CF Industries Holdings, Inc. Reports First Quarter Earnings

  CF Industries Holdings, Inc. Reports First Quarter Earnings                   Execution Excellence Delivers Strong Results  Business Wire  DEERFIELD, Ill. -- May 7, 2014  CF Industries Holdings, Inc. (NYSE: CF):  First Quarter Highlights  Operations:    *Strong ammonia shipments helped deliver robust financial results despite     gas cost headwinds.   *Reported EBITDA^1 of $1.3 billion, or Adjusted EBITDA^2 of $512.6 million     excluding gain on phosphate sale.   *Generated net earnings attributable to common stockholders of $708.5     million or $12.90 per diluted share, or Adjusted Net Earnings^2 of $247.5     million or $4.51 per diluted share excluding gain on sale of phosphates.  Strategic:    *Continued progress on capacity expansion projects, which remain on-time     and on-budget.   *Repurchased 3.2 million shares for $794.0 million, resulting in increased     nitrogen capacity (and cash generation) per share.   *Issued $1.5 billion of investment grade debt with 25 year average     maturities.   *Closed sale of phosphate business for $1.4 billion or $1.1 billion cash     proceeds after tax.  Focus for 2014    *Maintain focus on operational excellence.   *Execute capacity expansion projects which will increase nitrogen capacity     25 percent by 2016.   *Return excess cash to shareholders via repurchases and dividends.  ^1 Earnings Before Interest, Taxes, Depreciation and Amortization  ^2 See Reconciliation of EBITDA, Adjusted EBITDA, Adjusted Net Earnings and Adjusted Diluted Earnings Per Share in the tables accompanying this release.  Overview  CF Industries Holdings, Inc. today reported first quarter 2014 EBITDA of $1.3 billion and net earnings attributable to common stockholders of $708.5 million, or $12.90 per diluted share, compared to EBITDA of $651.4 million and net earnings attributable to common stockholders of $406.5 million, or $6.47 per diluted share, in the first quarter of 2013. First quarter adjusted EBITDA was $512.6 million excluding the $747.1 million pre-tax gain on sale of the phosphate business, and adjusted net earnings were $247.5 million, or $4.51 per diluted share excluding the $461.0 million after-tax gain. Nitrogen segment net sales in the first quarter of 2014 were $987.5 million, down 10 percent from $1.1 billion in the same period last year; total company net sales are not comparable given the sale of the phosphate business.  During the first quarter, ammonia inventory overhang from low fall applications, poor weather conditions in some key growing regions, customer reluctance to take inventory positions, and elevated natural gas prices combined to create a difficult operating environment. CF Industries was able to overcome these challenges to generate strong cash flow during the quarter. CF Industries used over 80 in-market storage and distribution locations, 5,000+ rail cars, ammonia pipeline access and 100,000+ tons of barge capacity to have product, especially ammonia, available to customers in regions where weather was conducive to applications. The company also benefited from its risk management and hedging programs that limited exposure to short-term, weather related volatility in the natural gas market.  “Coming into the year we were concerned with the high ammonia inventory position across the system, however our team executed well and increased ammonia shipments by 73 percent over the same period last year. That, combined with an effective natural gas hedging program, enabled us to generate strong results,” said Tony Will, president and chief executive officer, CF Industries Holdings, Inc.  For 2014, the ammonia season had a very strong start in the lower U.S. Midwest and Southern Plains regions, and is expected to continue with brisk movement in the upper Midwest, Northern Plains and Western Canada regions as spring progresses. Ammonia prices are expected to remain firm given strong demand and now tight supply. Both conditions are expected to continue through the spring application period.  Urea prices in North America, as represented at the Gulf of Mexico, have been at a $25 average premium to Middle East delivered prices during the first four months of 2014. However, buyer reluctance to make purchases due to lower forward prices and inland logistical challenges have combined to discourage importers from loading vessels for spring season delivery to North America. Tight North American urea inventory is expected to support spot prices through the spring. CF Industries anticipates that, following the spring application season, North American prices will continue to decline toward parity with international prices. Low Chinese coal prices and opening of China’s low-tariff export season on July 1^st could further pressure world urea prices as China’s 2014 exports are likely to be near or above the record high level of 8 million tons set last year.  UAN volume movement is expected to be strong during the remainder of the first half of the year. UAN imports have been lower than in prior years, partially due to retailer and wholesaler reluctance to take inventory positions earlier in the season. Additionally, the company anticipates that with tight ammonia and urea inventory there will be strong demand for UAN so that farmers can apply the recommended amounts of nitrogen needed by their crops. These factors are expected to result in significant spot UAN sales opportunities. CF Industries has been moving product into position in key UAN markets in anticipation of increased spot demand.  “The first quarter saw outstanding ammonia movements. As we move into the second quarter, we are extremely well positioned to provide upgraded products to the farmers as they move from ammonia application to urea and UAN” stated Mr. Will. “Our team is doing an excellent job executing our business plan.”  During the first quarter the company made significant progress on its strategic initiatives. Progress continued with its two major capacity expansion projects that, when complete, will increase the company’s nitrogen production by 25 percent. Both projects remain on-time and on-budget.  CF Industries repurchased 3.2 million shares during the quarter at an average price of approximately $248 per share, as well as an additional 0.7 million shares subsequent to the quarter end through April 30^th. Total shares outstanding have been reduced 27 percent from the beginning of 2011. Approximately $586 million remains on the existing share repurchase authorization which the company expects to complete by the end of 2014.  CF Industries issued $1.5 billion of investment grade debt with maturities of 20 and 30 years and a combined average coupon rate of less than 5.3 percent. And the company closed the sale of the phosphate business to the Mosaic Company for $1.4 billion, or approximately $1.1 billion after tax, and began ammonia shipments under the associated supply agreement.  “We are focused on driving total shareholder return through increasing our nitrogen capacity, and therefore cash generation capacity, on a per share basis, while utilizing long-term, low-cost capital to finance the company,” stated Mr. Will. “We are investing in high return projects, repurchasing shares at attractive prices and accessing investment grade debt to lower our overall cost of financing.”  For 2014, the company expects total capital expenditures of approximately $2.5 billion. This consists of $2.0 billion for the capacity expansion projects and $0.5 billion of sustaining and other capital expenditures. The pace of construction activity and spending is expected to increase during the remainder of the year as major components are delivered and mechanical system construction begins.  Attractive North American natural gas costs, in comparison to natural gas and coal costs in other regions of the world, continue to support CF Industries’ long-term cash generation prospects. Natural gas prices spiked during the quarter in association with the coldest winter in 30 years and all-time record natural gas inventory withdrawal. Despite these issues and temporary spikes in basis differentials, CF Industries’ effective gas cost for the quarter averaged $4.34 per MMBtu. The company continues to believe North American natural gas prices will be in a long-term range of $3 to $5 per MMBtu. This belief is supported by a record domestic production of nearly 68 BCF/day achieved at the end of the first quarter, and NYMEX natural gas futures prices not reaching $5 per MMBtu until 2020 despite recent record low gas storage levels and related price volatility. CF Industries’ gas hedging program is focused on limiting risks to the company’s earnings profile from short-term gas cost fluctuations. The company has 90 percent of its second quarter Henry Hub exposure hedged, with 50 percent hedged via swaps priced at $3.55 per MMBtu and 40 percent hedged via call options.  The long-term outlook for CF Industries is positive as a number of factors support the company’s growth and cash generation potential. Global population growth, higher protein diets and use of crops as a source of renewable fuels all are driving demand for more grain. The limited ability to bring into production additional arable land globally requires increased yields. The need for increased yields drives demand for nitrogen fertilizer, the nutrient that must be applied every year to promote plant growth. With a focus on nitrogen production, and the advantage gained from access to low-cost North American natural gas, CF Industries is well positioned to generate sustainable strong cash flow.   First Quarter Consolidated Results                       Three months ended March 31, (in millions, except per share       2014        2013        Change       % Change  amounts) Total net sales        $ 1,132.6     $ 1,336.5     $ (203.9 )     (15      ) %                                                                               EBITDA                   1,259.7       651.4         608.3        93 Adjusted EBITDA          512.6         651.4         (138.8 )     (21      )                                                                               Net earnings             708.5         406.5         302.0        74 attributable to common stockholders Adjusted net             247.5         406.5         (159.0 )     (39      ) earnings                                                                               Diluted earnings         12.90         6.47          6.43         99 per share Adjusted diluted         4.51          6.47          (1.96  )     (30      ) earnings per share                                                                                Comparison of 2014 to 2013 periods:    *For a description of revenue and earnings performance, please refer to the     business segment results below.   *First quarter 2014 results included $22.6 million of non-cash pre-tax     mark-to-market losses on natural gas derivatives, $0.9 million of pre-tax     gains on foreign currency derivatives and a $747.1 million pre-tax gain on     the sale of the phosphate business. These items increased/(decreased)     after-tax earnings per diluted share by ($0.26), $0.01 and $8.39,     respectively.   *First quarter 2013 results included $22.5 million of non-cash pre-tax     mark-to-market gains on natural gas derivatives, $11.8 million of pre-tax     losses on foreign currency derivatives and a $20.6 million after-tax net     benefit from the recognition of a portion of the net operating loss (NOL)     carry-forwards from periods prior to the company’s initial public offering     (IPO) allowed under a settlement agreement with the IRS. These items     increased/(decreased) after-tax earnings per diluted share by $0.23,     ($0.12) and $0.33, respectively.   *Share repurchases during the first quarter of 2014 increased after-tax     earnings per diluted share by $0.26, reflecting a 2 percent decrease in     weighted average diluted shares outstanding for the first quarter.   Nitrogen Segment Results                       Three months ended March 31, (in millions,          2014        2013          Change       % Change except as noted) Net sales              $ 987.5       $ 1,097.6       $ (110.1 )     (10   )  %                                                                               Gross margin             434.3         647.6           (213.3 )     (33   ) Gross margin             44.0  %       59.0    %     (15) pts percentage                                                                               Cost of natural gas (dollars per         4.34          3.57            0.77         22 MMBtu)* * Includes gas purchases and realized gains and losses on gas derivatives.   Comparison of 2014 to 2013 periods:    *Net sales decreased due to a decline in overall average selling prices     compared to the prior year period, partially offset by an increase in tons     of product sold.   *Gross margin decreased due to lower selling prices and an increase in     production costs. Cost of sales included a mark-to-market unrealized loss     on hedges of $22.6 million in the first quarter of 2014 compared to a gain     of $22.5 million in the prior year period.   *The company’s ammonia plants in aggregate operated at approximately 98     percent of rated capacity during the first quarter of 2014.                                Three months ended March 31, Sales volume (tons in              2014    2013    Change   % Change  thousands) Ammonia                            577       334       243        73         % Urea                               578       643       (65  )     (10      ) UAN                                1,451     1,636     (185 )     (11      ) AN                                 218       208       10         5                                                                                Comparison of 2014 to 2013 periods:    *Ammonia volume increased due to strong demand that carried over from the     fall application season, an earlier start to the spring application season     in the lower U.S. Midwest as compared to last year, and higher industrial     volumes from new and existing customers.   *Granular urea sales volume declined due to lower production volumes.   *UAN sales volume decreased due to buyer deferrals and the company’s     decision to build inventory ahead of an expected strong application     season.                                 Three months ended March 31, Average selling price            2014    2013    Change     % Change  (dollars per ton) Ammonia                          $ 472     $ 600     $ (128 )     (21      ) % Urea                               374       410       (36  )     (9       ) UAN                                276       329       (53  )     (16      ) AN                                 266       264       2          1                                                                                Comparison of 2014 to 2013 periods:    *Ammonia average selling price decreased due to higher industry-wide     inventory levels in the first quarter of 2014 which resulted from poor     weather and reduced application during the fall ammonia season.   *Granular urea average price declined due to higher global supply,     especially from Chinese producers.   *UAN average selling price decreased due to increased domestic supply and     buyer reluctance to take inventory risk.  Phosphate Segment  The phosphate segment reflects the reported results of the phosphate business through March 17, 2014, plus the continuing sales of the phosphate inventory in the distribution network after March 17, 2014. It is expected that the remaining phosphate inventory in the distribution network will be sold in the second quarter of 2014, at which time the phosphate segment will cease to have reported results.                          Three months ended March 31, (in millions, except      2014        2013        Change      % Change as noted) Net sales                 $ 145.1       $ 238.9       $ (93.8 )     (39   )  %                                                                               Gross margin                8.5           27.5          (19.0 )     (69   ) Gross margin                5.9   %       11.5  %     (6) pts percentage                                                                               Domestic vs. export (tons in thousands) Domestic                    162           382           (220  )     (58   )  % Export                      266           113           153         135                                                                               Average selling price (dollars per ton) DAP                       $ 335         $ 477         $ (142  )     (30   )  % MAP                         349           511           (162  )     (32   )                                                                                Comparison of 2014 to 2013 periods:    *Phosphate segment net sales declined because of lower average selling     prices and lower sales volume due to the sale of the phosphate business     during the quarter.   *Phosphate segment gross margin declined due to lower selling prices, which     were partially offset by lower ammonia and sulfur costs.   *Depreciation, depletion and amortization expenses were no longer being     recognized due to the sale of the phosphate business.  Environmental, Health & Safety Performance  As of March 31, 2014, CF Industries’ 12-month rolling average recordable incidence rate was 1.61.  “Strong safety and environmental practices are fundamental to our ability to run our business,” said Mr. Will. “We continuously strive for perfection and want our employees to place safety first in everything they do. I thank them for their attention to the welfare of our colleagues, neighbors and communities.”  Balance Sheet and Cash Flow Items  As of March 31, 2014, CF Industries’ cash and cash equivalents totaled $3.5 billion, while restricted cash for capacity expansion projects was $653.3 million. The increase in the restricted cash account was primarily the result of $460.6 million of cash proceeds received from the sale of the phosphate business and deposited into a restricted cash arrangement that will be utilized over the next six months in a tax-efficient manner to purchase assets in the capacity expansion program. The additional investment grade bonds issued during the quarter brought the company’s total long-term debt to $4.6 billion and further reduced the company’s overall cost of capital.  The company repurchased 3.2 million shares during the quarter for $794.0 million at an average share price of approximately $248. Subsequent to the end of the quarter, the company repurchased 0.7 million shares through April 30^th, at an average price of approximately $252, or a total of $170.8 million. At the beginning of 2011, CF Industries had 71.3 million shares outstanding. Inclusive of the shares repurchased through April 30^th, CF Industries has 52.1 million shares outstanding, a reduction of 27 percent since the beginning of 2011.  Total capital expenditures during the quarter were $392.4 million, of which $278.3 million related to the capacity expansion program. The program is progressing in-line with schedule and budget expectations as pile driving is nearing completion and equipment has started arriving at both sites. Construction has begun on the urea warehouses at both locations and the ammonia storage tank at Donaldsonville, Louisiana.  Dividend Payment  On May 1, 2014, CF Industries’ Board of Directors declared the regular quarterly dividend of $1.00 per common share. The dividend will be paid on May 30, 2014, to stockholders of record as of May 16, 2014.  Conference Call  CF Industries will hold a conference call to discuss these first quarter results at 10:00 a.m. ET on Thursday, May 8, 2014. Investors can access the call and find dial-in information on the Investor Relations section of the company’s website at www.cfindustries.com.  About CF Industries Holdings, Inc.  CF Industries Holdings, Inc., headquartered in Deerfield, Illinois, through its subsidiaries is a global leader in the manufacturing and distribution of nitrogen products, serving both agricultural and industrial customers. CF Industries operates world-class nitrogen manufacturing complexes in the central United States and Canada and distributes plant nutrients through a system of terminals, warehouses, and associated transportation equipment located primarily in the midwestern United States. The company also owns 50 percent interests in GrowHow UK Limited, a plant nutrient manufacturer in the United Kingdom; an ammonia facility in The Republic of Trinidad and Tobago; and KEYTRADE AG, a global plant nutrient trading organization headquartered near Zurich, Switzerland. CF Industries routinely posts investor announcements and additional information on the company’s website at www.cfindustries.com and encourages those interested in the company to check there frequently.  Note Regarding Non-GAAP Financial Measures  The company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). Management believes that EBITDA, a non-GAAP financial measure, provides additional meaningful information regarding the company's performance, liquidity and financial strength. Management believes that adjusted net earnings attributable to common stockholders, adjusted diluted earnings per share and adjusted EBITDA, each a non-GAAP financial measure, provide meaningful information regarding the company’s operating performance because they exclude the impact of the phosphate sale and allow investors to better evaluate ongoing business performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the company's reported results prepared in accordance with GAAP. In addition, because not all companies use identical calculations, EBITDA and the adjusted items included in this release may not be comparable to similarly titled measures of other companies. Reconciliations of EBITDA and the adjusted items to GAAP are provided in the tables accompanying this release under “CF Industries Holdings, Inc.—Selected Financial Information—Non-GAAP Disclosure Items.”  