Capacity Expansion Projects Complete and Generating Cash
Excess Global Nitrogen Supply Pressured Fourth Quarter Results
Reduced Chinese Urea Exports, Improving Prices Suggest Positive First
Half of 2017
DEERFIELD, Ill.--(BUSINESS WIRE)--
CF Industries Holdings, Inc. (NYSE: CF), the global leader in nitrogen
fertilizer manufacturing and distribution, today announced results for
its fourth quarter and full year ended December 31, 2016.
Fourth Quarter Highlights
-
Net loss of $320 million, or $1.38 per diluted share; adjusted net loss(1)
of $90 million, or $0.39 per diluted share(1)
-
EBITDA(2) loss of $135 million; adjusted EBITDA(2)
of $133 million
-
New ammonia and urea plants at Port Neal Nitrogen Complex in operation
-
Refinanced private placement notes
-
Shipments of UAN in fourth quarter exceeded two million tons, a
company record
-
Record fourth quarter exports above 500,000 tons
-
Net loss includes $134 million non-cash impairment charge related to
Point Lisas Nitrogen Limited (PLNL)
Full Year Highlights
-
Net loss of $277 million, or $1.19 per diluted share; adjusted net
earnings(1) of $109 million or $0.47 per diluted share(1)
-
EBITDA(2) of $395 million; adjusted EBITDA(2) of
$858 million
-
Accelerated tax depreciation on capacity expansion projects driving
estimated federal and state tax refunds of approximately $800 million,
expect to receive in third quarter 2017
-
Record exports of approximately 1.4 million tons in 2016, 110 percent
increase over prior year
_________________________________________________________________________
|
(1)
|
|
See reconciliations of adjusted net earnings and adjusted net
earnings per diluted share to the most directly comparable GAAP
measures in the tables accompanying this release.
|
|
(2)
| |
EBITDA is defined as net earnings attributable to common
stockholders plus interest expense (income)-net, income taxes, and
depreciation and amortization. See reconciliations of EBITDA and
adjusted EBITDA to the most directly comparable GAAP measures in the
tables accompanying this release.
|
| |
|
Overview of Results
CF Industries Holdings, Inc., today announced a fourth quarter 2016 net
loss attributable to common stockholders of $320 million, or $1.38 per
diluted share, and adjusted net loss of $90 million, or $0.39 per
diluted share. Fourth quarter 2016 EBITDA loss was $135 million, and
adjusted EBITDAwas $133 million. These results compare to
fourth quarter 2015 net earnings attributable to common stockholders of
$27 million, or $0.11 per diluted share; adjusted net earnings of $168
million, or $0.72 per diluted share; EBITDA of $254 million; and
adjusted EBITDA of $445 million. Fourth quarter 2016 results include a
realized loss on natural gas hedges of $5 million for the fourth quarter
of 2016, compared to a realized loss on natural gas hedges of $30
million for the fourth quarter of 2015.
For the full year 2016, net loss attributable to common stockholders was
$277 million, or $1.19 per diluted share, and adjusted net earnings was
$109 million, or $0.47 per diluted share. Full year 2016 EBITDA was $395
million, and adjusted EBITDA was $858 million. These results compare to
full year 2015 net earnings attributable to common stockholders of $700
million, or $2.96 per diluted share; adjusted net earnings for the full
year 2015 of $896 million, or $3.79 per diluted share; EBITDA of $1.67
billion; and adjusted EBITDA of $1.98 billion. Full year 2016 results
include a realized loss on natural gas hedges of $133 million, compared
to a realized loss on natural gas hedges of $70 million for the full
year 2015.
The company expects to receive tax refunds of approximately $800 million
due to the carryback of certain federal and state tax losses from the
2016 tax year to prior periods. These tax losses are primarily related
to accelerated tax depreciation of the capacity expansion projects that
were placed in service in 2016. The cash refunds related to this tax
loss carryback are expected to be received in the third quarter of 2017.
During the fourth quarter, the company completed the issuance of $1.25
billion of senior secured notes. The proceeds were used primarily to
fund the prepayment of the $1.0 billion principal amount of CF
Industries, Inc.'s senior notes due 2022, 2025 and 2027, plus a related
make-whole amount of approximately $170 million.
CF Industries has completed a review of its equity method investment in
PLNL, the company's 50 percent interest in an ammonia production joint
venture located in the Republic of Trinidad and Tobago. This review
assessed the recoverability of the company's carrying value of the
investment. During the fourth quarter of 2016, the company recognized an
impairment charge of $134 million relating to its investment in PLNL due
to projected longer-term challenges with gas availability and potential
price increases from the government-controlled gas supplier.
Manufacturing Operations
CF Industries' manufacturing network operated safely and efficiently
during the fourth quarter of 2016. As of December 31, 2016, CF
Industries' 12-month rolling average recordable incident rate was 1.16
incidents per 200,000 work hours, well below industry averages. Ammonia
utilization rate during the quarter across the manufacturing network was
99 percent.
During the fourth quarter, the company completed its capacity expansion
projects as the new ammonia and urea plants at the Port Neal Nitrogen
Complex were successfully commissioned and started-up. Both new plants
are producing on-spec product for sale.
“Our expansion projects are complete, and the company's production
capacity is now 25 percent greater on a nutrient ton basis than it was
this time last year," said Tony Will, president and chief executive
officer, CF Industries Holdings, Inc. "With our cash generation
capability strengthened significantly as a result, and the structural
advantages of being the low cost producer in an import-dependent region,
we believe CF is the best-positioned company to benefit both from the
improving market in the first half of 2017 and from the sustained
recovery we see ahead for the sector over the next several years."
Sales Overview
Net sales in the fourth quarter of 2016 decreased to $867 million from
$1,115 million in the same period last year due to lower average selling
prices across all segments. Excess global nitrogen supply continued to
pressure prices as it had throughout 2016. The average selling price for
ammonia was $277 per ton in the fourth quarter of 2016 compared to $458
per ton in the fourth quarter of 2015. Similarly, the average selling
price for urea was $214 per ton in the fourth quarter of 2016 compared
to $275 per ton in the fourth quarter of 2015, and the average selling
price for UAN was $149 per ton in the fourth quarter of 2016 compared to
$230 per ton in the fourth quarter of 2015.
Sales volume for the quarter increased compared to the fourth quarter of
2015, partially offsetting the decrease in average prices. Greater
volumes were available for sale due to the company's completed capacity
expansion projects. Additionally, exports of UAN and ammonia were
significantly higher year-over-year as the company continues to develop
a global portfolio of customers in order to optimize the overall
business.
Cost of sales decreased in the fourth quarter of 2016 compared to the
fourth quarter of 2015 due primarily to an unrealized net mark-to-market
gain on natural gas derivatives of $91 million in the fourth quarter of
2016 compared to an unrealized net mark-to-market loss on natural gas
derivatives of $97 million in the fourth quarter of 2015. This was
partially offset by the impact of higher volumes in 2016, $34 million in
start-up costs related to the new Port Neal ammonia and urea plants, and
an increase of $43 million in depreciation related to the capacity
expansion projects compared to the fourth quarter of 2015.
In the fourth quarter of 2016, the average cost of natural gas reflected
in cost of sales for the company was $3.24 per MMBtu, which includes a
realized loss of $0.06 per MMBtu on natural gas hedges, totaling
$5 million. This compares to the average cost of natural gas in cost of
sales of $3.23 per MMBtu for the fourth quarter of 2015, which included
a realized loss of $0.41 per MMBtu on natural gas hedges totaling $30
million. During the fourth quarter of 2016, the average price of natural
gas at Henry Hub in North America was $2.99 per MMBtu, and the average
price of natural gas at the National Balancing Point in the United
Kingdom was $5.69 per MMBtu.
The company did not enter into any additional natural gas hedges in the
fourth quarter of 2016.
Outlook
Global nitrogen prices rose during the fourth quarter of 2016. U.S.
prices also increased, but remained below international parity. The
average U.S. Gulf urea barge price was approximately $180 per ton at the
start of the fourth quarter and increased to approximately $240 per ton
by the end of the quarter. The average U.S. Gulf UAN barge price was
approximately $130 per ton at the start of the fourth quarter and
increased to $153 per ton by the end of the quarter.
