CF - Earnings call transcript Q4 2017 | CF Industries Holdings, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2017 CF Industries Holdings Earnings Conference Call. My name is Cynthia. I will be your coordinator for today. [Operator Instructions] I would now like to turn the presentation over to the host for today, Mr. Martin Jarosick, with CF, Investor Relations. proceed. please Sir,

Martin Jarosick

yesterday CEO; of afternoon, thanks and earnings Distribution CF Tax. the be or in and that Manufacturing may discuss and posted between did Relations the we'll GAAP Industries' and on materially President Senior may our about on of forward-looking in These the and of and Will, press CF is CF. and statements this are Frost, quarter implied facts our differ measures Therefore, More host the CFO; Eugene factors then Good Vice results Chain; XXXX Vice website. Senior any assumptions our actual to website call. for on call, and expressed I'm fourth of available outcomes predict. what that release quarter President performance our presentation filings will performance question-and-answer in Tony risks, information affect on outlook, are our are conference in call find me reconciliations statements. Company, detailed guarantees SEC are results our with Market President-Investor Industries Kelleher, our you made not historical Martin that fourth our With are which statements. involve may Bert Development CF presentation Industries' found morning, Also, Nitrogen Sales, not difficult from uncertainties and session. and President as are reported Terra detail, and this future L.P. website. today non-GAAP joining Statements its Vice Dennis McCluskey, Supply and a results On Jarosick, for in the Bohn, Vice Chris review

CEO. Now, let our Tony President and introduce Will, me

Anthony Will

good XXXX. everyone. financial Martin, for posted Thanks, our we Last results night, morning, and the

into safety do It performance adjusted million EBITDA detailed has and The account team million, safest natural execution a adjusted all EBITDA was we quarter, improved and These a earnings Most by record our business. taking shift aspects Focus XXX tremendous of on release. our company reflect of produced what before. of distribution, in in after significant of than control. as prices headwinds. product the corporate we level ever cost what our in we results already full-year on our Despite our can execution a sold best. more For of we where the volume year $XXX importantly the produced, fourth setting teams. this new generated year were and the outstanding we for was CF excellent manufacturing, we nitrogen sales and ever. This crucial gas achievement did items

we As offset more challenges a result, production sales efforts the management volumes than cost our and levels, faced.

XXXX, balance As XXXX. look of in ahead navigated we better we the environment the we expect to what be to than

gas and XXXX. As with currencies Dennis oil XXXX prices dollar higher, safe Meanwhile North while more Bert higher. American Chinese corresponding detail, the global meaningfully Global coal against mutation cost to notably gas European weaker lower the Ruble price cost RMB. and will is in is and along key are versus significantly cover natural are U.S.

international expensive reduce of of Nitrogen interest lower fixed year our the lower all our of CFO Along the our of recent charges, actions positive ahead. Last purchase exercising XX% rate better nitrogen demand controllable than the and payments by to million environment week from more publicly listed operating with and right as benefits create run debt year. gas traded X.X we market deliver remains us cost dollar, the Terra about common the and $XX more of the public coupon This simplify optimistic associated the the This XXXX of last company repaid and are These that X%. cost December billion about weaker reduced to separately in structure set most we efficiently. make TNCLP Company, announced units administrative our by entity the our higher or nitrogen In global that a we pricing optimization blended XX% L.P. industry will Additionally, with with U.S. to and U.S. and conditions network higher debt annually. factors the structure, cheaper benefits. prices cost a company help about realized

slide free $XXX of $XX about million As XX flow. actions approximately of increased by the expected results shown on additional cash million EBITDA generated and these would have

also line. moving pass tax will XX% that will rate to pieces recently earnings historical of with reform cash long Moving that lower clear U.S. tax but rate generate close lot cover cash is bottom expect has corporate a tax Dennis the in laws. statutory a the flow that forward we the straight are it our drops changes and There had rate. to tax to benefit CF from

With and to our Additionally, good XXXX. the Then country, what Dennis This Bert will field Chris We're sales and the the like to discuss outlook closing return proud financials we see over our under XXXX achieved market our new we difficult let create and opportunities performance. a Chris? call review ahead thoughts. forward is for our base CF. law before for me employees looking that to more the company, tax operational I plan cover will manufacturers of we in U.S. turn are level circumstances will shareholders. in for and

