Company: CF
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0001324404-25-000006
Chunk: 102

Company: CF Industries Holdings, Inc.
Filing Date: 2025-02-20
Form: 10-K
Item: Item 7
Chunk 102
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 2024 and 2023, respectively, except for acquisition and integration costs related to the Waggaman acquisition, which reflects a 24.0% and 26.2% marginal effective rate in 2024 and 2023, respectively. 

(2)Included in cost of sales in our consolidated statements of operations.

(3)Included in cost of sales and selling, general and administrative expenses in our consolidated statement of operations.

(4)Included in equity in earnings (loss) of operating affiliate in our consolidated statement of operations.

(5)Included in interest expense and interest income in our consolidated statement of operations.

35

Table of ContentsCF INDUSTRIES HOLDINGS, INC.

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

Natural gas is the largest and most volatile single component of the manufacturing cost for our nitrogen-based products. At certain times, we have managed the risk of changes in natural gas prices through the use of derivative financial instruments. The derivatives that we use for this purpose are primarily natural gas fixed price swaps, basis swaps and options. We use natural gas derivatives as an economic hedge of natural gas price risk, but without the application of hedge accounting. This can result in volatility in reported earnings due to the unrealized mark-to-market adjustments that occur from changes in the value of the derivatives, which are reflected in cost of sales in our consolidated statements of operations. In 2024 and 2023, we recognized unrealized net mark-to-market gains on natural gas derivatives of $35 million and $39 million, respectively.

Impact of employee benefit plan policy change

In 2024, we recognized income of $16 million pertaining to a policy change to an employee benefit plan that is included in both cost of sales and selling, general and administrative expenses in our consolidated statement of operations.

U.K. operations restructuring

In 2023, we recognized total charges of $10 million, consisting primarily of the recognition of an asset retirement obligation and post-employment benefits related to contractual and statutory obligations due to employees as a result of our approved plan to permanently close the ammonia plant at our Billingham complex.

Acquisition and integration costs

On December 1, 2023, we acquired an ammonia production facility located in Waggaman, Louisiana, as described above under “Acquisition of Waggaman Ammonia Production Facility.” In 2024, we incurred approximately $4 million of integration costs related to the Waggaman acquisition. In 2023, we incurred