Cf Industries Holdings, Inc. · NYSE:CF
Cf Industries — Investor Presentation (June 2011)
21 slides from Cf Industries's investor presentation, Jun 21, 2011
Slide 1: CF Industries Investor Visits June 2011
Corporate Development Supply Chain Sales Finance Legal Operations Human Resources Dv Sc Sa Fi Le Op Hr CF Industries NYSE: CF Investor Visits June 2011
Slide 2: Forward-looking statements
Certain statements contained in this communication may constitute "forward-looking statements." All statements in this communication, other than those relating to historical information or current condition, are forward-looking statements. These forward-looking statements are subject to a number of
Slide 3: Record Profits and Cash Flow
Record Profits and Cash Flow Any-quarter record First quarter record 2006 2007 2008 2009 2010 2011 Earnings per Share Operating Cash Flow (millions)
Slide 4: Company Overview
Company Overview North America’s largest producer of nitrogen fertilizer and #2 in the world Third largest producer of phosphate fertilizer among public companies 80% Nitrogen 20% Phosphate Based on 2010 consolidated sales
Slide 5: Manufacturing and Distribution Locations
Manufacturing and Distribution Locations Medicine Hat Courtright Port Neal Woodward Verdigris Yazoo City Donaldsonville Plant City Hardee (Mine) Ritzville Velva Grand Forks Glenwood Pine Bend Blair Garner Aurora Fremont Spencer Tampa Palmyra Mt. Vernon Cowden Terre Haute Frankfort Huntington Kingsto
Slide 6: Nitrogen Segment Sales Volume
Nitrogen Segment Sales Volume (000 st) North America’s leading producer of all four primary nitrogen products World’s leading producer of UAN Segment size doubled with acquisition of Terra Industries in April 2010 6.5 million nutrient tons annual nitrogen capacity (converted to 14.0 million product
Slide 7: Nitrogen Production Capacities
Nitrogen Production Capacities (000 Short Tons) Location Gross Ammonia Net Ammonia UAN (32%) Urea Ammonium Nitrate Fertilizer Compounds Product Tons for Sale Donaldsonville, LA 2,850 910 2,415 1,680 0 0 5,005 Medicine Hat, AB 1,250 788 0 810 0 0 1,598 Verdigris, OK 1,080 294 1,965 0 0 0 2,259 Yazoo
Slide 8: UAN: A High Value-Added Product
UAN: A High Value-Added Product North American UAN Production Capacity (million tons/year, 32% basis) Attributes Non-volatile liquid Contains urea (fast release) and AN (slow release) Typically 28-32% nitrogen 2.6 tons of UAN required to replace the nitrogen content of 1 ton of ammonia Advantages Ca
Slide 9: Nitrogen Segment Results
Nitrogen Segment Results Source: Green Markets 2009 2010 2011 In millions, except as noted 2011 Q1 H/(L) 2010 Q1 H/(L) 2010 Q4 Sales $ 926 $ 599 $ (77) Gross margin 443 345 22 - Percent 48% 18 pts 6 pts Volume (000 st) 2,841 1,643 (509) Average selling prices ($/st) - Ammonia $ 494 $ 173 $ 42 - Urea
Slide 10: Low Gas Prices Despite Strong Demand
Low Gas Prices Despite Strong Demand Storage inventories reached a new record high in November, exceeding the five year average by nearly 400 BCF Winter 2010/2011 was the coldest in a decade, which boosted heating demand and erased nearly all of the surplus storage compared to the five year average
Slide 11: Phosphate Operations Advantages
Phosphate Operations Advantages World scale operation 3.5 million tons of phosphate rock annually 1 million tons of P2O5 2 million tons DAP/MAP Fully integrated system Well-balanced operations (rock/beneficiation/ chemical plant capacity) Excellent location to serve domestic and export markets Nimbl
Slide 12: Phosphate Segment Results
Phosphate Segment Results Source: Green Markets In millions, except as noted 2011 Q1 H/(L) 2010 Q1 H/(L) 2010 Q4 Sales $ 248 $ 73 $ 13 Gross margin 83 51 20 - Percent 33% 15 pts 6 pts Volume (000 st) 440 (40) (37) - DAP 331 (43) (23) - MAP 109 3 (14) - Domestic 394 5 1 - Export 46 (45) (38) Average
Slide 13: Reduction in Net Debt
Reduction in Net Debt Millions Term loan was repaid in full in the first quarter See slide 21 for reconciliation of net debt
Slide 14: U.S. Corn Demand and Stocks
U.S. Corn Demand and Stocks (Billion bushels, marketing year basis) Source: USDA
Slide 15: Industry Conditions Compared to 2008
Max 2008 2011 Min 2011 2008 Corn Acres ‘07 ‘08 ‘11 ‘12 Industry Conditions Compared to 2008 Farm Income (2008 Actual, 2011 Fcst.) Average Oil Price (2008 Avg., 2011 YTD) Source: Bloomberg, Green Markets, USDA
Slide 16: Favorable Outlook for Corn and Natural Gas
Favorable Outlook for Corn and Natural Gas Source: USDA, EIA, Bloomberg Projected U.S. Corn Plantings Projected U.S. Corn Plantings (million acres) Avg. Natural Gas Cost per MMBtu at Henry Hub
Slide 17: Economics Drive Ethanol, Not Policy
Economics Drive Ethanol, Not Policy Note: 2.8 bushels/gallon of ethanol; gasoline $/gal ~ 3% of oil price/barrel Corn Price ($/bushel) Oil Price ($/barrel) Blender Break-even Ethanol Blender Economics (Last 52 Weeks)
Slide 18: China Urea Export Tariff
China Urea Export Tariff $U.S. per tonne at port China’s low export tariff season for urea extends from July through October The sliding scale tariff would be higher than 7% at prevailing prices Production costs in China have risen with energy prices Expect significantly lower exports in 2011 vs. 20
Slide 19: Global Trends Favoring CF Industries
Global Trends Favoring CF Industries U.S. Shale Gas Supply Oil Prices Higher-Protein Diets Population Growth Source: Bloomberg, U.S. Census Bureau, USDA, FAS Million Tonnes
Slide 20: [LOGO]
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Slide 21: Non-GAAP Information
Non-GAAP Information Net debt (net cash) is defined as total debt minus cash, cash equivalents and short-term investments, plus customer advances. We include customer advances in this calculation to reflect the liability associated with our obligations to supply fertilizer in the future, which offse
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