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0001104659-10-056102.txt : 20101104
0001104659-10-056102.hdr.sgml : 20101104
20101104164540
ACCESSION NUMBER: 0001104659-10-056102
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 3
CONFORMED PERIOD OF REPORT: 20101104
ITEM INFORMATION: Results of Operations and Financial Condition
ITEM INFORMATION: Financial Statements and Exhibits
FILED AS OF DATE: 20101104
DATE AS OF CHANGE: 20101104
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: CF Industries Holdings, Inc.
CENTRAL INDEX KEY: 0001324404
STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE CHEMICALS [2870]
IRS NUMBER: 202697511
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-32597
FILM NUMBER: 101165509
BUSINESS ADDRESS:
STREET 1: 4 PARKWAY NORTH
STREET 2: SUITE 400
CITY: DEERFIELD
STATE: IL
ZIP: 60015
BUSINESS PHONE: (847) 405-2400
MAIL ADDRESS:
STREET 1: 4 PARKWAY NORTH
STREET 2: SUITE 400
CITY: DEERFIELD
STATE: IL
ZIP: 60015
8-K
1
a10-20412_18k.htm
8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
Form 8-K
CURRENT
REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 4,
2010
CF Industries Holdings, Inc.
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction
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001-32597
(Commission File No.)
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20-2697511
(I.R.S. Employer
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of incorporation)
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Identification Number)
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4 Parkway North, Suite 400
Deerfield, IL
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60015
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(Address of principal
executive office)
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(Zip Code)
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Registrants telephone number, including area code (847)
405-2400
(Former name or former address if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02.
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|
Results of Operations and Financial Condition.
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On
November 4, 2010, CF Industries Holdings, Inc. issued a press release
announcing its results for the quarter and nine months ended September 30,
2010. The press release is attached hereto as Exhibit 99.1.
Item
9.01.
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Financial
Statements and Exhibits.
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(d)
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Exhibits.
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Exhibit No.
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Description of Exhibit
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99.1
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Press
release dated November 4, 2010
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2
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date:
November 4, 2010
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CF
INDUSTRIES HOLDINGS, INC.
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By:
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/s/
Douglas C. Barnard
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Name:
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Douglas
C. Barnard
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Title:
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Vice
President, General Counsel and Secretary
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3
EXHIBIT INDEX
Exhibit No.
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Description
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99.1
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Press
release dated November 4, 2010
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4
EX-99.1
2
a10-20412_1ex99d1.htm
EX-99.1
Exhibit 99.1
NEWS
NEWS
NEWS
![](g204121mmi001.jpg)
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4 Parkway North, Suite 400
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Deerfield, IL 60015
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Contact:
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Terry Huch
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Senior Director, Investor Relations &
Corporate Communications
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847-405-2515 thuch@cfindustries.com
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CF Industries Holdings, Inc.
Reports Third Quarter 2010 Results
Strong Grain and Fertilizer
Prices and Favorable Natural
Gas Costs Support Positive
Outlook
DEERFIELD, ILNov. 4, 2010CF Industries
Holdings, Inc. (NYSE: CF):
Third
Quarter Highlights
· Net earnings attributable to common stockholders were $48.2 million, or
$0.67 per diluted share, compared to earnings of $38.5 million, or $0.78 per
diluted share, in the 2009 third quarter.
· Third quarter results included a $25.7 million non-cash mark-to-market loss
on natural gas derivatives, $22.8 million of business combination and
integration costs and $0.8 million of Perú project development costs.
· Net sales were $917.1 million, up 113 percent from $430.1 million in the
2009 third quarter.
· Total sales volume was 3.4 million tons.
Outlook
· North American outlook is very positive for fall and spring demand and
pricing due to early harvest and strong projected 2011 plantings.
· Global supply/demand balances are favorable for all products.
· Strong cash flow supports faster reduction of long-term debt.
CF Industries Holdings, Inc. today reported third
quarter 2010 net earnings attributable to common stockholders of $48.2 million,
or $0.67 per diluted share, compared to earnings of $38.5 million, or $0.78 per
diluted share, in the third quarter of 2009.
Third quarter results included a $25.7 million non-cash mark-to-market
loss on natural gas derivatives, $22.8 million of business combination and
integration costs and $0.8 million of Perú
1
project development costs. These items reduced after-tax earnings per
diluted share by $0.22, $0.20 and $0.01, respectively.
During the quarter, CF Industries took advantage of
strong cash flow to reduce long-term debt by $350 million. The company remains committed to a strong
balance sheet with targeted net debt in the range of 1.0 to 1.5 times earnings
before interest, taxes, depreciation and amortization (EBITDA).
Net sales were $917.1 million, up 113 percent from
$430.1 million in the same period last year, due to inclusion of Terra net
sales of $400.0 million and higher product prices, especially for
phosphates. Year-ago sales and all other
2009 volume and financial data in this release are presented on a pre-acquisition
basis, as reported in the prior periods.
Reflecting this basis, total sales volume doubled from 1.7 million tons
in the 2009 third quarter to 3.4 million tons in 2010, largely explained by the
inclusion of 1.6 million tons of Terra sales volume.
Nitrogen volumes in the third quarter benefited from
an increase in winter wheat plantings in reaction to weather-related supply
shortfalls in Russia and other eastern European countries, said Stephen R.
Wilson, chairman and chief executive officer, CF Industries Holdings, Inc.
