CF Industries Holdings, Inc. Reports Full Year 2024 Net Earnings of $1.22 Billion, Adjusted EBITDA of $2.28 Billion

Solid Operational and Financial Performance, Consistent Strong Cash Generation

Constructive Global Nitrogen Industry Dynamics in Near- and Long-Terms

Returned $1.9 Billion to Shareholders Through Share Repurchases and Dividends in 2024

CF Industries Holdings, Inc. (NYSE:CF), a leading global manufacturer of hydrogen and nitrogen products, today announced results for the full year and fourth quarter ended December 31, 2024.

Highlights

• Full year 2024 net earnings⁽¹⁾⁽²⁾ of $1.22 billion, or $6.74 per diluted share, EBITDA⁽³⁾ of $2.33 billion, and adjusted EBITDA⁽³⁾ of $2.28 billion
• Fourth quarter 2024 net earnings of $328 million, or $1.89 per diluted share, EBITDA of $582 million, and adjusted EBITDA of $562 million
• Full year 2024 net cash from operating activities of $2.27 billion and free cash flow⁽⁴⁾ of $1.45 billion
• Repurchased 18.8 million shares for $1.51 billion during 2024

"CF Industries' 2024 results reflect strong execution by our team against the backdrop of constructive global nitrogen industry dynamics," said Tony Will, president and chief executive officer, CF Industries Holdings, Inc. "We believe our cost-advantaged North American-based production network, operational capabilities and disciplined strategic initiatives position CF Industries well to continue to create substantial value for long-term shareholders."

Operations Overview

As of December 31, 2024, the Company's 12-month rolling average recordable incident rate was 0.31 incidents per 200,000 work hours.

Gross ammonia production for the full year and fourth quarter of 2024 was approximately 9.8 million and 2.6 million tons, respectively, compared to 9.5 million and 2.5 million tons for the full year and fourth quarter of 2023, respectively. The Company expects gross ammonia production in 2025 to be approximately 10 million tons.

Financial Results Overview

Full Year 2024 Financial Results

For the full year 2024, net earnings attributable to common stockholders were $1.22 billion, or $6.74 per diluted share, EBITDA was $2.33 billion, and adjusted EBITDA was $2.28 billion. These results compare to full year 2023 net earnings attributable to common stockholders of $1.53 billion, or $7.87 per diluted share, EBITDA of $2.71 billion, and adjusted EBITDA of $2.76 billion.

Net sales for the full year 2024 were $5.94 billion compared to $6.63 billion for 2023. Average selling prices for 2024 were lower than 2023 as lower global energy costs reduced the global market clearing price required to meet global demand. Sales volumes for 2024 were similar to 2023 as higher ammonia sales volumes due primarily to the addition of contractual commitments served from the recently acquired Waggaman ammonia production facility were offset by lower urea ammonium nitrate solution (UAN), ammonium nitrate (AN) and other sales volumes.

Cost of sales for the full year 2024 was lower compared to 2023 due to lower realized natural gas costs partially offset by higher maintenance costs.

The average cost of natural gas reflected in the Company's cost of sales was $2.40 per MMBtu for the full year 2024 compared to the average cost of natural gas in cost of sales of $3.67 per MMBtu for 2023.

Fourth Quarter 2024 Financial Results

For the fourth quarter of 2024, net earnings attributable to common stockholders were $328 million, or $1.89 per diluted share, EBITDA was $582 million, and adjusted EBITDA was $562 million. These results compare to fourth quarter of 2023 net earnings attributable to common stockholders of $274 million, or $1.44 per diluted share, EBITDA of $556 million, and adjusted EBITDA of $592 million.

Net sales in the fourth quarter of 2024 were $1.52 billion compared to $1.57 billion in the fourth quarter of 2023. Average selling prices for the fourth quarter of 2024 were similar to the fourth quarter of 2023. Sales volumes in the fourth quarter of 2024 were similar to the fourth quarter of 2023 as higher ammonia sales volumes due primarily to the addition of contractual commitments served from the recently acquired Waggaman ammonia production facility were offset primarily by lower UAN, AN and other sales volumes.

