Completed $500 Million Share Repurchase Authorization
Announces New $1 Billion Share Repurchase Authorization
Strong Nitrogen Demand Outlook in North America for First Half of 2019
DEERFIELD, Ill.--(BUSINESS WIRE)--
CF Industries Holdings, Inc. (NYSE: CF), a leading global fertilizer and
chemical company, today announced results for its fourth quarter and
year ended December 31, 2018.
Fourth Quarter Highlights
-
Fourth quarter net earnings of $49 million, or $0.21 per diluted
share; EBITDA(1) of $349 million; adjusted EBITDA(1)
of $341 million
-
Completed $500 million share repurchase authorization, which reduced
common shares outstanding as of the beginning of 2018 by nearly five
percent
-
Subsequent to quarter end, the Board of Directors authorized a $1
billion share repurchase program through 2021
Full Year Highlights
-
Full year net earnings of $290 million, or $1.24 per diluted share;
EBITDA of $1,429 million; adjusted EBITDA of $1,403 million
-
12-month rolling average recordable incident rate at 0.60 incidents
per 200,000 work hours
-
Returned $780 million to shareholders through $500 million in share
repurchases and $280 million in dividend payments
-
Completed purchase of all publicly traded common units of Terra
Nitrogen Company, L.P. on April 2, 2018
Overview of Results
CF Industries Holdings, Inc. today announced fourth quarter and full
year 2018 net earnings attributable to common stockholders of
$49 million, or $0.21 per diluted share, and $290 million, or $1.24 per
diluted share, respectively. These results are not directly comparable
to 2017 results given the impact on the 2017 periods from the U.S. Tax
Cut and Jobs Act. Fourth quarter and full year 2017 net earnings
attributable to common stockholders were $465 million, or $1.98 per
diluted share(2), and $358 million, or $1.53 per diluted share(2),
respectively.
The company announced fourth quarter and full year 2018 EBITDA of $349
million and $1,429 million, respectively; and fourth quarter and full
year 2018 adjusted EBITDA of $341 million and $1,403 million,
respectively. These results are directly comparable to 2017 results as
they were not impacted by the U.S. Tax Cut and Jobs Act. Fourth quarter
and full year 2017 EBITDA were $224 million and $856 million,
respectively; and fourth quarter and full year 2017 adjusted EBITDA were
$260 million and $969 million, respectively.
"We delivered strong results in 2018, as higher global nitrogen prices
and lower natural gas costs drove a 45 percent increase in adjusted
EBITDA compared to 2017," said Tony Will, president and chief executive
officer, CF Industries Holdings, Inc. “With strong nitrogen demand
anticipated in North America during the first half of 2019, our
in-region production and extensive transportation and distribution
network position us well to build on our 2018 performance.
“Longer-term, our outlook remains positive: we are positioned at the low
end of the global cost curve due to our access to low-cost North
American natural gas, we continue to operate exceptionally well and we
expect the global nitrogen supply and demand balance to continue to
tighten."
|
_______________________________________________________________________
|
(1) |
|
EBITDA is defined as net earnings attributable to common
stockholders plus interest expense-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.
|
| (2) | |
Fourth quarter and full year 2017 net earnings attributable to
common stockholders included a $491 million income tax benefit from
the impact of the U.S. Tax Cuts and Jobs Act, which impacted diluted
net earnings per share attributable to common stockholders by $2.09
and $2.10 for the fourth quarter and full year 2017, respectively.
|
| |
|
Operations Overview
CF Industries continued operating safely and efficiently during 2018. As
of December 31, 2018, the company's 12-month rolling average recordable
incident rate was 0.60 incidents per 200,000 work hours despite
increased turnaround and maintenance activity compared to 2017.
Sales Overview
Net sales in the fourth quarter of 2018 were $1,132 million and for the
full year 2018 were $4,429 million compared to $1,099 million and
$4,130 million in the same periods last year. The increases were due
primarily to higher average selling prices across all segments.
Total sales volumes for the fourth quarter and full year were lower
compared to the same periods in 2017 as lower ammonia and ammonium
nitrate sales volume was partially offset by higher granular urea sales
volume.
Average selling prices for the fourth quarter and full year 2018 were
higher year-over-year across all segments as higher energy costs in Asia
and Europe, along with continued enforcement of environmental
regulations in China, resulted in lower production in these regions,
tightening the global supply and demand balance.
Cost of sales for the full year 2018 decreased compared to the full year
2017 driven by lower sales volume and lower realized gas costs partially
offset by higher costs related to plant turnarounds and maintenance. The
company also recorded an unrealized net mark-to-market gain on natural
gas derivatives of $13 million for the full year 2018 compared to an
unrealized net mark-to-market loss on natural gas derivatives of
$61 million for the full year 2017.
For the full year 2018, the average cost of natural gas reflected in the
company's cost of sales was $3.16 per MMBtu, which included a realized
loss of $0.01 per MMBtu on natural gas hedges. This compares to the
average cost of natural gas in cost of sales of $3.40 per MMBtu for the
full year 2017, which included a realized loss of $0.07 per MMBtu on
natural gas hedges. During 2018, the average price of natural gas at
Henry Hub in North America was $3.12 per MMBtu, and the average price of
natural gas at the National Balancing Point in the United Kingdom was
$8.07 per MMBtu.
Market Overview
Global nitrogen prices reached in-year highs early in the fourth quarter
of 2018, and then declined through the end of the year and into 2019 due
to seasonally low demand in the Northern Hemisphere and moderating
energy prices in Asia and Europe. As demand in the Northern Hemisphere
begins to materialize, industry fundamentals should be supportive of
global nitrogen prices in the first half of 2019.
In North America, the company expects strong nitrogen fertilizer demand
during the first half of 2019. Corn and wheat plantings in the United
States are projected to increase by four million and one million acres,
respectively, compared to 2018. Additionally, unfavorable weather
limited fall ammonia applications in the Midwest United States,
suggesting a nitrogen deficit in many areas that will need to be made up
by applications of ammonia or upgraded products during the first half of
2019.
India and Brazil, two of the largest urea-importing regions in the
world, will continue to be key global demand centers. Urea imports into
India and Brazil in 2018 totaled 6.3 million metric tons and 5.5 million
metric tons, respectively. The company expects total Indian and
Brazilian urea import requirements to be in a similar range in 2019.
