CF Industries Financial Model
Chemicals Company Financials Example (Free Excel Download)
CF Industries Holdings, Inc. is a leading global manufacturer of hydrogen and nitrogen products, primarily serving the agricultural and industrial sectors.
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About this model
This model evaluates the equity valuation and free cash flow generation capacity of CF Industries to help an equity research analyst determine the impact of natural gas input costs and global nitrogen pricing on the company's aggressive share repurchase programme and dividend sustainability.
CF Industries Holdings, Inc. is a leading global manufacturer of hydrogen and nitrogen products, primarily serving the agricultural and industrial sectors. The company operates a highly efficient, asset-heavy manufacturing network, anchored by the world's largest ammonia production complex in Donaldsonville, Louisiana.
Business segments by approximate revenue contribution:
- UAN (Urea Ammonium Nitrate): 30%
- Granular Urea: 25%
- Ammonia: 25%
- AN (Ammonium Nitrate): 10%
- Other (DEF, urea liquor, nitric acid, aqua ammonia): 10%
Key geographies include the United States, Canada, and the United Kingdom, with North America driving the vast majority of revenue and production. The business model is asset-heavy and highly sensitive to commodity spreads, specifically the price of natural gas (the primary feedstock) versus the global selling price of nitrogen fertilisers. CF Industries holds a structural cost advantage due to historically cheaper North American natural gas compared to European and Asian marginal producers. Recent major events include the formation and consolidation of the Blue Point low-carbon ammonia joint venture with JERA and Mitsui, and the acquisition of the Waggaman ammonia production facility.
The downloadable CF Industries financial model includes SEC-sourced historical financials, forecast assumptions, core operating schedules, and valuation outputs in an Excel workbook built for review and scenario analysis.
A turnkey financial model
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
Historicals & AssumptionsCF Industries financial modelCompany, Historicals & Assumptions used
Source: SEC EDGAR · values in USD
| Line item | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue | $6.54B | $11.19B | $6.63B | $5.94B | $7.08B |
| Gross profit | $2.39B | $5.86B | $2.54B | $2.06B | $2.72B |
| Operating income | $1.73B | $5.40B | $2.23B | $1.75B | $2.30B |
| Net income | $1.26B | $3.94B | $1.84B | $1.48B | $1.80B |
Forecast assumptions
Defaults used in the downloadable model. Forecast horizon: FY2026–FY2030.
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How to build a detailed financial model for CF Industries
A complete walkthrough of every driver, margin, working-capital input, and capital-allocation assumption used in the downloadable model.
Revenue Deep Dive
Ammonia
- Segment name: Ammonia
- Revenue driver formula: Ammonia Sales Volume (tons) x Average Selling Price per Ton
- Historical growth rate: Highly volatile, fluctuating between -20% and +40% annually based on global commodity cycles.
- Key growth levers and headwinds: Driven by global agricultural demand, industrial applications, and the emerging low-carbon (blue/green) ammonia market. Headwinds include global capacity additions and geopolitical supply shocks.
- Pricing dynamics: Spot and contract pricing linked to global nitrogen benchmarks.
- Revenue recognition notes: Recognised upon transfer of control, typically at the point of shipment or delivery.
- Seasonality: Strongest in the spring (Q2) and autumn (Q4) application seasons in North America.
Granular Urea
- Segment name: Granular Urea
- Revenue driver formula: Granular Urea Sales Volume (tons) x Average Selling Price per Ton
- Historical growth rate: Cyclical, typically tracking a 3-5% volume CAGR but with significant price-driven revenue swings.
- Key growth levers and headwinds: Corn planted acreage in North America and export restrictions from major producers like China.
- Pricing dynamics: Highly competitive global commodity pricing.
- Revenue recognition notes: Recognised upon delivery.
- Seasonality: Peaks in Q2 ahead of the Northern Hemisphere planting season.
UAN (Urea Ammonium Nitrate)
- Segment name: UAN
- Revenue driver formula: UAN Sales Volume (tons) x Average Selling Price per Ton
- Historical growth rate: Stable volume growth of 2-4%, with revenue volatility tied to underlying nitrogen prices.
- Key growth levers and headwinds: Preferred liquid fertiliser in North America due to application ease. Weather delays can shift application windows.
- Pricing dynamics: Priced at a premium to urea on a nitrogen-equivalent basis due to handling advantages.
