Segment Disclosures

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Segment Disclosures

Segment Disclosures

On July 31, 2015, we acquired the remaining 50% equity interest in CF Fertilisers UK not previously owned by us. See Note 4—Acquisitions and Divestitures and Note 8—Equity Method Investments for additional information. CF Fertilisers UK has nitrogen manufacturing complexes located in Ince, United Kingdom, and Billingham, United Kingdom. The Ince complex produces ammonia, AN and NPKs while the Billingham complex produces ammonia and AN. Our reportable segment structure reflects how our chief operating decision maker (CODM), as defined under U.S. GAAP, assesses the performance of our operating segments and makes decisions about resource allocation. In the third quarter of 2015, we changed our reportable segment structure to separate AN from our Other segment as our AN products increased in significance as a result of the CF Fertilisers UK acquisition. Our reportable segments now consist of ammonia, granular urea, UAN, AN, Other, and phosphate. These segments are differentiated by products. Historical financial results have been restated to reflect the new reportable segment structure on a comparable basis.

We sold our phosphate mining and manufacturing business on March 17, 2014. See Note 4—Acquisitions and Divestitures for additional information. 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. The remaining phosphate inventory was sold in the second quarter of 2014 and reportable results ceased.

Upon selling the phosphate business, we began to supply Mosaic with ammonia produced by our PLNL joint venture. The contract to supply ammonia to Mosaic from our PLNL joint venture represents the continuation of a supply practice that previously existed between our former phosphate mining and manufacturing business and other operations of the Company. Prior to March 17, 2014, PLNL sold ammonia to us for use in the phosphate business and the cost was included in our production costs in our phosphate segment. Subsequent to the sale of the phosphate business, we now sell the PLNL-sourced ammonia to Mosaic. The revenue from these sales to Mosaic and costs to purchase the ammonia from PLNL are now included in our ammonia segment. Our 50% share of the operating results of our PLNL joint venture continues to be included in our equity in earnings of operating affiliates in our consolidated statements of operations. Because of the significance of this continuing supply practice, in accordance with U.S. GAAP, the phosphate mining and manufacturing business is not reported as discontinued operations in our consolidated statements of operations.

Our management uses gross margin to evaluate segment performance and allocate resources. Total other operating costs and expenses (consisting of selling, general and administrative expenses and other operating—net) and non-operating expenses (interest and income taxes) are centrally managed and are not included in the measurement of segment profitability reviewed by management.

Our assets, with the exception of goodwill, are not monitored by or reported to our CODM by segment; therefore, we do not present total assets by segment. Goodwill by segment is presented in Note 7—Goodwill and Other Intangible Assets.

Segment data for sales, cost of sales and gross margin for 2016, 2015 and 2014 are presented in the tables below.

	Ammonia		Granular Urea(1)		UAN(1)		AN(1)		Other(1)		Phosphate		Consolidated
	(in millions)
Year ended December 31, 2016
Net sales	$	981	$	831	$	1,196	$	411	$	266	$	—	$	3,685
Cost of sales	715		584		920		409		217		—		2,845
Gross margin	$	266	$	247	$	276	$	2	$	49	$	—	840
Total other operating costs and expenses													561
Equity in losses of operating affiliates													(145		)
Operating earnings													$	134
Year ended December 31, 2015
Net sales	$	1,523	$	788	$	1,480	$	294	$	223	$	—	$	4,308
Cost of sales	884		469		955		291		162		—		2,761
Gross margin	$	639	$	319	$	525	$	3	$	61	$	—	1,547
Total other operating costs and expenses													319
Equity in losses of operating affiliates													(35		)
Operating earnings													$	1,193
Year ended December 31, 2014
Net sales	$	1,576	$	915	$	1,670	$	243	$	171	$	168	$	4,743
Cost of sales	983		517		998		189		120		158		2,965
Gross margin	$	593	$	398	$	672	$	54	$	51	$	10	1,778
Total other operating costs and expenses													205
Gain on sale of phosphate business													750
Equity in earnings of operating affiliates													43
Operating earnings													$	2,366

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⁽¹⁾  The cost of ammonia that is upgraded into other products is transferred at cost into the upgraded product results.

	Ammonia		Granular Urea		UAN		AN		Other		Phosphate(1)		Corporate		Consolidated
	(in millions)
Depreciation and amortization
Year ended December 31, 2016	$	96	$	112	$	247	$	93	$	46	$	—	$	84	$	678
Year ended December 31, 2015	$	95	$	51	$	192	$	66	$	35	$	—	$	41	$	480
Year ended December 31, 2014	$	69	$	37	$	179	$	47	$	20	$	—	$	41	$	393

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⁽¹⁾  The assets and liabilities of our phosphate business were classified as held for sale as of December 31, 2013; therefore, no depreciation, depletion or amortization was recorded in 2014 for the related property, plant and equipment.

Enterprise-wide data by geographic region is as follows:

	Year ended December 31,
	2016		2015		2014
	(in millions)
Sales by geographic region (based on destination of shipments):
United States	$	2,728	$	3,485	$	3,994
Foreign:
Canada	349		490		544
United Kingdom	394		153		—
Other foreign	214		180		205
Total foreign	957		823		749
Consolidated	$	3,685	$	4,308	$	4,743

	December 31,
	2016		2015		2014
	(in millions)
Property, plant and equipment—net by geographic region:
United States	$	8,444	$	7,202	$	4,987
Foreign:
Canada	523		497		539
United Kingdom	685		840		—
Total foreign	1,208		1,337		539
Consolidated	$	9,652	$	8,539	$	5,526

Our principal customers are cooperatives, independent fertilizer distributors and industrial users. In 2016, CHS accounted for approximately 12% of our consolidated net sales. See Note 17—Noncontrolling Interests for additional information. None of our customers accounted for more than ten percent of our consolidated sales in 2015 or 2014.