You should read the following discussion and analysis in conjunction with
our annual consolidated financial statements and related notes and our
discussion and analysis of financial condition and results of operations, which
were included in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2021, filed with the Securities and Exchange Commission on
February 24, 2022, as well as Item 1. Financial Statements in this Quarterly
Report on Form 10-Q. All references to "CF Holdings," "we," "us," "our" and "the
Company" refer to CF Industries Holdings, Inc. and its subsidiaries, except
where the context makes clear that the reference is only to CF Industries
Holdings, Inc. itself and not its subsidiaries. All references to
"CF Industries" refer to CF Industries, Inc., a 100% owned subsidiary of
CF Industries Holdings, Inc. References to tons refer to short tons, and
references to tonnes refer to metric tons. Notes referenced in this discussion
and analysis refer to the notes to our unaudited interim consolidated financial
statements in Item 1. Financial Statements in this Quarterly Report on Form
10-Q. The following is an outline of the discussion and analysis included
herein:

•Overview of CF Holdings

•Our Company

•Our Commitment to a Clean Energy Economy

•Market Conditions and Current Developments

•Financial Executive Summary

•Items Affecting Comparability of Results

•Consolidated Results of Operations

•Operating Results by Business Segment

•Liquidity and Capital Resources

•Critical Accounting Estimates



•Forward-Looking Statements


Overview of CF Holdings

Our Company

Our mission is to provide clean energy to feed and fuel the world sustainably.
With our employees focused on safe and reliable operations, environmental
stewardship, and disciplined capital and corporate management, we are on a path
to decarbonize our ammonia production network - the world's largest - to enable
green and blue hydrogen and nitrogen products for energy, fertilizer, emissions
abatement and other industrial activities. Our nine nitrogen manufacturing
complexes in the United States, Canada and the United Kingdom, an extensive
storage, transportation and distribution network in North America, and logistics
capabilities enabling a global reach underpin our strategy to leverage our
unique capabilities to accelerate the world's transition to clean energy. Our
principal customers are cooperatives, independent fertilizer distributors,
traders, wholesalers and industrial users. Our core product is anhydrous ammonia
(ammonia), which contains 82% nitrogen and 18% hydrogen. Our nitrogen products
that are upgraded from ammonia are granular urea, urea ammonium nitrate solution
(UAN) and ammonium nitrate (AN). Our other nitrogen products include diesel
exhaust fluid (DEF), urea liquor, nitric acid and aqua ammonia, which are sold
primarily to our industrial customers, and compound fertilizer products (NPKs),
which are solid granular fertilizer products for which the nutrient content is a
combination of nitrogen, phosphorus and potassium.

Our principal assets as of March 31, 2022 include:



•five U.S. nitrogen manufacturing facilities located in Donaldsonville,
Louisiana (the largest nitrogen complex in the world); Port Neal, Iowa; Yazoo
City, Mississippi; Verdigris, Oklahoma; and Woodward, Oklahoma. These facilities
are wholly owned directly or indirectly by CF Industries Nitrogen, LLC (CFN), of
which we own approximately 89% and CHS Inc. (CHS) owns the remainder. See Note
14-Noncontrolling Interest for additional information on our strategic venture
with CHS;

•two Canadian nitrogen manufacturing facilities located in Medicine Hat, Alberta (the largest nitrogen complex in Canada) and Courtright, Ontario;

•two United Kingdom nitrogen manufacturing facilities located in Billingham and Ince;

•an extensive system of terminals and associated transportation equipment located primarily in the Midwestern United States; and


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CF INDUSTRIES HOLDINGS, INC.

•a 50% interest in Point Lisas Nitrogen Limited (PLNL), an ammonia production
joint venture located in the Republic of Trinidad and Tobago (Trinidad) that we
account for under the equity method.

