Noncontrolling Interest

12 Months Ended

Dec. 31, 2022

A reconciliation of the beginning and ending balances of noncontrolling interest and distributions payable to the noncontrolling interest on our consolidated balance sheets is provided below.


	Year ended December 31,
	2022		2021		2020

	(in millions)
Noncontrolling interest:
Balance as of January 1	$	2,830	$	2,681	$	2,740
Earnings attributable to noncontrolling interest	591		343		115
Declaration of distributions payable	(619)		(194)		(174)



Balance as of December 31	$	2,802	$	2,830	$	2,681
Distributions payable to noncontrolling interest:
Balance as of January 1	$	—	$	—	$	—
Declaration of distributions payable	619		194		174
Distributions to noncontrolling interest	(619)		(194)		(174)

Balance as of December 31	$	—	$	—	$	—

We have a strategic venture with CHS under which CHS owns an equity interest in CFN, a subsidiary of CF Holdings, which represents approximately 11% of the membership interests of CFN. We own the remaining membership interests. Under the terms of CFN’s limited liability company agreement, each member’s interest will reflect, over time, the impact of the profitability of CFN, any member contributions made to CFN and withdrawals and distributions received from CFN. For financial reporting purposes, the assets, liabilities and earnings of the strategic venture are consolidated into our financial statements. CHS’ interest in the strategic venture is recorded in noncontrolling interest in our consolidated financial statements. CHS also receives deliveries pursuant to a supply agreement under which CHS has the right to purchase annually from CFN up to approximately 1.1 million tons of granular urea and 580,000 tons of UAN at market prices. As a result of its equity interest in CFN, CHS is entitled to semi-annual cash distributions from CFN. We are also entitled to semi-annual cash distributions from CFN. The amounts of distributions from CFN to us and CHS are based generally on the profitability of CFN and determined based on the volume of granular urea and UAN sold by CFN to us and CHS pursuant to supply agreements, less a formula driven amount based primarily on the cost of natural gas used to produce the granular urea and UAN, and adjusted for the allocation of items such as operational efficiencies and overhead amounts. Additionally, under the terms of the strategic venture, we have recognized an embedded derivative related to our credit rating. See Note 9—Fair Value Measurements for additional information.

On January 31, 2023, the CFN Board of Managers approved semi-annual distribution payments for the distribution period ended December 31, 2022, in accordance with CFN’s limited liability company agreement. On January 31, 2023, CFN distributed $255 million to CHS for the distribution period ended December 31, 2022.