CF Industries Holdings, Inc. (NYSE: CF):
Fourth Quarter Highlights
-
EBITDA1 of $643.0 million during period of weak global
fertilizer prices.
-
Net earnings attributable to common stockholders of $325.8 million, or
$5.71 per diluted share.
-
Announced sale of phosphate business to the Mosaic Company for $1.4
billion and separate long-term ammonia supply agreement with a defined
margin.
-
Repurchased 1.5 million shares at an average price of approximately
$223 per share.
-
Increased dividend 150% to $1.00 per share per quarter.
Full Year Highlights
-
EBITDA of $2.7 billion, third highest in company history.
-
Net earnings attributable to common stockholders of $1.5 billion, or
$24.74 per diluted share.
-
Repurchased 7.3 million shares, 12% of shares outstanding.
-
Inaugural issuance of $1.5 billion of investment grade debt.
-
Acquired outstanding one-third interest in Medicine Hat facility and 3
Canadian distribution facilities.
Focus for 2014
-
Maintain commitment to safety and operational excellence.
-
Complete $1.4 billion sale of phosphate to Mosaic.
-
Raise up to $1.5 billion in new long-term debt.
-
Continue to execute capacity expansion projects which will increase
nitrogen capacity 25% by 2016.
-
Return significant cash to shareholders via repurchases and dividends.
1 Earnings Before Interest, Taxes, Depreciation and
Amortization.
Overview
CF Industries Holdings, Inc. today reported fourth quarter 2013 EBITDA
of $643.0 million and net earnings attributable to common stockholders
of $325.8 million, or $5.71 per diluted share, compared to EBITDA of
$835.2 million and net earnings attributable to common stockholders of
$470.7 million, or $7.40 per diluted share, in the fourth quarter of
2012. Net sales in the fourth quarter of 2013 were $1.3 billion, down 10
percent from $1.5 billion in the same period last year.
Full year 2013 EBITDA was $2.7 billion and net earnings attributable to
common stockholders was $1.5 billion, or $24.74 per diluted share,
compared to EBITDA of $3.3 billion and net earnings attributable to
common stockholders of $1.8 billion, or $28.59 per diluted share, for
2012.
For the full year 2013, nitrogen prices were down significantly compared
to 2012 due to weaker demand in important agricultural regions and
higher global supply. Global nitrogen prices found a floor in October as
represented by U.S. Gulf urea prices of around $285 per ton. Prices
moved in a narrow band until rebounding in December to around $330 per
ton. Increases in urea and urea ammonium nitrate (UAN) prices coincided
with the close of the low export tariff season for Chinese urea
producers and growing recognition of low nitrogen industry inventories
in several agricultural regions. Idled production due to nitrogen prices
being below the cash costs of producers in areas such as Eastern Europe
and production issues in several areas such as Algeria, Egypt, Iran,
Pakistan and Trinidad also contributed to a tightening global supply and
demand balance. While producers in Ukraine stand to benefit from a
reduction in the cost of natural gas from Russia, Chinese producers
utilizing anthracite coal continue to be the basis for world urea floor
prices.
Even with global urea prices during the second half of the year
declining to the estimated break-even economics of marginal producers,
CF Industries was able to generate a significant level of EBITDA thanks
to the structural advantage provided by low cost North American natural
gas and the company’s extensive network of plant and logistical assets.
“The earnings power of CF was demonstrated again this quarter as we
generated strong EBITDA during a period characterized by global urea
prices declining to floor levels,” said Tony Will, president and chief
executive officer, CF Industries Holdings, Inc. “Thanks to our
outstanding execution we realized favorable prices and strong
profitability even during difficult market conditions.”
CF Industries made progress during and subsequent to the quarter on
several key priorities oriented toward maximizing the value of the
business. The company announced strategic agreements with the Mosaic
Company including an agreement to sell the phosphate business for $1.4
billion and a long-term ammonia supply contract. Subsequent to the
quarter end, the company also announced a long-term agreement with Orica
to supply ammonium nitrate products. Both of these contracts provide CF
Industries with a defined margin independent of gas costs, and increase
confidence in the cash flow profile associated with a portion of the
company’s production capacity. The company reached several milestones on
its capacity expansion projects, which will increase its annual nitrogen
production capacity by 25% when the plants come on-stream in 2015 and
2016. CF Industries increased its dividend to $1.00 per share in October
and repurchased 1.5 million shares during the quarter.
“Our overarching objective is to deliver superior total shareholder
return. We are focused on selectively investing in projects with return
profiles significantly above our cost of capital to grow the cash
generation capability represented in each share of CF while minimizing
the overall cost of financing the enterprise,” stated Mr. Will. “The
accomplishments of 2013 represent significant progress in that
direction.”
2014 Outlook and Objectives
The long-term outlook for CF Industries is positive as a number of
factors support the company’s growth and cash generation potential.
Global population growth, higher protein diets and use of crops as a
source of renewable fuels all are driving demand for more grain. The
limited ability to bring into production additional arable land globally
requires increased yields. The need for increased yields drives demand
for nitrogen fertilizer, the nutrient that must be applied every year to
promote plant growth.
Global nitrogen prices have improved significantly since November.
Nitrogen floor prices are expected to continue to be the cash cost of
Chinese urea producers. During the high-tariff season of November to
June, their cash cost is estimated to be roughly $340 to $350 per ton
delivered to the U.S. Gulf, compared to $285 to $300 per ton during the
low-tariff season of July to October. Upside to nitrogen prices has
recently developed due to the close of the Chinese low-tariff export
season, low retailer and distributor inventory levels in important
agricultural regions including Europe and North America, and emergence
of normal seasonal demand.
North America is expected to have robust ammonia demand through the
first half of 2014, assuming normal weather conditions; however, prices
may be constrained due to high levels of producer inventory carried over
from 2013.
Prices of urea and UAN in North America have increased and are expected
to remain firm through the spring application season in order to attract
imports required to fill 22 million nutrient tons of expected full year
nitrogen demand, which is well in excess of the 15 million nutrient tons
of expected North American production. Imports of urea and UAN have been
lower than year ago levels, while strong spring demand is expected in
association with 92 million acres of corn anticipated to be planted.
During 2014, CF Industries is focused on making progress on several key
strategic objectives. The company expects after-tax proceeds of roughly
$1.0 billion following the close of the sale of the phosphate business
to the Mosaic Company in the first half of 2014. The company also
intends to raise up to $1.5 billion of additional long-term debt in
early 2014. These new borrowings, in addition to cash from operations
and proceeds from the sale of the phosphate business, will fund the
company’s capital expenditures, working capital, dividends and
additional share repurchases. The company currently has $1.4 billion
remaining on its existing $3.0 billion share buyback authorization.
For 2014, the company expects total capital expenditures of
approximately $2.5 billion. This consists of $2.0 billion for the
capacity expansion projects and $0.5 billion of sustaining and other
capital expenditures. These amounts exclude the phosphate business.
Attractive North American natural gas costs, in comparison to natural
gas and coal costs in other regions, continue to support CF Industries’
long-term cash generation prospects. Despite record storage withdrawals
across North America, the company’s gas costs have remained within its
long-term expected range of $3 to $5 per MMBtu. CF Industries’ gas
hedging program is focused on limiting risks to the company’s earnings
profile from short-term price fluctuation. The company has 75% of its
first quarter NYMEX exposure hedged at an average price of $3.66 and 50%
of its second quarter NYMEX exposure hedged at an average price of
$3.55. The company continues to have exposure to floating basis
differentials for gas at some of its production points.
