Cf Industries Holdings, Inc. · NYSE:CF
Cf Industries — Merger or Acquisition (March 2016)
24 slides from Cf Industries's merger presentation, Mar 2, 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, adjusted EBITDA, adjusted net earnings, and adjusted net earnings per diluted share, which are non-GAAP fin
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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 such
Slide 3: No Offer or Solicitation; Additional Information
4 No Offer or Solicitation This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to o
Slide 4: Annual Nitrogen Equivalent Tons per 1,000 Shares Outstanding
5 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 5: Global nitrogen cost curve reflects differences in feedstock and logistics costs
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 seasonal urea floor prices in the range of $225 to $270 per ton, delivered to the U
Slide 6: North American Producers Remain Highly Profitable
Source: FERTECON, CRU, Integer, CF Urea Price/Production Cost In U.S. Dollars Per Ton 7 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 spot pricing as of 2/12/16. Assumes a market ga
Slide 7: CHS Strategic Venture
8 $2.8 billion equity investment for ~9% of CF’s production capacity CHS has the right to purchase up to: 1,095,000 tons of urea 580,000 tons of UAN Supply agreement tons have an average gross margin that reflects the average gross margin across the entire CF system CHS Strategic Venture PORT NEAL,
Slide 8: Unparalleled Growth Pipeline
9 Unparalleled Growth Pipeline Note: Capacity for Beaumont is included on a proportional basis. Excludes Natgasoline capacity. Includes 100% of CF Fertilisers UK capacity and 50% of PLNL capacity. Volume calculation includes Net Ammonia, UAN, Urea, CAN/AN, NPK, DEF, Melamine and Methanol. Expected C
Slide 9: Capacity Expansion Update
Capacity Expansion Update Donaldsonville Urea plant began production in November 2015 and has produced over 230,000 tons of granular urea through January 2016 UAN plant is mechanically complete and in the process of being commissioned Ammonia plant: welding and piping (majority of remaining work/cos
Slide 10: Strong Strategic Logic Continues to Underpin OCI Combination
Strong Strategic Logic Continues to Underpin OCI Combination 11 Attractive economics, cash-flow-per-share accretion Expect ~ $500 million in annual after-tax run-rate synergies Expect effective tax rate to drop from ~ 35% to low 20’s% Leverage extensive CF distribution network with Wever production
Slide 11: The Premier Global Footprint
The Premier Global Footprint 12 Largest North American producer with unmatched distribution network Expect to have a scale Western Europe position with Billingham, Ince and Geleen Combining Beaumont with Natgasoline (once completed, and if call option exercised) would make CF the largest North Ameri
Slide 12: 2017 North America Nitrogen Landscape
2017 North America Nitrogen Landscape (‘000 short nutrient tons) Imports Should Continue to Provide Over 20% of North America’s Nitrogen Supply 13 CF Industries Agrium Koch PCS Others Imports Note: Assumes demand growth between 2015 and 2017 is offset by exports of domestic production Source: CF Ind
Slide 13: OCI Acquired Assets
Geleen (Netherlands) Wever (US, Iowa) Beaumont (US, Texas) Global Distribution Natgasoline (US, Texas) % Acquired Ownership 100% 100% ~80% 100% 45% Production Capacity 1.2mstpa of gross ammonia 851kstpa of gross ammonia 375kstpa of gross ammonia 1.0mstpa of methanol ~2.9mstpa volume distributed 1.9m
Slide 14: OCI Process Update
Dutch 60 Day Creditor Notice Period OCI Process Update 15 Available on the SEC's website at www.sec.gov under the company name “CF B.V.” New holding company to be domiciled in the Netherlands. Oct 2015 Nov 2015 Month 1 Month 2 Month 3 Month 4 11/6/2015 S-4 Filed(1) S-4 Effective Date CF / OCI Shareh
