cf industries investor day 11 jun 2013
DESCRIPTION
Investor Day Presentation for CF Industries from 11 Jun 2013TRANSCRIPT
CF Industries Holdings, Inc.
Investor Day
June 11, 2013
A tightly focused strategy…
… well executed
NYSE: CF
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 are beyond our control, which could cause actual results to differ
materially from such statements. Important factors that could cause actual results to differ materially from our
expectations include, among others: the volatility of natural gas prices in North America; the cyclical nature of our
business and the agricultural sector; the global commodity nature of our fertilizer products, the impact of global supply
and demand on our selling prices, and the intense global competition from other fertilizer producers; conditions in the
U.S. agricultural industry; reliance on third party providers of transportation services and equipment; difficulties in the
implementation of a new enterprise resource planning system and risks associated with cyber security; weather
conditions; our ability to complete our recently announced production capacity expansion projects on schedule as
planned and on budget or at all; risks associated with other expansions of our business, including unanticipated
adverse consequences and the significant resources that could be required; potential liabilities and expenditures
related to environmental and health and safety laws and regulations; our potential inability to obtain or maintain
required permits and governmental approvals or to meet financial assurance requirements from governmental
authorities; future regulatory restrictions and requirements related to greenhouse gas emissions; the seasonality of the
fertilizer business; the impact of changing market conditions on our forward sales programs; risks involving derivatives
and the effectiveness of our risk measurement and hedging activities; the significant risks and hazards involved in
producing and handling our products against which we may not be fully insured; our reliance on a limited number of
key facilities; risks associated with joint ventures; acts of terrorism and regulations to combat terrorism; difficulties in
securing the supply and delivery of raw materials, increases in their costs and or delays or interruptions in their
delivery; risks associated with international operations; losses on our investments in securities; deterioration of global
market and economic conditions; our ability to manage our indebtedness; and loss of key members of management
and professional staff. More detailed information about factors that may affect our performance may be found in our
filings with the Securities and Exchange Commission, including our most recent periodic reports filed on Form 10-K
and Form 10-Q, which are available in the Investor Relations section of the CF Industries Web site. Forward-looking
statements are given only as of the date of this communication and we disclaim any obligation to update or revise the
forward-looking statements, whether as a result of new information, future events or otherwise, except as required by
law. This presentation includes certain non-GAAP financial measures to the most directly comparable GAAP
measures, which is available in the Appendix.
2
Safe Harbor Statement
Steve Wilson
Chairman and
Chief Executive Officer
3
Overview
A tightly focused strategy…
… well executed
Agenda
4
8:00am Steve Wilson Introduction
8:20am Doug Hoadley Agriculture and Fertilizer Background
8:50am Phil Koch Natural Gas and Logistics
9:20am Break
9:30am Bert Frost Sales and Market Development
10:00am Tony Will Operations and Capacity Expansion
10:30am Break
10:40am Dennis Kelleher Financial Management
11:10am Steve Wilson Summary
11:20am Q&A
A tightly focused strategy…
… well executed
Investment Thesis
Demand growth underpinned by population growth, higher protein diets
Search for higher yields leads to consistent consumption
5
Strategy Tightly Focused On Core Strength As a Nitrogen and Phosphate Producer
North America (Canada and the U.S.) imports almost 40% of its nitrogen needs
Long-term North American natural gas costs estimated to be $3-$5/MMBtu
Significant offshore capacity operates at the high end of the cost curve
Positioned to serve the world’s largest and most productive corn growing area
Extensive North American production and distribution footprint
Transportation assets provide logistical flexibility
Peer-leading financial performance
Disciplined capital allocation decisions
Experienced talented management team
Long-Term
Industry Growth
Favorable
Industry
Environment
Operational
Advantages
Excellent
Execution
Tightly Focused Strategy
Core strength as a nitrogen and phosphate producer
– Seven nitrogen complexes near major customers and with low cost feedstock
– Vertically integrated and well-matched phosphate mine and fertilizer plant
Dedicated to safety and operational excellence
– Emphasis on safe operations and environmental stewardship
– Ongoing investments in physical assets enables very high capacity utilization
Integrated logistics system
– Utilization of pipeline, waterway, rail and truck transportation modes
– Over 70 in-market storage terminals and warehouses in a 20-state region
Strong sales and marketing presence
– Deep and long-term customer relationships
– Informed and rigorous process for managing product prices and order book
Prudent financial management
– Focus on cash flow
– Investment grade credit ratings and metrics
– Record of effective capital management
6
CF Industries Has Consistently
Outperformed Peers
A tightly focused strategy to capitalize on nitrogen
advantages and optimize phosphate business
Well executed by experienced talented management
7
CF Industries management has a record of consistent
excellent execution. Meet the company’s senior leadership
team….
8
A tightly focused strategy…
… well executed
9
Doug Barnard
Senior Vice President, General Counsel and Secretary
Total Business Experience: 31 Years
Joined CF Industries: 2004
A tightly focused strategy…
… well executed
10
Bert Frost
Senior Vice President, Sales and Market Development
Total Business Experience: 26 Years
Joined CF Industries: 2008
A tightly focused strategy…
… well executed
11
Wendy Jablow Spertus
Senior Vice President, Human Resources
Total Business Experience: 29 Years
Joined CF Industries: 2007
A tightly focused strategy…
… well executed
12
Dennis Kelleher
Senior Vice President and Chief Financial Officer
Total Business Experience: 27 Years
Joined CF Industries: 2011
A tightly focused strategy…
… well executed
13
Phil Koch
Senior Vice President, Supply Chain
Total Business Experience: 39 Years
Joined CF Industries: 2003
A tightly focused strategy…
… well executed
14
Tony Will
Senior Vice President, Manufacturing and Distribution
Total Business Experience: 25 Years
Joined CF Industries: 2007
A tightly focused strategy…
… well executed
Excellent Execution
15
Gross Margin as % of Sales EBITDA as % of Sales(1)
Return on Equity (2) Return on Invested Capital (2)
(1) Calculated using Agrium, Yara and PotashCorp. self-reported EBITDA. Mosaic EBITDA calculated from its reported financials, consistent with the methodology used for CF Industries as described on slide 110.
(2) See slide 111 for a definition of invested capital, Return on Invested Capital and Return on Equity.
(3) See slide 110-111 for reconciliation of non-GAAP financial measures.
(3)
(3) (3)
49
54 55
17 16 16
32
27 28
55
45 45
23 20 20
0%
10%
20%
30%
40%
50%
60%
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
CF Industries Agrium Mosaic PotashCorp Yara
34 34 34
19
14 14
22
14 13
23
15 15 17
14 14
0%
5%
10%
15%
20%
25%
30%
35%
40%
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
CF Industries Agrium Mosaic PotashCorp Yara
34
31
33
21 22 21 21
14 15
39
21 21
27
22 19
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
CF Industries Agrium Mosaic PotashCorp Yara
47 51 52
28 27 27 32
28 28
49
43 43
22 25
21
0%
10%
20%
30%
40%
50%
60%
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
CF Industries Agrium Mosaic PotashCorp Yara
Cash Returned to Shareholders
16
Dividends & Share Repurchases as % of EBITDA (2)
Dividends & Share Repurchases as % of Equity Market Value (1)
(1) See slide 110 for a definition of Equity Market Value.
(2) Calculated using Agrium, Yara and PotashCorp. self-reported EBITDA. Mosaic EBITDA calculated from its reported financials, consistent with the methodology used for CF Industries as described on slide 110.
(3) See slide 110-111 for reconciliation of non-GAAP financial measures.
(3)
(3)
♦ $218 million of dividends since
2010
♦ $2.25 billion of share repurchases
since 2011
♦ $2.25 billion remaining on 2012
($3.0 billion) authorization as of
April 30, 2013
♦ Recognized for effectiveness of
share repurchase program 23
34
16
40
24
13
24
16 14
19
0%
10%
20%
30%
40%
50%
3 Y
r A
vrg
.
LT
M
3 Y
r A
vrg
.
LT
M
3 Y
r A
vrg
.
LT
M
3 Y
r A
vrg
.
LT
M
3 Y
r A
vrg
.
LT
M
CF Industries Agrium Mosaic PotashCorp Yara
6
9
3
7
3 2
2 2
3
4
0%
2%
4%
6%
8%
10%
3 Y
r A
vrg
.
LT
M
3 Y
r A
vrg
.
LT
M
3 Y
r A
vrg
.
LT
M
3 Y
r A
vrg
.
LT
M
3 Y
r A
vrg
.
LT
M
CF Industries Agrium Mosaic PotashCorp Yara
A tightly focused strategy…
… well executed
History of Value Creation
Management track record of bold and disciplined actions
– 2005: Initial Public Offering at $16/share
– 2008: Announced and completed $500M share repurchase program
– 2009: Bid for Terra Industries
– 2010: Closed Terra Industries acquisition
– 2011: Expenditure of $1B for share repurchase program
– 2012: Expenditure of $500M to complete $1.5B share repurchase program;
Announced C$0.9B agreement to purchase outstanding interests in CFL;
Authorized new $3B share repurchase program;
Announced $3.8B capacity expansion project
– 2013: Expenditure of $750M for share repurchases under the $3B authorization (as of April 30);
Completed acquisition of all outstanding interests in CFL
Tightly focused strategy based on thorough study and analysis
Disciplined decisions based on rigorous DCF analysis and stress testing
Effective execution demonstrated by financial results and share price performance
17
CF Industries’ shareholders have been rewarded by
management’s disciplined strategic decisions
18
(1) Excludes 34% of Canadian Fertilizers Limited (CFL) that was owned by Viterra. CFL operations were treated as a consolidated variable interest entity in CF
Industries Holdings, Inc. financial statements.
(2) Acquisition of all outstanding interests in CFL closed April 30, 2013.
(3) Approved ammonia debottleneck projects that are in process.
(4) New plant construction projects.