“With a structural cost advantage, we are confident in the
sustainability of our cash flows,” said Mr. Will. “We are executing a
compelling business plan and are focused on maximizing value for CF
shareholders.”
Fourth Quarter Consolidated Results
|
|
|
|
Three months ended December 31
|
|
|
(in millions, except per share amounts)
|
|
2013
|
|
2012
|
|
Change
|
|
% Change
|
|
|
Total net sales
|
|
$
|
1,326.3
|
|
$
|
1,481.4
|
|
$
|
(155.1
|
)
|
|
(10
|
)
|
%
|
|
Total net sales, as adjusted (1)
|
|
|
1,326.3
|
|
|
1,675.2
|
|
|
(348.9
|
)
|
|
(21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
643.0
|
|
|
835.2
|
|
|
(192.2
|
)
|
|
(23
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to
|
|
|
325.8
|
|
|
470.7
|
|
|
(144.9
|
)
|
|
(31
|
)
|
|
|
common stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
5.71
|
|
|
7.40
|
|
|
(1.69
|
)
|
|
(23
|
)
|
|
Comparison of 2013 to 2012 periods:
-
For a description of revenue and earnings performance, please refer to
the business segment results below.
-
Fourth quarter 2013 results included $54.0 million of non-cash pre-tax
mark-to-market gains on natural gas derivatives and $6.5 million of
pre-tax gains on foreign currency derivatives. These items increased
after-tax earnings per diluted share by $0.60 and $0.07, respectively.
-
Fourth quarter 2012 results included $13.1 million of non-cash pre-tax
mark-to-market gains on natural gas and foreign currency derivatives,
which increased after-tax earnings per diluted share by $0.13.
-
Share repurchases during 2013 increased after-tax earnings per diluted
share by $0.57, reflecting a 10 percent decrease in weighted average
diluted shares outstanding for the fourth quarter.
Nitrogen Segment Results
|
|
|
|
|
Three months ended December 31
|
|
|
(in millions, except as noted)
|
|
2013
|
|
2012
|
|
Change
|
|
% Change
|
|
|
Net sales
|
|
$
|
1,178.7
|
|
|
$
|
1,225.6
|
|
|
$
|
(46.9
|
)
|
|
(4
|
)
|
%
|
|
|
Net sales, as adjusted (1)
|
|
|
1,178.7
|
|
|
|
1,419.4
|
|
|
|
(240.7
|
)
|
|
(17
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
592.1
|
|
|
|
620.0
|
|
|
|
(27.9
|
)
|
|
(5
|
)
|
|
|
Gross margin percentage
|
|
|
50.2
|
%
|
|
|
50.6
|
%
|
|
(0.4) pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin, as adjusted (1)
|
|
|
592.1
|
|
|
|
813.8
|
|
|
|
(221.7
|
)
|
|
(27
|
)
|
|
|
|
Gross margin percentage, as adjusted (1)
|
|
|
50.2
|
%
|
|
|
57.3
|
%
|
|
(7) pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of natural gas (dollars per MMBtu)*
|
|
|
3.74
|
|
|
|
3.61
|
|
|
|
0.13
|
|
|
4
|
|
|
|
|
* Includes gas purchases and realized gains and losses on gas
derivatives.
|
|
Comparison of 2013 to 2012 periods:
-
Net sales as reported and as adjusted decreased due to a decline in
overall average selling prices compared to the prior year period,
partially offset by an increase in tons of product sold.
-
Gross margin as reported and as adjusted decreased due to lower
revenues and an increase in natural gas costs. Cost of sales included
a mark-to-market unrealized gain on hedges of $54.0 million and $5.0
million in the fourth quarter of 2013 and 2012, respectively.
-
The company’s ammonia plants in aggregate operated at approximately
107 percent of rated capacity during the fourth quarter of 2013.
|
|
|
|
|
Three months ended December 31
|
|
|
Sales volume (tons in thousands)
|
|
2013
|
|
2012
|
|
Change
|
|
% Change
|
|
|
Ammonia
|
|
859
|
|
905
|
|
(46
|
)
|
|
(5
|
)
|
%
|
|
Urea
|
|
611
|
|
582
|
|
29
|
|
|
5
|
|
|
|
UAN
|
|
1,680
|
|
1,500
|
|
180
|
|
|
12
|
|
|
|
AN
|
|
217
|
|
137
|
|
80
|
|
|
58
|
|
|
Comparison of 2013 to 2012 periods:
-
Ammonia volume decreased primarily due to a shortened application
season caused by a late harvest and adverse weather in 2013 as
compared to an elongated application season associated with the early
harvest in 2012. The decrease in domestic sales volume was partially
offset by exports.
-
Granular urea sales volume increased due to export sales while North
American volume was essentially unchanged.
-
UAN sales volume increased due to export sales, higher shipments on
customer advance orders, and higher production volumes as compared to
the prior year when UAN rates were reduced in favor of net ammonia
production.
-
Ammonium nitrate (AN) sales volume increased as the company took
advantage of export and industrial product sales opportunities.
|
|
|
|
Three months ended December 31
|
|
|
Average selling price (dollars per ton)
|
|
2013
|
|
2012
|
|
Change
|
|
% Change
|
|
|
Ammonia
|
|
$
|
512
|
|
$
|
567
|
|
$
|
(55
|
)
|
|
(10
|
)
|
%
|
|
Ammonia, as adjusted (1)
|
|
|
512
|
|
|
680
|
|
|
(168
|
)
|
|
(25
|
)
|
|
|
Urea
|
|
|
335
|
|
|
291
|
|
|
44
|
|
|
15
|
|
|
|
Urea, as adjusted (1)
|
|
|
335
|
|
|
449
|
|
|
(114
|
)
|
|
(25
|
)
|
|
|
UAN
|
|
|
266
|
|
|
307
|
|
|
(41
|
)
|
|
(13
|
)
|
|
|
AN
|
|
|
225
|
|
|
300
|
|
|
(75
|
)
|
|
(25
|
)
|
|
Comparison of 2013 to 2012 periods:
-
Ammonia as reported and as adjusted average selling prices decreased
due to higher supply available from industry-wide inventory carry-over
and lower fall demand due to a shortened application season as
compared to the prior year period.
-
Granular urea average price per ton increased compared to the 2012 as
reported average price due to CFL’s use of cost-plus based pricing for
sales to the minority interest partners and the effect in the quarter
of an adjustment to reflect cost-plus based pricing retroactive to the
beginning of 2012. Urea average price per ton in 2013 decreased
compared to the 2012 price as adjusted due to high global urea supply,
especially from Chinese producers.
-
UAN average selling price decreased due to a weaker urea pricing
environment.
-
AN average selling price declined in conjunction with price declines
in other internationally traded nitrogen products.
