CFCF Industries

We note the discussion of executive compensation in your proxy statement does not discuss the impact your share repurchases have on RONA and TSR. Please confirm that your future filings will discuss this impact on these measures and consequently on the vesting of your long term incentive awards or provide us with an analysis supporting your determination that the impact is not material.

We acknowledge the comment and respectfully advise you that the Company’s share repurchases do not have a material impact on the performance measures used in our long-term incentive awards or on the vesting of such awards.

Long-term incentive awards granted to our named executive officers are based on a specified cash value, the amount of which is split between two different award types:

· 40% restricted stock unit (“RSU”) awards that are subject to time vesting, and vest ratably over three years; and

· 60% performance restricted stock unit (“PRSU”) awards that are subject to three-year

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cliff vesting based on average return on net assets (“RONA”) performance over three one-year periods.

o In the event the Company’s average RONA performance results in a payout under the PRSU awards, the number of shares earned based on RONA performance may be increased or decreased by up to 20% based on our three-year total shareholder return (“TSR”) performance.

Unlike the calculation of a performance measure such as earnings per share (which we do not use in our compensation program), the calculation of RONA is not dependent on the number of shares outstanding or otherwise impacted by share repurchases. RONA is determined by reference to the ratio of our adjusted

EBITDA divided by our average operational assets.

· Share repurchases do not impact the calculation of adjusted EBITDA, so the amount or number of shares repurchased does not impact the numerator of the RONA calculation.

· We also note that cash and cash equivalents, common stock, treasury stock, or total equity are not included in average operational assets, so the funding of share repurchases or the number of shares repurchased does not impact the denominator of the RONA calculation.

A complete description of the calculation of RONA

(including the definitions of adjusted EBITDA and average operational assets) for purposes of our PRSU awards is set forth in Exhibit

1 to this letter and can be found on page 56 of our 2020 proxy statement filed on April 8, 2020. Therefore, none of the components of the ratio are impacted by share repurchases.

As described above, TSR performance does not govern vesting of PRSU awards, but it does modify the number of shares earned under the PRSUs based on RONA performance. The

Company’s share repurchases do not have a material impact on our TSR performance. During 2019 and 2020, the

Company’s share repurchases represented approximately 3% and 1%, respectively, of our common shares outstanding at the beginning of the applicable year. In addition, the Company’s share repurchase activity to date has been conducted in compliance with the conditions of Rule 10b-18 under the Securities Exchange Act of 1934, which the Commission has noted

“are designed to minimize the market impact of the issuer's repurchases, thereby allowing the market to establish a security's price based on independent market forces without undue influence by the issuer.” (Securities Exchange Act

Release No. 48766 (Nov. 10, 2003)) As a result, we do not believe that the Company’s share repurchases have a material short-term impact on its stock price nor that the Company’s share repurchases at market values over time have a material long-term impact on its stock price, since its stock is broadly traded on the NYSE in an efficient market. In particular, we do not believe share repurchases have a material impact on the Company’s TSR performance over the three-year performance period of a PRSU award.

Therefore, for the reasons described above, share repurchases do not have a material impact on the performance measures used in our long-term incentive awards or on the vesting of such awards.

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We note that in February 1, 2016, CHS purchased a minority equity interest in CFN for $2.8 billion. Please revise to disclose the percentage ownership owned by the minority interest.

The Company acknowledges the Staff’s comment and has outlined below the modification that will be made to the Noncontrolling interest footnote that will be used in future filings beginning with the second quarter ended June 30, 2017. The changes are marked in the disclosure below.

CF Industries Nitrogen, LLC (CFN)

We commenced a strategic venture with CHS on February 1, 2016, at which time CHS purchased a minority equity interest in CFN for $2.8 billion, which represented approximately 11% of the membership interest of CFN. We own the remaining membership interest.

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Under the terms of CFN's limited liability company agreement, each member’s percentage membership interest will reflect, over time, the impact of the profitability of CFN and any member contributions made to, and distributions received from, CFN. For financial reporting purposes, the assets, liabilities and earnings of the strategic venture are consolidated into our financial statements. On February 1, 2016, CHS also began receiving deliveries pursuant to a supply agreement under which CHS has the right to purchase annually from CFN up to approximately 1.1 million tons of granular urea and 580,000 tons of UAN at market prices. As a result of its minority equity interest in CFN, CHS is entitled to semi-annual cash distributions from CFN. We are also entitled to semi-annual cash distributions from CFN. The amounts of distributions from CFN to us and CHS are based generally on the profitability of CFN and determined based on the volume of granular urea and UAN sold by CFN to us and CHS pursuant to supply agreements, less a formula driven amount based primarily on the cost of natural gas used to produce the granular urea and UAN, and adjusted for the allocation of items such as operational efficiencies and overhead amounts.

