Financial Performance - Total net sales decreased by $695 million, or 10%, to $5.94 billion in 2024 compared to $6.63 billion in 2023, primarily due to a $944 million, or 14%, decline in net sales excluding the impact of the Waggaman acquisition [250]. - Net earnings in 2024 were $1.48 billion, a decrease of $361 million compared to $1.84 billion in 2023 [352]. - Net earnings attributable to common stockholders for 2024 were $1.218 billion, a decrease of 20.1% compared to $1.525 billion in 2023 [396]. - Comprehensive income attributable to common stockholders for 2024 was $1.147 billion, a decrease of 26% from $1.546 billion in 2023 [399]. - Net cash provided by operating activities in 2024 was $2.27 billion, a decrease of $486 million compared to $2.76 billion in 2023 [352]. Sales and Volume - Total sales volume was 18.9 million product tons in 2024, a 1% decrease from 19.1 million product tons in 2023, with the Waggaman acquisition contributing an additional 644,000 tons [252]. - Net sales in the Ammonia segment increased by $57 million, or 3%, to $1.74 billion in 2024 from $1.68 billion in 2023, driven by a 15% increase in sales volume [280]. - Ammonia sales volume reached 4.1 million tons in 2024, a 15% increase compared to 3.5 million tons in 2023, influenced by the Waggaman acquisition and additional purchases [282]. - Granular Urea segment net sales decreased by $223 million, or 12%, to $1.60 billion in 2024 compared to $1.82 billion in 2023, primarily due to an 11% decrease in average selling prices [285]. - UAN segment net sales decreased by $390 million, or 19%, to $1.68 billion in 2024 compared to $2.07 billion in 2023, driven by a 13% decrease in average selling prices and a 6% decrease in sales volume [292]. Pricing and Costs - Average selling price decreased by 10% to $313 per ton in 2024 from $347 per ton in 2023, resulting in a decrease in net sales of approximately $716 million [251]. - Average selling price per product ton decreased by 10% to $425 in 2024 from $473 in 2023, reflecting lower global energy costs [280]. - Cost of sales averaged $204 per ton in 2024, a 5% decrease from $214 per ton in 2023, with natural gas costs decreasing by 35% to $2.40 per MMBtu [258]. - Gross margin for 2024 was $2.056 billion, down 19.2% from $2.545 billion in 2023 [396]. - Gross margin in the Granular Urea segment decreased by $139 million, or 17%, to $674 million in 2024, with a gross margin percentage of 42.1% compared to 44.6% in 2023 [287]. Expenses - Selling, general and administrative expenses increased by $31 million to $320 million in 2024, primarily due to increased amortization expenses related to the Waggaman acquisition [260]. - Interest expense decreased by $29 million to $121 million in 2024, mainly due to a reduction in interest on tax liabilities [268]. - The company reported depreciation and amortization expenses of $925 million in 2024, compared to $869 million in 2023, an increase of about 6.4% [406]. Cash Flow and Investments - Cash and cash equivalents balance as of December 31, 2024, was $1.61 billion, a decrease of $418 million from $2.03 billion at December 31, 2023 [306]. - Net cash used in investing activities was $469 million in 2024, a decrease of $1.21 billion compared to $1.68 billion in 2023 [353]. - The company purchased treasury stock amounting to $1,509 million in 2024, compared to $580 million in 2023, indicating a significant increase in stock repurchase activity [406]. Debt and Financing - The total long-term debt as of December 31, 2024, was $3 billion, with various senior notes and secured notes issued [331]. - The company has a senior unsecured revolving credit agreement providing for a revolving credit facility of up to $750 million, maturing on October 26, 2028 [324]. - As of December 31, 2024, the company had unused borrowing capacity of $750 million under the revolving credit agreement and no outstanding letters of credit [329]. Natural Gas and Derivatives - Natural gas costs decreased by 35% to $2.40 per MMBtu in 2024 from $3.67 per MMBtu in 2023, representing approximately 28% of total production costs [343]. - The company manages natural gas price risk primarily through derivative financial instruments, including fixed price swaps and options [434]. - Unrealized net mark-to-market gains on natural gas derivatives were $35 million in 2024 and $39 million in 2023, impacting cost of sales [346]. Acquisitions and Facilities - The acquisition of the Waggaman ammonia production facility was completed for a final purchase price of $1.221 billion, with a long-term ammonia offtake agreement to supply up to 200,000 tons of ammonia per year [312][313]. - The Waggaman facility's financial results were included in the Ammonia segment from December 1, 2023, contributing to increased sales volume and gross margin [280]. Other Financial Metrics - Total assets decreased from $14,376 million in 2023 to $13,466 million in 2024, a decline of approximately 6.3% [402]. - Total stockholders' equity decreased from $8,373 million in 2023 to $7,592 million in 2024, a decline of approximately 9.3% [402]. - The company declared cash dividends of $2.00 per share in 2024, up from $1.60 per share in 2023 [404].

