Cf Industries Holdings, Inc. · NYSE:CF
Cf Industries — Q3 2015 Earnings Presentation
30 slides from Cf Industries's earnings presentation, Nov 5, 2015
Slide 1: Safe Harbor Statement
Safe Harbor Statement All statements in this communication by CF Industries Holdings, Inc. (together with its subsidiaries, the “Company”), other than those relating to historical facts, are forward-looking statements. Forward-looking statements can generally be identified by their use of terms such
Slide 2: No Offer or Solicitation
3 No Offer or Solicitation This presentation is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to or
Slide 3: Third Quarter Results and Accomplishments
4 Announced combination of CF with OCI N.V.'s (OCI) European, North American and global distribution businesses; the deal received U.S. anti-trust clearance Entered into an agreement with CHS for their purchase of a minority equity position in CF Industries Nitrogen, LLC, and also entered into a lon
Slide 4: Nitrogen Market Outlook
Nitrogen Market Outlook 5 Higher corn acreage expected in the U.S. as current returns for the 2016 crop, based on new crop futures, favor corn plantings 2016 corn planted acres estimated at 90.5M acres, up from 88.4M acres in 2015 Entered the fourth quarter with a solid order book for ammonia and UA
Slide 5: Gas Hedges Are In Place Through 2018
Gas Hedges Are In Place Through 2018 6 NYMEX First Of The Month Settlement/Futures Prices (6) Hedged Prices Swaps of $2.96/MMBtu for an average of 11.9 million MMBtus per month for October-December, 2015. Collars with a floor price of $2.30/MMBtu and a ceiling price of $3.20/MMBtu for an average of
Slide 6: Full Year Gas Cost Remains Below $4.00/MMBtu Until 2026
7 Full Year Gas Cost Remains Below $4.00/MMBtu Until 2026 Natural gas prices have decreased significantly in 2015 due to stable natural gas production and favorable weather conditions Increased well efficiencies have resulted in lower break-even costs for producers Longer term gas prices also impact
Slide 7: Capacity Expansion Update
Capacity Expansion Update Donaldsonville Urea plant is mechanically complete Plant commissioning has begun Late 2015 startup expected for new UAN plant Piping is nearly complete and insulation has started Ammonia plant on pace for early 2016 start-up Piping installation is progressing well; insulati
Slide 8: Global nitrogen cost curve
Operating rate adjusted to 95% for all regions. U.S. natural gas price assumed at $3.00/MMBtu, Western and Eastern Europe assumed at $6.70/MMBtu, Chinese-Anthracite High assumed at $4.50/MMBtu ($125/mt of mine mouth coal cost), and Ukraine assumed at $6.80/ MMBtu. Assumes $17-$22 per metric ton of s
Slide 9: Increasing Cash Flow Capacity Per Share
10 Annual Nitrogen Equivalent Tons per 1,000 Shares Outstanding Increasing Cash Flow Capacity Per Share Nitrogen Capacity Per 1000 Shares Upside from Potential Future Buybacks Increased cash flow capacity as measured by N/1000 shares by 173% since 2010 Capacity projects underway will increase total
Slide 10: Attractive Business Profile: EBITDA Sensitivity
11 Attractive Business Profile EBITDA Sensitivity to Natural Gas and Urea Prices Realized North American Natural Gas Cost ($/MMBtu)(1) Realized Urea Equivalent Price ($/ton) The table was created by adjusting 2014 EBITDA(2) of $2.7 billion and gas consumption for: The sale of our former phosphate se
Slide 11: Additional Cash Available for Capital Returns and Growth
12 Additional Cash Available for Capital Returns and Growth Existing Dividend(3) Estimated Minority Distributions to CHS(4) Capital Expenditures Operating Cash Needs (5) Strategic Initiatives Provide Significant Cash Available for Capital Allocation Priorities Total Sources: ~$15.0B – $16.5B CHS equ
Slide 12: Unparalleled Track Record of Creating Value
CF Industries has consistently produced strong shareholder returns across multiple time periods Market data as of 10/20/2015. Total shareholder returns reflect share price appreciation plus dividends reinvested into the security/index. Source: Bloomberg * Yara ADR’s trading in US dollars Five Years
Slide 13: Financial Highlights
