CF Industries Holdings, Inc.
CF · Basic Materials · Annual report 2025-12-31 · 6 reported years · Figures in USD
Market Cap
18.31B USD
Price on 2026-10-27
Average of the Three Values
23.16B USD
The plain average of EPV, Profit and FCFF
Intrinsic / Market Ratio
1.27×
Average / Market Cap, the ratio the list ranks by
Margin of Safety (Average)
+21.0%
1 − Market Cap / Average of the Three Values
Price / Book
3.78×
Market Cap / Book Value as printed (4.84B)
Greenwald Value, Case C: Earnings Power
25.82B USD
Protected franchise · +29.1%
Evidence: N is a note in the company's reports, F a line of its financial statements, R a fact from recent research; +n is n more sources. This page reads the company's own reports at its price date; the screener's values, the hollow dots, read the data provider's figures at their own date, so they differ on purpose.
Price vs Value
Every value of the company against the Market Cap on the price date above.
Bottom line
CF Industries has an intrinsic value of 23.14B USD against a market cap of 18.29B USD, a margin of safety of 21.0%. The verdict holds unless Profit and FCFF fall below 60.7% of their projected values, so the projections can fall by 39.3% before the price stops being covered. Greenwald's value on the company's case is the earnings power value of 25.80B USD (a margin of safety of 29.1%), shown here as a reading beside the verdict. The weak point is that case C reads as a franchise, yet the reports find no barrier to entry in a commodity business, so the earnings power may not last.Book Value
Assets less liabilities, as printed
Asset Value
What an entrant would spend to reproduce the assets, less what is owed
EPV + Growth Value
From the report's figures
Profit
From the report's figures
18% capital at year 15 · 82% 15 years of profit
FCFF
From the report's figures
27% capital at year 15 · 73% 15 years of free cash flow, before the net cash or net debt
Average of the Three
Uncapped, as the screener averages them
Greenwald Value, Case C: Earnings Power
The value Greenwald assigns on this case
How Each Value Is Built
The screener's three formulas on the report's own figures. Each card reads the same way: the value as a sum of numbered terms, each term's calculation opened under it, from the reported figures to the value. The verdict rests on their plain average, as the screener ranks; the Greenwald value on the company's case is a reading beside it.
What it is worth
EPV + Growth
32.42B USD
what the normal year's earnings are worth for ever, plus growth that pays
Profit
20.24B USD
15 years of cash the shareholders can take out, and the equity left at year 15
FCFF
16.82B USD
15 years of cash for shareholders and lenders, less what is owed
Average Intrinsic Value
23.16B USD
The plain average of EPV, Profit and FCFF
Against the price
Market Cap
18.31B USD
the price on the date above times the shares
Intrinsic Value ÷ Market Cap
1.27×
the ratio the screener ranks by
Margin of Safety
+21.0%
1 − Market Cap / Average Intrinsic Value
EPV of the Operations (NOPAT over WACC)
33.38B USD
Net Debt and Claims Ahead of the Shareholders
-7.55B USD
Growth Value
+6.59B USD
Value
32.42B USD
①EPV of the Equity
25.82B USD②Growth Value
6.59B USDMarket value
The price on the date above times the shares.
Value vs market
1 minus the market cap as a share of the value.
①Present Value of the 15 Years of FCFE
16.60B USD②Equity at Year 15, Today
3.64B USDMarket value
The price on the date above times the shares.
Value vs market
1 minus the market cap as a share of the value.
①Present Value of the 15 Years of FCFF
17.87B USD②Invested Capital at Year 15, Today
6.51B USD③Net Debt and Claims Ahead of the Shareholders
-7.55B USDMarket value
The price on the date above times the shares.
Value vs market
1 minus the market cap as a share of the value.
27.49B USD
Average on the reported years
EPV + Growth Value, Profit and FCFF on the years as reported
+1.39B USD
Acquisitions read as reinvestment
FCFF +4.16B USD
-5.84B USD
Growth basis chosen
Profit -15.56B USD, FCFF -1.97B USD
+122.85M USD
Growth by five-year blocks
Profit +123.46M USD, FCFF +245.09M USD
23.16B USD
Intrinsic value
the average the verdict rests on
- Acquisitions: counted as reinvestment, since buying a business is capital spending like building one: 1.22B USD in 2023, 2.00M USD in 2024, from Purchase of Waggaman ammonia production facility.
Profit growth: the stable rate (2.0% a year for years 1 to 5, lowered from the reported years' paid growth of 16.1%).
FCFF growth: the stable rate (2.0% a year for years 1 to 5, lowered from the reported years' paid growth of 4.3%).
Set by the analyst: Sales volume was flat at 18.3 to 19.1 million product tons in 2021 to 2025 (sales volume by product tons, N020 and N340: 18,501, 18,331, 19,130, 18,943, 19,057), so the reported years earned their swings from the price of nitrogen, not from growth: the 2022 earnings (3.9B against 1.3B in 2021) are a price spike. Ahead, nitrogen demand grows about 1% a year to 2030 (IFA, R029), and Blue Point adds CF's 40% of 1.4 million tons from 2029 (R012, R013), about 5% of its 10.4 million tons of ammonia capacity (N021) once, in 2029, not a yearly rate. The stable growth rate is what the business supports.