Financial Data and Key Metrics Changes - CF Industries reported adjusted EBITDA of $562 million for Q4 2024 and $2.3 billion for the full year, with net earnings attributable to common stockholders of approximately $328 million, or $1.89 per diluted share for Q4, and $1.2 billion, or $6.74 per diluted share for the full year [7][20][21]. - The company generated net cash from operations of $2.3 billion and free cash flow of approximately $1.45 billion for the year, with a cash flow to adjusted EBITDA conversion rate of 63% [21][22]. Business Line Data and Key Metrics Changes - The production network achieved over 2.6 million tons of gross ammonia in Q4 2024, reflecting a 100% utilization rate, finishing the year with 9.8 million tons of gross ammonia production [10][11]. - The company expects to produce approximately 10 million tons of gross ammonia in 2025 [11]. Market Data and Key Metrics Changes - The global nitrogen market is experiencing a tightening supply-demand balance, particularly highlighted by India's struggles to secure targeted volumes for urea tenders [18]. - World corn stocks and the corn stocks-to-use ratio, excluding China, are at 13- and 30-year lows, indicating strong nitrogen demand in the U.S. for 2025 [18]. Company Strategy and Development Direction - CF Industries is advancing strategic initiatives, including the completion of a carbon capture and sequestration project at the Donaldsonville complex and evaluating a greenfield low-carbon ammonia plant at the Blue Point complex [12][13]. - The company aims to finalize investment decisions for the Blue Point project in Q1 2025, with ownership potentially ranging from 40% to 75% depending on equity partners [14][15]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position due to strong nitrogen industry fundamentals and the ability to generate superior free cash flow [8][28]. - The outlook for 2025 is positive, with expectations of robust demand for nitrogen products driven by low corn stocks and favorable agricultural conditions [18][95]. Other Important Information - CF Industries returned $1.9 billion to shareholders in 2024, the highest level in over a decade, including $364 million in dividends and over $1.5 billion in share repurchases [8][22]. - The company completed a FEED study for a 1.4 million metric tons per year ATR ammonia plant, with an estimated project cost of approximately $4 billion [24]. Q&A Session Summary Question: Discussion on hedging strategy and gas prices - Management indicated a more opportunistic approach to hedging in 2024, focusing on cash market strategies and front-month hedging [35][36]. Question: Sensitivity table for EBITDA based on gas and urea prices - The sensitivity table reflects last year's actual product price differentials, indicating potential EBITDA could be lower due to changes in market conditions [39][42]. Question: Capital allocation for 2025 and potential long-term offtakes - The company plans to allocate over $500 million for capital expenditures and expects to complete share repurchases by the end of the year [50][51]. Question: Demand outlook for the Blue Point project - Management expressed confidence in demand for the Blue Point project, with ongoing discussions with potential partners and a strong market interest [56][60]. Question: Risks impacting supply-demand and prices - Management acknowledged potential risks from geopolitical issues and economic factors but remains optimistic about the nitrogen market's fundamentals [138][139]. Question: Clarification on carbon sequestration plans - Management clarified that the carbon sequestration project is on track, with expectations to begin operations in the second half of 2025 [115][116].

2024 Fourth Quarter and Full Year Financial Results February 19, 2025 NYSE: CF Safe harbor statement All statements in this presentation 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 simil ...

