CF Industries Holdings, Inc. Reports Fourth Quarter Net Earnings of $465 Million and EBITDA of $224 Million; Adjusted Net Loss of $3 Million and Adjusted EBITDA of $260 Million

Outstanding Operational Performance in the Quarter and the Year

Highest Quarterly Sales Volume in Company's History

Long-term Debt Reduced by $1.1 Billion

DEERFIELD, Ill.–(BUSINESS WIRE)–CF Industries Holdings, Inc. (NYSE: CF), the global leader in nitrogen
products manufacturing and distribution, today announced results for its
fourth quarter ended December 31, 2017.

Fourth Quarter Highlights

• Net earnings of $465 million, or $1.98 per diluted share, which
  includes a net income tax benefit of $491 million, or $2.09 per
  diluted share, as a result of the U.S. Tax Cuts and Jobs Act
• Adjusted net loss(1) of $3 million or $0.02 per diluted
  share(1)
• EBITDA(2) of $224 million; adjusted EBITDA(2) of
  $260 million
• Sales volume of approximately 5.3 million tons, five percent higher
  than previous quarterly record
• Reduced long-term debt by $1.1 billion, lowering annualized interest
  payments by $76 million

Full Year Highlights

• Net earnings of $358 million, or $1.53 per diluted share, which
  includes a net income tax benefit of $491 million, or $2.10 per
  diluted share, as a result of the U.S. Tax Cuts and Jobs Act
• Adjusted net loss(1) of $59 million or $0.25 per diluted
  share(1)
• EBITDA(2) of $856 million; adjusted EBITDA(2) of
  $969 million
• Year-end 12-month rolling average recordable incident rate at lowest
  level in company’s history
• Record production volume of 10.3 million tons of gross ammonia
• Record sales volumes of approximately 20 million product tons

Impact of U.S. Tax Cuts and Jobs Act

As a result of the Tax Cuts and Jobs Act of 2017, the company's fourth
quarter 2017 net earnings of $1.98 per diluted share included a $2.09
per share net income tax benefit and for the full year 2017 net earnings
of $1.53 per diluted share included a $2.10 per share net income tax
benefit. The net income tax benefit is primarily comprised of a $552
million income tax benefit from a revaluation of the company's deferred
taxes as a result of the new lower corporate tax rate and a $57 million
income tax provision related to the transition tax on deferred foreign
earnings. This is a one-time item that affects the comparability of
results between periods, and accordingly has been excluded from adjusted
net earnings per diluted share and adjusted EBITDA.

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Overview of Results

CF Industries Holdings, Inc., today announced fourth quarter 2017 net
earnings attributable to common stockholders of $465 million, or $1.98
per diluted share, and adjusted net loss of $3 million, or $0.02 per
diluted share. Fourth quarter 2017 EBITDA was $224 million, and adjusted
EBITDA was $260 million. These results compare to fourth quarter 2016
net loss attributable to common stockholders of $320 million, or $1.38
per diluted share; adjusted net loss for the fourth quarter 2016 of $90
million, or $0.39 per diluted share; EBITDA loss of $135 million; and
adjusted EBITDA of $133 million. Fourth quarter 2017 results include a
realized loss on natural gas hedges of $13 million, compared to a
realized loss on natural gas hedges of $5 million for the fourth quarter
of 2016.

For the full year 2017, net earnings attributable to common stockholders
was $358 million, or $1.53 per diluted share, and adjusted net loss was
$59 million, or $0.25 per diluted share. Full year 2017 EBITDA was $856
million, and adjusted EBITDA was $969 million. These results compare to
full year 2016 net loss attributable to common stockholders of $277
million, or $1.19 per diluted share; adjusted net earnings for full year
2016 of $109 million, or $0.47 per diluted share; EBITDA of $395
million; and adjusted EBITDA of $858 million. Full year 2017 results
include a realized loss on natural gas hedges of $26 million, compared
to a realized loss on natural gas hedges of $133 million for full year
2016.

“Outstanding execution by the team in 2017 produced records for safe
operations, production and sales volumes," said Tony Will, president and
chief executive officer, CF Industries Holdings, Inc. "In addition, we
paid down $1.1 billion in debt during the quarter and recently exercised
our right to purchase all of the publicly traded common units of Terra
Nitrogen Company, L.P. We estimate that full ownership of TNCLP would
have added approximately $45 million to EBITDA, including anticipated
cost reductions and network optimization benefits. Additionally, we
estimate that full ownership of TNCLP and the debt reduction would have
resulted in $110 million of additional free cash flow.”

Manufacturing Operations

CF Industries' manufacturing network continued its focus on safety and
operated efficiently during the fourth quarter of 2017. As of
December 31, 2017, CF Industries' 12-month rolling average recordable
incident rate was 0.67 incidents per 200,000 work hours, well below
industry averages.