Profit growth by five-year blocks: years 1 to 5 2.0%, years 6 to 10 2.0%, years 11 to 15 2.0%, years 1 to 5’s own, already below the risk-free rate. The return on new capital falls by year 10 to 10.1%, the average return on capital of the Agricultural Inputs industry in US, 8 companies, 2001 to 2024.
Measured on US's domestic companies, this company out. Largest: The Mosaic Company, 38.9% of the revenue. Left out: 1 reporting in another currency, 21 not domestic.
FCFF growth by five-year blocks: years 1 to 5 2.0%, years 6 to 10 2.0%, years 11 to 15 2.0%, years 1 to 5’s own, already below the risk-free rate. The return on new capital falls by year 10 to 13.6%, the average return on capital of the Agricultural Inputs industry in US, 8 companies, 2001 to 2024.
Measured on US's domestic companies, this company out. Largest: The Mosaic Company, 38.9% of the revenue. Left out: 1 reporting in another currency, 21 not domestic.
Earnings Power vs Assets
Does the business earn more than it would cost to rebuild? Greenwald's test for a moat.
Asset Value
What a newcomer would spend to rebuild it, less what it owes; the bar runs from every asset at the cautious end of its inputs to every asset at the generous end (see Adjusted Balance Sheet)
571.57M – 10.64B
Earnings Power Value
What the business earns, as if it never grew
25.82B USD
Market Cap
What the market pays for all the shares
18.31B USD
Logarithmic axis: 0.80× and 1.25× are the same distance from 1×.
Case A: The Assets Earn Too Little
The business earns less than it would cost to rebuild. A newcomer would not build it, so the value is what it earns, not what its assets cost.
Case B: A Normal Business
It earns about what its assets cost to rebuild: no moat and no penalty. The value is the asset value.
Case C: Something Protects It (This Company)
It earns well above what its assets cost. Something keeps newcomers out, and that franchise is worth the difference.
Franchise value
Earnings power value less asset value: what a moat is worth, negative when there is none.
19.74B USD
Bear case
The bear case rests on the asset value of 6.08B USD (range 571.00M USD to 10.63B USD).
Base case
The base case is what the reported years support: Greenwald's value on case C, the earnings power value of 25.80B USD.
Bull case
The bull case rests on the intrinsic value of 23.14B USD, the plain average of three values.
Expected Return
What a buyer at this price earns a year if the business holds: cash returned, organic growth and reinvestment, against the cost of equity.
8.5%
Cash Returned
Earnings Power less the cost of today's debt after tax (its rate × the debt), 2.09B USD, × 74.7% paid out, over the market cap
2.5%
Organic Growth
The stable growth the analysis chose, 2.0% a year, in place of the printed revenue growth of 19.6% the growth basis sets aside, × value over price of 1.27
12.0%
Reinvestment
490.96M USD kept beyond what organic growth needs × 4.47 of value created per unit, over the market cap
23.1%
Expected Return a Year
At value equal to price: 22.5%
Against a cost of equity of 7.1%: above it by 15.9%. That is how much of the return the franchise may lose before it earns only its cost.
Paid out: the reported years' dividends and the buybacks beyond the shares issued, over net income, averaged. Value created per unit: the return on capital over the cost of equity. Working capital per unit of revenue: 26.8%.
What Comes Next
Dated events ahead that can matter to a holder, each with the quote that dates it.
- 2026Canadian GHG regulations reviewed at federal and provincial levelRegulation
Downside for holders
The review could increase the costs the Canadian facilities incur for excess emissions.
- 2027Yazoo City complex expected to resume UAN and urea liquor productionOperations
Upside for holders
The site has been idle since the November 2025 incident, so restarting it brings back lost volumes and earnings.
- 2027EU CBAM certificates must be purchased for nitrogen fertilizer importsRegulation
Either way for holders
Importers into the EU will pay for embedded carbon emissions, which changes export economics and favours low-carbon ammonia.
- 1 Jan 2027PLNL gas sales contract with NGC expiresContract or concession
Either way for holders
Gas supply to the Trinidad joint venture after expiry needs a new contract, and without gas at profitable prices PLNL may stop operating and the remaining investment would be written off.
- 2028Yazoo City carbon capture and sequestration expected to startOperations
Upside for holders
Sequestering up to approximately 500,000 metric tons of CO2 a year would earn 45Q tax credits and support low-carbon product sales.
- 2029Blue Point low-carbon ammonia production expected to beginOperations
Upside for holders
The plant with nameplate capacity of approximately 1.4 million metric tons starts generating cash flows, of which the company holds 40%.
- 31 Dec 20292025 Share Repurchase Program of up to $2 billion runs through year endDividends and buybacks
Upside for holders
Continued buybacks under the authorization keep reducing the share count.
- 2030Canadian excess emissions fee reaches CAD $170 per metric tonRegulation
Downside for holders
The rising carbon price increases operating costs at the Medicine Hat and Courtright plants.
