Cf Industries Holdings, Inc. · NYSE:CF
Cf Industries — Dahlman Rose Global Metals, Mining & Materials Conference 2010
18 slides from Cf Industries's conference presentation, Nov 17, 2010
Slide 1: CF Industries – Dahlman Rose Global Metals, Mining & Materials Conference
Corporate Development Supply Chain Sales Finance Legal Operations Human Resources Dv Sc Sa Fi Le Op Hr CF Industries NYSE: CF Dahlman Rose Global Metals, Mining & Materials Conference November 17, 2010
Slide 2: Steve Wilson, Chairman, President and Chief Executive Officer
Steve Wilson Chairman, President, and Chief Executive Officer 2
Slide 3: 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 4: Company Overview
Company Overview North America’s largest producer of nitrogen fertilizer and #2 in the world among public companies Third largest producer of phosphate fertilizer among public companies 83% Nitrogen 17% Phosphate Based on pro forma 2009 sales 4
Slide 5: Nitrogen Segment
Nitrogen Segment North America’s leading producer of ammonia, urea, UAN and AN Segment size doubled with acquisition of Terra Industries in April 2010 6.3 million nutrient tons and 13.5 million product tons of annual nitrogen capacity Seven nitrogen production complexes in North America, plus three
Slide 6: Phosphate Segment
Phosphate Segment World scale mine and fertilizer plant in central Florida 3.5 million tons of rock annually 2 million tons annual DAP/MAP capacity Strong position in domestic phosphate fertilizer market Access to export markets through Tampa port facility and Keytrade relationship Exported to 21 co
Slide 7: Strong Demand Factors
Strong Demand Factors 2010 2011 Change Corn 88.2 92.0 +3.8 Wheat 53.6 58.0 +4.4 Rising Planted Acreage million acres in U.S. Corn Wheat High Grain Prices Fertilizer is Affordable Fertilizer cost as a percent of farm revenue Long Fall Application Window 2010 U.S. Corn Harvest Progress Source: INO Sou
Slide 8: Fertilizer Demand Outlook: Best Since 2007
Source: AAPFCO, CF Fertilizer Demand Outlook: Best Since 2007 Fertilizer Year Basis N P K Total (000 Nutrient Tons) 2007 13,194 4,572 5,133 22,899 2008 12,561 4,247 4,660 21,468 2009 12,031 3,648 3,265 18,944 2010 Est. 12,807 4,182 3,961 20,950 2011 Fct. 13,177 4,519 4,556 22,252 2010–11 Change Perc
Slide 9: Supportive Supply Dynamics
Supportive Supply Dynamics Nitrogen Low global and domestic inventories Longer than expected plant outages in eastern Europe Low operating rate in China due to economics, energy shortages and pollution controls Production issues among smaller domestic competitors Phosphate Low global and domestic in
Slide 10: Price Realizations Lag Publication Prices
Price Realizations Lag Publication Prices Average CF realized price per short ton vs. Midwest publication price 2007 2010 2009 2008 2007 2010 2009 2008 Realized prices lag publication prices because of forward sales Spot prices rose dramatically during Q3 2010 In Q3, CF export sales booked in Q2 low
Slide 11: Midwest Urea/UAN Prices and Production
Midwest Urea/UAN Prices and Production ($ per Unit of Nitrogen) Production mix tilted toward urea Production mix tilted toward UAN Urea Price UAN Price Source: Green Markets, CF 11
Slide 12: Natural Gas Prices
Natural Gas Prices NYMEX Forward Strip $/MMBtu Nov. 12, 2009 Nov. 12, 2010 Lower prices Flatter curve
Slide 13: Ammonia Business Mix
Ammonia Business Mix Agricultural Industrial Advantages High margins, strong CF market position Need is constant Requirements Transportation and in-market storage Consistent availability Pricing Basis Midwest dealer price Indexed to Tampa or cost-plus Recent Experience Spot supply outages due to hig
Slide 14: Capital Projects
Capital Projects At Time of Acquisition Reduced planned expenditures to enable debt repayment under a stressed industry scenario Suspended some previously approved projects Targeted $205 million in 2010 and 2011 Industry conditions permit increased investment in attractive projects Today High cash f
Slide 15: Terra Integration
Terra Integration Progress faster than originally estimated Identified synergies above original range of $105-135 million Run rate synergies of ~$100 million expected to be achieved by year-end Outperformance in operational areas, especially transportation and logistics 15
Slide 16: Diesel Exhaust Fluid (DEF)
Diesel Exhaust Fluid (DEF) Urea-based fluid to reduce NOx emissions from commercial vehicles High growth High margin CF Industries well positioned to lead Leading U.S. provider Domestic production preferred due to quality requirements and shipping costs Recently completed detailed study Validated ap
Slide 17: Debt Repayment
Debt Repayment (millions) Q2 2010 Q3 2010 Term loan repayment $ 200 $ 350 Total debt at period end $ 2,601 $ 2,256 Less cash 601 648 Plus customer deposits 11 321 Net debt at period end $ 2,011 $ 1,928 Good progress in repaying term loan Remaining balance of $650 million Plan to continue paying down
Slide 18: Frequently Asked Questions
Frequently Asked Questions Have you changed your forward selling philosophy? What is your approach to natural gas hedging? What are your export commitments or plans for upcoming quarters? What tax rate should we assume for the fourth quarter and 2011? What are your priorities for excess cash flow? 1
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