CF Industries Nitrogen Volumes and Shares Outstanding
2.6
3.6 0.1 0.3 6.6 0.1
1.7 8.5
46.0
52.5
59.0
65.5
72.0
0
1
2
3
4
5
6
7
8
9
2010 Pre-Terra
Acquisition (1)
TerraAcquisition
PreviouslyExecuted
Debottlenecks
34% CFL (2) Current PlannedDebottlenecks
(3)
New Plants(4)
Total 2016
Jan. 29,
2010
Million
Nutrient Tons
Million Shares
Outstanding
Share Count
Capital Allocation Impact
April 30, 2013
April 30, 2010
Jan. 31,
2013
Increased nitrogen volume
over 150% since 2010
Projects approved in 2012
and underway will lead to
total nitrogen volume
increase of 225% since 2010
Share repurchase activity
has reduced share count
17% since Terra acquisition
Remaining share repurchase
authorization of $2.25 billion
as of April 30, 2013
19
0%
200%
400%
600%
800%
1000%
1200%
1400%
1600%
8/10/2005 8/10/2006 8/10/2007 8/10/2008 8/10/2009 8/10/2010 8/10/2011 8/10/2012
+1,090%(1)
(1) Share price appreciation from IPO through 3/31/13
38% CAGR Since IPO(1)
CF Industries Share Price Performance
A tightly focused strategy…
… well executed
Agenda
20
8:00am Steve Wilson Introduction
8:20am Doug Hoadley Agriculture and Fertilizer Background
8:50am Phil Koch Natural Gas and Logistics
9:20am Break
9:30am Bert Frost Sales and Market Development
10:00am Tony Will Operations and Capacity Expansion
10:30am Break
10:40am Dennis Kelleher Financial Management
11:10am Steve Wilson Summary
11:20am Q&A
A tightly focused strategy…
… well executed
Doug Hoadley
Director, Agri-Business Analysis
21
Agriculture and
Fertilizer Background
A tightly focused strategy…
… well executed
22
Agricultural and
Nitrogen Themes
Corn prices around $5 per bushel is a “sweet spot” for fertilizer industry
− Farm income remains high
− Crop returns continue to favor corn and plantings are projected to continue at 92+
million acres
− Corn demand should recover in 2013, especially for feed and exports, and show
growth through 2016
− U.S. fertilizer demand is forecast to decline slightly next year, but remain at historically
high levels through 2016
World nitrogen demand shows consistent 2% growth
− Global nitrogen demand growth is equivalent to over 6 million product tons of urea or
about 4-5 new plants each year (net of closures)
− Global 2013 urea cost curve suggests strong support at $320-$340/st at U.S. Gulf
− Although numerous projects have been announced for the next three years, historically
only about 50% to 60% come onstream
− These nitrogen capacity additions are not expected to have a material impact on the
hypothetical margin available to North American producers
♦ North America currently imports about 38% of its total nitrogen use from offshore
– For planning purposes, CF Industries assumes that 6 million tons of new ammonia
capacity will be added in North America, mostly in 2016 to 2018
– This new capacity should displace offshore nitrogen imports, which would decline by
about 40%
23
The Season Average Corn Price has
risen over the last decade due to:
− Increasing feed, food and export
demand
− Adoption of Renewable Fuels Standard
(RFS)
− Reduced production due to drought
conditions
U.S. corn price is projected to decline
to around $5 per bushel in 2013 as
production recovers due to high
planted acreage and higher yields
− Farmers and ethanol producers are
highly profitable at this level
− Demand is projected to recover with
lower prices, especially for feed and
exports
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
2000 2002 2004 2006 2008 2010 2012E
Source: USDA, CF
Marketing Year
U.S. Corn Prices (U.S. Dollars per Bushel)
Corn Prices Moderating
In the Near Term
24
The 2013 estimated average corn
budget shows that corn returns over
variable costs are $163 per acre higher
than soybean returns, based on an
average of March-April new crop
futures for 2013
Farmer economics favor corn planting
over soybeans in 2014
Based on current new crop 2014
futures, returns over variable costs
are $194 per acre higher for corn than
soybeans
Assumptions include: − Trend yields
− March/April average for new crop prices and
for 2014 calculation using corn price of $5.60
per bushel and soybean price of $12.80
− USDA costs of production and CF Industries’
forecast of costs for 2014
Source: USDA, CF
Calendar Year
Economics Favor Corn Planting
U.S. Farmer Anticipated Returns
over Variable Costs (U.S. Dollars per Acre)
$0
$100
$200
$300
$400
$500
$600
2009 2010 2011 2012E 2013F 2014F
Corn Corn-on-Corn Soybeans
25
The 2012/13 stocks-to-use ratio is
expected to be the lowest since 1995
The 2013/14 stocks-to-use ratio is
expected to increase, but is highly
dependent on the actual yield
2013 plantings and emergence have
been delayed substantially and are
expected to result in lower planted corn
acres compared with USDA’s
Prospective Plantings report
Production forecast: − CF Industries forecasts a 155 bu/acre corn yield
and a $5.00 season average corn price
− If corn yields decline to 150 bu/acre, the stocks-
to-use ratios could fall to 8-10% and support
prices above the current forecast
5%
7%
9%
11%
13%
15%
17%
19%
21%
23%
2000 2002 2004 2006 2008 2010 2012E
158 bu/acre and 97M acres
155 bu/acre and 96M acres
150 bu/acre and 96M acres
Source: USDA, CF
Marketing Year
Corn Stocks Expected
to Increase Modestly
U.S. Corn Stocks-to-Use Ratio
97M acres
96M acres
96M acres
26
0
2
4
6
8
10
12
14
16
2002 2004 2006 2008 2010 2012 2014F 2016F
Exports Feed DDG Ethanol FS&I Demand for U.S. corn is forecast
to recover in 2013 and continue
to show growth through 2016
− Ethanol use is forecast to increase
to meet the RFS standard in 2013
− DDG demand, a by-product of ethanol
production, is forecast to continue to
grow for feed use
− Feed and Residual use is forecast
to increase
Exports in 2013 are forecast to nearly
double the 40-year record low level in
2012, with growth forecast to continue
through 2016
Strong Growth in U.S.
Corn Demand
U.S. Corn Demand (Thousand Bushels)
Source: USDA, CF
Marketing Year
50
55
60
65
70
75
80
85
90
95
100
2004 2006 2008 2010 2012E 2014F 2016F
CF Industries forecasts 2013 U.S. corn
acreage at 96 million acres, but
continued planting delays could result
in lower acreage
2014 U.S. corn acreage is expected to
be between 92-97 million acres and is
highly dependent on future weather
and demand response
CF Industries is forecasting corn
planted acreage to remain at 92+
million acres through 2016
U.S. nitrogen demand is forecast to
remain high as lower corn acreage is
offset by an increase in planting to
other crops along with a modest
increase in application rates
Source: USDA, CF
Marketing Year
27
U.S. Corn Plantings to Remain
Above 90 Million Acres
U.S. Corn Acreage (Million Acres)
28
U.S. nitrogen fertilizer demand is
projected at 13.3 million nutrient tons in
2013, near the record high level in 2012
U.S. nitrogen fertilizer demand is
projected to decline slightly for 2014
due to lower corn plantings
− Decline expected to result in fewer
imports, but no change in domestic
production
Nitrogen demand is expected to remain
at historically high levels through 2016
with modest growth in application rates
on corn to increase yields
Phosphate demand is forecast to be
nearly unchanged over the time period
at around 4.3-4.4 million nutrient tons Source: AAPFCO, CF
Fertilizer Year Nutrient Demand (Million Nutrient Tons)
U.S. Fertilizer Demand
Remains High
N P2O5 K20 Total
2010 12.3 4.1 4.5 20.8
2011 12.8 4.3 4.6 21.8
2012 13.4 4.4 4.7 22.5
2013 13.3 4.3 4.6 22.3
2014 13.2 4.4 4.7 22.3
2015 13.3 4.4 4.8 22.5
2016 13.4 4.5 4.9 22.7
29
Since 2005, farm revenue has
increased while fertilizer costs as a
percentage of farm revenue have
decreased
As a percent of corn revenue, U.S.
fertilizer costs are projected to stay
below the 10-year average of 20%,
indicating fertilizer offers a good return
on investment
Assumptions for 2014 include:
− Average annual corn price of $5.00 per
bushel
− Fertilizer costs are projected at $121 per
acre
− Corn yield of 155 bushels per acre
Source: USDA, CF
Calendar Year
0%
5%
10%
15%
20%
25%
30%
$0
$200
$400
$600
$800
$1,000
$1,200
2003 2005 2007 2009 2011 2013F
Revenue Fertilizer Percent Ten Year Average
Fertilizer Remains a Good Value
U.S. Corn Fertilizer Cost as
Percent of Revenue Fertilizer
Percent
Farm Revenue
(Million U.S. Dollars)
30
Global nitrogen demand growth is
projected to slow from the prior decade
to a rate of about 2.0% per year, or
about 3 million nutrient tons a year
The annual nitrogen demand growth is
equivalent to over 6 million product tons
of urea or about 4-5 new plants each
year (net of closures)
Industrial use is projected to grow at
3.4% per year, largely due to increasing
demand for emissions control
Nitrogen demand growth is expected to
be strongest in developing regions,
particularly FSU, Asia, and Latin
America Source: IFA, FERTECON, CF
Calendar Year
0
20
40
60
80
100
120
140
160
180
Fertilizer Industrial
CAGR: 2.3%
Fct. CAGR:
2.0%
Stable Long-Term
Demand Growth World Nitrogen Demand
(Million Nutrient Tons)
31
Global capacity is expected to
increase by 14% between 2013
and 2018
The increase in capacity is expected
to reduce the global operating rate
from over 80% to about 78%
However, a large portion of the
expansions are set to occur in China,
where continued government export
controls and off-setting plant closures
are expected
Operating rates outside China are
expected to remain high and near
today’s levels of 84%
Source: FERTECON, CF
Calendar Year
50%
55%
60%
65%
70%
75%
80%
85%
90%
0
50
100
150
200
250
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Capacity Production
Op. Rate Op. Rate Ex-China
World Nitrogen Utilization
Operating Rates Remain High
Million Tons Operating Rates
-2
0
2
4
6
8
2000 2002 2004 2006 2008 2010 2012 2014F 2016F
32
CF Industries examines global urea
capacity ex-China to reflect the
world trade situation more
accurately
China’s export policy is more
important than its actual capacity
Based on announced projects, urea
production capacity would be
expected to increase by
approximately 22 million tonnes,
ex-China, by 2016
Lists of future projects typically
overestimate actual capacity
brought online by as much as 50%
Source: FERTECON, CF
Calendar Year
Net Additions to Global Urea Capacity, ex-China (Million Product Tonnes)
Significant Capacity
Additions “Announced”
0
1
2
3
4
5
6
7
8
2008 2010 2012
Forecast Actual
CF Industries compared FERTECON’s
list of future urea projects at the
beginning of each year to the actual
capacity that came onstream
− On average, 50% of the total forecast
capacity came onstream by the end of the
year
IFA recently noted a similar situation with
their nitrogen capacity list
− Comparing the 2012 list with the current
list, IFA stated:
“At least 25 urea projects were delayed,
accounting for 60% of the announced
capacity by 2016. These delays have
removed up to 18 Mt of planned urea
capacity that had been foreseen for 2016
in the forecast of May 2012.”
