CF Industries Holdings, Inc.

Company Overview

Business Model: CF Industries Holdings, Inc. is a global manufacturer of hydrogen and nitrogen products, primarily anhydrous ammonia, which contains 82% nitrogen and 18% hydrogen. The Company sells ammonia directly or upgrades it into various nitrogen products such as granular urea, urea ammonium nitrate solution (UAN), and ammonium nitrate (AN) for agricultural fertilizer and commercial explosives. It also produces industrial products including diesel exhaust fluid (DEF), urea liquor, nitric acid, and aqua ammonia. A key strategic focus is the decarbonization of its ammonia production network to enable low-carbon hydrogen and nitrogen products for energy, fertilizer, emissions abatement, and new applications like power generation and steel production.

Market Position: CF Industries Holdings, Inc. operates the world's largest ammonia production complex in Donaldsonville, Louisiana, and Canada's largest in Medicine Hat, Alberta. As of December 31, 2025, its North American facilities represented approximately 40% of ammonia, 41% of granular urea, 44% of UAN, and 19% of AN production capacity. The Company leverages its advantaged production, extensive North American distribution and logistics network, operational excellence, and disciplined capital stewardship to maintain its leadership in ammonia production and drive its clean energy strategy.

Recent Strategic Developments:

• Donaldsonville Decarbonization Project: In July 2025, completed a carbon capture and sequestration (CCS) project at its Donaldsonville complex for approximately $200 million. This enables the annual production of up to 1.9 million tons of low-carbon ammonia by capturing up to 2 million metric tons of CO2, qualifying for 45Q Tax Credits.
• Blue Point Joint Venture: On April 8, 2025, formed the Blue Point joint venture with JERA Co., Inc. (35% ownership) and Mitsui & Co., Ltd. (25% ownership) to construct a greenfield low-carbon ammonia production facility at its Blue Point complex in Modeste, Louisiana. CF Industries Holdings, Inc. holds 40% ownership and is the primary beneficiary, consolidating the entity. The facility, estimated to cost approximately $3.7 billion (excluding an air separation unit), is designed for an annual nameplate capacity of approximately 1.4 million metric tons (~1.5 million tons) of low-carbon ammonia, capturing over 95% of CO2. Production is expected to begin in 2029 and will qualify for 45Q Tax Credits. CF Industries Holdings, Inc. also plans to invest approximately $550 million in scalable infrastructure at the Blue Point complex.
• Yazoo City Decarbonization Project: Initiated a CCS project at its Yazoo City complex, expected to cost approximately $100 million and commence in 2028. It aims to capture up to 500,000 metric tons of CO2 annually, qualifying for 45Q Tax Credits.
• Verdigris Nitric Acid Abatement: In Q4 2025, completed a nitric acid plant abatement project at its Verdigris complex, expected to significantly reduce nitrous oxide emissions by over 600,000 metric tons of CO2 equivalent annually.
• Low-Carbon Ammonia Sales: In 2025, completed its first sales of low-carbon ammonia at a premium to traditional ammonia consumers in Europe and Africa, driven by demand to reduce costs from European carbon regulations. JERA Co., Inc. and Mitsui & Co., Ltd. have committed low-carbon ammonia volumes from the Blue Point joint venture for new applications such as power generation and steel production in Japan.
• Waggaman Facility Acquisition: On December 1, 2023, acquired an ammonia production facility in Waggaman, Louisiana, from Dyno Nobel Louisiana Ammonia, LLC for $1.675 billion. The facility has a nameplate capacity of 880,000 tons of ammonia annually.
• Electrolyzer Project Abandonment: In December 2025, recognized an impairment charge of $51 million related to the abandonment of an electrolyzer project at its Donaldsonville complex, concluding it would not yield an acceptable return compared to CCS technologies.

