CF Industries Holdings, Inc. Reports First Half 2019 Net Earnings of $373 Million, EBITDA of $973 Million

Higher Year-Over-Year Prices for All Major Products Support Increased Margins

Record First Half Ammonia Production and Granular Urea Sales Volumes

Strong North American Nitrogen Demand Outlook for 2020 and 2021

DEERFIELD, Ill.–(BUSINESS WIRE)–CF Industries Holdings, Inc. (NYSE: CF), a leading global fertilizer and chemical company, today announced results for its first half and second quarter ended June 30, 2019.

Highlights

  • First half net earnings of $373 million(1), or $1.67 per diluted share; EBITDA(2) of $973 million; adjusted EBITDA(2) of $936 million
  • Second quarter net earnings of $283 million(1), or $1.28 per diluted share; EBITDAof $672 million; adjusted EBITDA of $631 million
  • Trailing 12-month net cash from operating activities of $1.6 billion, free cash flow(3) of $995 million
  • Record first half and quarterly gross ammonia production
  • Record first half and quarterly granular urea sales volume; record quarterly ammonia sales volumes
  • Repurchased approximately 2.7 million shares during the quarter

Overview of Results

CF Industries Holdings, Inc. today announced first half 2019 net earnings attributable to common stockholders of $373 million, or $1.67 per diluted share; EBITDA of $973 million; and adjusted EBITDA of $936 million. These results compare to the first half of 2018 net earnings attributable to common stockholders of $211 million, or $0.90 per diluted share; EBITDA of $772 million; and adjusted EBITDA of $763 million.

For the second quarter of 2019, net earnings attributable to common stockholders were $283 million, or $1.28 per diluted share; EBITDA was $672 million; and adjusted EBITDA was $631 million. These results compare to second quarter 2018 net earnings attributable to common stockholders of $148 million, or $0.63 per diluted share; EBITDA of $470 million; and adjusted EBITDA of $467 million.

“The CF team operated exceptionally well during a challenging spring season,” said Tony Will, president and chief executive officer, CF Industries Holdings, Inc. “We shifted our production mix, favoring urea over UAN to capture higher margin opportunities, we leveraged our transportation flexibility to overcome the impact of historic flooding and we reliably supplied our customers where and when they needed product. As a result of our outstanding execution and unparalleled production and logistics capabilities, we delivered first half adjusted EBITDA 23 percent higher than in 2018 on similar product volumes. As the global nitrogen market has strengthened over the last 12 months, CF generated nearly $1 billion in free cash flow. As we look forward, we believe strong demand in North America, our position on the low end of the global cost curve and the capabilities of CF’s people and systems will continue to drive substantial cash generation.”

________________________________________________________________

(1)

 

First half and second quarter 2019 net earnings attributable to common stockholders include an after-tax gain of $35 million on the sale of the company’s Pine Bend dry bulk storage and logistics facility in Minnesota. First half 2019 net earnings attributable to common stockholders also includes a previously announced net incentive tax credit of $30 million recognized in the first quarter.

(2)

 

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.

(3)

 

Free cash flow is defined as net cash from operating activities less capital expenditures and distributions to noncontrolling interests. See reconciliation of free cash flow to the most directly comparable GAAP measure in the table accompanying this release.

Operations Overview

CF Industries continued operating safely and efficiently. As of June 30, 2019, the company’s 12-month rolling average recordable incident rate was 0.60 incidents per 200,000 work hours.

Gross ammonia production for the first half of 2019 was over 5.2 million tons, and for the second quarter was nearly 2.7 million tons. The company expects gross ammonia production during the third quarter to be somewhat lower due to scheduled maintenance activity.

Sales Overview

Net sales in the first half and second quarter of 2019 were $2.5 billion and $1.5 billion, respectively, compared to $2.3 billion and $1.3 billion, respectively, in the same periods of the prior year due primarily to higher average selling prices across all major products.

Total sales volumes for the first half of 2019 were similar to the first half of 2018, reflecting the company’s ability to deal with changes in the timing of fertilizer applications due to weather and other developments. Total sales volumes for the second quarter of 2019 were higher compared to the second quarter of 2018 as cold and wet weather in North America shifted fertilizer shipments and applications out of the first quarter and into the second quarter. Therefore, quarterly comparisons year-over-year are less meaningful than the comparability of first half results.