- Revenue recognition notes: Recognised upon delivery.
- Seasonality: Highly concentrated in Q2.
AN (Ammonium Nitrate)
- Segment name: AN
- Revenue driver formula: AN Sales Volume (tons) x Average Selling Price per Ton
- Historical growth rate: Flat to low single-digit volume growth.
- Key growth levers and headwinds: Used in both agriculture and industrial applications (mining explosives). Regulatory scrutiny over storage is a persistent headwind.
- Pricing dynamics: Regional pricing dynamics, heavily influenced by local supply and demand.
- Revenue recognition notes: Recognised upon delivery.
- Seasonality: More balanced throughout the year due to industrial demand, with agricultural peaks in spring.
Other
- Segment name: Other
- Revenue driver formula: Other Sales Volume (tons) x Average Selling Price per Ton
- Historical growth rate: 5-8% CAGR, driven by Diesel Exhaust Fluid (DEF) demand.
- Key growth levers and headwinds: DEF demand is tied to heavy-duty trucking activity and emissions regulations.
- Pricing dynamics: Contractual and spot pricing.
- Revenue recognition notes: Recognised upon delivery.
- Seasonality: Generally stable across the year, tracking industrial and transport activity.
Cost Structure
Variable Costs / COGS
- Line-by-line breakdown: Natural gas (feedstock and fuel), maintenance materials, direct labour, distribution and logistics, and depreciation of production assets.
- Gross margin range: 25% to 45% (averaged 38% in 2025), highly dependent on the spread between nitrogen prices and natural gas costs.
- Key input costs: Natural gas is the single largest cost component. The company uses derivatives to hedge a portion of its near-term natural gas exposure.
- How COGS scales: Step-function scaling. The facilities run continuously at high utilisation rates, meaning fixed costs are spread over volume, but natural gas costs scale linearly with production.
Operating Expenses
- R&D: Negligible for this business model.
- SG&A: Typically 2-3% of revenue. Primarily corporate headcount, IT, and administrative expenses.
- Depreciation & Amortisation: Significant due to the asset-heavy nature of the business. Typically 10-15% of revenue, heavily weighted towards tangible PP&E.
- Stock-Based Compensation: Less than 1% of revenue.
- Restructuring / one-time charges: Infrequent, though environmental abatement projects and M&A integration costs occasionally appear.
Margin Profile
- Gross margin: 25-45% (38% in 2025).
- EBITDA margin: 35-50% (Adjusted EBITDA margin was approximately 40% in 2025).
- Operating margin: 25-40%.
- Net margin: 15-25%.
- Margin trend: Highly cyclical. Margins expanded significantly in 2022 due to the energy crisis, normalised in 2024, and rebounded in 2025 due to strong global demand and constrained supply.
Balance Sheet Structure
- Total assets: Approximately $15-18 billion.
- Key asset categories: Property, Plant, and Equipment (PP&E) makes up the vast majority of assets. Cash and cash equivalents are also substantial ($1.98 billion at year-end 2025).
- Goodwill & intangibles: Relatively low, typically under 15% of total assets, stemming from historical acquisitions.
- Working capital profile:
- Days Sales Outstanding (DSO): 15-25 days.
- Days Inventory Outstanding (DIO): 30-45 days.
- Days Payable Outstanding (DPO): 20-35 days.
- Net working capital: Typically positive but low as a percentage of revenue. Customer advances (pre-payments for future delivery) are a significant liability that funds working capital.
- PP&E: Consists of massive nitrogen manufacturing complexes, storage facilities, and distribution terminals. Useful lives range from 15 to 30 years for major plant equipment.
- Right-of-use assets: Material but not dominant, primarily related to railcars and storage terminals.
Capital Expenditure & Investment
- Capex as % of revenue: 7-14% (approximately $950 million in 2025 on $7.08 billion in revenue).
- Maintenance capex vs. growth capex: Historically 70% maintenance / 30% growth, but shifting towards 50/50 with the Blue Point low-carbon ammonia project.
- Major capex programmes: The Blue Point joint venture (low-carbon ammonia production) and carbon capture and sequestration (CCS) infrastructure at existing sites.
- Capitalised software: Immaterial.
- M&A pattern: Opportunistic bolt-on acquisitions (e.g., Waggaman facility) and strategic joint ventures.
- Typical acquisition multiple: 5-7x mid-cycle EBITDA.