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Fair Value Measurements, page 97 1. We note that you have included disclosures about the fair value measurements of assets and liabilities measured on a recurring basis. Please revise to also include the disclosures of fair value measurements for assets and liabilities measured at fair value on a nonrecurring basis, such as the fair value measurement of your equity method investment in PLNL that resulted in an

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impairment charge in 2015. See guidance in ASC 820-10-50-2. 20. Contingencies, page 130 2. We note the West Fertilizer Co. litigation that you believe you have strong legal and factual defenses and intend to continue defending the CF Entities vigorously in the pending lawsuits. Please note that in accordance with ASC 450-20-50-3, if there is at least a reasonable possibility that a loss or an additional loss may have been incurred, the disclosure shall indicate the nature of the contingency in addition to an estimate of the possible loss or range of loss or state that such an estimate cannot be made even if no accrual is made. Please confirm your compliance with the requirements of ASC 450-2050-4 and that you will revise your disclosures in future filings, as applicable.

By way of background, we note that information related to non-recurring fair value measurements, particularly our investment in Point Lisas Nitrogen Limited (“PLNL”) and the related impairment charge is included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 as follows:

The following disclosure related to the impairment of our equity method investment in PLNL was included in Note 8-Equity Method Investments in the Notes to Consolidated Financial Statements, below the table on page 95 of the Form 10-K:

“Equity in earnings of operating affiliates in

Rest of the answer

2015 includes an impairment of our equity method investment in PLNL of $61.9 million. In the fourth quarter of 2015, we determined the carrying value of our equity method investment in PLNL exceeded fair value. This was primarily due to ongoing natural gas curtailments impacting the results of operations of PLNL and the current expectation that these curtailments will continue into the future. No impairment was recognized in 2014 or 2013 related to this investment.”

2. The following disclosure was included in the Critical Accounting Policies and Estimates discussion in Management’s Discussion and Analysis of Financial Condition and Results of Operations, on pages 71 and 72 of the Form 10-K:

“Our joint venture investment in the Republic of Trinidad and Tobago operates an ammonia plant that relies on natural gas supplied by The National Gas Company of Trinidad and Tobago Limited (NGC). The joint venture is accounted for under the equity method and continues to generate positive income and cash flow. The financial results are included in the information in Note 8-Equity Method Investments to the consolidated financial statements. The joint venture has experienced natural gas curtailments in 2015 and 2014 due to major maintenance activities being conducted at upstream natural gas facilities and decreased gas exploration and development activity in the Republic of Trinidad and Tobago. These curtailments are expected to continue into the future. Commitments from NGC regarding the level of future availability and the related cost are not available. The future availability and cost of natural gas represents a significant assumption in the discounted cash flow models utilized for recoverability and impairment testing. In 2015, our equity in earnings of operating affiliates includes a $61.9 million impairment of our equity method investment in PLNL. No impairment was recognized in 2014 or 2013 related to this investment.”

The Company recognizes that the total PLNL impairment of $61.9 million represents approximately 0.5% of total assets as of December 31, 2015, and therefore does not represent a significant asset impairment charge for the Company. The Company, however, notes the Staff’s comment and also recognizes the Staff’s request to increase the level of disclosure concerning non-recurring fair value measurements within the fair value note to the consolidated financial statements. Accordingly, the Company respectfully advises the Staff that, in future filings, additional disclosure will be included regarding fair value measurements of assets and liabilities measured at fair value on a non-recurring basis, such as the fair value measurement of our investments in unconsolidated subsidiaries such as PLNL. The following represents disclosure that we intend to include in the Fair Value Measurements footnote of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2016:

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 an ongoing basis, but are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment, 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 which may be written down to fair value as a result of impairment. We determined that the fair value measurements related to each of these rely primarily on Company-specific inputs and the Company's assumptions about the use of the assets. Since certain of the Company’s assumptions involve inputs that are not observable, these assumptions reside within Level 3 of the fair value hierarchy.

Our equity method investment in the Republic of Trinidad and Tobago, PLNL, operates an ammonia plant that relies on natural gas supplied by The National Gas Company of Trinidad and Tobago Limited (NGC). The joint venture continues to generate positive income and cash flow; however, it experienced natural gas curtailments in 2014 and 2015, which have continued into 2016, due to major maintenance activities being conducted at upstream natural gas facilities and decreased gas exploration and development activity in the Republic of Trinidad and Tobago. Natural gas is the principal raw material used to produce nitrogen fertilizers; therefore, a decrease in availability of natural gas would lead to lower revenues and cash flows. In our fourth quarter 2015 impairment analysis, our assumptions included that these curtailments were expected to continue into the future. We previously assumed that future development and exploration activities within Trinidad would reduce the natural gas curtailments. However, commitments from NGC regarding the level of future availability and the related cost are not available. The future availability and cost of natural gas represents a significant assumption which is included in the projection of future revenue and expenses of the business used in the discounted cash flow model utilized to estimate fair value for our impairment analysis. In the fourth quarter of 2015, recognizing that natural gas curtailments are expected to continue into the future, we determined the carrying value of our investment in PLNL exceeded fair value and recognized an impairment charge of $61.9 million.

