CF Industries Holdings Inc.
11/05/2026 | Press release | Distributed by Public on 11/05/2026 12:58
Quarterly Report for Quarter Ending September 30, 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 Pronouncements
•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, or upgraded products, 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. Upgraded products 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 and upgraded products derived from low-carbon ammonia ("low-carbon upgraded products", together with low-carbon ammonia "low-carbon 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 carbon border adjustment fees and other carbon regulations.
Our principal assets as of September 30, 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
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Nitrogen, LLC (CFN), of which we own approximately 90% and CHS Inc. (CHS) owns the remainder (see Note 16-Noncontrolling Interests for additional information on our strategic venture with CHS);
•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 One 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 One 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 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 upgraded 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 products for both traditional and new applications. Traditional applications include agriculture, where low-carbon 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. ExxonMobil has obtained Class VI permits from the U.S. Environmental Protection Agency for its Rose CCS project (Rose). Upon receipt of Class VI permits issued by the Railroad Commission of Texas, ExxonMobil plans to transition to dedicated permanent storage at Rose.
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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 One joint venture
On April 8, 2025, 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 (the Blue Point One joint venture). We hold 40% ownership, JERA holds 35% ownership, and Mitsui holds 25% ownership in the Blue Point One joint venture.
The Blue Point One joint venture is constructing an autothermal reforming (ATR) ammonia production facility with a CO2 dehydration and compression unit to prepare captured CO2 for transportation and sequestration. We are responsible for overseeing and managing the development, construction, operation and maintenance of the ammonia production facility under contracts with the Blue Point One joint venture. Engineering, equipment procurement and pre-construction activities at our Blue Point complex began in the second quarter of 2025. State and federal permits were received in July 2026, enabling construction at the Blue Point complex to commence in August 2026. Low-carbon ammonia production is expected to begin in 2029. See Note 13-Variable Interest Entity, for information on permitting matters related to the Blue Point complex.
We estimate that the cost of the Blue Point One joint venture's 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 One joint venture members fund the cost of the facility's engineering, procurement and construction according to their respective ownership percentages.
Once production commences, we, JERA and Mitsui are required to purchase low-carbon ammonia produced by the Blue Point One joint venture in accordance with our respective ownership percentages. 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 One 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 One joint venture will compensate us for these services.
We determined that the Blue Point One 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 One Joint Venture," below, and Note 13-Variable Interest Entity, for additional information on the Blue Point One joint venture.
Demand for low-carbon products
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
CF INDUSTRIES HOLDINGS, INC.
and Africa as they began to establish a low-carbon ammonia supply chain. We expect continued demand growth for low-carbon 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 One 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 Japan's 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.
In 2026, we completed our first sales of low-carbon upgraded products. Our first sale of low-carbon upgraded products was PepsiCo's purchase of low-carbon UAN for use in their product supply chain. In addition, in September 2026, we completed our first sale of low-carbon UAN into Europe at a premium. Additional upgraded products are being certified low-carbon, and marketing for those products has begun.
We continue to engage in discussions with existing and potential customers who have interest in using low-carbon products for traditional applications as well as for the supply of our low-carbon products 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 our low-carbon products. These discussions continue to advance as we gain greater clarity regarding demand for low-carbon products, 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, including the impacts of the ongoing Russia-Ukraine war.
In late February of 2026, global market conditions were further impacted by the conflict with Iran, which led to additional global nitrogen fertilizer supply constraints and resulted in price volatility as trade disruptions in the Middle East unfolded. 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, with urea being the most widely used and traded nitrogen fertilizer globally. In March of 2026, safety concerns amid ongoing attacks by Iran, mines in the Strait of Hormuz waters, and unavailability or high cost of war risk insurance coverage on affected vessels brought the flow of vessels through the Strait of Hormuz to a halt. This prevented the export of nitrogen fertilizers from this region and resulted in curtailment of a significant amount of nitrogen capacity in the region. This supply disruption resulted 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 2026. This disruption in LNG supply out of the Middle East affected nitrogen producers reliant on imported LNG, such as nitrogen producers in India, Pakistan, and Bangladesh that were 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. For example, 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 will also require time to resume production at pre-conflict levels.
As a result of all these factors, global nitrogen fertilizer prices significantly increased in March of 2026 and remained elevated throughout most of the second quarter of 2026. However, during the third quarter of 2026, global nitrogen selling prices declined due primarily to the following factors:
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•a seasonal decline in agricultural demand driven by the conclusion of the Northern Hemisphere fertilizer application season, combined with delayed customer purchasing,
•a decline in global import demand for ammonia driven by phosphate production curtailments, in response to limited sulfur availability from the Middle East (which accounts for about half of globally traded sulfur supply), an input in the phosphoric acid production process, and
•prospects of returning supply availability from the Middle East as a memorandum of understanding was temporarily in effect between the U.S. and Iran, signaling a ceasefire or settlement of the conflict with Iran.
We expect that these geopolitical events, including the length and extent of the conflict with Iran and its expansion throughout and beyond the Persian Gulf, viability of shipping through the Strait of Hormuz, and the extent of damage and time to repair energy infrastructure, will continue to impact the global nitrogen supply and demand balance, and result in higher volatility of future selling prices and demand for nitrogen fertilizer products. The scope and duration of these impacts are currently unknown; however, we believe that the impacts of these geopolitical events on the global nitrogen supply and demand balance, as described above, will persist in the near-term.
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 multiple U.S. statutes. The 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 early 2025 through July 24, 2026, the Trump administration sought to impose tariffs under the International Emergency Economic Powers Act and other legal authority and exempted any products that entered the United States duty-free as a good of Canada pursuant to the United States-Mexico-Canada Agreement (USMCA), including imports of our Canadian production. In addition, from late 2025, most fertilizer products, including urea, UAN and AN, but not ammonia, were exempted from these global tariffs.
In 2026, the Office of the United States Trade Representative (USTR) launched multiple trade investigations pursuant to section 301 of the Trade Act of 1974 that have resulted in, and may in the future result in, the imposition of tariffs against a wide range of countries at tariff rates to be determined by the Trump administration. For example, on July 23, 2026, USTR finalized its investigation and, effective July 24, 2026, imposed 10% and 12.5% tariffs on more than 60 countries for failure to impose or effectively enforce bans on the importation of goods produced with forced labor. Prior exclusions of USMCA goods, products subject to tariffs pursuant to section 232 of the Trade Expansion Act of 1962, and certain fertilizer and other products were maintained in this action, which also exempted ammonia from these tariffs. USTR is expected to announce outcomes in other section 301 actions in the coming months.
The United States did not agree to renewal of the USMCA by July 1, 2026, and negotiations between the United States, Canada, and Mexico to address certain U.S. concerns continue. As a result, the USMCA remains intact (albeit some trade is subject to tariff actions outside the USMCA framework) and will continue to provide duty-free treatment to nitrogen products from Canada. The USMCA is set to be reviewed annually until a renewal is agreed to by the three countries. On July 20, 2026, the president issued three executive orders pursuant to section 338 of the Tariff Act of 1930 that imposed additional 50% tariffs on specified products imported from Canada, effective August 19, 2026. Canada responded by imposing tariffs on specified imports from the United States. The U.S. executive orders and the Canadian response do not subject nitrogen products to these tariffs.
Effective July 1, 2026, the European Union (EU) implemented the United States-European Union Framework on an Agreement on Reciprocal, Fair, and Balanced Trade to eliminate most-favored nation (MFN) tariffs on EU imports of all U.S. nitrogen fertilizer products through at least the end of 2029. Other trade agreements that were recently negotiated between the United States 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.
In September 2026, the Lindsey O. Graham Sanctioning Russia and Iran Act was enacted, authorizing the president to impose tariffs of up to 500% on imports from Russia and up to 100% on imports from countries that continue purchasing Russian crude oil or natural gas after enactment. The act provides substantial discretion to the president on whether and at what levels to impose tariffs. Subsequent to enactment, the president issued an executive order waiving the application of all tariffs that the legislation authorized on imports from Russia or countries that purchase Russian oil or natural gas, while directing the administration to continue to monitor developments.
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In April 2026, increased tariffs on imports of certain steel and aluminum products and their derivatives, which were imposed by the Trump administration in 2025, were further modified. Such tariffs may impact the cost of our capital equipment, including for development and construction at our Blue Point complex.
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.
The president 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 (FTC) 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. On May 28, 2026, the Chairman of the FTC announced that the FTC had launched an industry-wide investigation into fertilizer prices in the United States. The U.S. Senate is currently considering a farm bill with provisions that require reporting of fertilizer prices and a report on the fertilizer industry, although it is not clear if that legislation will be enacted or if it will contain fertilizer-related provisions once final. 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 third quarter of 2026, the average selling price for our products was $388 per ton, or 5% higher, compared to $368 per ton in the third quarter of 2025, reflecting higher average selling prices in our Ammonia, AN, and Other segments, partially offset by lower average selling prices in our Granular Urea and UAN segments. The higher average selling price resulted in an increase in net sales of approximately $78 million for the third quarter of 2026 compared to the third quarter of 2025.
In the nine months ended September 30, 2026, the average selling price for our products was $442 per ton, or 23% higher compared to $359 per ton in the nine months ended September 30, 2025, reflecting higher average selling prices for all of our segments. This resulted in an increase in net sales of approximately $1.07 billion for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. Higher average selling prices for our major products were due primarily to a tighter global nitrogen supply and demand balance that was further impacted by the conflict with Iran. See "Geopolitical Environment," above.
Nitrogen Sales Volume
Sales volume was 4.8 million tons in the third quarter of 2026 compared to 4.5 million tons in the third quarter of 2025. Higher sales volume resulted in an increase in net sales of approximately $123 million. The increase in sales volume was driven by our UAN, Granular Urea and Other segments, partially offset by a decrease in our AN and Ammonia segments.
Sales volume in the nine months ended September 30, 2026 was 13.7 million tons compared to 14.5 million tons in the nine months ended September 30, 2025. This resulted in a decrease in net sales of approximately $211 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The decrease in sales volume was driven by our AN, Ammonia and UAN segments, partially offset by an increase in our Granular Urea and Other segments.
The decrease in sales volumes for our AN segment in the three and nine months ended September 30, 2026 compared to the prior year periods was a result of the idled Yazoo City plant. See "Yazoo City Incident," below, for additional information.
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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 33% and 34%, respectively, of our production costs in the first nine 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.
In the first nine months of 2026, the U.S. natural gas market has transitioned from weather-driven tightness early in the year to a more balanced and well-supplied environment, as record U.S. natural gas production, above-average storage inventories, and LNG export maintenance in the third quarter of 2026 largely offset both strong summer power demand and growing LNG demand. Although global gas markets experienced substantial volatility due to Middle East LNG supply disruptions and global LNG market tightness, Henry Hub prices softened through the summer, generally trading below $3.00 per MMBtu during the third quarter of 2026, amid above-average storage inventories and robust supply growth. International gas markets remained significantly tighter in the third quarter of 2026, with elevated prices driven by Middle East LNG supply concerns and reduced LNG availability from the Persian Gulf region. In North America, natural gas prices moved higher near the end of the third quarter of 2026 as robust demand exceeded incremental supply growth, slowing storage builds and tightening fundamentals ahead of the winter heating season.