Phosphate Segment
|
|
|
|
|
Three months ended December 31
|
|
|
(in millions, except as noted)
|
|
2013
|
|
2012
|
|
Change
|
|
% Change
|
|
|
Net sales
|
|
$
|
147.6
|
|
|
$
|
255.8
|
|
|
$
|
(108.2
|
)
|
|
(42
|
)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
1.7
|
|
|
|
36.2
|
|
|
|
(34.5
|
)
|
|
(95
|
)
|
|
|
Gross margin percentage
|
|
|
1.2
|
%
|
|
|
14.2
|
%
|
|
(13) pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic vs. export (tons in thousands)
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
227
|
|
|
|
367
|
|
|
|
(140
|
)
|
|
(38
|
)
|
%
|
|
Export
|
|
|
188
|
|
|
|
142
|
|
|
|
46
|
|
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling price (dollars per ton)
|
|
|
|
|
|
|
|
|
|
|
DAP
|
|
$
|
348
|
|
|
$
|
499
|
|
|
$
|
(151
|
)
|
|
(30
|
)
|
%
|
|
MAP
|
|
|
382
|
|
|
|
527
|
|
|
|
(145
|
)
|
|
(28
|
)
|
|
Comparison of 2013 to 2012 periods:
-
Phosphate segment net sales declined due to lower average selling
prices resulting from lower global demand, notably from India, and
lower sales volume.
-
Phosphate segment gross margin declined due to lower revenues, which
was partially offset by lower ammonia and sulfur costs.
-
Depreciation, depletion and amortization expenses ceased as of the end
of October 2013 and are no longer being recognized. This is due to the
announced sale of the phosphate business which resulted in the assets
and liabilities being classified as held for sale on the consolidated
balance sheet at December 31, 2013.
-
CF Industries’ Plant City, Florida, Phosphate Complex operated at 77
percent of capacity during the 2013 fourth quarter.
Full Year Consolidated Results
|
|
|
|
Twelve months ended December 31
|
|
|
(in millions, except per share amounts)
|
|
2013
|
|
2012
|
|
Change
|
|
% Change
|
|
|
Total net sales
|
|
$
|
5,474.7
|
|
$
|
6,104.0
|
|
$
|
(629.3
|
)
|
|
(10
|
)
|
%
|
|
Total net sales, as adjusted (1)
|
|
|
5,474.7
|
|
|
6,239.9
|
|
|
(765.2
|
)
|
|
(12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
2,684.9
|
|
|
3,320.2
|
|
|
(635.3
|
)
|
|
(19
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to
|
|
|
1,464.6
|
|
|
1,848.7
|
|
|
(384.1
|
)
|
|
(21
|
)
|
|
|
common stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
24.74
|
|
|
28.59
|
|
|
(3.85
|
)
|
|
(13
|
)
|
|
Comparison of 2013 to 2012:
-
Full year 2013 total net sales and EBITDA declined from the prior year
primarily due to lower average selling prices for both nitrogen and
phosphate products, and lower phosphate sales volume.
-
Full year 2013 results included $52.9 million of non-cash pre-tax
mark-to-market gains on natural gas derivatives, $20.8 million of
pre-tax gains on foreign currency derivatives, and a $20.6 million
after-tax net benefit from the recognition of a portion of the net
operating loss (NOL) carry-forwards from periods prior to the
company’s initial public offering (IPO) allowed under a settlement
agreement with the IRS. These items increased after-tax earnings per
diluted share by $0.57, $0.22, and $0.35, respectively.
-
Full year results for 2012 included a $74.6 million non-cash, pre-tax
mark-to-market gain on natural gas and foreign currency derivatives,
$15.2 million of pre-tax accelerated amortization of capitalized
financing fees related to the termination of the company’s prior
credit facility, and a $10.9 million pre-tax gain from a change in
employee post-retirement benefits. These items increased/(decreased)
after-tax earnings per diluted share by $0.72, ($0.15) and $0.10,
respectively.
-
Share repurchases during 2013 increased after-tax earnings per diluted
share by $1.65, reflecting a 7 percent decrease in weighted average
diluted shares outstanding for full year 2013.
Environmental, Health & Safety Performance
As of December 31, 2013, CF Industries’ 12-month rolling average
recordable incidence rate was 1.33, an all-time low for the company. “I
thank our employees for their efforts to ensure safety in our
operations. Together, we will continue working to reduce our incident
rate with a company-wide focus on safety and environmental
responsibility,” said Mr. Will.
Balance Sheet and Cash Flow Items
As of December 31, 2013, CF Industries’ cash and cash equivalents
totaled $1.7 billion, while restricted cash for capacity expansion
projects was $154.0 million. Total long-term debt was $3.1 billion.
During the fourth quarter the company repurchased 1.5 million shares for
$337.8 million at an average share price of $223.21. For 2013, the
company repurchased a total of 7.3 million shares, or 12% of the
outstanding share count, for a total of $1.4 billion. Subsequent to the
end of the quarter, the company repurchased 0.7 million shares through
February 14, 2014 at an average price of $230.22, or a total of $162.2
million.
Total capital expenditures during the quarter were $190.9 million, of
which $129.0 million related to the capacity expansion program. The
program is progressing in-line with time and budget expectations as
civil construction work is ongoing at Donaldsonville and is well
underway at Port Neal. The company entered into general construction
contracts for the urea and UAN plants at Donaldsonville and the ammonia
and urea plants at Port Neal. The company also entered into lump sum,
turnkey construction contracts for urea warehouses and ammonia storage
tanks at both locations.
For the full year, total cash spent on capital expenditures for the
expansion projects was $356.1 million. In addition, $203.6 million was
invested in the expansion project and not paid at December 31, 2013, but
recognized in the consolidated balance sheet in the lines labeled
accounts payable and accrued expenses and other non-current liabilities.
Dividend Payment
On January 31, 2014, CF Industries’ Board of Directors declared the
regular quarterly dividend of $1.00 per common share. The dividend will
be paid on February 28, 2014, to stockholders of record as of February
14, 2014.
|
(1)
|
|
The comparability of sales and gross margin between 2013 and 2012
was impacted by a modification in 2012 to the selling price
calculation methodology used for products sold by Canadian
Fertilizers Limited (CFL) to the prior non-controlling interest
holder. We acquired the non-controlling interest in May 2013 and now
own 100% of CFL. This selling price modification impacts the
comparability of certain financial results between the two periods,
but does not impact the comparability of the company’s net earnings
attributable to common stockholders or EBITDA. See explanation under
“CF Industries Holdings, Inc.—Selected Financial
Information—Non-GAAP Disclosure Items—CFL Selling Price
Modification” in the tables accompanying this release.
|
Conference Call
CF Industries will hold a conference call to discuss these fourth
quarter and full year results at 10:00 a.m. ET on Wednesday, February
19, 2014. Investors can access the call and find dial-in information on
the Investor Relations section of the company’s website at www.cfindustries.com.
About CF Industries Holdings, Inc.
CF Industries Holdings, Inc., headquartered in Deerfield, Illinois,
through its subsidiaries is a global leader in manufacturing and
distribution of nitrogen and phosphate products, serving both
agricultural and industrial customers. CF Industries operates
world-class nitrogen manufacturing complexes in the central United
States and Canada; conducts phosphate mining and manufacturing
operations in central Florida; and distributes plant nutrients through a
system of terminals, warehouses, and associated transportation equipment
located primarily in the midwestern United States. The company also owns
50 percent interests in GrowHow UK Limited, a plant nutrient
manufacturer in the United Kingdom; an ammonia facility in The Republic
of Trinidad and Tobago; and KEYTRADE AG, a global plant nutrient trading
organization headquartered near Zurich, Switzerland. CF Industries
routinely posts investor announcements and additional information on the
company’s website at www.cfindustries.com
and encourages those interested in the company to check there frequently.