Forward demand was and continues to be very strong as customers prepare for a
long fall application window and higher planted acreage for corn in the spring.
Rising global grain prices and tightening fertilizer
supply/demand balances caused prices for all the companys products to increase
sharply during the third quarter. Global
nitrogen fertilizer supply was reduced by more and longer production outages
than expected, including government-mandated pollution control and energy conservation
outages in China. Domestic industry
production of diammonium phosphate (DAP) and monoammonium phosphate (MAP) was
adversely impacted by various operational factors, while much of the volume
produced was contractually committed to export customers. At the same time, global demand strengthened
for both nitrogen and phosphate due to inventory restocking and higher planting
expectations driven by falling estimates of world crop production.
The companys estimated annual effective tax rate in
the third quarter of 2010 was lower than in the second quarter due primarily to
a revision to projected results for the year.
The effective tax rate of 23.8 percent applied in the quarter included
the cumulative effect of the lower estimated annual effective tax rate.
Nine Month Results
In the first nine months of 2010, earnings
attributable to common stockholders totaled $148.9 million, or $2.35 per
diluted share, compared to $314.2 million, or $6.38 per diluted share, in the
same period of 2009. CF Industries
acquired a controlling stake in Terra Industries on April 5, 2010, and
Terras results are included in the companys consolidated financial statements
from that date. Terra became a wholly
owned subsidiary of CF Industries on April 15, 2010. CF Industries Holdings, Inc. issued 9.5
million shares of its common stock in the exchange offer for Terra and
subsequently completed a public offering of approximately 12.9 million shares
on April 21, 2010. As a result, the
company had 71.1 million shares issued and outstanding at September 30,
2010, compared to 48.6 million shares at December 31, 2009. Nine month results
2
included $272.7 million of business combination costs
related to the Terra acquisition, a $28.3 million gain on the sale of Terra
stock in the first quarter, $21.8 million of non-cash mark-to-market losses on
natural gas derivatives and $5.4 million of Perú project development costs.
Net sales for the first nine months of 2010 totaled
$2.7 billion, up 30 percent from $2.1 billion in the same period of 2009. The
increase resulted primarily from the inclusion of Terra net sales of $926.3
million and higher nitrogen volumes, partially offset by lower average nitrogen
prices and lower phosphate volumes.
Nitrogen Segment
CF Industries delivered 3.0 million tons of ammonia,
urea, urea ammonium nitrate solutions (UAN), ammonium nitrate (AN) and other
nitrogen products during the third quarter of 2010.
Ammonia sales volume of 513,000 tons was sold at an
average price of $394 per ton, compared to 164,000 tons at an average price of
$355 in the third quarter of 2009.
Prompt demand for pre-plant wheat application sustained product movement
in the southern plains. By the end of
the quarter, spot U.S. corn belt prices for ammonia had reached $650 per
ton. As one of its initiatives to
optimize business mix and margins, CF Industries chose not to renew some large
industrial ammonia contracts in the quarter.
The companys large network of ammonia storage terminals ensures product
availability for the most opportune uses and selling seasons, especially the
brief fall and spring seasons for agricultural direct application.
CF Industries sold 713,000 tons of urea at an average
price of $263 in the third quarter, compared to 495,000 tons at an average
price of $260 in the 2009 third quarter.
Of the 218,000 ton increase in sales volume, 94,000 tons was
attributable to the inclusion of Terra sales.
The company sold 1.4 million tons of UAN in the third
quarter of 2010 at an average price of $188 per ton, compared to 570,000 tons
at an average price of $155 in the year-ago quarter. The inclusion of Terra sales accounted for
almost all of the volume increase. The
company was able to sell into a rising market throughout the third
quarter. The companys production mix
favored urea over UAN early in the quarter, but was later shifted toward more
UAN due to market conditions. The
strength of agriculture and fertilizer markets in Europe reduced availability
of imported UAN in North America.
In the third quarter, AN sales volume of 262,000 tons
was sold at an average price of $203.
There were no AN sales in 2009 as all of the companys AN capacity was
acquired in the Terra transaction.
Nitrogen net sales totaled $735.1 million, up 166
percent from $276.1 million in the 2009 third quarter. Gross margin for the nitrogen segment was
$141.3 million, 39 percent higher than the $101.9 million in the 2009 third
quarter. The increase was due primarily
to the benefit from the Terra acquisition, offset partially by higher realized
natural gas costs and an unrealized mark-to-market loss on natural gas
derivatives. Gross margin as a percent
of sales including the mark-to-market loss was 19 percent, down from 37 percent
in the year-earlier quarter.
3
CF Industries realized natural gas cost averaged
$4.37 per MMBtu in the third quarter of 2010, compared to $3.29 during the
third quarter of 2009. Although higher
than the year-ago period, natural gas costs declined significantly during the
quarter despite higher demand for power generation and industrial
production. The natural gas production
rate in the lower 48 states of the U.S. briefly leveled off, but production resumed
its climb as the quarter progressed.
CF Industries ammonia production operated at 96
percent of capacity in the 2010 third quarter.
Phosphate Segment
The phosphate segment experienced rising prices and
margins, with domestic market prices increasing by approximately $125 per ton
during the quarter. Total DAP/MAP volume
was 3 percent higher year-over-year.
Domestic volume was 8 percent lower year-over-year as the company
fulfilled export commitments.
