Cf Industries Holdings, Inc. · NYSE:CF
Cf Industries — Q1 2015 Earnings Presentation
28 slides from Cf Industries's earnings presentation, May 7, 2015
Slide 1: 2015 First Quarter Financial Results
2015 First Quarter Financial Results May 6, 2015 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: Strong Operating Performance in First Quarter
3 Record safety performance:12-month recordable incidence rate of 1.1 is lowest ever Ammonia plants ran at system-wide capacity utilization rate of 99 percent Continued cost advantage from low prices for North American natural gas Donaldsonville and Port Neal expansion projects progressing well, wit
Slide 4: Capacity Expansion Remains On-track
Capacity Expansion Remains On-track First new plant at Donaldsonville nearing completion New urea plant expected to be running in third quarter Structural steel erection nearly complete Over 70% of pipe installed in the structure Confident of 4Q 2015 startup for new UAN plant Majority of structural
Slide 5: Nitrogen Market Outlook
Nitrogen Market Outlook 5 Positive outlook on nitrogen market conditions through the second quarter Ammonia demand strong with good movement across corn belt Urea market improving Chinese producers refusing to participate in low-priced India tenders Gulf prices (NOLA) have rallied from $280/st in Ma
Slide 6: NYMEX Prices
6 NYMEX Prices Includes the cost of natural gas purchased during the period for use in production. Includes the impact of losses realized on natural gas derivatives that were settled during the period. Excludes the unrealized mark-to-market (gains) and losses on natural gas derivatives (these gains
Slide 7: Gas Hedges Are In Place Through October 2016
Gas Hedges Are In Place Through October 2016 7 NYMEX First Of The Month Settlement/Futures Prices Hedged Prices Swaps with an average strike price of $2.86/MMBtu for an average of 6.5 million MMBtus per month for April-December, 2015. Collars with a floor price of $2.30/MMBtu and a ceiling price of
Slide 8: Full Year Gas Cost Remains Below $4.00/MMBtu Until 2023
8 Full Year Gas Cost Remains Below $4.00/MMBtu Until 2023 Since May 2014, the natural gas forward curve has moved down by more than $1.00 per MMBtu Near term prices impacted by: High production and storage concerns through 2015 The marginal development cost of natural gas is falling due to deflation
Slide 9: North American Production Costs Well Below Urea Floor Price
North American Production Costs Well Below Urea Floor Price 9 The global nitrogen cost curve is driven by differences in feedstock costs Feedstock cost for marginal production based on Chinese Anthracite coal Only a small portion of Eastern European production uses oil-linked gas contracts North Ame
Slide 10: International Energy Prices Have Declined Since Mid-2014
International Energy Prices Have Declined Since Mid-2014 Oil Prices have declined significantly from around $110/barrel (Brent) in July to around $66/barrel today Principal drivers: Tapering of China demand, U.S. supply growth (shale), Libya oil production and lifting stabilized, and no OPEC supply
Slide 11: Demonstrated Implementation of Capital Deployment Strategy
Rest of World North America 11 Strong track record of accretive share repurchases Demonstrated Implementation of Capital Deployment Strategy Share Repurchase History $500M $1.9B $1.1B $500M $1.0B $750M $5.25 billion at an average price of $203 per share $0 $50 $100 $150 $200 $250 $300 $350 2008 2009
Slide 12: Increasing Cash Flow Capacity Per Share
Increasing Cash Flow Capacity Per Share 12 CF Industries Nitrogen Volumes and Shares Outstanding Annual Capacity (Million Nutrient Tons) Million Shares Outstanding Share Count (3) Total N tons per 1,000 shares Increased cash flow capacity as measured by N/1000 shares by 170% since 2010 Capacity proj