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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 |
2026 v. 2025
|
2026 | 2025 |
2026 v. 2025
|
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| Average daily market price of natural gas at the Henry Hub (per MMBtu) | $ | 2.87 | $ | 3.03 | $ | (0.16) | (5) | % | $ | 3.56 | $ | 3.48 | $ | 0.08 | 2 | % | |||||||||||||||||||||||||||||||
|
Cost of natural gas used for production in cost of sales(1) (per MMBtu)
|
2.88 | 2.96 | (0.08) | (3) | % | 3.63 | 3.34 | 0.29 | 9 | % | |||||||||||||||||||||||||||||||||||||
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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 third quarter of 2026, our cost of natural gas used for production, which includes the impact of realized natural gas derivatives, was $2.88 per MMBtu compared to $2.96 per MMBtu in the third quarter of 2025. The decrease of $0.08 per MMBtu in the cost of natural gas resulted in an increase in gross margin of $20 million compared to the third quarter of 2025. In the nine months ended September 30, 2026, our cost of natural gas used for production, which includes the impact of realized natural gas derivatives, increased 9% to $3.63 per MMBtu from $3.34 per MMBtu in the nine months ended September 30, 2025. This increase in natural gas costs resulted in a decrease in gross margin of $53 million.
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 first nine months of 2026 compared to the first nine months of 2025 were due primarily to the idled Yazoo City plant.
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 second quarter of 2026, management approved a plan to rebuild the Yazoo City plant for the production of ammonia, AN solution (ANS), nitric acid, UAN and urea liquor. As a result of the approved plan, certain equipment will no longer provide future economic benefit, and we recorded an impairment charge of $23 million in the second quarter of 2026, which is reflected in asset impairment in our consolidated statement of operations for the nine months ended September 30, 2026. We expect production at our Yazoo City plant to resume in the first half of 2027.
See "Items Affecting Comparability of Results-Yazoo City incident," below, for additional information.
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Financial Executive Summary
We reported net earnings attributable to common stockholders of $436 million for the three months ended September 30, 2026 compared to $353 million for the three months ended September 30, 2025, an increase in net earnings of $83 million, or 24%. The increase in net earnings for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 was due primarily to an increase in gross margin of $88 million and business interruption insurance recoveries of $62 million related to the November 2025 incident at our Yazoo City complex, partially offset by an increase in interest expense-net of $58 million. Insurance recoveries related to our Yazoo City complex are discussed further below in "Items Affecting Comparability of Results-Yazoo City incident." Increases in interest expense and interest income pertain to the U.S. Canadian transfer pricing matter described in "Items Affecting Comparability of Results-Transfer pricing reserves," below.
Gross margin increased by $88 million, or 14%, to $720 million for the three months ended September 30, 2026 compared to $632 million for the three months ended September 30, 2025. The increase in gross margin was due primarily to a 7% increase in sales volume, which increased gross margin by $98 million, a 5% increase in average selling prices to $388 per ton in the third quarter of 2026 from $368 per ton in the third quarter of 2025, which increased gross margin by $78 million, and lower natural gas costs, which increased gross margin by $20 million. These increases in gross margin were partially offset by higher costs for purchased product, higher freight and distribution costs, and higher costs associated with maintenance activity, including at our idled Yazoo City complex.
Diluted net earnings per share attributable to common stockholders increased $0.68 per share, or 31%, to $2.87 per share in the third quarter of 2026 compared to $2.19 per share in the third 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 151.6 million shares for the three months ended September 30, 2026, a decrease of 6% compared to diluted weighted-average common shares outstanding of 161.2 million shares for the three months ended September 30, 2025.
Items Affecting Comparability of Results
For the three months ended September 30, 2026 and 2025, we reported net earnings attributable to common stockholders of $436 million and $353 million, respectively. For the nine months ended September 30, 2026 and 2025, we reported net earnings attributable to common stockholders of $1.78 billion and $1.05 billion, respectively. In addition to the impact of market conditions and current developments, discussed above, certain items affected the comparability of our financial results for the three and nine months ended September 30, 2026 and 2025. The following table and related discussion outline these items and their impact on the comparability of our financial results for these periods. The descriptions of items below that refer to amounts in the table refer to the pre-tax amounts unless otherwise noted.
CF INDUSTRIES HOLDINGS, INC.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| Pre-Tax | After-Tax | Pre-Tax | After-Tax | Pre-Tax | After-Tax | Pre-Tax | After-Tax | ||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
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Unrealized net mark-to-market loss (gain) on natural gas derivatives(1)
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$ | 2 | $ | 2 | $ | (1) | $ | (1) | $ | (3) | $ | (2) | $ | 1 | $ | - | |||||||||||||||||||
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(Gain) loss on foreign currency transactions(2)(3)
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- | - | (4) | (3) | 5 | 4 | (5) | (5) | |||||||||||||||||||||||||||
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Pension settlement loss(4)
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7 | 5 | - | - | 7 | 5 | - | - | |||||||||||||||||||||||||||
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Loss on sale of Ince facility(5)
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- | - | - | - | - | - | 23 | 21 | |||||||||||||||||||||||||||
| Yazoo City incident: | |||||||||||||||||||||||||||||||||||
| Asset impairment | - | - | - | - | 23 | 18 | - | - | |||||||||||||||||||||||||||
| Insurance recoveries-property damage | - | - | - | - | (25) | (19) | - | - | |||||||||||||||||||||||||||
| Insurance recoveries-business interruption | (62) | (47) | - | - | (112) | (85) | - | - | |||||||||||||||||||||||||||
| Transfer pricing reserves: | |||||||||||||||||||||||||||||||||||
| Interest expense | 131 | 131 | - | - | 131 | 131 | - | - | |||||||||||||||||||||||||||
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Interest income(6)
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(66) | (51) | - | - | (66) | (51) | - | - | |||||||||||||||||||||||||||
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Income tax benefit(6)
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- | (30) | - | - | - | (30) | - | - | |||||||||||||||||||||||||||
| Litigation settlement gain | - | - | - | - | (170) | (129) | - | - | |||||||||||||||||||||||||||
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45Q Tax Credits(2)
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(19) | (19) | (20) | (20) | (62) | (62) | (20) | (20) | |||||||||||||||||||||||||||
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Blue Point One joint venture development costs(2)(3)
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10 | 8 | 2 | 1 | 19 | 17 | 4 | 3 | |||||||||||||||||||||||||||
______________________________________________________________________________
(1)Included in cost of sales in our consolidated statements of operations.
(2)Included in other operating income-net in our consolidated statements of operations.
(3)Includes results related to the Blue Point One joint venture, of which we have a 40% equity interest. The after-tax impact for amounts related to the Blue Point One joint venture does not include a tax provision on the 60% attributable to noncontrolling interests.
(4)Included in other non-operating expense (income)-net in our consolidated statements of operations.
(5)Included in U.K. operations restructuring in our consolidated statement of operations.
(6)For the three and nine months ended September 30, 2026, the after-tax income tax benefit amount of $30 million, discussed below under "Transfer pricing reserves," excludes $15 million of income tax provision that is reflected in the after-tax interest income amount shown in this table.
Unrealized net mark-to-market loss (gain) 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. 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 September 30, 2026, we recognized an unrealized net mark-to-market loss on natural gas derivatives of $2 million compared to a gain of $1 million for the three months ended September 30, 2025. In the nine months ended September 30, 2026, we recognized an unrealized net mark-to-market gain on natural gas derivatives of $3 million compared to a loss of $1 million in the nine months ended September 30, 2025.
(Gain) loss on foreign currency transactions
In the three months ended September 30, 2025, we recognized a $4 million gain on foreign currency transactions. In the nine months ended September 30, 2026, we recognized a loss on foreign currency transactions of $5 million compared to a gain of $5 million in the nine months ended September 30, 2025. (Gain) loss on foreign currency transactions consists of foreign currency exchange rate impacts on foreign currency denominated transactions, including cash held in a foreign currency.
Pension settlement loss
In the third quarter of 2026, we settled all obligations under our U.S. defined benefit pension plan through a combination of lump sum payments and the purchase of a group buy-out annuity contract. The settlement payments, which totaled
CF INDUSTRIES HOLDINGS, INC.
approximately $185 million, were funded with plan assets. In connection with the full settlement of the plan, we remeasured the projected benefit obligation and plan assets, and we recognized a non-cash pre-tax pension settlement loss of approximately $7 million in the third quarter of 2026, reflecting the unamortized net unrecognized postretirement benefit costs related to the settled obligations, with a corresponding offset to accumulated other comprehensive loss.
In addition, in the third quarter of 2026, we settled substantially all obligations of one of our Canadian defined benefit pension plans through a combination of lump sum payments and the conversion of the majority of an existing group buy-in annuity contract to a group buy-out annuity contract. The settlement payments, which totaled approximately $65 million, were funded with plan assets. In connection with the substantial settlement of this plan, we remeasured the projected benefit obligation and plan assets and recognized an immaterial non-cash pre-tax pension settlement gain in the third quarter of 2026.
As a result of these settlement transactions, we recognized a net non-cash pre-tax pension settlement loss of approximately $7 million in the third quarter of 2026, which is reflected in other non-operating expense (income)-net in our consolidated statements of operations for the three and nine months ended September 30, 2026.
See "Liquidity and Capital Resources-Defined Benefit Pension Plans," below, and Note 10-Pension Settlements for additional information.
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 nine months ended September 30, 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. 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, which are included in insurance recoveries-property damage in our consolidated statement of operations for the nine months ended September 30, 2026.
In the second quarter of 2026, we recognized $50 million of insurance recoveries related to business interruption, which are included in insurance recoveries-business interruption in our consolidated statements of operations for the nine months ended September 30, 2026. In the third quarter of 2026, we received $62 million of additional business interruption insurance recoveries, which are included in insurance recoveries-business interruption in our consolidated statements of operations for the three and nine months ended September 30, 2026.
In the second quarter of 2026, management approved a plan to rebuild the Yazoo City plant for the production of ammonia, ANS, nitric acid, UAN and urea liquor. As a result of the approved plan, certain equipment will no longer provide future economic benefit, and we recorded an impairment charge of $23 million in the second quarter of 2026, which is reflected in asset impairment in our consolidated statement of operations for the nine months ended September 30, 2026. We expect production at our Yazoo City plant to resume in the first half of 2027.
See Note 6-Property, Plant and Equipment-Net for additional information.
Transfer pricing reserves
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 for transfer pricing matters. During the third quarter of 2026, we reevaluated our transfer pricing positions between Canada and the United States based on developments in the ongoing proceedings with the relevant taxing authorities. Based on this evaluation, for the three months ended September 30, 2026, we recorded the following:
•liabilities for unrecognized tax benefits of $265 million, with a corresponding income tax provision, and accrued interest expense of $131 million related to the liabilities for unrecognized benefits, and
•noncurrent income tax receivables of $311 million, with a corresponding income tax benefit, and accrued interest income of $66 million related to the noncurrent income tax receivables.
CF INDUSTRIES HOLDINGS, INC.
