CF Industries Holdings, Inc.CF
CF Industries Holdings, Inc. Fair Value Disclosure
Fair Value Measurements
Our cash and cash equivalents and other investments consist of the following:
| December 31, 2025 | |||||||||||||||||||||||
| Cost Basis | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Cash | $ | 629 | $ | — | $ | — | $ | 629 | |||||||||||||||
| Cash equivalents: | |||||||||||||||||||||||
| U.S. and Canadian government obligations | 284 | — | — | 284 | |||||||||||||||||||
| Other debt securities | 1,069 | — | — | 1,069 | |||||||||||||||||||
| Total cash and cash equivalents | $ | 1,982 | $ | — | $ | — | $ | 1,982 | |||||||||||||||
| Nonqualified employee benefit trusts | 15 | 3 | — | 18 | |||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Cost Basis | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Cash | $ | 168 | $ | — | $ | — | $ | 168 | |||||||||||||||
| Cash equivalents: | |||||||||||||||||||||||
| U.S. and Canadian government obligations | 932 | — | — | 932 | |||||||||||||||||||
| Other debt securities | 514 | — | — | 514 | |||||||||||||||||||
| Total cash and cash equivalents | $ | 1,614 | $ | — | $ | — | $ | 1,614 | |||||||||||||||
| Nonqualified employee benefit trusts | 15 | 2 | — | 17 | |||||||||||||||||||
Under our short-term investment policy, we may invest our cash balances, either directly or through mutual funds, in several types of investment-grade securities, including notes and bonds issued by governmental entities or corporations and also in bank deposits. Securities issued by governmental entities include those issued directly by the U.S. and Canadian federal
governments; those issued by state, local or other governmental entities; and those guaranteed by entities affiliated with governmental entities.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following tables present assets and liabilities included in our consolidated balance sheets as of December 31, 2025 and 2024 that are recognized at fair value on a recurring basis, and indicate the fair value hierarchy utilized to determine such fair value:
| December 31, 2025 | |||||||||||||||||||||||
| Total Fair Value | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Cash equivalents | $ | 1,353 | $ | 1,353 | $ | — | $ | — | |||||||||||||||
| Nonqualified employee benefit trusts | 18 | 18 | — | — | |||||||||||||||||||
| Derivative assets | 1 | — | 1 | — | |||||||||||||||||||
| Derivative liabilities | (5) | — | (5) | — | |||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Total Fair Value | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Cash equivalents | $ | 1,446 | $ | 1,446 | $ | — | $ | — | |||||||||||||||
| Nonqualified employee benefit trusts | 17 | 17 | — | — | |||||||||||||||||||
| Derivative assets | 4 | — | 4 | — | |||||||||||||||||||
| Derivative liabilities | (3) | — | (3) | — | |||||||||||||||||||
Cash Equivalents
Cash equivalents include highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less. As of December 31, 2025 and 2024, our cash equivalents consisted primarily of U.S. and Canadian government obligations and money market mutual funds that invest in U.S. government obligations and other investment-grade securities.
Nonqualified Employee Benefit Trusts
We maintain trusts associated with certain nonqualified supplemental pension plans. The fair values of the trust assets are based on daily quoted prices in an active market and are included on our consolidated balance sheets in other assets. Debt securities are accounted for as available-for-sale securities, and changes in fair value are reported in other comprehensive income. Changes in the fair value of available-for-sale equity securities in the trust assets are recognized through earnings.
Derivative Instruments
The derivative instruments that we use are primarily natural gas fixed price swaps, basis swaps and options traded in the OTC markets with multi-national commercial banks, other major financial institutions or large energy companies. The natural gas derivative contracts represent anticipated natural gas needs for future periods, and settlements are scheduled to coincide with anticipated natural gas purchases during those future periods. The natural gas derivative contracts settle using primarily a NYMEX futures price index. To determine the fair value of these instruments, we use quoted market prices from NYMEX and standard pricing models with inputs derived from or corroborated by observable market data such as forward curves supplied by an industry-recognized independent third party. See Note 16—Derivative Financial Instruments for additional information.
Financial Instruments
The carrying amount and estimated fair value of our financial instruments are as follows:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Long-term debt | $ | 3,215 | $ | 3,131 | $ | 2,971 | $ | 2,827 | |||||||||||||||
The fair value of our long-term debt was based on quoted prices for identical or similar liabilities in markets that are not active or valuation models in which all significant inputs and value drivers are observable and, as a result, they are classified as Level 2 inputs.
The carrying amounts of cash and cash equivalents, as well as any instruments included in other current assets and other current liabilities that meet the definition of financial instruments, approximate fair values because of their short-term maturities.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
We also have assets and liabilities that may be measured at fair value on a nonrecurring basis; that is, the assets and liabilities are not measured at fair value on a recurring basis, but are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment, when there is allocation of purchase price in an acquisition or when a new liability is being established that requires fair value measurement. These include long-lived assets, goodwill and other intangible assets and investments in unconsolidated subsidiaries, such as equity method investments, which may be written down to fair value as a result of impairment. The fair value measurements related to assets and liabilities measured at fair value on a nonrecurring basis rely primarily on Company-specific inputs. Since certain of the Company’s assumptions would involve inputs that are not observable, these fair values would reside within Level 3 of the fair value hierarchy.
In the fourth quarter of 2025, we recorded asset impairment charges related to property, plant and equipment at our Donaldsonville and Yazoo City facilities. See Note 6—Property, Plant and Equipment—Net for additional information.
In 2023, we determined the carrying value of our equity method investment in PLNL exceeded its fair value and recorded an impairment of our equity method investment in PLNL of $43 million. See Note 8—Equity Method Investment for additional information.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 24, 2020 | |
| 2018 | Feb 22, 2019 | |
| 2017 | Feb 22, 2018 | |
| 2016 | Feb 23, 2017 | |
| 2015 | Feb 25, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.