CF Industries Holdings Inc. reported fourth-quarter net earnings attributable to common shareholders of $26.5 million ($0.11 per diluted share) on sales of $1.11 billion, down from the year-ago $238.3 million ($0.96 per share) and $1.22 billion, respectively.
Full-year net earnings were $700 million ($2.96 per share) on sales of $4.31 billion down from $1.4 billion ($5.42 per share).
“Our business model demonstrated its resiliency in the face of some of the most difficult market conditions seen in a decade. Even at today’s low prices, we remain highly profitable with a gross margin of over 25 percent, which includes the impact of the unrealized mark-to-market loss on our natural gas hedges. U.S. producers continue to enjoy cash margins of almost 50 percent,” said Tony Will, CF President and CEO.
CF has completed a review of its equity method investment in Point Lisas Nitrogen Limited (PLNL), the company’s 50 percent interest in an ammonia production joint venture located in the Republic of Trinidad and Tobago. This review assessed the recoverability of the company’s carrying value of the investment. During the fourth quarter of 2015, the company recognized an impairment charge of $62 million relating to its investment in PLNL due to continuing gas curtailments from the government controlled gas supplier, and the expectation is that these curtailments will continue into the future.
CF noted that on Dec. 18, 2015, the Protecting Americans from Tax Hikes (PATH) Act of 2015 was signed into law and applies to tax years 2015 through 2019. One of the provisions of the PATH Act permits companies to deduct 50 percent of their capital expenditures for federal income tax purposes in the year qualifying assets were placed into service. As a result of this provision, for the year ended December 31, 2015, the company recorded a federal tax receivable of approximately $120 million that is expected to result in a tax refund. This receivable is primarily associated with the new urea plant and related offsites that were placed into service at the company’s Donaldsonville, LA complex during November of 2015.
Fourth-quarter adjusted earnings were $180.1 million ($0.76 per share) compared to the year-ago $280.6 million ($1.12 per share). Full-year adjusted earnings were $915.7 million ($3.88 per share) versus 2014’s $1.03 billion ($4.02 per share).