CF Industries Holdings, Inc.

CF generated $2,752 million in operating cash flow in FY2025 against capital expenditures of $950 million, producing normalized owner earnings of $1,830.5 million after deducting $522.5 million in sustaining maintenance capex. In the first half of 2026, operating cash flow reached $1,374 million, including $878 million in Q2 2026. Sustained cash flow generation provides strong liquidity support even during cyclical price corrections.⁶

Management executes a disciplined capital return framework balancing strategic growth, share repurchases, and dividends. Guided net capital expenditures of $950 million for 2026 (consolidated gross capex of approximately $1.3 billion) support maintenance and high-return DEF and clean energy initiatives. Excess are deployed into aggressive share repurchases, reducing diluted average shares from 162.20 million in FY2025 to 151.34 million in October 2026, creating approximately 300 basis points of annual per-share accretion above growth.

CF Industries structural feedstock advantage and disciplined reinvestment policy enable the business to generate returns on invested capital well above its moderate cost of equity of 7.81% and weighted average cost of capital of 7.27%, supporting long-term economic value creation.

Consistently positive spread above WACC of 7.27% through the cycle.

FY2025 operating cash flow funded $950 million in capital expenditure and $1,365 million in share repurchases, with Q2 2026 operating cash flow reaching $878 million.

Robust cash conversion provides self-funding capacity for decarbonization projects without straining balance sheet leverage.

In an extended bull cycle, elevated global energy prices and geopolitical friction maintain high European TTF gas and LNG prices, forcing curtailments at high-cost merchant ammonia producers. Simultaneously, strong global grain demand incentivizes maximum crop acreage and fertilizer application, driving realized nitrogen prices higher and expanding operating margins above 34.5%.

In a bear cycle, rapid European gas market normalization and increased merchant supply from the Middle East depress global nitrogen benchmarks. In historical troughs such as FY2016, CF operating income compressed to $539 million on $3,685 million revenue, illustrating that agricultural commodity downturns compress cash flows and test capital allocation flexibility.

Risk management centers on monitoring the spread between North American Henry Hub natural gas and European TTF benchmarks, tracking quarterly capacity utilization and unplanned downtime at major complexes like Yazoo City and Donaldsonville, and verifying that annual net capital expenditures do not exceed the guided $950 million envelope.