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UNITED STATES
SECURITIES ANDEXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 1, 2024
CFIndustries Holdings, Inc.
(Exact name of registrant as specified in itscharter)
Delaware 001-32597 20-2697511
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
2375 Waterview Drive 60062
Northbrook
,
Illinois
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, includingarea code
(
847
)
405-2400
(Former name or former address,if changed since last report.)
Check the appropriate box below if the Form 8-Kfiling is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions (see GeneralInstruction A.2. below):
.. Writtencommunications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
.. Solicitingmaterial pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
.. Pre-commencementcommunications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
.. Pre-commencementcommunications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbol(s) Name of each exchange on which registered
common stock, par value $0.01 per share CF New York Stock Exchange
Indicate by check mark whether the registrantis an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 ((s)230.405 of this chapter)
or Rule 12b-2of the Securities Exchange Act of 1934 ((s)240.12b-2 of this
chapter).
Emerging growth company
..
Ifan emerging growth company, indicate by check mark if the registrant has
elected not to use the extended transition period for complyingwith any new or
revised financial accounting standards provided pursuant to Section 13(a) of
the Exchange Act.
..
Item 2.02. Results of Operations and Financial Condition.
On May 2, 2024, CF Industries Holdings, Inc. will host a conferencecall
discussing its results for the quarter ended March 31, 2024, at which the
presentation attached hereto as Exhibit 99.1 will be used.
The information set forth herein, including the exhibit attached hereto,shall
not be deemed "filed" for purposes of Section 18 of the Securities Exchange
Act of 1934, as amended, nor shall it bedeemed incorporated by reference in
any filing under the Securities Act of 1933, as amended, except as shall be
expressly set forth byspecific reference in any such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description of Exhibit
99.1 Presentation of CF Industries Holdings, Inc. dated May 1, 2024
104 Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document)
SIGNATURES
Pursuant to the requirements of the SecuritiesExchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: May 1, 2024 CF INDUSTRIES HOLDINGS, INC.
By: /s/ Christopher D. Bohn
Name: Christopher D. Bohn
Title: Executive Vice President and Chief Operating Officer
Exhibit 99.1
2024 First Quarter Financial Results May 1, 2024 NYSE: CF
Safe harbor statement All statements in this presentation by CF Industries
Holdings, Inc. (together with its subsidiaries, the "Company"), other th an
those relating to historical facts, are forward - looking statements. Forward
- looking statements can generally be identified by their use of terms such as
"anticipate," " believe," "could," "estimate," "expect," "intend," "may,"
"plan," "predict," "project," "will" or "would" and similar terms and phrases,
including reference s t o assumptions. 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 the Company's control, which
could cause actual results to differ materially from such statements. These
statements may include, but are not limited to, statements about the synergies
and other benefits, and other aspects of the transactions with Incitec Pivot
Limited ("IPL"), strategic p lan s and management's expectations with respect
to the production of green and low - carbon ammonia, the development of carbon
capture and sequestration projects, th e transition to and growth of a
hydrogen economy, greenhouse gas reduction targets, projected capital
expenditures, statements about future financial and ope rat ing results, and
other items described in this presentation. Important factors that could cause
actual results to differ materially from those in the forw ard - looking
statements include, among others, the risk of obstacles to realization of the
benefits of the transactions with IPL; the risk that the synergies from t he
transactions with IPL may not be fully realized or may take longer to realize
than expected; the risk that the completion of the transactions with IPL,
including in teg ration of the Waggaman ammonia production complex into the
Company's operations, disrupt current operations or harm relationships with
customers, employees and suppliers; the risk that integration of the Waggaman
ammonia production complex with the Company's current operations will be more
costly or difficult th an expected or may otherwise be unsuccessful; diversion
of management time and attention to issues relating to the transactions with
IPL; unanticipated co sts or liabilities associated with the IPL transactions;
the cyclical nature of the Company's business and the impact of global supply
and demand on the Company's s ell ing prices; the global commodity nature of
the Company's nitrogen products, the conditions in the international market
for nitrogen products, and th e i ntense global competition from other
producers; conditions in the United States, Europe and other agricultural
areas, including the influence of governmenta l p olicies and technological
developments on the demand for our fertilizer products; the volatility of
natural gas prices in North America and the United Kin gdom; weather
conditions and the impact of adverse weather events; the seasonality of the
fertilizer business; the impact of changing market conditions on the Co
mpany's forward sales programs; difficulties in securing the supply and
delivery of raw materials or utilities, increases in their costs or delays or
interru pti ons in their delivery; reliance on third party providers of
transportation services and equipment; the Company's reliance on a limited