Our Commitment to a Clean Energy Economy



We are taking significant steps to support a global hydrogen and clean fuel
economy, through the production of green and blue ammonia. Since ammonia is one
of the most efficient ways to transport and store hydrogen and is also a fuel in
its own right, we believe that the Company, as the world's largest producer of
ammonia with an unparalleled manufacturing and distribution network and deep
technical expertise, is uniquely positioned to fulfill anticipated demand for
hydrogen and ammonia from green and blue sources. Our approach includes green
ammonia production, which refers to ammonia produced through a carbon-free
process, and blue ammonia production, which relates to ammonia produced by
conventional processes but with CO2 removed through carbon capture and
sequestration (CCS) and other certified carbon abatement projects.

In October 2020, we announced an initial green ammonia project at our
Donaldsonville complex. In April 2021, we signed an engineering and procurement
contract with thyssenkrupp to supply a 20 MW alkaline water electrolysis plant
to produce green hydrogen at our Donaldsonville complex. Construction and
installation, which is being managed by us, began in the fourth quarter of 2021
and is expected to finish in 2023, with an estimated total cost of approximately
$100 million. The cost of the project is expected to fit within our annual
capital expenditure budgets. We will integrate the green hydrogen generated by
the electrolysis plant into existing ammonia synthesis loops to enable the
production of approximately 20,000 tons per year of green ammonia. We believe
that, when completed in 2023, the Donaldsonville green ammonia project will be
the largest of its kind in North America.

In the third quarter of 2021, we signed a memorandum of understanding with
Mitsui & Co., Ltd. (Mitsui) that is guiding us in a joint exploration of the
development of blue ammonia projects in the United States. On May 3, 2022, we
and Mitsui announced our intention to jointly develop a greenfield ammonia
production facility to produce blue ammonia in the United States. We anticipate
that a front-end engineering design (FEED) study will commence shortly with a
final investment decision on constructing the blue ammonia production facility
expected in 2023.

We have also announced steps to produce blue ammonia from our existing ammonia
production network. In the fourth quarter of 2021, our Board of Directors (the
Board) authorized projects within our existing network that we believe will
enable the permanent sequestration of up to 2.5 million tons of carbon emissions
each year and the annual production of approximately 2 million tons of blue
ammonia, which is equivalent to 1.25 million tons of net-zero carbon ammonia,
starting in 2024. The projects will involve constructing units at our
Donaldsonville and Yazoo City complexes that dehydrate and compress CO2, a
process essential for CO2 transport via pipeline to sequestration sites.
Management expects that, once the units are in service and sequestration is
initiated, we could sequester up to 2.5 million tons of CO2 per year (2 million
tons at Donaldsonville and 500,000 tons at Yazoo City). Under current
regulations, the projects would be expected to qualify for tax credits under
Section 45Q of the Internal Revenue Code, which provides a credit per tonne of
CO2 sequestered.

Construction of the units at the Donaldsonville complex is expected to begin in
2022 and to be completed in 2024, with an estimated total cost of $200 million.
The Yazoo City project will be timed to coincide with CO2 transport pipeline
construction. Once started, the Yazoo City project is expected to be completed
in three years with an estimated total cost of $85 million. In addition, we are
currently in advanced discussions with several parties regarding transportation
and sequestration of CO2 from Donaldsonville.

Market Conditions and Current Developments

Geopolitical Environment

Russia's invasion of Ukraine in February 2022, and the resulting war between
Russia and Ukraine, has led to disruptions in the global markets for certain
crop commodities, natural gas and nitrogen fertilizer. In recent weeks, we have
seen effects in particular from export reductions from the region; energy,
financial and transportation sanctions by U.S., Canadian, European and other
governments; and shipping and logistical complications.

As further described below, natural gas is the principal raw material used to
produce our nitrogen products. Natural gas is also a globally traded commodity
that experiences price fluctuations based on supply demand balances and has been
impacted by the recent geopolitical events. As a result of Europe's dependence
on Russia for a portion of its natural gas supply, Russia's invasion of Ukraine
disrupted European energy markets and threatened security of natural gas supply.
This led to further increases in natural gas prices and natural gas price
volatility, which in turn led to disruptions in manufacturing and distribution
activities at other nitrogen manufacturers and suppliers in our industry and to
reductions in global fertilizer supply.