Third quarter net sales of DAP and MAP were $182.0
million, up 47 percent from third quarter 2009 levels due primarily to higher
average selling prices. The average
price realizations for DAP and MAP were 43 percent higher than year-ago levels,
at $403 and $404 per ton, respectively.
Gross margin for the segment was $28.5 million, up
from $22.1 million in the 2009 third quarter.
Gross margin percentage was 15.6 percent of sales, compared to 14.4
percent of sales in the year-earlier period (17.2 percent excluding potash
purchased for resale).
CF Industries Plant City, Florida Phosphate Complex
operated at 89 percent of capacity during the 2010 third quarter.
Safety Performance
The company experienced two
lost-time accidents during the third quarter of 2010, each of which was a joint
injury sustained in the normal course of work.
Other Developments
Terra Integration
The integration of Terra Industries, acquired in
April, into the companys operations continues on a faster pace than originally
expected. Said Wilson, We were always
confident in our ability to integrate the two businesses and realize our
projected synergies, but we didnt expect to be this far along after only seven
months. Our newly realigned
organizations have better market intelligence and decision support, allowing us
to realize the full value of our products and deliver them to customers more
efficiently. These benefits are already
contributing to the bottom line.
The integration remains on track to deliver synergies
in excess of $135 million per year.
Diesel Exhaust Fluid Business
CF Industries recently completed an extensive study of
the mobile emissions business of its Terra Environmental Technologies
unit. The study validated the units
approach to the business and the conclusion that production of diesel exhaust
fluid represents a large and important opportunity for the company.
4
Perú Nitrogen Complex
CF Industries completed the Environmental and Social
Impact Assessment (ESIA) process for its proposed nitrogen complex in Perú
during the third quarter and is now awaiting approval of the ESIA. The company expects expenditures on the
project to be modest until uncertainties regarding local infrastructure are
resolved.
Liquidity and Financial Position
At September 30, 2010, CF Industries cash, cash
equivalents and short-term investments totaled $648.4 million. In addition, the company held investments in
illiquid auction rate securities at September 30, 2010 that were valued at
$122.4 million.
CF Industries repaid $350 million of its term loan
from available cash flow during the quarter and had repaid a total of $554
million of the original $1.2 billion loan by September 30. At that time, the company had outstanding
long term debt of $2.25 billion, comprising primarily $1.6 billion in senior
notes and the remaining term loan balance of $646 million.
Dividend Payment
On October 20, 2010, CF Industries board of
directors declared the regular quarterly dividend of $0.10 per common share.
The dividend will be paid on November 29, 2010 to stockholders of record
on November 15, 2010.
Outlook
The outlook for nitrogen and phosphate fertilizers is
very favorable. Historically high grain
prices and low grain stocks support high planting expectations and optimal
fertilization practices. In North
America, added market strength accrues from an expected long fall application
window, low system inventories, high farm incomes and the incentive for farmers
to reinvest in crop inputs this tax year.
Longer term, the recent increase in the maximum ethanol blend rate also
will be supportive. The fall direct
application season for ammonia is underway in the corn belt, and strong demand
is evident. Availability of supply is
likely to be a constraining factor for application volumes in some areas,
assuming weather conditions remain favorable.
Fertilizer inventories continue to be low at all
levels of the distribution chain in North America and around the world. The company continues to monitor global
nitrogen supply, which was reduced in the third quarter by unexpected outages. UAN is in particularly short supply as
already tight inventories have been strained by below-normal imports and
production problems at certain domestic manufacturers. As a result, it again commands the highest
price per unit of nitrogen among the major products. CF Industries expects to benefit from these
conditions, especially as the added capacity of the Woodward, Oklahoma UAN
expansion becomes available during the fourth quarter.
Natural gas prices have continued to decline since the
end of the third quarter, and a flatter forward price strip has been
maintained. The twelve-month forward
strip now averages approximately $4.10 per MMBtu.
We pursued the acquisition of Terra in part because
we believed the fundamental business environment for domestic nitrogen
fertilizer manufacturers had improved meaningfully and
5
sustainably, said Wilson. The market conditions we now enjoy should
allow us to reap the benefits of the transaction even sooner and more
completely.
The companys phosphate operations also face favorable
conditions. Farmers are increasing
phosphate application rates this fall to make up for below-normal application
the last two years and to ensure optimal fertilization in response to high crop
prices. At the end of September,
domestic producer inventories of DAP and MAP were lower than any comparable
period since 1983. Domestic phosphate
production likely will continue to be constrained by raw material availability,
maintenance requirements and regulatory considerations.
The company believes business conditions are
supportive of an extended period of strong cash flow. In light of this, the company expects capital
expenditures in the range of $240 million to $260 million in 2010 and likely
somewhat more in 2011.
Conference Call
CF Industries will hold a conference call to discuss
these third quarter and year-to-date results at 10:00 ET on Friday, November 5,
2010. Investors can access the call and
find dial-in information on the Investor Relations section of the companys Web
site at www.cfindustries.com.
About CF Industries Holdings, Inc.