number of key facilities; risks assoc iat ed with cybersecurity; acts of
terrorism and regulations to combat terrorism; risks associated with
international operations; the significant risks and haza rds involved in
producing and handling the Company's products against which the Company may
not be fully insured; the Company's ability to manage its indebtedness a nd
any additional indebtedness that may be incurred; the Company's ability to
maintain compliance with covenants under its revolving credit agreement and th
e a greements governing its indebtedness; downgrades of the Company's credit
ratings; risks associated with changes in tax laws and disagreements with ta
xin g authorities; risks involving derivatives and the effectiveness of the
Company's risk management and hedging activities; potential liabilities and
expendit ure s related to environmental, health and safety laws and
regulations and permitting requirements; regulatory restrictions and
requirements related to greenhouse g as emissions; the development and growth
of the market for green and low - carbon ammonia and the risks and
uncertainties relating to the development and implementa tion of the Company's
green and low - carbon ammonia projects; and risks associated with expansions
of the Company's business, including unanticipated adverse consequences and
the significant resources that could be required. More detailed information
about factors that may affect the Company's performance and could cause actual
results to differ materially from those in any forward - looking statements
may be found in CF Industries Holdings, Inc.'s filings with the S ecurities
and Exchange Commission, including CF Industries Holdings, Inc.'s most recent
annual and quarterly reports on Form 10 - K and Form 10 - Q, which are
availabl e in the Investor Relations section of the Company's web site. It is
not possible to predict or identify all risks and uncertainties that might
affect th e a ccuracy of our forward - looking statements and, consequently,
our descriptions of such risks and uncertainties should not be considered
exhaustive. There is no guarante e t hat any of the events, plans or goals
anticipated by these forward - looking statements will occur, and if any of
the events do occur, there is no guarantee what effect they will have on our
business, results of operations, cash flows, financial condition and future
prospects. Forward - looking statements are given only as of the date of this
presentation and the Company disclaims any obligation to update or revise the
forward - looking statements, whether as a result of new informat ion, future
events or otherwise, except as required by law.
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, free cash flow, free
cash flow to adjusted EBITDA conversion and free cash flow yield, which are
non - GAAP financial measures, provide additional meaningful information
regarding the Company's performance and financial strength. Non - GAAP
financial measures should be viewed in addition to, and not as an alternative
for, the Company's reported results prepared in accordance with GAAP. In
addition, because not all companies use identical calculations, EBITDA,
adjusted EBITDA, free cash flow, free cash flow to adjusted EBITDA conversion
and free cash flow yield included in this prese nta tion may not be comparable
to similarly titled measures of other companies. Reconciliations of EBITDA,
adjusted EBITDA, free cash flo w, and free cash flow yield to the most
directly comparable GAAP measures are provided in the tables accompanying this
presentat ion . EBITDA is defined as net earnings attributable to common
stockholders plus interest expense - net, income taxes, and depreciatio n and
amortization. Other adjustments include the elimination of loan fee
amortization that is included in both interest and am ort ization, and the
portion of depreciation that is included in noncontrolling interest. The
Company has presented EBITDA because management uses the measure to track
performance and believes that it is frequently used by securities analysts,
investors an d other interested parties in the evaluation of companies in the
industry. Adjusted EBITDA is defined as EBITDA adjusted with the selected
items as summarized in the tables accompanying this presentation. The Company
has presented adjusted EBITDA because management uses adjusted EBITDA, and
believes it is useful to investors, as a supplemental financial measure in the
comparison of year - over - year performance. Free cash flow is defined as net
cash provided by operating activities, as stated in the consolidated
statements of cash flow s, reduced by capital expenditures and distributions
to noncontrolling interests. Free cash flow to adjusted EBITDA conversion i s
defined as free cash flow divided by adjusted EBITDA. Free cash flow yield is
defined as free cash flow divided by market val ue of equity (market cap). For
full year 2022, the Company has also presented cash provided by operating
activities, free cash flow , f ree cash flow to adjusted EBITDA conversion and
free cash flow yield, in each case excluding certain tax and interest payments
ma de to Canadian tax authorities in relation to an arbitration decision
covering tax years 2006 through 2011 and to our transfer pric ing positions
between Canada and the United States for open years 2012 and after. The
Company has presented these financial measures, as well as the financial
measures free cash flow, free cash flow to adjusted EBITDA conversion and free
cash flow y iel d, because management uses these measures and believes they
are useful to investors, as an indication of the strength of the Company and
its ability to generate cash and to evaluate the Company's cash generation
ability relative to its industry compe tit ors. It should not be inferred that
the entire free cash flow amount is available for discretionary expenditures.