20. Contingencies, page 130

We note the West Fertilizer Co. litigation that you believe you have strong legal and factual defenses and intend to continue defending the CF Entities vigorously in the pending lawsuits. Please note that in accordance with ASC 450-20-50-3, if there is at least a reasonable possibility that a loss or an additional loss may have been incurred, the disclosure shall indicate the nature of the contingency in addition to an estimate of the possible loss or range of loss or state that such an estimate cannot be made even if no accrual is made. Please confirm your compliance with the requirements of ASC 450-20-50-4 and that you will revise your disclosures in future filings, as applicable.

Response:

The Company acknowledges the Staff’s comment and notes that the Company follows ASC 450-20 with regard to the recognition and disclosure of contingencies related to the West Fertilizer Co. litigation matter.

Based on available information, and advised appropriately by legal counsel, management forms an opinion on whether the ultimate resolution of pending or threatened litigation or arbitration resulting in loss is probable, reasonably possible or remote and if any loss or impairment from such matters would have a material effect on the Company’s financial condition, results of operations or liquidity. With respect to the West Fertilizer Co. litigation, the Company has provided disclosure describing the nature of the litigation and the types of claims at issue. We have not included a range of reasonably possible losses in our filings because, based upon the totality of available information, we are not able to determine a range of reasonably possible losses. In light of the Staff’s comment, in future filings, we will modify our existing disclosures to include additional clarifying details. Set forth below is background information on the West Fertilizer matter followed by the suggested additional disclosure.

Background

The West Fertilizer Co. litigation arises from a fire and explosion that occurred at West Fertilizer Co. in April 2013. Although the Company did not own or operate the West Fertilizer Co. facility, fertilizer products that were manufactured by a subsidiary of the Company and sold to others were delivered to the West Fertilizer Co. facility. The plaintiffs have alleged that the fertilizer manufactured by a subsidiary of the Company was involved in the explosion. Over 400 plaintiffs filed claims against various subsidiaries of the Company (the “CF Entities”). In addition, these claims also name the entity that purchased fertilizer from the CF Entities and had it delivered to West Fertilizer Co., and name West Fertilizer Co. itself. The defendants in the litigation have also named certain potentially responsible third parties. Although the Company has strong legal and factual defenses in the litigation, there is at least some possibility that a jury could find the CF Entities at least partially liable in at least some of the cases involved in the litigation. However, the Company cannot at this time estimate a range of reasonably possible losses in the West Fertilizer Co. litigation for a number of reasons.

For example, as explained in the current disclosure, over 400 plaintiffs filed claims in this litigation, including claims for wrongful death, personal injury, and property damage, claiming a range of potential damages, with potential damages for individual plaintiffs varying widely depending on their particular circumstances. These cases are at various stages of discovery and pre-trial proceedings with both fact and expert discovery being incomplete or insufficient for many of the cases such that the aggregate or a range of reasonably possible damages cannot be estimated with any reliability. In addition, in the event the defendants in the West Fertilizer Co. litigation are found liable in any particular trial, they would be entitled to a comparison of fault and allocation of damages among the CF Entities and the other defendants as well as the potentially responsible third parties. The percentage of fault that any particular jury might place on the CF Entities or any of the other defendants and third parties will vary widely depending on a number of factors, including, among others (i) the particular facts and circumstances of the particular plaintiffs’ claims; (ii) the composition and timing of the trial groups; and (iii) the composition of the jury. The Company’s ability to reasonably estimate potential losses is also hindered by the tendency of plaintiffs to significantly reduce demands when cases reach a critical juncture, such as an impending trial date, as well as ongoing discovery arising out of both completed and ongoing government investigations into the fire and explosion.

Additional Disclosure

In light of the Staff’s comment, the Company will revise the last paragraph of the disclosure for this matter. The following represents disclosure that we intend to include in the Contingencies footnote of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2016:

West Fertilizer Co.

On April 17, 2013, there was a fire and explosion at the West Fertilizer Co. fertilizer storage and distribution facility in West, Texas. According to published reports, 15 people were killed and approximately 200 people were injured in the incident, and the fire and explosion damaged or destroyed a number of homes and buildings around the facility. Various subsidiaries of CF Industries Holdings, Inc. (the CF Entities) have been named as defendants along with other companies in lawsuits filed in 2013, 2014 and 2015 in the District Court of McLennan County, Texas by the City of West, individual residents of the County and other parties seeking recovery for damages allegedly sustained as a result of the explosion. The cases have been consolidated for discovery and pretrial proceedings in the District Court of McLennan County under the caption “In re: West Explosion Cases.” The two-year statute of limitations expired on April 17, 2015. As of that date, over 400 plaintiffs had filed claims, including at least 9 entities, 325 individuals, and 80 insurance companies. Plaintiffs allege various theories of negligence, strict liability, and breach of warranty under Texas law. Although we do not own or operate the facility or directly sell our products to West Fertilizer Co., products that the CF Entities have manufactured and sold to others have been delivered to the facility and may have been stored at the West facility at the time of the incident.