In the three and nine months ended September 30, 2026, the net impact on our consolidated statements of operations of the amounts recorded as a result of this evaluation of transfer pricing positions, including a $16 million deferred income tax provision for other transfer pricing tax effects, was a $30 million income tax benefit and $65 million of net interest expense before tax ($80 million after tax).
See Note 9-Income Taxes for additional information.
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 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 nine months ended September 30, 2026.
On April 30, 2026, we received the cash payment from Orica.
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, we began earning 45Q Tax Credits, which are recorded in other operating income-net in our consolidated statements of operations. In the nine months ended September 30, 2026, we earned 45Q Tax Credits of approximately $62 million compared to $20 million in the nine months ended September 30, 2025. In the three months ended September 30, 2026 and 2025, we earned 45Q Tax Credits of approximately $19 million and $20 million, respectively. See "Overview of CF Holdings-Our Strategy," above, for additional information related to our clean energy initiatives.
Blue Point One joint venture development costs
In the three and nine months ended September 30, 2026, the Blue Point One joint venture incurred development costs that were not eligible for capitalization of $10 million and $19 million, respectively, compared to $2 million and $4 million, respectively, in the three and nine months ended September 30, 2025. These development costs 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 One joint venture," above, and Note 13-Variable Interest Entity, for additional information on the Blue Point One joint venture.
CF INDUSTRIES HOLDINGS, INC.
Consolidated Results of Operations
The following table presents our consolidated results of operations for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 v. 2025 | 2026 | 2025 | 2026 v. 2025 | ||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 1,860 | $ | 1,659 | $ | 201 | 12 | % | $ | 6,068 | $ | 5,212 | $ | 856 | 16 | % | |||||||||||||||||||||||||||||||
| Cost of sales | 1,140 | 1,027 | 113 | 11 | % | 3,457 | 3,253 | 204 | 6 | % | |||||||||||||||||||||||||||||||||||||
| Gross margin | 720 | 632 | 88 | 14 | % | 2,611 | 1,959 | 652 | 33 | % | |||||||||||||||||||||||||||||||||||||
| Gross margin percentage | 38.7 | % | 38.1 | % | 0.6 | % | 43.0 | % | 37.6 | % | 5.4 | % | |||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 87 | 88 | (1) | (1) | % | 279 | 273 | 6 | 2 | % | |||||||||||||||||||||||||||||||||||||
| U.K. operations restructuring | - | - | - | - | % | - | 23 | (23) | (100) | % | |||||||||||||||||||||||||||||||||||||
| Asset impairment | - | - | - | - | % | 23 | - | 23 | N/M | ||||||||||||||||||||||||||||||||||||||
| Insurance recoveries-property damage | - | - | - | - % | (25) | - | (25) | N/M | |||||||||||||||||||||||||||||||||||||||
| Insurance recoveries-business interruption | (62) | - | (62) | N/M | (112) | - | (112) | N/M | |||||||||||||||||||||||||||||||||||||||
| Litigation settlement gain | - | - | - | - | % | (170) | - | (170) | N/M | ||||||||||||||||||||||||||||||||||||||
| Other operating income-net | (2) | (30) | 28 | (93) | % | (52) | (8) | (44) | N/M | ||||||||||||||||||||||||||||||||||||||
| Total other operating expense (income)-net | 23 | 58 | (35) | (60) | % | (57) | 288 | (345) | N/M | ||||||||||||||||||||||||||||||||||||||
| Equity in earnings of operating affiliate | 4 | 6 | (2) | (33) | % | 17 | 12 | 5 | 42 | % | |||||||||||||||||||||||||||||||||||||
| Operating earnings | 701 | 580 | 121 | 21 | % | 2,685 | 1,683 | 1,002 | 60 | % | |||||||||||||||||||||||||||||||||||||
| Interest expense | 168 | 41 | 127 | 310 | % | 257 | 114 | 143 | 125 | % | |||||||||||||||||||||||||||||||||||||
| Interest income | (92) | (23) | (69) | (300) | % | (138) | (57) | (81) | (142) | % | |||||||||||||||||||||||||||||||||||||
| Other non-operating expense (income)-net | 6 | (3) | 9 | N/M | 10 | (11) | 21 | N/M | |||||||||||||||||||||||||||||||||||||||
| Earnings before income taxes | 619 | 565 | 54 | 10 | % | 2,556 | 1,637 | 919 | 56 | % | |||||||||||||||||||||||||||||||||||||
| Income tax provision | 99 | 105 | (6) | (6) | % | 491 | 334 | 157 | 47 | % | |||||||||||||||||||||||||||||||||||||
| Net earnings | 520 | 460 | 60 | 13 | % | 2,065 | 1,303 | 762 | 58 | % | |||||||||||||||||||||||||||||||||||||
| Less: Net earnings attributable to noncontrolling interests | 84 | 107 | (23) | (21) | % | 287 | 252 | 35 | 14 | % | |||||||||||||||||||||||||||||||||||||
| Net earnings attributable to common stockholders | $ | 436 | $ | 353 | $ | 83 | 24 | % | $ | 1,778 | $ | 1,051 | $ | 727 | 69 | % | |||||||||||||||||||||||||||||||
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Diluted net earnings per share attributable to common stockholders
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$ | 2.87 | $ | 2.19 | $ | 0.68 | 31 | % | $ | 11.60 | $ | 6.39 | $ | 5.21 | 82 | % | |||||||||||||||||||||||||||||||
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Diluted weighted-average common shares outstanding
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151.6 | 161.2 | (9.6) | (6) | % | 153.3 | 164.3 | (11.0) | (7) | % | |||||||||||||||||||||||||||||||||||||
| Dividends declared per common share | $ | 0.60 | $ | 0.50 | $ | 0.10 | 20 | % | $ | 1.60 | $ | 1.50 | $ | 0.10 | 7 | % | |||||||||||||||||||||||||||||||
___________________________________________________________________________
N/M-Not Meaningful
CF INDUSTRIES HOLDINGS, INC.
The following table presents certain supplemental data for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 v. 2025 | 2026 | 2025 | 2026 v. 2025 | ||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions, except per share and per MMBtu amounts) | |||||||||||||||||||||||||||||||||||||||||||||||
| Natural gas supplemental data (per MMBtu) | |||||||||||||||||||||||||||||||||||||||||||||||
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Natural gas costs in cost of sales(1)
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$ | 2.87 | $ | 2.96 | $ | (0.09) | (3) | % | $ | 3.76 | $ | 3.35 | $ | 0.41 | 12 | % | |||||||||||||||||||||||||||||||
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Realized derivatives loss (gain) in cost of sales(2)
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0.01 | - | 0.01 | N/M | (0.13) | (0.01) | (0.12) | N/M | |||||||||||||||||||||||||||||||||||||||
| Cost of natural gas used for production in cost of sales | $ | 2.88 | $ | 2.96 | $ | (0.08) | (3) | % | $ | 3.63 | $ | 3.34 | $ | 0.29 | 9 | % | |||||||||||||||||||||||||||||||
| Average daily market price of natural gas at the Henry Hub | $ | 2.87 | $ | 3.03 | $ | (0.16) | (5) | % | $ | 3.56 | $ | 3.48 | $ | 0.08 | 2 | % | |||||||||||||||||||||||||||||||
| Unrealized net mark-to-market loss (gain) on natural gas derivatives | $ | 2 | $ | (1) | $ | 3 | N/M | $ | (3) | $ | 1 | $ | (4) | N/M | |||||||||||||||||||||||||||||||||
| Depreciation and amortization | $ | 233 | $ | 217 | $ | 16 | 7 | % | $ | 676 | $ | 670 | $ | 6 | 1 | % | |||||||||||||||||||||||||||||||
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Capital expenditures
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$ | 282 | $ | 347 | $ | (65) | (19) | % | $ | 776 | $ | 724 | $ | 52 | 7 | % | |||||||||||||||||||||||||||||||
| Sales volume by product tons (000s) | 4,799 | 4,504 | 295 | 7 | % | 13,734 | 14,529 | (795) | (5) | % | |||||||||||||||||||||||||||||||||||||
| Production volume by product tons (000s): | |||||||||||||||||||||||||||||||||||||||||||||||
|
Ammonia(3)
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2,367 | 2,440 | (73) | (3) | % | 7,221 | 7,614 | (393) | (5) | % | |||||||||||||||||||||||||||||||||||||
| Granular urea | 1,070 | 1,011 | 59 | 6 | % | 3,491 | 3,303 | 188 | 6 | % | |||||||||||||||||||||||||||||||||||||
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UAN (32%)(4)
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1,632 | 1,650 | (18) | (1) | % | 4,799 | 5,231 | (432) | (8) | % | |||||||||||||||||||||||||||||||||||||
| AN | 146 | 360 | (214) | (59) | % | 386 | 1,023 | (637) | (62) | % | |||||||||||||||||||||||||||||||||||||
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.
Third Quarter of 2026 Compared to Third Quarter of 2025
Net Sales
Our total net sales increased $201 million, or 12%, to $1.86 billion in the third quarter of 2026 compared to $1.66 billion in the third quarter of 2025, due to higher sales volume and a higher average selling price. Our average selling price was $388 per ton in the third quarter of 2026 compared to $368 per ton in the third quarter of 2025. Higher average selling prices in our Ammonia, AN, and Other segments, were partially offset by lower average selling prices in our Granular Urea and UAN segments. The impact of a higher average selling price was an increase in net sales of approximately $78 million for the third quarter of 2026 compared to the third quarter of 2025.
Our total sales volume was 4.8 million product tons in the third quarter of 2026 compared to 4.5 million product tons in the third quarter of 2025, as higher sales volume in our UAN, Granular Urea and Other segments was partially offset by lower sales volume in our AN and Ammonia segments. The impact of higher sales volume was an increase in net sales of approximately $123 million.
Cost of Sales
Our total cost of sales increased $113 million, or 11%, to $1.14 billion in the third quarter of 2026 from $1.03 billion in the third quarter of 2025. The increase in our cost of sales primarily reflects (i) higher costs for purchased product, reflecting a higher price per ton for ammonia purchased for upgrade at our U.K. operations and ammonia purchased for resale, (ii) higher freight and distribution costs, (iii) an increase in sales volume in the third quarter of 2026, which increased cost of sales by $25 million, and (iv) higher costs associated with maintenance activity, including at our idled Yazoo City complex. These factors that increased cost of sales were partially offset by lower costs for natural gas, including the impact of realized derivatives, which decreased cost of sales by $20 million.
CF INDUSTRIES HOLDINGS, INC.
Cost of sales averaged $238 per ton in the third quarter of 2026, a 4% increase compared to $228 per ton in the third quarter of 2025. Our cost of natural gas, including the impact of realized derivatives, was $2.88 per MMBtu in the third quarter of 2026 compared to $2.96 per MMBtu in the third 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 decreased $1 million to $87 million in the third quarter of 2026 compared to $88 million in the third quarter of 2025.
Insurance Recoveries
In the third quarter of 2026, we recognized income of $62 million related to business interruption insurance proceeds related to our Yazoo City complex. See "Market Conditions and Current Developments-Yazoo City Incident," above.