Geographic Footprint: CF Industries Holdings, Inc. operates six manufacturing facilities in the United States (Donaldsonville, Sergeant Bluff (Port Neal), Yazoo City, Claremore (Verdigris), Woodward, and Waggaman, Louisiana), two in Canada (Medicine Hat, Alberta, and Courtright, Ontario), and one in the United Kingdom (Billingham). It also holds a 50% interest in Point Lisas Nitrogen Limited, an ammonia production joint venture in Trinidad and Tobago. The Company maintains an extensive storage, transportation, and distribution network primarily in the Midwestern United States, with global logistics capabilities.

• United States: 75.3% of total revenue
• Canada: 8.4% of total revenue
• North America, excluding U.S. and Canada: 0.8% of total revenue
• United Kingdom: 5.3% of total revenue
• Other foreign: 10.1% of total revenue

Financial Performance

Revenue Analysis

Profitability Metrics (2025):

• Gross Margin: 38.5%
• Operating Margin: 32.5%
• Net Margin: 25.4%

Investment in Growth:

• Capital Expenditures: $950 million (2025), $518 million (2024), $499 million (2023).
• Strategic Investments:
  • Donaldsonville CCS project: Approximately $200 million (completed July 2025).
  • Blue Point joint venture: CF Industries Holdings, Inc. contributed $195 million in 2025 (cash and non-cash IP license) towards the estimated $3.7 billion facility cost.
  • Blue Point complex scalable infrastructure: Planned investment of approximately $550 million.
  • Yazoo City CCS project: Expected cost of approximately $100 million.

Business Segment Analysis

Ammonia

Financial Performance:

• Revenue: $2.18 billion (+25% YoY)
• Gross Margin: 31.3%
• Key Growth Drivers: Strong global nitrogen demand, supply disruptions in key exporting regions (Egypt, Iran, Russia), and higher supply availability from increased production in Q1 2025 compared to Q1 2024 (which was impacted by a winter storm).

Product Portfolio:

• Anhydrous ammonia (NH3), containing 82% nitrogen and 18% hydrogen.
• Low-carbon ammonia for traditional and new applications.

Market Dynamics:

• Global commodity market with intense price competition.
• Demand influenced by agricultural and industrial applications, including emissions control.
• New demand emerging for low-carbon ammonia in Europe and Japan for power generation and steel production.

Granular Urea

Financial Performance:

• Revenue: $1.78 billion (+11% YoY)
• Gross Margin: 47.0%
• Key Growth Drivers: Strong global nitrogen demand and supply disruptions in key exporting regions (Egypt, Iran, Russia). Partially offset by decreased sales volume due to management's decision to favor UAN production and lower beginning inventory.

Product Portfolio:

• Granular urea, containing 46% nitrogen, produced from ammonia and carbon dioxide.

Market Dynamics:

• Global commodity with purchasing decisions primarily based on delivered price.
• Competition from foreign-sourced products.

UAN

Financial Performance:

• Revenue: $2.16 billion (+29% YoY)
• Gross Margin: 42.6%
• Key Growth Drivers: Strong global nitrogen demand and supply disruptions in key exporting regions (Egypt, Iran, Russia). Increased sales volume due to higher production in 2025 and inventory drawdown to meet strong domestic and international demand.

Product Portfolio:

• Urea ammonium nitrate solution (UAN), a liquid fertilizer with nitrogen content typically ranging from 28% to 32%.

Market Dynamics:

• Global commodity, highly sensitive to market conditions and import volumes.
• Competition from foreign-sourced products, including historical high volumes from Russia.

AN

Financial Performance:

• Revenue: $421 million (0% YoY)
• Gross Margin: 18.8%
• Key Growth Drivers: Strong global nitrogen demand and supply disruptions in key exporting regions (Egypt, Iran, Russia). These positive factors were offset by lower supply availability due to the incident at the Yazoo City complex.

Product Portfolio:

• Ammonium nitrate (AN), with nitrogen content between 29% and 35%, used as nitrogen fertilizer and extensively by the commercial explosives industry.

Market Dynamics:

• Global commodity, subject to price competition and supply disruptions.
• Production at the Yazoo City complex was temporarily idled in November 2025 due to an incident in the AN upgrade area, with production not expected to resume until Q4 2026 at the earliest.