Actual Additions Well Below
“Announced” Additions
Source: FERTECON, CF
Calendar Year
33
FERTECON Urea Capacity Additions, Ex-China (Million Metric Tonnes Per Year)
0
50
100
150
200
250
300
350
400
0 50 100 150 200
North American Production
Costs Well Below Urea Floor Price
34
Source: FERTECON, CF
Costs of product delivered to the
U.S. Gulf based on each country’s
cash costs and freight rates
Urea global floor price is estimated
to range from $320 per ton to $340
per ton delivered to the U.S. Gulf
based on Chinese and Eastern
European production
Eastern Europe and “other FSU”
producers are the marginal
producers during China’s high
export tax season
A typical U.S. producer has cash
production costs of about $150 per
ton at $4/MMBtu natural gas
CF Industries has significant
margin opportunity at the projected
urea floor price
$/ton
Demand 183 M Tons
Hypothetical Floor Margin
Alg
eria
Mid
dle
East
Nort
h A
merica
Oth
er
Afr
ica
Trin
idad +
Venezuela
Oth
er
Latin
Am
erica
Russia
Low
R
ussia
Base
South
east
Asia
South
Asia
Chin
a B
ase C
oal
Easte
rn E
uro
pe
Weste
rn E
uro
pe
Oth
er
FS
U
Ukra
ine O
PZ
U
kra
ine D
F G
roup
Chin
a (
Gas)
Chin
a L
ow
Coal
Egypt
2013 World Urea Production Costs (Estimated $U.S. per Short Ton Delivered U.S. Gulf)
Million
Product
Tons
0
50
100
150
200
250
300
350
400
0 50 100 150 200 250
35
Source: FERTECON, CF
For 2018, urea production costs are
expected to rise for most producers as
feedstock costs increase
The urea floor price is estimated
to be approximately $350 per ton
delivered to the U.S. Gulf based
on Chinese and FSU production
− Assumes new capacity of approximately
6 million tons
A typical U.S. producer is expected
to have cash production costs of $180
per ton at $5/MMBtu natural gas
CF Industries should continue to have
significant margin opportunity at the
projected urea floor price
$/ton
Demand 203 M Tons
Hypothetical
Floor Margin
Alg
eria
Mid
dle
East
Nort
h A
merica
Oth
er
Afr
ica
Trin
idad +
Venezuela
Oth
er
Latin
Am
erica
Russia
Low
R
ussia
Base
South
east
Asia
South
Asia
Chin
a B
ase C
oal
Easte
rn E
uro
pe
Weste
rn E
uro
pe
Oth
er
FS
U
Ukra
ine O
PZ
Ukra
ine D
F G
roup
Chin
a (
Gas)
Chin
a L
ow
Coal
Egypt
2018 World Urea Production Costs (Projected $U.S. per Short Ton Delivered U.S. Gulf)
Additions Not Expected
to Change Floor Price Materially
Million
Product
Tons
(Thousand Tons per Year, Announced)
36
Current Producers
Expanding Capacity
Source: Company announcements and industry publications
♦ Existing and some new entrant producers currently plan to add nearly 6 million
tons of new ammonia capacity in the next five years
Company Location Products Start-up Capacity (000 t) Notes
Potash Corp. Geismar, LA Ammonia Online 500 Ammonia Restart/Debottleneck
Coffeeville Resources Coffeeville, KS UAN Online 400 UAN Upgrade
Rentech Nitrogen Dubuque, IA Ammonia 2014 67 Ammonia Expansion/Debottleneck
Potash Corp. Lima, OH Ammonia, Urea 2015 80 Ammonia
73 Urea Debottleneck
Agrium Borger, TX Ammonia, Urea 2016 640 Ammonia
525 Urea Debottleneck
CF Industries Port Neal, IA Ammonia, Urea, UAN,
DEF 2016
849 Ammonia
1.35 mil t Urea Brownfield/Debottleneck
CF Industries Donaldsonville, LA Ammonia, Urea, UAN,
DEF 2016
1.25 mil t Ammonia
2.4 mil t various Brownfield/Debottleneck
Koch Various Ammonia, Urea 2016-2018 1.0+ mil t Urea (Enid)
2.0 mil t various Debottleneck
Iowa Fertilizer Co. (OCI) Weaver, IA Ammonia, Urea, UAN,
DEF 2017
850 Ammonia
1.5-2.0 mil t various $1.3 billion, Greenfield
Dyno Nobel (IPL) Waggaman, LA Ammonia 2017 880 Ammonia Site at Cornerstone
Chemical (formerly Cytec)
Mosaic Faustina, LA Ammonia 2017 800 Ammonia Existing site
Yara Belle Plaine, SK Ammonia, Urea, UAN,
DEF 2017
800 Ammonia
1,300 Urea (DEF) Existing site
(Thousand Tons per Year, Announced)
37
♦ New entrants and some producers have proposed to add approximately another
7-8 million tons of new ammonia capacity in the next five years
Greenfield Projects Face High
Capital Costs
Company Location Products Start-up Capacity (000 t) Notes
U.S. Nitrogen/Austin Powder Greene County, TN Ammonia, AN 2014 60 Ammonia
126 AN liquid
Ammonia upgraded
to AN
Dakota Gasification Beulah, ND Ammonia, Urea 2016 360 Urea Brownfield at Synfuels
Plant
Ohio Valley Resources Rockport, IN Ammonia, Urea, UAN, DEF 2016 800 Ammonia, 950
UAN, 90 DEF Greenfield
Northern Plains Nitrogen (North
Dakota Corn Growers) Western ND Ammonia, Urea, UAN, DEF 2017
800 Ammonia
1.0+ mil t various $1.5 billion, greenfield
Summit Power Group Texas Ammonia, Urea 2017 700 Urea Coal gasification,
Greenfield
CHS Spiritwood, ND Ammonia, Urea, UAN 2018 770 Ammonia Greenfield
KIT/IFFCO Canada JV Becancour, QB Ammonia, Urea 2018 1,600 Ammonia
2,500 Urea Greenfield
Agrium TBD/Under Study Ammonia, Urea - 2.0 mil t various Greenfield
Agrium Redwater, AB Urea - 170 Urea Debottleneck
Southeast Idaho Energy American Falls, ID Ammonia, Urea, UAN - 800 Ammonia, 380
Urea, 240 UAN Greenfield
Source: Company announcements and industry publications
53%
32%
1%
2%
12%
Ammonia Urea AN Other UAN
38
38%
62%
Imports Domestic Production Offshore imports account for 38% of total
North American nitrogen demand, or 8.8
million of the 23.3 million nutrient tons
consumed
In recent years, offshore imports
accounted for 30% to 35% of North
American ammonia use
Offshore imports account for
approximately 60% of urea fertilizer use
For UAN, offshore imports comprise
approximately 25% of North American
consumption
North America Relies
on Nitrogen Imports
Source: FERTECON
Calendar Year
2012 Demand:
23.3 Million Nutrient Tons
Imports:
8.8 Million Nutrient Tons
39
0
5
10
15
20
25
30
Demand
For planning purposes, CF Industries
assumes North America will add around
6 million tons of new ammonia capacity
between 2013 and 2018
This growth, if realized, represents a
32% increase in capacity from 2013
levels, with the majority expected to
come onstream in 2016-2018
The additional nitrogen capacity is
expected to be used largely for
producing upgraded products
Nitrogen fertilizer imports are expected
to continue but the total should decline Source: IFA, FERTECON, CF
Calendar Year
North American Nitrogen
Capacity and Demand Outlook (Million Nutrient Tons)
Growth in North American
Nitrogen Capacity Expected
40
North American imports from offshore
sources are expected to decline
dramatically as new capacity comes
onstream
Imported ammonia would decline the
least, falling about 20%
The assumed volume of new urea
capacity would displace about 60% of
the current import volume
UAN imports would decline by
about 70% 0
2
4
6
8
10
2010 2011 2012 2013F 2014F 2015F 2016F 2017F 2018F
Ammonia Urea UAN AN
North American Offshore Nitrogen Imports (Million Nutrient Tons)
North America Expected
to Remain a Net Importer
Source: USDOC, CF
Fertilizer Year
$3
$6
$9
$12
$15
$18
Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13
Urea Ammonia UAN
41
Since January 2010, U.S. urea prices
have averaged just over $400 per ton
at the U.S. Gulf, while UAN prices have
averaged close to $290 per ton
Tampa ammonia prices have averaged
$490 per ton since January 2010, while
Midwest ammonia prices have averaged
$650 per ton
On a per unit nitrogen basis, UAN
typically trades at a premium to other
nitrogen sources
Ammonia is typically the best value for
farmers on a per unit nitrogen basis
Source: Green Markets
U.S. Gulf Prices, per Short Ton
U.S. Midwest Prices, per N Unit
UAN Priced at a Premium
$0
$200
$400
$600
$800
Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13
Urea UAN Ammonia (Tampa)
$350
$450
$550
$650
Jan-10 Jan-11 Jan-12 Jan-13
NOLA Tampa (Nola Equiv.)