Other Operating Income-Net
Other operating income-net was $2 million in the third quarter of 2026 compared to $30 million in the third quarter of 2025. The $2 million of income in the third quarter of 2026 consists primarily of $19 million of 45Q Tax Credits earned as a result of CO2 sequestered in the third quarter of 2026 and gains on sales of emission credits, partially offset by development costs for our Blue Point One joint venture. The $30 million of income in the third quarter of 2025 consisted primarily of $20 million of 45Q Tax Credits earned as a result of CO2 sequestered in the third quarter of 2025 and gains on sales of emission credits. See "Overview of CF Holdings-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 $4 million in the third quarter of 2026 compared to $6 million in the third quarter of 2025. Lower equity in earnings of operating affiliate in the third quarter of 2026 compared to the third quarter of 2025 reflects higher natural gas costs and lower sales volumes, partially offset by higher ammonia selling prices.
Interest Expense
Interest expense was $168 million in the third quarter of 2026 compared to $41 million in the third quarter of 2025. The increase of $127 million was due primarily to $131 million of interest expense recorded in the third quarter of 2026 related to income tax matters, which are more fully described under "Items Affecting Comparability of Results-Transfer pricing reserves," above.
Interest Income
Interest income was $92 million in the third quarter of 2026 compared to $23 million in the third quarter of 2025. The increase of $69 million was due primarily to $66 million of interest income recorded in the third quarter of 2026 related to income tax matters, which are more fully described under "Items Affecting Comparability of Results-Transfer pricing reserves," above.
Income Tax Provision
For the third quarter of 2026, we recorded an income tax provision of $99 million on pre-tax income of $619 million, or an effective tax rate of 15.9%, compared to an income tax provision of $105 million on pre-tax income of $565 million, or an effective tax rate of 18.6%, for the third quarter of 2025. Our income tax provision for the three months ended September 30, 2026 included $20 million of income tax benefit primarily related to a decrease in our unrecognized tax benefits resulting from the effective settlement of a state income tax position, which decreased our effective tax rate for the three months ended September 30, 2026 by 3.2 percentage points.
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 third quarter of 2026 of 15.9%, which is based on pre-tax income of $619 million, including $84 million of earnings attributable to noncontrolling interests, would be 2.5 percentage points higher, or 18.4%, if based on pre-tax income exclusive of the earnings attributable to noncontrolling interests of $84 million. Our effective tax rate for the third quarter of 2025 of 18.6%, which is based on pre-tax income of $565 million, including $107 million of earnings attributable to noncontrolling interests, would be 4.3 percentage points higher, or 22.9%, if based on pre-tax income exclusive of the earnings attributable to noncontrolling interests of $107 million.
CF INDUSTRIES HOLDINGS, INC.
Net Earnings Attributable to Noncontrolling Interests
Net earnings attributable to noncontrolling interests decreased $23 million, or 21%, to $84 million in the third quarter of 2026 compared to $107 million in the third quarter of 2025 due primarily to lower earnings of CFN driven by lower average selling prices and the loss attributable to the noncontrolling interests in the Blue Point One joint venture. See "Overview of CF Holdings-Our Strategy-Blue Point One joint venture," above, Note 13-Variable Interest Entity and Note 16-Noncontrolling Interests for additional information on the Blue Point One joint venture.
Diluted Net Earnings Per Share Attributable to Common Stockholders
Diluted net earnings per share attributable to common stockholders increased $0.68, or 31%, to $2.87 per share in the third quarter of 2026 from $2.19 per share in the third quarter of 2025. This increase was due 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 6% from 161.2 million shares for the third quarter of 2025 to 151.6 million shares for the third quarter of 2026.
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
Net Sales
Our total net sales increased $856 million, or 16%, to $6.07 billion in the first nine months of 2026 compared to $5.21 billion in the first nine months of 2025, due to higher average selling prices partially offset by lower sales volume.
Our average selling price was $442 per ton in the first nine months of 2026 compared to $359 per ton in the first nine months of 2025. Average selling prices for all of our major products were higher in the first nine months of 2026 than in the first nine months of 2025 due primarily to a tighter global nitrogen supply and demand balance that was further tightened by supply disruptions due to geopolitical events. See "Market Conditions and Current Developments-Geopolitical Environment," above. The impact of higher average selling prices was an increase in net sales of approximately $1.07 billion for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.
Our total sales volume was 13.7 million product tons in the first nine months of 2026 compared to 14.5 million product tons in the first nine months of 2025, as lower sales volume in our AN, Ammonia and UAN segments was partially offset by higher sales volume in our Granular Urea and Other segments. The impact of lower sales volume was a decrease in net sales of approximately $211 million.
Cost of Sales
Our total cost of sales increased $204 million, or 6%, to $3.46 billion in the first nine months of 2026 from $3.25 billion in the first nine months of 2025. The increase in our cost of sales primarily reflects (i) higher costs in the first nine months of 2026 associated with maintenance activity, including certain unabsorbed fixed costs as a result of plant downtime, including at our idled Yazoo City complex, (ii) higher costs for purchased product, reflecting a higher price per ton for ammonia purchased for upgrade at our U.K. operations and ammonia purchased for resale, (iii) higher costs for natural gas, including the impact of realized derivatives, which increased cost of sales by $53 million, and (iv) higher freight and distribution costs. These factors that increased cost of sales were partially offset by a decrease in sales volume, which decreased cost of sales by $148 million.
Cost of sales also includes the impact of a $3 million unrealized net mark-to-market gain on natural gas derivatives in the first nine months of 2026 compared to a $1 million loss in the first nine months of 2025.
Cost of sales averaged $252 per ton in the first nine months of 2026, a 13% increase compared to $224 per ton in the first nine months of 2025. Our cost of natural gas, including the impact of realized derivatives, increased $0.29 per MMBtu, or 9%, to $3.63 per MMBtu in the first nine months of 2026 from $3.34 per MMBtu in the first nine months 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 $6 million to $279 million in the first nine months of 2026 compared to $273 million in the first nine months of 2025. The increase was due primarily to higher costs related to certain corporate initiatives.
CF INDUSTRIES HOLDINGS, INC.
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 nine months ended September 30, 2025.
Asset Impairment
In the second quarter of 2026, we recognized an asset impairment charge of $23 million related to property, plant and equipment at our Yazoo City complex. See "Market Conditions and Current Developments-Yazoo City Incident," above.
Insurance Recoveries
In the first nine months of 2026, we recognized income of $137 million related to insurance proceeds for claims related to the incident at our Yazoo City complex, which consisted of $112 million related to business interruption and $25 million related to property damage. See "Market Conditions and Current Developments-Yazoo City Incident," above.
Litigation Settlement Gain
In the first nine months of 2026, we recognized a gain of approximately $170 million as a result of litigation settled during the first quarter of 2026. See "Items Affecting Comparability of Results-Litigation settlement gain," above, for additional information.
Other Operating Income-Net
Other operating income-net was $52 million in the first nine months of 2026 compared to $8 million in the first nine months of 2025. The $52 million of income in the first nine months of 2026 consists primarily of $62 million of 45Q tax credits earned as a result of CO2 sequestered in the period, partially offset by development costs for our Blue Point One joint venture. The $8 million of income in the nine months ended September 30, 2025 consists primarily of $20 million of 45Q Tax Credits earned as a result of CO2 sequestered in the period and gains on sales of emission credits, partially offset by costs related to front-end engineering and design studies for our clean energy initiatives. See "Overview of CF Holdings-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 $17 million in the first nine months of 2026 compared to $12 million in the first nine months of 2025. Equity in earnings of operating affiliate in the first nine months of 2026 reflects an increase in the operating results of PLNL due primarily to higher ammonia selling prices, partially offset by higher natural gas costs and lower sales volume.
Interest Expense
Interest expense was $257 million in the first nine months of 2026 compared to $114 million in the first nine months of 2025. The increase in interest expense of $143 million in the first nine months of 2026 compared to the first nine months of 2025 was due primarily to $131 million of interest expense recorded in the third quarter of 2026 related to income tax matters, which are more fully described under "Items Affecting Comparability of Results-Transfer pricing reserves," above.
In addition, interest expense in the first nine months of 2026 includes higher outstanding principal amounts of senior notes outstanding compared to the first nine months of 2025, 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, and Note 12-Interest Expense, for additional information.
Interest Income
Interest income was $138 million in the first nine months of 2026 compared to $57 million in the first nine months of 2025. The increase in interest income of $81 million was due primarily to $66 million of interest income recorded in the third quarter of 2026 related to income tax matters, which are more fully described under "Items Affecting Comparability of Results-Transfer pricing reserves," above. In addition, the increase in interest income in the first nine months of 2026 compared to the first nine months of 2025 includes interest income on higher average cash balances.
CF INDUSTRIES HOLDINGS, INC.
Income Tax Provision
For the nine months ended September 30, 2026, we recorded an income tax provision of $491 million on pre-tax income of $2.56 billion, or an effective tax rate of 19.2%, compared to an income tax provision of $334 million on pre-tax income of $1.64 billion, or an effective tax rate of 20.4%, for the nine months ended September 30, 2025. Our income tax provision for the nine months ended September 30, 2026 included $20 million of income tax benefit primarily related to a decrease in our unrecognized tax benefits resulting from the effective settlement of a state income tax position, partially offset by $11 million of income tax expense related to an increase in our unrecognized tax benefits resulting from ongoing tax audits, which decreased our effective tax rate for the nine months ended September 30, 2026 by 0.4 percentage points. Our income tax provision for the nine months ended September 30, 2025 included $21 million of income tax expense related to an increase in our unrecognized tax benefits resulting from ongoing tax audits, which increased our effective tax rate by 1.3 percentage points.
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 nine months ended September 30, 2026 of 19.2%, which is based on pre-tax income of $2.56 billion, including $287 million of earnings attributable to noncontrolling interests, would be 2.4 percentage points higher, or 21.6%, if based on pre-tax income exclusive of the earnings attributable to noncontrolling interests of $287 million. Our effective tax rate for the nine months ended September 30, 2025 of 20.4%, which is based on pre-tax income of $1.64 billion, including $252 million of earnings attributable to noncontrolling interests, would be 3.7 percentage points higher, or 24.1%, if based on pre-tax income exclusive of the earnings attributable to noncontrolling interests of $252 million.
Net Earnings Attributable to Noncontrolling Interests
Net earnings attributable to noncontrolling interests increased $35 million to $287 million in the first nine months of 2026 compared to $252 million in the first nine months of 2025 due primarily to higher earnings of CFN driven by higher average selling prices, partially offset by higher natural gas costs. 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 One joint venture, which was formed in the second quarter of 2025. See "Overview of CF Holdings-Our Strategy-Blue Point One joint venture," above, Note 13-Variable Interest Entity and Note 16-Noncontrolling Interests for additional information on the Blue Point One joint venture.