- 6 Jan 2031EU antidumping duties on U.S. UAN extended through this dateRegulation
Either way for holders
The duties limit the company's EU export access for UAN until they expire or are renewed.
Earnings Power, Step by Step
Average margin on sustainable revenue, average tax, depreciation above maintenance CapEx.
From Revenue to the Value of the Operations
7.09B USD
Latest Revenue
34.0%
Average Operating Margin, Latest 5 Reported Years
2.41B USD
Sustainable Operating Profit
19.0%
Average Tax Rate
270.99M USD
Depreciation Above Maintenance CapEx, After Tax
2.22B USD
Earnings Power (NOPAT)
6.7%
Cost of Capital (WACC)
33.38B USD
EPV of the Operations
Depreciation Above Maintenance CapEx, set by the analyst: Sales volume was flat at 18.3 to 19.1 million product tons in 2021 to 2025 (sales volume by product tons, N020 and N340: 18,501, 18,331, 19,130, 18,943, 19,057), so the revenue swings (6.5B, 11.2B, 6.6B, 5.9B, 7.1B) are price and no capex went to growth: Maintenance CapEx is all capex.
Cost of equity: 4.77% the 10-year government bond in USD + beta 0.53 (the market's) × 4.46% the country's equity risk premium = 7.12%, in the currency of the figures it discounts.
Cost of debt after tax: interest of 155.15M USD over the year's average debt of 3.10B USD, less tax at 19.0% = 4.06%. Weighted 85.05% equity at the market cap, 14.95% debt: 6.66%.
The screener's rate, a check: 6.26%.
From the Operations to the Shareholders
EPV of the Operations
33.38B USD
Free Cash
cash the company may use freely; 130.13M restricted left out
+1.85B USD
Assets the Business Does Not Need
Stake in PLNL (Trinidad)
+32.03M USD
Debt
financial debt and leases
-3.13B USD
Claims Ahead of the Shareholders
minority interests, a dividend already declared
-5.78B USD
Legacy Liabilities
pensions, lawsuits, environment: inherited from the past
-527.53M USD
EPV of the Equity
25.82B USD
22 of 25 cells are above the price: the EPV of the equity depends on the assumptions.
EPV of the equity in USD; the outlined cell is the analysis's own. Green above the market cap (18.31B), red below.
Returns, Payouts and Debt
What each reported year earned, paid to shareholders and owed, as the report prints it, before any adjustment.
Return on Capital, 2025
28.9%
operating profit after tax over book plus net debt
Dividend Yield
1.8%
the latest year's dividends over the Market Cap on the price date above
Paid Out in All, 2025
94.0%
dividends and the buybacks beyond the shares issued, over profit
Net Debt over EBITDA, 2025
0.4×
years of operating profit before depreciation to repay it
Dividend policy: The company pays a quarterly cash dividend, which the Board raised in July 2026 to $0.60 per common share from $0.50; dividends declared were $2.00 per share in 2025. It also returns cash through buybacks under the 2025 Share Repurchase Program of up to $2 billion, effective through December 31, 2029.
2034
750.75M USD
5.150% senior notes due March 2034
2035
1.00B USD
5.300% senior notes due 2035
Lenders' conditions
- The revolving credit facility requires a total net leverage ratio no greater than 3.75:1.00 (or 4.25:1.00 for four fiscal quarters after certain material acquisitions) at each quarter end; at December 31, 2025 the company was in compliance and the $750 million facility was undrawn.
- The senior notes indentures limit liens securing debt, sale and leaseback transactions, mergers and transfers of substantially all assets, with no financial maintenance covenants; the company was in compliance at December 31, 2025.
- On a change of control repurchase event the company must offer to repurchase the Public Senior Notes at 101% of principal plus accrued interest.
Financial Statements
Every line the reports print, before any adjustment, then what is calculated from them. Open a period for the document it comes from.
Who Owns It
Every holder of 5% or more of the capital the reports and the research name (5% is the share at which holders must disclose), then the rest of the capital.
The Vanguard Group
Fund or institution
15.7%
BlackRock, Inc.
Fund or institution
8.3%
T. Rowe Price Associates, Inc.
Fund or institution
5.2%
State Street Corporation
Fund or institution
5.1%
The rest of the capital
holders the reports and the research do not name
65.7%
Peers
The company against listings in the same industry: how the market prices them, what they earn.
