Cf Industries Holdings, Inc. · NYSE:CF
Cf Industries — Q1 2016 Earnings Presentation
23 slides from Cf Industries's earnings presentation, May 5, 2016
Slide 1: Note Regarding Non-GAAP Financial Measures
2 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 and adjusted EBITDA, adjusted net earnings, and adjusted net earnings per share, which are non-GAAP financia
Slide 2: Safe Harbor Statement
Safe Harbor Statement 3 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 su
Slide 3: First Quarter 2016 Highlights
4 New Donaldsonville UAN plant began production in March; approximately 95,000 tons produced through the end of the quarter New Donaldsonville ammonia plant is mechanically complete; pre-commissioning and commissioning activities taking place New record urea production of 819,000 tons Financial Resu
Slide 4: Nitrogen Market Outlook
Nitrogen Market Outlook 5 Overall outlook remains positive, however, new capacity coming on line later this year is expected to keep nitrogen prices under pressure. Economics support planted corn area forecast of ~92 million acres, with possible upside given a positive spring planting outlook and fa
Slide 5: Farm Economics Continue to Favor Corn Plantings
6 Farm Economics Continue to Favor Corn Plantings U.S. Farmer Anticipated Returns Source: USDA, Green Markets, CME, CF Industries Calendar Year; As of April 20, 2016 Source: USDA, Green Markets, CF Industries Marketing Year of September 1 – August 30 Revenue (U.S. Dollar per Acre) Ten-Year Average =
Slide 6: Capacity Expansion Update
Capacity Expansion Update Donaldsonville UAN plant began production in early March 2016, producing approximately 95,000 tons through the end of the quarter Ammonia plant is mechanically complete; pre-commissioning and commissioning activities taking place Port Neal Ammonia and urea plants projected
Slide 7: Nitrogen Capacity Per 1,000 Shares Outstanding Driving Increased Cash Flow
8 Annual Nitrogen Equivalent Tons per 1,000 Shares Outstanding Driving Increased Cash Flow Capacity Per Share Nitrogen Capacity Per 1000 Shares Upside from Potential Future Buybacks Increased cash flow capacity as measured by N/1000 shares by 173% since 2010 Capacity projects underway are expected t
Slide 8: International Energy Prices Have Declined Since Mid-2014
International Energy Prices Have Declined Since Mid-2014 Oil prices have declined significantly from around $115/barrel (Brent Front Month) in June 2014 to a low near $28/barrel in January 2016, rebounding to approximately $48/barrel recently Principal drivers: Tapering of China demand, U.S. supply
Slide 9: North American Production Costs Remain Well Below Urea Floor Price Range
The global nitrogen cost curve reflects differences in feedstock and logistics costs The monthly shipment range is calculated using consuming regions that represent two-thirds of global demand The cost curve suggests urea floor prices in the range of $205 to $250 per ton, delivered to the U.S. Gulf
Slide 10: Year-Over-Year Change in the Global Cost Curve
Year-Over-Year Change in the Global Cost Curve 11 Source: Industry Publications, Fertecon, CRU, Integer, CF Impacts to costs include: Depressed hydrocarbon pricing Lower contract gas Historically-low freight rates Lower coal prices Declines in a number of global currencies Production capacity of app
Slide 11: North American Producers Remain Highly Profitable
Source: FERTECON, CRU, Integer, CF Urea Price/Production Cost In U.S. Dollars Per Ton 12 North American Producers Remain Highly Profitable Freight/Loading Other Cash North American natural gas cost assumed at an average price of $2.00 per MMBtu based on approximate spot pricing as of 4/19/16. Assume
Slide 12: North American Producers Remain Highly Profitable
North American Producers Remain Highly Profitable Illustra 60% cash margin for North American producer with $2.00/MMBtu natural gas at marginal producer cost level of $250 per short ton a 50% cash margin for North American producer with $2.00/MMBtu natural gas at $200 per short ton market price Curr
Slide 13: Financial Highlights
Financial Highlights See slide 15 for reconciliation of EBITDA and Adjusted EBITDA. See slide 16 for reconciliation of adjusted net earnings and adjusted net earnings per diluted share. As of March 31, 2016, the company had 233 million shares outstanding. On June 17, 2015, CF Industries common stock
Slide 14: Non-GAAP: Reconciliation of Net Earnings to EBITDA and Adjusted EBITDA
Non-GAAP: Reconciliation of Net Earnings to EBITDA and Adjusted EBITDA EBITDA is defined as net earnings attributable to common stockholders plus interest expense (income)-net, income taxes, and depreciation and amortization. Other adjustments include the elimination of loan fee amortization that is
Slide 15: Non-GAAP: Reconciliation of Net Earnings Per Diluted Share to Adjusted Net Earnings
Non-GAAP: Reconciliation of Net Earnings and Net Earnings Per Diluted Share to Adjusted Net Earnings and Adjusted Net Earnings Per Diluted Share 16 Three months ended March 31, Three months ended March 31, 2016 2015 After-tax amounts 2016 EPS Impact After-tax amounts 2015 EPS Impact (in millions, ex
Slide 16: Donaldsonville Expansion Site Overview
17 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 17: Donaldsonville Expansion Operating Urea Plant
Donaldsonville Expansion Operating Urea Plant Granulation Area Urea Melt Urea Granulation Urea Melt 18 Urea Granulation Urea Melt Urea Granulation Urea Melt Urea Granulation Urea Melt TO BE UPDATED
Slide 18: Donaldsonville Expansion Fully Operational Nitric Acid/UAN and Offsites
Donaldsonville Expansion Fully operational Nitric Acid/UAN and Offsites CO2 Compression Package Boiler CO2 Compressor Package Boiler Cooling Tower Nitric Acid UAN 19 CO2 Compressor Nitric Acid Package Boiler UAN CO2 Compressor Cooling Tower CO2 Compressor Package Boiler Nitric Acid UAN Cooling Tower
Slide 19: Donaldsonville Expansion Ammonia Plant
Donaldsonville Expansion Ammonia Plant CO2 Compression Package Boiler CO2 Compressor Package Boiler Cooling Tower Nitric Acid UAN 20 CO2 Compressor Nitric Acid Package Boiler UAN CO2 Compressor Cooling Tower
Slide 20: Port Neal Expansion Ammonia Plant
Port Neal Expansion Ammonia Plant 21
Slide 21: Port Neal Expansion Urea Plant- Granulation
22 Port Neal Expansion Urea Plant- Granulation
Slide 22: Port Neal Expansion Urea Warehouse Interior
Port Neal Expansion Urea Warehouse Interior 23
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