Debt & Capital Structure
- Total debt: Approximately $3.0 billion in long-term debt.
- Debt/EBITDA ratio: Consistently maintained below 1.0x (net debt is often near zero or negative due to high cash balances).
- Credit rating: Investment grade (BBB/Baa2).
- Key debt instruments: Senior unsecured notes (e.g., $1.0 billion 5.300% notes due 2035) and a $750 million revolving credit facility maturing in 2030.
- Maturity profile: Well-laddered, with recent refinancing pushing major maturities into the 2030s.
- Interest rate profile: Predominantly fixed-rate bonds.
- Covenants: Standard investment-grade covenants, primarily interest coverage and leverage maximums.
- Share repurchase programme: Highly active. Repurchased 16.6 million shares for $1.34 billion in 2025. A new $2.0 billion programme is active through 2029.
- Dividend policy: Modest base dividend, prioritising share repurchases for capital return. Payout ratio is typically under 15%.
Cash Flow Characteristics
- Operating cash flow conversion: OCF / Net Income is typically 1.2x to 1.5x due to high depreciation and deferred taxes.
- Free cash flow margin: 15-25% (FCF was $1.79 billion in 2025, a 25% margin).
- Major non-cash items: Depreciation and amortisation, deferred income taxes, and equity-based compensation.
- Working capital cash flow impact: Customer advances create seasonal swings in operating cash flow, acting as a source of cash in Q4 and Q1, and a use of cash in Q2 and Q3.
- Capex intensity: Moderate to high, requiring continuous turnaround maintenance at major facilities.
- Cash tax rate: Often lower than the GAAP effective tax rate due to accelerated depreciation on large capital projects.
Sheet Structure
- Assumptions: Hardcoded inputs for macroeconomic drivers (natural gas prices), segment volumes, pricing, margin profiles, and capital allocation targets.
- Scenarios: Toggle for base, bull, and bear cases driven by natural gas cost curves and global nitrogen pricing.
- Revenue Build: Volume and pricing forecasts for Ammonia, Granular Urea, UAN, AN, and Other segments.
- COGS & Opex Build: Natural gas cost calculation (MMBtu per ton x gas price), fixed manufacturing costs, SG&A, and D&A schedules.
- Income Statement: Consolidated P&L mirroring the 10-K, down to Net Earnings Attributable to Common Stockholders.
- Balance Sheet: Standard asset, liability, and equity lines, explicitly breaking out Customer Advances and the Blue Point VIE noncontrolling interest.
- Cash Flow Statement: Indirect method starting from Net Income, detailing working capital changes, capex, debt issuance/repayment, and share repurchases.
- Debt Schedule: Tranche-by-tranche tracking of senior notes, the revolver, interest expense, and mandatory repayments.
- Working Capital: Schedules for receivables, inventory, payables, and customer advances based on days outstanding metrics.
- PP&E & Capex: Roll-forward of gross PP&E, accumulated depreciation, and separate tracking for the Blue Point JV capital expenditures.
- Equity & Distributions: Share count roll-forward (factoring in aggressive buybacks), dividends, and distributions to noncontrolling interests (e.g., CHS Inc.).
- DCF Valuation: Unlevered free cash flow calculation, WACC derivation, terminal value, and implied share price.
Key Financial Relationships
- Ammonia Revenue = Ammonia Sales Volume x Ammonia Average Selling Price
- Granular Urea Revenue = Granular Urea Sales Volume x Granular Urea Average Selling Price
- UAN Revenue = UAN Sales Volume x UAN Average Selling Price
- AN Revenue = AN Sales Volume x AN Average Selling Price
- Other Revenue = Other Sales Volume x Other Average Selling Price
- Total Net Sales = Sum of all segment revenues
- Natural Gas Cost in COGS = Total Production Volume x Natural Gas Requirement per Ton x Average Cost of Natural Gas ($/MMBtu)
- Gross Margin = Total Net Sales - Total Cost of Sales
- Adjusted EBITDA = Net Earnings + Interest Expense + Income Taxes + D&A + Unrealised Mark-to-Market Losses on Natural Gas Derivatives
- Free Cash Flow = Net Cash Provided by Operating Activities - Capital Expenditures - Distributions to Noncontrolling Interests
- Ending Shares Outstanding = Beginning Shares Outstanding - (Share Repurchase Spend / Average Share Price)
- Customer Advances Balance = Prior Balance + New Advances Received - Advances Applied to Current Period Revenue
Cross-Sheet Dependencies
- The Assumptions sheet feeds pricing and volume data to the Revenue Build and natural gas prices to the COGS & Opex Build.