Slide 13: Unparalleled Track Record of Creating Value for Shareholders
Unparalleled Track Record of Creating Value for Shareholders CF Industries’ shares have significantly outperformed peers over all time periods Market data as of 5/1/2015. Total shareholder returns reflect share price appreciation plus dividends reinvested into the security. Source: Bloomberg * Yara
Slide 14: Financial Highlights
Financial Highlights In millions, except percentages, per MMBtu and EPS 2015 Q1 2014 Q1 Net sales $ 954 $ 1,133 Gross margin 416 443 - As percent of sales 43.6% 39.1% EBITDA(1) $ 486 $ 1,260 Net earnings attributable to common stockholders 231 709 Net earnings per diluted share 4.79 12.90 Diluted av
Slide 15: Segment Results: Ammonia
Segment Results: Ammonia In millions, except percentages and per ton amounts 2015 Q1 2014 Q1 Net Sales $ 288 $ 272 Gross margin 120 124 - As percent of sales(1) 41.7% 45.6% Sales volume by product ton (000’s) 531 577 Sales volume by nutrient ton (000’s)(2) 435 473 Average selling price per product t
Slide 16: 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 Q1 2014 Q1 Net Sales $ 212 $ 216 Gross margin 112 102 - As percent of sales 52.8% 47.0% Sales volume by product ton (000’s) 616 578 Sales v
Slide 17: 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 Q1 2014 Q1 Net Sales $ 356 $ 400 Gross margin 159 182 - As percent of sales 44.6% 45.5% Sales volume by product ton (000’s) 1,317 1,451 Sales volume
Slide 18: Segment Results: Other
Segment Results: Other* 18 * Other segment primarily includes: ammonium nitrate (AN); diesel exhaust fluid (DEF); and urea liquor. Nutrient tons represent the tons of nitrogen within the product tons. In millions, except percentages and per ton amounts 2015 Q1 2014 Q1 Net Sales $ 98 $ 99 Gross margi
Slide 19: For more information, please visit www.cfindustries.com
For more information, please visit www.cfindustries.com 19
Slide 20: Reconciliation of EBITDA and Selected Items
Reconciliation of EBITDA and Selected Items (in millions) 20 2015 Q1 2014 Q1 Net earnings attributable to common stockholders $ 230.6 $ 708.5 Interest expense (income) – net 33.5 39.8 Income taxes 112.7 413.2 Depreciation and amortization 115.4 105.3 Less: Other adjustments(1) (6.1) (7.1) EBITDA(1)
Slide 21: Donaldsonville Expansion Site Overview
21 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 22: Donaldsonville Expansion Urea Plant Status
Donaldsonville Expansion Urea Plant Status Granulation Area Urea Melt Urea Granulation Urea Melt 22
Slide 23: Donaldsonville Expansion Nitric Acid/UAN and Off-sites
Donaldsonville Expansion Nitric Acid/UAN and Off-sites CO2 Compression Package Boiler CO2 Compressor Package Boiler MCC2 Cooling Tower Nitric Acid UAN 23
Slide 24: Donaldsonville Expansion Ammonia Status
24 Reformer Flare Table Cooling Tower Control Building Donaldsonville Expansion Ammonia Status Cooling Tower Ammonia Synthesis Compressor Building
Slide 25: Port Neal Expansion Site Overview
Port Neal Expansion Site Overview Urea Warehouse 154K Tons Laydown Yard Urea Granulation 3,850 TPD Urea Synthesis Ammonia Plant 2,425 TPD Ammonia Cooling Tower Urea Cooling Tower Ammonia Storage Tanks 30K Tons Each Offsites & Utilities Lunch Tent Storage 25
Slide 26: Port Neal Expansion Ammonia Plant
Port Neal Expansion Ammonia Plant Reformer HT Converter Process Gas Cooler Convection Section Combustion Air Foundations 26
Slide 27: Port Neal Expansion Urea Plant
27 Port Neal Expansion Urea Plant Granulation Synthesis
Slide 28: Port Neal Expansion Offsites and Utilities
Port Neal Expansion Offsites and Utilities Air Receivers Demin Building Storage Tent Lime and Soda Ash Silos Utility Pipe Rack Clarifiers 28
CF Industries Holdings — Q1 2015 Earnings Presentation on 6ix