Diluted Net Earnings Per Share Attributable to Common Stockholders
Diluted net earnings per share attributable to common stockholders increased $5.21, or 82%, to $11.60 per share in the first nine months of 2026 from $6.39 per share in the first nine months of 2025. This increase was due 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 7% from 164.3 million shares for the nine months ended September 30, 2025 to 153.3 million shares for the nine months ended September 30, 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-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 September 30, 2026 | |||||||||||||||||||||||||||||||||||
| Net sales | $ | 534 | $ | 456 | $ | 639 | $ | 67 | $ | 164 | $ | 1,860 | |||||||||||||||||||||||
| Cost of sales | 340 | 262 | 370 | 64 | 104 | 1,140 | |||||||||||||||||||||||||||||
| Gross margin | $ | 194 | $ | 194 | $ | 269 | $ | 3 | $ | 60 | $ | 720 | |||||||||||||||||||||||
| Gross margin percentage | 36.3 | % | 42.5 | % | 42.1 | % | 4.5 | % | 36.6 | % | 38.7 | % | |||||||||||||||||||||||
| Three months ended September 30, 2025 | |||||||||||||||||||||||||||||||||||
| Net sales | $ | 457 | $ | 423 | $ | 517 | $ | 122 | $ | 140 | $ | 1,659 | |||||||||||||||||||||||
| Cost of sales | 349 | 210 | 287 | 91 | 90 | 1,027 | |||||||||||||||||||||||||||||
| Gross margin | $ | 108 | $ | 213 | $ | 230 | $ | 31 | $ | 50 | $ | 632 | |||||||||||||||||||||||
| Gross margin percentage | 23.6 | % | 50.4 | % | 44.5 | % | 25.4 | % | 35.7 | % | 38.1 | % | |||||||||||||||||||||||
| Nine months ended September 30, 2026 | |||||||||||||||||||||||||||||||||||
| Net sales | $ | 1,747 | $ | 1,805 | $ | 1,835 | $ | 196 | $ | 485 | $ | 6,068 | |||||||||||||||||||||||
| Cost of sales | 1,097 | 879 | 966 | 208 | 307 | 3,457 | |||||||||||||||||||||||||||||
| Gross margin | $ | 650 | $ | 926 | $ | 869 | $ | (12) | $ | 178 | $ | 2,611 | |||||||||||||||||||||||
| Gross margin percentage | 37.2 | % | 51.3 | % | 47.4 | % | (6.1) | % | 36.7 | % | 43.0 | % | |||||||||||||||||||||||
| Nine months ended September 30, 2025 | |||||||||||||||||||||||||||||||||||
| Net sales | $ | 1,468 | $ | 1,409 | $ | 1,597 | $ | 340 | $ | 398 | $ | 5,212 | |||||||||||||||||||||||
| Cost of sales | 1,038 | 744 | 955 | 268 | 248 | 3,253 | |||||||||||||||||||||||||||||
| Gross margin | $ | 430 | $ | 665 | $ | 642 | $ | 72 | $ | 150 | $ | 1,959 | |||||||||||||||||||||||
| Gross margin percentage | 29.3 | % | 47.2 | % | 40.2 | % | 21.2 | % | 37.7 | % | 37.6 | % | |||||||||||||||||||||||
(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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 v. 2025 | 2026 | 2025 | 2026 v. 2025 | ||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions, except per ton amounts) | |||||||||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 534 | $ | 457 | $ | 77 | 17 | % | $ | 1,747 | $ | 1,468 | $ | 279 | 19 | % | |||||||||||||||||||||||||||||||
| Cost of sales | 340 | 349 | (9) | (3) | % | 1,097 | 1,038 | 59 | 6 | % | |||||||||||||||||||||||||||||||||||||
| Gross margin | $ | 194 | $ | 108 | $ | 86 | 80 | % | $ | 650 | $ | 430 | $ | 220 | 51 | % | |||||||||||||||||||||||||||||||
| Gross margin percentage | 36.3 | % | 23.6 | % | 12.7 | % | 37.2 | % | 29.3 | % | 7.9 | % | |||||||||||||||||||||||||||||||||||
| Sales volume by product tons (000s) | 1,003 | 1,092 | (89) | (8) | % | 2,971 | 3,325 | (354) | (11) | % | |||||||||||||||||||||||||||||||||||||
|
Sales volume by nutrient tons (000s)(1)
|
823 | 895 | (72) | (8) | % | 2,436 | 2,726 | (290) | (11) | % | |||||||||||||||||||||||||||||||||||||
| Average selling price per product ton | $ | 532 | $ | 418 | $ | 114 | 27 | % | $ | 588 | $ | 442 | $ | 146 | 33 | % | |||||||||||||||||||||||||||||||
|
Average selling price per nutrient ton(1)
|
$ | 649 | $ | 511 | $ | 138 | 27 | % | $ | 717 | $ | 539 | $ | 178 | 33 | % | |||||||||||||||||||||||||||||||
| Gross margin per product ton | $ | 193 | $ | 99 | $ | 94 | 95 | % | $ | 219 | $ | 129 | $ | 90 | 70 | % | |||||||||||||||||||||||||||||||
|
Gross margin per nutrient ton(1)
|
$ | 236 | $ | 121 | $ | 115 | 95 | % | $ | 267 | $ | 158 | $ | 109 | 69 | % | |||||||||||||||||||||||||||||||
| Depreciation and amortization | $ | 58 | $ | 64 | $ | (6) | (9) | % | $ | 179 | $ | 164 | $ | 15 | 9 | % | |||||||||||||||||||||||||||||||
| Unrealized net mark-to-market loss (gain) on natural gas derivatives | $ | 1 | $ | - | $ | 1 | N/M | $ | (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.
Third Quarter of 2026 Compared to Third Quarter of 2025
Net Sales. Net sales in our Ammonia segment increased by $77 million, or 17%, to $534 million in the third quarter of 2026 from $457 million in the third quarter of 2025. The increase in our net sales reflects a 27% increase in average selling prices, partially offset by an 8% decrease in sales volume. Average selling prices increased to $532 per ton in the third quarter of 2026 compared to $418 per ton in the third quarter of 2025 due primarily to a tighter global nitrogen supply and demand balance that was further tightened by supply disruptions related to the conflict with Iran. See "Market Conditions and Current Developments-Geopolitical Environment," above. Ammonia sales volume in the third quarter of 2026 was 1.0 million tons compared to 1.1 million tons in the third quarter of 2025.
Cost of Sales. Cost of sales in our Ammonia segment averaged $339 per ton in the third quarter of 2026, a 6% increase from $319 per ton in the third quarter of 2025. The increase was due primarily to a higher cost per ton for purchased product, higher costs associated with maintenance activity, including certain unabsorbed fixed costs as a result of plant downtime, and higher freight and distribution costs. These factors that increased cost of sales were partially offset by lower realized natural gas costs, including the impact of realized derivatives, in the third quarter of 2026 compared to the third quarter of 2025.
Gross Margin. Gross margin in our Ammonia segment increased by $86 million, or 80%, to $194 million in the third quarter of 2026 from $108 million in the third quarter of 2025, and our gross margin percentage was 36.3% in the third quarter of 2026 compared to 23.6% in the third quarter of 2025. The increase in gross margin was due primarily to a 27% increase in average selling prices, which increased gross margin by $109 million, and a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $16 million. These factors that increased gross margin were partially offset by a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $28 million, and an 8% decrease in sales volume, which decreased gross margin by $10 million. Gross margin also includes the impact of a $1 million unrealized net mark-to-market loss on natural gas derivatives in the third quarter of 2026.
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
Net Sales. Net sales in our Ammonia segment increased by $279 million, or 19%, to $1.75 billion in the nine months ended September 30, 2026 from $1.47 billion in the nine months ended September 30, 2025. The increase in our net sales
CF INDUSTRIES HOLDINGS, INC.
reflects a 33% increase in average selling prices, partially offset by an 11% decrease in sales volume. Average selling prices increased to $588 per ton in the nine months ended September 30, 2026 compared to $442 per ton in the nine months ended September 30, 2025 due primarily to a tighter global nitrogen supply and demand balance that was further tightened by supply disruptions related to the conflict with Iran. See "Market Conditions and Current Developments-Geopolitical Environment," above.
Ammonia sales volume in the nine months ended September 30, 2026 was 3.0 million tons, a decrease of 11% compared to 3.3 million tons in the nine months ended September 30, 2025. The decrease in sales volume was due primarily to lower customer demand for ammonia utilized in their production of phosphate fertilizers and lower supply availability as a result of lower beginning inventory entering 2026 and higher plant turnaround activity and plant downtime in the first nine months of 2026 compared to the first nine months of 2025.
Cost of Sales. Cost of sales in our Ammonia segment averaged $369 per ton in the nine months ended September 30, 2026, an 18% increase from $313 per ton in the nine months ended September 30, 2025. The increase was due primarily to a higher cost per ton for purchased product, higher costs for 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 nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.
Gross Margin. Gross margin in our Ammonia segment increased by $220 million, or 51%, to $650 million in the nine months ended September 30, 2026 from $430 million in the nine months ended September 30, 2025, and our gross margin percentage was 37.2% in the nine months ended September 30, 2026 compared to 29.3% in the nine months ended September 30, 2025. The increase in gross margin was due primarily to a 33% increase in average selling prices, which increased gross margin by $440 million. This increase in gross margin was partially offset by the impact of a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $119 million, an 11% decrease in sales volume, which decreased gross margin by $72 million, and an increase in realized natural gas costs, including the impact of realized derivatives, which decreased gross margin by $31 million. Gross margin also includes the impact of a $1 million unrealized net mark-to-market gain on natural gas derivatives in the nine months ended September 30, 2026 compared to a $1 million loss in the nine months ended September 30, 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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 v. 2025 | 2026 | 2025 | 2026 v. 2025 | ||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions, except per ton amounts) | |||||||||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 456 | $ | 423 | $ | 33 | 8 | % | $ | 1,805 | $ | 1,409 | $ | 396 | 28 | % | |||||||||||||||||||||||||||||||
| Cost of sales | 262 | 210 | 52 | 25 | % | 879 | 744 | 135 | 18 | % | |||||||||||||||||||||||||||||||||||||
| Gross margin | $ | 194 | $ | 213 | $ | (19) | (9) | % | $ | 926 | $ | 665 | $ | 261 | 39 | % | |||||||||||||||||||||||||||||||
| Gross margin percentage | 42.5 | % | 50.4 | % | (7.9) | % | 51.3 | % | 47.2 | % | 4.1 | % | |||||||||||||||||||||||||||||||||||
| Sales volume by product tons (000s) | 1,079 | 939 | 140 | 15 | % | 3,650 | 3,252 | 398 | 12 | % | |||||||||||||||||||||||||||||||||||||
|
Sales volume by nutrient tons (000s)(1)
|
496 | 431 | 65 | 15 | % | 1,679 | 1,496 | 183 | 12 | % | |||||||||||||||||||||||||||||||||||||
| Average selling price per product ton | $ | 423 | $ | 450 | $ | (27) | (6) | % | $ | 495 | $ | 433 | $ | 62 | 14 | % | |||||||||||||||||||||||||||||||
|
Average selling price per nutrient ton(1)
|
$ | 919 | $ | 981 | $ | (62) | (6) | % | $ | 1,075 | $ | 942 | $ | 133 | 14 | % | |||||||||||||||||||||||||||||||
| Gross margin per product ton | $ | 180 | $ | 227 | $ | (47) | (21) | % | $ | 254 | $ | 204 | $ | 50 | 25 | % | |||||||||||||||||||||||||||||||
|
Gross margin per nutrient ton(1)
|
$ | 391 | $ | 494 | $ | (103) | (21) | % | $ | 552 | $ | 445 | $ | 107 | 24 | % | |||||||||||||||||||||||||||||||
| Depreciation and amortization | $ | 69 | $ | 58 | $ | 11 | 19 | % | $ | 220 | $ | 201 | $ | 19 | 9 | % | |||||||||||||||||||||||||||||||
| Unrealized net mark-to-market loss (gain) on natural gas derivatives | $ | 1 | $ | - | $ | 1 | N/M | $ | (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.