A decline in Chinese urea exports, from more than one million tonnes per
month in the first quarter of 2016 to an average of approximately
470,000 tonnes per month in the fourth quarter, has been a key driver of
increased global nitrogen prices. Rising costs for marginal producers in
China, including significantly higher coal costs compared to the middle
of 2016 along with reduced urea subsidies, and concerns over pollution
and air quality drove urea operating rates, according to published
reports, down to approximately 50 percent in that country during the
fourth quarter. At these operating rates, Chinese demand for urea is
expected to exceed available domestic supply during the spring. Chinese
manufacturers will need to increase urea production, or purchasers will
need to import urea, in order to meet seasonal domestic needs. As a
result, CF expects global prices will be supported through the first
half of the year due to limited Chinese export availability. For the
full year 2017, Chinese urea exports are expected to decline from 8.9
million tonnes in 2016 to an anticipated range of approximately 5-6
million tonnes.
Higher hydrocarbon feedstock costs compared to the lows of early and
mid-2016 are also supporting higher nitrogen prices. Higher oil prices
have led to increased prices for contract gas in Europe. The
strengthened Russian ruble has led to higher U.S. dollar gas prices in
that country.
Import activity into North America during the fourth quarter of 2016 was
lower than the fourth quarter of 2015 driven in part by regional prices
that were below international parity. Additionally, the impact of the
new North American capacity brought online during 2016 and expectations
for the startup of additional new capacity in the region lowered the
perceived economic incentive for North American purchasers to import
product.
CF Industries expects North American demand for nitrogen in 2017 to be
relatively unchanged compared to 2016. In the United States, the company
forecasts 89.5 million acres of corn planted and fewer than 50 million
acres of wheat planted, while in Canada lower grain planting is
anticipated to be largely offset by increased canola plantings. As a
result, total North American nitrogen fertilizer demand is projected to
be roughly 16 million nutrient tons for full year 2017. Based on this,
approximately 7 million nutrient tons of imported nitrogen will be
required to meet North American agricultural and industrial demand for
the full year 2017.
The company expects nitrogen prices in North America during the first
half of 2017 to continue to improve into the second quarter, driven by
the same factors currently supporting the higher global prices. As
additional nitrogen capacity comes online globally during 2017,
including a significant increase in North America, market price
uncertainty exists for the second half of the year before a more
sustained global nitrogen price recovery is expected to begin in 2018.
Capital Expenditures
New capital expenditures for 2017 are estimated to be in the range of
approximately $400 to $450 million for sustaining and other, a level
that continues the company's commitment to safe, reliable and compliant
operations. Actual cash expenditures will also reflect amounts accrued
but not paid in 2016. At December 31, 2016, approximately $225 million
was accrued related to activities in 2016.
Liquidity
As of December 31, 2016, the company had a balance of cash and cash
equivalents of $1.16 billion, had no borrowings outstanding under its
revolving credit facility and was in compliance with all applicable
covenant requirements under its debt instruments.
CHS Inc. Distribution
On January 31, 2017, the Board of Managers of CF Industries Nitrogen,
LLC approved a semi-annual distribution payment to CHS Inc. of $48
million for the distribution period ended December 31, 2016. The
distribution was paid on January 31, 2017. The total distribution
approved pertaining to 2016 was approximately $128 million.
|
|
|
| |
| |
Consolidated Results | | | | | | |
| | | | | |
|
| | | | Three months ended | | Twelve months ended |
| | | | December 31, | | December 31, |
| | | | 2016 |
| 2015 | | 2016 |
| 2015 |
| | | | (dollars in millions, except per share and per MMBtu amounts) |
|
Net sales
| | | |
$
|
867
| | |
$
|
1,115
| | |
$
|
3,685
| | |
$
|
4,308
| |
|
Cost of sales
| | | |
773
|
| |
835
|
| |
2,845
|
| |
2,761
|
|
|
Gross margin
| | | |
$
|
94
|
| |
$
|
280
|
| |
$
|
840
|
| |
$
|
1,547
|
|
| | | | | | | | | |
|
|
Gross margin percentage
| | | |
10.8
|
%
| |
25.1
|
%
| |
22.8
|
%
| |
35.9
|
%
|
| | | | | | | | | |
|
|
Net (loss) earnings attributable to common stockholders
| | | |
$
|
(320
|
)
| |
$
|
27
| | |
$
|
(277
|
)
| |
$
|
700
| |
|
Adjusted net (loss) earnings (1) | | | |
$
|
(90
|
)
| |
$
|
168
| | |
$
|
109
| | |
$
|
896
| |
| | | | | | | | | |
|
|
Net (loss) earnings per diluted share
| | | |
$
|
(1.38
|
)
| |
$
|
0.11
| | |
$
|
(1.19
|
)
| |
$
|
2.96
| |
|
Adjusted net (loss) earnings per diluted share(1) | | | |
$
|
(0.39
|
)
| |
$
|
0.72
| | |
$
|
0.47
| | |
$
|
3.79
| |
| | | | | | | | | |
|
|
EBITDA(1) | | | |
$
|
(135
|
)
| |
$
|
254
| | |
$
|
395
| | |
$
|
1,666
| |
|
Adjusted EBITDA(1) | | | |
$
|
133
| | |
$
|
445
| | |
$
|
858
| | |
$
|
1,975
| |
| | | | | | | | | |
|
|
Tons of product sold (000s)
| | | |
4,683
| | |
3,982
| | |
16,957
| | |
13,718
| |
| | | | | | | | | |
|
|
Supplemental data (per MMBtu):
| | | | | | | | | | |
|
Natural gas costs in cost of sales(2) | | | |
$
|
3.18
| | |
$
|
2.82
| | |
$
|
2.61
| | |
$
|
3.00
| |
|
Realized derivatives loss in cost of sales(3) | | | |
0.06
|
| |
0.41
|
| |
0.46
|
| |
0.28
|
|
|
Cost of natural gas in cost of sales
| | | |
$
|
3.24
| | |
$
|
3.23
| | |
$
|
3.07
| | |
$
|
3.28
| |
| | | | | | | | | |
|
|
Average daily market price of natural gas (per MMBtu):
| | | | | | | | | | |
| Henry Hub | | | |
$
|
2.99
| | |
$
|
2.09
| | |
$
|
2.48
| | |
$
|
2.61
| |
|
National Balancing Point UK | | | |
$
|
5.69
| | |
$
|
5.58
| | |
$
|
4.66
| | |
$
|
6.53
| |
| | | | | | | | | |
|
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
| | | |
$
|
(91
|
)
| |
$
|
97
| | |
$
|
(260
|
)
| |
$
|
176
| |
| | | | | | | | | |
|
|
Capital expenditures
| | | |
$
|
392
| | |
$
|
678
| | |
$
|
2,211
| | |
$
|
2,469
| |
| | | | | | | | | |
|
|
Production volume by product tons (000s):
| | | | | | | | | | |
|
Ammonia(4) | | | |
2,326
| | |
2,098
| | |
8,307
| | |
7,673
| |
|
Granular urea
| | | |
914
| | |
758
| | |
3,368
| | |
2,520
| |
|
UAN (32%)
| | | |
1,795
| | |
1,602
| | |
6,698
| | |
5,888
| |
|
AN
| | | |
553
| | |
487
| | |
1,845
| | |
1,283
| |
_______________________________________________________________________________
|
(1)
|
|
See reconciliations of EBITDA, adjusted EBITDA, adjusted net (loss)
earnings and adjusted net (loss) earnings per diluted share to the
most directly comparable GAAP measures in the tables accompanying
this release.
|
|
(2)
| |
Includes the cost of natural gas that is included in cost of sales
during the period under the first-in, first-out inventory cost
method.
|
|
(3)
| |
Includes the realized gains and losses on natural gas derivatives
settled during the period. Excludes unrealized mark-to-market gains
and losses on natural gas derivatives.
|
|
(4)
| |
Gross ammonia production including amounts subsequently upgraded
into other products.
|
| |
|
During the years ended December 31, 2016 and 2015, certain significant
items impacted our financial results. The following table outlines these
significant items and how they impacted the comparability of our
financial results during these periods. For the quarter and year ended
December 31, 2016, we reported a net loss attributable to common
stockholders of $320 million and $277 million, respectively. For the
quarter and year ended December 31, 2015, we reported net earnings
attributable to common stockholders of $27 million and $700 million,
respectively. Positive amounts in the table below are costs or expenses
incurred, while negative amounts are income recognized in the periods
presented.