4 Strong cash generation despite challenging production environment in the
first quarter (1) Free cash flow represents cash provided by operating
activities (cash from operations) less capital expenditures less distrib uti
ons to noncontrolling interest; see appendix for reconciliation of free cash
flow (2) See appendix for reconciliations of EBITDA and adjusted EBITDA to the
most directly comparable GAAP measures Continued strong cash generation in Q1:
Net operating cash of $445M, free cash flow of $203M (1) Q1 production outages
due to severe cold and other maintenance events resulted in: - ~$75 million
higher maintenance costs associated with production outages - Gross ammonia
production down ~9% which reduced ammonia available to produce higher - margin
upgraded fertilizer products Management intends to complete $3 billion share
repurchase authorization by December 2025 - Repurchased 4.3 million shares for
$347 million during the first quarter of 2024 Advanced our clean energy
initiatives - Donaldsonville green ammonia project commissioning activities
nearing completion, with start - up of green ammonia to follow - Executed a
joint development agreement with JERA to explore development of greenfield low
- carbon ammonia production capacity in Louisiana EBITDA (2) Net earnings Net
earnings per diluted share Adjusted EBITDA (2) $459 M 1Q 2024 $866 M 1Q 2023
$1.03 1Q 2024 $2.85 1Q 2023 LTM Cash from operations LTM Free cash flow (1)
$2.26 B 1Q 2024 $488 M 1Q 2024 $924 M 1Q 2023 $194 M 1Q 2024 $560 M 1Q 2023
$1.38 B 1Q 2024
5 In millions, except percentages, per MMBtu and EPS Q1 2024 Q1 2023 Net sales
$ 1,470 $ 2,012 Gross margin 409 863 - As a percentage of net sales 27.8 %
42.9 % Net earnings attributable to common stockholders $ 194 $ 560 Net
earnings per diluted share 1.03 2.85 EBITDA (1) 488 924 Adjusted EBITDA (1)
459 866 Diluted weighted - average common shares outstanding 188.1 196.9
Natural gas costs in cost of sales (per MMBtu) (2) $ 2.73 $ 5.14 Realized
derivatives loss in cost of sales (per MMBtu) (3) 0.46 1.48 Cost of natural
gas used for production in cost of sales (per MMBtu) $ 3.19 $ 6.62 Average
daily market price of natural gas Henry Hub - Louisiana (per MMBtu) 2.43 2.68
Depreciation and amortization 253 206 Capital expenditures 98 69 (1) See
appendix for reconciliations of EBITDA and adjusted EBITDA to the most
directly comparable GAAP measures (2) Includes the cost of natural gas used
for production and related transportation that is included in cost of sales
during the period under the first - in, first - out inventory method (3)
Includes realized gains and losses on natural gas derivatives settled during
the period. Excludes unrealized mark - to - market gains and losses on natural
gas derivatives Financial results - first quarter 2024
6 6.6 (1) 6.6 7.0 (2) 8.1 (3) 8.1 8.2 (4) 8.2 8.2 8.2 7.9 (5) 8.2 (6) 8.2 All
N production numbers based on year end figures per 10 - K filings. (1)
Beginning in 2013 includes incremental 34% of Medicine Hat production to
reflect CF acquisition of Viterra's interests (2) Beginning in 2015 includes
incremental 50% interest in CF Fertilisers UK acquired from Yara (3) Beginning
in 2016 excludes nitrogen equivalent of 1.1 million tons of urea and 0.58
million tons of UAN under CHS supply agreement and includes expansion project
capacity at Donaldsonville and Port Neal (4) Beginning in 2018 includes
incremental 15% of Verdigris production to reflect CF's acquisition of
publicly traded TNH units (5) Includes d ecrease in production capacity due to
Ince plant closure (6) Includes decrease in production capacity due to
Billingham NH3 plant closure and additional production capacity from Waggaman
ammonia production complex (7) Share count based on end of period common
shares outstanding; share count prior to 2015 based on 5 - for - 1 split -
adjusted shares Production Capacity (M nutrient tons) Annual Nitrogen
Equivalent Tons per 1,000 Shares Outstanding CF Industries' Nitrogen Volumes
and Shares Outstanding as of March 31, 2024 Million Shares Outstanding (7)
2013 - Q1 2024 Nitrogen per share CAGR: 6.4% 24 27 30 35 35 37 38 39 40 41 43
44 0 50 100 150 200 250 300 0 5 10 15 20 25 30 35 40 45 50 2013 2014 2015 2016
2017 2018 2019 2020 2021 2022 2023 Q124 Capacity growth coupled with share
repurchases continue to drive nitrogen participation per share.
