Cf Industries Holdings, Inc. · NYSE:CF
Cf Industries — Q4 2013 Earnings Presentation
18 slides from Cf Industries's earnings presentation, Feb 19, 2014
Slide 1: 2013 Fourth Quarter Financial Results
2013 Fourth Quarter Financial Results February 19, 2014 NYSE: CF
Slide 2: Safe Harbor Statement
Safe Harbor Statement All statements in this communication, other than those relating to historical facts, are “forward-looking statements.” These forward-looking statements are not guarantees of future performance and are subject to a number of assumptions, risks and uncertainties, many of which ar
Slide 3: Fourth Quarter Highlights
Fourth Quarter Highlights $643 million EBITDA and $5.71 Diluted EPS despite urea market testing floor prices Entered into set of strategic agreements with the Mosaic Company including: Sale of phosphate business for $1.4 billion Long-term ammonia supply agreement for 600,000 and 800,000 tons of ammo
Slide 4: 2013 Highlights
2013 Highlights 4 Generated $2.7 billion of EBITDA and gross margin of 46% on sales of $5.5 billion Exported all major forms of nitrogen Operational Excellence Selectively investing in projects with attractive return profiles Completed Medicine Hat acquisition $559.7 million invested in capacity exp
Slide 5: 2014 Priorities
2014 Priorities Maintain commitment to safety and operational excellence Focus on expansion projects execution to keep on schedule and on budget Complete the $1.4 billion sale of phosphate to Mosaic Anticipate $1.0 billion in after-tax proceeds Expect to close in first half of 2014 Reduce cost of ca
Slide 6: Strategic Advantages
Strategic Advantages North American natural gas cost advantage Network of production, logistical and distribution assets Experienced, high-performance team 6
Slide 7: CF Industries Nitrogen Volumes and Shares Outstanding
7 Excludes 34% of Canadian Fertilizers Limited (CFL) that was owned by Viterra. CFL operations were treated as a consolidated variable interest entity in CF Industries Holdings, Inc. financial statements. Approved ammonia debottleneck projects that have been completed. Acquisition of all outstanding
Slide 8: Nitrogen Market Summary
Nitrogen Market Summary Global urea price recovery Floor prices consistent with estimated break-even cash costs for marginal (Chinese) producers reached in October Eastern European manufacturers shut down as prices dropped below estimates of their cash costs Nitrogen production shutdowns from gas cu
Slide 9: Market Highlights
9 China Cost: High Tax Period Low Tax Period Western Europe Ukraine DF Group $0 $100 $200 $300 $400 0 50 100 150 200 250 Estimated High Tax Period Floor Algeria Middle East $0 $2 $4 $6 $8 $10 $12 2009 2010 2011 2012 2013 Henry Hub Price Zeebrugge Cash Price -40 -30 -20 -10 0 10 20 30 40 J13 F M A M
Slide 10: Financial Highlights
Financial Highlights 10 In millions, except percentages and EPS 2013 Q4 2012 Q4 Net sales $ 1,326 $ 1,481 Gross margin 594 656 - As percent of sales 45% 44% EBITDA(1) $ 643 $ 835 Net earnings attributable to common stockholders 326 471 Earnings per diluted share 5.71 7.40 Diluted Average Shares Outs
Slide 11: Q4 Nitrogen Segment Results
Q4 Nitrogen Segment Results In millions, except as noted 2013 Q4 H/(L) 2012 Q4 Sales $ 1,179 $ (47) Gross margin 592 (28) - Percent 50.2% (0.4) pts Volume (000 st) 3,560 281 Average selling prices ($/st) - Ammonia $ 512 $ (55) - Urea 335 44 - UAN 266 (41) - AN 225 (75) Gas cost $/MMBtu $ 3.74 $ 0.13
Slide 12: Q4 Phosphate Segment Results
In millions, except as noted 2013 Q4 H/(L) 2012 Q4 Sales $ 148 $ (108) Gross margin 2 (35) - Percent 1.2% (13) pts Volume (000 st) 415 (94) - Domestic 227 (140) - Export 188 46 Average selling prices ($/st) - DAP $ 348 $ (151) - MAP 382 (145) Q4 Phosphate Segment Results 12 Graph source: Green Marke
Slide 13: 2013 Financial Highlights
2013 Financial Highlights 13 (1) Adjusted to exclude the impact of a retroactive modification to the selling price calculation methodology used for products sold by Canadian Fertilizers Limited (CFL). This modification impacts the comparability of the financial results between the 2012 and 2013 time
Slide 14: For more information, please visit www.cfindustries.com
For more information, please visit www.cfindustries.com 14
Slide 15: EBITDA and Selected Items
EBITDA and Selected Items 15 (in millions) Three months ended December 31, Twelve months ended December 31, 2013 2012 2013 2012 Net earnings attributable to common stockholders $ 325.8 $ 470.7 $ 1,464.6 $ 1,848.7 Interest expense (income) – net 39.2 28.1 147.5 131.0 Income taxes 187.2 241.9 686.5 96
Slide 16: CFL Selling Price Modifications
CFL Selling Price Modifications 16 Prior to April 30, 2013, CF Industries, Inc. (CF Industries) owned 49% of the voting common shares and 66% of the non-voting preferred shares of Canadian Fertilizers Limited (CFL), an Alberta, Canada based nitrogen fertilizer manufacturer and had the right to purch
Slide 17: CFL Selling Price Modifications: Consolidated Results
17 CFL Selling Price Modifications CONSOLIDATED RESULTS Three months ended Twelve months ended December 31, December 31, 2013 2012 2013 2012 (in millions, except as noted) Net sales As reported $ 1,326.3 $ 1,481.4 $ 5,474.7 $ 6,104.0 Impact of selling price adjustment - 193.8 - 135.9 As adjusted $ 1
Slide 18: Nitrogen Segment Data
18 Three months ended Twelve months ended NITROGEN SEGMENT DATA December 31, December 31, 2013 2012 2013 2012 (in millions, except as noted) Net sales As reported $ 1,178.7 $ 1,225.6 $ 4,677.8 $ 5,096.6 Impact of selling price adjustment - 193.8 - 135.9 As adjusted $ 1,178.7 $ 1,419.4 $ 4,677.8 $ 5,
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