|
|
| | Three months ended |
| Twelve months ended |
| | | | December 31, |
| December 31, |
| | | | 2016 |
| 2015 | | 2016 |
| 2015 |
| | | | Pre-Tax |
| After-Tax | | Pre-Tax |
| After-Tax | | Pre-Tax |
| After-Tax | | Pre-Tax |
| After-Tax |
| | | | (in millions) |
| Capacity Expansion Projects: | | | | | | | | | | | | |
|
Expansion project depreciation
| | | (1) |
$
|
56
| |
|
$
|
35
| | |
$
|
13
| |
|
$
|
8
| | |
$
|
116
| |
|
$
|
73
| | |
$
|
13
| |
|
$
|
8
| |
|
Start-up costs - Donaldsonville / Port Neal expansion plants
| | | (1) | |
34
| | | |
21
| | | |
—
| | | |
—
| | | |
52
| | | |
32
| | | |
—
| | | |
—
| |
|
Expansion project expenses
| | | (2) | |
14
| | | |
9
| | | |
15
| | | |
9
| | | |
73
| | | |
46
| | | |
51
| | | |
32
| |
|
Loss on foreign currency derivatives
| | | (2) | |
2
| | | |
1
| | | |
3
| | | |
2
| | | |
—
| | | |
—
| | | |
22
| | | |
13
| |
| Strategic Venture with CHS: | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Noncontrolling interest
| | | (7) | |
26
| | | |
26
| | | |
—
| | | |
—
| | | |
93
| | | |
93
| | | |
—
| | | |
—
| |
|
Loss on embedded derivative liability
| | | (2) | |
1
| | | |
1
| | | |
—
| | | |
—
| | | |
23
| | | |
14
| | | |
—
| | | |
—
| |
| Debt Restructuring: | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Loss on debt extinguishment
| | | | |
167
| | | |
105
| | | |
—
| | | |
—
| | | |
167
| | | |
105
| | | |
—
| | | |
—
| |
|
Debt and revolver amendment fees
| | | (3) | |
14
| | | |
8
| | | |
—
| | | |
—
| | | |
16
| | | |
10
| | | |
—
| | | |
—
| |
|
Private Senior Notes amendment arrangement fees
| | | (4) | |
—
| | | |
—
| | | |
—
| | | |
—
| | | |
2
| | | |
1
| | | |
—
| | | |
—
| |
| CF Fertilisers UK Acquisition: | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Gain on remeasurement of CF Fertilisers UK investment
| | | (5) | |
—
| | | |
—
| | | |
—
| | | |
—
| | | |
—
| | | |
—
| | | |
(94
|
)
| | |
(94
|
)
|
| Equity Method Investments: | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Impairment of equity method investment in PLNL
| | | (6) | |
134
| | | |
134
| | | |
62
| | | |
62
| | | |
134
| | | |
134
| | | |
62
| | | |
62
| |
|
Loss on sale of equity method investments
| | | (5) | |
—
| | | |
—
| | | |
—
| | | |
—
| | | |
—
| | | |
—
| | | |
43
| | | |
31
| |
| Transaction Costs and Termination of Agreement with OCI: | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Transaction costs
| | | | |
—
| | | |
—
| | | |
20
| | | |
12
| | | |
179
| | | |
96
| | | |
57
| | | |
37
| |
|
Financing costs related to bridge loan commitment fee
| | | (3) | |
—
| | | |
—
| | | |
—
| | | |
—
| | | |
28
| | | |
18
| | | |
6
| | | |
4
| |
| Other items: | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
| | | (1) | |
(91
|
)
| | |
(57
|
)
| | |
97
| | | |
61
| | | |
(260
|
)
| | |
(163
|
)
| | |
176
| | | |
111
| |
|
Loss (gain) on foreign currency transactions including intercompany
loans
| | | (2) |
|
7
|
|
|
|
8
|
| |
|
(6
|
)
|
|
|
(5
|
)
| |
|
93
|
|
|
|
93
|
| |
|
(8
|
)
|
|
|
—
|
|
| Total Impact of Significant Items | | | |
$
|
364
|
|
|
$
|
291
|
| |
$
|
204
|
|
|
$
|
149
|
| |
$
|
716
|
|
|
$
|
552
|
| |
$
|
328
|
|
|
$
|
204
|
|
_______________________________________________________________________________
| (1) |
|
Included in cost of sales in our consolidated statements of
operations.
|
| (2) | |
Included in other operating-net in our consolidated statements of
operations.
|
| (3) | |
Included in interest expense in our consolidated statements of
operations.
|
| (4) | |
Included in selling, general and administrative expenses in our
consolidated statements of operations.
|
| (5) | |
Included in equity in earnings of non-operating affiliates in our
consolidated statements of operations.
|
| (6) | |
Included in equity in (losses) earnings of operating affiliates in
our consolidated statements of operations.
|
| (7) | |
Included in net earnings attributable to noncontrolling interests in
our consolidated statements of operations.
|
|
|
|
| |
| |
| | | | Three months ended | | Twelve months ended |
| | | | December 31, | | December 31, |
| | | | 2016 |
| 2015 | | 2016 |
| 2015 |
| Subtotals of Amounts Above by Line Item in | | | | | | |
| | | | |
| |
| the Consolidated Statements of Operations: | | | | | | | | | | | | | |
|
Cost of sales
| | | |
$
|
(1
|
)
| | |
$
|
110
| | | |
$
|
(92
|
)
| | |
$
|
189
| |
|
Selling, general and administrative expenses
| | | |
—
| | | |
—
| | | |
2
| | | |
—
| |
|
Transaction costs
| | | |
—
| | | |
20
| | | |
179
| | | |
57
| |
|
Other operating—net
| | | |
24
| | | |
12
| | | |
189
| | | |
65
| |
|
Equity in (losses) earnings of operating affiliates
| | | |
134
| | | |
62
| | | |
134
| | | |
62
| |
|
Interest expense
| | | |
14
| | | |
—
| | | |
44
| | | |
6
| |
|
Loss on debt extinguishment
| | | |
167
| | | |
—
| | | |
167
| | | |
—
| |
|
Equity in earnings of non-operating affiliates—net of taxes
| | | |
—
| | | |
—
| | | |
—
| | | |
(51
|
)
|
|
Net earnings attributable to noncontrolling interests
| | | |
26
|
| | |
—
|
| | |
93
|
| | |
—
|
|
| Total Impact of Significant Items | | | |
$
|
364
|
| | |
$
|
204
|
| | |
$
|
716
|
| | |
$
|
328
|
|
| | | | | | | | | | | | | | | | | | | | |
|
Segment Results
Ammonia Segment
CF Industries’ ammonia segment produces anhydrous ammonia (ammonia),
which is the company’s most concentrated nitrogen fertilizer, containing
82 percent nitrogen. The results of the ammonia segment consist of sales
of ammonia to external customers. In addition, ammonia is the “basic”
nitrogen product that the company upgrades into other nitrogen
fertilizers such as urea, UAN, and AN.
|
|
| |
| |
| | | Three months ended | | Twelve months ended |
| | | December 31, | | December 31, |
| | | 2016 |
| 2015 | | 2016 |
| 2015 |
| | | (dollars in millions, except per ton amounts) |
|
Net sales
| | |
$
|
211
| | |
$
|
375
| | |
$
|
981
| | |
$
|
1,523
| |
|
Cost of sales
| | |
210
|
| |
249
|
| |
715
|
| |
884
|
|
|
Gross margin
| | |
$
|
1
|
| |
$
|
126
|
| |
$
|
266
|
| |
$
|
639
|
|
| | | | | | | | |
|
|
Gross margin percentage
| | |
0.5
|
%
| |
33.6
|
%
| |
27.1
|
%
| |
42.0
|
%
|
| | | | | | | | |
|
|
Sales volume by product tons (000s)
| | |
762
| | |
819
| | |
2,874
| | |
2,995
| |
|
Sales volume by nutrient tons (000s)(1) | | |
626
| | |
671
| | |
2,358
| | |
2,456
| |
| | | | | | | | |
|
|
Average selling price per product ton
| | |
$
|
277
| | |
$
|
458
| | |
$
|
341
| | |
$
|
509
| |
|
Average selling price per nutrient ton(1) | | |
337
| | |
560
| | |
416
| | |
620
| |
| | | | | | | | |
|
|
Gross margin per product ton
| | |
$
|
1
| | |
$
|
154
| | |
$
|
93
| | |
$
|
213
| |
|
Gross margin per nutrient ton(1) | | |
2
| | |
188
| | |
113
| | |
260
| |
| | | | | | | | |
|
|
Depreciation and amortization
| | |
$
|
37
| | |
$
|
20
| | |
$
|
96
| | |
$
|
95
| |
| | | | | | | | |
|
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
| | |
$
|
(30
|
)
| |
$
|
22
| | |
$
|
(85
|
)
| |
$
|
40
| |
_______________________________________________________________________________
|
(1)
|
|
Nutrient tons represent the tons of nitrogen within the product tons.
|
| |
|
Comparison of 2016 to 2015 fourth quarter periods:
-
Ammonia sales volume decreased for the fourth quarter of 2016 compared
to the fourth quarter of 2015 as unfavorable weather and economic
considerations, including declining year-over-year farmer disposable
income and futures prices favoring soybeans over corn, led many
farmers to delay ammonia application and planting decisions until
spring. The decrease was partially offset by a significant increase in
export sales.