Average selling prices for the first half and second quarter of 2019 were each higher year-over-year across all major products due to a tighter global nitrogen supply and demand balance than the prior year periods and logistical issues in North America that limited supply at some inland locations.

Cost of sales in the first half of 2019 increased slightly compared to the first half of 2018 primarily due to higher freight and realized natural gas costs partially offset by lower plant maintenance costs. Cost of sales in the second quarter of 2019 increased slightly compared to the second quarter of 2018 due primarily to the impact of higher sales volumes and freight costs partially offset by lower realized natural gas and plant maintenance costs.

In the first half of 2019, the average cost of natural gas reflected in the company’s cost of sales was $3.15 per MMBtu compared to the average cost of natural gas in cost of sales of $3.11 per MMBtu in the first half of 2018. The increase reflects the impact of inventory sold during the first half of 2019 that was produced in the fourth quarter of 2018 when realized natural gas costs were higher. In the second quarter of 2019, the average cost of natural gas reflected in the company’s cost of sales was $2.81 per MMBtu compared to the average cost of natural gas in cost of sales of $2.95 per MMBtu in the second quarter of 2018.

Looking ahead, the company expects the cost of natural gas for 2019 to be well below 2018 levels. During the first half of 2019, the average cost of natural gas at Henry Hub in North America was $2.70 per MMBtu and the average cost of natural gas at the National Balancing Point in the United Kingdom was $5.15 per MMBtu. This compares to the average cost of natural gas at Henry Hub in North America of $2.92 per MMBtu and the average cost of natural gas at the National Balancing Point in the United Kingdom of $7.77 per MMBtu in the first half of 2018. Through the end of 2019, Henry Hub natural gas futures remain well below $3.00 per MMBtu, and below 2018 costs.

Market Overview

The company expects that nitrogen fertilizer industry fundamentals will be positive over the near and longer term. In the near-term, demand for nitrogen in North America should be strong due to the impact of adverse planting and growing conditions in many parts of the United States in 2019. Historic flooding is expected to lead to a reduction in 2019 corn production due to significantly lower planted acres and yields. This should create a strong price incentive for growers in the United States to increase planted corn acres significantly over the next two seasons.

Globally, the company expects demand for urea from India and Brazil to remain strong over the next two years. Through the end of June 2019, urea imports to India were 3.5 million metric tons, an increase of 11 percent over the prior year period. Imports of urea to Brazil for the full year 2019 are expected to increase.

The company expects that global demand growth for nitrogen over the next four years will outpace net capacity additions given the limited number of facilities currently under construction around the world, none of which are in North America. The company also expects Chinese coal-based nitrogen complexes to remain the global marginal urea producer. Net Chinese-produced urea exports are likely to be in a range of 1-3 million metric tons annually, with higher nitrogen prices bidding in additional Chinese export tons at times when urea supply is needed worldwide.

Capital Expenditures

Capital expenditures in 2019 are projected to be $400-$450 million.

Liquidity

As of June 30, 2019, the company had cash and cash equivalents of $858 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.

The company is currently executing a $1 billion share repurchase program that is authorized through 2021. During the second quarter of 2019, the company repurchased approximately 2.7 million shares for $118 million. Since the current authorization was announced in February 2019, the company has repurchased approximately 4.2 million shares for $178 million.

During the first quarter of 2019, the company entered into an agreement to sell its Pine Bend dry bulk storage and logistics facility in Minnesota. In April of 2019, the sale closed and the company received proceeds of $55 million.

CHS Inc. Distribution

On July 31, 2019, the Board of Managers of CF Industries Nitrogen, LLC (CFN) approved a semi-annual distribution payment to CHS Inc. (CHS) of $100 million for the distribution period ended June 30, 2019. The distribution was paid on July 31, 2019.

