Rental and Management Operations New Site Revenue Growth.
During the year ended December 31, 2014, we grew our portfolio of communications real estate through the acquisition and construction of approximately 8,450 sites.
In a majority of our international markets, the acquisition or construction of new sites results in increased pass-through revenues (such as ground rent or power and fuel costs) and expenses.
We continue to evaluate opportunities to acquire communications real estate portfolios, both domestically and internationally, to determine whether they meet our risk-adjusted hurdle rates and whether we believe we can effectively integrate them into our existing portfolio.
## Table 0 ##
(1) The majority of sites acquired or constructed in 2014 were in Brazil, India and Mexico; in 2013 were in Brazil, Colombia, Costa Rica, India, Mexico and South Africa; and in 2012 were in Brazil, Germany, India and Uganda.
Rental and Management Operations Expenses.
Direct operating expenses incurred by our domestic and international rental and management segments include direct site level expenses and consist primarily of ground rent and power and fuel costs, some of which may be passed through to our tenants, as well as property taxes, repairs and maintenance.
These segment direct operating expenses exclude all segment and corporate selling, general, administrative and development expenses, which are aggregated into one line item entitled Selling, general, administrative and development expense in our consolidated statements of operations.
In general, our domestic and international rental and management segments’ selling, general, administrative and development expenses do not significantly increase as a result of adding incremental tenants to our legacy sites and typically increase only modestly year-over-year.
As a result, leasing additional space to new tenants on our legacy sites provides significant incremental cash flow.
We may, however, incur additional segment selling, general, administrative and development expenses as we increase our presence in geographic areas where we have recently launched operations or are focused on expanding our portfolio.
Our profit margin growth is therefore positively impacted by the addition of new tenants to our legacy sites and can be temporarily diluted by our development activities.
Network Development Services Segment Revenue Growth.
As we continue to focus on growing our rental and management operations, we anticipate that our network development services revenue will continue to represent a small percentage of our total revenues.
Non-GAAP Financial Measures Included in our analysis of our results of operations are discussions regarding earnings before interest, taxes, depreciation, amortization and accretion, as adjusted (“Adjusted EBITDA”), Funds From Operations, as defined by the National Association of Real Estate Investment Trusts (“NAREIT FFO”) and Adjusted Funds From Operations (“AFFO”).
We define Adjusted EBITDA as Net income before Income (loss) on discontinued operations, net; Income (loss) on equity method investments; Income tax benefit (provision); Other income (expense); Gain (loss) on retirement of long-term obligations; Interest expense; Interest income; Other operating income (expense); Depreciation, amortization and accretion; and stock-based compensation expense.
NAREIT FFO is defined as net income before gains or losses from the sale or disposal of real estate, real estate related impairment charges, real estate related depreciation, amortization and accretion and dividends declared on preferred stock, and including adjustments for (i) unconsolidated affiliates and (ii) noncontrolling interest.
CF INDUSTRIES HOLDINGS, INC.  5 (1) Average annual capacity includes allowance for normal outages and planned maintenance shutdowns.
(2) Gross ammonia capacity includes ammonia used to produce upgraded products.
Net ammonia capacity is gross ammonia capacity less ammonia used to produce upgraded products based on the product mix shown in the table.
(3) Measured in tons of UAN containing 32% nitrogen by weight.
(4) Urea is sold as granular urea from the Donaldsonville and Medicine Hat facilities, as urea liquor from the Port Neal, Woodward and Yazoo City facilities and as either granular urea or urea liquor from the Courtright facility.
Urea liquor produced at the Yazoo City, Courtright, Woodward and Port Neal facilities can be sold as DEF.
(5) AN includes prilled products (Amtrate and IGAN) and AN solution produced for sale.
(6) The urea expansion capacity at Donaldsonville is online and available (Note: the urea expansion capacity of approximately 1.3 million tons has not been added to the capacity table above).
If the full urea expansion capacity of approximately 1.3 million tons were produced, then the net ammonia balance would decrease by approximately 768,000 tons.
(7) The Donaldsonville facility's remaining production capacity depends on product mix.
Including the urea expansion capacity, the facility is capable of producing approximately 3.0 million tons of granular urea with UAN running at capacity.
Granular urea production can be increased to approximately 3.3 million tons if UAN production is reduced to approximately 1.6 million tons.
(8) Production of urea products at the Port Neal and Courtright facilities can be increased by reducing UAN production.