The company projects net global urea production capacity to increase by
3.5 million metric tons during 2019, below the historical nitrogen
demand growth rate of two percent. However, 1.2 million metric tons of
this new urea production capacity in Iran that is included in the
company’s projection is at risk of delay due to United States sanctions
on Iran.
China's role in globally traded urea continued to shrink in 2018, with
exports totaling approximately 2.4 million metric tons. Published
reports suggest this volume may include substantial re-exports of
Iranian urea. Chinese urea exports are expected to be in a similar
volume range in 2019 due to continued firm energy prices and tighter
environmental restrictions.
The company continues to monitor the impact of sanctions on Iran. Urea
from Iranian producers is available at a significant discount to global
prices with few regions of the world open to purchasing from that
country due to sanctions. Iranian producers will face additional
challenges should the sanctions continue due to the loss of access to
technical expertise, replacement parts for current plants and resources
to support new construction.
Longer-term, industry and energy market fundamentals are expected to
continue to support the global nitrogen cost curve at higher levels. Net
global urea supply growth through 2022 is projected to fall short of the
historical nitrogen demand annual growth rate of approximately two
percent, further tightening the global supply and demand balance.
Capital Expenditures
Capital expenditures in 2019 are projected to be $400-$450 million.
Liquidity
As of December 31, 2018, the company had cash and cash equivalents of
$682 million on the balance sheet, had no borrowings outstanding under
its $750 million revolving credit facility and was in compliance with
all applicable covenant requirements under its debt instruments.
During the fourth quarter, the company repurchased 9.1 million shares
for $409 million. As of December 31, 2018, the company had repurchased
10.9 million shares for $500 million, completing the share repurchase
program authorized by the Board of Directors in August 2018.
Subsequent to the end of the quarter, the Board of Directors authorized
a new $1 billion share repurchase program through 2021.
CHS Inc. Distribution
On January 31, 2019, the Board of Managers of CF Industries Nitrogen,
LLC (CFN) approved a semi-annual distribution payment to CHS Inc. (CHS)
of $86 million for the distribution period ended December 31, 2018. The
distribution was paid on January 31, 2019. The total distribution to CHS
pertaining to 2018 was approximately $165 million.
|
| |
| |
Consolidated Results | | | | |
| | | |
|
| | Three months ended
December 31, | | Year ended
December 31, |
| | 2018 |
| 2017 | | 2018 |
| 2017 |
| | (dollars in millions, except per share and per MMBtu amounts) |
|
Net sales
| |
$
|
1,132
| | |
$
|
1,099
| | |
$
|
4,429
| | |
$
|
4,130
| |
|
Cost of sales
| |
890
|
| |
956
|
| |
3,512
|
| |
3,696
|
|
|
Gross margin
| |
$
|
242
|
| |
$
|
143
|
| |
$
|
917
|
| |
$
|
434
|
|
|
Gross margin percentage
| |
21.4
|
%
| |
13.0
|
%
| |
20.7
|
%
| |
10.5
|
%
|
| | | | | | | |
|
|
Net earnings attributable to common stockholders
| |
$
|
49
| | |
$
|
465
| | |
$
|
290
| | |
$
|
358
| |
|
Net earnings per diluted share
| |
$
|
0.21
| | |
$
|
1.98
| | |
$
|
1.24
| | |
$
|
1.53
| |
| | | | | | | |
|
|
EBITDA(1) | |
$
|
349
| | |
$
|
224
| | |
$
|
1,429
| | |
$
|
856
| |
|
Adjusted EBITDA(1) | |
$
|
341
| | |
$
|
260
| | |
$
|
1,403
| | |
$
|
969
| |
| | | | | | | |
|
|
Tons of product sold (000s)
| |
4,723
| | |
5,284
| | |
19,329
| | |
19,952
| |
| | | | | | | |
|
|
Supplemental data (per MMBtu):
| | | | | | | | |
|
Natural gas costs in cost of sales(2) | |
$
|
3.30
| | |
$
|
3.11
| | |
$
|
3.15
| | |
$
|
3.33
| |
|
Realized derivatives (gain) loss in cost of sales(3) | |
(0.06
|
)
| |
0.13
|
| |
0.01
|
| |
0.07
|
|
|
Cost of natural gas in cost of sales
| |
$
|
3.24
| | |
$
|
3.24
| | |
$
|
3.16
| | |
$
|
3.40
| |
| | | | | | | |
|
|
Average daily market price of natural gas (per MMBtu):
| | | | | | | | |
| Henry Hub | |
$
|
3.74
| | |
$
|
2.87
| | |
$
|
3.12
| | |
$
|
2.96
| |
|
National Balancing Point UK | |
$
|
8.35
| | |
$
|
6.92
| | |
$
|
8.07
| | |
$
|
5.80
| |
| | | | | | | |
|
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
| |
$
|
(2
|
)
| |
$
|
(3
|
)
| |
$
|
(13
|
)
| |
$
|
61
| |
|
Depreciation and amortization
| |
$
|
221
| | |
$
|
235
| | |
$
|
888
| | |
$
|
883
| |
|
Capital expenditures
| |
$
|
144
| | |
$
|
183
| | |
$
|
422
| | |
$
|
473
| |
| | | | | | | |
|
|
Production volume by product tons (000s):
| | | | | | | | |
|
Ammonia(4) | |
2,381
| | |
2,642
| | |
9,805
| | |
10,295
| |
|
Granular urea
| |
1,162
| | |
1,122
| | |
4,837
| | |
4,451
| |
|
UAN (32%)
| |
1,946
| | |
1,892
| | |
6,903
| | |
6,914
| |
|
AN
| |
376
| | |
555
| | |
1,731
| | |
2,127
| |
|
_______________________________________________________________________________
|
| (1) |
|
See reconciliations of EBITDA and adjusted EBITDA to the most
directly comparable GAAP measures in the tables accompanying this
release.
|
| (2) | |
Includes the cost of natural gas and related transportation that is
included in cost of sales during the period under the first-in,
first-out inventory cost method.
|
| (3) | |
Includes 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.
|
| |
|
| |
|
Segment Results
Ammonia Segment
CF Industries’ ammonia segment produces anhydrous ammonia (ammonia),
which is the company’s most concentrated form of nitrogen, 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 form that the company upgrades into other nitrogen products
such as urea, UAN and AN.