CF INDUSTRIES HOLDINGS, INC.
Third Quarter of 2026 Compared to Third Quarter of 2025
Net Sales. Net sales in our Granular Urea segment increased $33 million, or 8%, to $456 million in the third quarter of 2026 from $423 million in the third quarter of 2025. The increase in our net sales reflects a 15% increase in sales volume, partially offset by a 6% decrease in average selling prices. The increase in sales volume was due primarily to a production mix that favored granular urea production in the third quarter of 2026 compared to the third quarter of 2025. Average selling prices decreased to $423 per ton in the third quarter of 2026 compared to $450 per ton in the third quarter of 2025 due primarily to lower global demand due in part to prospects of returning supply availability from the Middle East, as further described in "Market Conditions and Current Developments-Geopolitical Environment," above.
Cost of Sales. Cost of sales in our Granular Urea segment averaged $243 per ton in the third quarter of 2026, a 9% increase from $223 per ton in the third quarter of 2025. The increase was due primarily to higher production costs, including labor and other overhead, and higher costs for maintenance activity in the third quarter of 2026 compared to the third quarter of 2025.
Gross Margin. Gross margin in our Granular Urea segment decreased by $19 million, or 9%, to $194 million in the third quarter of 2026 from $213 million in the third quarter of 2025, and our gross margin percentage was 42.5% in the third quarter of 2026 compared to 50.4% in the third quarter of 2025. The decrease in gross margin was due primarily to a 6% decrease in average selling prices, which decreased gross margin by $31 million, a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $20 million and an increase in realized natural gas costs, including the impact of realized derivatives, which decreased gross margin by $2 million. These factors that decreased gross margin were partially offset by a 15% increase in sales volume, which increased gross margin by $35 million. Gross margin also includes the impact of a $1 million unrealized net mark-to-market loss on natural gas derivatives in the third quarter of 2026.
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
Net Sales. Net sales in our Granular Urea segment increased $396 million, or 28%, to $1.81 billion in the nine months ended September 30, 2026 from $1.41 billion in the nine months ended September 30, 2025 due primarily to a 14% increase in average selling prices and a 12% increase in sales volume. Average selling prices increased to $495 per ton in the nine months ended September 30, 2026 compared to $433 per ton in the nine months ended September 30, 2025 due primarily to a tighter global nitrogen supply and demand balance that was further tightened by supply disruptions related to the conflict with Iran. See "Market Conditions and Current Developments-Geopolitical Environment," above. The increase in sales volume was due primarily to a production mix that favored granular urea production and higher beginning inventory entering 2026 compared to the prior year period in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.
Cost of Sales. Cost of sales in our Granular Urea segment averaged $241 per ton in the nine months ended September 30, 2026, a 5% increase from $229 per ton in the nine months ended September 30, 2025. The increase was due primarily to higher production costs, including labor and other overhead, higher realized natural gas costs, including the impact of realized derivatives, and higher freight and distribution costs in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.
Gross Margin. Gross margin in our Granular Urea segment increased by $261 million, or 39%, to $926 million in the nine months ended September 30, 2026 from $665 million in the nine months ended September 30, 2025, and our gross margin percentage was 51.3% in the nine months ended September 30, 2026 compared to 47.2% in the nine months ended September 30, 2025. The increase in gross margin was due primarily to a 14% increase in average selling prices, which increased gross margin by $226 million, and a 12% increase in sales volume, which increased gross margin by $83 million. These factors that increased gross margin were partially offset by a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $37 million, and an increase in realized natural gas costs, including the impact of realized derivatives, which decreased gross margin by $12 million. Gross margin also includes the impact of a $1 million unrealized net mark-to-market gain on natural gas derivatives in the nine months ended September 30, 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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 v. 2025 | 2026 | 2025 | 2026 v. 2025 | ||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions, except per ton amounts) | |||||||||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 639 | $ | 517 | $ | 122 | 24 | % | $ | 1,835 | $ | 1,597 | $ | 238 | 15 | % | |||||||||||||||||||||||||||||||
| Cost of sales | 370 | 287 | 83 | 29 | % | 966 | 955 | 11 | 1 | % | |||||||||||||||||||||||||||||||||||||
| Gross margin | $ | 269 | $ | 230 | $ | 39 | 17 | % | $ | 869 | $ | 642 | $ | 227 | 35 | % | |||||||||||||||||||||||||||||||
| Gross margin percentage | 42.1 | % | 44.5 | % | (2.4) | % | 47.4 | % | 40.2 | % | 7.2 | % | |||||||||||||||||||||||||||||||||||
| Sales volume by product tons (000s) | 1,987 | 1,564 | 423 | 27 | % | 5,049 | 5,341 | (292) | (5) | % | |||||||||||||||||||||||||||||||||||||
|
Sales volume by nutrient tons (000s)(1)
|
627 | 495 | 132 | 27 | % | 1,593 | 1,690 | (97) | (6) | % | |||||||||||||||||||||||||||||||||||||
| Average selling price per product ton | $ | 322 | $ | 331 | $ | (9) | (3) | % | $ | 363 | $ | 299 | $ | 64 | 21 | % | |||||||||||||||||||||||||||||||
|
Average selling price per nutrient ton(1)
|
$ | 1,019 | $ | 1,044 | $ | (25) | (2) | % | $ | 1,152 | $ | 945 | $ | 207 | 22 | % | |||||||||||||||||||||||||||||||
| Gross margin per product ton | $ | 135 | $ | 147 | $ | (12) | (8) | % | $ | 172 | $ | 120 | $ | 52 | 43 | % | |||||||||||||||||||||||||||||||
|
Gross margin per nutrient ton(1)
|
$ | 429 | $ | 465 | $ | (36) | (8) | % | $ | 546 | $ | 380 | $ | 166 | 44 | % | |||||||||||||||||||||||||||||||
| Depreciation and amortization | $ | 78 | $ | 60 | $ | 18 | 30 | % | $ | 195 | $ | 205 | $ | (10) | (5) | % | |||||||||||||||||||||||||||||||
| Unrealized net mark-to-market gain on natural gas derivatives | $ | - | $ | (1) | $ | 1 | 100 | % | $ | (1) | $ | - | $ | (1) | 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.
Third Quarter of 2026 Compared to Third Quarter of 2025
Net Sales. Net sales in our UAN segment increased $122 million, or 24%, to $639 million in the third quarter of 2026 from $517 million in the third quarter of 2025 due primarily to a 27% increase in sales volume, partially offset by a 3% decrease in average selling prices. The increase in sales volume was due primarily to higher supply availability resulting from higher beginning inventory entering the third quarter of 2026 as a result of deferred demand from the second quarter of 2026. Average selling prices decreased to $322 per ton in the third quarter of 2026 compared to $331 per ton in the third quarter of 2025 as a tighter global nitrogen supply and demand balance further tightened by global supply constraints, including the impacts of geopolitical events, continued to impact pricing in both the third quarter of 2025 and third quarter of 2026. See "Market Conditions and Current Developments-Geopolitical Environment," above, for further information.
Cost of Sales. Cost of sales in our UAN segment averaged $187 per ton in the third quarter of 2026, a 2% increase from $184 per ton in the third quarter of 2025, due primarily to higher freight and distribution costs, partially offset by a decrease in realized natural gas costs, including the impact of realized derivatives, in the third quarter of 2026 compared to the third quarter of 2025.
Gross Margin. Gross margin in our UAN segment increased by $39 million, or 17%, to $269 million in the third quarter of 2026 from $230 million in the third quarter of 2025, and our gross margin percentage was 42.1% in the third quarter of 2026 compared to 44.5% in the third quarter of 2025. The increase in gross margin was due primarily to a 27% increase in sales volume, which increased gross margin by $82 million and a decrease in realized natural gas costs, including the impact of realized derivatives, which increased gross margin by $6 million. These factors that increased gross margin were partially offset by a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $28 million and a 3% decrease in average selling prices, which decreased gross margin by $20 million. Gross margin also includes the impact of a $1 million unrealized net mark-to-market gain on natural gas derivatives in the third quarter of 2025.
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
Net Sales. Net sales in our UAN segment increased $238 million, or 15%, to $1.84 billion in the nine months ended September 30, 2026 from $1.60 billion in the nine months ended September 30, 2025 due primarily to a 21% increase in
CF INDUSTRIES HOLDINGS, INC.
average selling prices, partially offset by a 5% decrease in sales volume. Average selling prices increased to $363 per ton in the nine months ended September 30, 2026 compared to $299 per ton in the nine months ended September 30, 2025 due primarily to a tighter global nitrogen supply and demand balance further tightened by global supply constraints, including the impacts of geopolitical events. See "Market Conditions and Current Developments-Geopolitical Environment," above, for further information. The decrease in sales volume was due primarily to lower global demand and lower supply availability, which was driven by a production mix that favored granular urea production and the impact of our idled Yazoo City complex.
Cost of Sales. Cost of sales in our UAN segment averaged $191 per ton in the nine months ended September 30, 2026, a 7% increase from $179 per ton in the nine months ended September 30, 2025, due primarily to higher freight and distribution costs, higher costs for maintenance activity and higher realized natural gas costs, including the impact of realized derivatives, in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.
Gross Margin. Gross margin in our UAN segment increased by $227 million, or 35%, to $869 million in the nine months ended September 30, 2026 from $642 million in the nine months ended September 30, 2025, and our gross margin percentage was 47.4% in the nine months ended September 30, 2026 compared to 40.2% in the nine months ended September 30, 2025. The increase in gross margin was due primarily to a 21% increase in average selling prices, which increased gross margin by $310 million. The impact to gross margin from the increase in average selling prices was partially offset by a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $42 million, a 5% decrease in sales volume, which decreased gross margin by $34 million and an increase in realized natural gas costs, including the impact of realized derivatives, which decreased gross margin by $8 million. Gross margin also includes the impact of a $1 million unrealized net mark-to-market gain on natural gas derivatives in the nine months ended September 30, 2026.