-
Ammonia average selling prices decreased primarily due to excess
global nitrogen supply. Additionally, the company's ammonia sales
during the quarter included a higher proportion of lower-priced
industrial and export sales compared to the prior year.
-
Ammonia gross margin per ton decreased in the fourth quarter of 2016
due to lower average selling prices, $32 million of start-up costs
associated with the new Port Neal ammonia plant, and a $17 million
increase in depreciation primarily related to the new Donaldsonville
and Port Neal ammonia plants. The decrease was partially offset by a
$30 million unrealized net mark-to-market gain on natural gas
derivatives in the fourth quarter of 2016 compared to a $22 million
unrealized net mark-to-market loss on natural gas derivatives in the
fourth quarter of 2015.
Granular Urea Segment
CF Industries’ granular urea segment produces granular urea, which
contains 46 percent nitrogen. Produced from ammonia and carbon dioxide,
it has the highest nitrogen content of any of the company’s solid
nitrogen fertilizers.
|
|
| |
| |
| | | Three months ended | | Twelve months ended |
| | | December 31, | | December 31, |
| | | 2016 |
| 2015 | | 2016 |
| 2015 |
| | | (dollars in millions, except per ton amounts) |
|
Net sales
| | |
$
|
189
| | |
$
|
194
| | |
$
|
831
| | |
$
|
788
| |
|
Cost of sales
| | |
139
|
| |
145
|
| |
584
|
| |
469
|
|
|
Gross margin
| | |
$
|
50
|
| |
$
|
49
|
| |
$
|
247
|
| |
$
|
319
|
|
| | | | | | | | |
|
|
Gross margin percentage
| | |
26.5
|
%
| |
25.2
|
%
| |
29.7
|
%
| |
40.4
|
%
|
| | | | | | | | |
|
|
Sales volume by product tons (000s)
| | |
883
| | |
705
| | |
3,597
| | |
2,460
| |
|
Sales volume by nutrient tons (000s)(1) | | |
406
| | |
325
| | |
1,654
| | |
1,132
| |
| | | | | | | | |
|
|
Average selling price per product ton
| | |
$
|
214
| | |
$
|
275
| | |
$
|
231
| | |
$
|
320
| |
|
Average selling price per nutrient ton(1) | | |
466
| | |
597
| | |
502
| | |
696
| |
| | | | | | | | |
|
|
Gross margin per product ton
| | |
$
|
57
| | |
$
|
69
| | |
$
|
69
| | |
$
|
129
| |
|
Gross margin per nutrient ton(1) | | |
123
| | |
150
| | |
149
| | |
281
| |
| | | | | | | | |
|
|
Depreciation and amortization
| | |
$
|
37
| | |
$
|
20
| | |
$
|
112
| | |
$
|
51
| |
| | | | | | | | |
|
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
| | |
$
|
(23
|
)
| |
$
|
26
| | |
$
|
(67
|
)
| |
$
|
47
| |
_______________________________________________________________________________
|
(1)
|
|
Nutrient tons represent the tons of nitrogen within the product tons.
|
| |
|
Comparison of 2016 to 2015 fourth quarter periods:
-
Granular urea sales volume increased for the quarter primarily due to
additional volume available for sale from the new urea capacity at the
company's Donaldsonville Nitrogen Complex.
-
Granular urea average selling price per ton decreased due to excess
global nitrogen supply.
-
Granular urea gross margin per ton decreased due to lower average
selling prices, a $17 million increase in depreciation and
amortization primarily associated with the new Donaldsonville and Port
Neal urea plants and $2 million in start-up costs associated with the
new Port Neal urea plant, offset by a $23 million unrealized net
mark-to-market gain on natural gas derivatives in the fourth quarter
of 2016 compared to a $26 million unrealized net mark-to-market loss
on natural gas derivatives in the fourth quarter of 2015.
UAN Segment
CF Industries’ UAN segment produces urea ammonium nitrate solution
(UAN). UAN is a liquid fertilizer product with nitrogen content that
typically ranges from 28 percent to 32 percent and is produced by
combining urea and ammonium nitrate in solution.
|
|
| |
| |
| | | Three months ended | | Twelve months ended |
| | | December 31, | | December 31, |
| | | 2016 |
| 2015 | | 2016 |
| 2015 |
| | | (dollars in millions, except per ton amounts) |
|
Net sales
| | |
$
|
305
| | |
$
|
368
| | |
$
|
1,196
| | |
$
|
1,480
| |
|
Cost of sales
| | |
274
|
| |
277
|
| |
920
|
| |
955
|
|
|
Gross margin
| | |
$
|
31
|
| |
$
|
91
|
| |
$
|
276
|
| |
$
|
525
|
|
| | | | | | | | |
|
|
Gross margin percentage
| | |
10.2
|
%
| |
24.8
|
%
| |
23.1
|
%
| |
35.5
|
%
|
| | | | | | | | |
|
|
Sales volume by product tons (000s)
| | |
2,047
| | |
1,599
| | |
6,681
| | |
5,865
| |
|
Sales volume by nutrient tons (000s)(1) | | |
648
| | |
507
| | |
2,109
| | |
1,854
| |
| | | | | | | | |
|
|
Average selling price per product ton
| | |
$
|
149
| | |
$
|
230
| | |
$
|
179
| | |
$
|
252
| |
|
Average selling price per nutrient ton(1) | | |
471
| | |
724
| | |
567
| | |
798
| |
| | | | | | | | |
|
|
Gross margin per product ton
| | |
$
|
15
| | |
$
|
57
| | |
$
|
41
| | |
$
|
90
| |
|
Gross margin per nutrient ton(1) | | |
48
| | |
180
| | |
131
| | |
283
| |
| | | | | | | | |
|
|
Depreciation and amortization
| | |
$
|
72
| | |
$
|
52
| | |
$
|
247
| | |
$
|
192
| |
| | | | | | | | |
|
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
| | |
$
|
(29
|
)
| |
$
|
40
| | |
$
|
(81
|
)
| |
$
|
73
| |
_______________________________________________________________________________
|
(1)
|
|
Nutrient tons represent the tons of nitrogen within the product tons.
|
| |
|
Comparison of 2016 to 2015 fourth quarter periods:
-
UAN sales volume increased in the fourth quarter of 2016 due to
additional volume available for sale from the new UAN capacity at the
company's Donaldsonville Nitrogen Complex. During the quarter,
customers built UAN inventories in preparation for spring after having
delayed purchases earlier in the year. The company also exported a
significant amount of UAN during the quarter.
-
UAN average selling price per ton decreased due to excess global
nitrogen supply. Additionally, the company's UAN sales during the
quarter included a higher proportion of lower-priced export sales
compared to the prior year.
-
UAN gross margin per ton decreased due to lower average selling prices
and a $20 million increase in depreciation and amortization primarily
associated with the new Donaldsonville UAN plant, partially offset by
a $29 million unrealized net mark-to-market gain on natural gas
derivatives in the fourth quarter of 2016 compared to a $40 million
unrealized net mark-to-market loss on natural gas derivatives in the
fourth quarter of 2015.