| Peer | Market | Market Cap (USD) | Price / Book | ROE | Op. Margin |
|---|---|---|---|---|---|
CTVA Corteva, Inc. | US | 8.40B | 0.34× | — | 0.0% |
MOS The Mosaic Company | US | 6.86B | 0.59× | -5.1% | -0.1% |
ICL ICL Group Ltd | US | 6.42B | 1.00× | 5.6% | 12.5% |
SMG The Scotts Miracle-Gro Company | US | 3.45B | — | — | 16.8% |
FMC FMC Corporation | US | 786.29M | 0.47× | -88.4% | 11.8% |
IU2.F Yara International ASA | DE | 10.91B | 1.21× | 17.9% | 13.5% |
NTR.TO Nutrien Ltd. | CA | 34.11B | 1.31× | 9.4% | 17.5% |
SDF.F K+S Aktiengesellschaft | DE | 2.56B | 0.42× | 22.0% | 77.3% |
KWS.DE KWS SAAT SE & Co. KGaA | DE | 2.48B | 1.25× | 9.5% | 12.6% |
1866.HK China XLX Fertiliser Ltd. | HK | 1.67B | 0.89× | 13.0% | 10.3% |
TEZ.F Tessenderlo Group NV | DE | 1.13B | 0.58× | -0.3% | 4.1% |
3983.HK China BlueChemical Ltd. | HK | 1.09B | 0.38× | 4.1% | 4.6% |
Agricultural Inputs in the screener: 12 of 33, the same market first, then the closest in size. The company's own figures are from its report (2025): net income over the printed book value, operating profit over revenue.
In Our Strategy
Where the screener ranks the company and whether the strategy would buy it.
Not in what the strategy buys
Place 211 of 2,309 by value in its market (US). The strategy buys the first 25.
Place 1 is the cheapest: the highest value over market cap. Only companies above their market's floor count, $1B in every market and $500M in Romania, and a company listed in several markets counts once.
Adjusted Balance Sheet
From the book value the balance sheet prints to the asset value a buyer would count.
Book Value
assets less liabilities, as printed
4.84B USD
Property, plant and equipment—net (amount related to VIE—2025: $361)
+2.54B USD
Goodwill
-2.50B USD
Long-term debt
+84.08M USD
Organisation
not in the balance sheet
+1.09B USD
Trained workforce
not in the balance sheet
+290.29M USD
Unrecorded conditional asset retirement obligations
not in the balance sheet
-142.14M USD
Restricted cash (not the owners')
-130.13M USD
Asset Value
at reproduction, less what is owed
6.09B USD
Investor Checklist
The questions to ask of any business, answered from the reports and research, or marked unknown.
Answered
21
questions
Not applicable
1
question
Unknown
0
questions
business
The largest customers, products, suppliers and countries, and their share of revenue.
CHS is the largest customer and a related party, because it also holds a minority stake in CFN; it buys at market prices. Sales are concentrated in North America. Production depends on one site and on gas delivered by third-party pipelines. The reports do not give CHS's share of net sales as a figure.
- Customer: CHS may buy each year "up to approximately 1.1 million tons of granular urea and 580,000 tons of UAN at market prices" (R020). CHS holds about 11% of CFN (R019).
- Products: revenue is split among Ammonia, Granular Urea, UAN, AN and Other (N518).
- Country: most 2025 revenue came from North America (N519).
- Site: Donaldsonville "represented approximately 40% of our ammonia production capacity as of December 31, 2025" (N397).
- Suppliers: gas reaches the plants through third-party pipelines, some plants rely on a single pipeline (N399), and ammonia moves on the third-party Sunoco pipeline (N382).
Fixed against variable costs, operating leverage, the main cost lines and what drives them.
Natural gas is the largest and most volatile cost, and little of it is hedged. Depreciation, SG&A and the plants are largely fixed. Selling prices are set by the world market, so small price moves swing operating earnings.
- Natural gas: the largest production cost, and its share of costs rose in 2025 (N436). The cost per MMBtu rose sharply and cut gross margin (N437). Only a small share of consumption is hedged (N572).
- Cost of sales: 4,360,000,000 in 2025 (F173).
- Selling, general and administrative: 364,000,000 in 2025 (F175).
- Depreciation and amortization: 898,000,000 in 2025 (F295), a fixed charge.
- Operating leverage: net sales of 5,936,000,000 in 2024 and 7,084,000,000 in 2025 (F146, F172) against operating earnings of 1,746,000,000 and 2,300,000,000 (F156, F182).
- Carbon and logistics: a Canadian carbon price that rises every year (N389), and leased railcar and river fleets (N380, N381).
How revenue, volumes and margins moved through past cycles and shocks.
Revenue moves with the world nitrogen price, not with volume. Revenue peaked in 2022, more than halved in price terms in 2023, bottomed in 2024 and recovered in 2025. High U.K. gas prices led to closures.
- Price: "The average selling price for our products was $347 per ton in 2023 compared to $610 per ton in 2022" (N115), and "$372 per ton in 2025 compared to $313 per ton in 2024" (N435).
- Revenue: 6,631,000,000 in 2023, 5,936,000,000 in 2024 and 7,084,000,000 in 2025 (F120, F146, F172).
- Volume: tons shipped rose in 2023 even as prices fell (N116).
- Peak: 2022 was a peak-price year for gross margin (N304).
- Shocks: high U.K. gas prices closed Ince and ended ammonia production at Billingham (N036). Winter Storm Uri produced a one-off gain in 2021 (N281).
industry
What could replace the product or shrink the industry: substitutes, technology, energy transition, regulation.
Crops need nitrogen every year, and the reports name no substitute at scale. The risks are to demand and to the cost edge: policy, carbon rules, imports and new capacity. Low-carbon ammonia opens a new market.
- Ethanol policy: ethanol is "approximately 35% of total U.S. corn demand" and depends on federal mandates (N412).