Note Regarding Non-GAAP Financial Measures
The company reports its financial results in accordance with U.S.
generally accepted accounting principles (GAAP). Management believes
that EBITDA, a non-GAAP financial measure, provides additional
meaningful information regarding the company's performance, liquidity
and financial strength. Management believes that the presentation of net
sales, nitrogen segment net sales, gross margin, nitrogen segment gross
margin, gross margin percentage, nitrogen segment gross margin
percentage and average selling prices per ton of ammonia and urea on an
as adjusted basis, and percentages changes in these adjusted items, as
described under “CF Industries Holdings, Inc. Selected Financial
Information Non-GAAP Disclosure Items—CFL Selling Price Modifications”,
provides investors with additional meaningful information to facilitate
period-to-period comparisons of the company’s underlying operating
performance. The adjusted items and percentage changes in those adjusted
items are provided only for the purpose of facilitating comparisons
between the company’s 2013 and 2012 full-year and fourth-quarter
operating performance and do not purport to represent what the actual
consolidated results of operations of the company would have been, nor
are they necessarily indicative of future consolidated results of
operations. Non-GAAP financial measures should be viewed in addition to,
and not as an alternative for, the company's reported results prepared
in accordance with GAAP. In addition, because not all companies use
identical calculations, EBITDA and the adjusted items and percentage
changes in adjusted items included in this release may not be comparable
to similarly titled measures of other companies. Reconciliations of
EBITDA and the adjusted items to GAAP are provided in the tables
accompanying this release under “CF Industries Holdings, Inc.—Selected
Financial Information—Non-GAAP Disclosure Items.”
Safe Harbor Statement
All statements in this communication, other than those relating to
historical facts, are “forward-looking statements.” These
forward-looking statements are not guarantees of future performance and
are subject to a number of assumptions, risks and uncertainties, many of
which are beyond our control, which could cause actual results to differ
materially from such statements. These statements include, but are not
limited to, statements about the benefits, expected timing of closing
and other aspects of the proposed transactions with Mosaic; statements
about future strategic plans; and statements about future financial and
operating results. Important factors that could cause actual results to
differ materially from our expectations include, among others: risks and
uncertainties arising from the possibility that the proposed
transactions with Mosaic may be delayed or may not occur, including
delays arising from any ability to obtain governmental approvals of the
transactions; the risk that other conditions to the closing of the
proposed transactions with Mosaic may not be satisfied; difficulties
with realization of the benefits of the proposed transactions with
Mosaic; the risk that disruptions from the proposed transactions with
Mosaic will harm relationships with customers, employees and suppliers;
the volatility of natural gas prices in North America; the cyclical
nature of our business and the agricultural sector; the global commodity
nature of our fertilizer products, the impact of global supply and
demand on our selling prices, and the intense global competition from
other fertilizer producers; conditions in the U.S. agricultural
industry; reliance on third party providers of transportation services
and equipment; risks associated with cyber security; weather conditions;
our ability to complete our production capacity expansion projects on
schedule as planned and on budget or at all; risks associated with other
expansions of our business, including unanticipated adverse consequences
and the significant resources that could be required; potential
liabilities and expenditures related to environmental and health and
safety laws and regulations; our potential inability to obtain or
maintain required permits and governmental approvals or to meet
financial assurance requirements from governmental authorities; future
regulatory restrictions and requirements related to greenhouse gas
emissions; the seasonality of the fertilizer business; the impact of
changing market conditions on our forward sales programs; risks
involving derivatives and the effectiveness of our risk measurement and
hedging activities; the significant risks and hazards involved in
producing and handling our products against which we may not be fully
insured; our reliance on a limited number of key facilities; risks
associated with joint ventures; acts of terrorism and regulations to
combat terrorism; difficulties in securing the supply and delivery of
raw materials, increases in their costs or delays or interruptions in
their delivery; risks associated with international operations; losses
on our investments in securities; deterioration of global market and
economic conditions; our ability to manage our indebtedness; and loss of
key members of management and professional staff. More detailed
information about factors that may affect our performance may be found
in our filings with the Securities and Exchange Commission, including
our most recent periodic reports filed on Form 10-K and Form 10-Q, which
are available in the Investor Relations section of the CF Industries
website. Forward-looking statements are given only as of the date of
this release and we disclaim any obligation to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
|
|
|
|
|
|
|
CF INDUSTRIES HOLDINGS, INC.
|
|
SELECTED FINANCIAL INFORMATION
|
|
RESULTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Twelve months ended
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
(in millions, except per share amounts)
|
|
Net sales
|
|
$
|
1,326.3
|
|
|
$
|
1,481.4
|
|
|
$
|
5,474.7
|
|
|
$
|
6,104.0
|
|
|
Cost of sales
|
|
|
732.5
|
|
|
|
825.2
|
|
|
|
2,954.5
|
|
|
|
2,990.7
|
|
|
Gross margin
|
|
|
593.8
|
|
|
|
656.2
|
|
|
|
2,520.2
|
|
|
|
3,113.3
|
|
|
Selling, general and administrative expenses
|
|
|
45.0
|
|
|
|
40.2
|
|
|
|
166.0
|
|
|
|
151.8
|
|
|
Other operating - net
|
|
|
(6.6
|
)
|
|
|
7.4
|
|
|
|
(15.8
|
)
|
|
|
49.1
|
|
|
Total other operating costs and expenses
|
|
|
38.4
|
|
|
|
47.6
|
|
|
|
150.2
|
|
|
|
200.9
|
|
|
Equity in earnings of operating affiliates
|
|
|
9.4
|
|
|
|
7.5
|
|
|
|
41.7
|
|
|
|
47.0
|
|
|
Operating earnings
|
|
|
564.8
|
|
|
|
616.1
|
|
|
|
2,411.7
|
|
|
|
2,959.4
|
|
|
Interest expense
|
|
|
39.8
|
|
|
|
30.4
|
|
|
|
152.2
|
|
|
|
135.3
|
|
|
Interest income
|
|
|
(0.6
|
)
|
|
|
(2.3
|
)
|
|
|
(4.7
|
)
|
|
|
(4.3
|
)
|
|
Other non-operating - net
|
|
|
0.4
|
|
|
|
(0.2
|
)
|
|
|
54.5
|
|
|
|
(1.1
|
)
|
|
Earnings before income taxes and equity in earnings of
non-operating affiliates
|
|
|
525.2
|
|
|
|
588.2
|
|
|
|
2,209.7
|
|
|
|
2,829.5
|
|
|
Income tax provision
|
|
|
187.2
|
|
|
|
242.2
|
|
|
|
686.5
|
|
|
|
964.2
|
|
|
Equity in earnings of non-operating affiliates - net of taxes
|
|
|
3.4
|
|
|
|
9.3
|
|
|
|
9.6
|
|
|
|
58.1
|
|
|
Net earnings
|
|
|
341.4
|
|
|
|
355.3
|
|
|
|
1,532.8
|
|
|
|
1,923.4
|
|
|
Less: Net earnings (loss) attributable to noncontrolling interest
|
|
|
15.6
|
|
|
|
(115.4
|
)
|
|
|
68.2
|
|
|
|
74.7
|
|
|
Net earnings attributable to common stockholders
|
|
$
|
325.8
|
|
|
$
|
470.7
|
|
|
$
|
1,464.6
|
|
|
$
|
1,848.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share attributable to common stockholders
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
5.73
|
|
|
$
|
7.48
|
|
|
$
|
24.87
|
|
|
$
|
28.94
|
|
|
Diluted
|
|
$
|
5.71
|
|
|
$
|
7.40
|
|
|
$
|
24.74
|
|
|
$
|
28.59
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
56.9
|
|
|
|
62.9
|
|
|
|
58.9
|
|
|
|
63.9
|
|
|
Diluted
|
|
|
57.1
|
|
|
|
63.6
|
|
|
|
59.2
|
|
|
|
64.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CF INDUSTRIES HOLDINGS, INC.