AN Segment
CF Industries' AN segment produces ammonium nitrate (AN). AN is used as
a nitrogen fertilizer with nitrogen content between 29% to 35%, and also
is used by industrial customers for commercial explosives and blasting
systems. AN is produced at the company's Yazoo City, Mississippi;
Billingham, United Kingdom; and Ince, United Kingdom, complexes.
|
|
| |
| |
| | | Three months ended | | Twelve months ended |
| | | December 31, | | December 31, |
| | | 2016 |
| 2015 | | 2016 |
| 2015 |
| | | (dollars in millions, except per ton amounts) |
|
Net sales
| | |
$
|
93
| | |
$
|
115
| | |
$
|
411
| | |
$
|
294
| |
|
Cost of sales
| | |
93
|
| |
112
|
| |
409
|
| |
291
|
|
|
Gross margin
| | |
$
|
—
|
| |
$
|
3
|
| |
$
|
2
|
| |
$
|
3
|
|
| | | | | | | | |
|
|
Gross margin percentage
| | |
—
|
%
| |
3.0
|
%
| |
0.5
|
%
| |
1.1
|
%
|
| | | | | | | | |
|
|
Sales volume by product tons (000s)
| | |
541
| | |
495
| | |
2,151
| | |
1,290
| |
|
Sales volume by nutrient tons (000s)(1) | | |
181
| | |
166
| | |
726
| | |
437
| |
| | | | | | | | |
|
|
Average selling price per product ton
| | |
$
|
172
| | |
$
|
233
| | |
$
|
191
| | |
$
|
228
| |
|
Average selling price per nutrient ton(1) | | |
514
| | |
693
| | |
566
| | |
673
| |
| | | | | | | | |
|
|
Gross margin per product ton
| | |
$
|
—
| | |
$
|
7
| | |
$
|
1
| | |
$
|
2
| |
|
Gross margin per nutrient ton(1) | | |
—
| | |
20
| | |
3
| | |
7
| |
| | | | | | | | |
|
|
Depreciation and amortization
| | |
$
|
21
| | |
$
|
22
| | |
$
|
93
| | |
$
|
66
| |
| | | | | | | | |
|
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
| | |
$
|
(3
|
)
| |
$
|
9
| | |
$
|
(10
|
)
| |
$
|
16
| |
_______________________________________________________________________________
|
(1)
|
|
Nutrient tons represent the tons of nitrogen within the product tons.
|
| |
|
Comparison of 2016 to 2015 fourth quarter periods:
-
AN sales volume was higher compared to the fourth quarter of 2015.
Agricultural AN sales in the United Kingdom increased as farmers
purchased AN early driven by lower nitrogen prices, improving crop
prices and higher European Union support payments. AN sales volumes in
North America also increased due to additional production volume of
industrial AN at the company's Yazoo City Nitrogen Complex.
-
AN average selling price per ton decreased primarily due to excess
global nitrogen supply.
-
AN gross margin per ton decreased primarily due to lower selling
prices, which were partially offset by a $3 million unrealized net
mark-to-market gain on natural gas derivatives in the fourth quarter
of 2016 compared to a $9 million unrealized net mark-to-market loss on
natural gas derivatives in the fourth quarter of 2015.
Other Segment
CF Industries’ Other segment includes diesel exhaust fluid (DEF), urea
liquor, nitric acid and compound fertilizer products (NPKs).
|
|
| |
| |
| | | Three months ended | | Twelve months ended |
| | | December 31, | | December 31, |
| | | 2016 |
| 2015 | | 2016 |
| 2015 |
| | | (dollars in millions, except per ton amounts) |
|
Net sales
| | |
$
|
69
| | |
$
|
63
| | |
$
|
266
| | |
$
|
223
| |
|
Cost of sales
| | |
57
|
| |
52
|
| |
217
|
| |
162
|
|
|
Gross margin
| | |
$
|
12
|
| |
$
|
11
|
| |
$
|
49
|
| |
$
|
61
|
|
| | | | | | | | |
|
|
Gross margin percentage
| | |
17.4
|
%
| |
16.8
|
%
| |
18.4
|
%
| |
27.2
|
%
|
| | | | | | | | |
|
|
Sales volume by product tons (000s)
| | |
450
| | |
364
| | |
1,654
| | |
1,108
| |
|
Sales volume by nutrient tons (000s)(1) | | |
87
| | |
71
| | |
317
| | |
215
| |
| | | | | | | | |
|
|
Average selling price per product ton
| | |
$
|
153
| | |
$
|
175
| | |
$
|
161
| | |
$
|
202
| |
|
Average selling price per nutrient ton(1) | | |
793
| | |
899
| | |
839
| | |
1,040
| |
| | | | | | | | |
|
|
Gross margin per product ton
| | |
$
|
27
| | |
$
|
29
| | |
$
|
30
| | |
$
|
55
| |
|
Gross margin per nutrient ton(1) | | |
138
| | |
151
| | |
155
| | |
283
| |
| | | | | | | | |
|
|
Depreciation and amortization
| | |
$
|
12
| | |
$
|
9
| | |
$
|
46
| | |
$
|
35
| |
| | | | | | | | |
|
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
| | |
$
|
(6
|
)
| |
$
|
—
| | |
$
|
(17
|
)
| |
$
|
—
| |
_______________________________________________________________________________
|
(1)
|
|
Nutrient tons represent the tons of nitrogen within the product tons.
|
| |
|
Comparison of 2016 to 2015 fourth quarter periods:
-
Other segment volume was higher due primarily to higher year-over-year
sales of DEF as the company continues to grow its North American DEF
business.
-
Other segment average selling price per ton decreased due to excess
global nitrogen supply.
-
Other segment gross margin per ton decreased primarily due to lower
average selling prices partially offset by a $6 million unrealized net
mark-to-market gain on natural gas derivatives in the fourth quarter
of 2016.
Dividend Payment
On February 8, 2017, CF Industries’ Board of Directors declared a
quarterly dividend of $0.30 per common share. The dividend will be paid
on February 28, 2017 to stockholders of record as of February 17, 2017.
Conference Call
CF Industries will hold a conference call to discuss its fourth quarter
2016 results at 9:00 a.m. ET on Thursday, February 16, 2017. This
conference call will include discussion of CF Industries' business
environment and outlook. 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, Canada and the
United Kingdom, 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.
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, EBITDA per ton, EBITDA as a percent of net sales, adjusted
EBITDA, adjusted EBITDA per ton, adjusted EBITDA as a percent of net
sales, adjusted net (loss) earnings, and adjusted net (loss) earnings
per diluted share, which are non-GAAP financial measures, provide
additional meaningful information regarding the company's performance
and financial strength. 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, EBITDA per ton, EBITDA as
a percent of net sales, adjusted EBITDA, adjusted EBITDA per ton,
adjusted EBITDA as a percent of net sales, adjusted net (loss) earnings,
and adjusted net (loss) earnings per diluted share included in this
release may not be comparable to similarly titled measures of other
companies. Reconciliations of EBITDA, EBITDA per ton, EBITDA as a
percent of net sales, adjusted EBITDA, adjusted EBITDA per ton, adjusted
EBITDA as a percent of net sales, adjusted net (loss) earnings, and
adjusted net (loss) earnings per diluted share to the most directly
comparable GAAP measures 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 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,” “project,” “will” or “would” 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
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; the
volatility of natural gas prices in North America and Europe;
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; the Company’s ability to manage its indebtedness;
operating and financial restrictions imposed on the Company and its
subsidiaries by the Company's senior secured revolving credit agreement;
risks associated with the Company’s incurrence of additional
indebtedness; the Company's ability to maintain compliance with
covenants under the agreements governing its indebtedness; downgrades of
the Company’s credit ratings; risks associated with cyber security;
weather conditions; risks associated with the Company’s ability to
utilize its tax net operating losses and other tax assets, including the
risk that the use of such tax benefits is limited by an “ownership
change” (as defined under the Internal Revenue Code and related Internal
Revenue Service pronouncements); risks associated with changes in tax
laws and disagreements with taxing authorities; 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; and
deterioration of global market and economic conditions.