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These geopolitical developments have also led to supply chain disruptions for
Russian producers of fertilizer. Prior to the invasion, Russia had been the
largest exporter of nitrogen fertilizer globally, and in recent years had been a
significant supplier of nitrogen fertilizer to North America and Europe. Russia
and Ukraine are large exporters of commodity grains such as wheat, corn and
soybeans. The direct and indirect impacts of the war in Ukraine, and the related
uncertainty, have resulted in an expectation that commodity grain supply from
this region will be reduced, causing increased prices for grains globally. The
increase in commodity grain prices has in turn driven a greater demand for
nitrogen fertilizer.

These events have further contributed to an already tight global supply demand
balance for nitrogen fertilizers and even led to shortages of certain products
in some international locations. These factors are causing changes in global
trade flows as both manufacturers and customers react to the changing market
dynamics. As a result, nitrogen fertilizer prices have significantly increased
since the start of 2022.

We expect that the recent geopolitical events, including any further
government-imposed sanctions, will have an impact on the future supply demand
balance and future selling prices for our nitrogen fertilizer products, but the
scope and duration of these impacts are unknown at the present time.

Nitrogen Selling Prices



Our nitrogen products are globally traded commodities with selling prices that
fluctuate in response to global market conditions, changes in supply and demand,
and other cost factors including domestic and local conditions. Intense global
competition-reflected in import volumes and prices-strongly influences delivered
prices for nitrogen fertilizers around the world, including in the United
States. In general, the prevailing global prices for nitrogen products must be
high enough in order for the marginal producers in the world with the highest
input costs to at least break even over the long term, or else they would cease
production and leave a portion of global demand unsatisfied.

In the first quarter of 2022, the average selling price for our products was
$620 per ton, an increase of 170%, compared to $230 per ton in the first quarter
of 2021, reflecting higher average selling prices across all our segments, which
primarily drove the increase in net sales of approximately $1.82 billion, as
sales volume in tons in the first quarter of 2022 was essentially unchanged
compared to the first quarter of 2021. The increase in our average selling price
was caused by a tighter global nitrogen supply and demand balance resulting from
strong global demand as well as a decrease in global supply availability as
higher global energy costs continued to drive lower global operating rates, and
exacerbated by the geopolitical environment described above.

Natural Gas



Natural gas is the principal raw material used to produce our nitrogen products.
Natural gas is both a chemical feedstock and a fuel used to produce nitrogen
products. Natural gas is a significant cost component of manufactured nitrogen
products, representing approximately 50% of our production costs in the first
quarter of 2022 and 40% of our production costs in 2021. The following table
presents the average daily market price of natural gas at the Henry Hub, the
most heavily-traded natural gas pricing point in North America, and the National
Balancing Point (NBP), the major trading point for natural gas in the United
Kingdom:

Three Months Ended March 31,


                                                                                   2022        2021                 2022 v. 2021

Natural gas supplemental data (per MMBtu)



Average daily market price of natural gas Henry Hub (Louisiana)                             $  4.60          $ 3.38          $  1.22             36  %

Average daily market price of natural gas National Balancing Point (United Kingdom)

$ 30.20          $ 6.90          $ 23.30            338  %


Most of our nitrogen manufacturing facilities are located in the United States
and Canada. As a result, the price of natural gas in North America directly
impacts a substantial portion of our operating expenses. North American natural
gas prices during the first three months of 2022 were higher on average than the
first three months of 2021 due to tight supply and demand conditions within the
market. After a warm start to the winter season at the end of 2021, colder
temperatures in the first quarter of 2022 drove higher heating demand. North
American supply failed to keep pace and did not sustain production levels
achieved in late 2021, due to well freeze-offs and continued producer capital
discipline hindering growth. As a result, North American gas withdrawals from
storage during the first quarter of 2022 were larger than normal, leading to
end-of-quarter levels below both last year and the five-year average. In
addition, record high global gas prices and newly commissioned liquefaction
facilities in North America led to record liquefied natural gas (LNG) exports
from the United States throughout the first quarter of 2022.