Other

Financial Performance:

• Revenue: $545 million (+8% YoY)
• Gross Margin: 37.6%
• Key Growth Drivers: Strong global nitrogen demand and supply disruptions in key exporting regions (Egypt, Iran, Russia).

Product Portfolio:

• Primarily diesel exhaust fluid (DEF), urea liquor, nitric acid, and aqua ammonia.

Market Dynamics:

• Serves industrial customers with specialized nitrogen-based products.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: $1.37 billion (16.6 million shares) in 2025, $1.51 billion (18.8 million shares) in 2024.
• Dividend Payments: $326 million in 2025, $364 million in 2024.
• Future Capital Return Commitments: The Board authorized a new $2 billion share repurchase program (2025 Share Repurchase Program) effective through December 31, 2029, commencing upon completion of the prior $3 billion program in October 2025.

Balance Sheet Position:

• Cash and Equivalents: $1.98 billion (2025), $1.61 billion (2024).
• Total Debt: $3.25 billion (principal outstanding) (2025), $3.00 billion (2024).
• Net Cash Position: -$1.27 billion (Net Debt) (2025), -$1.39 billion (Net Debt) (2024).
• Debt Maturity Profile: Unsecured senior notes with varying maturity dates between March 2034 and March 2044.
• The Company has a $750 million senior unsecured revolving credit facility maturing September 4, 2030, with no outstanding borrowings as of December 31, 2025.

Cash Flow Generation:

• Operating Cash Flow: $2.75 billion (2025), $2.27 billion (2024), $2.76 billion (2023).
• Free Cash Flow: $1.80 billion (2025), $1.75 billion (2024), $2.26 billion (2023).

Operational Excellence

Production & Service Model: CF Industries Holdings, Inc. utilizes the Haber-Bosch process to produce anhydrous ammonia from atmospheric nitrogen and hydrogen derived from natural gas. This ammonia is then either sold directly or upgraded into a diverse portfolio of nitrogen products. The Company's operational philosophy emphasizes safe and reliable operations, environmental stewardship, and disciplined capital management, with a strategic focus on decarbonizing its ammonia production network through carbon capture and sequestration (CCS) and autothermal reforming (ATR) technologies.

Supply Chain Architecture: Key Suppliers & Partners:

• Natural Gas: Sourced from a variety of quality suppliers through daily spot and term purchases, transported via a reliable network of pipelines connected to major North American and U.K. trading hubs (e.g., Henry Hub, AECO, National Balancing Point).
• CO2 Sequestration: ExxonMobil for the Donaldsonville and Yazoo City CCS projects. A joint venture between Occidental Petroleum Corporation and Enbridge Inc. for the Blue Point complex.
• Air Separation Unit (ASU): Linde plc will design, construct, own, operate, and maintain an ASU at the Blue Point complex.

Facility Network:

• Manufacturing: Nine facilities in North America (six U.S., two Canadian) and one in the United Kingdom. Key facilities include Donaldsonville, Louisiana (world's largest ammonia complex), Medicine Hat, Alberta (Canada's largest ammonia complex), and the developing Blue Point complex in Modeste, Louisiana.
• Distribution: An extensive system of terminals and associated transportation equipment primarily in the Midwestern United States. This includes a leased fleet of approximately 5,000 railcars, up to 13 tow boats, and 42 river barges. The Donaldsonville and Waggaman facilities are connected to the 2,000-mile Sunoco ammonia pipeline.
• Storage: Aggregate storage capacity of approximately 2.8 million tons of product across production facilities and 39 in-market storage terminals and warehouses in the U.S., Canada, and U.K.

Operational Metrics (2025):

• Gross Ammonia Production: 10.12 million tons
• Granular Urea Production: 4.26 million tons
• UAN Production (32% N): 6.93 million tons
• AN Production: 1.25 million tons
• Employee 12-month rolling recordable incident rate (RIR): 0.26 incidents per 200,000 work hours
• Total recordable injury/illness count: 8
• Days away, restricted or transferred (DART) incident rate: 0.13 injuries per 200,000 work hours
• Lost time incident rate: 0.03 injuries per 200,000 work hours

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Managed by an internal marketing and sales force.
• Channel Partners: Sales are primarily made to cooperatives, retailers, independent fertilizer distributors, traders, wholesalers, and industrial users.