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 and
quarterly reports on Form 10-K and Form 10-Q, which are 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.
|
|
CF INDUSTRIES HOLDINGS, INC. SELECTED FINANCIAL INFORMATION CONSOLIDATED STATEMENTS OF OPERATIONS |
|
|
| |
| |
| | | Three months ended | | Twelve months ended |
| | | December 31, | | December 31, |
| | | 2016 |
| 2015 | | 2016 |
| 2015 |
| | | (in millions, except per share amounts) |
|
Net sales
| | |
$
|
867
| | |
$
|
1,115
| | |
$
|
3,685
| | |
$
|
4,308
| |
|
Cost of sales
| | |
773
|
| |
835
|
| |
2,845
|
| |
2,761
|
|
|
Gross margin
| | |
94
|
| |
280
|
| |
840
|
| |
1,547
|
|
|
Selling, general and administrative expenses
| | |
33
| | |
50
| | |
174
| | |
170
| |
|
Transaction costs
| | |
—
| | |
20
| | |
179
| | |
57
| |
|
Other operating—net
| | |
27
|
| |
18
|
| |
208
|
| |
92
|
|
|
Total other operating costs and expenses
| | |
60
| | |
88
| | |
561
| | |
319
| |
|
Equity in (losses) earnings of operating affiliates
| | |
(134
|
)
| |
(55
|
)
| |
(145
|
)
| |
(35
|
)
|
|
Operating (loss) earnings
| | |
(100
|
)
| |
137
| | |
134
| | |
1,193
| |
|
Interest expense
| | |
70
| | |
40
| | |
200
| | |
133
| |
|
Interest income
| | |
(1
|
)
| |
(1
|
)
| |
(5
|
)
| |
(2
|
)
|
|
Loss on debt extinguishment
| | |
167
| | |
—
| | |
167
| | |
—
| |
|
Other non-operating—net
| | |
(1
|
)
| |
(1
|
)
| |
(2
|
)
| |
4
|
|
|
(Loss) earnings before income taxes and equity in earnings of
non-operating affiliates
| | |
(335
|
)
| |
99
| | |
(226
|
)
| |
1,058
| |
|
Income tax (benefit) provision
| | |
(47
|
)
| |
63
| | |
(68
|
)
| |
396
| |
|
Equity in earnings of non-operating affiliates—net of taxes
| | |
—
|
| |
—
|
| |
—
|
| |
72
|
|
|
Net (loss) earnings
| | |
(288
|
)
| |
36
| | |
(158
|
)
| |
734
| |
|
Less: Net earnings attributable to noncontrolling interests
| | |
32
|
| |
9
|
| |
119
|
| |
34
|
|
|
Net (loss) earnings attributable to common stockholders
| | |
$
|
(320
|
)
| |
$
|
27
|
| |
$
|
(277
|
)
| |
$
|
700
|
|
| | | | | | | | |
|
|
Net (loss) earnings per share attributable to common stockholders:
| | | | | | | | | |
|
Basic
| | |
$
|
(1.38
|
)
| |
$
|
0.11
|
| |
$
|
(1.19
|
)
| |
$
|
2.97
|
|
|
Diluted
| | |
$
|
(1.38
|
)
| |
$
|
0.11
|
| |
$
|
(1.19
|
)
| |
$
|
2.96
|
|
| | | | | | | | |
|
|
Weighted-average common shares outstanding:
| | | | | | | | | |
|
Basic
| | |
233.1
|
| |
233.1
|
| |
233.1
|
| |
235.3
|
|
|
Diluted
| | |
233.1
|
| |
233.8
|
| |
233.1
|
| |
236.1
|
|
|
|
CF INDUSTRIES HOLDINGS, INC. SELECTED FINANCIAL INFORMATION CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
| |
| |
| | | | December 31, | | December 31, |
| | | | 2016 | | 2015 |
| | | | (in millions) |
| Assets | | | | | | |
|
Current assets:
| | | | | | |
|
Cash and cash equivalents
| | | |
$
|
1,164
| | |
$
|
286
|
|
Restricted cash
| | | |
5
| | |
23
|
|
Accounts receivable—net
| | | |
236
| | |
267
|
|
Inventories
| | | |
339
| | |
321
|
|
Prepaid income taxes
| | | |
841
| | |
185
|
|
Other current assets
| | | |
70
|
| |
45
|
|
Total current assets
| | | |
2,655
| | |
1,127
|
|
Property, plant and equipment—net
| | | |
9,652
| | |
8,539
|
|
Investments in affiliates
| | | |
139
| | |
298
|
| Goodwill | | | |
2,345
| | |
2,390
|
|
Other assets
| | | |
340
|
| |
329
|
| Total assets | | | |
$
|
15,131
|
| |
$
|
12,683
|
| | | | | |
|
| Liabilities and Equity | | | | | | |
|
Current liabilities:
| | | | | | |
|
Accounts payable and accrued expenses
| | | |
$
|
638
| | |
$
|
918
|
|
Income taxes payable
| | | |
1
| | |
5
|
|
Customer advances
| | | |
42
| | |
162
|
|
Other current liabilities
| | | |
5
|
| |
130
|
|
Total current liabilities
| | | |
686
|
| |
1,215
|
|
Long-term debt
| | | |
5,778
| | |
5,537
|
|
Deferred income taxes
| | | |
1,630
| | |
916
|
|
Other liabilities
| | | |
545
| | |
628
|
|
Equity:
| | | | | | |
|
Stockholders' equity
| | | |
3,348
| | |
4,035
|
|
Noncontrolling interests
| | | |
3,144
|
| |
352
|
|
Total equity
| | | |
6,492
|
| |
4,387
|
| Total liabilities and equity | | | |
$
|
15,131
|
| |
$
|
12,683
|
|
|
CF INDUSTRIES HOLDINGS, INC. SELECTED FINANCIAL INFORMATION CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
|
| |
| |
| | | Three months ended | | Twelve months ended |
| | | December 31, | | December 31, |
| | | 2016 |
| 2015 | | 2016 |
| 2015 |
| | | (in millions) |
| Operating Activities: | | | | | | | | | |
|
Net (loss) earnings
| | |
$
|
(288
|
)
| |
$
|
36
| | |
$
|
(158
|
)
| |
$
|
734
| |
|
Adjustments to reconcile net (loss) earnings to net cash provided by
operating activities:
| | | | | | | | | |
|
Depreciation and amortization
| | |
203
| | |
132
| | |
678
| | |
480
| |
|
Deferred income taxes
| | |
9
| | |
84
| | |
739
| | |
78
| |
|
Stock-based compensation expense
| | |
4
| | |
4
| | |
19
| | |
17
| |
|
Unrealized net (gain) loss on natural gas and foreign currency
derivatives
| | |
(91
|
)
| |
93
| | |
(260
|
)
| |
163
| |
|
Loss on embedded derivative
| | |
1
| | |
—
| | |
23
| | |
—
| |
|
Gain on re-measurement of CF Fertilisers UK investment
| | |
—
| | |
—
| | |
—
| | |
(94
|
)
|
|
Impairment of equity method investment in PLNL
| | |
134
| | |
62
| | |
134
| | |
62
| |
|
Loss on sale of equity method investments
| | |
—
| | |
—
| | |
—
| | |
43
| |
|
Loss on extinguishment of debt
| | |
167
| | |
—
| | |
167
| | |
—
| |
|
Loss on disposal of property, plant and equipment
| | |
2
| | |
3
| | |
10
| | |
21
| |
|
Undistributed earnings of affiliates—net of taxes
| | |
9
| | |
(1
|
)
| |
9
| | |
(3
|
)
|
|
Changes in:
| | | | | | | | | |
|
Accounts receivable—net
| | |
(37
|
)
| |
(20
|
)
| |
18
| | |
(4
|
)
|
|
Inventories
| | |
(3
|
)
| |
1
| | |
(7
|
)
| |
(71
|
)
|
|
Accrued and prepaid income taxes
| | |
(11
|
)
| |
(79
|
)
| |
(676
|
)
| |
(148
|
)
|
|
Accounts payable and accrued expenses
| | |
(11
|
)
| |
10
| | |
(18
|
)
| |
42
| |
|
Customer advances
| | |
(45
|
)
| |
(220
|
)
| |
(120
|
)
| |
(164
|
)
|
|
Other—net
| | |
(17
|
)
| |
28
|
| |
59
|
| |
51
|
|
|
Net cash provided by operating activities
| | |
26
|
| |
133
|
| |
617
|
| |
1,207
|
|
| Investing Activities: | | | | | | | | | |
|
Additions to property, plant and equipment
| | |
(392
|
)
| |
(678
|
)
| |
(2,211
|
)
| |
(2,469
|
)
|
|
Proceeds from sale of property, plant and equipment