The Court granted in part and denied in part the CF Entities' Motions for Summary Judgment in August 2015. Thirty-four cases have been resolved pursuant to confidential settlements fully funded by insurance. The remaining cases are in various stages of discovery and pre-trial proceedings. These cases will be set for trial in the upcoming months at the discretion of the Court. We believe we have strong legal and factual defenses and intend to continue defending the CF Entities vigorously in the pending lawsuits. Due to the uncertain nature of this litigation, the Company cannot provide a range of reasonably possible loss in these lawsuits. However, based upon currently available information, including available insurance coverage, we do not believe that the West Fertilizer Co. litigation will have a material adverse effect on the Company’s financial condition, results of operations or liquidity.

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The Company hereby acknowledges that:

• the Company is responsible for the adequacy and accuracy of the disclosure in the filing;

Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

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We note from your disclosure in Note 4 that subsequent to the sale of the phosphate business to Mosaic, you now re-sell ammonia sourced by PLNL, your 50% owned joint venture, to Mosaic, and the revenue from these sales to Mosaic and costs to purchase the ammonia from PLNL are included in your ammonia segment. Please explain to us why you believe that gross revenue recognition is appropriate for this arrangement.

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As part of your response please address each of the indicators set forth in ASC 605-45-45. Also, please tell us the business purpose for serving as an intermediary in this transaction, rather than having PLNL sell the ammonia directly to Mosaic.

Gross Revenue Recognition

On March 17, 2014, CF Industries completed the sale of its phosphate mining and manufacturing business (the “Phosphate Business”) to The Mosaic Company (“Mosaic”), and a three-year ammonia supply agreement between CF Industries and Mosaic (the “Mosaic Supply Agreement”) became effective. Anhydrous ammonia (“ammonia”) is a key raw material that is used in the production of phosphate fertilizers.

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Pursuant to the Mosaic Supply Agreement, CF Industries sells approximately 300,000 tons of ammonia per year to Mosaic for use in the production of phosphate fertilizers.

Contemporaneously with entering into the Mosaic Supply Agreement, CF Industries and Mosaic entered into a separate agreement (the “Mosaic Additional Supply Agreement”) under which CF Industries will supply Mosaic with between 600,000 and 800,000 tons of ammonia per year for up to 15 years, starting no later than 2017.

CF Industries holds a 50% interest in an ammonia joint venture, Point Lisas Nitrogen Limited (“PLNL”), located in the Republic of Trinidad and Tobago. CF Industries is obligated to purchase 50% of PLNL’s ammonia output, and the other joint venture partner is responsible for purchasing the remaining 50% of PLNL’s ammonia output. CF Industries sources the ammonia for the Mosaic Supply Agreement from PLNL. Depending on the joint venture’s output in any given year, some or all of the ammonia CF Industries is obligated to purchase from PLNL may ultimately be sold to Mosaic.

The purchase by CF Industries of ammonia from PLNL and the subsequent sale by CF Industries of ammonia to Mosaic are reported on a gross basis in accordance with Accounting Standards Codification (“ASC”) 605-45-45. The following table outlines the eleven indicators that are specified in ASC 605-45-45 (there are eight indicators of gross revenue reporting and three indicators of net revenue reporting) and the Company’s conclusion with regard to each of the eleven indicators as applied to its sales of ammonia under the Mosaic Supply Agreement. Following the table is a brief overview of the relevant facts and circumstances that support the conclusion for each indicator, with reference to each indicator by number according to the numbering used in the table below.

Indicator

Presence/

Absence of

Gross Revenue Reporting

(1)

The Entity Is the Primary Obligor in the Arrangement

Present

(2)

The Entity Has General Inventory Risk—Before Customer Order Is Placed or Upon Customer Return

(3)

The Entity Has Latitude in Establishing Price

(4)

The Entity Changes the Product or Performs Part of the Service

N/A

(5)

The Entity Has Discretion in Supplier Selection

(6)

The Entity Is Involved in the Determination of Product Specifications

(7)

The Entity Has Physical Loss Inventory Risk—After Customer Order or During Shipping

(8)

The Entity Has Credit Risk

Net Revenue Reporting

(9)

The Entity’s Supplier Is the Primary Obligor in the Arrangement

Absent

(10)

The Amount the Entity Earns is Fixed

(11)

The Supplier Has Credit Risk

Indicator (1): CF Industries Is the Primary Obligor — Under the terms of the Mosaic Supply Agreement, CF Industries (through one of its wholly owned subsidiaries) is the only party that is responsible for fulfillment of the ammonia sales to Mosaic. PLNL is not a party to the Mosaic Supply Agreement and has no rights or responsibilities under the agreement. Under the Mosaic Supply Agreement, CF Industries represents that it has good title to the ammonia being delivered, and CF Industries is responsible for all aspects of the importation of the ammonia. CF

Industries is responsible for and pays all expenses incurred as a result of being the importer. This indicator supports gross revenue reporting.