Consolidated Results

 

Three months ended

June 30,

 

Six months ended

June 30,

 

2019

 

2018

 

2019

 

2018

 

(dollars in millions, except per share

and per MMBtu amounts)

Net sales

$

1,502

 

 

$

1,300

 

 

$

2,503

 

 

$

2,257

 

Cost of sales

1,003

 

 

988

 

 

1,784

 

 

1,755

 

Gross margin

$

499

 

 

$

312

 

 

$

719

 

 

$

502

 

Gross margin percentage

33.2

%

 

24.0

%

 

28.7

%

 

22.2

%

 

 

 

 

 

 

 

 

Net earnings attributable to common stockholders

$

283

 

 

$

148

 

 

$

373

 

 

$

211

 

Net earnings per diluted share

$

1.28

 

 

$

0.63

 

 

$

1.67

 

 

$

0.90

 

 

 

 

 

 

 

 

 

EBITDA(1)

$

672

 

 

$

470

 

 

$

973

 

 

$

772

 

Adjusted EBITDA(1)

$

631

 

 

$

467

 

 

$

936

 

 

$

763

 

 

 

 

 

 

 

 

 

Tons of product sold (000s)

5,716

 

 

5,538

 

 

9,803

 

 

9,841

 

 

 

 

 

 

 

 

 

Supplemental data (per MMBtu):

 

 

 

 

 

 

 

Natural gas costs in cost of sales(2)

$

2.81

 

 

$

2.92

 

 

$

3.16

 

 

$

3.08

 

Realized derivatives loss (gain) in cost of sales(3)

 

 

0.03

 

 

(0.01

)

 

0.03

 

Cost of natural gas in cost of sales

$

2.81

 

 

$

2.95

 

 

$

3.15

 

 

$

3.11

 

 

 

 

 

 

 

 

 

Average daily market price of natural gas (per MMBtu):

 

 

 

 

 

 

 

Henry Hub

$

2.51

 

 

$

2.82

 

 

$

2.70

 

 

$

2.92

 

National Balancing Point UK

$

4.07

 

 

$

7.34

 

 

$

5.15

 

 

$

7.77

 

 

 

 

 

 

 

 

 

Unrealized net mark-to-market (gain) loss on natural gas derivatives

$

(1

)

 

$

(5

)

 

$

1

 

 

$

(8

)

Depreciation and amortization

$

252

 

 

$

241

 

 

$

440

 

 

$

434

 

Capital expenditures

$

74

 

 

$

77

 

 

$

154

 

 

$

145

 

 

 

 

 

 

 

 

 

Production volume by product tons (000s):

 

 

 

 

 

 

 

Ammonia(4)

2,661

 

 

2,460

 

 

5,228

 

 

4,968

 

Granular urea

1,324

 

 

1,228

 

 

2,630

 

 

2,379

 

UAN (32%)

1,589

 

 

1,557

 

 

3,226

 

 

3,362

 

AN

551

 

 

423

 

 

1,033

 

 

881

 

_______________________________________________________________________________

(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

June 30,

 

Six months ended

June 30,

 

2019

 

2018

 

2019

 

2018

 

(dollars in millions,

except per ton amounts)

Net sales

$

473

 

 

$

374

 

 

$

660

 

 

$

586

 

Cost of sales

300

 

 

272

 

 

466

 

 

460

 

Gross margin

$

173

 

 

$

102

 

 

$

194

 

 

$

126

 

Gross margin percentage

36.6

%

 

27.3

%

 

29.4

%

 

21.5

%

 

 

 

 

 

 

 

 

Sales volume by product tons (000s)

1,222

 

 

1,094

 

 

1,828

 

 

1,758

 

Sales volume by nutrient tons (000s)(1)

1,002

 

 

898

 

 

1,499

 

 

1,442

 

 

 

 

 

 

 

 

 

Average selling price per product ton

$

387

 

 

$

342

 

 

$

361

 

 

$

333

 

Average selling price per nutrient ton(1)

472

 

 

416

 

 

440

 

 

406

 

 

 

 

 

 

 

 

 

Adjusted gross margin(2):

 

 

 

 

 

 

 

Gross margin

$

173

 

 

$

102

 

 

$

194

 

 

$

126

 

Depreciation and amortization

53

 

 

52

 

 

82

 

 

77

 

Unrealized net mark-to-market gain on natural gas derivatives

 

 

(1

)

 

 

 

(2

)

Adjusted gross margin

$

226

 

 

$

153

 

 

$

276

 

 

$

201

 

Adjusted gross margin as a percent of net sales

47.8

%

 

40.9

%

 

41.8

%

 

34.3

%

 

 

 

 

 

 

 

 

Gross margin per product ton

$

142

 

 

$

93

 

 

$

106

 

 

$

72

 

Gross margin per nutrient ton(1)

173

 

 

114

 

 

129

 

 

87

 

Adjusted gross margin per product ton

185

 

 