0
4
8
12
16
20Exports Domestic
42
Domestic shipments are expected to
reach 7.4 million tons of DAP/MAP
product in 2013 as high corn acreage
continues to drive stable phosphate
demand
However, greater competition in
international market continues to weigh
on the export market
This is due to both higher supplies from
Morocco and Saudi Arabia and recently
lower demand in India due to decreasing
subsidies
U.S. exports have declined gradually
from 11 million tons in 2004 to an
estimated 5 million tons in 2013
U.S. Phosphate Situation
Source: Green Markets, TFI, USDOC, CF
Fertilizer Year
U.S. Phosphate Prices (U.S. Dollars per Short Ton)
U.S. DAP/MAP Shipments (Million Product Tons)
43
Agricultural and
Nitrogen Themes
A $5 per bushel corn price is a “sweet spot”:
− For the farmer
− For ethanol producers, feedlot operators and corn exporters
− For the fertilizer industry
World nitrogen demand is expected to continue at a consistent 2% growth
♦ The global 2013 urea cost curve suggests strong support at $320-$340/st
for US Gulf
♦ Nitrogen capacity additions are not expected to have a material impact on
the hypothetical margin available to North American producers
A tightly focused strategy…
… well executed
Agenda
44
8:00am Steve Wilson Introduction
8:20am Doug Hoadley Agriculture and Fertilizer Background
8:50am Phil Koch Natural Gas and Logistics
9:20am Break
9:30am Bert Frost Sales and Market Development
10:00am Tony Will Operations and Capacity Expansion
10:30am Break
10:40am Dennis Kelleher Financial Management
11:10am Steve Wilson Summary
11:20am Q&A
A tightly focused strategy…
… well executed
Phil Koch
SVP, Supply Chain
45
Natural Gas and Logistics
A tightly focused strategy…
… well executed
46
CF Industries Has Significant
Cost and Logistical Advantages
CF Industries has a significant and enduring cost advantage from North
American natural gas
− The company’s natural gas consumption to increase from 700 MCF / day to 1 BCF /
day with capacity expansion projects
− Exploration, development and production companies have realized greater
efficiencies, lowering the cost of gas
− Unique attributes of the North American natural gas environment help provide a
sustainable cost advantage
CF Industries’ production, storage and distribution assets are competitive
differentiators
− Manufacturing flexibility and locations throughout North America
− Supply chain from raw material and natural gas procurement to transportation to
distribution
Flexibility and nimbleness enable optimization of assets
Natural Gas Consumption
Profile
47
MEDICINE HAT, AB Consumption: 120,000 MMBtu/d
Pricing Index: TransCanada/
Nova - AECO
Average Basis: ($0.35)
COURTRIGHT, ON Consumption: 40,000 MMBtu/d
Pricing Index: Union Gas Pipeline–
Dawn Pool
Average Basis: $0.35
PORT NEAL, IA
Consumption: 40,000 MMBtu/d
Expansion: 130,000 MMBtu/d
Pricing Index: Northern Natural
Gas- Ventura
Average Basis: $0.05
VERDIGRIS, OK Consumption: 120,000 MMBtu/d
Pricing Index: Oneok Gas
Transmission
Average Basis: ($0.15)
WOODWARD, OK Consumption: 57,000 MMBtu/d
Pricing Index: Oneok Gas
Transmission
Average Basis: ($0.15)
YAZOO CITY, MS Consumption: 40,000 MMBtu/d
Pricing Index: Henry Hub
DONALDSONVILLE, LA Consumption: 295,000 MMBtu/d
Expansion: 430,000 MMBtu/d
Pricing Index: Henry Hub
Natural gas represents
about 70% of cash cost
of nitrogen production
CF Industries’ proximity
to the largest producing
basins in the U.S. yields
attractive gas cost and
supply flexibility
Note: Average basis is a trailing twelve month average and is the differential to
Henry Hub excluding delivery cost.
Enduring Natural Gas
Price Advantage
48
Source: PIRA, EIA
World Natural Gas Cost Outlook (U.S. Dollars per MMBtu)
West Europe
Ukraine
U.S.
Russia
Middle East
Contributors to the decline in North
American natural gas prices:
− Increase in North American shale gas
reserves and production
− Greater drilling rig and well efficiencies
− Growing production of associated gas
from liquids development
Unique and sustainable advantages of
North American natural gas
− Abundant reserves
− Extensive geological data
− Land owner mineral rights
− Existing infrastructure for production
and distribution
− Hydraulic fracturing expertise/innovation
− Abundant water resources
− Robust domestic market
These advantages exist in few, if any,
other parts of the world Source: FERTECON, EIA, CME
$0
$4
$8
$12
$16
2006 2007 2008 2009 2010 2011 2012 2013F 2014F 2015F
$/MMBtu
$0
$2
$4
$6
$8
$10
0
10
20
30
40
50
60
70
2007 2008 2009 2010 2011 2012Conventional/Other Shale Henry Hub Price (right hand scale)
Bcf/day
U.S. Lower 48-States Dry Gas Production
Abundant Resources
with Attractive Economics
49
Source: BENTEK
Internal Rate of Return by Play
The Potential Gas Committee estimates future U.S.
supply of 2.7 quadrillion cubic feet (over 100 years),
up 486 TCF from last report
An immense amount of gas is economically
recoverable for less than $5/MMBtu with today’s
technology
Technology and efficiency continue to advance
rapidly in North America
− A culture and history of innovation
− Powerful competitive forces
− A supportive regulatory regime – so far
50
$3.00 $3.00
$1.25
$3.00 $0.60
$0.60
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
Western Europe Asia
Shipping
Gas Cost
Fuel/Basis
Liquefaction
Estimated Delivered Cost of LNG from U.S. Gulf (U.S. Dollars per MMBtu)
Source: Cheniere Energy, based on $4.50 Henry Hub natural
gas price and $100 Brent crude oil price.
Persistent
advantage
for North
American gas
consumer
Gas Cost Advantage Remains
Despite Likely LNG Exports
Significant rents need to be
paid on infrastructure
investments associated with
LNG
Long permitting and
infrastructure build-out period
Pricing of gas from competing
regions also impacts net-back
pricing for North American gas
producers
High cost of liquefaction,
shipping and regasification
ensure a persistent advantage
for North American gas users
$3.00 $3.00
$1.25
$3.00 $0.60
$0.60
Western Europe Asia
Shipping
Gas Cost
Fuel/Basis
Liquefaction
$9.35
$11.10
More Gas from Fewer Rigs
51
Gas-directed rig count has
tumbled, but production has
remained strong
− 5% increase in production despite
50% reduction in gas directed rig
count since September 2011
− Newer plays have high initial
production rates
Drilling has become much more
efficient
− Significant reduction in drill time
despite longer lateral distance
− Multiple holes per pad, often
accessing multiple reservoirs
Southwestern Energy Fayetteville
Shale Drilling Performance
Source: Southwestern Energy
Source: EIA, Baker Hughes
54
58
62
66
0
500
1,000
1,500
2,000
2010 2011 2012 2013
Gas Directed Rig Count
Total Land Rigs (Gas+Oil)
Production (r axis)
Production vs. Rig Count
3.5
4.0
4.5
5.0
5.5
0
3
6
9
12
15
2009 2010 2011 2012
Drill Time (Days) Lateral Length (000 feet, r axis)
Bcf/day Rig Count
Days Thousand
Feet
Market Forces Drive North American
Natural Gas Toward Range Trading
52
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
$5.00
Market forces tend to drive gas
prices toward range-bound
trading
When prices fall, electricity
producers substitute natural gas
for coal generation, reducing
gas stockpiles
When prices rise above
marginal cost of new production
basin by basin, supply is
expected to increase
Many gas producers have
chosen to hedge in the $4.50
to $5.00 range
CF Industries expects natural
gas to trade between $3 - $5 /
MMBtu over the next several
years
Upward demand pressure from coal-to-
gas switching for electricity generation
Downward price pressure from supply
response as prices remain above
marginal cost of new production
Henry Hub Cash Price (U.S. Dollars per MMBtu)
Source: Bloomberg
Unique Asset Base Creates
Competitive Advantage
53
CF Industries’ extensive asset
base creates distinct business
advantage
Nitrogen production in the heart
of the Corn Belt
Flexible product configuration to
take advantage of evolving product
prices and profit opportunities
Extensive ammonia terminal
network near customers facilitates
quick delivery during short
application windows
Multiple transportation modes for
flexible methods of getting products
to customers
Seven
Nitrogen
Complexes
Broad
Terminal
System
Multiple
Transportation
Modes
Flexible
Product
Configuration
Maximize
Margin
Unparalleled breadth
of plant locations and
production flexibility
Immediate proximity
to high-demand
regions
Production flexibility
to address changing
market conditions
− Optimize mix of
UAN and urea
− Increase net
ammonia when/if
conditions
appropriate
Source: AAPFCO, CF
54
Production Flexibility
Nitrogen Demand and Production Capacity*
*Thousand Product Tons
Legend
(Thousand Nutrient Tons)
0 1,100
MEDICINE HAT, AB Net Ammonia: 790
Urea: 810
COURTRIGHT, ON Net Ammonia: 265
UAN: 345
Urea: 160
PORT NEAL, IA Net Ammonia: 30
UAN: 800
Urea: 50
WOODWARD, OK Net Ammonia: 140
UAN: 820
Urea: 25
VERDIGRIS, OK Net Ammonia: 30
UAN: 1,965 YAZOO CITY, MS UAN: 160
Urea: 20
AN: 1,075
DONALDSONVILLE, LA Net Ammonia: 1,010
UAN: 2,415
Urea: 1,680
PLANT CITY, FL DAP/MAP: 2,165
Significant inventory
holding capacity − 29 ammonia
facilities– 1.2 million
ton capacity
− 57 UAN facilities –
1.2 million ton
capacity
Critical to providing in-
market and in-season
product availability
− Product distribution in
close proximity to
customers
− Inventory availability
during peak seasonal
demand
− Investments to
increase loading
capabilities = more
inventory turns
Broad Network of Terminal
Facilities
55
0 1,100 Source: AAPFCO, CF
Nitrogen Demand and Terminal Facilities
Production
Distribution
Legend
(Thousand Nutrient Tons)
Value of Access to
Ammonia Pipelines
Lowest cost method
of ammonia
distribution
− NuStar and
Magellan
− Connected to 10
distribution facilities
Provide ability to
move product around
“choke points” and
optimize distribution
methods − Moving ammonia
from plant locations
to river-terminals
− Cross-loading to
river barges for
northern destinations
56
0 1,100 Source: AAPFCO, CF
Nitrogen Demand and Ammonia Pipelines
Production
Distribution
Pipeline Legend
(Thousand Nutrient Tons)
Significant Product Volumes
Moved via River System
Utilization of multiple
inland waterways to
reach end-markets − Mississippi, Ohio,