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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 v. 2025 | 2026 | 2025 | 2026 v. 2025 | ||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions, except per ton amounts) | |||||||||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 67 | $ | 122 | $ | (55) | (45) | % | $ | 196 | $ | 340 | $ | (144) | (42) | % | |||||||||||||||||||||||||||||||
| Cost of sales | 64 | 91 | (27) | (30) | % | 208 | 268 | (60) | (22) | % | |||||||||||||||||||||||||||||||||||||
| Gross margin | $ | 3 | $ | 31 | $ | (28) | (90) | % | $ | (12) | $ | 72 | $ | (84) | N/M | ||||||||||||||||||||||||||||||||
| Gross margin percentage | 4.5 | % | 25.4 | % | (20.9) | % | (6.1) | % | 21.2 | % | (27.3) | % | |||||||||||||||||||||||||||||||||||
| Sales volume by product tons (000s) | 127 | 384 | (257) | (67) | % | 386 | 1,090 | (704) | (65) | % | |||||||||||||||||||||||||||||||||||||
|
Sales volume by nutrient tons (000s)(1)
|
44 | 133 | (89) | (67) | % | 133 | 376 | (243) | (65) | % | |||||||||||||||||||||||||||||||||||||
| Average selling price per product ton | $ | 528 | $ | 318 | $ | 210 | 66 | % | $ | 508 | $ | 312 | $ | 196 | 63 | % | |||||||||||||||||||||||||||||||
|
Average selling price per nutrient ton(1)
|
$ | 1,523 | $ | 917 | $ | 606 | 66 | % | $ | 1,474 | $ | 904 | $ | 570 | 63 | % | |||||||||||||||||||||||||||||||
| Gross margin per product ton | $ | 24 | $ | 81 | $ | (57) | (70) | % | $ | (31) | $ | 66 | $ | (97) | N/M | ||||||||||||||||||||||||||||||||
|
Gross margin per nutrient ton(1)
|
$ | 68 | $ | 233 | $ | (165) | (71) | % | $ | (90) | $ | 191 | $ | (281) | N/M | ||||||||||||||||||||||||||||||||
| Depreciation and amortization | $ | 2 | $ | 9 | $ | (7) | (78) | % | $ | 8 | $ | 27 | $ | (19) | (70) | % | |||||||||||||||||||||||||||||||
| Unrealized net mark-to-market (gain) loss on natural gas derivatives | $ | - | $ | - | $ | - | - | % | $ | - | $ | - | $ | - | - | % | |||||||||||||||||||||||||||||||
_______________________________________________________________________________
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. In the second quarter of 2026, management approved a plan to rebuild the Yazoo City plant and expects production to resume in the first half of 2027 based on time required for fabrication and delivery of certain required
CF INDUSTRIES HOLDINGS, INC.
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.
Third Quarter of 2026 Compared to Third Quarter of 2025
Net Sales. Net sales in our AN segment decreased $55 million, or 45%, to $67 million in the third quarter of 2026 from $122 million in the third quarter of 2025 due to a 67% decrease in sales volume, partially offset by a 66% increase in average selling prices. The decrease in sales volume was due primarily to lower supply availability due to lower production in the third quarter of 2026 as a result of the idled Yazoo City plant described above. Average selling prices increased to $528 per ton in the third quarter of 2026 compared to $318 per ton in the third quarter of 2025 due primarily to a tighter global nitrogen supply and demand balance that was further impacted by geopolitical events as well as a higher proportion of AN sales in the United Kingdom compared to the third quarter of 2025. See "Market Conditions and Current Developments-Geopolitical Environment," above.
Cost of Sales. Cost of sales in our AN segment averaged $504 per ton in the third quarter of 2026, a 113% increase from $237 per ton in the third quarter of 2025. The increase was due primarily to (i) a higher proportion of AN sales in the United Kingdom compared to the third quarter of 2025, which include a higher cost per ton due to purchasing ammonia for upgrade to AN compared to the cost of natural gas used to produce ammonia, (ii) a higher price per ton for ammonia purchased for upgrade to AN, and (iii) higher costs associated with maintenance activity, including certain unabsorbed fixed costs resulting from our idled Yazoo City plant in the third quarter of 2026 compared to the third quarter of 2025.
Gross Margin. Gross margin in our AN segment decreased $28 million to $3 million in the third quarter of 2026 from $31 million in the third quarter of 2025, and our gross margin percentage was 4.5% in the third quarter of 2026 compared to 25.4% in the third quarter of 2025. The decrease in gross margin was due primarily to a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $23 million, and a 67% decrease in sales volume, which decreased gross margin by $22 million. These factors that decreased gross margin were partially offset by the impact of a 66% increase in average selling prices, which increased gross margin by $17 million.
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
Net Sales. Net sales in our AN segment decreased $144 million, or 42%, to $196 million in the nine months ended September 30, 2026 from $340 million in the nine months ended September 30, 2025 due to a 65% decrease in sales volume, partially offset by a 63% increase in average selling prices. Sales volume was lower due primarily to lower supply availability due to the idled Yazoo City plant described above. Average selling prices increased to $508 per ton in the nine months ended September 30, 2026 compared to $312 per ton in the nine months ended September 30, 2025 due primarily to a tighter global nitrogen supply and demand balance that was further impacted by geopolitical events as well as a higher proportion of AN sales in the United Kingdom compared to the nine months ended September 30, 2025. See "Market Conditions and Current Developments-Geopolitical Environment," above.
Cost of Sales. Cost of sales in our AN segment averaged $539 per ton in the nine months ended September 30, 2026, a 119% increase from $246 per ton in the nine months ended September 30, 2025. The increase was due primarily to (i) a higher proportion of AN sales in the United Kingdom compared to the nine months ended September 30, 2025, which included a higher cost per ton due to purchasing ammonia for upgrade to AN compared to the cost of natural gas used to produce ammonia, (ii) a higher price per ton for ammonia purchased for upgrade to AN, and (iii) higher costs associated with maintenance activity, including certain unabsorbed fixed costs resulting from our idled Yazoo City plant, in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.
Gross Margin. Gross margin in our AN segment decreased $84 million to $(12) million in the nine months ended September 30, 2026 from $72 million in the nine months ended September 30, 2025, and our gross margin percentage was (6.1)% in the nine months ended September 30, 2026 compared to 21.2% in the nine months ended September 30, 2025. The decrease in gross margin was due primarily to a 65% decrease in sales volume, which reduced gross margin by $66 million, and a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $64 million. These factors that decreased gross margin were partially offset by a 63% increase in average selling prices, which increased gross margin by $46 million.
CF INDUSTRIES HOLDINGS, INC.
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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 v. 2025 | 2026 | 2025 | 2026 v. 2025 | ||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions, except per ton amounts) | |||||||||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 164 | $ | 140 | $ | 24 | 17 | % | $ | 485 | $ | 398 | $ | 87 | 22 | % | |||||||||||||||||||||||||||||||
| Cost of sales | 104 | 90 | 14 | 16 | % | 307 | 248 | 59 | 24 | % | |||||||||||||||||||||||||||||||||||||
| Gross margin | $ | 60 | $ | 50 | $ | 10 | 20 | % | $ | 178 | $ | 150 | $ | 28 | 19 | % | |||||||||||||||||||||||||||||||
| Gross margin percentage | 36.6 | % | 35.7 | % | 0.9 | % | 36.7 | % | 37.7 | % | (1.0) | % | |||||||||||||||||||||||||||||||||||
| Sales volume by product tons (000s) | 603 | 525 | 78 | 15 | % | 1,678 | 1,521 | 157 | 10 | % | |||||||||||||||||||||||||||||||||||||
|
Sales volume by nutrient tons (000s)(1)
|
122 | 106 | 16 | 15 | % | 335 | 306 | 29 | 9 | % | |||||||||||||||||||||||||||||||||||||
| Average selling price per product ton | $ | 272 | $ | 267 | $ | 5 | 2 | % | $ | 289 | $ | 262 | $ | 27 | 10 | % | |||||||||||||||||||||||||||||||
|
Average selling price per nutrient ton(1)
|
$ | 1,344 | $ | 1,321 | $ | 23 | 2 | % | $ | 1,448 | $ | 1,301 | $ | 147 | 11 | % | |||||||||||||||||||||||||||||||
| Gross margin per product ton | $ | 100 | $ | 95 | $ | 5 | 5 | % | $ | 106 | $ | 99 | $ | 7 | 7 | % | |||||||||||||||||||||||||||||||
|
Gross margin per nutrient ton(1)
|
$ | 492 | $ | 472 | $ | 20 | 4 | % | $ | 531 | $ | 490 | $ | 41 | 8 | % | |||||||||||||||||||||||||||||||
| Depreciation and amortization | $ | 18 | $ | 17 | $ | 1 | 6 | % | $ | 50 | $ | 47 | $ | 3 | 6 | % | |||||||||||||||||||||||||||||||
| Unrealized net mark-to-market (gain) loss on natural gas derivatives | $ | - | $ | - | $ | - | - | % | $ | - | $ | - | $ | - | - | % | |||||||||||||||||||||||||||||||
(1)Nutrient tons represent the tons of nitrogen within the product tons.
Third Quarter of 2026 Compared to Third Quarter of 2025
Net Sales. Net sales in our Other segment increased by $24 million, or 17%, to $164 million in the third quarter of 2026 from $140 million in the third quarter of 2025 due to a 15% increase in sales volume and a 2% increase in average selling prices. The increase in sales volume primarily reflected higher DEF and urea liquor shipments. Average selling prices increased by 2% due primarily to a tighter global nitrogen supply and demand balance that continued to impact nitrogen selling prices in the third quarter of 2026.
Cost of Sales. Cost of sales in our Other segment averaged $172 per ton in both the third quarter of 2026 and the third quarter of 2025.
Gross Margin. Gross margin in our Other segment increased by $10 million, or 20%, to $60 million in the third quarter of 2026 from $50 million in the third quarter of 2025, and our gross margin percentage was 36.6% in the third quarter of 2026 compared to 35.7% in the third quarter of 2025. The increase in gross margin was due primarily to a 15% increase in sales volume, which increased gross margin by $13 million, and a 2% increase in average selling prices, which increased gross margin by $3 million. These factors that increased gross margin were partially offset by a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $6 million.
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
Net Sales. Net sales in our Other segment increased by $87 million, or 22%, to $485 million in the nine months ended September 30, 2026 from $398 million in the nine months ended September 30, 2025 due to a 10% increase in average selling prices and a 10% increase in sales volume. Average selling prices increased by 10% due primarily to a tighter global nitrogen supply and demand balance. The increase in sales volume primarily reflected higher DEF and nitric acid shipments.
Cost of Sales. Cost of sales in our Other segment averaged $183 per ton in the nine months ended September 30, 2026, a 12% increase from $163 per ton in the nine months ended September 30, 2025, due primarily to higher costs associated with
CF INDUSTRIES HOLDINGS, INC.
maintenance activity, including certain unabsorbed fixed costs as a result of plant downtime, including at our idled Yazoo City complex, in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. See "AN Segment-Yazoo City Incident," above, for additional information.
Gross Margin. Gross margin in our Other segment increased by $28 million, or 19%, to $178 million in the nine months ended September 30, 2026 from $150 million in the nine months ended September 30, 2025, and our gross margin percentage was 36.7% in the nine months ended September 30, 2026 compared to 37.7% in the nine months ended September 30, 2025. The increase in gross margin was due primarily to a 10% increase in average selling prices, which increased gross margin by $45 million, and a 10% increase in sales volume, which increased gross margin by $26 million. These factors that increased gross margin were partially offset by a net increase in manufacturing, maintenance and other costs, which decreased gross margin by $41 million, and an increase in realized natural gas costs, including the impact of realized derivatives, which decreased gross margin by $2 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. As of September 30, 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.
