized the repurchase of up to $3 billion of CF Holdings common stock effective through December 31, 2025 (the 2022 Share Repurchase Program). On May 6, 2025, the Board authorized the repurchase of up to $2 billion of CF Holdings common stock commencing upon the completion of the 2022 Share Repurchase Program and effective through December 31, 2029 (the 2025 Share Repurchase Program). In October 2025, we completed the 2022 Share Repurchase Program and commenced repurchases under the 2025 Share Repurchase Program.
The following table summarizes the share repurchases under the 2025 Share Repurchase Program through March 31, 2026.
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| Shares |
Amounts(1)
|
||||||||||
| (in millions) | |||||||||||
| Shares repurchased in 2025: | |||||||||||
| Fourth quarter | 3.4 | $ | 278 | ||||||||
| Total shares repurchased in 2025 | 3.4 | $ | 278 | ||||||||
| Shares repurchased in 2026: | |||||||||||
| First quarter | 0.2 | $ | 15 | ||||||||
|
Shares repurchased as of March 31, 2026
|
3.6 | $ | 293 | ||||||||
(1)As defined in the 2025 Share Repurchase Program, amounts reflect the price paid for the shares of common stock repurchased, excluding commissions paid to brokers and excise taxes.
In the three months ended March 31, 2026, we repurchased approximately 155,000 shares under the 2025 Share Repurchase Program for $15 million. In the three months ended March 31, 2025, we repurchased approximately 5.4 million shares under the 2022 Share Repurchase Program for $434 million.
Canada Revenue Agency Competent Authority Matter
For tax years after 2011, certain of our Canadian subsidiaries were accepted for consideration under the bilateral settlement provisions of the U.S.-Canada tax treaty by the United States and Canadian competent authorities in connection with transfer pricing matters. In order to mitigate the assessment of future Canadian interest on these Canadian transfer pricing positions, we made income tax deposits to the Canadian taxing authorities of CAD $130 million (approximately $95 million) during the first quarter of 2026. The income tax deposits were recorded as noncurrent income tax-related assets and will be applied against the final assessments upon resolution by the competent authorities. For the amounts ultimately owed and paid to the Canadian taxing authorities, the Company will seek refunds of related taxes paid in the United States.
Debt
Revolving Credit Agreement
We have a senior unsecured revolving credit facility (the Revolving Credit Agreement), which provides for revolving credit facility commitments of up to $750 million with a maturity of September 4, 2030 and includes a letter of credit sub-limit of $125 million and a swingline loan sub-limit of $75 million. Borrowings under the Revolving Credit Agreement may be used for working capital, capital expenditures, acquisitions, share repurchases and other general corporate purposes. CF Industries is the lead borrower, and CF Holdings is the sole guarantor, under the Revolving Credit Agreement.
Borrowings under the Revolving Credit Agreement can be denominated in U.S. dollars, Canadian dollars, euros and British pounds. Borrowings in U.S. dollars bear interest at an annual rate equal to, at our option, an applicable adjusted term
CF INDUSTRIES HOLDINGS, INC.
secured overnight financing rate (or a similar benchmark rate for non-U.S. dollar borrowings) plus a specified margin, or base rate plus a specified margin. We are required to pay a commitment fee on the undrawn portion of the commitments under the Revolving Credit Agreement and customary letter of credit fees. The specified margins and the amount of the commitment fee will depend on CF Holdings' credit rating at the time. The Revolving Credit Agreement contains representations and warranties and affirmative and negative covenants, including one financial covenant.
As of March 31, 2026, we had unused borrowing capacity under the Revolving Credit Agreement of $750 million and no outstanding letters of credit under the Revolving Credit Agreement. In addition, there were no borrowings outstanding under the Revolving Credit Agreement during the three months ended March 31, 2026, or as of December 31, 2025.