Customer Portfolio: Enterprise Customers:

• Strategic Partnerships:
  • CHS Inc.: A strategic venture partner with an approximately 11% equity interest in CF Industries Nitrogen, LLC. CHS Inc. has the right to purchase annually up to 1.1 million tons of granular urea and 580,000 tons of UAN at market prices.
  • JERA Co., Inc. and Mitsui & Co., Ltd.: Joint venture partners in the Blue Point joint venture, committed to purchasing low-carbon ammonia for new applications like power generation and steel production.
  • Dyno Nobel, Inc.: Long-term ammonia offtake agreement for up to 200,000 tons per year from the Waggaman facility.
• Customer Concentration: CHS Inc. accounted for approximately 13% of consolidated net sales in 2025.

Geographic Revenue Distribution (2025):

• United States: 75.3% of total revenue
• Canada: 8.4% of total revenue
• North America, excluding U.S. and Canada: 0.8% of total revenue
• United Kingdom: 5.3% of total revenue
• Other foreign: 10.1% of total revenue
• Growth Markets: Europe and Japan are identified as key growth markets for low-carbon ammonia, driven by regulatory incentives and new application demand. India and Brazil also showed strong demand in 2025.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The nitrogen fertilizer industry is global, intensely competitive, and cyclical. Product pricing is primarily driven by delivered price, with low-carbon attributes, reliability, customer service, and product quality also playing roles. Supply is influenced by production capacity, operating rates, raw material costs, energy prices, government policies, and global trade. Demand is affected by agricultural factors (planted acreage, crop selection, application rates, dietary habits, non-food crop uses like ethanol) and industrial uses.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• North America: Nutrien Ltd., Koch Fertilizer LLC, LSB Industries, CVR Partners, LP, Yara International.
• United Kingdom: Yara International, Origin Fertilisers, Ameropa, Thomas Bell & Sons Ltd.
• Global: Significant competition from producers in the Middle East, Trinidad, Africa, and Russia, some of whom benefit from lower natural gas costs or government subsidies.

Emerging Competitive Threats:

• Increased global production capacity, particularly for low-carbon ammonia, could outpace demand growth.
• Changes in Chinese government policy regarding nitrogen fertilizer exports.
• Development of alternative decarbonization technologies that could reduce demand for low-carbon ammonia.
• New entrants and disruptive technologies in the clean energy and fertilizer sectors.

Competitive Response Strategy: CF Industries Holdings, Inc. aims to maintain its competitive advantage by leveraging its advantaged production, unmatched distribution and logistics network, operational excellence, and disciplined capital stewardship. The Company is strategically investing in decarbonization technologies to produce low-carbon ammonia, targeting both traditional agricultural applications and new growth opportunities in power generation and marine shipping.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics:

• Cyclicality and Price Volatility: The nitrogen fertilizer industry is cyclical, and operating results are highly dependent on fluctuating supply and demand, which can lead to periods of oversupply and downward pressure on selling prices.
• Global Competition: Intense price competition from other global producers, including state-owned or subsidized entities with lower feedstock costs, can create competitive disadvantages.
• Agricultural Demand Fluctuations: Demand for products is sensitive to weather conditions, crop prices, government agricultural policies, and developments in crop technology (e.g., nitrogen fixation, nitrogen-efficient varieties), which could reduce fertilizer usage.
• Low-Carbon Ammonia Market Development: The market for low-carbon ammonia may develop slower than anticipated, or not at all, impacting the value and returns on significant decarbonization investments. This market is influenced by clean energy demand, technology evolution, and government policies.

Technology Disruption:

• New Technology Performance: Risks associated with the design, development, and construction of new technologies (e.g., autothermal reforming for ammonia production, carbon capture and sequestration) at scales beyond prior experience, potentially leading to cost overruns, project delays, or failure to deliver expected benefits.
• Obsolescence Risks: Rapid development of alternative decarbonization technologies could render current low-carbon ammonia solutions less competitive.

