Here’s why CF Industries Holdings Terminated its NOL Poison Pill

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CF Industries Holdings, Inc. (NYSE: CF) terminated its NOL Poison Pill Plan on July 25, 2017.  The Company’s Board of Directors announced in a press release that it terminated the tax benefits preservation plan that was adopted on September 6, 2016.  The 1-year NOL Poison Pill Plan was designed to preserve CF Industries Holdings, Inc. ability to utilize its net operating losses and certain other tax assets that were primarily related to accelerated tax depreciation of the company’s capacity expansion projects which were placed in service in 2016.  The Plan was originally scheduled to expire on September 5, 2017.

When the NOL Poison Pill Plan was adopted last year, the Company estimated that it would generate a federal tax net operating loss in excess of $2 billion in 2016, arising principally from accelerated depreciation on the Company’s capacity expansion projects.

In June, the Company announced that it had received federal tax refunds of approximately $815 million due to the carryback of certain federal tax losses from the 2016 tax year to prior periods. The receipt of the federal tax refunds was earlier than the Company’s previously stated expectations for the third quarter of 2017.

According to Stephen A. Furbacher, chairman of the Company’s board, “Stockholders were well-served by the tax benefits preservation plan as it protected the company’s ability to utilize its tax losses and receive $815 million in federal tax refunds..With the earlier-than-expected receipt of these tax refunds, the Plan has served its intended purpose and the Board believes that it is in the best interests of the company and its stockholders to terminate the Plan at this time.”

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