140

 

 

151

 

 

114

 

Adjusted gross margin per nutrient ton(1)

226

 

 

170

 

 

184

 

 

139

 

_______________________________________________________________________________

(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 2019 to 2018 first half and second quarter periods:

  • Ammonia sales volume increased for the first half of 2019 compared to 2018 due to greater supply availability as a result of increased production. Sales volume for the second quarter of 2019 increased compared to 2018 as cold and wet weather in North America shifted fertilizer shipments and applications out of the first quarter and into the second quarter.
  • Ammonia average selling prices increased for the first half and second quarter of 2019 compared to 2018 due to a tighter nitrogen supply and demand balance than the prior year periods.
  • Ammonia adjusted gross margin per ton increased for the first half and second quarter of 2019 compared to 2018 due primarily to higher average selling prices.

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

June 30,

 

Six months ended

June 30,

 

 

2019

 

2018

 

2019

 

2018

 

 

(dollars in millions,

except per ton amounts)

 

Net sales

$

433

 

 

$

360

 

 

$

776

 

 

$

624

 

 

Cost of sales

251

 

 

255

 

 

479

 

 

444

 

 

Gross margin

$

182

 

 

$

105

 

 

$

297

 

 

$

180

 

 

Gross margin percentage

42.0

%

 

29.2

%

 

38.3

%

 

28.8

%

 

 

 

 

 

 

 

 

 

 

Sales volume by product tons (000s)

1,496

 

 

1,434

 

 

2,680

 

 

2,416

 

 

Sales volume by nutrient tons (000s)(1)

688

 

 

659

 

 

1,233

 

 

1,111

 

 

 

 

 

 

 

 

 

 

 

Average selling price per product ton

$

289

 

 

$

251

 

 

$

290

 

 

$

258

 

 

Average selling price per nutrient ton(1)

629

 

 

546

 

 

629

 

 

562

 

 

 

 

 

 

 

 

 

 

 

Adjusted gross margin(2):

 

 

 

 

 

 

 

 

Gross margin

$

182

 

 

$

105

 

 

$

297

 

 

$

180

 

 

Depreciation and amortization

79

 

 

81

 

 

145

 

 

140

 

 

Unrealized net mark-to-market (gain) loss on natural gas derivatives

 

 

(1

)

 

1

 

 

(2

)

 

Adjusted gross margin

$

261

 

 

$

185

 

 

$

443

 

 

$

318

 

 

Adjusted gross margin as a percent of net sales

60.3

%

 

51.4

%

 

57.1

%

 

51.0

%

 

 

 

 

 

 

 

 

 

 

Gross margin per product ton

$

122

 

 

$

73

 

 

$

111

 

 

$

75

 

 

Gross margin per nutrient ton(1)

265

 

 

159

 

 

241

 

 

162

 

 

Adjusted gross margin per product ton

174

 

 

129

 

 

165

 

 

132

 

 

Adjusted gross margin per nutrient ton(1)

379

 

 

281

 

 

359

 

 

286

 

_______________________________________________________________________________

(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 2019 to 2018 first half and second quarter periods:

  • Granular urea sales volume increased for the first half and second quarter of 2019 compared to 2018 due to higher volumes of product available for sale as the company chose to increase granular urea production at the expense of UAN production.
  • Urea average selling prices improved in the first half and second quarter of 2019 compared to 2018 due to a tighter global nitrogen supply and demand balance than the prior year periods and logistical issues in North America that limited supply at some inland locations.
  • Granular urea adjusted gross margin per ton increased for the first half and second quarter of 2019 compared to 2018 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

June 30,

 

Six months ended

June 30,

 

 

2019

 

2018

 

2019

 

2018

 

 

(dollars in millions,

except per ton amounts)

 

Net sales

$

369

 

 

$

339

 

 

$

625

 

 

$

622

 

 

Cost of sales

277

 

 

258

 

 

472

 

 

488

 

 

Gross margin

$

92

 

 

$

81

 

 

$

153

 

 

$

134

 

 

Gross margin percentage

24.9

%

 

23.9

%

 

24.5

%

 

21.5

%

 

 

 

 

 

 

 

 

 

 

Sales volume by product tons (000s)

1,871

 

 

1,820

 

 

3,139

 

 

3,489

 

 

Sales volume by nutrient tons (000s)(1)

591

 

 

575

 