Customer Concentration:

• Dependency Risks: CHS Inc. accounted for approximately 13% of consolidated net sales in 2025, indicating a degree of customer concentration.

Operational & Execution Risks

Supply Chain Vulnerabilities:

• Supplier Dependency: Reliance on third-party suppliers for raw materials (primarily natural gas) and utilities, with some plants dependent on a single natural gas pipeline. Delays or interruptions can adversely affect operations.
• Transportation Dependency: Reliance on third-party providers for transportation (rail, barge, truck, vessel) and CO2 sequestration infrastructure (pipelines, wells). Disruptions due to adverse weather, system failures, aging infrastructure, or regulatory changes can impact delivery and costs.
• CO2 Sequestration Permitting: The ability to develop and operate CO2 pipelines and sequestration wells is subject to permitting processes (e.g., Louisiana's Class VI moratorium), which may cause delays or impact viability.

Geographic Concentration:

• Key Facility Reliance: The Donaldsonville complex represents approximately 40% of ammonia production capacity, making operations vulnerable to disruptions at this single site.
• Extreme Weather Exposure: Several complexes, including Donaldsonville, Waggaman, and the developing Blue Point complex, are located in areas prone to hurricanes or extreme weather events, which can damage facilities and disrupt operations.
• Yazoo City Incident: An incident in November 2025 at the Yazoo City complex idled all production, with resumption not expected until Q4 2026 at the earliest, impacting AN production.

Financial & Regulatory Risks

Market & Financial Risks:

• Indebtedness: Approximately $3.25 billion in total funded indebtedness as of December 31, 2025, with debt service obligations and restrictive covenants that could limit financial flexibility.
• Natural Gas Price Volatility: Natural gas is the largest and most volatile component of manufacturing costs, and price increases or unfavorable differentials could significantly erode profitability.
• Derivative Risks: Use of derivatives for hedging can result in earnings volatility due to mark-to-market adjustments and exposure to counterparty credit risk.

Regulatory & Compliance Risks:

• Environmental, Health, and Safety (EHS) Laws: Subject to numerous EHS laws and regulations (e.g., Clean Air Act, CERCLA) in multiple jurisdictions, with potential for substantial penalties, capital improvement requirements, and liabilities for cleanup costs.
• Greenhouse Gas (GHG) Regulations: Production facilities emit GHGs and are subject to evolving regulations in Canada, the U.K., the EU (Carbon Border Adjustment Mechanism - CBAM), and the U.S. More stringent regulations could increase operating costs, limit output, and create competitive disadvantages.
• Permitting Challenges: Obtaining and renewing environmental and other governmental permits for existing and new operations (including the Blue Point joint venture) can be challenging due to stringent standards and community opposition.

Geopolitical & External Risks

Geopolitical Exposure:

• International Operations Risks: Exposure to complex laws, currency fluctuations, varying tax rates, and changes in global trade policy (tariffs, embargoes, sanctions) in international operating regions.
• Trade Relations: U.S. tariffs on imports and retaliatory tariffs on U.S. exports, as well as the EU's CBAM (effective January 1, 2026) and the U.K.'s planned CBAM (expected January 1, 2027), can impact costs, trade flows, and product demand.
• Anti-Corruption and Sanctions: Risks of violating anti-corruption laws (e.g., U.S. Foreign Corrupt Practices Act) and economic sanctions programs in various jurisdictions.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas:

• Decarbonization of Ammonia Production: Significant investment in carbon capture and sequestration (CCS) technologies for existing facilities and autothermal reforming (ATR) for new low-carbon ammonia production.
• Low-Carbon Hydrogen and Nitrogen Products: Developing products for new applications such as power generation and steel production, in addition to traditional fertilizer and emissions abatement uses.