Illinois, Arkansas,
Yazoo Rivers
Product transportation
and inventory holding
capacity − Ammonia – 12 barges
with 31,000 ton total
capacity
− UAN – 20 barges with
60,000 ton total
capacity
− 1 chartered ocean
UAN vessel
− 1 contracted ocean
vessel for dry product
57
0 1,100 Source: AAPFCO, CF
Nitrogen Demand and River System
Production
Distribution
Rivers Legend
(Thousand Nutrient Tons)
Range of Options Provided
By Rail Access and Assets
Fleet of over 5,000 cars
Established relationships with all
Class 1 railroads − Donaldsonville – Union Pacific
− Yazoo City – Canadian National
− Verdigris – BNSF
− Woodward – BNSF
− Port Neal – Union Pacific
− Courtright – CN & CSX
− Medicine Hat – CP
− Plant City – CSX
♦ Provides options to move any
product to any domestic location
58
Ammonia 26%
UAN 46%
Hopper 17%
Other 11%
Rail Fleet by Car Type
909 1,361
2,432
553
59
Natural Gas and Logistics
Unique attributes of the North American natural gas environment provide
a sustainable natural gas price range of $3 - $5 / MMBtu
CF Industries’ plant and distribution facilities are located in the heart
of the Corn Belt, providing exceptional access to customers
CF Industries’ asset base and management approach provide
a high degree of flexibility which helps maximize earnings opportunities
A tightly focused strategy…
… well executed
Agenda
60
8:00am Steve Wilson Introduction
8:20am Doug Hoadley Agriculture and Fertilizer Background
8:50am Phil Koch Natural Gas and Logistics
9:20am Break
9:30am Bert Frost Sales and Market Development
10:00am Tony Will Operations and Capacity Expansion
10:30am Break
10:40am Dennis Kelleher Financial Management
11:10am Steve Wilson Summary
11:20am Q&A
A tightly focused strategy…
… well executed
Bert Frost
SVP, Sales and
Market Development
61
Sales and Market Development
A tightly focused strategy…
… well executed
Source: FERTECON, CF
2012 World Nitrogen Net Trade (Million Nutrient Tonnes)
-5.1
8.5
12.4
-3.7 -7.6
0.5
-7.0
-1.5
4.4
-0.9
Net Importer
Net Exporter
Decision Making
with a World View
62
Factors include major agricultural growing regions, fertilizer supply
and demand, logistics, currencies, geopolitical issues
Revenue Available in Value Chain* (U.S. Dollars per Ton)
* Estimated three year average weighted for seasonal patterns
Source: CF, Green Markets, USDA
$0
$100
$200
$300
$400
$500
$600
$700
$800
Ammonia Urea UAN
to Retailer
to Wholesaler
to Manufacturer
Conversion of natural gas feedstock
into plant nutrients creates value for
nitrogen fertilizer manufacturers
Manufacturers (who have the
biggest investment) have captured
the largest share of available
revenue in the fertilizer value chain
during recent years
Margins for nitrogen manufacturers
have benefitted from historically
high nitrogen prices and low natural
gas costs
Fertilizer Value Chain
63
Optimization through Flexibility
Market based approach through
response to global agricultural
and fertilizer developments
Maximizing profitability through
flexibility
− Production mix: urea vs. UAN,
DAP vs. MAP, urea liquor vs. DEF
− Markets: domestic vs. export,
agricultural vs. industrial
− Logistics and transportation: numerous
production and distribution sources and
modes of delivery
− Pricing: various options with forward,
index, block and cash prices
− Order book: management of product
volumes offered during specific
timeframes
Maximizing Profitability
Production Mix
Markets
Logistics & Transportation
Pricing Options
Order Book Management
64
Maximize Margin
Sales Overview
65
2012 Sales Volume by Product (Thousand Product Tons)
Market Segmentation (Thousand Product Tons)
Diverse sales mix
− 15 million product tons
− UAN is highest volume product
− Seasonal mix changes based on market
balance and pricing
Nitrogen represents more than
85% percent of total sales
− North American-centric nitrogen sales
− Phosphate export opportunities to
maximize net-backs
Primary focus on agricultural sales
− Highest margin sales opportunities
− Improved profitability of industrial sales
since Terra acquisition
Balance with industrial sales
− Ratable business
− Sizable volumes help base load production
Ammonia
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Agriculture Industrial Export
Source: DOC, TFI, CF
Ammonia Application Period
is Compressing
0
5
10
15
20
25
30
1995 1997 1999 2001 2003 2005 2007 2009 2011
Days
Trend
Index
Trend
0
100
200
300
400
500
1995 1997 1999 2001 2003 2005 2007 2009 2011
Fall: October – November at Central Illinois Ammonia Terminals
Index: Fall 2000 = 100
Source: CF
Highest Single Day Shipments
Days to Ship 66% of Total Fall Shipments
With technological advances and
larger, faster equipment, peak day
ammonia volume is increasing and
peak shipping period is trending down
24 hour operation in-season is more
important than ever
Improvements in ammonia terminal
loading capacity have been made and
more are planned
66
67
$0
$50
$100
$150
2009 2010 2011 2012
0%
25%
50%
75%
100%
2009* 2010* 2011 2012
Terminals Other
% of Total
Ammonia Volume
U.S. Dollars per
Ton Ammonia
* Pro forma: CF plus Terra Legacy sales
Average
* Pro forma margin based on average Green Market prices
Value of Ammonia
Distribution System
Ammonia terminals create significant
value with close proximity to
agricultural markets
− 21 in-market ammonia terminals with
790,000 tons of storage to supply peak
demand in both fall and spring
Terminal sales yield a price premium
relative to the U.S. Gulf due to
in-market storage and logistics
advantage which ensures just-in-time
delivery to the customer
− The additional margin for an ammonia sale
at a Midwest terminal vs. a Gulf sale has
averaged an estimated $81 per ton
Source: CF
Source: Green Markets, CF
Increasing Terminal Sales
Valuable Additional Margin at Midwest
Terminals vs. Gulf
0
200
400
600
800
1,000
1,200
1,400
1,600
2004 2005 2006 2007 2008 2009 2010 2011 2012
Phosphate Nitrogen
Export Sales
CF Industries Exports (Thousand Tons)
Source: CF
Unique ability via Donaldsonville
and Tampa to arbitrage the best
geographic sales opportunities
− Vessel logistics favorable to growing
markets in Central and South America
Exports provide flexibility and
diversify customer base
Nitrogen (mainly UAN) and
phosphate are exported
KEYTRADE partnership provides
access to global markets for exports
68
KEYTRADE partnership provides access and visibility to global markets
Global Reach
69
Exports through
KEYTRADE in 2012
Asia
South
America
North
America
Africa
Asia
Europe
2009 - 2012 export locations shown
China
Vietnam Bangladesh
India
Pakistan Ivory Coast
Senegal
Kenya
South Africa
Tanzania
Turkey
France Canada
Argentina
Brazil
Chile
Colombia
Ecuador
Peru
Uruguay
Venezuela
Mexico
Costa Rica
Guatemala
Honduras
Nicaragua
Panama
North American Manufacturing
50%-Owned Offshore Operations
Global Distribution
Ammonia 38%
Urea 7%
AN 23%
Other Nitrogen 32%
Industrial Sales Volume
by Product
Industrial Business
70
Industrial chemicals
− Chemical intermediates
− Ethanol producers
− Explosives producers
− Cattle feed
Environmental
− Reduction in NOx emissions
at stationary power plants
Diesel Exhaust Fluid (DEF)
− Growing market for liquid urea used
to reduce NOx emissions from diesel
engines
1.8 million tons in 2012
Evolution of DEF Market in North America
71
Diesel exhaust fluid (DEF)
currently represents ~ 2%
of the North American urea
market
Expected to reach ~1.5 million
tons of urea equivalent, or 8%
of the North American urea
market, by 2020
EPA-mandated NOx reduction − Selective Catalytic Reduction (SCR)
technology has been adopted by all
U.S. heavy duty truck manufacturers
CF Industries positioned to lead − Largest U.S. based provider
− Domestic production preferred due to
quality requirements and shipping costs
Source: Integer
DEF Use for Buses, Class 4 through 8 Trucks
& Off-Road Vehicles (Equivalent Tons of Urea in Millions)
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
2012 2013 2014 2015 2016 2017 2018 2019 2020
Product Pricing Process
In-depth agribusiness analysis of agricultural and fertilizer-specific market
trends
− Crop market factors
− Global fertilizer supply/demand
Frequent management discussion and evaluation of near-term industry
developments and market/pricing trends
− International/national/regional
− Agricultural/industrial
− Weekly/monthly/quarterly meetings
Continuous assessment of spot market price versus future expectations
Array of price offerings to enable customers to manage price risks:
− Forward
− Index
− Block
− Cash
72
45%
Sales and Support
One stop source for nitrogen
and phosphate products
Flexibility and scale
– In-market production
and supply
– Ability to adjust production
to match changing market conditions
Market insight through team
dedicated to agri-business analysis
State-of-the-art customer service
through e-business process
and performance management
Innovative pricing options help customers
manage future price risk when buying
fertilizer
73
45%
Product and Process Innovation
45%
74
New sulfur enhanced phosphate
(MAPpluSTM)
– Supplies crops with sulfate for immediate
plant use and elemental sulfur
for season-long fertilization
– Among easiest-to-handle enhanced
fertilizers available on the market
– Export opportunities in Latin America
Expanded features through new PROMISESM
e-business portal
– Increased automation
– Enhanced communication
– Ease of use
Implemented new ERP system in early 2013
– Streamlines business processes and provides
infrastructure to support future growth
North America and Europe –
largest UAN markets with 90%
of global demand
Sizable exports of UAN
to mature markets like France
and Belgium
Actively developing new markets –
Latin America, Australia and China
Deep water dock at Donaldsonville
positioned to load large vessels of UAN
to supply markets worldwide
UAN Markets
75
Source: FERTECON, CF
UAN Market Development
United
States
Mexico
Argentina
Peru
Colombia
UK
France
Belgium China
Australia
0
200
400
600
800
1990 1995 2000 2005 2010
Production Imports Consumption
0
50
100
150
200
Maize Wheat Cotton Sugar Soy
Brazil U.S.
* Most recent data: 2008
Latin America is a key market -
logistically advantaged to the U.S.