7 $1,505 $1,231 $2,873 $3,855 $2,757 $2,255 (404) (309) (514) (453) (499)
(528) (186) (174) (194) (619) (459) (348) $915 $748 $2,165 $2,783 $1,799
$1,379 216 214 208 196 188 184 LTM Free Cash Flow (millions) (1) CF
Industries' Free Cash Flow and Shares Outstanding as of period - end Shares
Outstanding (millions) 170 180 190 200 210 220 230 $0 $500 $1,000 $1,500
$2,000 $2,500 $3,000 $3,500 2019 2020 2021 2022 2023 1Q 2024 LTM .resulting in
strong free cash flow participation End of period shares outstanding Cash from
Operations Capital expenditures Distributions to noncontrolling interests Free
Cash Flow (millions) Non - GAAP reconciliation: Cash from Operations to Free
Cash Flow (2) (1) Represents annual and Q1 2024 LTM free cash flow; see
appendix for reconciliations of free cash flow and adjusted EBITDA to t he
most directly comparable GAAP measures (2) For FY 2022 free cash flow includes
$491M of tax and interest payments related to a dispute between Canadian and
U.S. tax aut hor ities dating back to the early 2000s; the Company has filed
amended tax returns in the U.S. seeking refunds of related taxes paid
Canada/US tax matter (2)
8 Global urea pricing sensitive to supply/demand and geopolitical
uncertainties (1) Industry Publications, CF Analysis 393.50 295.00 150 200 250
300 350 400 450 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24
Sep-24 Oct-24 Nov-24 Dec-24 Pricing sensitive to global factors: - India
accepted 724k mt of urea in the latest tender, but cut actual urea purchases
to 340k mt - China urea export quantity and timing uncertainty - Expected
fertilizer pricing reset following the end of Northern Hemisphere spring
demand - Global cost curve suggests mid - point urea price of ~$344/ton $/ton,
FOB India booked 340k mt Chinese government opens applications for urea export
inspections Global supply disruptions due to Iran & Nigeria gas shortages
Extreme cold weather snap in U.S. affecting production NOLA Barge Granular
Urea Prices (1) Expected 2024 Chinese exports of ~4 million mt following
domestic spring applications Typical fertilizer pricing reset Southern
Hemisphere application (Brazil) Active India tenders North American fall
application period India issued LOIs for 724k mt Chinese government delays
approvals for urea export inspection applications
9 0 5 10 15 20 25 30 35 40 Jan-23 Jul-23 Jan-24 Jul-24 The data and
information provided by Wood Mackenzie should not be interpreted as advice and
you should not rely on it for any pu rpose. You may not copy or use this data
and information except as expressly permitted by Wood Mackenzie in writing. To
the fullest extent permitted by law, Wood Mackenzie accepts no responsibility
for your use of this d ata and information except as specified in a written
agreement you may have entered into with Wood Mackenzie for the provision of
such data and information Global Energy Price 2023 - 2024F Henry Hub natural
gas TTF natural gas Chinese anthracite coal JKM natural gas USD per MMBtu 0
100 200 300 400 500 USD per Metric Ton (MT) North American Production Margin
Advantage (1) Ammonia (2) Urea TTF Anthracite (3) 2023 2024F Versus: TTF
Anthracite (3) (1) Advantage per MT based on annualized costs including
settled feedstock prices through March 2024 and from April 2024 to Decem ber
2024 based on forward curve and projections as of April 17, 2024; Coal MMBtu
price includes efficiency factor of 1.3 (additional coal requires hydrogen
yield equivalent to feedstock natural gas) (2) North American production
assumed to be 37.2 MMBtu per MT of ammonia for feedstock and fuel, European
production assumed at 3 7.8 MMBtu per MT for feedstock and fuel, Chinese
production assumed to be 1.2 MT of coal and 1300 KWH for feedstock and power
(3) Forecast Chinese anthracite coal prices are derived from thermal prices in
Wood Mackenzie's China Coal Short Term Outlook Note: dotted lines represent
forward price curves Source: ICE, Bloomberg, SX Coal, Wood Mackenzie, CF
Analysis 2023 2024F 2023 2024F 2023 2024F Forward global energy curves suggest
attractive margin opportunities for CF's cost - advantaged network Forward
spread HH vs TTF ~$7 - 8/MMBtu
10 0 2 4 6 8 10 2019 2020 2021 2022 2023 2024F Import demand expected to
remain resilient in 2024 Sources: Industry Publications, CRU Urea Market
Outlook as of March 22, 2024, CF Analysis India Urea Imports Million metric
tons Supply/Demand Dynamics 7.4 MMT China urea exports expected to be ~4
million mt annual following domestic spring applications India import demand
expected to be down vs prior year due to higher domestic urea production rates
in 2024 Brazil expected to remain key demand driver and importer as urea