- The Revenue Build feeds Total Net Sales to the Income Statement and drives the receivables calculation in the Working Capital sheet.
- The COGS & Opex Build feeds Cost of Sales and SG&A to the Income Statement and inventory/payables to the Working Capital sheet.
- The Working Capital sheet feeds the changes in operating assets and liabilities to the Cash Flow Statement.
- The Debt Schedule calculates interest expense, which feeds the Income Statement, creating a circular reference if excess cash automatically pays down debt.
- The PP&E & Capex sheet calculates depreciation, which feeds both the Income Statement and the Cash Flow Statement (as a non-cash add-back).
- The Equity & Distributions sheet calculates the ending share count, which feeds the EPS calculation on the Income Statement and the per-share value on the DCF Valuation.
Sign Convention
- Revenues and Assets: Positive.
- Expenses and Liabilities: Positive in their supporting schedules, but subtracted in aggregate formulas (e.g., Gross Profit = Revenue - COGS).
- Cash Flow Statement: Cash inflows are positive; cash outflows (capex, share repurchases, dividends) are negative.
- Debt Schedule: Borrowings are positive; repayments are negative.
Things Most Likely to Go Wrong
- Blue Point JV Consolidation: CF consolidates the Blue Point joint venture as a Variable Interest Entity (VIE). The model must account for the 60% noncontrolling interest owned by JERA and Mitsui in both the balance sheet and cash flow statement.
- CHS Distributions: CF Industries Nitrogen, LLC pays substantial semi-annual distributions to CHS Inc. (e.g., $304 million in 2025). Failing to deduct these from Free Cash Flow will overstate cash available to CF shareholders.
- Natural Gas Derivatives: The company reports realised gains/losses on natural gas derivatives in COGS, but excludes unrealised mark-to-market changes from Adjusted EBITDA. The model must separate these cleanly.
- Customer Advances: This liability swings wildly between quarters. Modelling it as a flat percentage of revenue will break the seasonal cash flow dynamics.
- Share Count Reduction: CF retires shares aggressively (reduced count by 56% since 2010). The model must dynamically reduce the share count to calculate EPS accurately, rather than holding it flat.
- Capitalised Interest: The company capitalises interest on major projects (e.g., $40 million expected in 2026). This reduces reported interest expense and increases capex.
- Pricing Volatility: Nitrogen prices are highly volatile. Hardcoding historical growth rates for revenue will produce nonsensical results; revenue must be driven by explicit volume and price-per-ton assumptions.
- Maintenance Turnarounds: Plant turnarounds reduce volume and increase COGS in specific quarters. Annualising a quarter with heavy turnarounds will understate full-year earnings.
Validation Checks
- Gross Margin Band: Gross margin should remain between 25% and 45%. Flag if it falls outside this range, indicating a disconnect between modelled nitrogen prices and natural gas costs.
- Net Debt to EBITDA: Should remain below 1.5x. CF operates with very low leverage; a higher ratio indicates an error in debt accumulation or cash generation.
- FCF Conversion: Free Cash Flow to Adjusted EBITDA conversion should typically be between 40% and 65%.
- Balance Sheet Balancing: Total Assets must equal Total Liabilities plus Shareholders' Equity in every forecast period.
- Capex to Revenue: Should track between 7% and 15%. A lower figure ignores the heavy maintenance requirements of the plants.
- Share Repurchase Limit: Annual share repurchases should not exceed Free Cash Flow plus available cash reserves.
- Effective Tax Rate: Should remain between 22% and 26% based on the blended US, Canadian, and UK statutory rates.