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The average daily market price at the Henry Hub for the three months ended March
31, 2022 was $4.60 per MMBtu compared to $3.38 per MMBtu for the three months
ended March 31, 2021, an increase of 36%. The average daily market price of
natural gas at the Henry Hub for April 2022 was $6.48 per MMBtu.

In the first quarter of 2021, the central portion of the United States
experienced extreme and unprecedented cold weather due to the impact of Winter
Storm Uri. Certain natural gas suppliers and natural gas pipelines declared
force majeure events due to frozen equipment. This occurred at the same time as
large increases in natural gas demand were occurring due to the cold
temperatures. Due to these unprecedented factors, several states declared a
state of emergency. and natural gas was redirected for residential use. At
certain of our manufacturing locations, we reduced our natural gas consumption,
and, as a consequence, our plants at these locations either operated at reduced
rates or temporarily suspended operations. We net settled certain natural gas
contracts with our suppliers and received prevailing market prices, which were
in excess of our cost. As a result, we recognized a gain of $112 million, which
is reflected in cost of sales in our consolidated statement of operations for
the three months ended March 31, 2021.

Our two nitrogen manufacturing facilities located in the United Kingdom are
subject to fluctuations associated with the price of natural gas in Europe. The
price of natural gas in the United Kingdom continued to reach record high prices
during the first quarter of 2022. Europe began the year with record low storage
levels, but a large increase in LNG import vessels along with milder weather
started to ease concerns. However, Russia's invasion of Ukraine on February 24,
2022 disrupted European energy markets and threatened security of supply,
driving natural gas prices in Europe upward to unprecedented levels, further
exacerbating an energy crisis that has been impacting our U.K. operations, as
further discussed below. Prices subsequently declined in March as Russian supply
of natural gas continued to flow, albeit with the possibility of total supply
disruption still a concern.

The average daily market price of natural gas at the NBP for the three months
ended March 31, 2022 was $30.20 per MMBtu compared to $6.90 per MMBtu for the
three months ended March 31, 2021, an increase of 338%. For the three months
ended March 31, 2022, the daily closing price at NBP reached a low of $15.37 per
MMBtu on January 3, 2022 and a high of $67.08 per MMBtu on March 8, 2022. The
average daily market price of natural gas at the NBP for April 2022 was $21.75
per MMBtu.

In the first quarter of 2022, the cost of natural gas used for production, which
includes the impact of realized natural gas derivatives, increased 101% to $6.48
per MMBtu from $3.22 per MMBtu in the three months ended March 31, 2021. This
increase in natural gas costs resulted in a decrease in gross margin of
approximately $271 million.

United Kingdom Energy Crisis



During the third quarter of 2021, the United Kingdom began experiencing an
energy crisis that included a substantial increase in the price of natural gas,
which impacted our U.K. operations. In the first half of 2021, natural gas
prices had increased to levels that were considered high compared to historical
prices, and prices then more than doubled within the third quarter of 2021. On
September 15, 2021, we announced the halt of operations at both our Ince and
Billingham manufacturing facilities in the United Kingdom due to negative
profitability driven by the high cost of natural gas. Shortly thereafter, our
Billingham facility resumed operations. As of the filing of this report,
production continues at our Billingham facility and continues to be idled at our
Ince facility.

During the first quarter of 2022, we concluded that the continued impacts of the
U.K. energy crisis, including higher natural gas prices due in part to the
geopolitical environment described above, triggered an additional impairment
test. The results of our interim long-lived asset impairment test indicated that
no long-lived asset impairment should be recorded as the undiscounted estimated
future cash flows were in excess of the carrying values for each of the U.K.
asset groups.