consumption is forecast to increase 3% YoY European overall domestic nitrogen
production expected to remain below historical averages over the long - term
given region's status as the global marginal producer ~5.5 - 6.5 MMT 0 1 2 3 4
5 6 2019 2020 2021 2022 2023 2024F China Urea Exports Million metric tons 4.3
MMT ~4 MMT 0 2 4 6 8 10 2019 2020 2021 2022 2023 2024F Brazil Urea Imports
Million metric tons 7.3 MMT ~7 - 8 MMT
11 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 2018 2019 2020 2021
2022 2023F 2024F Corn Soybeans Wheat Global demand to remain resilient
supported by constructive farmer economics (1) Annual cash cost on a per acre
basis, including cash rent and other variable costs such as fertilizers,
chemicals, seed, fuel , e nergy, machinery, and labor; 2018 - 202 3 data from
USDA Commodity Cost and Returns and forecasts and 2024 returns using USDA
baseline projections and costs from USDA forecast / CF analysis Source: USDA,
DTN, CF Analysis Anticipated Average Returns over Variable and Land Cost, by
Crop (1) $/acre, U.S. average
12 2024 management outlook positive as industry fundamentals remain favorable
Global Nitrogen Market North America: Corn area planted expected to be
approximately 91 million acres India: Urea imports expected to be in a range
of 5.5 - 6.5 million metric tons Brazil: Urea imports expected to be in a
range of 7.0 - 8.0 million metric tons Europe: Nitrogen imports of ammonia and
upgraded products expected to be higher than historical averages China: Urea
exports projected to be approximately 4.0 million metric tons Forward spread
HH vs TTF ~$7 - 8 MMBtu suggests attractive margin opportunities for low -
cost producers CF Industries Operations Gross ammonia production expected to
be approximately 9.8 million tons Capital Expenditures expected to be
approximately $550 million CF Industries Strategic Initiatives Disciplined
capital approach through investments in growth opportunities and returning
capital to shareholders - Approximately $2.2 billion remaining in $3 billion
share repurchase authorization expects to complete by expiration in December
2025 Progressing evaluation of low - carbon ammonia technologies and global
low - carbon demand continue to inform organic production FID Advancing clean
energy initiatives to decarbonize and foster demand with global partners and
customers
Appendix
14 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 $300 $1.8 $1.6 $1.5 $1.4 $1.2
$1.1 $1.0 $350 $2.5 $2.4 $2.2 $2.1 $2.0 $1.8 $1.7 $400 $3.2 $3.1 $3.0 $2.8
$2.7 $2.6 $2.4 $450 $4.0 $3.8 $3.7 $3.5 $3.4 $3.3 $3.1 $500 $4.7 $4.5 $4.4
$4.3 $4.1 $4.0 $3.9 $550 $5.4 $5.3 $5.1 $5.0 $4.9 $4.7 $4.6 $600 $6.1 $6.0
$5.9 $5.7 $5.6 $5.5 $5.3 CF Industries Adjusted EBITDA sensitivity table Table
illustrates the CF Industries business model across a broad range of industry
conditions $50/ton urea realized movement implies ~$725M change in Adjusted
EBITDA on an annual basis (1) Based on 2023 sales volumes of approximately
19.1 million product tons, 2023 gas consumption of 341 million MMBtus and 2023
n itr ogen product sales price relationships. Changes in product prices and
gas costs are not applied to the CHS minority interest or industrial contracts
w her e CF Industries is naturally hedged against changes in product prices
and gas costs (2) Assumes that a $50 per ton change in urea prices is also
applied proportionally to all nitrogen products and is equivalent to a $34.78
per ton change in UAN price, $36.96 per ton change in AN price, $89.14 per ton
change in ammonia price, and $21.20 per ton change in the price of the Other
segme nt Adjusted EBITDA Sensitivity to Natural Gas and Urea Prices (1) $
billions CF Realized Natural Gas Cost ($/MMBtu) CF Realized Urea Price ($/ton)
(2)
15 Recent transactions highlight economic value in North American assets has
increased significantly Nitrogen asset historic capex per N ton (1,2) pre -
synergies $000's / N ton `10 `16 `17 `23 Capital intensity associated with new
projects has increased. Resulting in increased valuation of existing first
quartile assets. As economic value continues to increase to provide returns
greater than the cost of capital on new projects Current enterprise value
substantially below economic value of assets implied by precedent transactions
$40B $20B (1) Total project cost divided by N ton equivalent volume of net
production (Ammonia - 82% N, Urea - 46% N, UAN - 32% N, AN - 34% N) , summary
of project details can be found in the appendix (2) Precedent transactions
include nitrogen facilities with ammonia production, upgrade production and on
- site logistics assets. Exc ludes ammonia only facilities such as CF's
Waggaman acquisition in 2023 for ~$2,300 per N ton (3) CF Industries economic