| | |
6
| | |
3
| | |
14
| | |
12
| |
|
Proceeds from sale of equity method investment
| | |
—
| | |
—
| | |
—
| | |
13
| |
|
Purchase of CF Fertilisers UK, net of cash acquired
| | |
—
| | |
2
| | |
—
| | |
(552
|
)
|
|
Withdrawals from restricted cash funds
| | |
2
| | |
3
| | |
18
| | |
63
| |
|
Other—net
| | |
(2
|
)
| |
(7
|
)
| |
2
|
| |
(43
|
)
|
|
Net cash used in investing activities
| | |
(386
|
)
| |
(677
|
)
| |
(2,177
|
)
| |
(2,976
|
)
|
| Financing Activities: | | | | | | | | | |
|
Proceeds from long-term borrowings
| | |
1,244
| | |
—
| | |
1,244
| | |
1,000
| |
|
Payments of long-term borrowings
| | |
(1,170
|
)
| |
—
| | |
(1,170
|
)
| |
—
| |
|
Proceeds from short-term borrowings
| | |
—
| | |
—
| | |
150
| | |
367
| |
|
Payments of short-term borrowings
| | |
—
| | |
—
| | |
(150
|
)
| |
(367
|
)
|
|
Payment to CHS related to credit provision
| | |
(5
|
)
| |
—
| | |
(5
|
)
| |
—
| |
|
Financing fees
| | |
(20
|
)
| |
(19
|
)
| |
(31
|
)
| |
(47
|
)
|
|
Dividends paid on common stock
| | |
(71
|
)
| |
(70
|
)
| |
(280
|
)
| |
(282
|
)
|
|
Issuance of noncontrolling interest in CFN
| | |
—
| | |
—
| | |
2,800
| | |
—
| |
|
Distributions to noncontrolling interests
| | |
(8
|
)
| |
(13
|
)
| |
(119
|
)
| |
(45
|
)
|
|
Purchases of treasury stock
| | |
—
| | |
—
| | |
—
| | |
(556
|
)
|
|
Issuances of common stock under employee stock plans
| | |
—
| | |
—
| | |
—
| | |
8
| |
|
Shares withheld for taxes
| | |
—
|
| |
—
|
| |
—
|
| |
(1
|
)
|
|
Net cash (used in) provided by financing activities
| | |
(30
|
)
| |
(102
|
)
| |
2,439
|
| |
77
|
|
|
Effect of exchange rate changes on cash and cash equivalents
| | |
—
|
| |
(11
|
)
| |
(1
|
)
| |
(19
|
)
|
|
(Decrease) increase in cash and cash equivalents
| | |
(390
|
)
| |
(657
|
)
| |
878
| | |
(1,711
|
)
|
|
Cash and cash equivalents at beginning of period
| | |
1,554
|
| |
943
|
| |
286
|
| |
1,997
|
|
|
Cash and cash equivalents at end of period
| | |
$
|
1,164
|
| |
$
|
286
|
| |
$
|
1,164
|
| |
$
|
286
|
|
| | | | | | | | | | | | | | | | |
|
CF INDUSTRIES HOLDINGS, INC.
SELECTED FINANCIAL
INFORMATION
NON-GAAP DISCLOSURE ITEMS
Reconciliation of net (loss) earnings, net (loss) earnings per ton
and net (loss) earnings as a percent of net sales (GAAP measures) to
EBITDA, EBITDA per ton, EBITDA as a percent of net sales, adjusted
EBITDA, adjusted EBITDA per ton and adjusted EBITDA as a percent of net
sales (non-GAAP measures), as applicable:
EBITDA is defined as net (loss) earnings attributable to common
stockholders plus interest expense (income)-net, income taxes, and
depreciation 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 interests. The company has presented EBITDA, EBITDA per
ton and EBITDA as a percent of net sales because management uses these
measures to track performance and believes that they are frequently used
by securities analysts, investors and other interested parties in the
evaluation of companies in the industry.
Adjusted EBITDA is defined as EBITDA adjusted with the selected items
included in EBITDA as summarized in the table below. The company has
presented adjusted EBITDA, adjusted EBITDA per ton and adjusted EBITDA
as a percent of net sales because management uses these measures, and
believes they are useful to investors, as supplemental financial
measures in the comparison of year-over-year performance.
|
|
| |
| |
| | | Three months ended | | Twelve months ended |
| | | December 31, | | December 31, |
| | | 2016 |
| 2015 | | 2016 |
| 2015 |
| | | (in millions) |
|
Tons of product sold (000s)
| | |
4,683
| | |
3,982
| | |
16,957
| | |
13,718
| |
|
Net sales
| | |
$
|
867
| | |
$
|
1,115
| | |
$
|
3,685
| | |
$
|
4,308
| |
| | | | | | | | |
|
|
Net (loss) earnings attributable to common stockholders
| | |
$
|
(320
|
)
| |
$
|
27
| | |
$
|
(277
|
)
| |
$
|
700
| |
|
Interest expense (income)—net
| | |
69
| | |
39
| | |
195
| | |
131
| |
|
Income tax (benefit) provision(1) | | |
(47
|
)
| |
63
| | |
(68
|
)
| |
385
| |
|
Depreciation and amortization
| | |
203
| | |
132
| | |
678
| | |
480
| |
|
Less: other adjustments
| | |
(40
|
)
| |
(7
|
)
| |
(133
|
)
| |
(30
|
)
|
|
EBITDA
| | |
(135
|
)
| |
254
|
| |
395
|
| |
1,666
|
|
| Net (loss) earnings per ton | | |
$
|
(68.33
|
)
| |
$
|
6.78
| | |
$
|
(16.34
|
)
| |
$
|
51.03
| |
| Net (loss) earnings as a percent of net sales | | |
(36.9
|
)%
| |
2.4
|
%
| |
(7.5
|
)%
| |
16.2
|
%
|
| EBITDA per ton | | |
$
|
(28.83
|
)
| |
$
|
63.79
| | |
$
|
23.29
| | |
$
|
121.45
| |
| EBITDA as a percent of net sales | | |
(15.6
|
)%
| |
22.8
|
%
| |
10.7
|
%
| |
38.7
|
%
|
| | | | | | | | |
|
|
Start-up costs Donaldsonville ammonia
| | |
—
| | |
—
| | |
18
| | |
—
| |
|
Start-up costs Port Neal ammonia and urea
| | |
34
| | |
—
| | |
34
| | |
—
| |
|
Expansion project expenses
| | |
14
| | |
15
| | |
73
| | |
51
| |
|
Loss on foreign currency derivatives
| | |
2
| | |
3
| | |
—
| | |
22
| |
|
Loss on debt extinguishment
| | |
167
| | |
—
| | |
167
| | |
—
| |
|
Private Senior Notes amendment arrangement fees
| | |
—
| | |
—
| | |
2
| | |
—
| |
|
Gain on remeasurement of CF Fertilisers UK investment
| | |
—
| | |
—
| | |
—
| | |
(94
|
)
|
|
Impairment of equity method investment in PLNL
| | |
134
| | |
62
| | |
134
| | |
62
| |
|
Loss on sale of equity method investments
| | |
—
| | |
—
| | |
—
| | |
43
| |
|
Transaction costs(2) | | |
—
| | |
20
| | |
179
| | |
57
| |
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
| | |
(91
|
)
| |
97
| | |
(260
|
)
| |
176
| |
|
Loss on embedded derivative(3) | | |
1
| | |
—
| | |
23
| | |
—
| |
|
Loss (gain) on foreign currency transactions(4) | | |
7
|
| |
(6
|
)
| |
93
|
| |
(8
|
)
|
|
Total adjustments
| | |
268
|
| |
191
|
| |
463
|
| |
309
|
|
| | | | | | | | |
|
|
Adjusted EBITDA
| | |
$
|
133
|
| |
$
|
445
|
| |
$
|
858
|
| |
$
|
1,975
|
|
| Adjusted EBITDA per ton | | |
$
|
28.40
| | |
$
|
111.75
| | |
$
|
50.60
| | |
$
|
143.97
| |
| Adjusted EBITDA as a percent of net sales | | |
15.3
|
%
| |
39.9
|
%
| |
23.3
|
%
| |
45.8
|
%
|
_______________________________________________________________________________
|
(1)
|
|
Includes the tax benefit of $11 million on loss on sale of
non-operating equity method investment for the twelve months ended
December 31, 2015.