CF Industries Holdings, Inc., headquartered in
Deerfield, Illinois, is the holding company for the operations of CF
Industries, Inc. CF Industries is a global leader in nitrogen and
phosphate fertilizer manufacturing and distribution, serving both agricultural
and industrial customers. CF Industries operates world-class nitrogen
fertilizer manufacturing complexes in the central United States and Canada;
conducts phosphate mining and manufacturing operations in Central Florida; and
distributes fertilizer products 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
fertilizer manufacturer in the United Kingdom; an ammonia facility in The
Republic of Trinidad and Tobago; and KEYTRADE AG, a global fertilizer trading
organization headquartered near Zurich, Switzerland. CF Industries routinely
posts investor announcements and additional information on the companys
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 certain non-GAAP financial measures provide additional
meaningful information regarding the companys performance, liquidity,
financial strength, and capital structure. The non-GAAP financial measures
should be viewed in addition to, and not as an alternative for, the companys
reported results prepared in accordance with GAAP. In addition, because not all
companies use identical calculations, the non-GAAP financial measures included
in this financial results release may not be comparable to similarly titled
measures of other companies. Reconciliations of the non-GAAP financial measures
to GAAP are provided in tables accompanying this release.
6
Safe Harbor Statement
Certain statements contained in this communication may
constitute forward-looking statements. All statements in this communication,
other than those relating to historical information or current condition, are
forward-looking statements. These forward-looking statements are subject to a
number of risks and uncertainties, many of which are beyond our control, which
could cause actual results to differ materially from such statements. Important
factors that could cause actual results to differ materially from our
expectations include, among others: our
ability to integrate the businesses of CF Industries and Terra promptly and
effectively and to achieve the cost savings and synergies we anticipate from
the Terra acquisition within the expected time frame or at all; the potential for disruption from the Terra
acquisition to make it more difficult for us to maintain relationships with
customers, employees or suppliers; the volatile cost of natural gas in the
areas where our production facilities are principally located; 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 in the consolidating markets
in which we operate; conditions in the U.S. agricultural industry; weather
conditions; our inability to accurately predict seasonal demand for our
products; the concentration of our sales with certain large customers; the
impact of changing market conditions on our FPP; risks involving derivatives
and the effectiveness of our risk measurement and hedging activities; the
reliance of our operations on a limited number of key facilities and the
significant risks and hazards against which we may not be fully insured;
reliance on third party transportation providers; risks associated with joint
ventures; risks associated with
expansion of our business, including unanticipated adverse consequences and the
significant resources that could be required; potential liabilities and
expenditures related to environmental and health and safety laws and
regulations; our potential inability to obtain or maintain required permits and
governmental approvals or to meet financial assurance requirements; future
regulatory restrictions and requirements related to GHG emissions, climate
change or other environmental requirements; acts of terrorism and regulations
to combat terrorism; difficulties in securing the supply and delivery of raw
materials we use and increases in their costs;
risks associated with international operations; losses on our
investments in securities; deterioration of global market and economic conditions;
our substantial indebtedness and the limitations on our operations imposed by
the terms of our indebtedness; our ability to comply with the covenants under
our indebtedness and to make payments under such indebtedness when due;
potential inability to refinance our indebtedness in connection with any change
of control affecting us; and loss of key members of management and professional
staff. 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.
# # #
7
CF INDUSTRIES HOLDINGS, INC.
SELECTED FINANCIAL INFORMATION
RESULTS OF OPERATIONS
|
|
Three months ended
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|
Nine months ended
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September 30,
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September 30,
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2010
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2009
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2010
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2009
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(in millions, except per share amounts)
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Net sales
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$
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917.1
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$
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430.1
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$
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2,727.4
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$
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2,101.7
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Cost of sales
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747.3
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306.1
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2,031.8
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1,388.4
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Gross margin
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169.8
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124.0
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695.6
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713.3
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Selling, general and administrative
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28.8
|
|
15.1
|
|
73.3
|
|
47.0
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Restructuring and integration costs
|
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8.6
|
|
|
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17.9
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|
|
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Equity in earnings of operating affiliates
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(5.7
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)
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|
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(7.2
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)
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Other operating - net
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1.3
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19.1
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150.9
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57.6
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Operating earnings
|
|
136.8
|
|
89.8
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460.7
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608.7
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Interest expense
|
|
58.3
|
|
0.4
|
|
170.6
|
|
1.1
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Interest income
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(0.3
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)
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(2.1
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)
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(1.0
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)
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(4.1
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)
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Loss on extinguishment of debt
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|
|
|
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17.0
|
|
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Other non-operating - net
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(0.5
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)
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(28.6
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)
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(0.4
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)
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Earnings before income taxes and equity in
earnings (loss) of non-operating affiliates
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79.3
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91.5
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|
302.7
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612.1
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Income tax provision
|
|
18.9
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32.1
|
|
104.4
|
|
220.1
|
|
Equity in earnings (loss) of non-operating affiliates
- net of taxes
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10.8
|
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0.6
|
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15.7
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(0.8
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)
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Net earnings
|
|
71.2
|
|
60.0
|
|
214.0
|
|
391.2
|
|
Less: Net earnings attributable to noncontrolling
interest
|
|
23.0
|
|
21.5
|
|
65.1
|
|
77.0
|
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Net earnings attributable to common stockholders
|
|
$
|
48.2
|
|
$
|
38.5
|
|
$
|
148.9
|
|
$
|
314.2
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share attributable to common
stockholders
|
|
|
|
|
|
|
|
|
|
Basic
|
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$
|
0.68
|
|
$
|
0.79
|
|
$
|
2.38
|
|
$
|
6.49
|
|
Diluted
|
|
$
|
0.67
|
|
$
|
0.78
|
|
$
|
2.35
|
|
$
|
6.38
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
71.1
|
|
48.5
|
|
62.5
|
|
48.4
|
|
Diluted
|
|
71.9
|
|
49.3
|
|
63.2
|
|
49.2
|
|
CF INDUSTRIES HOLDINGS, INC.