Slide 15: New North American Ammonia Plants Announced Since 2012
Since 2012, At Least 24 New North American Ammonia Plants Have Been Announced 16 (Capacity in thousand tons per annum) Source: CF Industries and Industry Publications Announce Date Company Location Gross Ammonia Capacity Nutrient Capacity Product Focus Expansion Type Status Feb-12 Yara Belle Plaine,
Slide 16: Only a Few New Nitrogen Fertilizer Plants Have Proceeded to Construction
17 However, To Date, Only 3 New Nitrogen Fertilizer Plants Have Proceeded to Construction 1 Includes proposed new plants designed to produce at least 75K ammonia tons per year Source: CF, Industry Publications, STATSCAN, USDOC 24 Projects Announced (14.3M N Tons)1 ‘000 Nutrient Tons/Year 5 Projects
Slide 17: Donaldsonville is uniquely positioned to serve global market
Donaldsonville is uniquely positioned to serve global market Situated outside New Orleans Connected to 5 gas supply pipelines Has 6 ammonia plants and 8 upgrade units, allowing it to keep operating at full upgrade capacity even with an ammonia plant down Ongoing 600,000-800,000 stpa ammonia contract
Slide 18: Donaldsonville Export Capacity Roughly 80% of Total New North American Construction
19 Donaldsonville Export Capacity Roughly 80% of Total New North American Construction (1) Includes proposed new plants designed to produce at least 75K ammonia tons per year Source: CF, Industry Publications, STATSCAN, USDOC 24 Projects Announced (14.3M N Tons)(1) ‘000 Nutrient Tons/Year 5 Projects
Slide 19: Donaldsonville Export Capacity Roughly 80% of Total New North American Construction
Donaldsonville Export Capacity Roughly 80% of Total New North American Construction ‘000 Nutrient Tons/Year 16,0007 24 Projects ‘Announced (143M N Tons)" 5 Projects HSNO Yara Canada (TEINS) 7.6M Nutrient tons of FOO Coes imports the Imports 2015 12,000: satu Mest 4 rojects equivalentof 9world- | 14.
Slide 20: Financial Highlights
Financial Highlights In millions, except percentages, per MMBtu and EPS 2015 Q4 2015 Q4 2014 Q4 2014 Q4 2015 YTD 2015 YTD 2014 YTD 2014 YTD Net sales $ 1,115.8 $ 1,216.5 $ 4,308.3 $ 4,743.2 Gross margin $ 280.4 $ 444.3 $ 1,547.1 $ 1,778.5 - As percent of sales 25.1 % 36.5 % 35.9 % 37.5 % EBITDA(1) $
Slide 21: EBITDA Reconciliation
Three months ended December 31, Three months ended December 31, Twelve months ended December 31, Twelve months ended December 31, 2015 2015 2014 2014 2015 2015 2014 2014 (in millions) (in millions, except percentages) Net earnings attributable to common stockholders $ 26.5 $ 238.3 $ 699.9 $ 1,390.3
Slide 22: Reconciliation of Net Earnings and Diluted Net Earnings Per Share
Three months ended December 31, Three months ended December 31, Twelve months ended December 31, Twelve months ended December 31, 2015 2015 After-tax EPS Impact 2014 2014 After-tax EPS Impact 2015 2015 After-tax EPS Impact 2014 2014 After-tax EPS Impact (in millions, except per share data) (in milli
Slide 23: Non-GAAP: Reconciliation of Net Earnings (continued)
Non-GAAP: Reconciliation of Net Earnings and Diluted Net Earnings Per Share to Adjusted Net Earnings and Adjusted Net Earnings Per Share- (continued) 24 For the three months ended December 31, 2015 and 2014, and the twelve months ended December 31, 2015 and 2014, loss on mark-to-market—natural gas d
Slide 24: Non-GAAP: Reconciliation of Net Earnings (continued)
Non-GAAP: Reconciliation of Net Earnings and 2 Diluted Net Earnings Per Share to Adjusted Net ©CFindustries Earnings and Adjusted Net Earnings Per Share- (continued) For the three months ended December 31, 2015 and 2014, and the twelve months ended December 31, 2015 and 2014, Joss on mark-to-market—
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