Core Viewpoint - CF Industries Holdings, Inc. reported a strong fourth-quarter performance with earnings per share of $1.89, surpassing both the previous year's $1.44 and the Zacks Consensus Estimate of $1.49 [1][2]. Financial Performance - Net sales for the fourth quarter decreased by approximately 3% year over year to $1,524 million, but exceeded the Zacks Consensus Estimate of $1,466.4 million [2]. - For the full year 2024, earnings per share were $6.74, down from $7.87 in the previous year, with net sales declining around 10.5% year over year to $5,936 million [8]. Segment Review - The Ammonia segment saw a 15.5% increase in net sales year over year to $572 million, exceeding estimates, with an average selling price per ton of $461 [4]. - The Granular Urea segment experienced an 11.2% decline in sales to $348 million, missing estimates, while the average selling price per ton was $347 [5]. - The Urea Ammonium Nitrate segment's sales fell around 11% to $372 million, beating estimates, with an average selling price per ton of $231 [6]. - The Ammonium Nitrate segment's sales decreased by 15.8% to $101 million, surpassing estimates, with an average selling price per ton of $283 [7]. Cash Flow and Share Repurchase - CF Industries ended 2024 with cash and cash equivalents of $1,614 million, a decrease of approximately 20.6% year over year [9]. - The company repurchased 18.8 million shares for $1.51 billion in 2024, including 4.4 million shares for $385 million in the fourth quarter [9]. Market Outlook - The company anticipates a positive global supply-demand balance, with inventories considered below normal and challenging production economics for marginal producers in Europe [10]. - Expectations for higher U.S. corn returns compared to soybeans are driven by rising corn prices and lower yield predictions, which may boost nitrogen demand [11]. - Low urea inventory in India is expected due to strong domestic demand and lower-than-targeted domestic output [12]. Stock Performance - CF Industries' shares have increased by 8.6% over the past year, outperforming the industry average rise of 2.2% [13].

Group 1 - CF Industries reported quarterly earnings of $1.89 per share, exceeding the Zacks Consensus Estimate of $1.49 per share, and showing an increase from $1.49 per share a year ago, representing an earnings surprise of 26.85% [1] - The company posted revenues of $1.52 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 3.93%, although this is a decrease from year-ago revenues of $1.57 billion [2] - CF Industries has surpassed consensus EPS estimates three times over the last four quarters and topped consensus revenue estimates two times in the same period [2] Group 2 - The stock has underperformed the market, losing about 2.5% since the beginning of the year compared to the S&P 500's gain of 4.2% [3] - The current consensus EPS estimate for the coming quarter is $1.39 on revenues of $1.47 billion, and for the current fiscal year, it is $5.83 on revenues of $5.96 billion [7] - The Zacks Industry Rank indicates that the Fertilizers industry is currently in the top 16% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