SELECTED FINANCIAL INFORMATION
SUMMARIZED BALANCE SHEETS
|
|
September 30,
|
|
December 31,
|
|
September 30,
|
|
|
|
2010
|
|
2009
|
|
2009
|
|
|
|
(in millions)
|
|
Assets
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
648.4
|
|
$
|
697.1
|
|
$
|
497.5
|
|
Short-term investments
|
|
|
|
185.0
|
|
205.1
|
|
Accounts receivable
|
|
228.8
|
|
167.4
|
|
143.3
|
|
Inventories - net
|
|
271.1
|
|
207.8
|
|
219.6
|
|
Prepaid income taxes
|
|
28.6
|
|
14.7
|
|
|
|
Other
|
|
22.1
|
|
11.1
|
|
19.3
|
|
Total current assets
|
|
1,199.0
|
|
1,283.1
|
|
1,084.8
|
|
Property, plant and equipment - net
|
|
3,928.8
|
|
793.8
|
|
766.9
|
|
Asset retirement obligation escrow account
|
|
40.2
|
|
36.5
|
|
36.5
|
|
Investments in and advances to unconsolidated
affiliates
|
|
988.5
|
|
45.6
|
|
46.4
|
|
Investments in auction rate securities
|
|
122.4
|
|
133.9
|
|
139.5
|
|
Investment in marketable equity securities
|
|
|
|
160.2
|
|
242.2
|
|
Goodwill
|
|
2,096.4
|
|
0.9
|
|
0.9
|
|
Other assets
|
|
242.2
|
|
40.9
|
|
39.9
|
|
Total assets
|
|
$
|
8,617.5
|
|
$
|
2,494.9
|
|
$
|
2,357.1
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
329.5
|
|
$
|
172.5
|
|
$
|
140.0
|
|
Income taxes payable
|
|
|
|
|
|
9.0
|
|
Customer advances
|
|
321.1
|
|
159.5
|
|
123.3
|
|
Notes payable
|
|
|
|
|
|
4.6
|
|
Deferred income taxes
|
|
43.5
|
|
52.6
|
|
49.5
|
|
Distributions payable to noncontrolling interest
|
|
|
|
92.1
|
|
|
|
Other
|
|
31.2
|
|
3.1
|
|
2.7
|
|
Total current liabilities
|
|
725.3
|
|
479.8
|
|
329.1
|
|
Notes payable
|
|
4.8
|
|
4.7
|
|
|
|
Long-term debt
|
|
2,250.8
|
|
|
|
|
|
Deferred income taxes
|
|
1,031.6
|
|
68.3
|
|
64.0
|
|
Other noncurrent liabilities
|
|
303.1
|
|
197.2
|
|
204.7
|
|
Equity
|
|
|
|
|
|
|
|
Stockholders equity
|
|
3,863.7
|
|
1,728.9
|
|
1,658.9
|
|
Noncontrolling interest
|
|
438.2
|
|
16.0
|
|
100.4
|
|
Total equity
|
|
4,301.9
|
|
1,744.9
|
|
1,759.3
|
|
Total liabilities and equity
|
|
$
|
8,617.5
|
|
$
|
2,494.9
|
|
$
|
2,357.1
|
|
CF INDUSTRIES HOLDINGS, INC.
SELECTED FINANCIAL INFORMATION
STATEMENTS OF CASH FLOWS
|
|
Three months ended
|
|
Nine months ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
(in millions)
|
|
Operating Activities:
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
$
|
71.2
|
|
$
|
60.0
|
|
$
|
214.0
|
|
$
|
391.2
|
|
Adjustments to reconcile net earnings to net cash provided
by operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
110.4
|
|
27.0
|
|
288.5
|
|
73.3
|
|
Deferred income taxes
|
|
47.8
|
|
4.0
|
|
41.5
|
|
49.6
|
|
Stock compensation expense
|
|
2.0
|
|
1.7
|
|
5.8
|
|
4.7
|
|
Excess tax benefit from stock-based compensation
|
|
(0.6
|
)
|
(3.5
|
)
|
(1.2
|
)
|
(4.4
|
)
|
Unrealized (gain) loss on derivatives
|
|
27.9
|
|
(1.9
|
)
|
20.9
|
|
(84.8
|
)
|
Inventory valuation allowance
|
|
0.4
|
|
(25.0
|
)
|
0.4
|
|
(57.0
|
)
|
Loss on extinguishment of debt
|
|
|
|
|
|
17.0
|
|
|
|
Gain on sale of marketable equity securities
|
|
|
|
|
|
(28.3
|
)
|
|
|
Loss (gain) on disposal of property, plant and
equipment
|
|
|
|
(0.4
|
)
|
(0.1
|
)
|
0.4
|
|
Undistributed (earnings) loss of affiliates - net
|
|
(21.6
|
)
|
(0.6
|
)
|
(31.1
|
)
|
0.8
|
|
Changes in (net of effects of acquistion):
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
122.5
|
|
2.6
|
|
77.6
|
|
43.0
|
|