Innovation Pipeline:

• Donaldsonville CCS Project: Completed in July 2025, enabling the production of up to 1.9 million tons of low-carbon ammonia annually.
• Yazoo City CCS Project: Expected to commence in 2028, aiming to capture approximately 500,000 metric tons of CO2 annually.
• Blue Point Joint Venture: Construction of a greenfield ATR low-carbon ammonia production facility expected to begin in 2026, with production anticipated in 2029. This facility is designed to capture over 95% of CO2 generated.
• Verdigris Nitric Acid Abatement Project: Completed in Q4 2025, significantly reducing nitrous oxide emissions.

Intellectual Property Portfolio:

• The Company contributed a non-cash license to use certain intellectual property to the Blue Point joint venture, indicating strategic use of its IP.

Technology Partnerships:

• ExxonMobil: Partner for CO2 transportation and permanent storage for the Donaldsonville and Yazoo City CCS projects.
• JERA Co., Inc. and Mitsui & Co., Ltd.: Joint venture partners in the Blue Point project, contributing to the development and future offtake of low-carbon ammonia.
• Occidental Petroleum Corporation and Enbridge Inc. Joint Venture: Long-term offtake agreement for CO2 transportation and permanent sequestration for the Blue Point facility.
• Linde plc: Partner for the design, construction, ownership, operation, and maintenance of an air separation unit (ASU) at the Blue Point complex.

Leadership & Governance

Executive Leadership Team

Board Composition: The Board of Directors includes Stephen J. Hagge (Chair), Javed Ahmed, Robert C. Arzbaecher, Deborah L. DeHaas, John W. Eaves, Susan A. Ellerbusch, Jesus Madrazo Yris, Anne P. Noonan, Michael J. Toelle, Theresa E. Wagler, and W. Anthony Will. The Audit Committee of the Board oversees management’s cybersecurity risk management efforts.

Human Capital Strategy

Workforce Composition:

• Total Employees: Approximately 2,900 employees as of December 31, 2025.
• Geographic Distribution: 80% in the United States, 14% in Canada, and 6% in the United Kingdom.
• Skill Mix: Full-time employees represent nearly 100% of the workforce. Approximately 5% are covered by collective bargaining agreements. The Company supplements its workforce with contractors for specialized skills during peak activities.

Talent Management: Acquisition & Retention:

• The Company invests in extensive recruitment, training, and professional development opportunities.
• Retention Metrics: As of December 31, 2025, 8% of employees have over 20 years of service, 27% have 11-20 years, 21% have 6-10 years, and 44% have less than 6 years.
• Employee Value Proposition: Focus on creating a workplace where employees are proud to work and grow, and feel empowered.

Diversity & Development:

• Fosters a culture of inclusion and engagement.

Workforce Health and Safety:

• Operating safely and responsibly is a core value.
• Safety Metrics (as of December 31, 2025):
  • Employee 12-month rolling recordable incident rate (RIR): 0.26 incidents per 200,000 work hours.
  • Total recordable injury/illness count: 8.
  • Days away, restricted or transferred (DART) incident rate: 0.13 injuries per 200,000 work hours.
  • Lost time incident rate: 0.03 injuries per 200,000 work hours.

Environmental & Social Impact

Environmental Commitments: Climate Strategy:

• Emissions Targets: On a path to decarbonize its ammonia production network. Completed a CCS project at Donaldsonville (capturing up to 2 million metric tons of CO2 annually) and is executing further decarbonization projects at Yazoo City (expected to capture 500,000 metric tons of CO2 annually) and the Blue Point complex (expected to capture 2.3 million metric tons of CO2 annually). Completed a nitric acid plant abatement project at Verdigris, reducing CO2e emissions by over 600,000 metric tons annually.
• Carbon Neutrality: Canada has a stated goal of net zero GHG emissions by 2050, which impacts the Company's Canadian operations.
• Renewable Energy: Not explicitly detailed.

Supply Chain Sustainability:

• Responsible Sourcing: The Company is subject to regulations related to conflict minerals compliance.

