CF Industries — First Half and Second Quarter 2026 Earnings Summary

Financial Performance

• Q2 2026 Net Sales were $2,222 million, up from $1,890 million in Q2 2025; 1H 2026 Net Sales were $4,208 million, up from $3,553 million in 1H 2025.
• Q2 2026 Gross Margin was 51.5% (vs. 39.9% in Q2 2025); 1H 2026 Gross Margin was 44.9% (vs. 37.3% in 1H 2025).
• Q2 2026 Net Earnings attributable to common stockholders were $727 million ($4.73 per diluted share); 1H 2026 Net Earnings were $1,342 million ($8.71 per diluted share).
• Q2 2026 Adjusted EBITDA was $1,192 million; 1H 2026 Adjusted EBITDA was $2,175 million.
• Q2 2026 LTM Free Cash Flow was $1.823 billion; 1H 2026 Free Cash Flow was $1.374 billion.
• Q2 2026 LTM Free Cash Flow to Adjusted EBITDA conversion was 50%.
• Q2 2026 LTM Free Cash Flow Yield was 11.1%.
• Q2 2026 LTM Cash from Operations was $3.0 billion; 1H 2026 Cash from Operations was $2.174 billion.
• 1H 2026 Capital Expenditures were $494 million.
• 1H 2026 Adjusted EBITDA included a $170 million gain from a litigation settlement.
• Natural gas costs in cost of sales per MMBtu were $3.37 in Q2 2026 (vs. $3.53 in Q2 2025) and $4.01 in 1H 2026 (vs. $3.52 in 1H 2025).

Guidance and Future Outlook

• CF-funded capital expenditures for 2026 are expected to be approximately $950 million, excluding Yazoo City rebuild costs.
• Gross ammonia production in 2026 is expected to be approximately 9.5 million tons.
• Yazoo City Complex is expected to resume production of ammonia, ammonium nitrate solution, nitric acid, urea ammonium nitrate solution, and urea liquor during the first half of 2027.
• Global supply-demand balance is expected to tighten into 2027 as demand outpaces global nitrogen capacity growth.
• European production is expected to face continued curtailment and shutdowns due to high feedstock and maintenance costs.
• Middle East and Russia producers are expected to face persistent geopolitical risk premiums affecting capital costs and distribution.
• Strategic initiatives are projected to drive 2030 mid-cycle EBITDA to approximately $3.3 billion.

Business Segments and Product Lines

• 1H 2026 Available Ammonia Capacity Utilization was 98%.
• CF Industries achieved 10% greater capacity utilization than North American peers over the 5-year rolling average.
• Blue Point One joint venture permits were received in July 2026, enabling construction to commence in August 2026.
• A front-end engineering and engineering design (FEED) study was initiated for DEF capacity expansion at the Courtright Complex.
• The Blue Point One joint venture includes a net cash inflow of approximately $73 million in Q2 2026, representing $289 million in contributions from JERA and Mitsui less $216 million in Capex funded by them.
• CF's estimated contribution to Blue Point One is $1.5 billion plus $550 million for common facilities.

Market and Competitive Landscape

• Global nitrogen supply remains tight, constrained by geopolitical disruptions in Russia and the Middle East.
• Chinese urea exports are expected to remain under strict quotas.
• Indian urea imports are projected to grow due to reduced domestic production.
• Brazil urea imports are expected to be robust in the second half of 2026.
• High energy costs continue to challenge European production.
• CF Industries has a 40% interest in Blue Point One capacity, which assumes completion on time and nameplate capacity.

Risks and Challenges

• Risks include the ability to complete Blue Point Complex projects on schedule and on budget, and the potential for capital expenditure needs to exceed estimates.
• Business is subject to the cyclical nature of the industry, global supply and demand fluctuations, and intense global competition.
• Tariffs, retaliatory measures, and global trade relations could impact material prices and availability.
• Volatility in natural gas prices and adverse weather conditions pose operational risks.
• Dependence on a limited number of key facilities and third-party transportation providers for carbon dioxide sequestration.
• Regulatory risks regarding greenhouse gas emissions, environmental laws, and tax regulations.
• Potential liabilities related to cybersecurity, terrorism, and environmental, health, and safety laws.

Management Commentary and Tone

• Management highlighted outstanding operational performance driven by a tight global nitrogen supply-demand balance.
• Safety performance is described as industry-leading with a 12-month rolling average recordable incident rate of 0.16 per 200,000 work hours.
• The tone regarding the Blue Point project is positive following the receipt of permits and the commencement of construction.
• Management noted that constructive supply-demand fundamentals persist into 2027.
• The company emphasized durable cash flow generation and a significant valuation disconnect compared to Industrial and Material sectors.

Other Key Points

• Q2 2026 returned $302 million to shareholders, including the repurchase of approximately 2 million shares for $225 million.
• A quarterly dividend of $0.60 per share was declared in July, representing a 20% increase over the prior quarterly dividend.
• Remaining share repurchase authorization is $2.1 billion, running through 2029.
• The Blue Point One joint venture was formed on April 8, 2025, with JERA and Mitsui.
• The company monetizes decarbonization through 45Q tax credits and low-carbon product premiums.
• Since 2010, production capacity has increased 36% while share count has decreased 57%.
• Q2 2026 Adjusted EBITDA was favorable driven by strong pricing, partially offset by lower volumes.
• 1H 2026 Adjusted EBITDA was favorable driven by strong pricing.