Inventories
|
|
(24.4
|
)
|
20.2
|
|
76.3
|
|
427.3
|
|
Accrued income taxes
|
|
(4.9
|
)
|
(9.9
|
)
|
(31.3
|
)
|
26.6
|
|
Accounts payable and accrued expenses
|
|
(42.2
|
)
|
(35.1
|
)
|
(67.0
|
)
|
(67.4
|
)
|
Customer advances - net
|
|
310.1
|
|
52.4
|
|
54.7
|
|
(224.5
|
)
|
Other - net
|
|
(10.6
|
)
|
(8.2
|
)
|
(3.7
|
)
|
(8.3
|
)
|
Net cash provided by operating activities
|
|
588.0
|
|
83.3
|
|
634.0
|
|
570.5
|
|
Investing Activities:
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and equipment
|
|
(84.2
|
)
|
(54.5
|
)
|
(188.5
|
)
|
(181.4
|
)
|
Proceeds from the sale of property, plant and
equipment
|
|
3.1
|
|
3.6
|
|
12.7
|
|
8.9
|
|
Purchases of short-term securities
|
|
|
|
(149.9
|
)
|
(25.5
|
)
|
(254.9
|
)
|
Sales and maturities of short-term and auction
rate securities
|
|
0.8
|
|
50.9
|
|
219.5
|
|
103.3
|
|
Purchase of marketable equity securities
|
|
|
|
(247.2
|
)
|
|
|
(247.2
|
)
|
Sale of marketable equity securities
|
|
|
|
|
|
167.1
|
|
|
|
Deposit to asset retirement obligation escrow
account
|
|
|
|
|
|
(3.7
|
)
|
(7.5
|
)
|
Purchase of Terra Industries Inc. - net of cash
acquired
|
|
|
|
|
|
(3,177.8
|
)
|
|
|
Other - net
|
|
0.8
|
|
(2.5
|
)
|
31.0
|
|
(2.5
|
)
|
Net cash used in investing activities
|
|
(79.5
|
)
|
(399.6
|
)
|
(2,965.2
|
)
|
(581.3
|
)
|
Financing Activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term borrowings
|
|
|
|
|
|
5,197.2
|
|
|
|
Payments of long-term debt
|
|
(350.0
|
)
|
|
|
(3,708.7
|
)
|
|
|
Financing fees
|
|
(1.3
|
)
|
|
|
(209.1
|
)
|
|
|
Dividends paid on common stock
|
|
(7.1
|
)
|
(4.9
|
)
|
(39.1
|
)
|
(14.5
|
)
|
Distributions to noncontrolling interests
|
|
(104.7
|
)
|
|
|
(110.5
|
)
|
(112.3
|
)
|
Issuance of common stock
|
|
|
|
|
|
1,150.0
|
|
|
|
Issuances of common stock under employee stock
plans
|
|
0.7
|
|
1.8
|
|
1.2
|
|
2.9
|
|
Excess tax benefit from stock-based compensation
|
|
0.6
|
|
3.5
|
|
1.2
|
|
4.4
|
|
Net cash provided by (used in) financing
activities
|
|
(461.8
|
)
|
0.4
|
|
2,282.2
|
|
(119.5
|
)
|
Effect of exchange rate changes on cash and cash
equivalents
|
|
0.3
|
|
(2.7
|
)
|
0.3
|
|
2.8
|
|
Increase (decrease) in cash and cash equivalents
|
|
47.0
|
|
(318.6
|
)
|
(48.7
|
)
|
(127.5
|
)
|
Cash and cash equivalents at beginning of period
|
|
601.4
|
|
816.1
|
|
697.1
|
|
625.0
|
|
Cash and cash equivalents at end
of period
|
|
$
|
648.4
|
|
$
|
497.5
|
|
$
|
648.4
|
|
$
|
497.5
|
|
CF INDUSTRIES HOLDINGS, INC.
SELECTED FINANCIAL INFORMATION
NITROGEN SEGMENT DATA
|
|
Three months ended
|
|
Nine months ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
(in millions, except as noted)
|
|
Net sales
|
|
$
|
735.1
|
|
$
|
276.1
|
|
$
|
2,184.9
|
|
$
|
1,487.3
|
|
Cost of sales
|
|
593.8
|
|
174.2
|
|
1,578.8
|
|
812.8
|
|
Gross margin
|
|
$
|
141.3
|
|
$
|
101.9
|
|
$
|
606.1
|
|
$
|
674.5
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin percentage
|
|
19.2
|
%
|
36.9
|
%
|
27.7
|
%
|
45.4
|
%
|
|
|
|
|
|
|
|
|
|
|
Tons of product sold (in thousands)
|
|
2,981
|
|
1,238
|
|
8,111
|
|
4,381
|
|
|
|
|
|
|
|
|
|
|
|
Sales volumes by product (tons in thousands)
|
|
|
|
|
|
|
|
|
|
Ammonia
|
|
513
|
|
164
|
|
1,892
|
|
778
|
|
Urea
|
|
713
|
|
495
|
|
2,162
|
|
1,942
|
|
UAN
|
|
1,430
|
|
570
|
|
3,396
|
|
1,618
|
|
AN
|
|
262
|
|
|
|
525
|
|
|
|