Cost of sales for the fourth quarter of 2024 was similar to the fourth quarter of 2023 as higher maintenance costs were offset by lower realized natural gas costs.

The average cost of natural gas reflected in the Company's cost of sales was $2.43 per MMBtu in the fourth quarter of 2024 compared to the average cost of natural gas in cost of sales of $3.01 per MMBtu in the fourth quarter of 2023.

Capital Management

Capital Expenditures

Capital expenditures in the fourth quarter and full year 2024 were $197 million and $518 million, respectively. Management projects capital expenditures for full year 2025 will be approximately $500-550 million.

Share Repurchase Program

The Company repurchased 18.8 million shares for $1.51 billion during 2024, which includes the repurchase of 4.4 million shares for $385 million during the fourth quarter of 2024. Since CF Industries commenced its current $3 billion share repurchase program in the second quarter of 2023, the Company has repurchased 24.4 million shares for approximately $1.94 billion. As of December 31, 2024, $1.06 billion remains under the program, which expires in December 2025.

CHS Inc. Distribution

On January 31, 2025, the Board of Managers of CF Industries Nitrogen, LLC (CFN) approved a semi-annual distribution payment to CHS Inc. (CHS) of $129 million for the distribution period ended December 31, 2024. The distribution was paid on January 31, 2025. Distributions to CHS pertaining to 2024 distribution periods were approximately $293 million.

Nitrogen Market Outlook

Global nitrogen pricing was supported in the fourth quarter of 2024 by positive global demand, constrained supply availability due in part to natural gas shortages in Iran and Egypt, and China's continued restrictions on urea exports. In the near-term, management expects the global supply-demand balance to remain constructive, as inventories globally are believed to be below average and production economics for the industry's marginal producers in Europe remain challenging.

• North America: The Company currently forecasts average U.S. corn returns above soybeans, due in part to improving corn prices from strong corn exports and lower 2024 yield estimates, which is expected to be positive for corn plantings and nitrogen demand in the region. Management expects corn plantings in the United States in 2025 will be approximately 93 million acres.
• Brazil: Urea imports for 2024 were 8.3 million metric tons, 14% higher than 2023. Nitrogen imports to Brazil are expected to remain strong in 2025 on forecast high corn plantings and continued nominal domestic nitrogen production.
• India: Urea inventory in India is believed to be low following strong domestic demand for urea, lower-than-targeted domestic urea production and lower urea import volumes in 2024 compared to 2023. Given the inability of import agencies to secure targeted volumes in the country's two most recent urea import tenders, another urea import tender may be necessary in the first quarter of 2025, which will compete for volumes with demand in the Northern Hemisphere for spring applications. Additionally, India is likely to tender earlier in its next fertilizer year than in recent years given the lower urea stock position.
• Europe: Approximately 25% of ammonia capacity, excluding two ammonia facilities that have recently announced shut-downs, and 20% of urea capacity were reported in shutdown/curtailment in Europe as of January 2025. Management believes that ammonia operating rates and overall domestic nitrogen product output in Europe will remain below historical averages over the long-term given the region's status as the global marginal producer.
• China: Ongoing urea export controls by the Chinese government continue to limit urea export availability from the country. China exported less than 300,000 metric tons of urea in 2024, 94% lower than 2023. Urea exports may resume following China's domestic spring application season.
• Russia: Urea exports from Russia increased by 16% through the end of the third quarter of 2024 compared to the same period in 2023 due to the start-up of new urea granulation capacity, producers favoring urea upgrades over UAN upgrades, and the willingness of certain countries to purchase Russian fertilizer, including the United States and Brazil.

Over the medium-term, significant energy cost differentials between North American producers and high-cost producers in Europe and Asia are expected to persist. As a result, the Company believes the global nitrogen cost structure will remain supportive of strong margin opportunities for low-cost North American producers.

Longer-term, management expects the global nitrogen supply-demand balance to tighten as global nitrogen capacity growth over the next four years is not projected to keep pace with expected global nitrogen demand growth of approximately 1.5% per year for traditional applications and new demand growth for clean energy applications. Global production is expected to remain constrained by continued challenges related to cost and availability of natural gas.