|
|
SELECTED FINANCIAL INFORMATION
|
|
SUMMARIZED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
2013
|
|
2012
|
|
|
|
|
|
(in millions)
|
|
Assets
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,710.8
|
|
$
|
2,274.9
|
|
|
Restricted cash
|
|
|
154.0
|
|
|
-
|
|
|
Accounts receivable - net
|
|
|
230.9
|
|
|
217.4
|
|
|
Inventories - net
|
|
|
274.3
|
|
|
277.9
|
|
|
Deferred income taxes
|
|
|
60.0
|
|
|
9.5
|
|
|
Prepaid income taxes
|
|
|
33.4
|
|
|
-
|
|
|
Assets held for sale
|
|
|
74.3
|
|
|
-
|
|
|
Other
|
|
|
92.4
|
|
|
27.9
|
|
|
|
Total current assets
|
|
|
2,630.1
|
|
|
2,807.6
|
|
Property, plant and equipment - net
|
|
|
4,101.7
|
|
|
3,900.5
|
|
Asset retirement obligation funds
|
|
|
-
|
|
|
200.8
|
|
Investments in and advances to affiliates
|
|
|
926.0
|
|
|
935.6
|
|
Goodwill
|
|
|
2,095.8
|
|
|
2,064.5
|
|
Noncurrent assets held for sale
|
|
|
679.0
|
|
|
-
|
|
Other assets
|
|
|
245.5
|
|
|
257.9
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
10,678.1
|
|
$
|
10,166.9
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
564.1
|
|
$
|
366.5
|
|
|
Income taxes payable
|
|
|
73.3
|
|
|
187.1
|
|
|
Customer advances
|
|
|
120.6
|
|
|
380.7
|
|
|
Notes payable
|
|
|
-
|
|
|
5.0
|
|
|
Distributions payable to noncontrolling interest
|
|
|
-
|
|
|
5.3
|
|
|
Liabilities held for sale
|
|
|
26.8
|
|
|
-
|
|
|
Other
|
|
|
43.5
|
|
|
5.6
|
|
|
|
Total current liabilities
|
|
|
828.3
|
|
|
950.2
|
|
Long-term debt
|
|
|
3,098.1
|
|
|
1,600.0
|
|
Deferred income taxes
|
|
|
833.2
|
|
|
938.8
|
|
Noncurrent liabilities held for sale
|
|
|
154.5
|
|
|
-
|
|
Other noncurrent liabilities
|
|
|
325.6
|
|
|
395.7
|
|
Equity
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
5,076.1
|
|
|
5,902.2
|
|
|
Noncontrolling interest
|
|
|
362.3
|
|
|
380.0
|
|
|
|
Total equity
|
|
|
5,438.4
|
|
|
6,282.2
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
10,678.1
|
|
$
|
10,166.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CF INDUSTRIES HOLDINGS, INC.
|
|
SELECTED FINANCIAL INFORMATION
|
|
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Twelve months ended
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
(in millions)
|
|
Operating Activities:
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
$
|
341.4
|
|
|
$
|
355.3
|
|
|
$
|
1,532.8
|
|
|
$
|
1,923.4
|
|
|
Adjustments to reconcile net earnings to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
96.8
|
|
|
|
101.1
|
|
|
|
410.6
|
|
|
|
419.8
|
|
|
Deferred income taxes
|
|
|
(70.1
|
)
|
|
|
(171.2
|
)
|
|
|
(34.3
|
)
|
|
|
(138.4
|
)
|
|
Stock compensation expense
|
|
|
3.1
|
|
|
|
3.1
|
|
|
|
12.6
|
|
|
|
11.9
|
|
|
Excess tax benefit from stock-based compensation
|
|
|
(2.1
|
)
|
|
|
(6.1
|
)
|
|
|
(13.5
|
)
|
|
|
(36.1
|
)
|
|
Unrealized (gain) loss on derivatives
|
|
|
(55.3
|
)
|
|
|
(17.3
|
)
|
|
|
(59.3
|
)
|
|
|
(78.8
|
)
|
|
Loss on disposal of property, plant and equipment and non-core assets
|
|
|
0.6
|
|
|
|
1.5
|
|
|
|
5.6
|
|
|
|
5.5
|
|
|
Undistributed loss (earnings) of affiliates - net
|
|
|
1.6
|
|
|
|
44.1
|
|
|
|
(11.3
|
)
|
|
|
(14.9
|
)
|
|
Changes in:
|
|
|
|
|
|
|
|
|
|
Accounts receivable - net
|
|
|
(44.2
|
)
|
|
|
121.0
|
|
|
|
0.4
|
|
|
|
53.2
|
|
|
Inventories - net
|
|
|
6.0
|
|
|
|
31.6
|
|
|
|
(80.3
|
)
|
|
|
34.8
|
|
|
Accrued income taxes
|
|
|
79.3
|
|
|
|
258.8
|
|
|
|
(153.4
|
)
|
|
|
58.7
|
|
|
Accounts payable and accrued expenses
|
|
|
(19.9
|
)
|
|
|
(38.5
|
)
|
|
|
49.5
|
|
|
|
25.5
|
|
|
Customer advances
|
|
|
(312.6
|
)
|
|
|
(236.8
|
)
|
|
|
(260.1
|
)
|
|
|
123.3
|
|
|
Other - net
|
|
|
12.9
|
|
|
|
(25.3
|
)
|
|
|
67.5
|
|
|
|
(12.3
|
)
|
|
Net cash provided by operating activities
|
|
|
37.5
|
|
|
|
421.3
|
|
|
|
1,466.8
|
|
|
|
2,375.6
|
|
|
Investing Activities:
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and equipment
|
|
|
(190.9
|
)
|
|
|
(262.1
|
)
|
|
|
(823.8
|
)
|
|
|
(523.5
|
)
|
|
Proceeds from the sale of property, plant and equipment and non-core
assets
|
|
|
1.5
|
|
|
|
5.4
|
|
|
|
12.6
|
|
|
|
17.0
|
|
|
Sales and maturities of short-term and auction rate securities
|
|
|
6.9
|
|
|
|
17.4
|
|
|
|
13.5
|
|
|
|
48.4
|
|
|
Canadian terminal acquisition
|
|
|
(72.5
|
)
|
|
|
-
|
|
|
|
(72.5
|
)
|
|
|
-
|
|
|
Deposits to restricted cash funds
|
|
|
(42.6
|
)
|
|
|
-
|
|
|
|
(154.0
|
)
|
|
|
-
|
|
|
Deposits to asset retirement obligation funds
|
|
|
(2.9
|
)
|
|
|
(53.2
|
)
|
|
|
(2.9
|
)
|
|
|
(55.4
|
)
|
|
Other - net
|
|
|
12.1
|
|