- Fertilizer emissions: Canada targets lower emissions from fertilizers by 2030, which could reduce demand (N080).
- Carbon border rules: EU CBAM applies from January 1, 2026, while some EU member state officials are "advocating for a suspension of CBAM's application to fertilizers" (N388).
- Gas advantage: more U.S. LNG exports could shrink the North American gas cost advantage (N082).
- Supply: Russian imports exempt from sanctions (N112), and new capacity such as the Gulf Coast Ammonia plant with "expected nameplate capacity of 1.3 mtpa" (R017), bought by Yara (R016).
- Upside: the company made its "first sales of low-carbon ammonia at a premium" (N370).
moat
Return on equity and on capital over the years in the statements, against the cost of capital.
Returns in the projections are well above the cost of capital: a return on equity of 47.7% against a cost of equity of 7.1%, and a return on capital of 39.2% against 6.7%. Book equity fell as buybacks retired shares, which flatters the return on equity.
- Net earnings: 1,838,000,000 in 2023, 1,477,000,000 in 2024 and 1,798,000,000 in 2025 (F137, F163, F189).
- Stockholders' equity: 5,717,000,000 in 2023, 4,985,000,000 in 2024 and 4,838,000,000 in 2025 (F036, F076, F116).
- Buybacks behind the shrinking equity: 1,509,000,000 in 2024 and 1,365,000,000 in 2025 (F284, F331).
When the protections expire or could erode: licence or concession end dates, patent expiries, regulatory reviews, contract renewals.
No licence or patent protects the business. Its edge is the North American gas discount and operating skill, and either can erode. The dated items below decide costs and market access rather than a franchise.
- PLNL gas contract with NGC expires on January 1, 2027 (R008).
- EU antidumping duties on U.S. UAN extended through 2031-01-06 (N407).
- Superfund excise tax on ammonia runs until the end of 2031, with fertilizer and export uses exempt (N411).
- Canadian carbon price rises each year to 2030, with a review in 2026 (N410).
- 45Q credits are available for twelve years from the in-service date (N515).
- Louisiana halted the review of new Class VI well permits on 15 October 2025 (R018).
- Gas advantage: could shrink as U.S. LNG exports grow (N082). The "8% greater ammonia capacity utilization" (N606) is operating skill, not a protection.
earnings
One-off items, accruals against cash, capitalised costs, stock-based pay, provisions built or released.
Cash backs the earnings: operating cash flow of 2,752,000,000 against net earnings of 1,798,000,000 in 2025 (F314, F189). Several items still distort earnings: one-offs, a non-cash revenue credit, capitalised turnarounds and policy-dependent tax credits.
- One-offs in 2025: asset impairment of 76,000,000 (F176) at Yazoo City and on the abandoned Donaldsonville electrolyzer (N441, N442); U.K. restructuring of 23,000,000 (F177); a loss on debt extinguishment of 6,000,000 (F185).
- 2026 one-off: Orica agreed to pay about $170 million in cash, and the gain was booked in Q1 2026 (R005).
- Non-cash revenue: amortisation of the Dyno Nobel supply contract liability lifts net sales without cash (N587).
- Capitalised costs: plant turnarounds are capitalised rather than expensed (N534).
- Stock-based pay: 45,000,000 in 2025 (F297).
- 45Q credits: booked in other operating—net and can be clawed back (N570, N517).
- Gas derivatives: unrealised mark-to-market results run through cost of sales (N492).
- Tax provisions: unrecognised tax benefits increased on U.S. positions under IRS audit (N462).
Capital spending needed just to keep capacity, against growth spending and against depreciation.
Sales volume was flat over the reported years, so the analysis treats all capex on existing operations as replacement. Depreciation exceeded capex until 2025, when Blue Point construction lifted spending. The partners fund most of Blue Point.
- Capex: 499,000,000 in 2023, 518,000,000 in 2024 and 950,000,000 in 2025 (F222, F269, F316).
- Depreciation and amortization: 869,000,000, 925,000,000 and 898,000,000 (F201, F248, F295).
- Growth spending: the 2025 rise was driven by Blue Point (N464). Partners fund the majority (N465), and the company pays 40% of Blue Point capex (N468).
- 2026 guidance: about $1.3 billion including Blue Point One (R003).
- Recurring: capitalised turnaround additions are maintenance spending (N535).
balance sheet
Guarantees, purchase commitments, leases, pensions, litigation, environmental and decommissioning duties, obligations at the end of a concession.
The obligations below sit outside debt. Two have no amount the reports can estimate: Georgetown Canyon and paraquat.
- Decommissioning: conditional AROs of "approximately $142 million" in 2025 dollars, unrecorded (N589, N315).
- Tax: "a reserve for unrecognized tax benefits, including penalties and interest, of $357 million" (N508). Letters of credit back disputed Canadian reassessments (N481).
- Pensions: retiree medical unfunded at "$ (19)" (N558), and a U.S. plan termination liability of "$9 million" to be paid in 2026 (N576, N496).
- Purchase commitments: minimum take commitments for gas and transport (N490), and buying half of PLNL's ammonia at market prices (N544).