Other nitrogen products
|
|
63
|
|
9
|
|
136
|
|
43
|
|
|
|
|
|
|
|
|
|
|
|
Average selling prices (dollars per ton)
|
|
|
|
|
|
|
|
|
|
Ammonia
|
|
$
|
394
|
|
$
|
355
|
|
$
|
378
|
|
$
|
596
|
|
Urea
|
|
263
|
|
260
|
|
286
|
|
313
|
|
UAN
|
|
188
|
|
155
|
|
205
|
|
255
|
|
AN
|
|
203
|
|
|
|
208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of natural gas (dollars per MMBtu) (1)
|
|
$
|
4.37
|
|
$
|
3.29
|
|
$
|
4.54
|
|
$
|
5.01
|
|
|
|
|
|
|
|
|
|
|
|
Average daily market price of natural gas Henry
Hub (dollars per MMBtu)
|
|
$
|
4.29
|
|
$
|
3.15
|
|
$
|
4.58
|
|
$
|
3.80
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
$
|
70.9
|
|
$
|
14.9
|
|
$
|
154.8
|
|
$
|
43.2
|
|
Capital expenditures
|
|
$
|
74.9
|
|
$
|
40.4
|
|
$
|
151.9
|
|
$
|
127.6
|
|
|
|
|
|
|
|
|
|
|
|
Production volume by product (tons in thousands)
|
|
|
|
|
|
|
|
|
|
Ammonia (2)
|
|
1,662
|
|
818
|
|
4,250
|
|
2,294
|
|
Granular urea
|
|
595
|
|
514
|
|
1,837
|
|
1,736
|
|
UAN (32%)
|
|
1,233
|
|
547
|
|
3,098
|
|
1,492
|
|
AN
|
|
263
|
|
|
|
521
|
|
|
|
(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
|
|
Nine months ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
(in millions, except as noted)
|
|
Net sales
|
|
$
|
182.0
|
|
$
|
154.0
|
|
$
|
542.5
|
|
$
|
614.4
|
|
Cost of sales
|
|
153.5
|
|
131.9
|
|
453.0
|
|
575.6
|
|
Gross margin
|
|
$
|
28.5
|
|
$
|
22.1
|
|
$
|
89.5
|
|
$
|
38.8
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin percentage
|
|
15.6
|
%
|
14.4
|
%
|
16.5
|
%
|
6.3
|
%
|
|
|
|
|
|
|
|
|
|
|
Gross margin by product
|
|
|
|
|
|
|
|
|
|
DAP/MAP
|
|
$
|
28.5
|
|
$
|
21.3
|
|
$
|
89.5
|
|
$
|
72.8
|
|
Potash
|
|
|
|
0.8
|
|
|
|
(34.0
|
)
|
|
|
|
|
|
|
|
|
|
|
Gross margin percentage by product
|
|
|
|
|
|
|
|
|
|
DAP/MAP
|
|
15.6
|
%
|
17.2
|
%
|
16.5
|
%
|
13.9
|
%
|
Potash
|
|
|
|
2.6
|
%
|
|
|
(37.9
|
)%
|
|
|
|
|
|
|
|
|
|
|
Tons of product sold (in thousands)
|
|
451
|
|
497
|
|
1,390
|
|
1,698
|
|
|
|
|
|
|
|
|
|
|
|
Sales volumes by product (tons in thousands)
|
|
|
|
|
|
|
|
|
|
DAP
|
|
329
|
|
332
|
|
1,058
|
|
1,246
|
|
MAP
|
|
122
|
|
107
|
|
332
|
|
288
|
|
Potash
|
|
|
|
58
|
|
|
|
164
|
|
|
|
|
|
|
|
|
|
|
|
Domestic vs. export sales (tons in thousands)
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
260
|
|
342
|
|
866
|
|
997
|
|
Export
|
|
191
|
|
155
|
|
524
|
|
701
|
|
|
|
|
|
|
|
|
|
|
|
Average selling prices (dollars per ton)
|
|
|
|
|
|
|
|
|
|
DAP
|
|
$
|
403
|
|
$
|
281
|
|
$
|
387
|
|
$
|
338
|
|
MAP
|
|
404
|
|
283
|
|
399
|
|
357
|
|
Potash
|
|
|
|
527
|
|
|
|
548
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion, and amortization
|
|
$
|
13.5
|
|
$
|
11.5
|
|
$
|
38.2
|
|
$
|
28.4
|
|
Capital expenditures
|
|
$
|
9.2
|
|
$
|
13.9
|
|
$
|
36.0
|
|
$
|
53.4
|
|
|
|
|
|
|
|
|
|
|
|
Production volume by product (tons in thousands)
|
|
|
|
|
|
|
|
|
|
Hardee Phosphate Rock Mine
|
|
|
|
|
|
|
|
|
|
Phosphate rock
|
|
965
|
|
914
|
|
2,563
|
|
2,268
|
|
|
|
|
|
|
|
|
|
|
|
Plant City Phosphate Fertilizer Complex
|
|
|
|
|
|
|
|
|
|
Sulfuric Acid
|
|
639
|
|
600
|
|
1,835
|
|
1,681
|
|
Phosphoric acid as P2O5 (1)
|
|
236
|
|
223
|
|
687
|
|
671
|
|
DAP/MAP
|
|
473
|
|
443
|
|
1,365
|
|
1,336
|
|
(1) P2O5 is the basic measure of the
nutrient content in phosphate fertilizer products.
CF INDUSTRIES HOLDINGS, INC.