value calculated as $000's / N ton capex for precedent transactions multiplied
by CF North American ne t N capacity as of 12/31/2023 less CHS supply
agreement volumes (4) CF current enterprise value = share price as of
2/13/2024 multiplied by shares outstanding as of 12/31/2023 plus net debt as
of 12/31/2023 $30B CF current enterprise value (4) `12 Line of best fit based
on regression equation: y = 0.23x - 459.7 R 2 = 0.68 Implied CF economic value
at precedent transaction $/N ton (3) CF Assets 2.0 2.6 2.5 2.7 3.3 4.3 4.1 3.6
5.0 $0 $1 $2 $3 $4 $5 $6
16 North American Nitrogen Precedent Transactions Project FID Year Completion
Year Total Cost $M Net N Volume 000's $000's / N North American Nitrogen
Assets CF - Terra Acquisition 2010 2010 4,800 2,414 2.0 CF - Medicine Hat
Acquisition 2012 2012 900 346 2.6 CF - Donaldsonville Construction Cost 2012
2016 2,643 1,067 2.5 LSB - El Dorado Construction Cost 2012 2016 830 308 2.7
CF - Port Neal Construction Cost 2012 2016 2,557 772 3.3 OCI - Wever, IA
Construction Cost 2017 2017 2,600 713 3.6 Austin Powder - Mosheim, TN
Construction Cost 2016 2016 225 53 4.3 CF & CHS Strategic Venture 2016 2016
2,800 689 4.1 Koch - Wever Acquisition 2023 2024 3,600 713 5.0
17 Strong free cash flow metrics show undervalued equity Attractive free cash
flow yield and free cash flow to adjusted EBITDA conversion rate suggest
undervalued equity, supporting robust share repurchase program 8.9% 9.0% 14.7%
16.7% 12.0% 9.0% 2019 2020 2021 2022 2023 Q1 2024 LTM 2019 - Q1 2024 LTM
average yield 11.7% Free Cash Flow Yield (1) FCF/Adj EBITDA conversion (2) %
57% 55% 79% 47% 65% 59% 56% (3) 19.6% (3) (1) Represents annual and Q1 2024
LTM free cash flow divided by market value of equity (market cap) as of
December 31 st of each year for 2019 - 2023 and as of March 31 , 2024 for Q1
2024 LTM; see appendix for reconciliation of free cash flow to the most
directly comparable GAAP measure and calculati on of market cap (2) Represents
annual and Q1 2024 LTM free cash flow divided by annual and Q1 2024 LTM
adjusted EBITDA; see appendix for reconcil iat ions of free cash flow and
adjusted EBITDA to the most directly comparable GAAP measures (3) Excluding
the impact of $491M of tax and interest payments related to a dispute between
Canadian and U.S. tax authorities dat ing back to the early 2000s; the Company
has filed amended tax returns in the U.S. seeking refunds of related taxes
paid Canada/US tax matter (3)
18 Capital management strategy focused on growing shareholder participation in
our free cash flow Emphasis on opportunistic share repurchases Executing $3
billion share repurchase program, expected to complete by December 2025 Target
clean energy projects with returns above cost of capital High - quality, clean
energy investments in motion with global industry leaders Q1 2024 LTM ~$1.2 B
returned to shareholders (1) Closed on Waggaman ammonia production facility
12/1/2023 Low - carbon & green ammonia projects DEF & Nitric Acid
production/logistics expansion Return capital to shareholders Inorganic growth
opportunities Invest in high return projects within our network Disciplined
growth initiatives & clean energy 18 (1) Last twelve months share repurchases
and dividends through March 31, 2024
19 Advancing decarbonization through significant progress on strategic
initiatives Clean Energy Growth Purchased natural gas certified by MiQ
Donaldsonville green ammonia Donaldsonville CCS low - carbon ammonia
Engineering activities ongoing Low - carbon ammonia plant (SMR w/CCS) FEED
study ATR FEED study Clean ammonia industry demand milestones Potential supply
of low - carbon ammonia into Asia PROJECTS Decarbonization Inorganic Growth
Closed 12/1/2023 Waggaman ammonia production facility 2025 project start - up
Purchased 2.2 BCF Purchased 4.4 BCF European CBAM NH3 marine engine
commercialization JERA: first commercial co - fire test at Hekinan coal fired
power plant Commissioning activities nearing completion FID targeted 2H 2024
Initial FEED study completed Estimated completion of greenfield low - carbon
ammonia facility (~4 years from FID) MOUs signed between CF, JERA, POSCO &
LOTTE Expected completion 2H 202 4 Expected METI carbon intensity guidelines
Flue gas capture w/SMR FEED study Expected completion 2H 202 4
20 Global grain stocks - to - use expected to approach five - year average by
the end of the 2024 growing season (1) Crop futures prices represent Marketing
Year (September - August) average daily settlement of the front month future
contracts f or 2011/12 through 2022/23. 2023/24F represents actual futures
settlements through April 19, 2024, and the forward curve through August 2024.