|
| |
| |
| | Three months ended
December 31, | | Year ended
December 31, |
| | 2018 |
| 2017 | | 2018 |
| 2017 |
| | (dollars in millions, except per ton amounts) |
|
Net sales
| |
$
|
250
| | |
$
|
344
| | |
$
|
1,028
| | |
$
|
1,209
| |
|
Cost of sales
| |
226
|
| |
300
|
| |
867
|
| |
1,070
|
|
|
Gross margin
| |
$
|
24
|
| |
$
|
44
|
| |
$
|
161
|
| |
$
|
139
|
|
|
Gross margin percentage
| |
9.6
|
%
| |
12.8
|
%
| |
15.7
|
%
| |
11.5
|
%
|
| | | | | | | |
|
|
Sales volume by product tons (000s)
| |
720
| | |
1,207
| | |
3,135
| | |
4,105
| |
|
Sales volume by nutrient tons (000s)(1) | |
590
| | |
991
| | |
2,571
| | |
3,367
| |
| | | | | | | |
|
|
Average selling price per product ton
| |
$
|
347
| | |
$
|
285
| | |
$
|
328
| | |
$
|
295
| |
|
Average selling price per nutrient ton(1) | |
424
| | |
347
| | |
400
| | |
359
| |
| | | | | | | |
|
|
Adjusted gross margin(2):
| | | | | | | | |
|
Gross margin
| |
$
|
24
| | |
$
|
44
| | |
$
|
161
| | |
$
|
139
| |
|
Depreciation and amortization
| |
45
| | |
53
| | |
155
| | |
183
| |
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
| |
(1
|
)
| |
—
|
| |
(4
|
)
| |
20
|
|
|
Adjusted gross margin
| |
$
|
68
|
| |
$
|
97
|
| |
$
|
312
|
| |
$
|
342
|
|
|
Adjusted gross margin as a percent of net sales
| |
27.2
|
%
| |
28.2
|
%
| |
30.4
|
%
| |
28.3
|
%
|
| | | | | | | |
|
|
Gross margin per product ton
| |
$
|
33
| | |
$
|
36
| | |
$
|
51
| | |
$
|
34
| |
|
Gross margin per nutrient ton(1) | |
41
| | |
44
| | |
63
| | |
41
| |
|
Adjusted gross margin per product ton
| |
94
| | |
80
| | |
100
| | |
83
| |
|
Adjusted gross margin per nutrient ton(1) | |
115
| | |
98
| | |
121
| | |
102
| |
|
_______________________________________________________________________________
|
| (1) |
|
Nutrient tons represent the tons of nitrogen within the product tons.
|
| (2) | |
Adjusted gross margin, adjusted gross margin as a percent of net
sales and adjusted gross margin per product ton and per nutrient ton
are non-GAAP financial measures. Adjusted gross margin is defined as
gross margin excluding depreciation and amortization and unrealized
net mark-to-market (gain) loss on natural gas derivatives. The
company has presented adjusted gross margin, adjusted gross margin
as a percent of net sales and adjusted gross margin per product ton
and per nutrient ton because management uses these measures, and
believes they are useful to investors, as supplemental financial
measures in the comparison of year-over-year performance. A
reconciliation of adjusted gross margin, adjusted gross margin as a
percent of net sales and adjusted gross margin per product ton and
per nutrient ton to gross margin, the most directly comparable GAAP
measure, is provided in the table above. See "Note Regarding
Non-GAAP Financial Measures" in this release.
|
| |
|
Comparison of 2018 to 2017 full year and fourth quarter periods:
-
Ammonia sales volume decreased for the full year and fourth quarter of
2018 compared to 2017 due to cold and wet weather in the Midwestern
United States that reduced demand for fall ammonia applications and
due to reduced production volumes as more plant turnarounds and
maintenance year-over-year lowered the volume of ammonia available for
sale.
-
Ammonia average selling prices improved in 2018 compared to 2017 as
higher energy costs in Asia and Europe, along with continued
enforcement of environmental regulations in China, resulted in lower
production in these regions, tightening the global supply and demand
balance.
-
Ammonia adjusted gross margin per ton increased for the full year and
fourth quarter of 2018 compared to 2017 due to higher average selling
prices partially offset by higher costs related to plant turnarounds
and maintenance.
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 products.
|
| |
| |
| | Three months ended
December 31, | | Year ended
December 31, |
| | 2018 |
| 2017 | | 2018 |
| 2017 |
| | (dollars in millions, except per ton amounts) |
|
Net sales
| |
$
|
345
| | |
$
|
246
| | |
$
|
1,322
| | |
$
|
971
| |
|
Cost of sales
| |
207
|
| |
188
|
| |
889
|
| |
855
|
|
|
Gross margin
| |
$
|
138
|
| |
$
|
58
|
| |
$
|
433
|
| |
$
|
116
|
|
|
Gross margin percentage
| |
40.0
|
%
| |
23.6
|
%
| |
32.8
|
%
| |
11.9
|
%
|
| | | | | | | |
|
|
Sales volume by product tons (000s)
| |
1,119
| | |
1,008
| | |
4,898
| | |
4,357
| |
|
Sales volume by nutrient tons (000s)(1) | |
515
| | |
463
| | |
2,253
| | |
2,004
| |
| | | | | | | |
|
|
Average selling price per product ton
| |
$
|
308
| | |
$
|
244
| | |
$
|
270
| | |
$
|
223
| |
|
Average selling price per nutrient ton(1) | |
670
| | |
531
| | |
587
| | |
485
| |
| | | | | | | |
|
|
Adjusted gross margin(2):
| | | | | | | | |
|
Gross margin
| |
$
|
138
| | |
$
|
58
| | |
$
|
433
| | |
$
|
116
| |
|
Depreciation and amortization
| |
62
| | |
59
| | |
276
| | |
246
| |
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
| |
(1
|
)
| |
(1
|
)
| |
(4
|
)
| |
16
|
|
|
Adjusted gross margin
| |
$
|
199
|
| |
$
|
116
|
| |
$
|
705
|
| |
$
|
378
|
|
|
Adjusted gross margin as a percent of net sales
| |
57.7
|
%
| |
47.2
|
%
| |
53.3
|
%
| |
38.9
|
%
|
| | | | | | | |
|
|
Gross margin per product ton
| |
$
|
123
| | |
$
|
58
| | |
$
|
88
| | |
$
|
27
| |
|
Gross margin per nutrient ton(1) | |
268
| | |
125
| | |
192
| | |
58
| |
|
Adjusted gross margin per product ton
| |
178
| | |
115
| | |
144
| | |
87
| |
|
Adjusted gross margin per nutrient ton(1) | |
386
| | |
251
| | |
313
| | |
189
| |
|
_______________________________________________________________________________
|
| (1) |
|
Nutrient tons represent the tons of nitrogen within the product tons.