On July 8, 2026, our Board of Directors (the Board) declared a quarterly dividend of $0.60 per common share, representing an increase from the quarterly dividend of $0.50 per common share that was declared and paid in the second quarter of 2026. The dividend was paid on August 31, 2026 to stockholders of record as of August 14, 2026.
As of September 30, 2026, our cash and cash equivalents balance was $2.82 billion, an increase of $838 million from $1.98 billion at December 31, 2025, and consisted of the following:
|
September 30, 2026 |
December 31, 2025 | ||||||||||
| (in millions) | |||||||||||
| Cash and cash equivalents, excluding amounts related to Blue Point Number One, LLC | $ | 2,324 | $ | 1,852 | |||||||
| Cash and cash equivalents-Blue Point Number One, LLC | 496 | 130 | |||||||||
| Total cash and cash equivalents | $ | 2,820 | $ | 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 One Joint Venture
On April 8, 2025, we formed the Blue Point One 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 One joint venture.
The Blue Point One joint venture is constructing 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. State and federal permits were received in July 2026, enabling construction at the Blue Point complex to commence in August 2026. Low-carbon ammonia production
CF INDUSTRIES HOLDINGS, INC.
is expected to begin in 2029. See Note 13-Variable Interest Entity, for information on permitting matters related to the Blue Point complex.
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. The following table presents capital expenditures of the Blue Point One joint venture:
| Blue Point One | |||||
| (in millions) | |||||
| Capital expenditures in 2026: | |||||
| First quarter | $ | 65 | |||
| Second quarter | 78 | ||||
| Third quarter | 89 | ||||
| Total capital expenditures in 2026 | $ | 232 | |||
| Capital expenditures project to date-September 30, 2026 | $ | 539 | |||
Pursuant to periodic capital calls, the Blue Point One joint venture members fund the cost of the facility's engineering, procurement and construction according to their respective ownership percentages. The following table presents capital contributions made by us and our Blue Point One joint venture partners, JERA and Mitsui:
|
CF Holdings(1)(2)
|
JERA and Mitsui | Total | |||||||||||||||
| (in millions) | |||||||||||||||||
| Capital contributions in 2025: | |||||||||||||||||
| Second quarter | $ | 157 | $ | 235 | $ | 392 | |||||||||||
| Third quarter | 38 | 56 | 94 | ||||||||||||||
| Total capital contributions in 2025 | 195 | 291 | 486 | ||||||||||||||
| Capital contributions in 2026: | |||||||||||||||||
| First quarter | 78 | 117 | 195 | ||||||||||||||
| Second quarter | 78 | 116 | 194 | ||||||||||||||
| Third quarter | 105 | 158 | 263 | ||||||||||||||
| Total capital contributions in 2026 | 261 | 391 | 652 | ||||||||||||||
| Capital contributions project to date-September 30, 2026 | $ | 456 | $ | 682 | $ | 1,138 | |||||||||||
(1)Our 40% equity interest in the Blue Point One joint venture is held by one of our wholly owned subsidiaries.
(2)For the second quarter of 2025, our contributions included a $43 million non-cash contribution of an intellectual property license.
In June 2025, the Blue Point One 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 are being constructed with a similar timeline as the ammonia production facility noted above.
See "Overview of CF Holdings-Our Strategy-Blue Point One joint venture," above, and Note 13-Variable Interest Entity, for additional information on the Blue Point One joint venture.
CF INDUSTRIES HOLDINGS, INC.
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 $776 million in the first nine months of 2026 compared to $724 million in the first nine months of 2025.
_______________________________________________________________________________
| September 30, 2026 |
September 30, 2025 |
||||||||||
| (in millions) | |||||||||||
| Existing operations | $ | 421 | $ | 500 | |||||||
|
Blue Point One joint venture(1)
|
232 | 213 | |||||||||
| Blue Point complex Common Facilities | 99 | 2 | |||||||||
| Capitalized interest | 24 | 9 | |||||||||
| Total capital expenditures | $ | 776 | $ | 724 | |||||||
(1)Amounts represent 100% of the Blue Point One 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 One joint venture," above, and Note 13-Variable Interest Entity, for additional information on the Blue Point One joint venture.
The Blue Point One 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 $600 million for our existing operations and approximately $600 million representing the Blue Point One 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 One 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 One 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 One 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 One joint venture partners pursuant to periodic capital calls as discussed under "Blue Point One 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," below, 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.
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 nine months of 2026, we have filed insurance claims for property damage and business interruption related to the Yazoo City incident. In the second and third quarters of 2026, we received insurance proceeds of $75 million and $62 million, respectively. We continue to work with the insurance carriers to determine the total value of the claims and expect to receive insurance proceeds over the rebuilding period of the Yazoo City plant.
Our projected consolidated capital expenditures for the full year 2026 related to our existing operations of $600 million, as noted under Capital Spending, above, does not include an estimate of the capital expenditures for the rebuild of our Yazoo City plant. We expect a significant portion of these capital expenditures will be offset by property insurance proceeds. Based on time required for fabrication and delivery of certain required equipment, we expect production at our Yazoo City complex will resume in the first half of 2027.
CF INDUSTRIES HOLDINGS, INC.
Share Repurchase Programs
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 September 30, 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 | ||||||||
| Second quarter | 2.0 | 230 | |||||||||
| Third quarter | 3.0 | 367 | |||||||||
| Total shares repurchased in 2026 | 5.2 | $ | 612 | ||||||||
|
Shares repurchased as of September 30, 2026
|
8.6 | $ | 890 | ||||||||
(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 nine months ended September 30, 2026, we repurchased approximately 5.2 million shares under the 2025 Share Repurchase Program for $612 million, of which $15 million was accrued and unpaid as of September 30, 2026. In the nine months ended September 30, 2025, we repurchased approximately 12.5 million shares under the 2022 Share Repurchase Program for $1.00 billion, of which $5 million was accrued and unpaid as of September 30, 2025.
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 $423 million (approximately $306 million) during the first nine months of 2026. The income tax deposits were recorded as noncurrent income tax-related assets and will be applied against the tax and interest ultimately due 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 secured overnight financing rate (or a similar benchmark rate for non-U.S. dollar borrowings) plus a specified margin, or base
CF INDUSTRIES HOLDINGS, INC.
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 September 30, 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 nine months ended September 30, 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 September 30, 2026, approximately $300 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 September 30, 2026 and December 31, 2025 consisted of the following debt securities issued by CF Industries:
| Effective Interest Rate | September 30, 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 | 990 | 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 | $ | 3,217 | $ | 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 September 30, 2026 and December 31, 2025, and total deferred debt issuance costs were $28 million and $30 million as of September 30, 2026 and December 31, 2025, respectively.
Under the indentures (including the applicable supplemental indentures) governing the senior notes due 2034, 2035, 2043 and 2044 (the Public Senior Notes), each series of the Public Senior 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 September 30, 2026 and December 31, 2025, we had $469 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. For example, 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 September 30, 2026, our open natural gas derivative contracts consisted of natural gas fixed price swaps, basis swaps and options for 37.2 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
The Company has been undertaking a strategy to settle our defined benefit pension plans in the United States, Canada and the United Kingdom.
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. In the third quarter of 2026, we settled substantially all obligations under our other Canadian pension plan through a combination of lump sum payments and the conversion of the majority of an existing non-participating group buy-in annuity contract to a non-participating group buy-out annuity contract. As a result of these transactions, the remaining projected benefit obligations under our Canadian pension plans are insignificant. For our U.K. pension plans, 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. Accordingly, we do not expect to have any significant future required contributions for our U.K. or Canadian pension plans.
In the third quarter of 2026, we settled all obligations under our primary U.S. pension plan through a combination of lump sum payments and the purchase of a non-participating group buy-out annuity contract, both of which were funded with plan assets. In connection with the settlement, we made total cash contributions of $9 million to the U.S. pension plan in order to complete the final settlement of the plan liabilities, including the cost to purchase the annuity contract and distribute the lump sum payments.
CF INDUSTRIES HOLDINGS, INC.
Distributions to Noncontrolling Interest in CFN
On January 30, 2026, CFN distributed $201 million to CHS for the distribution period ended December 31, 2025. On July 31, 2026, the CFN Board of Managers approved semi-annual distribution payments for the distribution period ended June 30, 2026, in accordance with CFN's limited liability company agreement, and CFN distributed $246 million to CHS for this distribution period. The estimate of the partnership distribution earned by CHS, but not yet declared, for the third quarter of 2026 is approximately $93 million.
Cash Flows
Net cash provided by operating activities during the first nine months of 2026 was $2.54 billion, an increase of $331 million, compared to $2.21 billion in the first nine months of 2025. The increase in cash flow from operations was due primarily to an increase in gross margin of $652 million, driven by higher average selling prices, partially offset by higher costs associated with maintenance activity, including certain unabsorbed fixed costs as a result of plant downtime, including at our idled Yazoo City complex, and lower sales volume. The increase in cash flow from operations also includes $170 million of litigation settlement proceeds and $112 million of insurance proceeds received for business interruption related to our idled Yazoo City complex. The factors increasing cash flows from operations were partially offset by approximately $306 million of income tax deposits made to Canadian taxing authorities during the first nine months of 2026 and cash used for changes in working capital, including cash used to fund accounts payable and accrued expenses and income taxes. See "Canada Revenue Agency Competent Authority Matter," above, for additional information.
Net cash used in investing activities was $756 million in the first nine months of 2026 compared to $707 million in the first nine months of 2025. Capital expenditures totaled $776 million during the first nine months of 2026 compared to $724 million in the first nine months of 2025. Our capital expenditures for the first nine months of 2026 included $232 million related to the Blue Point One joint venture and $99 million related to the Blue Point complex Common Facilities. Our capital expenditures for the first nine months of 2025 included $213 million related to the Blue Point One joint venture and $2 million related to the Blue Point complex Common Facilities. These factors increasing cash used in investing activities were partially offset by $25 million of insurance proceeds received for property damage related to the November 2025 incident at our Yazoo City complex.
Net cash used in financing activities was $929 million in the first nine months of 2026 compared to $1.30 billion in the first nine months of 2025. The decrease in net cash used in financing activities was due primarily to lower share repurchases and higher contributions from noncontrolling interests. In the first nine months of 2026, we paid $610 million for share repurchases compared to $1.02 billion in the first nine months of 2025. In the first nine months of 2026, contributions received from noncontrolling interests were $391 million compared to $291 million in the first nine months of 2025 due to higher capital contributions from our Blue Point One joint venture partners, JERA and Mitsui. These factors that resulted in lower cash used in financing activities were partially offset by higher distributions to noncontrolling interests related to our strategic joint venture with CHS.
Critical Accounting Estimates
During the first nine 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 Pronouncements
See Note 2-New Accounting Standards for a discussion of recently issued accounting pronouncements not yet adopted.
CF INDUSTRIES HOLDINGS, INC.
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;
•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;
CF INDUSTRIES HOLDINGS, INC.
•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 November 05, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 05, 2026 at 18:58 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]