Urea liquor production at the Yazoo City facility can be increased by obtaining additional ammonia to supplement the facility's ammonia production.
(9) Represents 100% of the capacity of this facility.
(10) Reduction of UAN or AN production at the Yazoo City, Courtright, Verdigris and Billingham facilities can allow more merchant nitric acid to be made available for sale.
(11) The Yazoo City facility's production capacity depends on product mix.
With the facility maximizing the production of AN products, 160,000 tons of UAN can be produced.
UAN production can be increased to 450,000 tons by reducing the production of AN to 945,000 tons.
(12) The Ince facility's production capacity depends on product mix.
The facility can increase production of NPKs to 550,000 tons by reducing AN production to 485,000 tons.
(13) Represents our 50% interest in the capacity of PLNL.
The following table summarizes our nitrogen fertilizer production volume for the last three years.
## Table 1 ##
(1) Gross ammonia production, including amounts subsequently upgraded on-site into granular urea, UAN or AN.
Donaldsonville, Louisiana The Donaldsonville nitrogen fertilizer complex is the largest nitrogen fertilizer production facility in North America.
It has five ammonia plants, five urea plants, three nitric acid plants and two UAN plants.
The complex, which is located on the Mississippi River, includes deep-water docking facilities, access to an ammonia pipeline, and truck and railroad loading capabilities.
The complex has on-site storage for 160,000 tons of ammonia, 168,000 tons of UAN (measured on a 32% nitrogen content basis) and 163,000 tons of granular urea.
In the fourth quarter of 2012, we announced our expansion project plans for our Donaldsonville, Louisiana facility, which will increase our annual capacity of ammonia and granular urea by up to 1.3 million tons each and UAN by up to 1.8 million tons.
The new Donaldsonville urea plant became operational during the fourth quarter of 2015.
For additional details regarding this project, see Item 7.
MD&A—Liquidity and Capital Resources—Capacity Expansion Projects and Restricted Cash.
CF INDUSTRIES HOLDINGS, INC.
## Table 2 ##
The following describes the significant items that impacted the comparability of our financial results in 2016, 2015 and 2014.
Descriptions of items below that refer to amounts in the table above, refer to the pre-tax amounts.
Capacity Expansion Projects In 2016, we completed capacity expansion projects at Donaldsonville, Louisiana and Port Neal, Iowa.
These projects, originally announced in 2012, included the construction of new ammonia, urea, and UAN plants at our Donaldsonville, Louisiana complex and new ammonia and urea plants at our Port Neal, Iowa complex.
These plants increased our overall production capacity by approximately 25%, improved our product mix flexibility at Donaldsonville, and improved our ability to serve upper-Midwest urea customers from our Port Neal location.
In combination, these new facilities are able to produce 2.1 million tons of gross ammonia per year, upgraded products ranging from 2.0 million to 2.7 million tons of granular urea per year and up to 1.8 million tons of UAN 32% solution per year, depending on our choice of product mix.
These new facilities will allow us to benefit from the cost advantages of North American natural gas.
At our Donaldsonville complex, the ammonia plant was placed in service in the fourth quarter of 2016, the UAN plant was placed in service in the first quarter of 2016 and the granular urea plant was placed in service during fourth quarter of 2015.
At our Port Neal, Iowa complex, both the ammonia and granular urea plants were placed in service in the fourth quarter of 2016.
The total capital cost of the capacity expansion projects was $5.2 billion.
Depreciation expense pertaining to each of our capacity expansion plants commenced once the respective plant was placed in service.
Total depreciation expense pertaining to our capacity expansion plants recognized in 2016 and 2015 was $116 million and $13 million, respectively.
Start-up costs of $52 million, which primarily relate to the cost of commencing production at the ammonia plants, were incurred in 2016.
Expansion project expenses, consisting primarily of administrative costs and other project costs that do not qualify for capitalization, totaled $73 million, $51 million and $31 million in 2016, 2015 and 2014, respectively.
Losses on foreign currency derivatives of $22 million and $38 million in 2015 and 2014, respectively, relate to hedges of European euro denominated equipment purchased as part of the capacity expansion projects.
Strategic Venture with CHS We commenced a strategic venture with CHS on February 1, 2016, at which time CHS purchased a minority equity interest in CFN for $2.8 billion.