Indicator (2): CF Industries Has General Inventory Risk — CF Industries has a contractual obligation to purchase 50% of the ammonia output of PLNL. This obligation is independent of the Mosaic Supply Agreement. CF Industries takes title to the ammonia as it is loaded onto shipping vessels in Trinidad. Regardless of Mosaic’s ability to accept delivery of ammonia pursuant to the Mosaic Supply Agreement, CF Industries is, and will continue to be, obligated to purchase 50% of the ammonia output of PLNL. Ammonia purchased from PLNL cannot be returned to PLNL. Additionally, the risk of loss for the product as it is shipped from Trinidad to North America is borne entirely by CF Industries. This risk includes the risk of physical loss and the price risk due to market changes in supply and demand since ammonia is a commodity that fluctuates in price. The sale of ammonia to Mosaic pursuant to the Mosaic Supply Agreement is consummated, and risk of loss transfers to Mosaic, when the product is placed in a Mosaic-controlled storage tank in Tampa, Florida. This indicator supports gross revenue reporting.

Indicator (3): CF Industries Has Latitude in Establishing Price — CF Industries has reasonable latitude to establish prices for the ammonia that it sells under the Mosaic Supply Agreement, given the economic constraints to establish an exchange price involving a worldwide commodity over a long-term contract. Ammonia is a worldwide chemical commodity that is traded in U.S. dollars in the international market. Due to geographic differences in supply and demand and transportation costs, the price of ammonia can differ across markets. This is similar to the pricing behavior of other worldwide commodities. The pricing terms agreed upon between CF Industries and Mosaic for the term of the Mosaic Supply Agreement were negotiated between the parties and are market-based. PLNL did not have any ability to prescribe or influence the pricing arrangement in the Mosaic Supply Agreement. The full latitude to establish the selling price rests with CF Industries. CF Industries purchases ammonia from PLNL at prices based on published measures of market prices in the Republic of Trinidad and Tobago and sells ammonia to Mosaic under the terms of the Mosaic Supply Agreement at prices based on published measures of market prices in the Tampa, Florida region. This indicator supports gross revenue reporting.

Indicator (4): CF Industries Changes the Product — Given that ammonia is a chemical commodity, there are no changes that are required in the product. This indicator is not applicable to the determination of the appropriateness of gross revenue reporting by CF Industries in this case.

Indicator (5): CF Industries Has Discretion in Supplier Selection — The ammonia that is being sold under the Mosaic Supply Agreement could have been sourced from multiple production complexes, as ammonia is a commodity for which there are multiple sources of supply. In particular, in addition to the ammonia production capacity to which CF Industries has access as a result of its 50% interest in PLNL, CF Industries owns (and owned at the time it entered into the Mosaic Supply Agreement) seven ammonia production complexes in North America, one or more of which complexes could have been specified in the Mosaic Supply Agreement as the source of the ammonia to be supplied to Mosaic under that agreement. The fact that multiple wholly-owned production alternatives were available to supply ammonia to Mosaic under the Mosaic Supply Agreement supports gross revenue reporting. The decision to source the ammonia from PLNL was based on logistical cost management focused on minimizing transportation costs and optimizing gross margin across CF Industries’ production network. This factor supports gross revenue reporting.

Additionally, once CF Industries starts making deliveries of ammonia to Mosaic pursuant to the Mosaic Additional Supply Agreement, the ammonia sales under the Mosaic Additional Supply Agreement will also be reported on a gross basis.

Indicator (6): CF Industries’ Involvement in the Determination of Product Specifications — Since ammonia is a worldwide commodity, there is no difference in the ammonia produced by any of the various global manufacturers. This indicator is not applicable to the determination of the appropriateness of gross revenue reporting by CF Industries in this case.

Indicator (7): CF Industries Has Physical Loss Inventory Risk — CF Industries has risk of loss for all ammonia purchased from PLNL as CF Industries takes title and risk of loss to the product as the ammonia is loaded onto shipping vessels in Trinidad. PLNL does not have any risk of loss once title has passed to CF Industries. The risk of loss associated with any ammonia sold pursuant to the Mosaic Supply Agreement does not transfer to Mosaic until the ammonia is placed in Mosaic’s storage tank near Tampa, Florida. This factor supports gross revenue reporting.

Indicator (8): CF Industries Has Credit Risk — CF Industries has full risk of loss from credit risk in the event that Mosaic does not fulfill its payment obligations under the Mosaic Supply Agreement. This factor supports gross revenue reporting.

The next three indicators, as outlined in ASC 605-45-45, are indicators of net revenue reporting.

Indicator (9): The Entity’s Supplier Is the Primary Obligor in the Arrangement — CF Industries’ supplier, PLNL, is not a party to, or an obligor under, the Mosaic Supply Agreement. CF Industries maintains the primary obligor responsibility. This indicator does not support net revenue reporting.