Source: USDA, CME, CF Analysis Global Coarse Grains Stocks - to - Use Ratio vs
Corn Futures Prices (1) Percent $0 $1 $2 $3 $4 $5 $6 $7 0% 2% 4% 6% 8% 10% 12%
14% 16% World ex-China Crop Futures Price (RHS) USD per Bushel Global Oilseeds
Stocks - to - Use Ratio vs Soybean Futures Prices (1) Percent $0 $2 $4 $6 $8
$10 $12 $14 $16 0% 5% 10% 15% 20% 25% 30% World ex-China Crop Futures Price
(RHS) USD per Bushel
21 (1) Source of data: December 19, 2023 CRU Ammonia Database (2) Represents
CF Industries' historical North American production and CRU's capacity
estimates for CF Industries (3) Calculated by removing CF Industries' annual
reported production and capacity from the CRU data for all North American
ammoni a p roduction peer group, Waggaman production/capacity included for one
month only (4) ~0.9 million tons represents the difference between CF
Industries' actual trailing 5 - year average ammonia production of 9.3 mill
ion tons at 97% of capacity utilization and the 8.4 million tons CF Industries
would have produced if operated at the 87% CRU North American benchmark
excluding CF Industries Note: CRU North American peer group includes AdvanSix
, Austin Powder (US Nitrogen), Carbonair , CF Industries, Chevron, CVR
Partners, Dakota Gasification Co, Dyno Nobel, Fortigen , Incitec Pivot (11
months production/capacity), Koch Industries, LSB Industries, LSB
Industries/Cherokee Nitrogen, Mississippi Power, Mos aic, Nutrien , OCI N.V.,
RenTech Nitrogen, Sherritt International Corp, Shoreline Chemical, Simplot,
Yara International North American Ammonia Percent of Capacity Utilization (1)
5 - Year Rolling Avg. Percent of Capacity CF's 10% greater capacity
utilization yields an additional ~0.9 million tons of ammonia annually (4)
Outstanding safety performance drives industry leading production capacity
utilization 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 2012 2014 2016 2018 2020
2022 Q1 '24 Total injuries per 200,000 work hours Total Recordable Incident
Rate BLS Fertilizer Manufacturing CF Industries As of March 31, 2024, the 12 -
month rolling average recordable incident rate was 0.36 per 200,000 work hours
CF North America (2) North America Excl. CF (3) 96% 96% 97% 84% 86% 87% 80%
82% 84% 86% 88% 90% 92% 94% 96% 98% 100% 5 years ending 2021 5 years ending
2022 5 years ending 2023
Non - GAAP: reconciliation of net earnings to EBITDA and adjusted EBITDA In
millions Q1 2024 Q1 2023 Q1 2024 LTM FY 2023 Net earnings $ 238 $ 650 $ 1,426
$ 1,838 Less: Net earnings attributable to noncontrolling interest (44) (90)
(267) (313) Net earnings attributable to common stockholders 194 560 1,159
1,525 Interest expense (income) - net 7 10 (11) (8) Income tax provision 62
169 303 410 Depreciation and amortization 253 206 916 869 Less other
adjustments: Depreciation and amortization in noncontrolling interest (27)
(20) (92) (85) Loan fee amortization (1) (1) (1) (4) (4) EBITDA Unrealized net
mark - to - market gain on natural gas derivatives $ 488 $ 924 $ 2,271 $ 2,707
(33) (72) - (39) Loss (gain) on foreign currency transactions, including
intercompany loans 1 (1) 2 - U.K. operations restructuring - 2 8 10
Acquisition and integration costs 3 13 29 39 Impairment of equity method
investment in PLNL - - 43 43 Total adjustments (29) (58) 82 53 Adjusted EBITDA
$ 459 $ 866 $ 2,353 $ 2,760 (1) Loan fee amortization is included in both
interest expense - net and depreciation and amortization 22
Non - GAAP: reconciliation of net earnings to EBITDA and adjusted EBITDA,
continued In millions FY 2022 FY 2021 FY 2020 FY 2019 Net earnings $ 3,937 $
1,260 $ 432 $ 646 Less: Net earnings attributable to noncontrolling interest
(591) (343) (115) (153) Net earnings attributable to common stockholders 3,346
917 317 493 Interest expense - net 279 183 161 217 Income tax provision 1,158