CHS also began receiving deliveries pursuant to a supply agreement under which CHS has the right to purchase annually from CFN up to approximately 1.1 million tons of granular urea and 580,000 tons of UAN at market prices.
As a result of its minority equity interest in CFN, CHS is entitled to semi-annual cash distributions from CFN.
We are also entitled to semi-annual cash distributions from CFN.
The amounts of distributions from CFN to us and CHS are based generally on the profitability of CFN and determined based on the volume of granular urea and UAN sold by CFN to us and CHS pursuant to supply agreements, less a formula driven amount based primarily on the cost of natural gas used to produce the granular urea and UAN, and adjusted for the allocation of items such as operational efficiencies and overhead amounts.
We began recognizing the noncontrolling interest pertaining to CHS’ ownership interest in CFN on February 1, 2016, and during 2016, we recognized $93 million of earnings attributable to the noncontrolling interest in CFN.
See Note 17—Noncontrolling Interests to our consolidated financial statements included in Item 8 of this report for additional information regarding our strategic venture with CHS.
CF INDUSTRIES HOLDINGS, INC.  48 Granular Urea Segment Our granular urea segment produces granular urea, which contains 46% nitrogen.
Produced from ammonia and carbon dioxide, it has the highest nitrogen content of any of our solid nitrogen fertilizers.
Granular urea is produced at our Courtright, Ontario; Donaldsonville, Louisiana; Medicine Hat, Alberta; and Port Neal, Iowa nitrogen complexes.
The following table presents summary operating data for our granular urea segment:
## Table 3 ##
N/M—Not Meaningful (1) Granular urea represents 46% nitrogen content.
Nutrient tons represent the tons of nitrogen within the product tons.
Year Ended December 31, 2018 Compared to Year Ended December 31, 2017 Net Sales.
Net sales in the granular urea segment increased $351 million, or 36%, to $1,322 million in 2018 compared to $971 million in 2017 due primarily to a 21% increase in average selling prices and a 12% increase in sales volume.
Average selling prices increased to $270 per ton in 2018 compared to $223 per ton in 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 nitrogen supply and demand balance.
Sales volume was higher due primarily to higher supply availability from increased production at our Port Neal facility as a result of higher demand, and higher inventories entering the year.
Cost of Sales.
Cost of sales per ton in our granular urea segment averaged $182 in 2018, a 7% decrease from the $196 per ton in 2017.
The decrease was due primarily to lower realized natural gas costs and an unrealized net mark-to-market gain on natural gas derivatives in 2018 compared to a loss in 2017 and the impact of a 9% increase in production.
Year Ended December 31, 2017 Compared to Year Ended December 31, 2016 Net Sales.
Net sales in the granular urea segment increased by $140 million, or 17%, to $971 million in 2017 compared to $831 million in 2016 due primarily to a 21% increase in sales volume partially offset by a 3% decrease in average selling prices.
Sales volume was higher due to increased production at our new Port Neal facility, which came on line in the fourth quarter of 2016.
Average selling prices decreased to $223 per ton in 2017 compared to $231 per ton in 2016 due primarily to greater global nitrogen supply availability due to global capacity additions.
Selling prices strengthened in the fourth quarter of 2017 rising approximately 14% compared to the prior year period.
Cost of Sales.
Cost of sales per ton in our granular urea segment averaged $196 in 2017, a 21% increase from the $162 per ton in 2016.
The increase was due primarily to higher depreciation as a result of the new granular urea plant at our Port Neal facility, an unrealized net mark-to-market loss on natural gas derivatives in 2017 compared to a gain in the comparable period of 2016 and higher realized natural gas costs, including the impact of realized derivatives.
These increases in cost of sales were partially offset by the impact of production efficiencies due to increased volume.
Depreciation and amortization in our granular urea segment in 2017 was $56 per ton compared to $31 per ton in 2016.