|
|
-
|
|
|
|
7.8
|
|
|
|
-
|
|
|
Net cash used in investing activities
|
|
|
(288.4
|
)
|
|
|
(292.5
|
)
|
|
|
(1,019.3
|
)
|
|
|
(513.5
|
)
|
|
Financing Activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term borrowings
|
|
|
-
|
|
|
|
-
|
|
|
|
1,498.0
|
|
|
|
-
|
|
|
Financing fees
|
|
|
-
|
|
|
|
-
|
|
|
|
(14.5
|
)
|
|
|
-
|
|
|
Purchase of treasury stock
|
|
|
(297.6
|
)
|
|
|
-
|
|
|
|
(1,409.1
|
)
|
|
|
(500.0
|
)
|
|
Payments of long-term debt
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(13.0
|
)
|
|
Advances from unconsolidated affiliates
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
40.5
|
|
|
Repayments of advances from unconsolidated affiliates
|
|
|
-
|
|
|
|
(40.5
|
)
|
|
|
-
|
|
|
|
(40.5
|
)
|
|
Acquisitions of noncontrolling interests in CFL
|
|
|
-
|
|
|
|
-
|
|
|
|
(918.7
|
)
|
|
|
-
|
|
|
Dividends paid on common stock
|
|
|
(57.2
|
)
|
|
|
(25.3
|
)
|
|
|
(129.1
|
)
|
|
|
(102.7
|
)
|
|
Distributions to noncontrolling interests
|
|
|
(9.3
|
)
|
|
|
(19.0
|
)
|
|
|
(73.7
|
)
|
|
|
(231.8
|
)
|
|
Issuances of common stock under employee stock plans
|
|
|
4.0
|
|
|
|
2.0
|
|
|
|
10.3
|
|
|
|
14.6
|
|
|
Excess tax benefit from stock-based compensation
|
|
|
2.1
|
|
|
|
6.1
|
|
|
|
13.5
|
|
|
|
36.1
|
|
|
Other
|
|
|
43.0
|
|
|
|
-
|
|
|
|
43.0
|
|
|
|
-
|
|
|
Net cash used in financing activities
|
|
|
(315.0
|
)
|
|
|
(76.7
|
)
|
|
|
(980.3
|
)
|
|
|
(796.8
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(9.5
|
)
|
|
|
1.5
|
|
|
|
(31.3
|
)
|
|
|
2.6
|
|
|
(Decrease) increase in cash and cash equivalents
|
|
|
(575.4
|
)
|
|
|
53.6
|
|
|
|
(564.1
|
)
|
|
|
1,067.9
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
2,286.2
|
|
|
|
2,221.3
|
|
|
|
2,274.9
|
|
|
|
1,207.0
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
1,710.8
|
|
|
$
|
2,274.9
|
|
|
$
|
1,710.8
|
|
|
$
|
2,274.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CF INDUSTRIES HOLDINGS, INC.
|
|
SELECTED FINANCIAL INFORMATION
|
|
NITROGEN SEGMENT DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Twelve months ended
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
(in millions, except as noted)
|
|
Net sales
|
|
$
|
1,178.7
|
|
|
$
|
1,225.6
|
|
|
$
|
4,677.8
|
|
|
$
|
5,096.6
|
|
|
Cost of sales
|
|
|
586.6
|
|
|
|
605.6
|
|
|
|
2,232.5
|
|
|
|
2,183.0
|
|
|
Gross margin
|
|
$
|
592.1
|
|
|
$
|
620.0
|
|
|
$
|
2,445.3
|
|
|
$
|
2,913.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin percentage
|
|
|
50.2
|
%
|
|
|
50.6
|
%
|
|
|
52.3
|
%
|
|
|
57.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Tons of product sold (in thousands)
|
|
|
3,560
|
|
|
|
3,279
|
|
|
|
12,945
|
|
|
|
12,969
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales volumes by product (tons in thousands)
|
|
|
|
|
|
|
|
|
|
Ammonia
|
|
|
859
|
|
|
|
905
|
|
|
|
2,427
|
|
|
|
2,786
|
|
|
Granular urea
|
|
|
611
|
|
|
|
582
|
|
|
|
2,506
|
|
|
|
2,593
|
|
|
UAN
|
|
|
1,680
|
|
|
|
1,500
|
|
|
|
6,383
|
|
|
|
6,131
|
|
|
AN
|
|
|
217
|
|
|
|
137
|
|
|
|
859
|
|
|
|
839
|
|
|
Other nitrogen products
|
|
|
193
|
|
|
|
155
|
|
|
|
770
|
|
|
|
620
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling prices (dollars per ton)
|
|
|
|
|
|
|
|
|
|
Ammonia
|
|
$
|
512
|
|
|
$
|
567
|
|
|
$
|
592
|
|
|
$
|
602
|
|
|
Granular urea
|
|
|
335
|
|
|
|
291
|
|
|
|
369
|
|
|
|
441
|
|
|
UAN
|
|
|
266
|
|
|
|
307
|
|
|
|
303
|
|
|
|
308
|
|
|
AN
|
|
|
225
|
|
|
|
300
|
|
|
|
250
|
|
|
|
266
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of natural gas (dollars per MMBtu) (1)
|
|
$
|
3.74
|
|
|
$
|
3.61
|
|
|
$
|
3.66
|
|
|
$
|
3.39
|
|
|
|
|
|
|
|
|
|
|
|
|
Average daily market price of natural gas
|
|
|
|
|
|
|
|
|
|
Henry Hub (dollars per MMBtu)
|
|
$
|
3.84
|
|
|
$
|
3.39
|
|
|
$
|
3.72
|
|
|
$
|
2.75
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
$
|
82.7
|
|
|
$
|
84.0
|
|
|
$
|
328.4
|
|
|
$
|
334.6
|
|
|
Capital expenditures
|
|
$
|
178.0
|
|
|
$
|
238.8
|
|
|
$
|
759.5
|
|
|
$
|
431.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Production volume by product (tons in thousands)
|
|
|
|
|
|
|
|
|
|
Ammonia (2)
|
|
|
1,940
|
|
|
|
1,752
|
|
|
|
7,105
|
|
|
|
7,067
|
|
|
Granular urea
|
|
|
656
|
|
|
|
577
|
|
|
|
2,474
|
|
|
|
2,560
|
|
|
UAN (32%)
|
|
|
1,652
|
|
|
|
1,571
|
|
|
|
6,332
|
|
|
|
6,027
|
|
|
AN
|
|
|
228
|
|
|
|
151
|
|
|
|
882
|
|
|
|
839
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes gas purchases and realized gains and losses on
gas derivatives.
