294a96fb4d6f627bb09055cb69318f7b8d952dec52043108843ee2a3bd3db758

edae5788b06bd75692e00d1ca8aaed9dacf370ab6e63dd6bd22b94fc9ef0fa79

Net sales (USD, millions)

Cost of sales (USD, millions)

Gross margin (USD, millions)

Selling, general and administrative expenses (USD, millions)

U.K. operations restructuring (USD, millions)

Acquisition and integration costs (USD, millions)

Other operating—net (USD, millions)

Total other operating costs and expenses (USD, millions)

Equity in earnings (losses) of operating affiliate (USD, millions)

Operating earnings (USD, millions)

Interest expense (USD, millions)

Interest income (USD, millions)

Other non-operating—net (USD, millions)

Earnings before income taxes (USD, millions)

Income tax provision (USD, millions)

Net earnings (USD, millions)

Net earnings attributable to noncontrolling interest (USD, millions)

Net earnings attributable to common stockholders (USD, millions)

Net earnings per share attributable to common stockholders - Basic (USD)

Net earnings per share attributable to common stockholders - Diluted (USD)

Weighted-average common shares outstanding - Basic (millions)

Weighted-average common shares outstanding - Diluted (millions)

Dividends declared per common share (USD)

U.K. goodwill impairment (USD, millions)

U.K. long-lived and intangible asset impairment (USD, millions)

Loss on debt extinguishment (USD, millions)

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Adjustments for Non-Cash Items (USD, millions)

Stock-Based Compensation (USD, millions)

Changes in Working Capital (USD, millions)

Capital Expenditures (CapEx) (USD, millions)

Proceeds from / Repayments of Debt (USD, millions)

Share Repurchases (USD, millions)

Dividend Payments (USD, millions)

Net Change in Cash (USD, millions)

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0b3a7962474eef9afad7074f8b958331a2e8605f1397b7679f561a911dc99990

Ammonia

Granular Urea

Other

Phosphate

Total Revenue

7cf15bee1f1bb76ccba0951170d4de2efc28d9efad48bc4f4a350395656c8ad5

United States

Foreign

- Canada

- North America (excl. U.S. and Canada)

- United Kingdom

- Other foreign

North America

Europe and Other

cf93555e4111b428b92cc814ef4a06dc05fb7425e3f2d821339a2045df0e36bf

4b93dd6b88642d62563eb0271ba52f2fe480fe3217bfb6cb38da582edf9483b2

The sharp drop in **operating earnings** in Q3 2023 was mainly driven by a significant decline in **net sales** (from **$2,321 million** in Q3 2022 to **$1,273 million** in Q3 2023) and a less-than-proportionate decrease in **cost of sales**. This resulted in a lower gross margin. Additionally, while Q3 2022 included a **$87 million** U.K. asset impairment that negatively affected earnings, the absence of such an adjustment in 2023 did not offset the sales decline. There was also a notable **loss of $36 million** in equity earnings from operating affiliates in Q3 2023—compared to a **$20 million gain** in Q3 2022, which included a **$43 million impairment** of an equity method investment in PLNL. These factors combined led to the substantial reduction in operating earnings in Q3 2023.  **[0001324404-23-000022_cf-11012023_ex991xearnings.htm:17]** **[0001324404-23-000025_cf-20230930.htm:41]** 

Why did operating earnings drop so sharply in Q3 2023?

The decline in Q3 2023 was primarily driven by a **sharp drop in average selling prices** across all product segments, which significantly lowered **net sales** (from **$2,321 million** in Q3 2022 to **$1,273 million** in Q3 2023).  **[0001324404-23-000025_cf-20230930.htm:50]**  This effect was only partially offset by **lower natural gas costs** that improved margins in specific segments like UAN, Granular Urea, Ammonia, AN, and others.  **[0001324404-23-000025_cf-20230930.htm:50]** 

What drove the decline in gross margin in Q3 2023?