The results of our U.K. operations are included in our Ammonia, AN and Other
segments, and account for a small portion of our consolidated gross margin. For
the three months ended March 31, 2022, gross margin generated by our U.K.
operations represented approximately 2% of our consolidated gross margin. For
the year ended December 31, 2021, our U.K. operations generated negative gross
margin representing approximately 1% of our consolidated gross margin.

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Financial Executive Summary



We reported net earnings attributable to common stockholders of $883 million for
the three months ended March 31, 2022 compared to $151 million for the three
months ended March 31, 2021, an increase in net earnings of 485%, or
$732 million. Diluted net earnings per share attributable to common stockholders
increased $3.51 per share, to $4.21 per share, in the first quarter of 2022
compared to $0.70 per share in the first quarter of 2021. These increases were
due primarily to an increase in gross margin driven by higher average selling
prices, partially offset by higher natural gas prices, and an increase in
interest expense and income tax provision related to the Canada Revenue Agency
Competent Authority Matter, discussed below under "Items Affecting Comparability
of Results."

Gross margin increased by $1.41 billion in the first quarter of 2022 to
$1.70 billion as compared to $289 million in the first quarter of 2021. Average
selling prices increased 170% to $620 per ton in the first quarter of 2022 from
$230 per ton in the first quarter of 2021, which increased gross margin by
$1.83 billion. The impact of higher average selling prices was partially offset
by an increase in natural gas costs. The cost of natural gas used for production
increased 101% to $6.48 per MMBtu in the first quarter of 2022 from $3.22 per
MMBtu in the first quarter of 2021, which reduced gross margin by $271 million.
In the first quarter of 2021, we recognized a gain of $112 million as a result
of the net settlement of certain natural gas contracts with our suppliers as a
result of Winter Storm Uri.

Items Affecting Comparability of Results



For the three months ended March 31, 2022 and 2021, we reported net earnings
attributable to common stockholders of $883 million and $151 million,
respectively. In addition to the impact of market conditions discussed above,
certain items impacted the comparability of our financial results for the three
months ended March 31, 2022 and 2021. The following table and related discussion
outline these items and how they impacted the comparability of our financial
results for these periods.

                                                                  Three Months Ended March 31,
                                                                           2022                       2021
                                                                                     Pre-Tax     After-Tax           Pre-Tax     After-Tax
                                                                                                         (in millions)

Unrealized net mark-to-market gain on natural gas
derivatives(1)

$ (33) $ (25) $ (6) $ (5)



Loss on foreign currency transactions, including
intercompany loans(2)                                                                     6             5                 -             -
Canada Revenue Agency Competent Authority Matter and
Transfer pricing reserves:
Interest expense                                                                        198           196                 -             -
Interest income                                                                         (36)          (28)
Income tax provision(3)                                                                   -            72                 -             -

Loss on debt extinguishment                                                               -             -                 6             5

______________________________________________________________________________


(1)Included in cost of sales in our consolidated statements of operations.
(2)Included in other operating-net in our consolidated statements of operations.
(3)The after-tax income tax provision amount of $72 million for the three months
ended March 31, 2022 reflects an income tax provision of $78 million, consisting
of the $76 million income tax provision referenced below under "Canada Revenue
Agency Competent Authority Matter" and the $2 million income tax provision
referenced below under "Transfer pricing reserves," net of $6 million of income
tax provision that is reflected in the after-tax interest expense and interest
income amounts shown in this table for the three months ended March 31, 2022.

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 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 the three months ended March 31,
2022 and 2021, we recognized unrealized net mark-to-market gains of $33 million
and $6 million, respectively.

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Loss on foreign currency transactions, including intercompany loans



In the three months ended March 31, 2022, we recognized a loss of $6 million,
which consists of foreign currency exchange rate impacts on foreign currency
denominated transactions, including the impact of changes in foreign currency
exchange rates on intercompany loans that were not permanently invested.