Letters of Credit Under Reimbursement Agreement
We are party to a reimbursement agreement providing for the issuance of up to $425 million of letters of credit. As of March 31, 2026, approximately $335 million of letters of credit were outstanding under this agreement. The primary purpose of the letters of credit outstanding is to provide credit support to Canadian taxing authorities for amounts related to certain tax years that were reassessed and objected to, and which have been accepted for consideration under the bilateral settlement provisions of the U.S.-Canada tax treaty by the United States and Canadian competent authorities.
Senior Notes
Long-term debt presented on our consolidated balance sheets as of March 31, 2026 and December 31, 2025 consisted of the following debt securities issued by CF Industries:
| Effective Interest Rate | March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||
| Principal Outstanding |
Carrying Amount(1)
|
Principal Outstanding |
Carrying Amount(1)
|
||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
| Public Senior Notes: | |||||||||||||||||||||||||||||
| 5.150% due March 2034 | 5.293% | $ | 750 | $ | 743 | $ | 750 | $ | 743 | ||||||||||||||||||||
| 5.300% due November 2035 | 5.444% | 1,000 | 989 | 1,000 | 989 | ||||||||||||||||||||||||
| 4.950% due June 2043 | 5.040% | 750 | 743 | 750 | 742 | ||||||||||||||||||||||||
| 5.375% due March 2044 | 5.478% | 750 | 741 | 750 | 741 | ||||||||||||||||||||||||
| Total long-term debt | $ | 3,250 | $ | 3,216 | $ | 3,250 | $ | 3,215 | |||||||||||||||||||||
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(1)Carrying amount is net of unamortized debt discount and deferred debt issuance costs. Total unamortized debt discount was $5 million as of both March 31, 2026 and December 31, 2025, and total deferred debt issuance costs were $29 million and $30 million as of March 31, 2026 and December 31, 2025, respectively.
Under the indentures (including the applicable supplemental indentures) governing the senior notes due 2034, 2043 and 2044 (the Public Senior Notes), each series of notes is guaranteed by CF Holdings. Interest on the Public Senior Notes is payable semiannually, and the Public Senior Notes are redeemable at our option, in whole at any time or in part from time to time, at specified redemption prices.
Pursuant to Rule 3-10 of Regulation S-X and Rule 12h-5 of the Exchange Act, subsidiary issuers of obligations guaranteed by their parent company are not required to provide separate financial statements, provided that the subsidiary obligor is consolidated into such parent company's consolidated financial statements, such related guarantee is "full and unconditional" and, subject to certain exceptions as set forth below, the alternative disclosure required by Rule 13-01 is provided, which includes narrative disclosure and summarized financial information. CF Holdings owns substantially all of its assets and conducts substantially all of its operations through CF Industries, and CF Industries is consolidated into CF Holdings' financial statements. Our Public Senior Notes either meet the conditions of this requirement or are otherwise not required to be presented. Accordingly, separate consolidated financial statements of CF Industries have not been presented.
Furthermore, as permitted under Rule 13-01(a)(4)(vi) of Regulation S-X, summarized financial information for CF Industries has been excluded because the assets, liabilities and results of operations of CF Industries are not materially different than the corresponding amounts in CF Holdings' consolidated financial statements, and because management believes such summarized financial information would not be material for investors.
CF INDUSTRIES HOLDINGS, INC.
Forward Sales and Customer Advances
We offer our customers the opportunity to purchase products from us on a forward basis at prices and on delivery dates we propose. Therefore, our reported fertilizer selling prices and margins may differ from market spot prices and margins available at the time of shipment.
Customer advances, which typically represent a portion of the contract's value, are received shortly after the contract is executed, with any remaining unpaid amount generally being collected by the time control transfers to the customer, thereby reducing or eliminating the accounts receivable related to such sales. Any cash payments received in advance from customers in connection with forward sales contracts are reflected on our consolidated balance sheets as a current liability until control transfers and revenue is recognized. As of March 31, 2026 and December 31, 2025, we had $132 million and $77 million, respectively, in customer advances on our consolidated balance sheets.
