CF Industries Holdings, Inc.CF
CF Industries Holdings, Inc. Revenue Disclosure
4. Revenue Recognition
Our performance obligations under a customer contract correspond to each shipment of product that we make to our customer under the contract. As a result, each contract may have more than one performance obligation based on the number of products ordered, the quantity of product to be shipped and the mode of shipment requested by the customer. When we enter into a contract with a customer, we are obligated to provide the product in that contract during a mutually agreed upon time period. Depending on the terms of the contract, either we or the customer arranges delivery of the product to the customer’s intended destination. When we arrange delivery of the product and control of the product transfers upon loading, we recognize freight revenue. For 2025, 2024 and 2023, we recognized freight revenue of $80 million, $78 million and $92 million, respectively.
Certain of our contracts require us to supply products on a continuous basis to the customer. We recognize revenue on these contracts based on the quantity of products transferred to the customer during the period. For 2025, 2024 and 2023, the total amount of revenue for these contracts was $93 million, $115 million and $61 million, respectively.
From time to time, we will enter the marketplace to purchase product in order to satisfy the obligations of our customer contracts. When we purchase product for this purpose, we are the principal in the transaction and recognize revenue on a gross basis. As discussed in Note 8—Equity Method Investment, we have transactions in the normal course of business with PLNL, reflecting our obligation to purchase 50% of the ammonia produced by PLNL at current market prices. Other than products purchased from PLNL, products purchased in the marketplace in order to satisfy the obligations of our customers were not material during 2025, 2024 and 2023.
Transaction Price
We agree with our customers on the selling price of each transaction. This transaction price is generally based on the product, market conditions, including supply and demand balances, freight arrangements including where control transfers, and customer incentives. In our contracts with customers, we allocate the entire transaction price to the sale of product to the customer, which is the basis for the determination of the relative standalone selling price allocated to each performance obligation. Any sales tax, value added tax, and other tax we collect concurrently with our revenue-producing activities are excluded from revenue. Returns of our product by our customers are permitted only when the product is not to specification. Returns were not material during 2025, 2024 and 2023.
We offer cash incentives to certain customers generally based on the volume of their purchases over the fertilizer year ending June 30. Our cash incentives do not provide an option to the customer for additional product. Accrual of these incentives involves the use of estimates, including how much product the customer will purchase and whether the customer will achieve a certain level of purchases within the incentive period. The balances of customer incentives accrued at December 31, 2025 and 2024 were not material.
Revenue Disaggregation
We track our revenue by product and by geography. See Note 21—Segment Disclosures for our revenue by reportable segment, which are Ammonia, Granular Urea, UAN, AN and Other. The following table summarizes our revenue by product and by geography (based on destination of our shipment) for 2025, 2024 and 2023:
| Ammonia | Granular Urea | UAN | AN | Other | Total | ||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| Year ended December 31, 2025 | |||||||||||||||||||||||||||||||||||
| North America | $ | 1,702 | $ | 1,781 | $ | 1,865 | $ | 178 | $ | 468 | $ | 5,994 | |||||||||||||||||||||||
| Europe and other | 474 | — | 296 | 243 | 77 | 1,090 | |||||||||||||||||||||||||||||
| Total revenue | $ | 2,176 | $ | 1,781 | $ | 2,161 | $ | 421 | $ | 545 | $ | 7,084 | |||||||||||||||||||||||
| Year ended December 31, 2024 | |||||||||||||||||||||||||||||||||||
| North America | $ | 1,452 | $ | 1,528 | $ | 1,416 | $ | 208 | $ | 421 | $ | 5,025 | |||||||||||||||||||||||
| Europe and other | 284 | 72 | 262 | 211 | 82 | 911 | |||||||||||||||||||||||||||||
| Total revenue | $ | 1,736 | $ | 1,600 | $ | 1,678 | $ | 419 | $ | 503 | $ | 5,936 | |||||||||||||||||||||||
| Year ended December 31, 2023 | |||||||||||||||||||||||||||||||||||
| North America | $ | 1,387 | $ | 1,767 | $ | 1,646 | $ | 253 | $ | 486 | $ | 5,539 | |||||||||||||||||||||||
| Europe and other | 292 | 56 | 422 | 244 | 78 | 1,092 | |||||||||||||||||||||||||||||
| Total revenue | $ | 1,679 | $ | 1,823 | $ | 2,068 | $ | 497 | $ | 564 | $ | 6,631 | |||||||||||||||||||||||
Accounts Receivable and Customer Advances
Our customers purchase our products through sales on credit or forward sales. Products sold to our customers on credit are recorded as accounts receivable when the customer obtains control of the product. Customers that purchase our products on credit are required to pay in accordance with our customary payment terms, which are generally 30 days or less. For 2025, 2024 and 2023, the amount of customer bad debt expense recognized was not material.
For forward sales, the customer prepays a portion of the value of the sales contract prior to obtaining control of the product. These prepayments, when received, are recorded as customer advances and are recognized as revenue when the customer obtains control of the product. Forward sales are customarily offered for periods of less than one year in advance of when the customer obtains control of the product. As of December 31, 2025 and 2024, we had $77 million and $118 million, respectively, in customer advances on our consolidated balance sheets. The decrease in the balance of customer advances was due primarily to the timing of seasonal UAN sales programs in 2025 compared to 2024. All of our customer advances that were recorded as of December 31, 2024 were recognized as revenue in 2025.
We have certain customer contracts with performance obligations where if the customer does not take the required amount of product specified in the contract, then the customer is required to make a payment to us, the amount of which may vary based upon the terms and conditions of the applicable contract. As of December 31, 2025, excluding contracts with original durations of less than one year, and based on the minimum product tonnage to be sold and current market price estimates, our remaining performance obligations under these contracts were approximately $2.3 billion. We expect to recognize approximately 20% of these performance obligations as revenue in 2026, approximately 32% as revenue during 2027-2029, approximately 16% as revenue during 2030-2032, and the remainder as revenue thereafter. Subject to the terms and conditions of the applicable contracts, if these customers do not satisfy their purchase obligations under such contracts, the minimum amount that they would be required to pay to us under such contracts, in the aggregate, was approximately $1.3 billion as of December 31, 2025. Other than the performance obligations described above, any performance obligations with our customers that were unfulfilled or partially filled at December 31, 2025 will be satisfied in 2026.
All of our contracts require that the period between the payment for goods and the transfer of those goods to the customer occur within normal contractual terms that do not exceed one year; therefore, we have elected the practical expedient and not adjusted the transaction price of any of our contracts to recognize a significant financing component. We have also elected the practical expedient to not capitalize any incremental costs associated with obtaining a contract that has a duration of less than one year, and there were no costs capitalized during 2025, 2024 or 2023.
Supply Contract Liability
In connection with our December 1, 2023 acquisition of the Waggaman ammonia production facility, we entered into a long-term ammonia offtake agreement providing for us to supply up to 200,000 tons of ammonia per year to Dyno Nobel, Inc. (the Supply Contract). The terms of the Supply Contract were determined to be unfavorable compared to market as of the acquisition date. As a result, we recorded an intangible liability with an acquisition date fair value of $757 million, which is being amortized to net sales over the estimated life of the Supply Contract of 25 years. For the years ended December 31, 2025, 2024 and 2023, we amortized $30 million, $30 million and $3 million, respectively, of the Supply Contract liability into net
sales. As of December 31, 2025 and 2024, we had $694 million and $724 million, respectively, in Supply Contract liability on our consolidated balance sheets. Estimated amortization of the Supply Contract liability for each of the fiscal years from 2026 to 2030 is approximately $30 million.
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 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.