(2) Gross ammonia production, including amounts subsequently
upgraded on-site into urea and/or UAN.
|
CF INDUSTRIES HOLDINGS, INC.
|
|
SELECTED FINANCIAL INFORMATION
|
|
PHOSPHATE SEGMENT DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Twelve months ended
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
(in millions, except as noted)
|
|
Net sales
|
|
|
$
|
147.6
|
|
|
$
|
255.8
|
|
|
$
|
796.9
|
|
|
$
|
1,007.4
|
|
|
Cost of sales
|
|
|
|
145.9
|
|
|
|
219.6
|
|
|
|
722.0
|
|
|
|
807.7
|
|
|
Gross margin
|
|
|
$
|
1.7
|
|
|
$
|
36.2
|
|
|
$
|
74.9
|
|
|
$
|
199.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin percentage
|
|
|
|
1.2
|
%
|
|
|
14.2
|
%
|
|
|
9.4
|
%
|
|
|
19.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Tons of product sold (in thousands)
|
|
|
|
415
|
|
|
|
509
|
|
|
|
1,857
|
|
|
|
2,035
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales volumes by product (tons in thousands)
|
|
|
|
|
|
|
|
|
|
|
DAP
|
|
|
|
323
|
|
|
|
424
|
|
|
|
1,408
|
|
|
|
1,611
|
|
|
MAP
|
|
|
|
92
|
|
|
|
85
|
|
|
|
449
|
|
|
|
424
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic vs. export sales (tons in thousands)
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
|
227
|
|
|
|
367
|
|
|
|
1,061
|
|
|
|
1,254
|
|
|
Export
|
|
|
|
188
|
|
|
|
142
|
|
|
|
796
|
|
|
|
781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling prices (dollars per ton)
|
|
|
|
|
|
|
|
|
|
|
DAP
|
|
|
$
|
348
|
|
|
$
|
499
|
|
|
$
|
427
|
|
|
$
|
493
|
|
|
MAP
|
|
|
|
382
|
|
|
|
527
|
|
|
|
437
|
|
|
|
502
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion, and amortization (1)
|
|
|
$
|
3.8
|
|
|
$
|
10.7
|
|
|
$
|
42.3
|
|
|
$
|
43.5
|
|
|
Capital expenditures
|
|
|
$
|
10.8
|
|
|
$
|
17.0
|
|
|
$
|
59.0
|
|
|
$
|
64.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production volume by product (tons in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hardee Phosphate Rock Mine
|
|
|
|
|
|
|
|
|
|
|
Phosphate rock
|
|
|
|
834
|
|
|
|
827
|
|
|
|
3,565
|
|
|
|
3,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant City Phosphate Fertilizer Complex
|
|
|
|
|
|
|
|
|
|
|
Sulfuric Acid
|
|
|
|
540
|
|
|
|
622
|
|
|
|
2,480
|
|
|
|
2,530
|
|
|
Phosphoric acid as P2O5 (2)
|
|
|
|
204
|
|
|
|
236
|
|
|
|
921
|
|
|
|
975
|
|
|
DAP/MAP
|
|
|
|
413
|
|
|
|
473
|
|
|
|
1,847
|
|
|
|
1,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) In October 2013 we entered into an agreement to sell the
phosphate mining and manufacturing business in Florida to the Mosaic
Company. The assets and liabilities expected to be sold are classified
as held for sale. Effective November 1, 2013 we ceased depreciation on
amounts in property, plant and equipment.
(2) P2O5 is the basic measure of the
nutrient content in phosphate fertilizer products.
|
CF INDUSTRIES HOLDINGS, INC.
|
|
SELECTED FINANCIAL INFORMATION
|
|
NON-GAAP DISCLOSURE ITEMS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net earnings to EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Twelve months ended
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
Net earnings attributable to common stockholders
|
|
$
|
325.8
|
|
|
$
|
470.7
|
|
|
$
|
1,464.6
|
|
|
$
|
1,848.7
|
|
|
Interest expense (income) - net
|
|
|
39.2
|
|
|
|
28.1
|
|
|
|
147.5
|
|
|
|
131.0
|
|
|
Income taxes
|
|
|
187.2
|
|
|
|
241.9
|
|
|
|
686.5
|
|
|
|
963.8
|
|
|
Depreciation, depletion and amortization
|
|
|
96.8
|
|
|
|
101.1
|
|
|
|
410.6
|
|
|
|
419.8
|
|
|
Less: other adjustments
|
|
|
(6.0
|
)
|
|
|
(6.6
|
)
|
|
|
(24.3
|
)
|
|
|
(43.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
643.0
|
|
|
$
|
835.2
|
|
|
$
|
2,684.9
|
|
|
$
|
3,320.2
|
|
EBITDA is defined as net earnings attributable to common stockholders
plus interest expense (income)-net, income taxes, and depreciation,
depletion and amortization. Other adjustments include the elimination of
loan fee amortization that is included in both interest and
amortization, and the portion of depreciation that is included in
noncontrolling interest. We have presented EBITDA because management
uses the measure to track performance and believes that it is frequently
used by securities analysts, investors and other interested parties in
the evaluation of companies in our industry.
Net earnings and EBITDA for the three and twelve months ended December
31, 2013 includes $54.0 million and $52.9 million, respectively, of
mark-to-market gains on natural gas derivatives and $6.5 million and
$20.8 million, respectively, of gains on foreign currency derivatives.
Net earnings for the twelve months ended December 31, 2013 include a
$20.6 million net benefit resulting from the utilization of net
operating losses (NOLs) from periods prior to the company’s initial
public offering (IPO). EBITDA for the twelve months ended December 31,
2013 include a $55.2 million non-operating expense to record the
liability payable to the company’s pre-IPO owners for the NOL
carry-forward settlement.
Net earnings and EBITDA for the three and twelve months ended December
31, 2012 includes $13.1 million and $74.6 million, respectively, of
mark-to-market gains on derivatives.
Net earnings and EBITDA for the twelve months ended December 31, 2012
include a $10.9 million gain related to a change in employee
post-retirement benefits.
Net earnings, interest expense (income) - net, and depreciation,
depletion and amortization for the twelve months ended December 31, 2012
includes $15.2 million of accelerated amortization of deferred fees
related to the termination of our 2010 Credit Agreement.
CF INDUSTRIES HOLDINGS, INC.
SELECTED FINANCIAL INFORMATION
NON-GAAP DISCLOSURE ITEMS (CONTINUED)
CFL Selling Price Modifications
Prior to April 30, 2013, CF Industries, Inc. (CF Industries) owned 49%
of the voting common shares and 66% of the non-voting preferred shares
of Canadian Fertilizers Limited (CFL), an Alberta, Canada based nitrogen
fertilizer manufacturer and had the right to purchase 66% of the
production of CFL. Also prior to April 30, 2013, Viterra, Inc. (Viterra)
held 34% of the equity ownership of CFL and had the right to purchase up
to 34% of CFL’s production. Both CF Industries and Viterra were entitled
to receive distributions of net earnings of CFL based upon their
respective purchases from CFL. CFL was a variable interest entity that
was consolidated in the Company’s financial statements. On April 30,
2013, CF Industries completed the acquisitions of all of the outstanding
interests in CFL that it did not already own and CFL became a wholly
owned subsidiary of the Company.
CF Industries’ and Viterra’s purchases of nitrogen fertilizer products
from CFL were made under product purchase agreements, and the selling
prices were determined under the provisions of these agreements. An
initial selling price was paid to CFL based upon CFL’s production cost
plus an agreed-upon margin once title passed as the product was shipped.