|
| (2) | |
Adjusted gross margin, adjusted gross margin as a percent of net
sales and adjusted gross margin per product ton and per nutrient ton
are non-GAAP financial measures. Adjusted gross margin is defined as
gross margin excluding depreciation and amortization and unrealized
net mark-to-market (gain) loss on natural gas derivatives. The
company has presented adjusted gross margin, adjusted gross margin
as a percent of net sales and adjusted gross margin per product ton
and per nutrient ton because management uses these measures, and
believes they are useful to investors, as supplemental financial
measures in the comparison of year-over-year performance. A
reconciliation of adjusted gross margin, adjusted gross margin as a
percent of net sales and adjusted gross margin per product ton and
per nutrient ton to gross margin, the most directly comparable GAAP
measure, is provided in the table above. See "Note Regarding
Non-GAAP Financial Measures" in this release.
|
| |
|
Comparison of 2018 to 2017 full year and fourth quarter periods:
-
Granular urea sales volume increased for the full year and fourth
quarter of 2018 compared to 2017 due to higher year-over-year
production.
-
Urea average selling prices improved in 2018 compared to 2017 as
higher energy costs in Asia and Europe, along with continued
enforcement of environmental regulations in China, resulted in lower
production in these regions, tightening the global supply and demand
balance.
-
Granular urea adjusted gross margin per ton increased for the full
year and fourth quarter of 2018 compared to 2017 due primarily to
higher average selling prices.
UAN Segment
CF Industries’ UAN segment produces urea ammonium nitrate solution
(UAN). UAN is a liquid 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
December 31, | | Year ended
December 31, |
| | 2018 |
| 2017 | | 2018 |
| 2017 |
| | (dollars in millions, except per ton amounts) |
|
Net sales
| |
$
|
342
| | |
$
|
288
| | |
$
|
1,234
| | |
$
|
1,134
| |
|
Cost of sales
| |
276
|
| |
272
|
| |
1,007
|
| |
1,053
|
|
|
Gross margin
| |
$
|
66
|
| |
$
|
16
|
| |
$
|
227
|
| |
$
|
81
|
|
|
Gross margin percentage
| |
19.3
|
%
| |
5.6
|
%
| |
18.4
|
%
| |
7.1
|
%
|
| | | | | | | |
|
|
Sales volume by product tons (000s)
| |
1,933
| | |
1,920
| | |
7,042
| | |
7,093
| |
|
Sales volume by nutrient tons (000s)(1) | |
610
| | |
606
| | |
2,225
| | |
2,242
| |
| | | | | | | |
|
|
Average selling price per product ton
| |
$
|
177
| | |
$
|
150
| | |
$
|
175
| | |
$
|
160
| |
|
Average selling price per nutrient ton(1) | |
561
| | |
475
| | |
555
| | |
506
| |
| | | | | | | |
|
|
Adjusted gross margin(2):
| | | | | | | | |
|
Gross margin
| |
$
|
66
| | |
$
|
16
| | |
$
|
227
| | |
$
|
81
| |
|
Depreciation and amortization
| |
70
| | |
73
| | |
270
| | |
265
| |
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
| |
—
|
| |
—
|
| |
(4
|
)
| |
19
|
|
|
Adjusted gross margin
| |
$
|
136
|
| |
$
|
89
|
| |
$
|
493
|
| |
$
|
365
|
|
|
Adjusted gross margin as a percent of net sales
| |
39.8
|
%
| |
30.9
|
%
| |
40.0
|
%
| |
32.2
|
%
|
| | | | | | | |
|
|
Gross margin per product ton
| |
$
|
34
| | |
$
|
8
| | |
$
|
32
| | |
$
|
11
| |
|
Gross margin per nutrient ton(1) | |
108
| | |
26
| | |
102
| | |
36
| |
|
Adjusted gross margin per product ton
| |
70
| | |
46
| | |
70
| | |
51
| |
|
Adjusted gross margin per nutrient ton(1) | |
223
| | |
147
| | |
222
| | |
163
| |
|
_______________________________________________________________________________
|
| (1) |
|
Nutrient tons represent the tons of nitrogen within the product tons.
|
| (2) | |
Adjusted gross margin, adjusted gross margin as a percent of net
sales and adjusted gross margin per product ton and per nutrient ton
are non-GAAP financial measures. Adjusted gross margin is defined as
gross margin excluding depreciation and amortization and unrealized
net mark-to-market (gain) loss on natural gas derivatives. The
company has presented adjusted gross margin, adjusted gross margin
as a percent of net sales and adjusted gross margin per product ton
and per nutrient ton because management uses these measures, and
believes they are useful to investors, as supplemental financial
measures in the comparison of year-over-year performance. A
reconciliation of adjusted gross margin, adjusted gross margin as a
percent of net sales and adjusted gross margin per product ton and
per nutrient ton to gross margin, the most directly comparable GAAP
measure, is provided in the table above. See "Note Regarding
Non-GAAP Financial Measures" in this release.
|
| |
|
Comparison of 2018 to 2017 full year and fourth quarter periods:
-
UAN sales volume for the full year and fourth quarter of 2018 was
essentially unchanged compared to 2017.
-
UAN average selling prices improved in 2018 compared to 2017 as higher
energy costs in Europe resulted in lower production in this region,
tightening the global supply and demand balance.
-
UAN adjusted gross margin per ton increased for the full year and
fourth quarter of 2018 compared to 2017 due primarily to higher
average selling prices.