Key Assumptions (Default Values)
| Assumption | Default Value | Unit | Rationale |
|---|---|---|---|
| Ammonia Sales Volume | 4,600 | Thousand Tons | Based on 2025 actuals (4,597k tons). |
| Granular Urea Sales Volume | 4,100 | Thousand Tons | Based on 2025 actuals (4,109k tons). |
| UAN Sales Volume | 6,950 | Thousand Tons | Based on 2025 actuals (6,947k tons). |
| AN Sales Volume | 1,330 | Thousand Tons | Based on 2025 actuals (1,327k tons). |
| Other Sales Volume | 2,080 | Thousand Tons | Based on 2025 actuals (2,077k tons). |
| Average Natural Gas Cost | 3.34 | $/MMBtu | Based on 9M 2025 realised cost in COGS. |
| Consolidated Gross Margin | 38.0 | % | Based on full-year 2025 actuals. |
| SG&A as % of Revenue | 2.5 | % | Historical average run-rate. |
| Effective Tax Rate | 24.0 | % | Blended rate across operating jurisdictions. |
| Total Capital Expenditures | 950 | $ Millions | Based on 2025 actuals, including Blue Point JV. |
| Annual Share Repurchases | 1,340 | $ Millions | Based on 2025 actuals (16.6 million shares). |
| CHS Annual Distribution | 304 | $ Millions | Based on 2025 actual distributions. |
| DSO (Days Sales Outstanding) | 20 | Days | Calculated from historical receivables and revenue. |
| DIO (Days Inventory Outstanding) | 35 | Days | Calculated from historical inventory and COGS. |
| DPO (Days Payable Outstanding) | 25 | Days | Calculated from historical payables and COGS. |
| WACC | 8.5 | % | Standard cost of capital for asset-heavy basic materials. |
| Terminal Growth Rate | 1.5 | % | Mature industry with long-term GDP-like growth. |
Data Sources & Benchmarks
- Filings: SEC EDGAR database for CF Industries Holdings, Inc. (Form 10-K, 10-Q, 8-K).
- Investor Relations: CF Industries website for quarterly earnings presentations and the 2025 Investor Day materials.
- Key Peers: Nutrien (NTR), Mosaic (MOS), Yara International (YARIY), CVR Partners (UAN).
- Industry Data: Green Markets (Bloomberg) for weekly nitrogen pricing (NOLA Urea, Tampa Ammonia).
- Commodity Data: Henry Hub natural gas futures (CME Group) for feedstock cost benchmarking.
Sources
- CF Industries Holdings, Inc. 2025 Form 10-K and Q4 2025 Earnings Release.
- CF Industries Holdings, Inc. Q3 2025 Form 10-Q.
- CF Industries Holdings, Inc. 2025 Investor Presentation and Strategic Initiatives Update.
- SEC Form 8-K filings regarding the $750 million revolving credit facility and $1.0 billion senior notes issuance.
Do more with the CF Industries model
Frequently asked
What does CF Industries do and what are its main products?+
CF Industries Holdings, Inc. is a leading global manufacturer of hydrogen and nitrogen products, primarily serving the agricultural and industrial sectors. Its main products include UAN, Granular Urea, and Ammonia, which together contribute approximately 80% of its revenue. The company operates a highly efficient, asset-heavy manufacturing network, anchored by the world's largest ammonia production complex.
What are the key factors that drive CF Industries' revenue?+
CF Industries' revenue is highly sensitive to commodity spreads, specifically the price of natural gas (the primary feedstock) versus the global selling price of nitrogen fertilisers. The company holds a structural cost advantage due to historically cheaper North American natural gas compared to European and Asian marginal producers. North America drives the vast majority of its revenue and production.
What is CF Industries' typical capital expenditure as a percentage of revenue?+
CF Industries typically allocates 7-14% of its revenue to capital expenditures, reflecting its asset-heavy business model. Historically, maintenance capex made up 70% of this, but it is shifting towards a 50/50 split with growth capex due to major projects like the Blue Point low-carbon ammonia joint venture.
What are the key assumptions for revenue growth and cost of goods sold in the CF Industries financial model?+
The financial model for CF Industries assumes a revenue growth rate of approximately 9.63% and a cost of goods sold as a percentage of revenue of about 65.54%. These assumptions are crucial for forecasting the company's future profitability and cash flow generation over the forecast horizon.
How does the financial model evaluate CF Industries' equity valuation?+
The financial model evaluates CF Industries' equity valuation and free cash flow generation capacity. This analysis helps an equity research analyst determine the impact of natural gas input costs and global nitrogen pricing on the company's aggressive share repurchase programme and dividend sustainability.
What is the forecast horizon for the downloadable CF Industries financial model?+
The downloadable financial model for CF Industries provides forecasts spanning from Fiscal Year 2026 through Fiscal Year 2030. This forecast horizon allows analysts to project the company's financial performance and position over a significant medium-term period.
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