Cf Industries Holdings, Inc. · NYSE:CF
Cf Industries — 2008 Global Fertilizer Conference
41 slides from Cf Industries's conference presentation, Apr 2, 2008
Slide 1: 2008 Global Fertilizer Conference
“We Will Become A Leading Global Marketer, Producer And Supplier Of High-Quality, Low-Cost Fertilizer Products And Services, Creating Sustained Value For Shareholders, Customers And Employees.” CF Industries Holdings, Inc. NYSE: CF 2008 Global Fertilizer Conference April 2, 2008
Slide 2: For CF Industries Today . . . Stephen R. Wilson
2 For CF Industries Today . . . Stephen R. Wilson Chairman, President & CEO
Slide 3: Safe Harbor Statement
3 Safe Harbor Statement Certain statements contained in this presentation may constitute "forward-looking statements" within the meaning of federal securities laws. All statements in this presentation, other than those relating to historical information or current condition, are forward-looking stat
Slide 4: Today's Presentation
4 Today’s Presentation • A quick overview of CF Industries • Our strong fourth quarter and 2007 performance • Our outlook for spring and beyond • CF Industries’ ability to capitalize on that outlook
Slide 5: A Quick Overview of CF Industries
5 A Quick Overview of CF Industries • A leading North American manufacturer and distributor of nitrogen and phosphate fertilizer • The two largest nitrogen fertilizer complexes in North America, including Canada’s largest at Medicine Hat, Alberta • A large, integrated phosphate operation in Central
Slide 6: A Quick Overview of CF Industries: Distribution and Market Share
6 A Quick Overview of CF Industries • Extensive Corn Belt based distribution system • Corn Belt* market share in fertilizer year 2006: – 26% nitrogen – 19% phosphate • Global growth platform via KEYTRADE acquisition *ND, SD, NE, MN, IA, MO, IL, OH, IN & WI
Slide 7: An Outstanding Fourth Quarter
7 $135.4 $8.0 0 20 40 60 80 100 120 140 160 2006 2007 $852.5 $526.4 0 100 200 300 400 500 600 700 800 900 2006 2007 A Best-Ever 2007 Performance An Outstanding Fourth Quarter Sales Millions of Dollars Earnings Millions of Dollars
Slide 8: A Best-Ever 2007 Performance
8 $2,032.9 $2,756.7 0 500 1,000 1,500 2,000 2,500 3,000 2006 2007 A Best-Ever 2007 Performance Company announced five-fold increase in quarterly dividend to $0.10 An Outstanding 2007 $33.3 $372.7 0 50 100 150 200 250 300 350 400 2006 2007 Sales Millions of Dollars Earnings Millions of Dollars
Slide 9: A Robust First Half Outlook
9 A Robust First Half Outlook • Record crop prices should spur strong planting • For phosphate, global demand is strong and worldwide supply is tight • For nitrogen, corn acreage may decline, but higher acreage for other crops, plus increased application rates, should be offsets
Slide 10: Spring Weather – Not Unusual – Is Wet
10 Spring Weather – Not Unusual – Is Wet !! Palmer Drought Index Long-Term (Meteorological) Conditions March 9, 2008 - March 15, 2008 National Climatic Data Center, NOAA based on data provided by the Climate Prediction Center, NOAA extreme drought severe drought moderate drought mid-range moderately
Slide 11: Can CF Industries Capitalize on This Opportunity?