At the end of the year, the difference between the market price of
products purchased from CFL and the price based on production cost plus
an agreed-upon margin was paid to CFL. The sales revenue attributable to
this difference was accrued by the Company on an interim basis. Until
April 30, 2013 when CFL became a wholly owned subsidiary in the
Company’s financial statements, net sales and accounts receivable
attributable to CFL were solely generated by transactions with Viterra,
as all transactions with CF Industries were eliminated in consolidation
in the Company’s financial statements.
In the fourth quarter of 2012, the CFL Board of Directors approved
amendments to the product purchase agreements retroactive to January 1,
2012 that modified the selling prices that CFL charged for products sold
to Viterra and CF Industries which eliminated the requirement to pay to
CFL the difference between the market price and the price based on
production cost plus an agreed-upon margin. The following summarizes the
selling prices in the product purchase agreements that impacted the
Company’s results both before and after the effective date of the
amendment.
-
As a result of the January 1, 2012 retroactive effective date of the
amendment, the Company recognized in its “As reported” fourth quarter
2012 consolidated statement of operations a reduction in net sales to
Viterra of $129.7 million and a corresponding reduction in net
earnings attributable to the noncontrolling interest to reverse the
interim market price accruals recognized in the first three quarters
of 2012.
-
For 2012 and between January 1, 2013 and April 30, 2013, the Company’s
consolidated financial statements reflect selling prices for products
purchased from CFL including sales made by CFL to Viterra based on
production cost plus an agreed-upon margin.
-
Starting on April 30, 2013, CFL became a wholly owned subsidiary of CF
Industries. Once CFL became a wholly owned subsidiary, CF Industries
began purchasing all of the output of CFL for resale and reported
those sales in its consolidated financial statements at market based
selling prices.
As a result, the financial results for 2013 include four months of
selling prices based on production cost plus an agreed-upon margin and
eight months of market based selling prices. These selling price
amendments to the product purchase agreements impact the comparability
of the Company’s financial results. These changes affect the
year-over-year comparability of net sales, gross margin, operating
earnings, earnings before income taxes and net earnings attributable to
noncontrolling interest, but do not impact the comparability of the
Company’s net earnings attributable to common stockholders or net cash
flows for the same period.
In order to provide comparable information for the periods presented,
certain financial information is being provided for the prior year
comparable periods adjusted as if the current year CFL pricing
calculation pattern of four months of cost based pricing and eight
months of market based pricing had been used in the prior year
comparable periods.
The following table adjusts the three and twelve months ended December
31, 2012 to be comparable to 2013 results.
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED RESULTS
|
|
Three months ended
|
|
Twelve months ended
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
(in millions, except as noted)
|
|
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
$
|
1,326.3
|
|
$
|
1,481.4
|
|
|
$
|
5,474.7
|
|
$
|
6,104.0
|
|
|
Impact of selling price adjustment
|
|
|
-
|
|
|
193.8
|
|
|
|
-
|
|
|
135.9
|
|
|
As adjusted
|
|
$
|
1,326.3
|
|
$
|
1,675.2
|
|
|
$
|
5,474.7
|
|
$
|
6,239.9
|
|
|
Gross margin
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
$
|
593.8
|
|
$
|
656.2
|
|
|
$
|
2,520.2
|
|
$
|
3,113.3
|
|
|
Impact of selling price adjustment
|
|
|
-
|
|
|
193.8
|
|
|
|
-
|
|
|
135.9
|
|
|
As adjusted
|
|
$
|
593.8
|
|
$
|
850.0
|
|
|
$
|
2,520.2
|
|
$
|
3,249.2
|
|
|
Gross margin percentage
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
|
44.8
|
%
|
|
44.3
|
|
%
|
|
46.0
|
%
|
|
51.0
|
%
|
|
Impact of selling price adjustment
|
|
|
-
|
%
|
|
6.4
|
|
%
|
|
-
|
%
|
|
1.1
|
%
|
|
As adjusted
|
|
|
44.8
|
%
|
|
50.7
|
|
%
|
|
46.0
|
%
|
|
52.1
|
%
|
|
Net earnings attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
$
|
15.6
|
|
$
|
(115.4
|
)
|
|
$
|
68.2
|
|
$
|
74.7
|
|
|
Impact of selling price adjustment
|
|
|
-
|
|
|
193.8
|
|
|
|
-
|
|
|
135.9
|
|
|
As adjusted
|
|
$
|
15.6
|
|
$
|
78.4
|
|
|
$
|
68.2
|
|
$
|
210.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Similar to the consolidated results shown above, the table below
adjusts prior year nitrogen segment data for the impact of the
change in the CFL price calculation methodology to be comparable
to current year results.
|
|
|
|
|
|
|
|
|
|
|
|
|
NITROGEN SEGMENT DATA
|
|
Three months ended
|
|
Twelve months ended
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
(in millions, except as noted)
|
|
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
$
|
1,178.7
|
|
$
|
1,225.6
|
|
|
$
|
4,677.8
|
|
$
|
5,096.6
|
|
|
Impact of selling price adjustment
|
|
|
-
|
|
|
193.8
|
|
|
|
-
|
|
|
135.9
|
|
|
As adjusted
|
|
$
|
1,178.7
|
|
$
|
1,419.4
|
|
|
$
|
4,677.8
|
|
$
|
5,232.5
|
|
|
Gross margin
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
$
|
592.1
|
|
$
|
620.0
|
|
|
$
|
2,445.3
|
|
$
|
2,913.6
|
|
|
Impact of selling price adjustment
|
|
|
-
|
|
|
193.8
|
|
|
|
-
|
|
|
135.9
|
|
|
As adjusted
|
|
$
|
592.1
|
|
$
|
813.8
|
|
|
$
|
2,445.3
|
|
$
|
3,049.5
|
|
|
Gross margin percentage
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
|
50.2
|
%
|
|
50.6
|
|
%
|
|
52.3
|
%
|
|
57.2
|
%
|
|
Impact of selling price adjustment
|
|
|
-
|
%
|
|
6.7
|
|
%
|
|
-
|
%
|
|
1.1
|
%
|
|
As adjusted
|
|
|
50.2
|
%
|
|
57.3
|
|
%
|
|
52.3
|
%
|
|
58.3
|
%
|
|
Average selling prices (dollars per ton)
|
|
|
|
|
|
|
|
|
|
|
Ammonia
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
$
|
512
|
|
$
|
567
|
|
|
$
|
592
|
|
$
|
602
|
|
|
Impact of selling price adjustment
|
|
|
-
|
|
|
113
|
|
|
|
-
|
|
|
26
|
|
|
As adjusted
|
|
$
|
512
|
|
$
|
680
|
|
|
$
|
592
|
|
$
|
628
|
|
|
Granular urea
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
$
|
335
|
|
$
|
291
|
|
|
$
|
369
|
|
$
|
441
|
|
|
Impact of selling price adjustment
|
|
|
-
|
|
|
158
|
|
|
|
-
|
|
|
24
|
|
|
As adjusted
|
|
$
|
335
|
|
$
|
449
|
|
|
$
|
369
|
|
$
|
465
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Copyright Business Wire 2014