Indicator (10): The Amount the Entity Earns is Fixed — The amount that CF Industries earns from the sale of ammonia under the Mosaic Supply Agreement is the difference between the price at which CF Industries sells the ammonia to Mosaic under the Mosaic Supply Agreement and the costs CF Industries incurs in purchasing the ammonia and delivering it to Mosaic. Both the selling price for ammonia sales to Mosaic and the purchase price for ammonia purchases from PLNL are determined based on published measures of market prices in the relevant geographic markets and, accordingly, these selling and purchase prices, and the difference between them, fluctuate based on supply and demand balances in the respective markets. In addition to the variable cost to purchase the ammonia from PLNL, CF Industries incurs variable costs for freight, importation and insurance to deliver the ammonia to Mosaic. Since CF Industries’ selling prices for ammonia under the Mosaic Supply Agreement vary due to market conditions and CF Industries’ costs to purchase that ammonia and to deliver it to Mosaic also vary due to market conditions, CF Industries’ gross margin from the sale of ammonia under the Mosaic Supply Agreement is not fixed. This indicator does not support net revenue reporting.

Indicator (11): The Supplier Has Credit Risk — CF Industries’ supplier, PLNL, does not have any credit risk relating to the Mosaic Supply Agreement. PLNL’s full credit risk for the sale of ammonia that CF Industries ultimately delivers to Mosaic under the Mosaic Supply Agreement is solely with CF Industries. This indicator does not support net revenue reporting.

Based on the preponderance of the indicators noted above, gross revenue reporting has been applied to the ammonia sales to Mosaic under the Mosaic Supply Agreement.

Business Purpose

In the negotiation of the sale of the Phosphate Business by CF Industries to Mosaic, the parties agreed to maintain the Phosphate Business’ then-existing ammonia supply arrangement, under which CF Industries provided ammonia for use in phosphate production by the Phosphate Business from sources of supply owned by or under contract with CF Industries. In agreeing to continue to supply ammonia to the Phosphate Business following the sale to Mosaic, CF Industries had the ability to select among several sources of ammonia. CF Industries operates seven nitrogen manufacturing complexes in North America that each produce ammonia. In addition, CF Industries operates 23 ammonia distribution locations, primarily in the central agricultural region of North America. CF Industries’ decision to use the ammonia from PLNL as its source of ammonia for delivery under the Mosaic Supply Agreement was driven by its objective to minimize transportation costs and optimize gross margin across the Company. The delivery of the ammonia that CF Industries imports from PLNL in Trinidad to Mosaic’s location in Tampa, Florida allows CF Industries to reduce the overall transportation and distribution costs across its entire distribution network relative to the costs that would attach if the ammonia were obtained by CF Industries from alternative sources. Because CF Industries has an obligation to purchase ammonia from PLNL that predates the Mosaic Supply Agreement, and CF Industries’ supply arrangement with PLNL is integral to CF Industries’ interest in PLNL as a joint venture partner therein, it would not have been in CF Industries’ interest, and Mosaic and CF Industries did not seek, to substitute Mosaic for CF Industries in the supply arrangement with PLNL.

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We note your disclosure that because of the significance of the continuing supply practice between PLNL and the disposed entity (now owned by Mosaic), in accordance with U.S. GAAP, the phosphate mining and manufacturing business is not reported as discontinued operations in your consolidated statements of operations.

Rest of the question

Please provide us details as to how you evaluated your accounting treatment under the guidance in ASC 205-20-55-3. In this regard, in light of your disclosure in Note 10 that the ammonia sold to Mosaic represented 3% of total revenues in 2014, please tell us why you believe the cash flows are significant.

The Company acknowledges the Staff’s comment and has outlined below the historical timeline, background information, accounting requirements and the Company’s conclusions with regard to discontinued operations treatment in connection with the sale of the Phosphate Business. The Company notes that the accounting standards for discontinued operations have been updated by Accounting Standards Update No. 2014-08 (“ASU No.

Rest of the answer

2014-08”), which was issued in April 2014 and is effective for disposal transactions that occur in annual periods beginning after December 15, 2014 (i.e., beginning in calendar year 2015 for CF Industries). Because the sale of the Phosphate Business occurred prior to CF Industries’ first annual period beginning after December 15, 2014, ASU No. 2014-08 is not applicable to that transaction, and the prior standards are the basis for the analysis set forth below.

CF Industries completed the sale of the Phosphate Business to Mosaic on March 17, 2014. Prior to the sale, the Phosphate Business was included by CF

Industries in a separate reportable segment referred to as the phosphate segment.

Prior to the Company’s sale of the Phosphate Business to Mosaic, the ammonia purchased by CF Industries from PLNL, as discussed in the response to comment 1, above, was transported to North America for use by CF Industries in the Phosphate Business in the production of phosphate fertilizer.