Safe Harbor Statement  All statements in this communication, other than those relating to historical facts, are “forward-looking statements.” These forward-looking statements are not guarantees of future performance and are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from such statements. These statements include, but are not limited to, statements about future strategic plans; and statements about future financial and operating results. Important factors that could cause actual results to differ materially from our expectations include, among others: the volatility of natural gas prices in North America; the cyclical nature of our business and the agricultural sector; the global commodity nature of our fertilizer products, the impact of global supply and demand on our selling prices, and the intense global competition from other fertilizer producers; conditions in the U.S. agricultural industry; reliance on third party providers of transportation services and equipment; risks associated with cyber security; weather conditions; our ability to complete our production capacity expansion projects on schedule as planned and on budget or at all; risks associated with other expansions of our business, including unanticipated adverse consequences and the significant resources that could be required; potential liabilities and expenditures related to environmental and health and safety laws and regulations; future regulatory restrictions and requirements related to greenhouse gas emissions; the seasonality of the fertilizer business; the impact of changing market conditions on our forward sales programs; risks involving derivatives and the effectiveness of our risk measurement and hedging activities; the significant risks and hazards involved in producing and handling our products against which we may not be fully insured; our reliance on a limited number of key facilities; risks associated with joint ventures; acts of terrorism and regulations to combat terrorism; difficulties in securing the supply and delivery of raw materials, increases in their costs or delays or interruptions in their delivery; risks associated with international operations; losses on our investments in securities; deterioration of global market and economic conditions; our ability to manage our indebtedness; and loss of key members of management and professional staff. More detailed information about factors that may affect our performance may be found in our filings with the Securities and Exchange Commission, including our most recent periodic reports filed on Form 10-K and Form 10-Q, which are available in the Investor Relations section of the CF Industries website. Forward-looking statements are given only as of the date of this release and we disclaim any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.   CF INDUSTRIES HOLDINGS, INC. SELECTED FINANCIAL INFORMATION RESULTS OF OPERATIONS                                                                                                                                                                    Three months ended                                        March 31,                                        2014                     2013                                        (in millions, except per share amounts) Net sales                              $   1,132.6              $  1,336.5 Cost of sales                             689.8                 661.4     Gross margin                              442.8                 675.1     Selling, general and                       41.7                    44.3 administrative expenses Other operating - net                     (5.8      )            14.6      Total other operating costs and            35.9                    58.9 expenses Gain on sale of phosphate business         747.1                   - Equity in earnings of operating           15.8                  11.6      affiliates Operating earnings                         1,169.8                 627.8 Interest expense                           40.0                    39.1 Interest income                            (0.2      )             (2.1     ) Other non-operating - net                 (0.1      )            54.7      Earnings before income taxes and equity in earnings of non-operating               1,130.1                 536.1 affiliates Income tax provision                       413.2                   107.4 Equity in earnings of non-operating affiliates - net of taxes                 3.5                   0.7       Net earnings                               720.4                   429.4 Less: Net earnings attributable to noncontrolling interest                    11.9                    22.9 Net earnings attributable to                                    common stockholders                    $   708.5               $  406.5                                                                      Net earnings per share attributable to common stockholders Basic                                  $   12.94               $  6.53      Diluted                                $   12.90               $  6.47                                                                       Weighted average common shares outstanding Basic                                     54.8                  62.3      Diluted                                   54.9                  62.8                                                                                    CF INDUSTRIES HOLDINGS, INC. SELECTED FINANCIAL INFORMATION SUMMARIZED BALANCE SHEETS                                                                                                                                                                      March 31,      December 31,                                               2014           2013                                               (in millions) Assets Current assets: Cash and cash equivalents                     $ 3,530.2      $  1,710.8 Restricted cash                                 653.3           154.0 Accounts receivable - net                       215.7           230.9 Inventories - net                               384.4           274.3 Deferred income taxes                           44.6            60.0 Prepaid income taxes                            -               33.4 Assets held for sale                            -               74.3 Other                                          82.9           92.4 Total current assets                            4,911.1         2,630.1 Property, plant and equipment - net             4,281.9         4,101.7 Investments in and advances to affiliates       933.5           926.0 Goodwill                                        2,094.6         2,095.8 Noncurrent assets held for sale                 -               679.0 Other assets                                   254.4          245.5                                                               Total assets                                  $ 12,475.5     $  10,678.1                                                               Liabilities Accounts payable and accrued expenses         $ 593.7        $  564.1 Income taxes payable                            347.1           73.3 Customer advances                               477.3           120.6 Liabilities held for sale                       -               26.8 Other                                          17.6           43.5 Total current liabilities                       1,435.7         828.3 Long-term debt                                  4,592.3         3,098.1 Deferred income taxes                           821.0           833.2 Noncurrent liabilities held for sale            -               154.5 Other noncurrent liabilities                    318.2           325.6 Equity Stockholders' equity                            4,943.7         5,076.1 Noncontrolling interest                        364.6          362.3 Total equity                                   5,308.3        5,438.4                                                               Total liabilities and equity                  $ 12,475.5     $  10,678.1                                                                   CF INDUSTRIES HOLDINGS, INC. SELECTED FINANCIAL INFORMATION STATEMENTS OF CASH FLOWS                                                                                                                                                                                       Three months ended                                                    March 31,                                                    2014            2013                                                    (in millions) Operating Activities: Net earnings                                       $ 720.4         $ 429.4 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation, depletion and amortization             105.3           107.1 Deferred income taxes                                17.1            (66.7   ) Stock compensation expense                           3.8             3.2 Excess tax benefit from stock-based                  (4.5    )       (9.0    ) compensation Unrealized loss (gain) on derivatives                21.9            (9.0    ) Gain on sale of phosphate business                   (747.1  )       - Loss on disposal of property, plant and              0.1             2.3 equipment and non-core assets Undistributed earnings of affiliates - net           (11.4   )       (4.2    ) Changes in: Accounts receivable - net                            32.2            (25.4   ) Inventories - net                                    (112.3  )       (109.8  ) Accrued income taxes                                 279.9           (81.8   ) Accounts payable and accrued expenses                67.4            73.5 Customer advances                                    356.8           317.9 Other - net                                         20.4          51.2     Net cash provided by operating activities           750.0         678.7    Investing Activities: Additions to property, plant and equipment           (392.4  )       (152.8  ) Proceeds from the sale of property, plant and        1.3             3.3 equipment and non-core assets Proceeds from sale of phosphate business             1,353.6         - Deposits to restricted cash funds                    (505.0  )       (45.3   ) Withdrawals from restricted cash funds               5.7             - Other - net                                         5.8           (1.9    ) Net cash provided by (used in) investing            469.0         (196.7  ) activities Financing Activities: Proceeds from long-term borrowings                   1,494.2         - Financing fees                                       (15.7   )       - Purchase of treasury stock                           (781.8  )       (500.1  ) Dividends paid on common stock                       (55.2   )       (25.2   ) Distributions to noncontrolling interests            (9.6    )       (16.7   ) Issuances of common stock under employee stock       9.4             4.6 plans Excess tax benefit from stock-based                  4.5             9.0 compensation Other                                               (43.0   )      -        Net cash provided by (used in) financing            602.8         (528.4  ) activities Effect of exchange rate changes on cash and         (2.4    )      (18.2   ) cash equivalents Increase (decrease) in cash and cash                 1,819.4         (64.6   ) equivalents Cash and cash equivalents at beginning of           1,710.8       2,274.9  period Cash and cash equivalents at end of period         $ 3,530.2      $ 2,210.3                                                                                 