Strategic Initiatives Update

ATR Ammonia Production Facility FEED Study Update

In the fourth quarter of 2024, CF Industries and its partners completed a front-end engineering and design (FEED) study on constructing a greenfield autothermal reforming (ATR) ammonia production facility with carbon capture and sequestration (CCS) technologies at CF Industries' Blue Point Complex in Louisiana. The FEED study estimates the cost of a project with these attributes to be approximately $4.0 billion. Additionally, the Company estimates approximately $500 million would be required for the scalable common infrastructure for the site, such as ammonia storage and a vessel loading dock.

The Company and its potential partners expect to make final investment decisions on the proposed project in the first quarter of 2025.

Donaldsonville Complex Electrolyzer Project

Commissioning of the 20-megawatt alkaline water electrolysis plant at CF Industries' Donaldsonville, Louisiana, manufacturing complex was suspended due to an issue experienced in the fourth quarter of 2024. The Company is working with the technology provider, thyssenkrupp, and the provider's subcontractor, thyssenkrupp nucera, to determine the root cause of the issue. Upon identification and remediation of the issue, management expects to resume commissioning activities.

Donaldsonville Complex Carbon Capture and Sequestration Project

Construction of a dehydration and compression unit at CF Industries' Donaldsonville Complex continues to advance: all major equipment for the facility has been procured, installation of piping and process equipment is in progress, the two compressors have been delivered to the site, and commissioning activities have begun. Once in service, the dehydration and compression unit will enable up to 2 million metric tons annually of captured process carbon dioxide to be transported and permanently stored by ExxonMobil. CF Industries expects the project to qualify for tax credits under Section 45Q of the Internal Revenue Code, which provides a credit per metric ton of carbon dioxide sequestered. Start-up of the project is expected in 2025.

Yazoo City Complex Carbon Capture and Sequestration Project

CF Industries signed a definitive commercial agreement in July 2024 with ExxonMobil for the transport and sequestration in permanent geologic storage of up to 500,000 metric tons of carbon dioxide annually from the Company's Yazoo City, Mississippi, Complex. CF Industries will invest approximately $100 million into its Yazoo City Complex to build a carbon dioxide dehydration and compression unit to enable up to 500,000 metric tons of carbon dioxide captured from the ammonia production process per year to be transported and stored. CF Industries expects the project to qualify for tax credits under Section 45Q of the Internal Revenue Code, which provides a credit per metric ton of carbon dioxide sequestered. Start-up of the project is expected in 2028.

Consolidated Results

Ammonia Segment

CF Industries' ammonia segment produces anhydrous ammonia (ammonia), which is the base product that the Company manufactures, containing 82 percent nitrogen and 18 percent hydrogen. The results of the 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, the Company upgrades ammonia into other nitrogen products such as granular urea, UAN and AN.

Comparison of 2024 to 2023:

• Ammonia sales volume for 2024 increased compared to 2023 due to the addition of contractual commitments served from the Waggaman ammonia production facility that was acquired in December 2023.
• Ammonia average selling prices decreased for 2024 compared to 2023 as lower global energy costs reduced the global market clearing price required to meet global demand.
• Ammonia adjusted gross margin per ton decreased for 2024 compared to 2023 due primarily to lower average selling prices and higher maintenance costs partially offset by lower realized natural gas costs.

Granular Urea Segment

CF Industries' granular urea segment produces granular urea, which contains 46 percent nitrogen. Produced from ammonia and carbon dioxide, it has the highest nitrogen content of any of the Company's solid nitrogen products.

Comparison of 2024 to 2023:

• Granular urea sales volumes for 2024 were similar to 2023.
• Granular urea average selling prices decreased for 2024 compared to 2023 as lower global energy costs reduced the global market clearing price required to meet global demand.
• Granular urea adjusted gross margin per ton decreased for 2024 compared to 2023 due primarily to lower average selling prices partially offset by lower realized natural gas costs.