While customer advances are generally a significant source of liquidity, the level of forward sales contracts is affected by many factors, including current market conditions, our customers' outlook of future market fundamentals and seasonality. During periods of declining prices, customers tend to delay purchasing fertilizer in anticipation that prices in the future will be lower than the current prices. If the level of sales under our forward sales programs were to decrease in the future, our cash received from customer advances would likely decrease and our accounts receivable balances would likely increase. Additionally, borrowing under the Revolving Credit Agreement could become necessary. Due to the volatility inherent in our business and changing customer expectations, we cannot estimate the amount of future forward sales activity.
Under our forward sales programs, a customer may delay delivery of an order due to weather conditions or other factors. These delays generally subject the customer to potential charges for storage or may be grounds for termination of the contract by us. Such a delay in scheduled shipment or termination of a forward sales contract due to a customer's inability or unwillingness to perform may negatively impact our reported sales.
Derivative Financial Instruments
We use derivative financial instruments to reduce our exposure to changes in prices for natural gas that will be purchased in the future. Natural gas is the largest and most volatile component of our manufacturing cost for nitrogen-based products. From time to time, we may also use derivative financial instruments to reduce our exposure to changes in foreign currency exchange rates. Volatility in reported quarterly earnings can result from the unrealized mark-to-market adjustments in the value of the derivatives. As of March 31, 2026, our open natural gas derivative contracts consisted of natural gas basis swaps for 9.0 million MMBtus of natural gas. As of December 31, 2025, our open natural gas derivative contracts consisted of natural gas basis swaps for 13.5 million MMBtus of natural gas.
Defined Benefit Pension Plans
In the fourth quarter of 2025, pursuant to the implementation of our retirement plan strategy for our Canadian and U.K. pension plans, we entered into agreements with insurance companies to purchase non-participating group buy-in annuity contracts (buy-in contracts), and for one of our Canadian plans, a non-participating group buy-out annuity contract that transferred the majority of the plan's projected benefit obligation to the insurance company. While the buy-in contracts did not transfer the projected benefit obligations to the insurance companies, they were structured to align with the projected benefits for each of the plans and are held as pension trust assets. As a result of these transactions, we do not expect to have significant required contributions for our Canadian or U.K. pension plans.
As a result of the planned windup of our U.S. pension plan with an effective termination date of December 31, 2025, we expect to contribute approximately $9 million to this plan in 2026, representing the estimated plan termination liability.
Distributions to Noncontrolling Interest in CFN
On January 30, 2026, the CFN Board of Managers approved semi-annual distribution payments for the distribution period ended December 31, 2025, and on January 30, 2026, CFN distributed $201 million to CHS for this distribution period. The estimate of the partnership distribution earned by CHS, but not yet declared, for the first quarter of 2026 is approximately $88 million.
Cash Flows
Net cash provided by operating activities during the first three months of 2026 was $496 million, a decrease of $90 million, compared to $586 million in the first three months of 2025. The decrease in cash flow from operations was due primarily to cash used for changes in working capital, which included lower customer advances, higher accounts receivable and lower accounts payable and accrued expenses, and income tax deposits made to Canadian taxing authorities during the first
CF INDUSTRIES HOLDINGS, INC.
quarter of 2026 of approximately $95 million. These factors that resulted in lower cash from operations in the first three months of 2026 were partially offset by higher earnings driven by higher gross margin compared to the prior year period.
Net cash used in investing activities was $225 million in the first three months of 2026 compared to $126 million in the first three months of 2025. Capital expenditures totaled $223 million during the first three months of 2026 compared to $132 million in the first three months of 2025. Our capital expenditures for the first three months of 2026 included $65 million related to the Blue Point joint venture and $20 million related to the Blue Point complex Common Facilities.
Net cash used in financing activities was $199 million in the first three months of 2026 compared to $671 million in the first three months of 2025. The decrease in net cash used in financing activities was due primarily to (i) a decrease in share repurchases, (ii) contributions from noncontrolling interests of $117 million in the first three months of 2026, and (iii) a decrease in dividends paid on common stock due to lower shares outstanding as a result of common shares repurchased under our share repurchase programs. In the first three months of 2026, we paid $28 million for share repurchases compared to $444 million in the first three months of 2025. In the first three months of 2026, dividends paid on common stock were $78 million compared to $86 million in the first three months of 2025. These factors that resulted in lower cash used in financing activities were partially offset by higher distributions to noncontrolling interests.