− Growing demand for nutrients in
Argentina and an expanding
agricultural sector led to adoption of
UAN in the late 1990s
− There is excellent growth potential in
Brazil as the crop mix of maize and
sugar cane is ideal for UAN application
CF Industries is exploring ways to build
UAN demand in Latin America and
other developing markets
Argentina UAN Market (Thousand Tonnes)
Source: FERTECON
Nitrogen Application Rates* (Pounds per Acre)
Source: IFA, CF
UAN Market Development
76
Strong agricultural and fertilizer fundamentals continue to create value
for nitrogen fertilizer manufacturers
CF Industries is well positioned in the plant nutrient market with a diverse
sales mix and significant North American and international sales opportunities
CF Industries manages its business, sales and market development
decisions from a global perspective with a relentless focus on maximizing
margins
CF Industries is developing product markets in new regions that the company
can serve as its additional capacity comes on-line
Sales and Market Development
77
A tightly focused strategy…
… well executed
Agenda
78
8:00am Steve Wilson Introduction
8:20am Doug Hoadley Agriculture and Fertilizer Background
8:50am Phil Koch Natural Gas and Logistics
9:20am Break
9:30am Bert Frost Sales and Market Development
10:00am Tony Will Operations and Capacity Expansion
10:30am Break
10:40am Dennis Kelleher Financial Management
11:10am Steve Wilson Summary
11:20am Q&A
A tightly focused strategy…
… well executed
Tony Will
SVP, Manufacturing
and Distribution
79
Operations and Capacity
Expansion
A tightly focused strategy…
… well executed
Operating Philosophy
80
Core focus on safety and environmental
stewardship
− OSHA recordable incident rate better than
industry average
− Operate a diverse set of assets with a strict
regulatory and environmental permit compliance
program
High on-stream factor enabled by a robust
maintenance program
Investments in existing plants to increase
production capacity and energy efficiency
Annual Recordable Incidence Rates Incident Rate
(Recordable incidents/
200,000 hours)
0.0
0.4
0.8
1.2
1.6
2.0
2008 2009 2010 2011 2012
Industry Average D.A.R.T. Rate (1) CF D.A.R.T. Rate
D.A.R.T. Rate*
Days Away, Restricted, or Transferred (D.A.R.T.) Rate per 200,00 hours: Includes
cases involving days away from work, restricted work activity, or transfers to another
job. (1) Average for Phosphate Rock Mining (NAICS 212392), Nitrogen Plants (NAICS
325311), Phosphoric Plants (NAICS 325312) and Farm Supply Merchant Wholesalers
(NAICS 424910). Source: Bureau of Labor Statistics, CF
2.47 2.35
1.53
1.10
1.80 1.70 1.80 1.80
0.00
0.50
1.00
1.50
2.00
2.50
3.00
2010 2011 2012 2013 YTD
CF RIR TFI RIR
Source: TFI, CF Industries
High capacity utilization enabled
by robust maintenance program
and operating philosophy
Regularly scheduled turnaround
projects maintain safe operating
condition and increase plant
efficiency
Increased production capacity
through efficiency and
debottleneck projects
− 300,000 tons ammonia from 2010
through 2013 (1)
− 20,000 tons UAN since 2010
81
Operating Efficiency
Donaldsonville Ammonia Annual Capacity
and Gas Usage for Complex II
Source: CF Note: Complex II includes ammonia units #3 and #4 at Donaldsonville
Ammonia Operating Rates (% of Capacity Utilization)
50%
60%
70%
80%
90%
100%
110%
Q12010
Q22010
Q32010
Q42010
Q12011
Q22011
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
(1) Includes approximately 150,000 tons from debottleneck projects in 2013.
32.0
32.3
32.7
33.0
33.3
33.7
34.0
34.3
34.7
35.0
400
500
600
700
800
900
1,000
1,100
1,200
1,300
1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012
940
1,100
1,040 1,010
1,236
Thousand
Tons per Year MMBtu
per Ton Capacity Gas Usage
82
Nitrogen Production System
(Thousand Short Tons)
Current Annual Capacity (1)
Location
Gross
Ammonia
Net
Ammonia UAN (32%) Net Urea(2)
Ammonium
Nitrate
Fertilizer
Compounds
Total
Products
Donaldsonville, Louisiana 2,950 1,010 2,415 1,680 0 0 5,105
Medicine Hat, Alberta 1,250 790 0 810 0 0 1,600
Verdigris, Oklahoma 1,130 345 1,965 0 0 0 2,310
Yazoo City, Mississippi 560 0 160 20 1,075 0 1,255
Courtright, Ontario 500 265 345 160 0 0 770
Woodward, Oklahoma 480 140 820 25 0 0 985
Port Neal, Iowa 380 30 800 50 0 0 880
7,250 2,580 6,505 2,745 1,075 0 12,905
Unconsolidated Affiliates (3)
Point Lisas, Trinidad 360 360 0 0 0 0 360
Billingham, U.K. - GrowHow 275 135 0 0 310 0 445
Ince, U.K. - GrowHow 190 0 0 0 330 165 495
Total 8,075 3,075 6,505 2,745 1,715 165 14,205
Notes(1)
(2)
(3) Represents CF's 50% interest in the capacity of each of these facilities.
Includes granular urea, urea liquor (UL), and Diesel Exhaust Fluid (DEF).
2012 Form 10-K, average annual capacity includes allowance for normal outages and planned maintenance shutdowns.
World Scale Phosphate
Operations
83
Fully integrated system
1 million tons of P2O5 production
annually
− 2 million tons DAP / MAP
Well-balanced operations
(rock / beneficiation / chemical
plant capacity)
12 years of fully permitted rock
reserves
− In process to increase rock reserves
by 10 years
Excellent location to serve domestic
and export markets
CF Industries advantaged vs. non-
integrated producers
One of three draglines at the Hardee Phosphate Complex
Reclamation area post mining activities
Critical Factors Supporting
Decision to Invest in New Nitrogen Capacity
Strong and growing nitrogen market
− Fundamentals expected to sustain 2% average growth rate requiring about 5 new urea
plants per year
− Global market with pricing determined by production from much higher cost regions
− North America large net importer of nitrogen
Reliable source of low cost natural gas feedstock
− 2.7 quadrillion cubic feet of expected future U.S. supply
− North America has world’s most developed natural gas production and distribution
infrastructure
− Structural elements support long-term natural gas cost advantage versus many other regions
Lowest delivered cost, broadest reach
− Largest nitrogen manufacturer in North America
− Largest manufacturing and distribution footprint
− Best logistics infrastructure
− Number of “ship-from” points minimizes transportation cost
− Multiple deep-draft docks at Donaldsonville allow for export of nitrogen products if desired
84
Critical Factors Supporting
Decision to Invest in New Nitrogen Capacity, cont’d
Best capabilities
− Outstanding sales and marketing team - well positioned to sell additional tons
− Sharing of best practices and cross training among 2,200 operating employees
in multiple locations
− Able to pool/share spare parts
CF Industries’ expansion projects will be among the first new capacity
in North America to come online
− Spent or committed $500 million as of March 31, 2013
− Air permits in public comment phase at both locations
− Long-lead-time equipment (rotating and high-pressure equipment) for both ammonia plants,
both urea plants and the nitric acid plant have been ordered
− Expect to begin moving earth/constructing later this summer
− Projects expected to come online in 2015-2016
85
Attractive economics with expected returns
significantly above the company’s cost of capital
Capacity Expansion Projects
♦ Authorized expenditure of
$3.8 billion
− $2.1 billion at Donaldsonville
− $1.7 billion at Port Neal
♦ Combined annual production:
− 2.1 million tons of gross ammonia
− 2.0 – 2.7 million tons of urea
− Up to 1.8 million(1) tons of UAN
♦ Contracted ThyssenKrupp Uhde
for procurement and engineering
services
♦ Draft air permits out for public
comment in Louisiana and Iowa
Tons per
Day
Annual
Capacity (thousand tons)
Typical
Product
Mix (thousand tons)
Donaldsonville, LA
- Ammonia 3,640 1,274 184
- Urea 3,850 1,348 686
- Nitric Acid 1,675 586 --
- UAN 5,050 1,768 1,768(1)
Port Neal, IA
- Ammonia 2,425 849 81
- Urea 3,850 1,348 1,348
86
Notes: All production volume shown as short tons.
Production volume based on 350 operating days a year
Expansion Projects Capacities
and Typical Product Mix
(1) At 1.8M tons of UAN, 2.0M tons of granular urea can be
produced. Granular urea production could be increased by
decreasing UAN production.
Donaldsonville 2016 – World’s
Largest Nitrogen Complex
87
Donaldsonville project will increase UAN and urea product mix flexibility
in a cost-advantaged location to serve domestic and international markets
Six ammonia plants
Five urea plants
Three UAN plants
Five docks
– Two deep water docks for ocean
vessel loading
– Three floating docks for loading
river barges
Unit train capability
NuStar ammonia pipeline
Five natural gas pipelines
Donaldsonville Ammonia, Urea and UAN for Sale
(Thousands of Product Tons per Year)
Donaldsonville will have unmatched product upgrade flexibility
1 2 3 4 5 6 7
Gran Urea 2,248 2,336 2,378 2,540 2,698 2,812 3,039
UAN 4,349 4,228 4,168 3,900 3,430 3,095 2,413
Net Ammonia 1,320 1,320 1,320 1,320 1,416 1,484 1,641
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Net Ammonia UAN Gran Urea
Max UAN Max Urea
88
Additional urea capacity in a region with significant demand
Two ammonia plants
Three urea plants
Two nitric acid plants
One UAN plant
Unit train capability
Port Neal 2016 – Expanded
Capacity in Heart of the Corn Belt
2012 2016 Increase
Gross Ammonia 380 1,229 849
UAN 800 800 -
Urea 50 1,398 1,348
Average Annual Capacity (Thousand Tons)
A tightly focused strategy…
… well executed
89
Operations and Capacity
Expansion
CF Industries is a world-class fertilizer producer with a core focus on safe
and environmentally responsible operations
CF Industries maintains high capacity utilization through robust
maintenance program and capital projects to increase production volumes
and improve energy efficiency
♦ CF Industries is expanding nitrogen capacity with an attractive return profile
based on strong market fundamentals and best existing set of assets and
capabilities
♦ New production at Donaldsonville will increase product mix flexibility in a
cost-advantaged location to serve domestic and international markets, and
at Port Neal will add urea capacity in a region with significant demand
A tightly focused strategy…
… well executed
Agenda
90
8:00am Steve Wilson Introduction
8:20am Doug Hoadley Agriculture and Fertilizer Background
8:50am Phil Koch Natural Gas and Logistics
9:20am Break
9:30am Bert Frost Sales and Market Development
10:00am Tony Will Operations and Capacity Expansion
10:30am Break
10:40am Dennis Kelleher Financial Management
11:10am Steve Wilson Summary
11:20am Q&A
A tightly focused strategy…
… well executed
Dennis Kelleher
Chief Financial Officer
91
Financial Management
A tightly focused strategy…
… well executed
CF Industries’ Effective
Financial Management
Delivered first quarter record net earnings and EPS − Earnings of $407 million
− Earnings per diluted share of $6.47
Solid fundamentals and operational excellence − Strong planting despite challenging weather
− Favorable ammonia and UAN price realizations
− First quarter record UAN shipments
Strong credit profile and flexible balance sheet − Investment grade credit ratings from each agency
− Utilization of balance sheet through $1.5 billion of new bonds
Execution of capital allocation plans − Returned $2.25 billion of cash to shareholders through repurchases since 2011
− Closed acquisition of CFL interests
− Continued investments in capacity expansion projects ($500 million as of March 31, 2013)
Key value drivers support earnings profile − Feedstock, ammonia storage, transportation and production efficiency advantages
− Business model supports higher highs and higher lows
Significantly outperforming peers, yet trading at a discount
92
Strong Balance Sheet to Fund
Strategic Priorities
93
CF Industries has a solid investment
grade credit profile
− Modest leverage ratios
− Strong fixed charge coverage ratios
Commitment to maintain investment
grade metrics
Recent issuance of $1.5 billion of
long-term bonds
− $750 million of 3.45% notes due 2023
− $750 million of 4.95% notes due 2043
1.7x
0.5x 0.5x
0.9x
0.0x
0.4x
0.8x
1.2x
1.6x
2.0x
2010 2011 2012 LTM
Total Debt / EBITDA(2)(3)
Free Cash Flow / Total Debt (1)(3)
(1) See slide 111 for definition of free cash flow.