AN Segment
CF Industries' AN segment produces ammonium nitrate (AN). AN is used as
a nitrogen fertilizer with nitrogen content between 29 percent to 35
percent, 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
December 31, | | Year ended
December 31, |
| | 2018 |
| 2017 | | 2018 |
| 2017 |
| | (dollars in millions, except per ton amounts) |
|
Net sales
| |
$
|
97
| | |
$
|
125
| | |
$
|
460
| | |
$
|
497
| |
|
Cost of sales
| |
94
|
| |
115
|
| |
414
|
| |
446
|
|
|
Gross margin
| |
$
|
3
|
| |
$
|
10
|
| |
$
|
46
|
| |
$
|
51
|
|
|
Gross margin percentage
| |
3.1
|
%
| |
8.0
|
%
| |
10.0
|
%
| |
10.3
|
%
|
| | | | | | | |
|
|
Sales volume by product tons (000s)
| |
416
| | |
576
| | |
2,002
| | |
2,353
| |
|
Sales volume by nutrient tons (000s)(1) | |
141
| | |
194
| | |
676
| | |
793
| |
| | | | | | | |
|
|
Average selling price per product ton
| |
$
|
233
| | |
$
|
217
| | |
$
|
230
| | |
$
|
211
| |
|
Average selling price per nutrient ton(1) | |
688
| | |
644
| | |
680
| | |
627
| |
| | | | | | | |
|
|
Adjusted gross margin(2):
| | | | | | | | |
|
Gross margin
| |
$
|
3
| | |
$
|
10
| | |
$
|
46
| | |
$
|
51
| |
|
Depreciation and amortization
| |
18
| | |
21
| | |
85
| | |
85
| |
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
| |
—
|
| |
(1
|
)
| |
—
|
| |
2
|
|
|
Adjusted gross margin
| |
$
|
21
|
| |
$
|
30
|
| |
$
|
131
|
| |
$
|
138
|
|
|
Adjusted gross margin as a percent of net sales
| |
21.6
|
%
| |
24.0
|
%
| |
28.5
|
%
| |
27.8
|
%
|
| | | | | | | |
|
|
Gross margin per product ton
| |
$
|
7
| | |
$
|
17
| | |
$
|
23
| | |
$
|
22
| |
|
Gross margin per nutrient ton(1) | |
21
| | |
52
| | |
68
| | |
64
| |
|
Adjusted gross margin per product ton
| |
50
| | |
52
| | |
65
| | |
59
| |
|
Adjusted gross margin per nutrient ton(1) | |
149
| | |
155
| | |
194
| | |
174
| |
|
_______________________________________________________________________________
|
| (1) |
|
Nutrient tons represent the tons of nitrogen within the product tons.
|
| (2) | |
Adjusted gross margin, adjusted gross margin as a percent of net
sales and adjusted gross margin per product ton and per nutrient ton
are non-GAAP financial measures. Adjusted gross margin is defined as
gross margin excluding depreciation and amortization and unrealized
net mark-to-market (gain) loss on natural gas derivatives. The
company has presented adjusted gross margin, adjusted gross margin
as a percent of net sales and adjusted gross margin per product ton
and per nutrient ton because management uses these measures, and
believes they are useful to investors, as supplemental financial
measures in the comparison of year-over-year performance. A
reconciliation of adjusted gross margin, adjusted gross margin as a
percent of net sales and adjusted gross margin per product ton and
per nutrient ton to gross margin, the most directly comparable GAAP
measure, is provided in the table above. See "Note Regarding
Non-GAAP Financial Measures" in this release.
|
| |
|
Comparison of 2018 to 2017 full year and fourth quarter periods:
-
AN sales volume decreased for the full year and fourth quarter of 2018
compared to 2017 due to lower production volumes resulting in less AN
available for sale.
-
AN average selling prices improved in 2018 compared to 2017 as higher
energy costs in Asia and Europe resulted in lower production in these
regions, tightening the global supply and demand balance.
-
AN adjusted gross margin per ton was higher for the full year 2018 due
to higher average selling prices partially offset by higher gas costs
in the United Kingdom. AN adjusted gross margin per ton was lower for
the fourth quarter of 2018 compared to 2017 as higher average selling
prices were more than offset by higher gas costs in the United Kingdom
and higher costs related to plant turnarounds and maintenance.
Other Segment
CF Industries’ Other segment includes diesel exhaust fluid (DEF), urea
liquor, nitric acid and compound fertilizer products (NPKs).
|
| |
| |
| | Three months ended
December 31, | | Year ended
December 31, |
| | 2018 |
| 2017 | | 2018 |
| 2017 |
| | (dollars in millions, except per ton amounts) |
|
Net sales
| |
$
|
98
| | |
$
|
96
| | |
$
|
385
| | |
$
|
319
| |
|
Cost of sales
| |
87
|
| |
81
|
| |
335
|
| |
272
|
|
|
Gross margin
| |
$
|
11
|
| |
$
|
15
|
| |
$
|
50
|
| |
$
|
47
|
|
|
Gross margin percentage
| |
11.2
|
%
| |
15.6
|
%
| |
13.0
|
%
| |
14.7
|
%
|
| | | | | | | |
|
|
Sales volume by product tons (000s)
| |
535
| | |
573
| | |
2,252
| | |
2,044
| |
|
Sales volume by nutrient tons (000s)(1) | |
104
| | |
112
| | |
439
| | |
397
| |
| | | | | | | |
|
|
Average selling price per product ton
| |
$
|
183
| | |
$
|
168
| | |
$
|
171
| | |
$
|
156
| |
|
Average selling price per nutrient ton(1) | |
942
| | |
857
| | |
877
| | |
804
| |
| | | | | | | |
|
|
Adjusted gross margin(2):
| | | | | | | | |
|
Gross margin
| |
$
|
11
| | |
$
|
15
| | |
$
|
50
| | |
$
|
47
| |
|
Depreciation and amortization
| |
18
| | |
17
| | |
67
| | |
57
| |
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
| |
—
|
| |
(1
|
)
| |
(1
|
)
| |
4
|
|
|
Adjusted gross margin
| |
$
|
29
|
| |
$
|
31
|
| |
$
|
116
|
| |
$
|
108
|
|
|
Adjusted gross margin as a percent of net sales
| |
29.6
|
%
| |
32.3
|
%
| |
30.1
|
%
| |
33.9
|
%
|
| | | | | | | |
|
|
Gross margin per product ton
| |
$
|
21
| | |
$
|
26
| | |
$
|
22
| | |
$
|
23
| |
|
Gross margin per nutrient ton(1) | |
106
| | |
134
| | |
114
| | |
118
| |
|
Adjusted gross margin per product ton
| |
54
| | |
54
| | |
52
| | |
53
| |
|
Adjusted gross margin per nutrient ton(1) | |
279
| | |
277
| | |
264
| | |
272
| |
|
_______________________________________________________________________________
|
| (1) |
|
Nutrient tons represent the tons of nitrogen within the product tons.
