Cf Industries Holdings, Inc. · NYSE:CF
Cf Industries — Q2 2015 Earnings Presentation
26 slides from Cf Industries's earnings presentation, Aug 6, 2015
Slide 1: 2015 Second Quarter Financial Results
2015 Second Quarter Financial Results August 5, 2015 NYSE: CF
Slide 2: Safe Harbor Statement
Safe Harbor Statement All statements in this communication, other than those relating to historical facts, are “forward-looking statements.” These forward-looking statements are not guarantees of future performance and are subject to a number of assumptions, risks and uncertainties, many of which ar
Slide 3: Strong Operating Performance in Second Quarter
3 Record safety performance: lowest ever 12-month recordable incidence rate of 0.89 During the first six months of 2015, ammonia plants ran at system-wide capacity utilization rate of 99 percent while six ammonia terminals set distribution records Continued cost advantage of low price North American
Slide 4: Capacity Expansion Remains On-track
Capacity Expansion Remains On-track Donaldsonville Urea plant expected to be running late in 3Q or early 4Q 2015 Piping system testing is ramping up in urea and off-site areas Various process systems are being turned over to CF and pre-commissioned 4Q 2015 startup for new UAN plant All major equipme
Slide 5: Nitrogen Market Outlook
Nitrogen Market Outlook 5 Recent movement in corn prices has improved 2016 planting economics 2016 corn planted acres estimated at 89.5M acres, up modestly from 88.9M acres in 2015, as corn returns are better than soybeans Farmers continue to have strong liquidity Nitrogen market expected to be long
Slide 6: Gas Hedges Are In Place Through 2017
Gas Hedges Are In Place Through 2017 6 NYMEX First Of The Month Settlement/Futures Prices (5) Hedged Prices Swaps with an average strike price of $2.92/MMBtu for an average of 9.4 million MMBtus per month for July-December, 2015. Collars with a floor price of $2.30/MMBtu and a ceiling price of $3.20
Slide 7: Full Year Gas Cost Remains Below $4.00/MMBtu Until 2023
7 Full Year Gas Cost Remains Below $4.00/MMBtu Until 2023 Natural gas prices have remained favorable in 2015 due to 70 BCF/day production levels that have more than offset an increase in demand Near term prices impacted by: Continued high production levels despite a declining rig count and the impac
Slide 8: North American Production Costs Well Below Urea Floor Price
The global nitrogen cost curve reflects differences in feedstock and logistic 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 $260 to $300 per ton, delivered to the U.S. Gulf.
Slide 9: Strong track record of accretive share repurchases
9 Strong track record of accretive share repurchases Demonstrated Implementation of Capital Deployment Strategy Share Repurchase History $5.4 billion at an average price of $41 per share $0 $10 $20 $30 $40 $50 $60 $70 2008 2009 2010 2011 2012 2013 2014 2015 $500M $1.9B $1.1B $500M $1.0B $900M
Slide 10: Increasing Cash Flow Capacity Per Share
10 (Annual Nitrogen Equivalent Tons per 1,000 Shares Outstanding) Increasing Cash Flow Capacity Per Share Nitrogen Capacity Per 1000 Shares Potential upside from Future Buybacks (3) Increased cash flow capacity as measured by N/1000(3) shares by 173% since 2010 Capacity projects underway will increa
Slide 11: Unparalleled Track Record of Creating Value
CF Industries has consistently outperformed its peers and the broader market Market data as of 7/31/2015. Total shareholder returns reflect share price appreciation plus dividends reinvested into the security/index. Source: Bloomberg * Yara ADR’s trading in US dollars Five Years One Year Total Share
Slide 12: Financial Highlights
Financial Highlights See slide 18 for reconciliation of EBITDA. On June 17, 2015, CF Industries common stock split 5-for-1. All share and per-share data have been adjusted to reflect the stock split. Includes the cost of natural gas purchased during the period for use in production. Includes realize
Slide 13: Segment Results: Ammonia
Segment Results: Ammonia 13 Includes impact of tons purchased at market-based prices from PLNL and resold to The Mosaic Company. Nutrient tons represent the tons of nitrogen within the product tons. Gross ammonia production includes ammonia upgraded to urea, UAN and other products. In millions, exce
Slide 14: Segment Results: Granular Urea
Segment Results: Granular Urea 14 Nutrient tons represent the tons of nitrogen within the product tons. In millions, except percentages and per ton amounts 2015 Q2 2014 Q2 2015 YTD 2014 YTD Net Sales $ 211.0 $ 267.6 $ 423.2 $ 483.8 Gross margin 118.6 124.7 230.7 226.4 - As percent of sales 56.2 % 46
Slide 15: Segment Results: UAN
Segment Results: UAN 15 Nutrient tons represent the tons of nitrogen within the product tons. In millions, except percentages and per ton amounts 2015 Q2 2014 Q2 2015 YTD 2014 YTD Net Sales $ 407.4 $ 456.5 $ 763.1 $ 856.4 Gross margin 202.6 201.3 361.3 383.4 - As percent of sales 49.7 % 44.1 % 47.3
Slide 16: Segment Results: Other
Segment Results: Other(1) 16 Other segment primarily includes: ammonium nitrate (AN); diesel exhaust fluid (DEF); and urea liquor. Nutrient tons represent the tons of nitrogen within the product tons. In millions, except percentages and per ton amounts 2015 Q2 2014 Q2 2015 YTD 2014 YTD Net Sales $ 9
Slide 17: For more information, please visit www.cfindustries.com
For more information, please visit www.cfindustries.com 17
Slide 18: Reconciliation of EBITDA and Selected Items
Reconciliation of EBITDA and Selected Items (in millions) 18 Includes the tax benefit on loss on sale of non-operating equity method investment for $10.9 million for both the 2015 Q2 and 2015 YTD, respectively. EBITDA is defined as net earnings attributable to common stockholders plus interest expen
Slide 19: Donaldsonville Expansion Site Overview
19 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 20: Donaldsonville Expansion Urea Plant Status
Donaldsonville Expansion Urea Plant Status Granulation Area Urea Melt Urea Granulation Urea Melt 20 Urea Granulation Urea Melt
Slide 21: Donaldsonville Expansion Nitric Acid/UAN and Off-sites
Donaldsonville Expansion Nitric Acid/UAN and Off-sites CO2 Compression Package Boiler Cooling Tower Nitric Acid UAN 21
Slide 22: Donaldsonville Expansion Ammonia Status
22 Donaldsonville Expansion Ammonia Status Reformer Compressor Building Ammonia Syn-loop
Slide 23: Port Neal Expansion Site Overview
Port Neal Expansion Site Overview Urea Warehouse 154K Tons Laydown Yard Urea Granulation 3,850 TPD Urea Synthesis Ammonia Plant 2,425 TPD Ammonia Cooling Tower Urea Cooling Tower Ammonia Storage Tanks 30K Tons Each Offsites & Utilities Lunch Tent Storage 23
Slide 24: Port Neal Expansion Ammonia Plant- Reformer
Port Neal Expansion Ammonia Plant- Reformer 24
Slide 25: Port Neal Expansion Urea Plant- Granulation
25 Port Neal Expansion Urea Plant- Granulation Granulation Synthesis
Slide 26: Port Neal Expansion Urea Plant- Synthesis
26 Port Neal Expansion Urea Plant- Synthesis Granulation Synthesis
CF Industries Holdings — Q2 2015 Earnings Presentation on 6ix