11 • World-scale manufacturing facilities • Strategically located, flexible distribution system • Long-standing customer relationships • Leading positions in key U. S. Corn Belt states (26% nitrogen, 19% phosphate) • Forward Pricing Program (FPP) • Strong financial position Can CF Industries Capital
Slide 12: Nitrogen – World Class and Flexible
12 Nitrogen – World Class and Flexible • North America’s two largest nitrogen complexes: efficient and operated with a “continuous improvement” philosophy • “Make versus buy” capability at Donaldsonville Nitrogen Complex allows import product to supplement or replace production • Ability to shift be
Slide 13: Phosphate: 'Uncharted Waters'
13 Phosphate: ‘Uncharted Waters’ • World phosphate markets are extremely tight, with growing demand and no significant new capacity before 2010/2011 • U.S. is net exporter of phosphate, with approximately 25 percent of world phosphate supply
Slide 14: Phosphate: Self-Sufficient in Rock with Strong Reserves
14 • CF Industries operates a balanced, productive phosphate business in Central Florida • Phosphate rock mine and beneficiation plant are industry’s newest We Are 100% Self-Sufficient in Phosphate Rock with Strong Reserve Position Phosphate: ‘Uncharted Waters’
Slide 15: Phosphate: Plant City De-bottlenecking and Capacity
15 • De-bottlenecking at Plant City chemical plant in ‘07 added approximately 60,000 tons more product for ‘08 • Complex now has 2.1 million tons of DAP and MAP capacity • Port of Tampa facilities provide access to export markets Phosphate: ‘Uncharted Waters’
Slide 16: Phosphate Market Has Tightened Dramatically
16 0 100 200 300 400 500 600 700 800 900 1,000 J J02 J J03 J J04 J J05 J J06 J J07 J J08 Sulfur Rock Ammonia Upgrading Phosphate Market Has Tightened Dramatically Source: FMB Group DAP (price$/short ton Florida) Estimated cost for non-integrated producer June 2001 - Current Skyrocketing sulfur and r
Slide 17: Industry Leading Flexibility in Distribution
17 Industry Leading Flexibility in Distribution • One of the industry’s largest networks of terminals and warehouses, many with access to multiple transportation modes • Ability to serve Midwestern ammonia terminals and urea warehouses from either nitrogen complex • In-market storage capacity is app
Slide 18: Innovative Forward Pricing Program
18 Innovative Forward Pricing Program • Locks in assured supply and price for customers – and assured nitrogen margins for CF Industries • Prices and margins aren’t based on formula – they reflect our expectations for market conditions • Our forward prices for phosphate – and our “appetite” for phos
Slide 19: An Optimistic 'Present,' But What about The Future?
19 An Optimistic ‘Present,’ But What about The Future?
Slide 20: Specific Strategic Initiatives: Uranium Recovery
20 Specific Strategic Initiatives: Uranium Recovery • Uranium recovery opportunity at Plant City Phosphate Complex – Extracted from phosphate fertilizer production – Key is procuring long-term supply contracts with utilities – Economic returns promising
Slide 21: Specific Strategic Initiatives: Proposed Nitrogen Complex in Perú
21 • On November 19, CF Industries won bidding for natural gas pact in Perú • Proposed facility is world-scale nitrogen complex • Markets in region include Perú, Central & South America, and Mexico Specific Strategic Initiatives: Proposed Nitrogen Complex in Perú
Slide 22: Specific Strategic Initiatives: Global Platform for Marketing & Sourcing
22 • Acquisition of 50 percent of KEYTRADE, 3 million tonne per year global fertilizer trader • Markets fertilizer in 65 nations • Acquisition provides established, extensive global platform to pursue growth and diversification • Presence in Perú and rest of Central & South America Specific Strategi
Slide 23: Specific Strategic Initiatives: Gasification Project
23 Specific Strategic Initiatives: Gasification Project • Gasification/ammonia complex at Donaldsonville Nitrogen Complex – Reduce dependence on North American natural gas by converting substantial portion of complex to low-cost petcoke/coal blend – Increase operational flexibility – Evaluating alte
Slide 24: Positioned to Win
24 Positioned to Win • Worldwide demand for grain has created robust crop pricing and fertilizer demand • Absent weather problems, overall planting could be even stronger in ’08 • CF Industries is well positioned to adapt and capitalize on today’s opportunity
Slide 25: @CFindustries_
™ @CFindustries_
Slide 26: Appendix
26 APPENDIX
Slide 27: Innovative Forward Pricing Program