- Below-market supply: the Dyno Nobel contract (N523), carried as a supply contract liability of 694,000,000 (F106).
- Guarantees: the parent guarantees certain Blue Point vendor commitments (N569).
- Environmental and litigation: the Georgetown Canyon mine (N067) and paraquat suits inherited with Terra (N089).
- Insurance: the company is not fully insured against operational hazards (N413).
Debt, maturities, covenants, refinancing needs, liquidity.
Debt is long-dated, fixed-rate and unsecured, and nothing matures until 2034. Liquidity is ample: a large cash balance, an undrawn revolver and investment-grade ratings. Net debt is 0.39x EBITDA.
- Debt: long-term debt of 3,215,000,000 (F103), all senior notes with no maturities until 2034 (N561). The 2026 notes were refinanced early with 2035 notes (N563, N447).
- Revolver: up to $750 million, maturing 4 September 2030 (R028), and fully undrawn (N480).
- Covenant: a single maximum net leverage ratio (N478), with which the company complied (N479).
- Ratings: investment grade from all agencies (N346).
- Cash: 1,982,000,000 (F082), of which the Blue Point amount, "130" (N450), can only settle Blue Point's obligations (N568).
- Change of control: a change of control with a downgrade requires an offer to repurchase the notes (N186).
Assets the business does not need to run: surplus cash, investments, idle land or plant.
Little is idle. The only asset treated as non-operating is the PLNL stake, carried at 32,000,000 (F089), and its value depends on the gas contract. Cash is counted separately, net of the restricted Blue Point part.
- PLNL stake: 32,000,000 (F089), at risk if gas supply ends (N507).
- Cash: 1,982,000,000 (F082), less the Blue Point cash usable only by Blue Point (N568).
- Tax receivables in other assets of 980,000,000 (F093): their recovery depends on how the tax disputes end (N574).
- Ince: the closed site was sold in 2025 (N590).
management
Dividends, buybacks, investments and acquisitions over time, and what they returned.
Most cash went to buybacks, which cut shares issued from 188,188,401 in 2023 to 153,552,162 in 2025 (F032, F111). Dividends rose, and the company bought one plant. On the returns above, capital stayed above its cost. The electrolyzer project was abandoned for unacceptable returns.
- Buybacks: 580,000,000 in 2023, 1,509,000,000 in 2024 and 1,365,000,000 in 2025 (F237, F284, F331). A new programme runs through 2029 (N416).
- Dividends: 311,000,000, 364,000,000 and 326,000,000 (F234, F281, F328). The quarterly dividend was raised to $0.60 from $0.50 in July 2026 (R026).
- Acquisition: Waggaman for 1,223,000,000 in 2023 (F224).
- Growth project: a 40% share of Blue Point (N468).
- Write-off: the Donaldsonville electrolyzer was abandoned and impaired (N442).
- Minority leakage: distributions to noncontrolling interests of 459,000,000, 308,000,000 and 304,000,000 (F236, F283, F330).
Minority protection, related-party dealings, the board and its independence (the main shareholders have their own section).
The main governance issue is CHS, which is at once the largest customer and minority partner in CFN, paid semi-annual distributions. Blue Point is consolidated although the company holds only a minority stake. The reports do not give the board's independence.
- Related party: CHS buys under a long-term supply agreement and receives CFN distributions (N324, N500, N579).
- Blue Point: consolidated as a VIE; the JERA and Mitsui stakes are noncontrolling interests (N567).
- Audit: long-standing auditor KPMG gave an unqualified opinion (N509).
- Board: Chairman Hagge and former CEO Will will not stand for re-election at the 2026 meeting (N395).
Who runs it, their record, their incentives, turnover.
Leadership has changed. Christopher Bohn succeeded Tony Will as CEO, and a new CFO arrived in 2026. The operating record is strong on utilization but includes the Yazoo City incident and an abandoned project. The reports do not detail incentives beyond equity awards.
- CEO: Bohn succeeded Will (N394).
- CFO: Andrew T. Scribner became EVP and CFO effective 26 May 2026, after an interim period (R004, N595).
- Turnover: a separation agreement with Gregory D. Cameron was signed in January 2026 (N594).
- Record: "8% greater ammonia capacity utilization than other North American producers" over five years (N606). Against that, the November 2025 Yazoo City incident (N537) and the abandoned electrolyzer (N442).
- Incentives: options, RSUs and PSUs (N584).
regulation
Who regulates, how prices or tariffs are set, the allowed return, the next review.
No regulator sets prices or an allowed return; prices are set by the world market. Regulation acts on costs and market access, with the reviews below.
- Canada: GHG pricing on excess emissions, with a 2026 review (N410).
- U.K.: the plant must hold UK ETS allowances (N391).
- EU and U.K.: EU CBAM certificates from 2027, and a U.K. CBAM expected from 2027 (N409).
- U.S. credits: 45Q credits (N619), changed by the July 2025 One Big Beautiful Bill Act (N405).
- U.S. tax: Superfund excise tax until the end of 2031 (N411).
- Antitrust: task forces investigating price-fixing in the food supply chain, including fertilizer (N433).