 

987

 

 

1,102

 

 

 

 

 

 

 

 

 

 

 

Average selling price per product ton

$

197

 

 

$

186

 

 

$

199

 

 

$

178

 

 

Average selling price per nutrient ton(1)

624

 

 

590

 

 

633

 

 

564

 

 

 

 

 

 

 

 

 

 

 

Adjusted gross margin(2):

 

 

 

 

 

 

 

 

Gross margin

$

92

 

 

$

81

 

 

$

153

 

 

$

134

 

 

Depreciation and amortization

71

 

 

72

 

 

117

 

 

135

 

 

Unrealized net mark-to-market gain on natural gas derivatives

(1

)

 

(2

)

 

 

 

(3

)

 

Adjusted gross margin

$

162

 

 

$

151

 

 

$

270

 

 

$

266

 

 

Adjusted gross margin as a percent of net sales

43.9

%

 

44.5

%

 

43.2

%

 

42.8

%

 

 

 

 

 

 

 

 

 

 

Gross margin per product ton

$

49

 

 

$

45

 

 

$

49

 

 

$

38

 

 

Gross margin per nutrient ton(1)

156

 

 

141

 

 

155

 

 

122

 

 

Adjusted gross margin per product ton

87

 

 

83

 

 

86

 

 

76

 

 

Adjusted gross margin per nutrient ton(1)

274

 

 

263

 

 

274

 

 

241

 

_______________________________________________________________________________

(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 2019 to 2018 first half and second quarter periods:

  • UAN sales volume for the first half of 2019 decreased compared to 2018 due to lower supply availability from lower production as the company chose to favor granular urea production over UAN as well as the impact of late planting in North America that delayed some fertilizer shipments and applications into the third quarter. Sales volume for the second quarter of 2019 was similar to the second quarter of 2018.
  • UAN average selling prices improved in the first half and second quarter of 2019 compared to 2018 due to a tighter nitrogen supply and demand balance than the prior year periods and logistical issues in North America that limited supply at some inland locations.
  • UAN adjusted gross margin per ton increased for the first half and second quarter of 2019 compared to 2018 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

June 30,

 

Six months ended

June 30,

 

 

2019

 

2018

 

2019

 

2018

 

 

(dollars in millions,

except per ton amounts)

 

Net sales

$

126

 

 

$

124

 

 

$

253

 

 

$

224

 

 

Cost of sales

94

 

 

117

 

 

208

 

 

191

 

 

Gross margin

$

32

 

 

$

7

 

 

$

45

 

 

$

33

 

 

Gross margin percentage

25.4

%

 

5.6

%

 

17.8

%

 

14.7

%

 

 

 

 

 

 

 

 

 

 

Sales volume by product tons (000s)

528

 

 

568

 

 

1,029

 

 

985

 

 

Sales volume by nutrient tons (000s)(1)

179

 

 

193

 

 

345

 

 

333

 

 

 

 

 

 

 

 

 

 

 

Average selling price per product ton

$

239

 

 

$

218

 

 

$

246

 

 

$

227

 

 

Average selling price per nutrient ton(1)

704

 

 

642

 

 

733

 

 

673

 

 

 

 

 

 

 

 

 

 

 

Adjusted gross margin(2):

 

 

 

 

 

 

 

 

Gross margin

$

32

 

 

$

7

 

 

$

45

 

 

$

33

 

 

Depreciation and amortization

21

 

 

14

 

 

43

 

 

32

 

 

Unrealized net mark-to-market (gain) loss on natural gas derivatives

 

 

 

 

 

 

 

 

Adjusted gross margin

$

53

 

 

$

21

 

 

$

88

 

 

$

65

 

 

Adjusted gross margin as a percent of net sales

42.1

%

 

16.9

%

 

34.8

%

 

29.0

%

 

 

 

 

 

 

 

 

 

 

Gross margin per product ton

$

61

 

 

$

12

 

 

$

44

 

 

$

34

 

 

Gross margin per nutrient ton(1)

179

 

 

36

 

 

130

 

 

99

 

 

Adjusted gross margin per product ton

100

 

 

37

 

 

86

 

 

66

 

 

Adjusted gross margin per nutrient ton(1)

296

 

 

109

 

 

255

 

 

195

 

_______________________________________________________________________________

(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.

Contacts

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

Read full story here

error: Content is protected !!