Financial Highlights In millions, except percentages, per MMBtu and EPS 2015 Q3 2015 Q3 2014 Q3 2014 Q3 2015 YTD 2015 YTD 2014 YTD 2014 YTD Net sales $ 927.4 $ 921.4 $ 3,192.5 $ 3,526.7 Gross margin 165.0 301.1 1,266.7 1,334.2 - As percent of sales 17.8 % 32.7 % 39.7 % 37.8 % EBITDA(1) $ 256.3 $ 338
Slide 14: Segment Results: Ammonia
Segment Results: Ammonia In millions, except percentages and per ton amounts 2015 Q3 2015 Q3 2014 Q3 2014 Q3 2015 YTD 2015 YTD 2014 YTD 2014 YTD Net Sales $ 260.9 $ 232.1 $ 1,147.6 $ 1,109.3 Gross margin 54.2 63.5 513.1 416.2 - As percent of sales(1) 20.8 % 27.4 % 44.7 % 37.5 % Sales volume by produ
Slide 15: Segment Results: Granular Urea
Segment Results: Granular Urea 16 Nutrient tons represent the tons of nitrogen within the product tons. In millions, except percentages and per ton amounts 2015 Q3 2015 Q3 2014 Q3 2014 Q3 2015 YTD 2015 YTD 2014 YTD 2014 YTD Net Sales $ 170.7 $ 199.6 $ 593.9 $ 683.4 Gross margin 38.9 78.9 269.6 305.3
Slide 16: Segment Results: UAN
Segment Results: UAN 17 Nutrient tons represent the tons of nitrogen within the product tons. In millions, except percentages and per ton amounts 2015 Q3 2015 Q3 2014 Q3 2014 Q3 2015 YTD 2015 YTD 2014 YTD 2014 YTD Net Sales $ 349.3 $ 392.9 $ 1,112.4 $ 1,249.3 Gross margin 72.8 135.7 434.1 519.1 - As
Slide 17: Segment Results: AN
Segment Results: AN 18 Nutrient tons represent the tons of nitrogen within the product tons. In millions, except percentages and per ton amounts 2015 Q3 2015 Q3 2014 Q3 2014 Q3 2015 YTD 2015 YTD 2014 YTD 2014 YTD Net Sales $ 79.5 $ 54.9 $ 178.9 $ 187.0 Gross margin (17.2 ) 8.9 (0.2 ) 46.7 - As perce
Slide 18: Segment Results: Other
Segment Results: Other* 19 * Other segment primarily includes: NPK compounds; nitric acid; diesel exhaust fluid (DEF); and urea liquor. (1) Nutrient tons represent the tons of nitrogen within the product tons. In millions, except percentages and per ton amounts 2015 Q3 2015 Q3 2014 Q3 2014 Q3 2015 Y
Slide 19: For more information, please visit www.cfindustries.com
For more information, please visit www.cfindustries.com 20
Slide 20: Reconciliation of 2015 EBITDA and Selected Items
Reconciliation of 2015 EBITDA and Selected Items (in millions) 21 2015 Q3 2015 Q3 2014 Q3 2014 Q3 2015 YTD 2015 YTD 2014 YTD 2014 YTD Net earnings attributable to common stockholders $ 90.9 $ 130.9 $ 673.4 $ 1,152.0 Interest expense (income) – net 29.7 46.2 92.0 136.4 Income taxes(1) 20.1 70.5 322.6
Slide 21: Reconciliation of 2014 EBITDA and Selected Items
Reconciliation of 2014 EBITDA and Selected Items (in millions) 22 Twelve months ended December 31, 2014 2013 Net earnings attributable to common stockholders $ 1,390.3 $ 1,464.6 Interest expense (income) – net 177.3 147.5 Income taxes 773.0 686.5 Depreciation, depletion and amortization 392.5 410.6
Slide 22: Donaldsonville Expansion Site Overview
23 Donaldsonville Expansion Site Overview Urea Warehouse 90K Tons UAN Tank 50K Tons Ammonia 3,640 TPD Ammonia Tank 30K Tons UAN 5,050 TPD Urea 3,850 TPD Urea Barge Dock
Slide 23: Donaldsonville Expansion Urea Plant
Donaldsonville Expansion Urea Plant Granulation Area Urea Melt Urea Granulation Urea Melt 24 Urea Granulation Urea Melt Urea Granulation Urea Melt Urea Granulation Urea Melt
Slide 24: Donaldsonville Expansion Nitric Acid/UAN and Off-sites
Donaldsonville Expansion Nitric Acid/UAN and Off-sites CO2 Compression Package Boiler CO2 Compressor Package Boiler Cooling Tower Nitric Acid UAN 25 CO2 Compressor Nitric Acid Package Boiler UAN CO2 Compressor Package Boiler Nitric Acid UAN Cooling Tower
Slide 25: Donaldsonville Expansion Ammonia Status
26 Donaldsonville Expansion Ammonia Status Reformer Compressor Building Ammonia Syn-loop
Slide 26: Port Neal Expansion Site Overview
Port Neal Expansion Site Overview 27
Slide 27: Port Neal Expansion Ammonia Plant- Reformer
Port Neal Expansion Ammonia Plant- Reformer 28
Slide 28: Port Neal Expansion Urea Plant- Granulation and Synthesis
29 Port Neal Expansion Urea Plant- Granulation and Synthesis Granulation Synthesis Granulation Synthesis
Slide 29: Port Neal Expansion Pipe Rack and Urea Plant
30 Port Neal Expansion Pipe Rack and Urea Plant Granulation Synthesis
Slide 30: Port Neal Expansion
Port Neal Expansion CF Pipe Rack and Urea Plant
CF Industries Holdings — Q3 2015 Earnings Presentation on 6ix