Financial Performance - For the full year 2024, CF Industries reported net earnings of $1.22 billion, or $6.74 per diluted share, compared to $1.53 billion, or $7.87 per diluted share in 2023[4]. - Adjusted EBITDA for 2024 was $2.28 billion, down from $2.76 billion in 2023, while EBITDA was $2.33 billion compared to $2.71 billion in the previous year[4]. - Net sales for 2024 were $5.94 billion, a decrease from $6.63 billion in 2023, with average selling prices lower due to reduced global energy costs[5]. - Net earnings attributable to common stockholders for the year ended December 31, 2024, were $1,218 million, a decrease of 20.1% from $1,525 million in 2023[25]. - Free cash flow for the year ended December 31, 2024, was $1,445 million, compared to $1,799 million in 2023, indicating a decrease of 20%[58]. - Operating earnings for the year ended December 31, 2024, were $1,746 million, down from $2,230 million in 2023, a decline of 22%[50]. - The company reported total adjustments affecting comparability of results for the three months ended December 31, 2024, amounting to $(20) million, compared to $36 million in 2023[67]. Sales and Production - Gross ammonia production for 2024 was approximately 9.8 million tons, an increase from 9.5 million tons in 2023, with expectations of around 10 million tons in 2025[3]. - Ammonia sales volume for 2024 increased to 4,085,000 tons, up from 3,546,000 tons in 2023, due to the acquisition of the Waggaman ammonia production facility[28]. - UAN sales volume for 2024 was 6,753,000 tons, slightly down from 6,852,000 tons in 2023, indicating stable demand[28]. - Sales volume by product tons for the year ended December 31, 2024, was 18,943,000 tons, down from 19,130,000 tons in 2023, a decrease of 1.0%[64]. Pricing and Costs - The average cost of natural gas in 2024 was $2.40 per MMBtu, significantly lower than $3.67 per MMBtu in 2023, contributing to reduced cost of sales[6]. - Average selling price per product ton for ammonia was $425 in 2024, down from $473 in 2023, reflecting lower global energy costs[27]. - Granular urea net sales for the year ended December 31, 2024, were $1,600 million, a decrease of 12.3% from $1,823 million in 2023[30]. - Adjusted gross margin for granular urea was $949 million for the year ended December 31, 2024, compared to $1,087 million in 2023, with an adjusted gross margin percentage of 59.3%[30]. - The company reported a decrease in average selling prices across segments due to lower global energy costs impacting market prices[31]. Margins - Gross margin for the year ended December 31, 2024, was $2,056 million, down 19.2% from $2,545 million in 2023, with a gross margin percentage of 34.6% compared to 38.4%[25]. - Adjusted gross margin for the year ended December 31, 2024, was $867 million, representing 51.7% of net sales, compared to $1,094 million and 52.9% in 2023[33]. - Gross margin for the year ended December 31, 2024, was $609 million, down from $817 million in 2023, resulting in a gross margin percentage of 36.3% compared to 39.5%[33]. Shareholder Returns - CF Industries returned $1.9 billion to shareholders through share repurchases and dividends in 2024, repurchasing 18.8 million shares for $1.51 billion[1][11]. - The Board of Directors declared a quarterly dividend of $0.50 per common share, payable on February 28, 2025[41]. Future Outlook and Investments - Management expects the global nitrogen supply-demand balance to remain constructive in the near term, with global nitrogen demand growth projected at approximately 1.5% per year[16]. - CF Industries anticipates capital expenditures for 2025 to be approximately $500-550 million, following $518 million in 2024[10]. - The company completed a FEED study for a new ATR ammonia production facility with carbon capture, estimating project costs at approximately $4.0 billion[17]. - The company is focused on developing low-carbon ammonia projects, which may involve significant risks and uncertainties related to market growth and regulatory requirements[49]. - CF Industries is focused on decarbonizing its ammonia production network to enable low-carbon hydrogen and nitrogen products[43]. Operational Updates - The commissioning of the 20-megawatt alkaline water electrolysis plant at the Donaldsonville Complex was suspended due to an issue, with plans to resume once resolved[19][20]. - The company plans to discuss its full year and fourth quarter 2024 results in a conference call on February 20, 2025[42]. Quarterly Performance - Net sales for the three months ended December 31, 2024, were $1,524 million, a decrease of 3.0% compared to $1,571 million in the same period of 2023[25]. - Gross margin increased to $524 million in Q4 2024, compared to $501 million in Q4 2023, reflecting improved operational efficiency[50]. - For the three months ended December 31, 2024, net earnings attributable to common stockholders were $328 million, compared to $274 million for the same period in 2023, representing a 19.7% increase[66]. - EBITDA for the three months ended December 31, 2024, was $582 million, compared to $556 million in 2023, indicating an increase of 4.7%[64].

Core Insights - CF Industries is positioned to continue its earnings-beat streak, having a strong history of surpassing earnings estimates, particularly in the last two quarters with an average surprise of 37.70% [1][2] Earnings Performance - In the most recent quarter, CF Industries reported earnings of $1.55 per share against an expectation of $1.05, resulting in a surprise of 47.62% [2] - For the previous quarter, the consensus estimate was $1.80 per share, while the actual earnings were $2.30 per share, leading to a surprise of 27.78% [2] Earnings Estimates and Predictions - Recent estimates for CF Industries have been trending upwards, with a positive Earnings ESP of +1.25%, indicating bullish sentiment among analysts regarding the company's earnings prospects [3][6] - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a high likelihood of another earnings beat, with historical data showing that stocks with this combination beat estimates nearly 70% of the time [4][6] Earnings ESP Explanation - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions, which are often more accurate [5] - It is crucial for investors to check a company's Earnings ESP prior to quarterly releases to enhance the chances of successful predictions [8]