(2) LTM includes CF Industries $1.5B debt from May 20, 2013.
(3) See slides 110-111 for reconciliation of non-GAAP financial measures
(2)
(2)
0.4x
1.0x 0.9x
0.5x
0.0x
0.2x
0.4x
0.6x
0.8x
1.0x
1.2x
2010 2011 2012 LTM
History of Share Repurchases
94
$2.75 billion of cash returned
to shareholders through repurchase
of 21.9 million shares at an average
price of $126/share
− Significant value accretion to
remaining shareholders
− Programs completed well ahead
of schedule
Complete existing $3 billion program
− $2.25 billion remaining authorization
as of April 30, 2013
− Significant cash flow and available
liquidity to fund repurchases
Executed share repurchases while
investing in growth projects
− Closed C$910 million acquisition
of CFL interests on April 30, 2013
− $500 million spent or committed to
capacity expansion projects as of
March 31, 2013
~$164
Average
Price
~$197
Average
Price
$0
$50
$100
$150
$200
$250
$300
1/2/2008 1/2/2009 1/2/2010 1/2/2011 1/2/2012 1/2/2013
$5
00
M
$750M
$1.0
B
$5
00
M
~$153
Average
Price
~$59
Average
Price
95
(1) Excludes 34% of Canadian Fertilizers Limited (CFL) that was owned by Viterra. CFL operations were treated as a consolidated variable interest entity in CF
Industries Holdings, Inc. financial statements.
(2) Acquisition of all outstanding interests in CFL closed April 30, 2013.
(3) Approved ammonia debottleneck projects that are in process.
(4) New plant construction projects.
CF Industries Nitrogen Volumes and Shares Outstanding
2.6
3.6 0.1 0.3 6.6 0.1
1.7 8.5
46.0
52.5
59.0
65.5
72.0
0
1
2
3
4
5
6
7
8
9
2010 Pre-Terra
Acquisition (1)
TerraAcquisition
PreviouslyExecuted
Debottlenecks
34% CFL (2) Current PlannedDebottlenecks
(3)
New Plants(4)
Total 2016
Jan. 29,
2010
Million
Nutrient Tons
Million Shares
Outstanding
Share Count
Capital Allocation Impact
April 30, 2013
April 30, 2010
Jan. 31,
2013
Increased nitrogen volume
over 150% since 2010
Projects approved in 2012
and underway will lead to
total nitrogen volume
increase of 225% since 2010
Share repurchase activity
has reduced share count
17% since Terra acquisition
Remaining share repurchase
authorization of $2.25 billion
as of April 30, 2013
Key Value Drivers
96
Enduring feedstock cost advantage
− Lower, less volatile natural gas prices
− Significant cost advantage to Chinese coal-based nitrogen production, Eastern European
gas-based nitrogen production
− U.S. shale gas evolution difficult to replicate at scale elsewhere
Ammonia storage advantage
− Storage terminals provide opportunity to realize both seasonal and regional price differences
− Allows CF Industries to maximize higher-margin agricultural sales and provides flexibility to
negotiate better industrial sales
Transportation cost advantage
− Facilities located near or in world’s most productive corn growing region
− Significant landed-cost differential versus imports and low-cost inland transportation options
− Transportation advantage exists for potential exports from Donaldsonville to Central and
South American locations
Production efficiency advantage
− High capacity utilization rates
− Attractive investments in debottlenecking
Integrated phosphate advantage versus non-integrated producers
97
Robust Business Profile
Natural Gas Cost ($/MMBtu)
Ure
a P
rice
($
/to
n)
Sensitivity of 2012 Nitrogen Segment Cash
Operating Earnings to Gas and Urea Prices (Billions of U.S. Dollars)
$3.00 $3.50 $4.00 $4.50 $5.00
$300 $1.5 $1.4 $1.3 $1.2 $1.0
$325 $1.9 $1.7 $1.6 $1.5 $1.4
$350 $2.2 $2.1 $1.9 $1.8 $1.7
$375 $2.5 $2.4 $2.3 $2.1 $2.0
$400 $2.8 $2.7 $2.6 $2.4 $2.3
$425 $3.1 $3.0 $2.9 $2.8 $2.6
$450 $3.5 $3.3 $3.2 $3.1 $3.0
$475 $3.8 $3.7 $3.5 $3.4 $3.3
$500 $4.1 $4.0 $3.8 $3.7 $3.6
Source: CF
Note: Based on 2012 actual nitrogen segment gross margins plus DD&A.
Assumes that a $25 per ton change in urea price is equivalent to a $17.39 per
ton change in UAN price and a $44.57 per ton change in ammonia price.
The fundamentals of global nitrogen
product pricing and North American
natural gas costs give CF Industries
an attractive earnings profile
The company’s existing nitrogen
business profile can be highly
profitable across a broad range of
industry conditions
This analysis provides confidence for
the new investments in nitrogen
capacity
Higher Highs, Higher Lows
Excellent Execution
98
Gross Margin as % of Sales EBITDA as % of Sales (1)
Return on Equity (2) Return on Invested Capital (2)
(1) Calculated using Agrium, Yara and PotashCorp. self-reported EBITDA. Mosaic EBITDA calculated from its reported financials, consistent with the methodology used for CF Industries as described on slide 110.
(2) See slide 111 for a definition of invested capital, Return on Invested Capital and Return on Equity.
(3) See slides 110-111 for reconciliation of non-GAAP financial measures.
(3)
(3) (3)
49
54 55
17 16 16
32
27 28
55
45 45
23 20 20
0%
10%
20%
30%
40%
50%
60%
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
CF Industries Agrium Mosaic PotashCorp Yara
34 34 34
19
14 14
22
14 13
23
15 15 17
14 14
0%
5%
10%
15%
20%
25%
30%
35%
40%
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
CF Industries Agrium Mosaic PotashCorp Yara
34
31
33
21 22 21 21
14 15
39
21 21
27
22 19
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
CF Industries Agrium Mosaic PotashCorp Yara
47 51 52
28 27 27 32
28 28
49
43 43
22 25
21
0%
10%
20%
30%
40%
50%
60%
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
CF Industries Agrium Mosaic PotashCorp Yara
Accessing Low-Cost Debt
99
Increased utilization of CF
Industries’ borrowing capacity
through $1.5 billion bond issuance
Balance sheet efficiency and
leverage consistent with peers
Movement toward more leverage
demonstrates belief in sustainable
nature of fertilizer industry
economics
0.5 0.5
0.9 0.9
1.5
1.8
0.4 0.4 0.4
0.9
1.1 1.1
0.6 0.6 0.6
0.0x
0.4x
0.8x
1.2x
1.6x
2.0x
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
CF Industries Agrium Mosaic PotashCorp Yara
Total Debt to EBITDA(1)(2)
17
13
27
22
27
34
7 4 4
13 12 12
18
13 14
0%
10%
20%
30%
40%
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
2011
2012
LT
M
CF Industries Agrium Mosaic PotashCorp Yara
Total Debt to Equity Market Value(2)
(1) Calculated using Agrium, Yara and PotashCorp. self-reported EBITDA. Mosaic EBITDA calculated from its reported financials, consistent with the methodology used for CF Industries as described on slide 110.
(2) See slides 110-111 for definition of total debt to EBITDA and total debt to equity market value.
(3) LTM includes CF ($1.5B) and AGU ($1B) debt from May 20, 2013 and May 28, 2013, respectively.
Note: See slides 110-111 for reconciliation of non-GAAP financial measures.
(3) (3)
(3) (3)
Cash Returned to Shareholders
100
Dividends & Share Repurchases as % of EBITDA (2)
Dividends & Share Repurchases as % of Equity Market Value (1)
(1) See slide 110 for a definition of Equity Market Value.
(2) Calculated using Agrium, Yara and PotashCorp. self-reported EBITDA. Mosaic EBITDA calculated from its reported financials, consistent with the methodology used for CF Industries as described on slide 110.
(3) See slides 110-111 for reconciliation of non-GAAP financial measures.
(3)
(3)
♦ $218 million of dividends since
2010
♦ $2.25 billion of share repurchases
since 2011
♦ $2.25 billion remaining on 2012
($3.0 billion) authorization as of
April 30, 2013
♦ Recognized for effectiveness of
share repurchase program 23
34
16
40
24
13
24
16 14
19
0%
10%
20%
30%
40%
50%
3 Y
r A
vrg
.
LT
M
3 Y
r A
vrg
.
LT
M
3 Y
r A
vrg
.
LT
M
3 Y
r A
vrg
.
LT
M
3 Y
r A
vrg
.
LT
M
CF Industries Agrium Mosaic PotashCorp Yara
6
9
3
7
3 2
2 2
3
4
0%
2%
4%
6%
8%
10%
3 Y
r A
vrg
.
LT
M
3 Y
r A
vrg
.
LT
M
3 Y
r A
vrg
.
LT
M
3 Y
r A
vrg
.
LT
M
3 Y
r A
vrg
.