UAN Segment

CF Industries' UAN segment produces urea ammonium nitrate solution (UAN). UAN is a liquid product with nitrogen content that typically ranges from 28 percent to 32 percent and is produced by combining urea and ammonium nitrate in solution.

Comparison of 2024 to 2023:

• UAN sales volumes for 2024 were lower than 2023 sales volumes due to lower available supply from lower beginning inventory.
• UAN average selling prices decreased for 2024 compared to 2023 as lower global energy costs reduced the global market clearing price required to meet global demand.
• UAN adjusted gross margin per ton decreased for 2024 compared to 2023 due primarily to lower average selling prices partially offset by lower realized natural gas costs.

AN Segment

CF Industries' AN segment produces ammonium nitrate (AN). AN is used as a nitrogen fertilizer with nitrogen content between 29 percent to 35 percent, and is also used extensively by the commercial explosives industry as a component of explosives.

Comparison of 2024 to 2023:

• AN sales volumes for 2024 were lower than 2023 sales volumes primarily due to lower supply availability from lower production in 2024 compared to 2023.
• AN average selling prices decreased for 2024 compared to 2023 as lower global energy costs reduced the global market clearing price required to meet global demand.
• AN adjusted gross margin per ton decreased for 2024 compared to 2023 due primarily to lower average selling prices partially offset by lower maintenance costs and lower realized natural gas costs.

Other Segment

CF Industries' Other segment primarily includes diesel exhaust fluid (DEF), urea liquor and nitric acid.

Comparison of 2024 to 2023:

• Other sales volumes for 2024 were similar to 2023.
• Other average selling prices decreased for 2024 compared to 2023 as lower global energy costs reduced the global market clearing price required to meet global demand.
• Other adjusted gross margin per ton decreased for 2024 compared to 2023 due primarily to lower average selling prices partially offset by lower realized natural gas costs.

Dividend Payment

On January 30, 2025, CF Industries' Board of Directors declared a quarterly dividend of $0.50 per common share. The dividend will be paid on February 28, 2025 to stockholders of record as of February 14, 2025.

Conference Call

CF Industries will hold a conference call to discuss its full year and fourth quarter 2024 results at 11:00 a.m. ET on Thursday, February 20, 2025. This conference call will include discussion of CF Industries' business environment and outlook. 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.

At CF Industries, 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 manufacturing complexes in the United States, Canada, and the United Kingdom, an unparalleled storage, transportation and distribution network in North America, and logistics capabilities enabling a global reach underpin our strategy to leverage our unique capabilities to accelerate the world's transition to clean energy. 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, EBITDA per ton, adjusted EBITDA, adjusted EBITDA per ton, free cash flow, and, on a segment basis, adjusted gross margin, adjusted gross margin as a percent of net sales and adjusted gross margin per product ton and per nutrient ton, which are non-GAAP financial measures, provide additional meaningful information regarding the Company's performance and financial strength. Management uses these measures, and believes they are useful to investors, as supplemental financial measures in the comparison of year-over-year performance. 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, EBITDA per ton, adjusted EBITDA, adjusted EBITDA per ton, free cash flow, adjusted gross margin, adjusted gross margin as a percent of net sales and adjusted gross margin per product ton and per nutrient ton, included in this release may not be comparable to similarly titled measures of other companies. Reconciliations of EBITDA, EBITDA per ton, adjusted EBITDA, adjusted EBITDA per ton, and free cash flow to the most directly comparable GAAP measures are provided in the tables accompanying this release under "CF Industries Holdings, Inc.-Selected Financial Information-Non-GAAP Disclosure Items." Reconciliations of adjusted gross margin, adjusted gross margin as a percent of net sales and adjusted gross margin per product ton and per nutrient ton to the most directly comparable GAAP measures are provided in the segment tables included in this release.