The **significant drop in EPS in Q3 2023** was mainly driven by a **sharp decline in gross margin** owing to a **49% decrease in average selling prices**, which reduced the gross margin by **$1.22 billion** despite partial offset from lower natural gas costs, and by a **substantial reduction in net earnings** (from **$438 million** in Q3 2022 to **$164 million** in Q3 2023). Additionally, a **lower income tax provision** and changes in **impairment and restructuring charges**—with a notable adjustment in the U.K. operations charges—along with the impact of **share repurchases** affecting the weighted-average common shares outstanding, further contributed to the drop in EPS.  **[0001324404-23-000025_cf-20230930.htm:34]** **[0001324404-23-000025_cf-20230930.htm:2]** 

What led to the significant drop in EPS in Q3 2023?

The **EPS decline in FY 2023** was driven primarily by a **significant reduction in gross margin due to lower average selling prices**—a consequence of reduced global energy costs impacting the market clearing price. Additionally, the decline was influenced by a **lower income tax provision, decreased interest expense**, and a **reduction in net earnings attributable to noncontrolling interest**, although the drop was somewhat mitigated by share repurchases that reduced the number of shares outstanding.  **[0001324404-24-000003_cf-02142024_ex991xearnings.htm:17]** **[0001324404-24-000008_cf-20231231.htm:84]** 

Why did FY 2023 EPS decline so notably compared to FY 2022?

196d8c3ced65da4d3bc6f0415f7d111c9ae325df262c7796db3029a4da3327cb

The significant drop in **cash and cash equivalents** in **Q4 2023** was primarily driven by large outflows from **investing** and **financing activities**. Specifically, the company spent **$1,223 million** on acquiring the Waggaman ammonia production facility and an additional **$188 million** on property, plant, and equipment, while using **$225 million** for treasury stock repurchases and paying **$76 million** in dividends. Although these outflows were partially offset by **$480 million** generated from operating activities and a **$8 million** positive effect from exchange rate changes, they were not enough to prevent a sharp decline from **$3,254 million** to **$2,032 million** during the quarter.  **[0001324404-24-000005_cf-02142024_ex991xearnings.htm:18]** **[0001324404-24-000003_cf-02142024_ex991xearnings.htm:18]** 

Why did Cash and cash equivalents drop so sharply in Q4 2023?

The significant jump in **Property, plant and equipment—net** in Q4 2023 was mainly driven by several factors. **Capital expenditures** of **$499 million** and the **acquisition** of the Waggaman ammonia production facility for **$1,223 million** substantially increased the asset base. In addition, there was a significant rise in **construction in progress**. Although these increases were partially offset by **depreciation and amortization expenses** of **$861 million**, the net effect was an overall increase of **$704 million** in PP&E—net.  **[0001324404-24-000008_cf-20231231.htm:132]** **[0001324404-24-000008_cf-20231231.htm:114]** 

What drove the significant jump in Property, plant and equipment—net in Q4 2023?

The surge in **Intangible assets—net** in Q4 2023 was primarily due to the acquisition of the **Waggaman ammonia production facility**. This acquisition led to the recording of **$526 million** in intangible assets, which was broken down into **$455 million** in customer relationships and **$71 million** related to a favorable personal property tax agreement.  **[0001324404-24-000008_cf-20231231.htm:135]** 

Why did Intangible assets—net surge in Q4 2023?

The rise in **Total assets** in Q4 2023 was driven by multiple factors. **Property, Plant, and Equipment** increased from **$6,437 million** to **$7,141 million** due to capital investments or acquisitions; **Goodwill** grew from **$2,089 million** to **$2,495 million**, partly due to the acquisition of the Waggaman, Louisiana ammonia production facility; **Intangible Assets** saw a substantial jump from **$15 million** to **$538 million** likely related to recognizing new intangible assets or further acquisitions; and **Other Assets** increased from **$771 million** to **$867 million**, reflecting changes in various asset categories such as spare parts and tax-related assets.  **[0001324404-24-000005_cf-02142024_ex991xearnings.htm:17]** **[0001324404-24-000003_cf-02142024_ex991xearnings.htm:17]** **[0001324404-24-000003_cf-02142024_ex991xearnings.htm:8]** **[0001324404-24-000005_cf-02142024_ex991xearnings.htm:8]** **[0001324404-24-000008_cf-20231231.htm:161]** 

What contributed to the rise in Total assets in Q4 2023?

46033aee206f3334c52ec6e9e81b2b58ddfb6939c21d011b75e461620ddc86c5

CF Industries Holdings Inc (CF)

Financials