Gross ammonia production during the fourth quarter of 2017 was more than
2.6 million tons, the second highest volume for a quarter in the
company's history.

Sales Overview

Net sales in the fourth quarter of 2017 increased to $1,099 million from
$867 million in the same period last year due to higher sales volumes
across most segments and higher average selling prices across all
segments.

Total sales volumes for the quarter were significantly higher compared
to the fourth quarter of 2016 as the company's production increased at
the Donaldsonville and Port Neal Nitrogen Complexes.

Average selling prices for the quarter were higher year-over-year across
all segments due largely to a tighter global nitrogen supply and demand
balance. Additionally, average ammonia selling prices benefited from the
commencement of delivery under a long-term supply agreement.

The company's average selling price for ammonia was $285 per ton in the
fourth quarter of 2017 compared to $277 per ton in the fourth quarter of
2016. The average selling price for urea was $244 per ton in the fourth
quarter of 2017 compared to $214 per ton in the fourth quarter of 2016,
and the average selling price for UAN was $150 per ton in the fourth
quarter of 2017 compared to $149 per ton in the fourth quarter of 2016.

Cost of sales per ton increased 10 percent in the fourth quarter of 2017
compared to the fourth quarter of 2016 primarily driven by increased gas
consumption to support the higher production and sales volumes and
increased 11 percent for the full year 2017 compared to the full year
2016 for the same volume reasons.

Controllable cost of sales, defined as non-gas cash costs (maintenance,
labor, electricity, other raw materials, transportation and
distribution, and other plant costs), which excludes the impact of
natural gas, derivatives and depreciation and amortization, decreased 8
percent per ton,(3) in the fourth quarter of 2017 compared to
2016, and 14 percent per ton,(3) in the full year 2017, as a
result of cost reduction initiatives and production efficiencies.

In the fourth quarter of 2017, the average cost of natural gas reflected
in the company's cost of sales was $3.24 per MMBtu, which includes a
realized loss of $0.13 per MMBtu on natural gas hedges totaling $13
million. This compares to the average cost of natural gas in cost of
sales of $3.24 per MMBtu for the fourth quarter of 2016, which included
a realized loss of $0.06 per MMBtu on natural gas hedges totaling $5
million. During the fourth quarter of 2017, the average price of natural
gas at Henry Hub in North America was $2.87 per MMBtu, and the average
price of natural gas at the National Balancing Point in the United
Kingdom was $6.92 per MMBtu.

Additionally, the company recorded an unrealized net mark-to-market gain
on natural gas derivatives of $3 million in the fourth quarter of 2017
compared to an unrealized net mark-to-market gain on natural gas
derivatives of $91 million in the fourth quarter of 2016. The company
did not enter into any additional natural gas derivatives in the fourth
quarter of 2017.

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Market Overview

CF management expects the combination of: a somewhat weaker U.S. dollar;
higher energy costs in key producing regions; reduced production in
China; higher oil and freight costs; and steady global demand to support
nitrogen prices during the first half of 2018 at levels higher than the
same period in 2017.

The U.S. dollar is expected to remain lower against currencies in key
nitrogen producing regions through at least the first half of the year,
pushing up the cost of nitrogen fertilizer exports in U.S. dollar terms.
From the beginning of July 2017 to the beginning of February 2018, the
RMB strengthened against the dollar from approximately 6.8 to 6.3 and
the Russian Ruble strengthened against the dollar from approximately 60
to 57.

Additionally, energy prices since the middle of 2017 have increased
significantly for marginal producers in Eastern Europe and China. From
the beginning of July 2017 to the beginning of February 2018, the price
of natural gas per MMBtu at TTF in Europe has increased approximately 25
percent and the cost of anthracite coal per metric ton in China has
increased 29 percent. Over the same period, the price per MMBtu of
natural gas at Henry Hub has increased less than three percent.

Ocean freight costs have risen as well, adding cost to globally traded
nitrogen. At the beginning of February, ocean freight to ship urea from
the Arab Gulf to the Gulf of Mexico was 15 percent per ton higher than
the year before and nearly 30 percent per ton higher than at the
beginning of July 2017.

These factors have accelerated the transformation of China's role in the
global urea market. According to official government data, Chinese urea
exports have declined approximately 65 percent in two years, from over
13 million metric tons in 2015 to approximately 4.7 million metric tons
in 2017. Industry observers expect marginal producers in China to face
continued pressures during 2018, not only from higher coal costs and
currency impacts, but also from the effect of environmental regulation
enforcement. These challenges are likely to further reduce Chinese net
urea exports in 2018.

India and Brazil will remain key countries for urea demand this year.
Published reports and CF analysis suggest that India may require
500,000-1,000,000 metric tons of urea to be imported before the end of
March to meet that country’s fertilizer needs for 2018. Additionally,
Brazil has emerged in recent years as the second largest importer of
urea in the world, with imports of approximately 5.4 million metric tons
in 2017, 15 percent higher than 2016 and 64 percent higher than 2012.
Countries such as Australia, Mexico and Turkey have also significantly
increased imports of urea in recent years.

