Cf Industries Holdings, Inc. · NYSE:CF
Cf Industries — Merger or Acquisition (February 2016)
23 slides from Cf Industries's merger presentation, Feb 23, 2016
Slide 1: Note Regarding Non-GAAP Financial Measures
Note Regarding Non-GAAP Financial Measures The company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). Management believes that EBITDA, a non-GAAP financial measure, provides additional meaningful information regarding the company's performance
Slide 2: 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 3: No Offer or Solicitation
No Offer or Solicitation This communication 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 4: Driving Increased Cash Flow Capacity Per Share
Driving Increased Cash Flow Capacity Per Share CF Industries Nitrogen Volumes and Shares Outstanding Upside from Potential Future Buybacks Increased cash flow capacity as measured by N/1000 shares by 173% since 2010 Shares Outstanding (in millions) Nitrogen Capacity Per 1000 Shares 40 400 350 35 3
Slide 5: North American Production Costs Remain Well Below Urea Floor Price Range
North American Production Costs Remain Well Below Urea Floor Price Range The global nitrogen cost curve reflects differences in feedstock and logistics costs 2016 Monthly Delivered U.S. Gulf Urea Cost Curve (Y-axis: USD/ton, X-axis: Monthly Production Capacity at 95% Operating Rate, million tons)
Slide 6: North American Producers Remain Highly Profitable
North American Producers Highly Profitable Remain Urea Price/Production Cost In U.S. Dollars Per Ton $300 $200 Current pricing on the forward curve suggests CF’s cost for natural gas in North America (including hedges) will remain below $3.00/MMBtu for 2016 and beyond $100 $0 North America-Natural
Slide 7: CHS Strategic Venture
CHS Strategic Venture $2.8 billion equity investment for ~9% of CF’s production capacity ♦ ♦ CHS has the right to purchase up to(1): - - 1,095,000 tons of urea 580,000 tons of UAN ♦ Supply agreement tons have an average gross margin that reflects the average gross margin across the entire CF system
Slide 8: Unparalleled Growth Pipeline
Unparalleled Growth Pipeline ♦ ~60% increase in CF's production capacity over the next 9 months (measured in millions of product tons) 24.2 1.4 Melamine: 1% CF Industries Current Capacity Donaldsonville Included OCI Businesses Current Capacity Wever Port Neal Pro-Forma Including Expansion Projects N
Slide 9: Capacity Expansion Update
Capacity Expansion Update Donaldsonville ♦ - Urea plant began production in November 2015 and has produced over 230,000 tons of granular urea through January 2016 UAN plant is mechanically complete and in the process of being commissioned Ammonia plant: welding and piping (majority of remaining work
Slide 10: Strong Strategic Logic Continues to Underpin OCI Combination
Strong Strategic Logic Continues to Underpin OCI Combination Attractive economics, cash-flow-per-share accretion Expect ~ $500 million in annual after-tax run-rate synergies Expect effective tax rate to drop from ~ 35% to low 20’s% Leverage extensive CF distribution network with Wever production v
Slide 11: The Premier Global Footprint
The Premier Global Footprint ♦ Largest North American producer with unmatched distribution network ♦ Expect to have a scale Western Europe position with Billingham, Ince and Geleen ♦ Combining Beaumont with Natgasoline (once completed, and if call option exercised ) would make CF the largest North A
Slide 12: CF is Growing Product Tons AND Cash Flow Per Ton
CF is Growing Product Tons AND Cash Flow Per Ton Net cash generation Cash Flow Generation per ton conversion efficiency 6.7 Production (Nitrogen Nutrient Equivalent Short Tons, millions) 1 9.9 1. 2. 3. Actual 2014 production adjusted for planned run-rate effects of initiatives. Excludes production r
Slide 13: Imports Will Continue to Provide Nitrogen Supply
Imports Will Continue to Provide Nitrogen Supply 2017 North America Nitrogen Landscape (‘000 short nutrient tons) Over 20% of North America’s Agrium CF Industries Koch PCS Others Imports Note: Assumes demand growth between 2015 and 2017 is offset by exports of domestic production Source: CF Industri
Slide 14: Portfolio of World Class Businesses Being Acquired
Portfolio of World Class Businesses Being Acquired Straightforward integration with nitrogen businesses plugging into existing system Management team has proven experience in successful integration (Terra) methanol remaining 55% of equity interest global product portfolio 15 Geleen (Netherlands)
Slide 15: OCI Process Update
OCI Process Update Oct 2015 Nov 2015 Aug 2015 Month 1 Month 2 Month 3 Month 4 Dec 2015 S-4 Effective Date Transaction 10/30/2015 AnnouncedEuropean Commission Notified 11/6/201 S-4 Filed(1) CF / OCI Shareholder Meetings Transaction Close 11/2/2015 HSR Waiting Period Expiration 12/23/2015 Amended Regi
Slide 16: New North American Ammonia Plants Announced Since 2012
Since 2012, At Least 24 New North American Ammonia Plants Have Been (Capacity in thousand tons per annum) Announced Source: CF Industries and Industry Publications 17 Announce Date Company Location Gross Ammonia Capacity Nutrient Capacity Product Focus Expansion Type Status Feb-12 Yara Belle Plaine,
Slide 17: Only a Few New Nitrogen Fertilizer Plants Have Proceeded to Construction
However, To Date, Only 3 New Nitrogen Fertilizer Plants Have Proceeded ‘000 Nutrient Tons/Year to Construction Simplot, WY 1 Includes proposed new plants designed to produce at least 75K ammonia tons per year Source: CF, Industry Publications, STATSCAN, USDOC 18 24 Projects Announced (14.3M N Tons)1
Slide 18: Donaldsonville Uniquely Positioned to Serve Global Market
Donaldsonville is uniquely to serve global market positioned largest nitrogen facility in pipelines Source: CF, Industry Publications 19 Donaldsonville will be the the world… ♦ Situated outside New Orleans ♦ Connected to 5 gas supply World’s Largest N Facilities (Million Gross Ammonia Tons) 0.01.02.
Slide 19: Donaldsonville Export Capacity Roughly 80% of Total New Construction
Donaldsonville Export Capacity Roughly 80% of Total New ‘000 Nutrient Tons/Year North American Construction Simplot, WY Conceptual Scenario: International demand 100% of D’ville output 1 Includes proposed new plants designed to produce at least 75K ammonia tons per year Source: CF, Industry Publicat
Slide 20: For more information, please visit www.cfindustries.com
® For more information, please visit www.cfindustries.com
Slide 21: Financial Highlights
Financial Highlights 2015 Q4 2014 Q4 2015 YTD 2014 YTD and EPS 180.1 280.6 915.7 1,029.4 to common stockholders (2) (1) (2) (3) (4) See slide 14 for reconciliation of EBITDA and Adjusted EBITDA. See slide 15 for reconciliation of adjusted net earnings and adjusted net earnings per diluted share Incl
Slide 22: Leading North American Footprint, Extended By OCI Transaction
Leading North American Footprint, Extended By OCI Transaction ♦ Largest industrial investment play in North American natural gas conversion - Including the OCI operataing assets, CF would convert ~1.2 BCF of natural gas daily and account for 1.3% of North American domestic gas consumption Rycroft Va
Slide 23: Leading North American Footprint, Extended By OCI Transaction
Leading North American Footprint, Extended By OCI Transaction /* Largest industrial investment play in North American natural gas conversion ~ Including the OCI operataing assets, CF would convert ~1.2 BOF of natural gas daily and account for 1.3% of North American domestic gas consumption © CF has
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