|
|
(2)
| |
Transaction costs include the $150 million termination fee paid by
the company to OCI in the second quarter of 2016 as a result of the
termination of the combination agreement with OCI and costs of
various consulting and legal services associated with the company's
proposed combination with certain businesses of OCI and the
company's strategic venture with CHS.
|
|
(3)
| |
Represents the loss in 2016 on the embedded derivative included
within the terms of the company's strategic venture with CHS.
|
|
(4)
| |
Loss (gain) on foreign currency transactions primarily relates to
the unrealized foreign currency exchange rate impact on intercompany
debt that has not been permanently invested.
|
| |
|
Reconciliation of net (loss) earnings attributable to common
stockholders and net (loss) earnings per diluted share attributable to
common stockholders (GAAP measures) to adjusted net (loss) earnings and
adjusted net (loss) earnings per diluted share (non-GAAP measures), as
applicable:
Adjusted net (loss) earnings is defined as net (loss) earnings
attributable to common stockholders adjusted with the impacts of the
selected items included in net (loss) earnings as summarized in the
table below. The company has presented adjusted net (loss) earnings and
adjusted net (loss) earnings per diluted share because management uses
these measures, and believes they are useful to investors, as
supplemental financial measures in the comparison of year-over-year
performance.
|
|
| |
| |
| | | Three months ended | | Twelve months ended |
| | | December 31, | | December 31, |
| | | 2016 |
| 2015 | | 2016 |
| 2015 |
| | | (in millions) |
|
Net (loss) earnings attributable to common stockholders
| | |
$
|
(320
|
)
| |
$
|
27
| | |
$
|
(277
|
)
| |
$
|
700
| |
|
Start-up costs Donaldsonville ammonia
| | |
—
| | |
—
| | |
18
| | |
—
| |
|
Start-up costs Port Neal ammonia and urea
| | |
34
| | |
—
| | |
34
| | |
—
| |
|
Expansion project expenses
| | |
14
| | |
15
| | |
73
| | |
51
| |
|
Loss on foreign currency derivatives
| | |
2
| | |
3
| | |
—
| | |
22
| |
|
Loss on debt extinguishment
| | |
167
| | |
—
| | |
167
| | |
—
| |
|
Financing costs related to Private Senior Notes and Senior Secured
Notes(1) | | |
10
| | |
—
| | |
10
| | |
—
| |
|
Revolver amendment fees(1) | | |
4
| | |
—
| | |
6
| | |
—
| |
|
Private Senior Notes amendment arrangement fees
| | |
—
| | |
—
| | |
2
| | |
—
| |
|
Gain on remeasurement of CF Fertilisers UK investment
| | |
—
| | |
—
| | |
—
| | |
(94
|
)
|
|
Impairment of equity method investment in PLNL
| | |
134
| | |
62
| | |
134
| | |
62
| |
|
Loss on sale of equity method investments
| | |
—
| | |
—
| | |
—
| | |
43
| |
|
Transaction costs(2) | | |
—
| | |
20
| | |
179
| | |
57
| |
|
Financing costs related to bridge loan commitment fee(1) | | |
—
| | |
—
| | |
28
| | |
6
| |
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
| | |
(91
|
)
| |
97
| | |
(260
|
)
| |
176
| |
|
Loss on embedded derivative(3) | | |
1
| | |
—
| | |
23
| | |
—
| |
|
Loss (gain) on foreign currency transactions(4) | | |
7
| | |
(6
|
)
| |
93
| | |
(8
|
)
|
|
Income tax adjustments(5) | | |
(52
|
)
| |
(50
|
)
| |
(121
|
)
| |
(119
|
)
|
|
Total adjustments
| | |
230
|
| |
141
|
| |
386
|
| |
196
|
|
|
Adjusted net (loss) earnings
| | |
$
|
(90
|
)
| |
$
|
168
|
| |
$
|
109
|
| |
$
|
896
|
|
|
|
| |
| |
| | | Three months ended | | Twelve months ended |
| | | December 31, | | December 31, |
| | | 2016 |
| 2015 | | 2016 |
| 2015 |
|
Net (loss) earnings per diluted share attributable to common
stockholders
| | |
$
|
(1.38
|
)
| |
$
|
0.11
| | |
$
|
(1.19
|
)
| |
$
|
2.96
| |
|
Start-up costs Donaldsonville ammonia
| | |
—
| | |
—
| | |
0.08
| | |
—
| |
|
Start-up costs Port Neal ammonia and urea
| | |
0.14
| | |
—
| | |
0.14
| | |
—
| |
|
Expansion project expenses
| | |
0.06
| | |
0.06
| | |
0.31
| | |
0.22
| |
|
Loss on foreign currency derivatives
| | |
0.01
| | |
0.01
| | |
—
| | |
0.09
| |
|
Loss on debt extinguishment
| | |
0.72
| | |
—
| | |
0.72
| | |
—
| |
|
Financing costs related to Private Senior Notes and Senior Secured
Notes(1) | | |
0.04
| | |
—
| | |
0.04
| | |
—
| |
|
Revolver amendment fees(1) | | |
0.02
| | |
—
| | |
0.03
| | |
—
| |
|
Private Senior Notes amendment arrangement fees
| | |
—
| | |
—
| | |
0.01
| | |
—
| |
|
Gain on remeasurement of CF Fertilisers UK investment
| | |
—
| | |
—
| | |
—
| | |
(0.40
|
)
|
|
Impairment of equity method investment in PLNL
| | |
0.57
| | |
0.26
| | |
0.57
| | |
0.26
| |
|
Loss on sale of equity method investments
| | |
—
| | |
—
| | |
—
| | |
0.18
| |
|
Transaction costs(2) | | |
—
| | |
0.08
| | |
0.77
| | |
0.24
| |
|
Financing costs related to bridge loan commitment fee(1) | | |
—
| | |
—
| | |
0.12
| | |
0.02
| |
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
| | |
(0.39
|
)
| |
0.42
| | |
(1.12
|
)
| |
0.75
| |
|
Loss on embedded derivative(3) | | |
—
| | |
—
| | |
0.10
| | |
—
| |
|
Loss (gain) on foreign currency transactions(4) | | |
0.03
| | |
(0.02
|
)
| |
0.40
| | |
(0.03
|
)
|
|
Income tax adjustments(5) | | |
(0.21
|
)
| |
(0.20
|
)
| |
(0.51
|
)
| |
(0.50
|
)
|
|
Total adjustments
| | |
0.99
|
| |
0.61
|
| |
1.66
|
| |
0.83
|
|
|
Adjusted net (loss) earnings per diluted share
| | |
$
|
(0.39
|
)
| |
$
|
0.72
|
| |
$
|
0.47
|
| |
$
|
3.79
|
|
_______________________________________________________________________________
|
(1)
|
|
Not included in the calculation of EBITDA.
|
|
(2)
| |
Transaction costs include the $150 million termination fee paid by
CF Holdings to OCI in the second quarter of 2016 as a result of the
termination of the combination agreement with OCI and costs of
various consulting and legal services associated with the company's
proposed combination with certain businesses of OCI and the
company's strategic venture with CHS.
|
|
(3)
| |
Represents the loss in 2016 on the embedded derivative included
within the terms of the company's strategic venture with CHS.
|
|
(4)
| |
Loss (gain) on foreign currency transactions primarily relates to
the unrealized foreign currency exchange rate impact on intercompany
debt that has not been permanently invested.
|
|
(5)
| |
Represents the adjustment to the GAAP basis tax provision reflecting
the tax impact of the other non-GAAP adjustments. The income tax
adjustments for the twelve months ended December 31, 2016 also
include the tax impact of certain transaction costs that were
capitalized in prior tax periods and that are now deductible as a
result of the termination of the combination agreement with OCI.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170215006322/en/
CF Industries Holdings, Inc.
Media
Chris Close
Director,
Corporate Communications
847-405-2542
cclose@cfindustries.com
or
Investors
Martin
Jarosick
Vice President, Investor Relations
847-405-2045
mjarosick@cfindustries.com
Source: CF Industries Holdings, Inc.