In connection with the Company’s sale of the Phosphate Business to Mosaic, CF Industries and Mosaic entered into the Mosaic Supply Agreement to continue the supply of ammonia by CF Industries to the disposed Phosphate Business.

In its consideration of the accounting treatment of the Phosphate Business sale transaction, CF Industries analyzed whether discontinued operations treatment of the Phosphate Business would be warranted. The impact of the Mosaic Supply Agreement, particularly CF Industries’ continuing involvement in the Phosphate Business as a result of that agreement, was a key element in the Company’s analysis. ASC 205-20, Presentation of the Financial Statements — Discontinued Operations, outlines the accounting requirements for discontinued operations treatment of a business disposition. The relevant standard is set forth in ASC 205-20-45-1:

Reporting Discontinued Operations

The results of operations of a component of an entity that either has been disposed of or is classified as held for sale under the requirements of paragraph 360-10-45-9, shall be reported in discontinued operations in accordance with paragraph 205-20-45-3 if both of the following conditions are met:

a. The operations and cash flows of the component have been (or will be) eliminated from the ongoing operations of the entity as a result of the disposal transaction.

b. The entity will not have any significant continuing involvement in the operations of the component after the disposal transaction.

ASC 205-20-55-3 sets forth four steps, presented as questions, that may be used to evaluate whether conditions (a) and (b) in ASC 205-20-45-1 are met:

Step 1: Are continuing cash flows expected to be generated by the ongoing entity?

Step 2: Do the continuing cash flows result from a migration or continuation of activities?

Step 3: Are the continuing cash flows significant?

Step 4: Does the ongoing entity have significant continuing involvement in the operations of the disposed component?

Note that if the answer to Step 1, 2, or 3 is no, then evaluate Step 4.

Set forth below is the Company’s four-step analysis under ASC 205-20-55-3 with respect to the Phosphate Business.

Step 1: Are continuing cash flows expected to be generated by the ongoing entity (CF Industries)? Analysis — Yes. CF Industries’ sale of the Phosphate Business to Mosaic included the sale of all assets previously utilized by CF Industries in the production of phosphate fertilizer; as a result, no continuing cash flows will be generated by CF Industries from the Phosphate Business assets. However, as a result of the Mosaic Supply Agreement, CF Industries is continuing to provide ammonia, which is a key raw material used in the production of phosphate fertilizer, to the disposed Phosphate Business. The cash flows from the sale of ammonia are direct cash flows rather than indirect cash flows due to the fact they pertain to a raw material that is a material direct production cost of the business. These cash flows will continue for a period of three years, the length of the Mosaic Supply Agreement. The ammonia is significant in terms of the quantity and cost to the disposed Phosphate Business. As a result, significant cash inflows (or revenue producing activities) are expected to continue due to the sale of ammonia by CF Industries to Mosaic pursuant to the Mosaic Supply Agreement. Additional cash flows will be generated from the sale of ammonia under the Mosaic Additional Supply Agreement starting no later than 2017 and continuing for up to 15 years.

Step 2: Do the continuing cash flows result from a migration or continuation of activities? Analysis — Yes. The cash flows resulting from the sale of ammonia to Mosaic pursuant to the Mosaic Supply Agreement result from a continuation of activities. Prior to CF Industries’ sale of the Phosphate Business to Mosaic, ammonia purchased by CF Industries from PLNL was transferred into phosphate production and the cost of the ammonia became a cost included in phosphate inventory produced by CF Industries. After the sale of the Phosphate Business, CF Industries continues to supply ammonia to the disposed Phosphate Business.

Step 3: Are the continuing cash flows significant? Analysis — Yes. CF Industries’ management considers the continuing cash flows from the Mosaic Supply Agreement to be significant. ASC 205-20-55-14 provides guidance on determining significance. ASC 205-20-55-14 states that the determination of whether continuing cash flows are significant is a matter of judgment that is based on a comparison between (a) the expected continuing cash flows to be generated by the ongoing entity after the disposal transaction and (b) the cash flows that would have been expected to be generated by the disposed component absent the disposal transaction.

When evaluating the significance of the cash flows of the Mosaic Supply Agreement, CF Industries analyzed the cash inflows by comparing (1) the projected cash flows to the ongoing business from the sale of the ammonia (cash inflows) to (2) the total revenue of the disposed Phosphate Business.

The following accounting analysis of the cash inflows was performed by CF Industries. Due to the variability of the cash flows from the sale of ammonia to Mosaic, a low end and a high end of the projected range were used. The projected cash flows used in the following accounting analysis are management’s projections as of the October 2013 signing of the agreement between CF Industries and Mosaic for the sale of the Phosphate Business to Mosaic.

Cash Inflow Calculation

Low End of

High End of

(Amounts in millions, except percentages)

Projected Range

Projected Cash Flows From the Sale of Ammonia to Mosaic

$

146

195

2012 Phosphate Segment Net Sales

1,007

Significance Ratio

%

The evaluation of whether continuing cash flows are significant is a matter of judgment. Based on the metrics noted above, management considers both the low end and high end of the projected range of cash flows from the sale of ammonia under the Mosaic Supply Agreement to be significant as compared to the net sales of the disposed Phosphate Business.