|
| (2) | |
Adjusted gross margin, adjusted gross margin as a percent of net
sales and adjusted gross margin per product ton and per nutrient ton
are non-GAAP financial measures. Adjusted gross margin is defined as
gross margin excluding depreciation and amortization and unrealized
net mark-to-market (gain) loss on natural gas derivatives. The
company has presented adjusted gross margin, adjusted gross margin
as a percent of net sales and adjusted gross margin per product ton
and per nutrient ton because management uses these measures, and
believes they are useful to investors, as supplemental financial
measures in the comparison of year-over-year performance. A
reconciliation of adjusted gross margin, adjusted gross margin as a
percent of net sales and adjusted gross margin per product ton and
per nutrient ton to gross margin, the most directly comparable GAAP
measure, is provided in the table above. See "Note Regarding
Non-GAAP Financial Measures" in this release.
|
| |
|
Comparison of 2018 to 2017 full year and fourth quarter periods:
-
Other segment volume increased for the full year 2018 compared to 2017
due primarily to higher sales of DEF and nitric acid. Other segment
volume decreased for the fourth quarter of 2018 compared to 2017 due
to lower production volumes of compound fertilizer products as a
result of plant turnarounds and maintenance, reducing product
available for sale.
-
Other average selling prices improved in 2018 compared to 2017 as
higher energy costs in Asia and Europe resulted in lower production in
these regions, tightening the global supply and demand balance.
-
Other segment adjusted gross margin per ton was essentially unchanged
for the full year and fourth quarter of 2018.
Dividend Payment
On February 5, 2019, CF Industries’ Board of Directors declared a
quarterly dividend of $0.30 per common share. The dividend will be paid
on February 28, 2019 to stockholders of record as of February 15, 2019.
Conference Call
CF Industries will hold a conference call to discuss its fourth quarter
2018 results at 9:00 a.m. ET on Thursday, February 14, 2019. 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 is a leading global fertilizer and chemical company with
outstanding operational capabilities and a cost-advantaged production
and distribution platform. Our 3,000 employees operate world-class
manufacturing complexes in Canada, the United Kingdom and the United
States. We serve our customers in North America through an unparalleled
production, storage, transportation and distribution network. We also
reach a global customer base with exports from our Donaldsonville,
Louisiana, plant, the world’s largest and most flexible nitrogen
complex. Additionally, we move product to international destinations
from our Verdigris, Oklahoma, facility; our Yazoo City, Mississippi,
facility; our Billingham and Ince facilities in the United Kingdom; and
a joint venture ammonia facility in the Republic of Trinidad and Tobago
in which we own a 50 percent interest. 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, and, on a segment basis, adjusted gross margin, adjusted gross
margin as a percent of net sales and adjusted gross margin per product
ton and per nutrient ton, 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 gross margin,
adjusted gross margin as a percent of net sales and adjusted gross
margin per product ton and per nutrient ton, 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, and adjusted EBITDA as
a percent of net sales 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.” Reconciliations of adjusted gross margin, adjusted gross margin
as a percent of net sales and adjusted gross margin per product ton and
per nutrient ton to the most directly comparable GAAP measures are
provided in the segment tables included in this release.
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 by the
agreements governing the Company's senior secured indebtedness; 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 changes in tax laws and disagreements
with taxing authorities; the Company’s reliance on a limited number of
key facilities; 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; risks associated with expansions of the
Company’s business, including unanticipated adverse consequences and the
significant resources that could be required; 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;
risks associated with the operation or management of the strategic
venture with CHS (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 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
December 31, | | Year ended
December 31, |
| | 2018 |
| 2017 | | 2018 |
| 2017 |
| | (in millions, except per share amounts) |
|
Net sales
| |
$
|
1,132
| | |
$
|
1,099
| | |
$
|
4,429
| | |
$
|
4,130
| |
|
Cost of sales
| |
890
|
| |
956
|
| |
3,512
|
| |
3,696
|
|
|
Gross margin
| |
242
|
| |
143
|
| |
917
|
| |
434
|
|
|
Selling, general and administrative expenses
| |
51
| | |
51
| | |
214
| | |
191
| |
|
Other operating—net
| |
2
|
| |
4
|
| |
(27
|
)
| |
18
|
|
|
Total other operating costs and expenses
| |
53
| | |
55
| | |
187
| | |
209
| |
|
Equity in earnings of operating affiliates
| |
6
|
| |
17
|
| |
36
|
| |
9
|
|
|
Operating earnings
| |
195
| | |
105
| | |
766
| | |
234
| |
|
Interest expense
| |
61
| | |
74
| | |
241
| | |
315
| |
|
Interest income
| |
(4
|
)
| |
(4
|
)
| |
(13
|
)
| |
(12
|
)
|
|
Loss on debt extinguishment
| |
—
| | |
53
| | |
—
| | |
53
| |
|
Other non-operating—net
| |
(3
|
)
| |
(1
|
)
| |
(9
|
)
| |
3
|
|
|
Earnings (loss) before income taxes
| |
141
| | |
(17
|
)
| |
547
| | |
(125
|
)
|
|
Income tax provision (benefit)
| |
46
|
| |
(520
|
)
| |
119
|
| |
(575
|
)
|
|
Net earnings
| |
95
| | |
503
| | |
428
| | |
450
| |
|
Less: Net earnings attributable to noncontrolling interests
| |
46
|
| |
38
|
| |
138
|
| |
92
|
|
|
Net earnings attributable to common stockholders