27 Innovative Forward Pricing Program > 52% N and 41% P sold under FPP in Q1 ‘07 Challenge • Natural gas and nitrogen fertilizer prices are highly volatile Benefits • Margin certainty • Improved production scheduling • Reduced inventory risk • Enhanced liquidity • Integration with customers Solution
Slide 28: Demand Growth Is a Global Phenomenon
28 Demand Growth Is a Global Phenomenon 0 200 400 600 800 1000 1200 90 92 94 96 98 00 02 04 06 08 10 12 14 Source: USDA Rest of World EU China U.S. Growth: 1.5% Growth: 3.6% MM Metric Tons Coarse Grain Consumption Wild cards: China, world economic growth, energy prices
Slide 29: World Coarse Grain Ending Stocks
29 World Coarse Grain Ending Stocks (MM Tonnes) 0 50 100 150 200 250 96 97 98 99 00 01 02 03 04 05 06 07 08 09 Source: USDA Note: Certain columns/rows may not “tie” due to “rounding” U.S. China Rest of World CF Fct. 1998 2001 2004 2007 United States 51.4 45.0 58.8 39.4 China 123.4 85.6 37.0 29.5 EU-
Slide 30: Growth in U.S. Corn Demand Has Accelerated
30 Growth in U.S. Corn Demand Has Accelerated Billion Bushels Source: USDA 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 91 93 95 97 99 01 03 05 07 09 Exports Ethanol Food & Industrial Feed Ethanol and rising standards of living, especially in India and China, are driving growth Growth: 1.6% Growth: 4.7%
Slide 31: Continued Growth for Ethanol
31 Continued Growth for Ethanol • Margins for ethanol are positive, thanks to increased prices for ethanol and DDGs • U.S. renewable Fuel Standard mandates 15 billion gallons of corn-based ethanol by 2015 • Capacity today is 7.9 billion gallons, with 5.6 billion more due to come on stream by end of
Slide 32: U.S. Corn Demand for Ethanol Production
32 U.S. Corn Demand for Ethanol Production Billion Bushels Source: USDA, Doane % of Production Marketing Years 0.0 1.0 2.0 3.0 4.0 5.0 6.0 1995 1997 1999 2001 2003 2005 2007 2009 2011 0% 5% 10% 15% 20% 25% 30% 35% 40%
Slide 33: U.S. Average Farm Level Crop Prices
33 0.00 2.00 4.00 6.00 8.00 10.00 12.00 2000 2001 2002 2003 2004 2005 2006 2007F Source: USDA Marketing Year Record High Record High Record High Soybeans Wheat Corn U.S. Average Farm Level Crop Prices ($/Bushel) The Markets
Slide 34: Demand-Driven Environment Supported Strong Nitrogen Pricing
34 Demand-Driven Environment Supported Strong Nitrogen Pricing (World Nitrogen Price Index: Average 2002 = 100) 0 100 200 300 400 500 J02 J03 J04 J05 J06 J07 J08 NH3 Urea Source: FMB Group January 2002 – Current Price Index
Slide 35: World Nitrogen Market Is Tighter than Previous Cycles
35 World Nitrogen Market Is Tighter than Previous Cycles (World Nitrogen Surplus) 0 2 4 6 8 10 12 14 90 92 94 96 98 00 02 04 06 08 10 Calendar Years Source: Fertecon, CF Industries Although excess capacity is coming on stream, surplus is not expected to match peaks of previous two cycles Million ton
Slide 36: World Phosphate Market Is Tighter than Nitrogen
36 World Phosphate Market Is Tighter than Nitrogen 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 07 08 09 10 11 Capacity Increase Demand Increase Calendar Years Source: Fertecon, CF Industries MM tonnes of P2O5
Slide 37: The Battle for Acreage is On!
37 The Battle for Acreage is On! U.S. Planted Acreage – Major Crops (MM Acres) Source: USDA, CF Industries Projected Change 2006 2007 2008 2007-08 Corn 78.3 93.6 86.0 -7.6 Wheat 57.3 60.5 63.8 3.3 Soybeans 75.5 63.7 74.7 11.0 Cotton 15.3 10.9 9.2 -1.7 Other 89.5 91.5 87.3 -4.2 Total 315.9 320.2 321.
Slide 38: East European Nitrogen Capacity and Exports
38 East European Nitrogen Capacity and Exports (000/Tonnes) Source: Fertecon, CF Note: Certain columns/rows may not “tie” due to “rounding” Nitrogen Capacity Ammonia Urea UAN AN Total N Lithuania 853 82 9 352 129 572 Bulgaria 929 16 25 0 94 135 Poland 2,446 123 58 200 51 432 Romania 2,276 25 437 200
Slide 39: We Are Committed to Continuous Improvement
39 Increased Productivity at Florida Phosphate Operation Natural Gas and Capacity Gains at Medicine Hat Total Tons P2O5 Produced Per Employee 1,100 1,150 1,200 1,250 1,300 1,350 1,400 1,450 1,500 1,550 1,600 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 MMBtu of Natural Gas Per Ton 30.00 31.00 3
Slide 40: Steady Efficiency Improvements at Donaldsonville
40 Steady Efficiency Improvements at Donaldsonville * Representative of complex’s four ammonia plants DONALDSONVILLE AMMONIA NO. 3 PLANT MMBTU/TON * 31.5 32.0 32.5 33.0 33.5 34.0 34.5 35.0 35.5 36.0 1980 1985 1990 1995 2000 2005 2010 YEAR MMBTU/TON Significantly less natural gas per product ton We A
Slide 41: Camisea Project General Description
CAMISEA PROJECT GENERAL DESCRIPTION 41
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