- Tariffs: a temporary tariff keeps exemptions for fertilizers after IEEPA tariffs were struck down (N431).
Special taxes, state intervention, currency, country risk.
Most of the business is in the U.S. and Canada. The risks are policy on tax credits and trade, state counterparties abroad, sanctions-driven trade flows and unhedged currencies.
- Currency: exposure to the Canadian dollar, sterling and euro, generally unhedged (N087, N196).
- Tax credits: changed by the One Big Beautiful Bill Act (N405).
- Tariffs: steel and aluminium tariffs could raise equipment costs, including at Blue Point (N432).
- Louisiana: the governor halted new Class VI well permit reviews (R018).
- Trinidad: PLNL depends on the state company NGC; the contract expires January 1, 2027 (R008).
- Russia: nitrogen exempt from U.S. sanctions (N112), while the EU applies rising tariffs on Russian nitrogen (N408).
- Canadian tax: reassessments are under competent authority review (N482).
- U.S. EPA: rescinded the GHG endangerment finding (N390).
technology
The systems the business runs on (control, IT, automation): their state, cyber risk, obsolescence.
The reports describe process technology and third-party dependencies but say nothing on control systems, IT or cyber risk. The main technology risk they name is Blue Point's unproven process scale.
- Blue Point: autothermal reforming with CCS at a scale not proven for ammonia (N403).
- CCS chain: depends on third parties operating CO2 pipelines and wells (N401), with ExxonMobil at Donaldsonville (N609).
- Gas supply: some plants depend on a single third-party pipeline (N399).
- Missing: no disclosure on IT systems, automation or cyber risk.
For a technology-driven business: switching costs, network effects, proprietary data, R&D as investment, marginal cost of scale, retention.
This is a commodity chemical business, not a technology-driven one. It competes on gas cost, utilization and logistics, not on switching costs, network effects or R&D.
Age and condition of the physical assets, remaining life, deferred maintenance.
The plants are old and heavily depreciated, but the reports treat them as having indefinite lives and maintain them through capitalised turnarounds. One complex is idle after an incident.
- Age: accumulated depreciation is large against gross PP&E, an ageing base (N530).
- Life: no cessation date can be estimated (N315).
- Maintenance: net capitalised turnaround costs sit in PP&E (N536).
- Yazoo City: idle after the November 2025 incident (N376), with damaged equipment impaired (N441). Restart is now expected in the first half of 2027 (R009), and insurance proceeds are expected over the rebuild (R010).
- Billingham: the ammonia plant is closed permanently (N113).
- Hurricane exposure: Donaldsonville, Waggaman and Blue Point sit in a hurricane zone (N398).
market
What the price implies, liquidity, analyst coverage, why the market pays what it pays.
At 18.29B USD, the market pays 0.71x of the earnings power value. It is pricing a fall from 2025 earnings, as a commodity producer at a good point in the cycle. The dividend yield is 1.8%, and the return a year from buying is 23.1%. The reports do not give analyst coverage.
- Liquidity: listed on the NYSE as CF (N415).
- Holders: institutions, led by The Vanguard Group at 15.7% (R022).
- Coverage: no analyst coverage is given.
Why the gap might never close.
The gap may never close because the value rests on earnings that competition has no barrier to erode. The market may be right that 2025 margins are a high point in the cycle.
- Cycle: 2025 prices recovered from 2024 (N435), and early 2026 gas prices were much higher (N438).
- Entry: new Gulf Coast capacity (R016) and imports (N112).
- Blue Point: capex may exceed estimates (N404).
- Leakage: recurring distributions to CHS (N500).
decision
The facts that, if observed, would prove the conclusion wrong.
These findings would show the earnings power is not durable and the verdict is wrong.
- The North American gas discount to marginal producers narrows (N082).
- Selling prices fall back toward the 2023–2024 levels (N115).
- The Yazoo City restart slips beyond the first half of 2027 (R009).
- Blue Point costs overrun or its process fails at scale (N403, N404).
- CBAM for fertilizers is suspended, or 45Q credits are cut further (N388, N405).
- The tax disputes end against the company (N553).
- PLNL loses its gas supply after January 1, 2027 (R008).
| Question | Answer | Evidence | |
|---|---|---|---|
| business | |||
| The largest customers, products, suppliers and countries, and their share of revenue. | CHS is the largest customer and a related party, because it also holds a minority stake in CFN; it buys at market prices. Sales are concentrated in North America. Production depends on one site and on gas delivered by third-party pipelines. The reports do not give CHS's share of net sales as a figure.
| ||
| Fixed against variable costs, operating leverage, the main cost lines and what drives them. | Natural gas is the largest and most volatile cost, and little of it is hedged. Depreciation, SG&A and the plants are largely fixed. Selling prices are set by the world market, so small price moves swing operating earnings.
| ||
| How revenue, volumes and margins moved through past cycles and shocks. | Revenue moves with the world nitrogen price, not with volume. Revenue peaked in 2022, more than halved in price terms in 2023, bottomed in 2024 and recovered in 2025. High U.K. gas prices led to closures.