| |
$
|
49
|
| |
$
|
465
|
| |
$
|
290
|
| |
$
|
358
|
|
| | | | | | | |
|
|
Net earnings per share attributable to common stockholders:
| | | | | | | | |
|
Basic
| |
$
|
0.21
|
| |
$
|
1.99
|
| |
$
|
1.25
|
| |
$
|
1.53
|
|
|
Diluted
| |
$
|
0.21
|
| |
$
|
1.98
|
| |
$
|
1.24
|
| |
$
|
1.53
|
|
|
Weighted-average common shares outstanding:
| | | | | | | | |
|
Basic
| |
229.1
|
| |
233.5
|
| |
232.6
|
| |
233.5
|
|
|
Diluted
| |
230.6
|
| |
234.1
|
| |
233.8
|
| |
233.9
|
|
|
|
|
|
| |
| |
| | | | | | |
|
CF INDUSTRIES HOLDINGS, INC. SELECTED FINANCIAL INFORMATION CONDENSED CONSOLIDATED BALANCE SHEETS |
| | | | | | |
|
| | | | | December 31, | | December 31, |
| | | | | 2018 | | 2017 |
| | | | | (in millions) |
| Assets | | | | | | | |
|
Current assets:
| | | | | | | |
|
Cash and cash equivalents
| | | | |
$
|
682
| | |
$
|
835
|
|
Accounts receivable—net
| | | | |
235
| | |
307
|
|
Inventories
| | | | |
309
| | |
275
|
|
Prepaid income taxes
| | | | |
28
| | |
33
|
|
Other current assets
| | | | |
20
|
| |
15
|
|
Total current assets
| | | | |
1,274
| | |
1,465
|
|
Property, plant and equipment—net
| | | | |
8,623
| | |
9,175
|
|
Investment in affiliate
| | | | |
93
| | |
108
|
| Goodwill | | | | |
2,353
| | |
2,371
|
|
Other assets
| | | | |
318
|
| |
344
|
| Total assets | | | | |
$
|
12,661
|
| |
$
|
13,463
|
| | | | | | |
|
| Liabilities and Equity | | | | | | | |
|
Current liabilities:
| | | | | | | |
|
Accounts payable and accrued expenses
| | | | |
$
|
545
| | |
$
|
472
|
|
Income taxes payable
| | | | |
5
| | |
2
|
|
Customer advances
| | | | |
149
| | |
89
|
|
Other current liabilities
| | | | |
6
|
| |
17
|
|
Total current liabilities
| | | | |
705
|
| |
580
|
|
Long-term debt
| | | | |
4,698
| | |
4,692
|
|
Deferred income taxes
| | | | |
1,117
| | |
1,047
|
|
Other liabilities
| | | | |
410
| | |
460
|
|
Equity:
| | | | | | | |
|
Stockholders' equity
| | | | |
2,958
| | |
3,579
|
|
Noncontrolling interests
| | | | |
2,773
|
| |
3,105
|
|
Total equity
| | | | |
5,731
|
| |
6,684
|
| Total liabilities and equity | | | | |
$
|
12,661
|
| |
$
|
13,463
|
|
| |
| |
| | | |
|
CF INDUSTRIES HOLDINGS, INC. SELECTED FINANCIAL INFORMATION CONSOLIDATED STATEMENTS OF CASH FLOWS |
| | | |
|
| | Three months ended
December 31, | | Year ended
December 31, |
| | 2018 |
| 2017 | | 2018 |
| 2017 |
| | (in millions) |
| Operating Activities: | | | | | | | | |
|
Net earnings
| |
$
|
95
| | |
$
|
503
| | |
$
|
428
| | |
$
|
450
| |
|
Adjustments to reconcile net earnings to net cash provided by
operating activities:
| | | | | | | | |
|
Depreciation and amortization
| |
221
| | |
235
| | |
888
| | |
883
| |
|
Deferred income taxes
| |
41
| | |
(547
|
)
| |
78
| | |
(601
|
)
|
|
Stock-based compensation expense
| |
5
| | |
4
| | |
22
| | |
17
| |
|
Unrealized net (gain) loss on natural gas derivatives
| |
(2
|
)
| |
(3
|
)
| |
(13
|
)
| |
61
| |
|
(Gain) loss on embedded derivative
| |
(1
|
)
| |
—
| | |
1
| | |
4
| |
|
Gain on sale of equity method investment
| |
—
| | |
(14
|
)
| |
—
| | |
(14
|
)
|
|
Loss on debt extinguishment
| |
—
| | |
53
| | |
—
| | |
53
| |
|
Loss on disposal of property, plant and equipment
| |
7
| | |
—
| | |
6
| | |
3
| |
|
Undistributed losses (earnings) of affiliates—net of taxes
| |
2
| | |
(4
|
)
| |
(3
|
)
| |
3
| |
|
Changes in:
| | | | | | | | |
|
Accounts receivable—net
| |
37
| | |
(28
|
)
| |
68
| | |
(57
|
)
|
|
Inventories
| |
(49
|
)
| |
28
| | |
(52
|
)
| |
40
| |
|
Accrued and prepaid income taxes
| |
(5
|
)
| |
5
| | |
8
| | |
809
| |
|
Accounts payable and accrued expenses
| |
70
| | |
(6
|
)
| |
44
| | |
(1
|
)
|
|
Customer advances
| |
(165
|
)
| |
(3
|
)
| |
59
| | |
48
| |
|
Other—net
| |
(2
|
)
| |
7
|
| |
(37
|
)
| |
(67
|
)
|
|
Net cash provided by operating activities
| |
254
|
| |
230
|
| |
1,497
|
| |
1,631
|
|
| Investing Activities: | | | | | | | | |
|
Additions to property, plant and equipment
| |
(144
|
)
| |
(183
|
)
| |
(422
|
)
| |
(473
|
)
|
|
Proceeds from sale of property, plant and equipment
| |
7
| | |
7
| | |
26
| | |
20
| |
|
Distributions received from unconsolidated affiliates
| |
—
| | |
2
| | |
10
| | |
14
| |
|
Proceeds from sale of auction rate securities
| |
—
| | |
—
| | |
—
| | |
9
| |
|
Proceeds from sale of equity method investment
| |
—
| | |
16
| | |
—
| | |
16
| |
|
Insurance proceeds
| |
—
| | |
—
| | |
10
| | |
—
| |
|
Other—net
| |
—
|
| |
1
|
| |
1
|
| |
1
|
|
|
Net cash used in investing activities
| |
(137
|
)
| |
(157
|
)
| |
(375
|
)
| |
(413
|
)
|
| Financing Activities: | | | | | | | | |
|
Payments of long-term borrowings
| |
—
| | |
(1,148
|
)
| |
—
| | |
(1,148
|
)
|
|
Payment to CHS related to credit provision
| |
(5
|
)
| |
(5
|
)
| |
(5
|
)
| |
(5
|
)
|
|
Financing fees
| |
—
| | |
—
| | |
1
| | |
(1
|
)
|
|
Dividends paid on common stock
| |
(70
|
)
| |
(70
|
)
| |
(280
|
)
| |
(280
|
)
|
|
Acquisition of noncontrolling interests in TNCLP
| |
—
| | |
—
| | |
(388
|
)
| |
—
| |
|
Distributions to noncontrolling interests
| |
—
| | |
(6
|
)
| |
(139
|
)
| |
(131
|
)
|
|
Purchases of treasury stock
| |
(380
|
)
| |
—
| | |
(467
|
)
| |
—
| |
|
Issuances of common stock under employee stock plans
| |
2
| | |
—
| | |
12
| | |
1
| |
|
Shares withheld for taxes
| |
(3
|
)
| |
—
|
| |
(4
|
)
| |
—
|
|
|
Net cash used in financing activities
| |
(456
|
)
| |
(1,229
|
)
| |
(1,270
|
)
| |
(1,564
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
| |
(1
|
)
| |
(1
|
)
| |
(5
|
)
| |
12
|
|
|
Decrease in cash, cash equivalents and restricted cash
| |
(340
|
)
| |
(1,157
|
)
| |
(153
|
)
| |
(334
|
)
|
|
Cash, cash equivalents and restricted cash at beginning of period
| |
1,022
|
| |
1,992
|
| |
835
|
| |
1,169
|
|
| Cash, cash equivalents and restricted cash at end of period | |
$
|
682
|
| |
$
|
835
|
| |
$
|
682
|
| |
$
|
835
|
|
| | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | |
|
CF INDUSTRIES HOLDINGS, INC.