Imports of nitrogen will continue to be necessary to meet expected
demand in North America in 2018 with the company projecting that
approximately 91 million acres of corn will be planted in the United
States. For much of 2017, nitrogen prices in the region discouraged
imports. Urea barge prices at New Orleans averaged approximately $25
below international parity during the fourth quarter and only rose above
international parity for one week in all of 2017. As a result, imports
of urea and UAN from July through December declined 37 percent and 24
percent, respectively, compared to the same period in 2016. Given steady
demand and higher netbacks available in other regions, nitrogen prices
in North America will likely have to rise to attract the imports
necessary to meet expected demand.

Capital Expenditures

Capital expenditures in 2017 totaled $473 million. Of this amount,
approximately $350 million was for new activities in 2017 and the
remainder was for activities performed in 2016 but paid for in 2017. As
of September 30, 2017, the company had $158 million in costs accrued but
unpaid for work completed in 2016 related to capacity expansion
projects. At December 31, 2017, these costs are no longer the subject of
disputes and the company's capital expenditures for 2017 reflect all
payments associated with these formerly disputed costs.

Capital expenditures in 2018 for new activity are estimated to be in the
range of approximately $400 to $450 million, which takes into account a
higher number of plant turnarounds than in 2017.

Liquidity

As of December 31, 2017, the company had cash and cash equivalents of
$835 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.

On December 1, 2017, the company completed the redemption of all of the
$800 million outstanding principal amount of its 6.875% Senior Notes due
May 2018. Additionally, on December 26, 2017, the company purchased $300
million aggregate principal amount of its 7.125% Senior Notes due 2020
pursuant to a tender offer. As a result, the aggregate principal amount
of CF Industries Holdings, Inc.'s outstanding long-term indebtedness was
approximately $4.75 billion at the end of 2017, compared to $5.85
billion at the end of 2016. At this level of gross debt, interest
expense for 2018 would be approximately $230 million, or $76 million
lower than 2017 on an annualized basis.

Exercise of Right to Purchase All Publicly Traded Units of Terra
Nitrogen Company, L.P.

The company announced on February 7, 2018, that its wholly owned
subsidiary Terra Nitrogen GP Inc. has elected to exercise its right to
purchase all of the publicly traded common units of Terra Nitrogen
Company, L.P. on April 2, 2018, for a cash purchase price of $84.033 per
unit in accordance with the terms of TNCLP’s partnership agreement. The
purchase price of all of the publicly traded common units of TNCLP is
approximately $390 million. The company intends to fund the purchase
with cash on hand. As of the April 2, 2018, purchase date, all rights of
the holders of the units will terminate, with the exception of the right
to receive payment of the purchase price.

CHS Inc. Distribution

On January 31, 2018, the Board of Managers of CF Industries Nitrogen,
LLC (CFN) approved a semi-annual distribution payment to CHS Inc. (CHS)
of $49 million for the distribution period ended December 31, 2017. The
distribution was paid on January 31, 2018. The total distribution to CHS
pertaining to 2017 was approximately $108 million.

Consolidated Results

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During the three months and year ended December 31, 2017 and 2016,
certain significant items impacted our financial results. The following
table outlines these significant items and how they impacted the
comparability of our financial results during these periods. During the
three months ended December 31, 2017 and 2016, we reported net earnings
(loss) attributable to common stockholders of $465 million and
$(320) million, respectively. During the year ended December 31, 2017
and 2016, we reported net earnings (loss) attributable to common
stockholders of $358 million and $(277) million, respectively.

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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.

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Comparison of 2017 to 2016 fourth quarter periods:

• Ammonia sales volume increased for the fourth quarter of 2017 compared
  to the fourth quarter of 2016 due to additional production volume from
  the company's Donaldsonville and Port Neal Nitrogen Complexes and
  increased demand for fall agricultural applications.
• Ammonia average selling prices increased primarily due to the impact
  of a tighter global nitrogen supply and demand balance. Additionally,
  ammonia selling prices benefited from the commencement of delivery
  under a long-term supply agreement.
• Ammonia gross margin per ton increased in the fourth quarter of 2017
  compared to the fourth quarter of 2016 due to the absence of start-up
  expenses incurred in the fourth quarter of 2016 associated with the
  new Port Neal ammonia plant, production efficiencies due to increased
  volumes and higher average selling prices.

Contacts

CF Industries Holdings, Inc.
Media
Chris Close
Director,
Corporate Communications
847-405-2542 – [email protected]
or
Investors
Martin
Jarosick
Vice President, Investor Relations
847-405-2045 – [email protected]

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