<table><tr><td>New Sites (Acquired or Constructed)</td><td>2014</td><td>2013</td><td>2012</td></tr><tr><td>Domestic</td><td>900</td><td>5,260</td><td>960</td></tr><tr><td>International-1</td><td>7,550</td><td>7,810</td><td>7,850</td></tr></table>
<table><tr><td></td><td colspan="3">December 31,</td></tr><tr><td></td><td>2015</td><td>2014</td><td>2013</td></tr><tr><td></td><td colspan="3">(tons in thousands)</td></tr><tr><td>Ammonia<sup>-1</sup></td><td>7,673</td><td>7,011</td><td>7,105</td></tr><tr><td>Granular urea</td><td>2,520</td><td>2,347</td><td>2,474</td></tr><tr><td>UAN -32%</td><td>5,888</td><td>5,939</td><td>6,332</td></tr><tr><td>AN</td><td>1,283</td><td>950</td><td>882</td></tr></table>
<table><tr><td></td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td>Subtotals of Amounts Above by Line Item in the Consolidated Statements of Operations:</td><td colspan="3">(in millions)</td></tr><tr><td>Cost of sales</td><td>$-92</td><td>$189</td><td>$88</td></tr><tr><td>Selling, general and administrative expenses</td><td>2</td><td>—</td><td>4</td></tr><tr><td>Transaction costs</td><td>179</td><td>57</td><td>—</td></tr><tr><td>Other operating—net</td><td>189</td><td>65</td><td>54</td></tr><tr><td>Gain on sale of phosphate business</td><td>—</td><td>—</td><td>-750</td></tr><tr><td>Equity in (losses) earnings of operating affiliates</td><td>134</td><td>62</td><td>—</td></tr><tr><td>Interest expense</td><td>44</td><td>6</td><td>—</td></tr><tr><td>Loss on debt extinguishment</td><td>167</td><td>—</td><td>—</td></tr><tr><td>Equity in earnings of non-operating affiliates—net of taxes</td><td>—</td><td>-51</td><td>—</td></tr><tr><td>Net earnings attributable to noncontrolling interests</td><td>93</td><td>—</td><td>—</td></tr><tr><td>Total Impact of Significant Items</td><td>$716</td><td>$328</td><td>$-604</td></tr></table>
<table><tr><td></td><td colspan="7">Year ended December 31,</td></tr><tr><td></td><td>2018</td><td>2017</td><td>2016</td><td colspan="2">2018 v. 2017</td><td colspan="2">2017 v. 2016</td></tr><tr><td></td><td colspan="7">(in millions, except as noted)</td></tr><tr><td>Net sales</td><td>$1,322</td><td>$971</td><td>$831</td><td>$351</td><td>36%</td><td>$140</td><td>17%</td></tr><tr><td>Cost of sales</td><td>889</td><td>855</td><td>583</td><td>34</td><td>4%</td><td>272</td><td>47%</td></tr><tr><td>Gross margin</td><td>$433</td><td>$116</td><td>$248</td><td>$317</td><td>N/M</td><td>$-132</td><td>-53%</td></tr><tr><td>Gross margin percentage</td><td>32.8%</td><td>11.9%</td><td>29.8%</td><td>20.9%</td><td></td><td>-17.9%</td><td></td></tr><tr><td>Sales volume by product tons (000s)</td><td>4,898</td><td>4,357</td><td>3,597</td><td>541</td><td>12%</td><td>760</td><td>21%</td></tr><tr><td>Sales volume by nutrient tons (000s)<sup>(1)</sup></td><td>2,253</td><td>2,004</td><td>1,654</td><td>249</td><td>12%</td><td>350</td><td>21%</td></tr><tr><td>Average selling price per product ton</td><td>$270</td><td>$223</td><td>$231</td><td>$47</td><td>21%</td><td>$-8</td><td>-3%</td></tr><tr><td>Average selling price per nutrient ton<sup>-1</sup></td><td>$587</td><td>$485</td><td>$502</td><td>$102</td><td>21%</td><td>$-17</td><td>-3%</td></tr><tr><td>Gross margin per product ton</td><td>$88</td><td>$27</td><td>$69</td><td>$61</td><td>N/M</td><td>$-42</td><td>-61%</td></tr><tr><td>Gross margin per nutrient ton<sup>-1</sup></td><td>$192</td><td>$58</td><td>$150</td><td>$134</td><td>N/M</td><td>$-92</td><td>-61%</td></tr><tr><td>Depreciation and amortization</td><td>$276</td><td>$246</td><td>$112</td><td>$30</td><td>12%</td><td>$134</td><td>120%</td></tr><tr><td>Unrealized net mark-to-market (gain) loss on natural gas derivatives</td><td>$-4</td><td>$16</td><td>$-67</td><td>$-20</td><td>N/M</td><td>$83</td><td>N/M</td></tr></table>

Question: In the year/section with the most 2018, what is the growth rate of Cost of sales?
Answer: 0.03825