Safe Harbor Statement

All statements in this communication by CF Industries Holdings, Inc. (together with its subsidiaries, the "Company"), other than those relating to historical facts, are forward-looking statements. Forward-looking statements can generally be identified by their use of terms such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will" or "would" and similar terms and phrases, including references to assumptions. 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 the Company's control, which could cause actual results to differ materially from such statements. These statements may include, but are not limited to, statements about strategic plans and management's expectations with respect to the production of low-carbon ammonia, the development of carbon capture and sequestration projects, the transition to and growth of a hydrogen economy, greenhouse gas reduction targets, projected capital expenditures, statements about future financial and operating results, and other items described in this communication.

Important factors that could cause actual results to differ materially from those in the forward-looking statements include, among others, the cyclical nature of the Company's business and the impact of global supply and demand on the Company's selling prices; the global commodity nature of the Company's nitrogen products, the conditions in the international market for nitrogen products, and the intense global competition from other producers; 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 the United Kingdom; weather conditions and the impact of adverse weather events; the seasonality of the fertilizer business; the impact of changing market conditions on the Company's 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; the Company's reliance on a limited number of key facilities; risks associated with cybersecurity; acts of terrorism and regulations to combat terrorism; risks associated with international operations; the significant risks and hazards involved in producing and handling the Company's products against which the Company may not be fully insured; the Company's ability to manage its indebtedness and any additional indebtedness that may be incurred; the Company's ability to maintain compliance with covenants under its revolving credit agreement and the agreements governing its indebtedness; downgrades of the Company's credit ratings; risks associated with changes in tax laws and disagreements with taxing authorities; risks involving derivatives and the effectiveness of the Company's risk management and hedging activities; potential liabilities and expenditures related to environmental, health and safety laws and regulations and permitting requirements; regulatory restrictions and requirements related to greenhouse gas emissions; the development and growth of the market for low-carbon ammonia and the risks and uncertainties relating to the development and implementation of the Company's low-carbon ammonia projects; and risks associated with expansions of the Company's business, including unanticipated adverse consequences and the significant resources that could be required.

More detailed information about factors that may affect the Company's performance and could cause actual results to differ materially from those in any forward-looking statements may be found in CF Industries Holdings, Inc.'s filings with the Securities and Exchange Commission, including CF Industries Holdings, Inc.'s most recent annual and quarterly reports on Form 10-K and Form 10-Q, which are available in the Investor Relations section of the Company's web site. It is not possible to predict or identify all risks and uncertainties that might affect the accuracy of our forward-looking statements and, consequently, our descriptions of such risks and uncertainties should not be considered exhaustive. There is no guarantee that any of the events, plans or goals anticipated by these forward-looking statements will occur, and if any of the events do occur, there is no guarantee what effect they will have on our business, results of operations, cash flows, financial condition and future prospects. Forward-looking statements are given only as of the date of this communication and the Company disclaims 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

NON-GAAP DISCLOSURE ITEMS

Reconciliation of net cash provided by operating activities (GAAP measure) to free cash flow (non-GAAP measure):

Free cash flow is defined as net cash provided by operating activities, as stated in the consolidated statements of cash flows, reduced by capital expenditures and distributions to noncontrolling interest. The Company has presented free cash flow because management uses this measure and believes it is useful to investors, as an indication of the strength of the Company and its ability to generate cash and to evaluate the Company's cash generation ability relative to its industry competitors. It should not be inferred that the entire free cash flow amount is available for discretionary expenditures.

CF INDUSTRIES HOLDINGS, INC.

SELECTED FINANCIAL INFORMATION

NON-GAAP DISCLOSURE ITEMS (CONTINUED)

Reconciliation of net earnings attributable to common stockholders and net earnings attributable to common stockholders per ton (GAAP measures) to EBITDA, EBITDA per ton, adjusted EBITDA and adjusted EBITDA per ton (non-GAAP measures), as applicable:

EBITDA is defined as net earnings attributable to common stockholders plus interest expense (income)—net, income taxes and depreciation 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.

The Company has presented EBITDA and EBITDA per ton because management uses these measures to track performance and believes that they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the industry.

Adjusted EBITDA is defined as EBITDA adjusted with the selected items as summarized in the table below. The Company has presented adjusted EBITDA and adjusted EBITDA per ton because management uses these measures, and believes they are useful to investors, as supplemental financial measures in the comparison of year-over-year performance.