DEERFIELD, Ill.--(BUSINESS WIRE)--
CF Industries Holdings, Inc. (NYSE: CF) today announced that its Board
of Directors has adopted a one-year tax benefits preservation plan (the
"Plan") designed to preserve the Company's ability to utilize its net
operating losses and certain other tax assets. The Company estimates
that it will generate a federal tax net operating loss in excess of $2
billion in 2016, arising principally from accelerated depreciation on
the Company’s capacity expansion projects. The Plan is similar to plans
adopted by other public companies with significant tax attributes, and
was not adopted in response to any specific takeover threat or
accumulation of the Company’s stock.
The purpose of the Plan is to preserve the Company's ability to use its
tax assets to offset taxable income, which would be substantially
limited if the Company experienced an "ownership change" as defined
under Section 382 of the Internal Revenue Code and related Internal
Revenue Service pronouncements. In general, an ownership change would
occur if the Company's "5-percent shareholders," as defined under
Section 382, collectively increase their ownership in the Company by
more than 50 percentage points during the relevant testing period.
Under the Plan, the Company is issuing one Right for each share of its
common stock outstanding at the close of business on September 16, 2016.
The Rights are not taxable to stockholders. Stockholders are not
required to take any action to receive the Rights. The Rights will
expire on the earliest of (i) the close of business on September 5,
2017, (ii) the time at which the Rights are redeemed or exchanged under
the Plan, and (iii) the time at which the Board determines that the Plan
is no longer necessary or desirable for the preservation of the tax
assets.
Pursuant to the Plan, if a shareholder (or group) becomes a 5-percent
shareholder after adoption of the Plan without meeting certain customary
exceptions, the Rights would become exercisable and entitle stockholders
(other than the 5-percent shareholder or group) to purchase additional
shares of CF at a significant discount, resulting in significant
dilution in the economic interest and voting power of the 5-percent
shareholder or group. 5-percent shareholders existing at the time of
adoption of the Plan are grandfathered and will only cause the Rights to
distribute and become exercisable if they acquire an additional 1% of
the Company's outstanding shares. Under the Plan, the Board has the
discretion to exempt certain transactions and persons whose acquisitions
of the Company’s common stock is determined by the Board not to impair
the availability of the Company’s tax assets.
Details of the Plan will be communicated in a current report on Form 8-K
to be filed with the U.S. Securities and Exchange Commission.
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 Canada, the United Kingdom and the United
States, 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 a 50 percent
interest in an ammonia facility in The Republic of Trinidad and Tobago.
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.
Safe Harbor Statement
All statements in this communication by CF Industries Holdings, Inc.
(together with its subsidiaries, the "Company"), other than those
relating to historical facts, are forward-looking statements.
Forward-looking statements can generally be identified by their use of
terms such as "anticipate," "believe," "could," "estimate," "expect,"
"intend," "may," "plan," "predict" or "project" and similar terms and
phrases, including references to assumptions. 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 the
Company's control, which could cause actual results to differ materially
from such statements. These statements may include, but are not limited
to, statements about strategic plans and statements about future
financial and operating results.
Important factors that could cause actual results to differ materially
from those in the forward-looking statements include, among others, the
volatility of natural gas prices in North America and Europe; the
cyclical nature of the Company's business and the agricultural sector;
the global commodity nature of the Company's fertilizer products, the
impact of global supply and demand on the Company's selling prices, and
the intense global competition from other fertilizer producers;
conditions in the U.S. and European agricultural industry; difficulties
in securing the supply and delivery of raw materials, increases in their
costs or delays or interruptions in their delivery; reliance on third
party providers of transportation services and equipment; the
significant risks and hazards involved in producing and handling the
Company's products against which the Company may not be fully insured;
risks associated with cyber security; weather conditions; the Company's
ability to complete its production capacity expansion projects on
schedule as planned, on budget or at all; risks associated with
expansions of the Company's business, including unanticipated adverse
consequences and the significant resources that could be required;
potential liabilities and expenditures related to environmental, health
and safety laws and regulations and permitting requirements; future
regulatory restrictions and requirements related to greenhouse gas
emissions; the seasonality of the fertilizer business; the impact of
changing market conditions on the Company's forward sales programs;
risks involving derivatives and the effectiveness of the Company's risk
measurement and hedging activities; the Company's reliance on a limited
number of key facilities; risks associated with the operation or
management of the strategic venture with CHS Inc. (the "CHS Strategic
Venture"); risks and uncertainties relating to the market prices of the
fertilizer products that are the subject of the supply agreement with
CHS Inc. over the life of the supply agreement and the risk that any
challenges related to the CHS Strategic Venture will harm the Company's
other business relationships; risks associated with the Company's Point
Lisas Nitrogen Limited joint venture; acts of terrorism and regulations
to combat terrorism; risks associated with international operations;
losses on the Company's investments in securities; deterioration of
global market and economic conditions; and the Company's ability to
manage its indebtedness.
More detailed information about factors that may affect the Company's
performance and could cause actual results to differ materially from
those in any forward-looking statements may be found in CF Industries
Holdings, Inc.'s filings with the Securities and Exchange Commission,
including CF Industries Holdings, Inc.'s most recent annual report on
Form 10-K, which is available in the Investor Relations section of the
Company's web site. Forward-looking statements are given only as of the
date of this communication and the Company disclaims 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160906006612/en/
CF Industries Holdings, Inc.
Media
Chris Close
Director,
Corporate Communications
847-405-2542 – cclose@cfindustries.com
or
Investors
Dan
Aldridge
Director, Investor Relations
847-405-2530 – daldridge@cfindustries.com
Source: CF Industries Holdings, Inc.