| ||
| industry | |||
| What could replace the product or shrink the industry: substitutes, technology, energy transition, regulation. | Crops need nitrogen every year, and the reports name no substitute at scale. The risks are to demand and to the cost edge: policy, carbon rules, imports and new capacity. Low-carbon ammonia opens a new market.
| ||
| moat | |||
| Return on equity and on capital over the years in the statements, against the cost of capital. | Returns in the projections are well above the cost of capital: a return on equity of 47.7% against a cost of equity of 7.1%, and a return on capital of 39.2% against 6.7%. Book equity fell as buybacks retired shares, which flatters the return on equity.
| ||
| When the protections expire or could erode: licence or concession end dates, patent expiries, regulatory reviews, contract renewals. | No licence or patent protects the business. Its edge is the North American gas discount and operating skill, and either can erode. The dated items below decide costs and market access rather than a franchise.
| ||
| earnings | |||
| One-off items, accruals against cash, capitalised costs, stock-based pay, provisions built or released. | Cash backs the earnings: operating cash flow of 2,752,000,000 against net earnings of 1,798,000,000 in 2025 (F314, F189). Several items still distort earnings: one-offs, a non-cash revenue credit, capitalised turnarounds and policy-dependent tax credits.
| ||
| Capital spending needed just to keep capacity, against growth spending and against depreciation. | Sales volume was flat over the reported years, so the analysis treats all capex on existing operations as replacement. Depreciation exceeded capex until 2025, when Blue Point construction lifted spending. The partners fund most of Blue Point.
| ||
| balance sheet | |||
| Guarantees, purchase commitments, leases, pensions, litigation, environmental and decommissioning duties, obligations at the end of a concession. | The obligations below sit outside debt. Two have no amount the reports can estimate: Georgetown Canyon and paraquat.
| ||
| Debt, maturities, covenants, refinancing needs, liquidity. | Debt is long-dated, fixed-rate and unsecured, and nothing matures until 2034. Liquidity is ample: a large cash balance, an undrawn revolver and investment-grade ratings. Net debt is 0.39x EBITDA.
| ||
| Assets the business does not need to run: surplus cash, investments, idle land or plant. | Little is idle. The only asset treated as non-operating is the PLNL stake, carried at 32,000,000 (F089), and its value depends on the gas contract. Cash is counted separately, net of the restricted Blue Point part.
| ||
| management | |||
| Dividends, buybacks, investments and acquisitions over time, and what they returned. | Most cash went to buybacks, which cut shares issued from 188,188,401 in 2023 to 153,552,162 in 2025 (F032, F111). Dividends rose, and the company bought one plant. On the returns above, capital stayed above its cost. The electrolyzer project was abandoned for unacceptable returns.
| ||
| Minority protection, related-party dealings, the board and its independence (the main shareholders have their own section). | The main governance issue is CHS, which is at once the largest customer and minority partner in CFN, paid semi-annual distributions. Blue Point is consolidated although the company holds only a minority stake. The reports do not give the board's independence.
| ||
| Who runs it, their record, their incentives, turnover. | Leadership has changed. Christopher Bohn succeeded Tony Will as CEO, and a new CFO arrived in 2026. The operating record is strong on utilization but includes the Yazoo City incident and an abandoned project. The reports do not detail incentives beyond equity awards.
| ||
| regulation | |||
| Who regulates, how prices or tariffs are set, the allowed return, the next review. | No regulator sets prices or an allowed return; prices are set by the world market. Regulation acts on costs and market access, with the reviews below.
| ||
| Special taxes, state intervention, currency, country risk. | Most of the business is in the U.S. and Canada. The risks are policy on tax credits and trade, state counterparties abroad, sanctions-driven trade flows and unhedged currencies.
| ||
| technology | |||
| The systems the business runs on (control, IT, automation): their state, cyber risk, obsolescence. | The reports describe process technology and third-party dependencies but say nothing on control systems, IT or cyber risk. The main technology risk they name is Blue Point's unproven process scale.
| ||
| For a technology-driven business: switching costs, network effects, proprietary data, R&D as investment, marginal cost of scale, retention. | This is a commodity chemical business, not a technology-driven one. It competes on gas cost, utilization and logistics, not on switching costs, network effects or R&D. | ||
| Age and condition of the physical assets, remaining life, deferred maintenance. | The plants are old and heavily depreciated, but the reports treat them as having indefinite lives and maintain them through capitalised turnarounds. One complex is idle after an incident.
| ||
| market | |||
| What the price implies, liquidity, analyst coverage, why the market pays what it pays. | At 18.29B USD, the market pays 0.71x of the earnings power value. It is pricing a fall from 2025 earnings, as a commodity producer at a good point in the cycle. The dividend yield is 1.8%, and the return a year from buying is 23.1%. The reports do not give analyst coverage.
| ||
| Why the gap might never close. | The gap may never close because the value rests on earnings that competition has no barrier to erode. The market may be right that 2025 margins are a high point in the cycle.
| ||
| decision | |||
| The facts that, if observed, would prove the conclusion wrong. | These findings would show the earnings power is not durable and the verdict is wrong.
| ||
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