LT
M
CF Industries Agrium Mosaic PotashCorp Yara
A tightly focused strategy…
… well executed
Outperforming Peers
Yet Trading at a Discount
101
Share Price Performance (1/1/2009 – 3/31/2013)
Enterprise Value /
EBITDA(1)
CF Industries 3.3x
Agrium 6.7x
Mosaic 7.9x
Potash Corp. 10.0x
Yara 4.3x
(1) EV/ LTM EBITDA as of 3/31/2013. See slide 110 for calculation. See footnote 1 on slide 110 regarding EBITDA.
-50%
0%
50%
100%
150%
200%
250%
300%
350%
1/2/2009 1/2/2010 1/2/2011 1/2/2012 1/2/2013
CF +255% AGU +168% MOS +62% POT +52% YAR +64%
102
Financial Management
Solid fundamentals, effective management and operational excellence as
demonstrated through record earnings
Strong cash flow supports an investment grade credit profile and flexible
balance sheet, and enables execution of capital allocation plans
Key value drivers support an attractive earnings profile that demonstrates
higher highs and higher lows
Industry-leading execution, balance sheet utilization and cash returns to
shareholders have provided exceptional stock price appreciation
A tightly focused strategy…
… well executed
Agenda
103
8:00am Steve Wilson Introduction
8:20am Doug Hoadley Agriculture and Fertilizer Background
8:50am Phil Koch Natural Gas and Logistics
9:20am Break
9:30am Bert Frost Sales and Market Development
10:00am Tony Will Operations and Capacity Expansion
10:30am Break
10:40am Dennis Kelleher Financial Management
11:10am Steve Wilson Summary
11:20am Q&A
A tightly focused strategy…
… well executed
Steve Wilson
Chairman and
Chief Executive Officer
104
Summary
A tightly focused strategy…
… well executed
Investment Thesis
Demand growth underpinned by population growth, higher protein diets
Search for higher yields leads to consistent consumption
105
Strategy Tightly Focused On Core Strength As a Nitrogen and Phosphate Producer
North America (Canada and the U.S.) imports almost 40% of its nitrogen needs
Long-term North American natural gas costs estimated to be $3-$5/MMBtu
Significant offshore capacity operates at the high end of the cost curve
Positioned to serve the world’s largest and most productive corn growing area
Extensive North American production and distribution footprint
Transportation assets provide logistical flexibility
Peer-leading financial performance
Disciplined capital allocation decisions
Experienced talented management team
Long-Term
Industry Growth
Favorable
Industry
Environment
Operational
Advantages
Excellent
Execution
History of Value Creation
Management track record of bold and disciplined actions
– 2005: Initial Public Offering at $16/Share
– 2008: Announced and completed $500M share repurchase program
– 2009: Bid for Terra Industries
– 2010: Closed Terra Industries acquisition
– 2011: Expenditure of $1B for share repurchase program
– 2012: Expenditure of $500M to complete $1.5B share repurchase program;
Announced C$0.9B agreement to purchase outstanding interests in CFL;
Authorized new $3B share repurchase program;
Announced $3.8B capacity expansion project
– 2013: Expenditure of $750M for share repurchases under the $3B authorization (as of April 30);
Completed acquisition of all outstanding interests in CFL
Tightly focused strategy based on thorough study and analysis
Disciplined decisions based on rigorous DCF analysis and stress testing
Effective execution demonstrated by financial results and share price performance
106
CF Industries’ shareholders have been rewarded by
management’s disciplined strategic decisions
107
♦ We have done what we said we were going to do and
we have done those things effectively
♦ We are committed to executing flawlessly and
continuing to build value for shareholders
Summary
CF Industries has posted record earnings per share for 10
consecutive quarters. How?
A tightly focused strategy…
… well executed
108
Thank You!
A tightly focused strategy…
… well executed
For more information, please visit www.cfindustries.com
Reconciliation of non-GAAP
Measures – CF Industries
110
We have presented EBITDA, EBITDA as a % of sales,
Enterprise Value to EBITDA, total debt to EBITDA, Dividends
& Share Repurchases as a % of EBITDA and Dividends &
Share Repurchases as a % of Equity Market Value because
management uses these measures to track the company’s
performance in comparison to its peers and believes that
these are frequently used by securities analysts, investors
and other interested parties in the evaluation of companies in
our industry.
Notes:
(1) EBITDA is defined as net earnings attributable to
common stockholders plus interest expense
(income)-net, income taxes, and depreciation,
depletion and amortization. Other adjustments
include the elimination of loan fee amortization that is
included in both interest and amortization, and the
portion of depreciation that is included in non-
controlling interest.
(2) Share price as of the end of the applicable period.
(3) Enterprise value to EBITDA is defined as enterprise
value divided by EBITDA. Enterprise value is defined
as equity market value as of the period ending date
plus debt minus cash. Equity market value is defined
as shares outstanding multiplied by share price.
(4) Adjusted Debt includes the $1.5 billion of senior notes
issued May 20, 2013.
(5) Dividends & Share Repurchases as a percent of
EBITDA is defined as average dividends paid and
share repurchases for the specified time period
divided by average EBITDA for the specified period.
(6) Dividends & Share Repurchases as a percent of
Equity Market Value defined as average dividends
paid plus share repurchases for the specified time
period divided by the daily average equity market
value for the specified time period.
12 Mnths 12 Mnths 12 Mnths 3 Year 3 Mnths 3 Mnths LTM
Ending Ending Ending Avg as of Ending Ending Ending
In millions, except percentages and share price 12/31/10 12/31/11 12/31/12 12/31/12 3/31/12 3/31/13 3/31/13
EBITDA Calculation
Net Earnings Attributable to Common Stockholders 349 1,539 1,849 368 407 1,887
Interest Expense (net) 220 146 131 31 37 137
Income Taxes 277 932 963 207 107 863
Depreciation, depletion and amortization 395 416 420 103 107 424
Less: other adjustments (114) (47) (43) (7) (7) (43)
EBITDA (1) 1,127 2,986 3,320 2,478 702 651 3,268
Sales 6,098 6,104 1,528 1,337 5,913
EBITDA as a % of Sales 49% 54% 55%
Enterprise Value Calculation
Shares Outstanding 65.4 63.0 60.6
Share Price (2) 144.98 203.16 190.37
Equity Market Value 9,482 12,799 11,536
Debt 1,618 1,605 1,605
Cash (1,207) (2,275) (2,210)
Enterprise Value 9,893 12,129 10,931
Enterprise Value / EBITDA (3) 3.3x 3.7x 3.3x
Total Debt / EBITDA
Debt 1,959 1,618 1,605 1,605
Senior Unsecured Notes Issued May 23, 2013 1,498
Adjusted Debt (4) 3,103
Total Debt / EBITDA 1.7x 0.5x 0.5x 0.9x
Dividends & Share Repurchases as % of EBITDA
Dividends 26 69 103 66 26 25 102
Share Repurchases - 1,000 500 500 - 500 1,000
Dividends & Share Repurchases as % of EBITDA (5) 23% 34%
Dividends + Share Repurchases of % of Equity Market Value
Daily Average Equity Market Value 9,636 12,796
Dividends + Share Repurchases of % of Equity Market Value (6) 6% 9%
CF Industries (in USD)
Reconciliation of non-GAAP
Measures – CF Industries
111
We have presented Total Debt to Equity Market Value, Free
Cash Flow to Total Debt, Return on Invested Capital (ROIC)
and Return on Equity (ROE) because management uses
these measures to track the company’s performance in
comparison to its peers and believes that these are frequently
used by securities analysts, investors and other interested
parties in the evaluation of companies in our industry.
Invested capital, stockholders equity and each of their
components are period-end amounts and not average
amounts.
Notes:
(1) Adjusted Debt includes the $1.5 billion of senior notes
issued May 20, 2013.
(2) Total Debt to Equity Market Value is defined as total
debt divided by Equity Market Value. Total debt is
defined as all debt for the specified time period.
Equity Market Value is defined as shares outstanding
multiplied by the share price.
(3) Free Cash Flow to Total Debt is defined as operating
cash flow minus capital expenditures, dividends paid
and minority interest divided by all debt.
(4) ROIC is defined as after tax operating income divided
by invested capital. After tax operating income is
defined as operating income times the net of 1 minus
a standard tax rate of 35% (operating income x (1- tax
rate of 35%)). Invested capital is defined as net debt
plus stockholders equity. Net debt is defined as all
debt plus minority interests (Non-controlling Interest)
minus cash.
(5) ROE is defined as net earnings divided by
stockholders equity.
(6) Share price as of the end of the applicable period.
(7) Enterprise value to EBITDA is defined as enterprise
value divided by EBITDA. Enterprise value is defined
as equity value plus debt minus cash. Equity value is
defined as shares outstanding multiplied by share
price.
12 Mnths 12 Mnths 12 Mnths 3 Mnths 3 Mnths LTM
Ending Ending Ending Ending Ending Ending
In millions, except percentages 12/31/10 12/31/11 12/31/12 3/31/12 3/31/13 3/31/13
Total Debt / Equity Market Value
Total Debt 1,959 1,618 1,605 1,605
Senior Unsecured Notes Issued May 23, 2013 1,498
Adjusted Debt (1) 3,103
Equity Market Value 9,482 12,799 11,536
Total Debt / Equity Market Value (2) 17% 13% 27%
Free Cash Flow to Total Debt
Operating Cash Flow 1,194 2,079 2,376 603 679 2,452
Capital Expenditures (258) (247) (524) (64) (153) (613)
Dividends (26) (69) (103) (26) (25) (102)
Noncontrolling Interest (117) (146) (232) (21) (17) (228)
Free Cash Flow 793 1,617 1,517 492 484 1,509
Free Cash Flow / Total Debt (3) 0.4x 1.0x 0.9x 0.5x
ROIC Calculation
Operating Income 2,791 2,959 671 628 2,916
Tax @ 35% (977) (1,036) (235) (220) (1,021)
Net Operating Income After Tax 1,814 1,923 436 408 1,895
Cash (1,207) (2,275) (2,210) (2,210)
Short Term Borrowing - - -
Notes Payable - 5 5 5
Current Portion of LT Debt - - - -
Noncurrent Notes Payable 5 - - -
Long-term Debt 1,613 1,600 1,600 1,600
Non-Controlling Interest 386 380 385 385
Stockholders Equity 4,547 5,902 5,732 5,732
Invested Capital 5,344 5,612 5,512 5,512
ROIC (4) 34% 34% 34%
Return on Equity Calculation
Net Earnings Attributable to Common Stockholders 1,539 1,849 368 407 1,887
Stockholders Equity 4,547 5,902 5,732 5,732
ROE (5) 34% 31% 33%
CF Industries (in USD)