SELECTED FINANCIAL INFORMATION
NON-GAAP DISCLOSURE ITEMS
Reconciliation of net earnings to EBITDA:
|
|
Three months ended
|
|
Nine months ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
(in millions)
|
|
Net earnings attributable to common stockholders
|
|
$
|
48.2
|
|
$
|
38.5
|
|
$
|
148.9
|
|
$
|
314.2
|
|
Interest expense (income) - net
|
|
58.0
|
|
(1.7
|
)
|
169.6
|
|
(3.0
|
)
|
Income taxes
|
|
19.4
|
|
32.1
|
|
104.8
|
|
220.1
|
|
Depreciation, depletion and amortization
|
|
110.4
|
|
27.0
|
|
288.5
|
|
73.3
|
|
Less: Loan fee amortization
|
|
(20.0
|
)
|
(0.2
|
)
|
(84.3
|
)
|
(0.4
|
)
|
EBITDA
|
|
$
|
216.0
|
|
$
|
95.7
|
|
$
|
627.5
|
|
$
|
604.2
|
|
EBITDA
is defined as net earnings attributable to common stockholders plus interest
expense (income)net, income taxes, and depreciation, depletion and
amortization. Loan fee amortization is
subtracted in the calculation of EBITDA to adjust for amounts included in both
interest and amortization. We have presented EBITDA because management uses the
measure to track performance and believes that it is frequently used by
securities analysts, investors and other interested parties in the evaluation
of companies in our industry.
Net
earnings and EBITDA for the three months ended September 30, 2010 include
$(0.5) million of business combinations costs; $8.6 million of restructuring
and integration costs, $0.8 million of Peru project development costs and $25.7
million of mark-to-market losses on derivatives.
Net
earnings and EBITDA for the nine months ended September 30, 2010 include $144.6
million of business combinations costs which includes a $123 million merger
termination fee paid to Yara International ASA on behalf of Terra in the first
quarter of 2010; $17.9 million of restructuring and integration costs, $5.4
million of Peru project development costs, $21.8 million of mark-to-market
losses on derivatives, a $19.4 million inventory revaluation adjustment charged
to cost of sales upon the sale of Terras product inventory that was revalued
to fair value in purchase accounting in the second quarter of 2010; and a $17.0
million loss on extinguishment of acquired debt in the second quarter of 2010.
Net
earnings, interest expense (income) - net, and depreciation, depletion and
amortization for the three and nine months ended September 30, 2010 include
$14.7 million and $73.7 million, respectively, of accelerated amortization of
deferred loan fees related to repayments of certain Terra acquisition
financing.
CF
INDUSTRIES HOLDINGS, INC.
SELECTED
FINANCIAL INFORMATION
NON-GAAP
DISCLOSURE ITEMS
Reconciliation of debt to net debt (net cash):
|
|
September 30,
|
|
December 31,
|
|
September 30,
|
|
|
|
2010
|
|
2009
|
|
2009
|
|
|
|
(in millions)
|
|
Total debt
|
|
$
|
2,255.6
|
|
$
|
4.7
|
|
$
|
4.6
|
|
Less: cash, cash equivalents and short-term
investments
|
|
648.4
|
|
882.1
|
|
702.6
|
|
Plus: customer advances
|
|
321.1
|
|
159.5
|
|
123.3
|
|
|
|
|
|
|
|
|
|
Net debt (net cash)
|
|
$
|
1,928.3
|
|
$
|
(717.9
|
)
|
$
|
(574.7
|
)
|
Net
debt (net cash) is defined as total debt minus cash, cash equivalents and
short-term investments, plus customer advances.
We include customer advances in this calculation to reflect the
liability associated with our obligations to supply fertilizer in the future,
which offsets cash received in the form of customer advances. Net debt (net cash) does not include
distributions of earnings payable to noncontrolling interest holders. We use net debt (net cash) in the evaluation
of our capital structure.
CF INDUSTRIES HOLDINGS, INC.
SELECTED FINANCIAL INFORMATION
Consolidated Interest Expense:
|
|
Three months ended
|
|
Nine months ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
(in millions)
|
|
Interest on borrowings
|
|
$
|
38.4
|
|
$
|
|
|
$
|
81.1
|
|
$
|
0.1
|
|
Fees on ongoing financing agreements
|
|
7.4
|
|
0.4
|
|
20.0
|
|
0.9
|
|
Accelerated amortization of deferred loan fees
|
|
14.7
|
|
|
|
73.7
|
|
|
|
Interest capitalized and other
|
|
(2.2
|
)
|
|
|
(4.2
|
)
|
0.1
|
|
|
|
$
|
58.3
|
|
$
|
0.4
|
|
$
|
170.6
|
|
$
|
1.1
|
|
Depreciation, Depletion and Amortization
|
|
Three months ended
|
|
Nine months ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
(in millions)
|
|
Nitrogen segment
|
|
$
|
70.9
|
|
$
|
14.9
|
|
$
|
154.8
|
|
$
|
43.2
|
|
Phosphate segment
|
|
13.5
|
|
11.5
|
|
38.2
|
|
28.4
|
|
Corporate / unallocated
|
|
6.0
|
|
0.4
|
|
11.2
|
|
1.3
|
|
Amortization of deferred loan fees
|
|
5.3
|
|
0.2
|
|
10.6
|
|
0.4
|
|
Accelerated amortization of deferred loan fees
|
|
14.7
|
|
|
|
73.7
|
|
|
|
|
|
$
|
110.4
|
|
$
|
27.0
|
|
$
|
288.5
|
|
$
|
73.3
|
|
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3
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end
-----END PRIVACY-ENHANCED MESSAGE-----