Social Impact Initiatives:

• Product Impact: Low-carbon products are expected to be used for power generation and steel production in Japan, and to help customers reduce the economic impact of European carbon regulations. Low-carbon nitrogen products can also reduce the carbon footprint of food production.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: The fertilizer business is seasonal, with the strongest demand in North America occurring during the spring planting season and a second period of strong demand following the fall harvest. Ammonia experiences the greatest seasonality due to its short application season and limited storage capacity for customers.
• Economic Sensitivity: Demand is influenced by global economic conditions, farm sector income, weather patterns, global grain stocks, fertilizer application rates, and governmental policies (e.g., farm and biofuel subsidies, environmental policies).
• Industry Cycles: Periods of strong demand and high-capacity utilization tend to stimulate global investment in production capacity, which can lead to industry oversupply and downward pressure on prices.

Planning & Forecasting:

• The Company generally manufactures and distributes products throughout the year, building inventories during low demand periods to ensure timely product availability during peak sales seasons. Quarterly financial results can vary significantly due to weather-related shifts in planting and application schedules, purchasing patterns, and logistical limitations.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations:

• Environmental, Health, and Safety (EHS): Subject to numerous EHS laws and regulations in the United States (e.g., Clean Air Act, Clean Water Act, Resource Conservation and Recovery Act (RCRA), Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), Toxic Substances Control Act (TSCA), Occupational Safety and Health Act (OSHA)), Canada, the United Kingdom, and Trinidad.
• Superfund Tax: The Infrastructure Investment and Jobs Act of 2021 reinstated and doubled the Superfund tax on chemicals, including ammonia and nitric acid, applicable to domestic production and imports (with exemptions for fertilizer, animal feed, fuel, or exports).

Trade & Export Controls:

• International Compliance: Subject to GHG regulations in Canada, the United Kingdom, and the European Union (EU).
• Export Restrictions: The EU's Carbon Border Adjustment Mechanism (CBAM) became effective January 1, 2026, requiring importers of nitrogen fertilizer products to purchase certificates reflecting embedded carbon emissions. The United Kingdom is also adopting its own CBAM, expected to apply from January 1, 2027.
• Tariffs: The U.S. Supreme Court ruled against IEEPA-based tariffs in February 2026, leading to a new 10% tariff on most imported products, with exemptions for Canadian products and most fertilizers (excluding ammonia).
• Anti-Corruption and Sanctions: Subject to anti-corruption laws (e.g., U.S. Foreign Corrupt Practices Act, United Kingdom Bribery Act 2010, Canadian Corruption of Foreign Public Officials Act) and economic sanctions programs (e.g., OFAC).

Legal Proceedings:

• Environmental Remediation: Involved in CERCLA remediation matters, such as the Georgetown Canyon, Idaho, former phosphate mine site, with ongoing risk assessment and feasibility studies.
• Product Liability: Named in product liability actions related to the herbicide paraquat, associated with Terra Industries Inc. prior to its acquisition by CF Industries Holdings, Inc.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: 19.7% in 2025, compared to 16.2% in 2024. The higher rate in 2025 was primarily due to increases in unrecognized tax benefits related to U.S. tax positions under IRS audit.
• Geographic Tax Planning: The Company does not have an indefinite reinvestment assertion in any foreign subsidiaries. A deferred tax liability of $21 million was recorded on undistributed earnings of Canadian subsidiaries as of December 31, 2025.
• Tax Reform Impact: The Inflation Reduction Act of 2022 and the One Big Beautiful Bill Act (July 2025) modified carbon sequestration and clean hydrogen tax credits. The Company earned approximately $42 million in 45Q Tax Credits in 2025. The One Big Beautiful Bill Act did not have a material impact on income tax expense in 2025 or is expected to in future periods, but it affects the timing of cash tax payments.

Insurance & Risk Transfer

Risk Management Framework:

• Insurance Coverage: Maintains property, business interruption, casualty, and liability insurance policies. However, the Company is not fully insured against all potential hazards and risks inherent in its business, and certain hazards may not be insurable. Policies are subject to self-insured retentions, deductibles, and limits.
• Risk Transfer Mechanisms: Utilizes derivative financial instruments, primarily natural gas futures, swaps, and option contracts, to hedge financial exposure to natural gas price volatility. May also use foreign currency derivatives (forward exchange contracts) to mitigate foreign currency exchange rate risk.