Critical Accounting Estimates
During the first three months of 2026, there were no material changes to our critical accounting estimates as described in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Recent Accounting Pronouncement
See Note 2-New Accounting Standard for a discussion of a recently issued accounting pronouncement that is not yet adopted.
Forward-Looking Statements
From time to time, in this Quarterly Report on Form 10-Q as well as in other written reports and oral statements, we make forward-looking statements that are not statements of historical fact and may involve a number of risks and uncertainties. These statements relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our prospects, future developments and business strategies. We use the words "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will," or "would" and similar terms and phrases, including references to assumptions, to identify forward-looking statements. These forward-looking statements are made based on currently available competitive, financial and economic data, our current expectations, estimates, forecasts and projections about the industries and markets in which we operate and management's beliefs and assumptions concerning future events affecting us. These statements are not guarantees of future performance and are subject to risks, uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Therefore, our actual results may differ materially from what is expressed in or implied by any forward-looking statements. We caution you not to place undue reliance on any forward-looking statements. We do not undertake any responsibility to release publicly any revisions to these forward-looking statements to take into account events or circumstances that occur after the date of this document. Additionally, we do not undertake any responsibility to provide updates regarding the occurrence of any unanticipated events which may cause actual results to differ from those expressed or implied by the forward-looking statements contained in this document.
Important factors that could cause actual results to differ materially from our expectations are disclosed under "Risk Factors" in Item 1A in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 25, 2026. Such factors include, among others:
•our ability to complete the projects at our Blue Point complex, including the construction of a low-carbon ammonia production facility with our joint venture partners and scalable infrastructure on schedule and on budget or at all;
•our ability to fund the capital expenditure needs related to the joint venture at our Blue Point complex, which may exceed our current estimates;
•the cyclical nature of our business and the impact of global supply and demand on our selling prices and operating results;
•the global commodity nature of our nitrogen products, the conditions in the global market for nitrogen products, and the intense global competition from other producers;
•announced or future tariffs, retaliatory measures, and global trade relations, including the potential impact of tariffs and retaliatory measures on the price and availability of materials for our capital projects and maintenance;
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•conditions in the United States, Europe and other agricultural areas, including the influence of governmental policies and technological developments on the demand for our fertilizer products;
•the volatility of natural gas prices in North America and globally;
•weather conditions and the impact of adverse weather events;
•the seasonality of the fertilizer business;
•the impact of changing market conditions on our forward sales programs;
•difficulties in securing the supply and delivery of raw materials or utilities, increases in their costs or delays or interruptions in their delivery;
•reliance on third party providers of transportation services and equipment, including those related to carbon dioxide sequestration;
•our reliance on a limited number of key facilities;
•risks associated with cybersecurity;
•acts of terrorism and regulations to combat terrorism;
•the significant risks and hazards involved in producing and handling our products against which we may not be fully insured;
•risks associated with international operations;
•our ability to manage our indebtedness and any additional indebtedness that may be incurred;
•risks associated with changes in tax laws and adverse determinations by taxing authorities, including any potential changes in tax regulations and our qualification for tax credits;
•risks involving derivatives and the effectiveness of our risk management and hedging activities;
•potential liabilities and expenditures related to environmental, health and safety laws and regulations and permitting requirements;
•regulatory provisions and requirements related to greenhouse gas emissions and sustainability matters, including announced or future changes in environmental, climate change or sustainability laws;
•the development and growth of the market for low-carbon ammonia and the risks and uncertainties relating to the development and implementation of our low-carbon ammonia projects;
•risks associated with investments in and expansions of our business, including unanticipated adverse consequences and the significant resources that could be required; and
•failure of technologies to perform, develop or be available as expected, including the low-carbon ATR ammonia production facility with carbon capture and sequestration technologies being constructed at our Blue Point complex.
CF Industries Holdings Inc. published this content on May 07, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 07, 2026 at 17:22 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]