With the passage of time since the sale of the Phosphate Business and the commencement of the sale of ammonia to Mosaic, actual results are now available. During the period from March 31, 2014 (when the first sale of ammonia to Mosaic occurred) to March 31, 2015, the revenue that was recognized from the sale of ammonia to Mosaic under the Mosaic Supply Agreement was $155 million. This amount is within the range noted above.

Step 4: Does the ongoing entity have significant continuing involvement in the operations of the disposed component? Analysis — Evaluation of step 4 is not required since the answer to each of steps 1, 2 and 3 is yes.

The four-step analysis set forth above establishes that the conditions in ASC 205-20-45-1 for discontinued operations treatment of the Phosphate Business are not met; therefore, discontinued operations treatment of the Phosphate Business would not be appropriate.

The Company notes that the last sentence of the Staff’s comment refers to the purchased cost of ammonia from PLNL as reported in the Company’s Form 10-K of $141 million as compared to the total consolidated revenue of CF Industries. In the calculations above, pursuant to the guidance of ASC 205-20-55-14, for purposes of determining the significance of the cash inflows, cash flows are compared to the net sales of the phosphate segment prior to the disposition of the Phosphate Business, rather than to the consolidated results of CF Industries. ASC 205-20-55-14 states that “the evaluation . . . should be based on a comparison between the expected continuing cash flows to be generated by the ongoing entity after the disposal transaction and the cash flows that would have been expected to be generated by the disposed component absent the disposal transaction” (emphasis added).

Based on the analysis provided above, including the significance of the ongoing cash flows, management concluded that discontinued operations treatment of the Phosphate Business is not appropriate.

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We note as a result of your change in segments during the third quarter of 2014, you have reallocated goodwill amongst the new segments. Please explain to us your method and basis for allocating the goodwill to each of the new segments in 2014 under the guidance in ASC 350-20-35.

In the third quarter of 2014, CF Industries completed changes to its reporting structures that reflect how its chief operating decision maker (as defined under U.S. generally accepted accounting principles (“U.S. GAAP”)) assesses the performance of its operating segments and makes decisions about resource allocation.

Rest of the answer

As a result, CF Industries’ reportable segments were changed to align with the major products sold by the Company, increasing from two segments, consisting of phosphate and nitrogen, to five segments, consisting of ammonia, granular urea, urea ammonium nitrate solution (UAN), other, and phosphate. The phosphate segment reflects the reported results of CF Industries’ phosphate business through March 17, 2014, when CF Industries completed the sale of the

Phosphate Business, plus the continuing sales of the phosphate inventory in CF Industries’ distribution network after March 17, 2014.

When management reassigned the goodwill to the new reporting units, the reassignment was effected in accordance with ASC 350-20-35-45, which states (emphasis added):

When an entity reorganizes its reporting structure in a manner that changes the composition of one or more of its reporting units, the guidance in paragraphs 350-20-35-39 through 35-40 shall be used to reassign assets and liabilities to the reporting units affected. However, goodwill shall be reassigned to the reporting units affected using a relative fair value allocation approach similar to that used when a portion of a reporting unit is to be disposed of (see paragraphs 350-20-40-1 through 40-7).

Accordingly, the basis for the goodwill reassignment performed by management was done in accordance with U.S. GAAP and used a relative fair value allocation approach. In performing this reassignment, management determined the fair value by utilizing a discounted cash flow valuation methodology. CF Industries engaged the valuation services of a Big Four public accounting firm other than the Company’s auditor to assist with the discounted cash flow valuation. The valuation included determining the fair value of each new segment and a reconciliation of the aggregate fair value of the new segments to the market capitalization of CF Industries.

As discussed in the response to comment 2, above, the phosphate segment did not qualify for discontinued operations treatment in connection with CF Industries’ disposition of the Phosphate Business. Accordingly, the phosphate segment will continue to be included in CF Industries’ financial statements until the periods presented, including prior-year comparable periods, no longer reflect phosphate results. CF Industries’ goodwill pertaining to the phosphate reporting unit was included in the disposed assets as part of the Phosphate Business sale prior to the creation of the new segments. Thus, the reallocation of goodwill involved reallocation of the goodwill of the former nitrogen segment. The total goodwill of the nitrogen segment prior to the reallocation was $2,096 million.

CF Industries’ new operating segments are at the product level within the business. The review of product profitability and the allocation of capital resources by the chief operating decision maker are based on product level profitability calculated at the gross margin level. The product level is also the reporting unit level since the product level is the lowest level at which discrete financial information is available.

* * * * *

The Company hereby acknowledges that:

· the Company is responsible for the adequacy and accuracy of the disclosure in the filing;

· Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and

· the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

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