Cf Industries Holdings, Inc. · NYSE:CF
Cf Industries — Non-Deal Roadshow (March 2011)
25 slides from Cf Industries's roadshow presentation, Mar 22, 2011
Slide 1: CF Industries March 2011 Investor Visits
Corporate Development Supply Chain Sales Finance Legal Operations Human Resources Dv Sc Sa Fi Le Op Hr CF Industries NYSE: CF March 2011 Investor Visits
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: 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 80% Nitrogen 20% Phosphate Based on 2010 consolidated sales
Slide 4: 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 6.5 million nutrient tons annual nitrogen capacity (converted to 14.0 million product tons) Seven nitrogen production complexes in North America, plu
Slide 5: CF Industries Nitrogen Value Drivers
CF Industries Nitrogen Value Drivers Cost advantage vs. global swing producer in eastern Europe $2+ per MMBtu natural gas cost advantage Significant efficiency advantage Transportation cost advantage ($60-70 per ton for ammonia) Value created by ammonia storage/distribution Premium for in-market sta
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 over
Slide 7: Global Grain Demand Drives Long-Term Growth in Fertilizer Industry
Global Grain Demand Drives Long-Term Growth in Fertilizer Industry Global Grain Production Source: USDA, FAS Harvested Area
Slide 8: U.S. Corn Demand and Stocks
U.S. Corn Demand and Stocks (Billion Bushels) Source: USDA, CF
Slide 9: U.S. Crop Economics - 2011
U.S. Crop Economics - 2011 Corn Soybeans Wheat Revenue Yield (bu/acre) 162.6 44.3 45.7 Season Average Farm Price $5.26 $11.86 $6.88 Total Revenue $855 $526 $314 Costs (per acre) Variable Costs Fertilizers $132 $24 $60 Crop Protection - Herbicides 34 19 12 Seed Costs 88 62 19 Other (Interest, Insuran
Slide 10: Farmer Corn Economics
Source: USDA, Green Markets, CF Farmer Corn Economics Fertilizer Cost as a Percent of Projected Revenue (Dollars per Acre) (Percent of Revenue)
Slide 11: 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 12,591 4,246 4,664 21,501 2009 11,434 3,192 3,090 17,716 2010 Est. 12,812 4,184 3,948 20,944 2011 Fct. 13,341 4,563 4,856 22,761 2010–11 Change Perc
Slide 12: Fertilizer Prices
Fertilizer Prices (Price per Short Ton) Source: Green Markets 2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011 Urea Mid-Cornbelt UAN Mid-Cornbelt Ammonia Mid-Cornbelt DAP Central Florida
Slide 13: China Export Tariff
China Export Tariff High export tariff season lengthened Reduces expected export supply of urea and DAP Low season tariff of 7% or higher formula if prices are above base price 2011 2010 2011 2010 High Season Export Tax (110 Percent) Low Season Tax (7 Percent) 2010 Special Tax (Initially 7 Percent,
Slide 14: Falling Natural Gas Prices
Falling Natural Gas Prices Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec CF Industries has avoided locking in gas costs without forward sales Peak cash price at Henry Hub in Q4 was $4.54, despite cold weather Gas production and storage expected to remain at/near record levels Source: Bloomberg Nat
Slide 15: NYMEX Natural Gas Forward Strip
NYMEX Natural Gas Forward Strip $/MMBtu March 17, 2010 March 17, 2011 Lower prices Flatter curve
Slide 16: 2010 Financial Highlights
2010 Financial Highlights In millions, except percentages and EPS 2010 Q4 2009 Q4 2010 Year 2009 Year Net sales $ 1,238 $ 507 $ 3,965 $ 2,608 Gross margin 484 126 1,180 839 - As percent of sales 39% 25% 30% 32% Net earnings attributable to common $ 200 $ 51 $ 349 $ 366 Earnings per diluted share 2.7
Slide 17: 4th Quarter Nitrogen Segment Results
4th Quarter Nitrogen Segment Results Source: Green Markets 09 10 In millions, except as noted 2010 Q4 H/(L) 2009 Q4 H/(L) 2010 Q3 Sales $ 1,003 $ 651 $ 268 Gross margin 421 311 280 - Percent 42% 11 pts 23 pts Volume (000 st) 3,350 1,880 369 Average selling prices ($/st) - Ammonia $ 452 $ 144 $ 58 -
Slide 18: 4th Quarter Phosphate Segment Results
4th Quarter Phosphate Segment Results Source: Green Markets 09 10 In millions, except as noted 2010 Q4 H/(L) 2009 Q4 H/(L) 2010 Q3 Sales $ 235 $ 80 $ 53 Gross margin 63 47 35 - Percent 27% 16 pts 11 pts Volume (000 st) 477 (74) 26 - DAP 354 (136) 25 - MAP 123 62 1 - Domestic 393 116 133 - Export 84
Slide 19: Reduction in Net Debt
Reduction in Net Debt Millions Other Net Debt Term Loan B-1 Refinanced with Equity Term loan was repaid in full in the first quarter
Slide 20: Terra Integration
Terra Integration Progress faster than originally estimated Identified synergies above original range of $105-135 million Run rate synergies of ~$110 million achieved by year-end Outperformance in operational areas, especially transportation and logistics
Slide 21: DEF Expansion
DEF Expansion Industry ramp-up is accelerating CF Industries is North America’s capacity leader, making it the low-risk choice for customers Expanding urea liquor capacity Yazoo City, MS and Woodward, OK projects completed Port Neal, IA project underway Courtright, ON project planned for later this
Slide 22: 2010 Accomplishments
2010 Accomplishments Acquired Terra, closing and completing financing in 45 days Demonstrated integration progress ahead of target Identified synergies beyond $105-$135 million target Accelerated achievement ($110 million run rate by year-end) Succeeded to make transition seamless to customers Deliv
Slide 23: Outlook/Summary
Outlook/Summary High crop prices and farm profitability support strong plantings and fertilizer prices Tight supplies of UAN and phosphates Subdued natural gas costs Recent strong fertilizer prices not yet fully reflected in income statement High cash flow expected to continue Repaid term loan in fu
Slide 24: For more information, please visit www.cfindustries.com
For more information, please visit www.cfindustries.com
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation (in millions) Reconciliation of debt to net debt (net cash): December 31, 2010 December 31, 2009 Total Debt $ 1,959.0 $ 4.7 Less: cash, cash equivalents and short-term investments 800.8 882.1 Plus: customer advances 431.5 159.5 Net debt (net cash) $ 1,589.7 $ (717.9) Net debt
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