CF INDUSTRIES HOLDINGS, INC. SELECTED FINANCIAL INFORMATION NITROGEN SEGMENT DATA                                                                                                               Three months ended                                                 March 31,                                                 2014               2013                                                 (in millions, except as noted) Net sales                                       $  987.5           $ 1,097.6 Cost of sales                                     553.2           450.0    Gross margin                                    $  434.3          $ 647.6                                                                        Gross margin percentage                            44.0   %          59.0    %                                                                     Tons of product sold (in thousands)                3,018             2,996                                                                     Sales volumes by product (tons in thousands) Ammonia                                            577               334 Granular urea                                      578               643 UAN                                                1,451             1,636 AN                                                 218               208 Other nitrogen products                            194               175                                                                     Average selling prices (dollars per ton) Ammonia                                         $  472             $ 600 Granular urea                                      374               410 UAN                                                276               329 AN                                                 266               264                                                                     Cost of natural gas (dollars per MMBtu)         $  4.34            $ 3.57 ^(1)                                                                     Average daily market price of natural gas Henry Hub (dollars per MMBtu)                   $  5.05            $ 3.49                                                                     Depreciation and amortization                   $  94.6            $ 82.2 Capital expenditures                            $  374.1           $ 135.5                                                                     Production volume by product (tons in thousands) Ammonia ^(2)                                       1,800             1,826 Granular urea                                      546               644 UAN (32%)                                          1,549             1,673 AN                                                 210               227                                                                                ^(1) Includes gas purchases and realized gains and losses on gas derivatives.  ^(2) Gross ammonia production, including amounts subsequently upgraded on-site into urea and/or UAN.   CF INDUSTRIES HOLDINGS, INC. SELECTED FINANCIAL INFORMATION PHOSPHATE SEGMENT DATA                                                                                                               Three months ended                                                 March 31,                                                 2014              2013                                                 (in millions, except as noted) Net sales                                       $   145.1         $  238.9 Cost of sales                                      136.6          211.4   Gross margin                                    $   8.5          $  27.5                                                                       Gross margin percentage                             5.9     %        11.5   %                                                                    Tons of product sold (in thousands)                 428              495                                                                    Sales volumes by product (tons in thousands) DAP                                                 317              412 MAP                                                 111              83                                                                    Domestic vs. export sales (tons in thousands) Domestic                                            162              382 Export                                              266              113                                                                    Average selling prices (dollars per ton) DAP                                             $   335           $  477 MAP                                                 349              511                                                                    Depreciation, depletion, and amortization       $   -             $  15.4 ^(1) Capital expenditures                            $   16.3          $  14.6                                                                    Production volume by product (tons in thousands)                                                                    Hardee Phosphate Rock Mine Phosphate rock                                      786              850                                                                    Plant City Phosphate Fertilizer Complex Sulfuric Acid                                       551              650 Phosphoric acid as P[2]O[5] ^(2)                    213              238 DAP/MAP                                             425              475                                                                               ^(1) On March 17, 2014 we sold the phosphate mining and manufacturing business in Florida to The Mosaic Company pursuant to an Asset Purchase Agreement dated as of October 28, 2013. The assets and liabilities sold were classified as held for sale and we were no longer depreciating the amounts in property plant and equipment.  ^(2) P[2]O[5] is the basic measure of the nutrient content in phosphate fertilizer products.   CF INDUSTRIES HOLDINGS, INC. SELECTED FINANCIAL INFORMATION NON-GAAP DISCLOSURE ITEMS  Reconciliation of net earnings to EBITDA and adjusted EBITDA:  EBITDA is defined as net earnings attributable to common stockholders plus interest expense (income)-net, income taxes, and depreciation, depletion and amortization. Other adjustments include the elimination of loan fee amortization that is included in both interest and amortization, and the portion of depreciation that is included in noncontrolling interest. We have presented EBITDA because management uses the measure to track performance and believes that it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry.  Adjusted EBITDA is defined as EBITDA less the pre-tax gain on the sale of the phosphate business completed in March 2014. We use adjusted EBITDA as a supplemental financial measure in the comparison of year-over-year performance.                                                 Three months ended                                                      March 31,                                                      2014          2013                                                      (in millions) Net earnings attributable to common                  $ 708.5         $ 406.5 stockholders Interest expense (income) - net                        39.8            37.0 Income taxes                                           413.2           107.4 Depreciation, depletion and amortization               105.3           107.1 Less: other adjustments                               (7.1    )      (6.6  )                                                                       EBITDA                                               $ 1,259.7      $ 651.4                                                                        Less: Pre-tax gain on sale of the                     (747.1  )      -      phosphate business                                                                       Adjusted EBITDA                                      $ 512.6        $ 651.4                                                                                 Reconciliation of net earnings to adjusted net earnings and adjusted net earnings per share:  Adjusted net earnings is defined as net earnings attributable to common stockholders less the after-tax gain on sale of the phosphate business completed in March 2014. We use adjusted net earnings attributable to common stockholders and adjusted net earnings per share attributable to common stockholders as supplemental financial measures in the comparison of year-over-year performance.                                   Three months ended                                        March 31,                                        2014                      2013                                        (in millions, except per share amounts) Net earnings attributable              $    708.5                  $   406.5 to common stockholders Less: After-tax gain on sale of the phosphate                      (461.0    )               - business                                                                     Adjusted net earnings attributable to common stockholders                    $    247.5                 $   406.5                                                                                                                                         Net earnings per share attributable to common stockholders Diluted                                $    12.90                 $   6.47                                                                     Adjusted net earnings per share attributable to common stockholders Diluted                                $    4.51                  $   6.47                                                                     Weighted average common shares outstanding Diluted                                    54.9                     62.8                                                                          Notes:  Net earnings for the three months ended March 31, 2014 includes a $461.0 million net of tax gain on the sale of the phosphate business. EBITDA for the three months ended March 31, 2014 includes a $747.1 million pre-tax gain on sale of the phosphate business.  Net earnings and EBITDA for the three months ended March 31, 2014 include a $22.6 million mark-to-market loss on natural gas derivatives and a $0.9 million gain on foreign currency derivatives.  Net earnings for the three months ended March 31, 2013 include a $20.6 million net benefit resulting from the utilization of net operating losses (NOLs) from periods prior to the company’s initial public offering (IPO). EBITDA for the three months ended March 31, 2013 include a $55.2 million non-operating expense to record the liability payable to the company’s pre-IPO owners for the NOL carry-forward settlement.  Net earnings and EBITDA for the three months ended March 31, 2013 include a $22.5 million mark-to-market gain on natural gas derivatives and an $11.8 million loss on foreign currency derivatives.   Contact:  CF Industries Holdings, Inc. Dan Swenson Senior Director, Investor Relations & Corporate Communications 847-405-2515 dswenson@cfindustries.com  
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