Core Viewpoint - CF Industries is expected to report quarterly earnings of $1.49 per share, indicating no change from the previous year, with revenues projected at $1.47 billion, reflecting a 6.7% decline year-over-year [1]. Earnings Estimates - Over the last 30 days, the consensus EPS estimate has been revised downward by 7.7%, indicating a collective reassessment by analysts [2]. - Revisions to earnings projections are crucial for predicting investor behavior and are strongly correlated with short-term stock price performance [3]. Revenue and Sales Projections - The consensus estimate for 'Net Sales- Ammonia' is $451.17 million, showing a year-over-year decline of 8.9% [5]. - 'Net Sales- Granular Urea' is estimated at $359.17 million, reflecting an 8.4% decrease from the previous year [5]. - 'Net Sales- UAN (urea ammonium nitrate)' is projected at $408.57 million, indicating a 2.3% decline year-over-year [5]. - 'Net Sales- AN (ammonium nitrate)' is expected to reach $105.85 million, with an 11.8% decrease compared to the previous year [6]. Sales Volume Estimates - Analysts estimate 'Sales volume by product - UAN' at 1,806.32 KTon, slightly down from 1,812 KTon reported last year [7]. - 'Sales volume by product - Granular Urea' is forecasted to be 1,076.33 KTon, up from 1,038 KTon in the same quarter last year [7]. - 'Sales volume by product - Ammonia' is projected at 1,078.15 KTon, marginally higher than the 1,077 KTon reported last year [8]. - Total 'Tons of product sold' is expected to be 4,920.86 KTon, compared to 4,912 KTon in the previous year [8]. Average Selling Price Estimates - The average selling price per ton for 'Ammonia' is expected to be $417.62, down from $460 year-over-year [6]. - The average selling price per ton for 'UAN' is projected at $226.48, compared to $231 last year [9]. - The average selling price per ton for 'Granular Urea' is estimated at $334.48, down from $378 in the same quarter last year [9]. - The average selling price per ton for 'AN' is expected to be $265.09, compared to $290 last year [10]. Stock Performance - CF Industries shares have shown a return of -15.8% over the past month, contrasting with the Zacks S&P 500 composite's +3.9% change [10].

Core Viewpoint - CF Industries Holdings, Inc. is expected to report its fourth-quarter 2024 results on February 19, with indications of a potential earnings beat due to strong nitrogen fertilizer demand and lower natural gas costs, despite lower year-over-year selling prices impacting performance [1][2][5]. Group 1: Earnings Performance - CF Industries has beaten the Zacks Consensus Estimate for earnings in two of the last four quarters and missed twice, with an average earnings surprise of 10.2% over the trailing four quarters [2]. - The Earnings ESP for CF is +1.25%, with the Zacks Consensus Estimate for the fourth quarter currently at $1.49 [5]. Group 2: Revenue Estimates - The Zacks Consensus Estimate for CF Industries' fourth-quarter total sales is $1,466.4 million, reflecting a decline of approximately 6.7% year over year [7]. - Estimated sales for the Ammonia segment are $447.5 million, indicating a 9.6% decline year over year [9]. - The Granular Urea segment is estimated at $355.6 million, suggesting a decrease of 9.3% [9]. - Sales for the Urea Ammonium Nitrate Solution segment are projected at $369.9 million, indicating an 11.5% decline year over year [10]. - Total sales for the Ammonium Nitrate segment are estimated at $95.5 million, reflecting a decline of 20.4% year over year [10]. Group 3: Market Factors - CF Industries is expected to benefit from higher global demand for nitrogen fertilizers driven by strong agricultural demand, with healthy nitrogen demand anticipated in the December quarter [11]. - Lower natural gas prices are expected to reduce the company's cost of sales, with the average cost of natural gas falling to $2.10 per MMBtu from $2.54 per MMBtu year over year [12]. - While CF experienced higher selling prices in the third quarter due to increased ammonia prices from lower global supply, weaker year-over-year prices are expected to impact results in the fourth quarter [13].

CF Industries (CF) is expected to deliver flat earnings compared to the year-ago quarter on lower revenues when it reports results for the quarter ended December 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on ...