Canada Revenue Agency Competent Authority Matter



In 2016, the Canada Revenue Agency (CRA) and Alberta Tax and Revenue
Administration (Alberta TRA) issued Notices of Reassessment for tax years 2006
through 2009 to one of our Canadian affiliates asserting a disallowance of
certain patronage deductions. We filed Notices of Objection with respect to the
Notices of Reassessment with the CRA and Alberta TRA and posted letters of
credit in lieu of paying the additional tax liability assessed. The letters of
credit serve as security until the matter is resolved. In 2018, the matter,
including the related transfer pricing topic regarding the allocation of profits
between Canada and the United States, was accepted for consideration under the
bilateral settlement provisions of the U.S.-Canada tax treaty (the Treaty) by
the United States and Canadian competent authorities, and included tax years
2006 through 2011. In the second quarter of 2021, the Company submitted the
transfer pricing aspect of the matter into the arbitration process under the
terms of the Treaty.

In February 2022, we were informed that a decision was reached by the
arbitration panel for tax years 2006 through 2011. In March 2022, we received
further details of the results of the arbitration proceedings and the settlement
provisions between the United States and Canadian competent authorities, and we
accepted the decision of the arbitration panel. Under the terms of the
arbitration decision, additional income for tax years 2006 through 2011 will be
subject to tax in Canada, resulting in our having additional Canadian tax
liability for those tax years of approximately $127 million, based on current
estimates. We expect this resulting Canadian tax liability, plus interest of
approximately $98 million, will be assessed in the second quarter of 2022 and
that payment of those amounts, aggregating to approximately $225 million, based
on current estimates, will be due in the third quarter of 2022. The letters of
credit we had posted in lieu of paying the additional tax liability assessed by
the Notices of Reassessment will be cancelled upon payment of the additional tax
and interest to Canada. Due primarily to the availability of additional foreign
tax credits to offset in part the increased Canadian tax referenced above, the
Company will file amended tax returns in the United States to request a refund
of tax overpaid.

In the three months ended March 31, 2022, as a result of the impact of these
events on our Canadian and U.S. federal and state income taxes, we recognized an
income tax provision of $76 million, reflecting the net impact of $127 million
of accrued income taxes payable to Canada for tax years 2006 to 2011, partially
offset by net income tax receivables of approximately $51 million in the United
States, and we accrued net interest of $99 million, primarily reflecting the
impact of estimated interest payable to Canada.

Transfer pricing reserves



As a result of the outcome of the arbitration decision discussed above, we have
also evaluated our transfer pricing positions between Canada and the United
States for open years 2012 and after. Based on this evaluation, for the three
months ended March 31, 2022, we recorded the following:

•liabilities for unrecognized tax benefits of $319 million with a corresponding income tax provision, and accrued interest of $91 million related to the liabilities for unrecognized tax benefits, and

•noncurrent income tax receivables of $329 million with a corresponding income tax benefit, and accrued interest income of $28 million related to the noncurrent income tax receivables.

In the three months ended March 31, 2022, the impact of this evaluation of transfer pricing positions on our consolidated statement of operations, including a $12 million deferred income tax provision for other transfer pricing tax effects, was a $2 million income tax provision and $63 million of net interest expense before tax ($69 million after tax).

Loss on debt extinguishment



On March 20, 2021, we redeemed in full all of the $250 million outstanding
principal amount of the 3.400% senior secured notes due December 2021 (the 2021
Notes) in accordance with the optional redemption provisions in the indenture
governing the 2021 Notes. The total aggregate redemption price paid in
connection with the redemption of the 2021 Notes was $258 million, including
accrued interest. As a result, we recognized a loss on debt extinguishment of
$6 million, consisting primarily of the premium paid on the redemption of the
2021 Notes prior to their scheduled maturity.


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