SELECTED FINANCIAL
INFORMATION
NON-GAAP DISCLOSURE ITEMS
Reconciliation of net earnings attributable to common stockholders,
net earnings attributable to common stockholders per ton and net
earnings attributable to common stockholders 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 earnings attributable to common stockholders
plus interest expense—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
December 31, | | Year ended
December 31, |
| | 2018 |
| 2017 | | 2018 |
| 2017 |
| | (in millions) |
|
Net earnings
| |
$
|
95
| | |
$
|
503
| | |
$
|
428
| | |
$
|
450
| |
|
Less: Net earnings attributable to noncontrolling interests
| |
(46
|
)
| |
(38
|
)
| |
(138
|
)
| |
(92
|
)
|
|
Net earnings attributable to common stockholders
| |
49
|
| |
465
|
| |
290
|
| |
358
|
|
|
Interest expense—net
| |
57
| | |
70
| | |
228
| | |
303
| |
|
Income tax provision (benefit)
| |
46
| | |
(520
|
)
| |
119
| | |
(575
|
)
|
|
Depreciation and amortization
| |
221
| | |
235
| | |
888
| | |
883
| |
|
Less other adjustments:
| | | | | | | | |
|
Depreciation and amortization in noncontrolling interests(1) | |
(21
|
)
| |
(23
|
)
| |
(87
|
)
| |
(101
|
)
|
|
Loan fee amortization(2) | |
(3
|
)
| |
(3
|
)
| |
(9
|
)
| |
(12
|
)
|
|
EBITDA
| |
349
|
| |
224
|
| |
1,429
|
| |
856
|
|
|
Unrealized net mark-to-market (gain) loss on natural gas derivatives
| |
(2
|
)
| |
(3
|
)
| |
(13
|
)
| |
61
| |
|
(Gain) loss on foreign currency transactions including intercompany
loans(3) | |
(6
|
)
| |
—
| | |
(5
|
)
| |
2
| |
|
Insurance proceeds(4) | |
—
| | |
—
| | |
(10
|
)
| |
—
| |
|
Costs related to acquisition of TNCLP units
| |
—
| | |
—
| | |
2
| | |
—
| |
|
Equity method investment tax contingency accrual(5) | |
—
| | |
—
| | |
—
| | |
7
| |
|
Loss on embedded derivative(6) | |
—
| | |
—
| | |
—
| | |
4
| |
|
Loss on debt extinguishment
| |
—
| | |
53
| | |
—
| | |
53
| |
|
Gain on sale of equity method investment
| |
—
|
| |
(14
|
)
| |
—
|
| |
(14
|
)
|
|
Total adjustments
| |
(8
|
)
| |
36
|
| |
(26
|
)
| |
113
|
|
|
Adjusted EBITDA
| |
$
|
341
|
| |
$
|
260
|
| |
$
|
1,403
|
| |
$
|
969
|
|
| | | | | | | |
|
|
Net sales
| |
$
|
1,132
| | |
$
|
1,099
| | |
$
|
4,429
| | |
$
|
4,130
| |
|
Tons of product sold (000s)
| |
4,723
| | |
5,284
| | |
19,329
| | |
19,952
| |
| | | | | | | |
|
| Net earnings attributable to common stockholders as a percent of
net sales | | 4.3 | % | | 42.3 | % | | 6.5 | % | | 8.7 | % |
| Net earnings attributable to common stockholders per ton | | $ | 10.37 | | | $ | 88.00 | | | $ | 15.00 | | | $ | 17.94 | |
| EBITDA as a percent of net sales | | 30.8 | % | | 20.4 | % | | 32.3 | % | | 20.7 | % |
| EBITDA per ton | | $ | 73.89 | | | $ | 42.39 | | | $ | 73.93 | | | $ | 42.90 | |
| Adjusted EBITDA as a percent of net sales | | 30.1 | % | | 23.7 | % | | 31.7 | % | | 23.5 | % |
| Adjusted EBITDA per ton | | $ | 72.20 | | | $ | 49.21 | | | $ | 72.59 | | | $ | 48.57 | |
|
_______________________________________________________________________________
|
| (1) |
|
For the three months ended December 31, 2018, amount relates only to
CFN, as we purchased the remaining publicly traded common units of
TNCLP on April 2, 2018. For the twelve months ended December 31,
2018, amount includes $83 million related to CFN and $4 million
related to TNCLP.
|
| (2) | |
Loan fee amortization is included in both interest expense—net and
depreciation and amortization.
|
| (3) | |
(Gain) loss on foreign currency transactions primarily relates to
the unrealized foreign currency exchange rate impact on intercompany
debt that has not been permanently invested and is included in other
operating—net in our consolidated statements of operations.
|
| (4) | |
Represents proceeds related to a property insurance claim at one of
our nitrogen complexes.
|
| (5) | |
Represents an accrual recorded in the three months ended June 30,
2017 on the books of PLNL, the company's Trinidad joint venture, for
a disputed tax assessment. Amount reflects the company's 50 percent
equity interest in PLNL. This is included in equity in earnings of
operating affiliates in our consolidated statements of operations.
|
| (6) | |
Represents the loss on the embedded derivative included within the
terms of the company's strategic venture with CHS.
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190213005800/en/
Media
Chris Close
Director, Corporate Communications
847-405-2542
- cclose@cfindustries.com
Investors
Martin Jarosick
Vice President, Investor
Relations
847-405-2045 - mjarosick@cfindustries.com
Source: CF Industries Holdings, Inc.