283 31 126 Depreciation and amortization 850 888 892 875 Less other
adjustments: Depreciation and amortization in noncontrolling interest (87)
(95) (80) (82) Loan fee amortization (1) (4) (4) (5) (9) EBITDA $ 5,542 $
2,172 $ 1,316 $ 1,620 Unrealized net mark - to - market loss (gain) on natural
gas derivatives 41 25 (6) 14 COVID impact: Special COVID - 19 bonus for
operational workforce - - 19 - COVID impact: Turnaround deferral (2) - - 7 -
Loss (gain) on foreign currency transactions, including intercompany loans 28
6 5 (1) U.K. goodwill impairment - 285 - - U.K. long - lived and intangible
asset impairment 239 236 - - U.K. operations restructuring 19 - - -
Engineering cost write - off (3) - - 9 - Loss on sale of surplus land - - 2 -
Gain on sale of Pine Bend facility - - - (45) Property insurance proceeds (4)
- - (2) (15) PLNL tax withholding charge (5) - - - 16 Unrealized gain on
embedded derivative liability (14) - - - Pension settlement loss and
curtailments gains - net 17 - - - Loss on debt extinguishment 8 19 - 21 Total
adjustments 338 571 34 (10) Adjusted EBITDA $ 5,880 $ 2,743 $ 1,350 $ 1,610
(1) Loan fee amortization is included in both interest expense - net and
depreciation and amortization (2) Represents expense incurred due to the
deferral of certain plant turnaround activities as a result of the COVID - 19
pandemic (3) Represents costs written off upon the cancellation of a project
at one of our nitrogen complexes (4) Represents proceeds related to a property
insurance claim at one of the Company's nitrogen complexes (5) Represents a
charge in the year ended December 31, 2019 on the books of Point Lisas
Nitrogen Limited (PLNL), the Company's Trinidad joint venture for a tax
withholding matter; amount reflects our 50 percent equity interest in PLNL 23
Non - GAAP: reconciliation of cash from operations to free cash flow and free
cash flow yield In millions, except percentages, share price, and ratios FY
2019 FY 2020 FY 2021 FY 2022 FY 2023 Q1 2024 LTM Cash provided by operating
activities (1) $ 1,505 $ 1,231 $ 2,873 $ 3,855 $ 2,757 $ 2,255 Capital
expenditures (404) (309) (514) (453) (499) (528) Distributions to
noncontrolling interest (186) (174) (194) (619) (459) (348) Free cash flow (1)
$ 915 $ 748 $ 2,165 $ 2,783 $ 1,799 $ 1,379 Free cash flow yield (1)(2) 8.9 %
9.0 % 14.7 % 16.7 % 12.0 % 9.0 % Shares outstanding as of period end 216.0
214.0 207.6 195.6 188.2 184.3 Share price as of period end - US dollars (3)
47.74 38.71 70.78 85.20 79.50 83.21 Market Cap $ 10,312 $ 8,284 $ 14,694 $
16,665 $ 14,962 $ 15,336 Adjusted EBITDA 1,610 1,350 2,743 5,880 2,760 2,353
Free cash flow to Adjusted EBITDA conversion (1)(4) 57 % 55 % 79 % 47 % 65 %
59 % (1) For FY 2022, includes the impact of $491M of tax and interest
payments made in the second half of 2022 related to a dispute between Canadian
and U.S. tax authorities dating back to the early 2000s; For FY 2022, cash
provided by operating activities, free cash flow, free cash flow yield and
free cash flow to adjusted EBITDA conversion excluding the impact of such
$491M is equal to $4.35B, $3.27B, 19.6% and 56%, respectively. The Company has
filed amended tax returns in the U.S. seeking refunds of related taxes paid.
(2) Represents annual free cash flow divided by market value of equity (market
cap) as of December 31 st for each year and March 31st for Q1 2024 LTM (3)
Source: FactSet (4) Represents annual and Q1 2024 LTM free cash flow divided
by annual and Q1 2024 LTM adjusted EBITDA 24
25 Non - GAAP: reconciliation of cash from operations to free cash flow In
millions Q1 2024 Cash provided by operating activities $ 445 Capital
expenditures (98) Distributions to noncontrolling interest (144) Free cash
flow $ 203
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