Christopher Bohn

fourth has gross ammonia ammonia gross quarter Thanks Tony, of produced record million XX.X quarter, we in tons. systems our million X.X the our continue and annual it in manufacturing production distribution company was a well volume, to run as the

about rail outstanding million we record moved during transport XX,XXX than all an barge, vessels product moving including the and also loaded export vessels end product our job X.X, year year, to of the trucks also our commitment rate XX-month level facilities. We hours, our more company. marine lowest cars tons most X.X all reaching average is than sales tons incidents activity recordable than year. focus did the impressive the this the the million XXX,XXX with for rate for safety have we of within XXX,XXX incident facilities and and for is by At at on work this X in product we more more plants record and and What's the of XX the

the making quarter continued run in our products per cost, so a had injury X.X by without manufacturing also is moving momentum this hours controllable fourth In many for we XX%. a on our reduced cost and a the $XX about time remarkable We we of To million work almost or XXXX. while the do accomplishment loss year, ton team. management

As reduction initiatives and a product due result of deficiencies volumes. cost increase to

driving expenditures and fourth were further of the efficiencies activities. we will but approximately for XXX XXXX. for large million not XXXX new over of for quarter improvements quarter in were expect XXX forward focus should XXXX maintain million XXX you was the year Going delivered and Capital we quarter full expenditures the savings our which million, have capital

We of be a expect to higher new to CapEx million in for turnarounds million activity in number $XXX XXXX. $XXX in plant XXXX reflecting the

XXXX. production than With the Bert. expect we lower levels in volumes slightly be experienced to we record result, over turn to it that a let me As

Bert Frost

manufacturing in we into demonstrated our and the network. the sales we XXXX Thanks volume distribution through advantage created Chris, our optionality filled

tone for included approximately the which was For a the X.X grow sold XX sales It’s of to record work record. million our product well. of segment product global X.X the a million We million we over maximizing X.X several year and company ammonia This base. tons of each system include million urea about of years tons X overall year impact ton during of market. our UAN. exported our about These product totals customer million as

to more, however that due ammonia contract. we will We have greater be take exports in mostly shipments to anticipate XXXX under the off our lower, even capability domestic long-term export

returns ton tremendous Donaldsonville XXX,XXX-ton the XXXX year Our of equivalent a granular business of urea XXX,XXX from per fluid XXXX in over because sales sales our unit equivalent To This in seven DES to ground at we made premium sells With growth building completed has diesel a new in on This a on a capital. DEF of under the year business volume substantial of this basis. important XXXX urea urea and in progress years. we've a equivalent started also above support is up. typically in cost budget urea Donaldsonville. capacity compound growth XX% additional partial tons well facility up rates DES with at time our average reflect

America, asperity and region a North America energy has and in higher fewer former the this year export the do our market the XXXX the Since up position is XXXX. with dollar inventory of be The noticeably Discouraging The North time well Particularly of of cost This positioned first believe prices risen per demand American will year. Europe for of Supported of of last at marginal in quarter. curve. by in for fully ton book. during [Nolan] Chinese before. reabsorbed July of December spring. XXXX sustainable. of urea future as not beginning international and coal liens therefore to lower to yet months the per year. for you Imports a need to outside America less an attract XXXX not [rhythm] U.S. in imports prices beginning nearly North below of decline and from imports of is UAN it urea period we cost same fourth curve of continued the and high first result discount not United middle the North the since and solid is lower average substantial dependent into forcible are Further China global few July pushed cost running this price $XX to China in a volumes since end. in important to XX% the weaker to America Energy mid-XXXX. As will the during which compared India substantial also a reflect the XX% order producers the This out entered North performance Because [indiscernible] we February. and XXXX half for XXXX compared respectively. cost global the steepening through and States outstanding parity nitrogen stronger this at has metric a Brazil us the will and to input higher price Projected year more global international XX% freight is of imports. meet ton prices to surprising at the offshore fertilizer remain

million February. the of same prices Gulf higher market. time demand and The of of to approximately metric hub ongoing offset middle million Ocean enforcement removal the dollar recent the than of Mexico from environmental approximately XXXX the capacity exporters in driven discussed a cost have price other over urea seaborne the evident risen further The nitrogen global all with We on [ph] cost July and two period. XX% on XXXX from beginning has been natural robust of urea at Putting regulation over since RMB been about just exports same TTS has well The years of exports the XXXX to and appreciated trade X.X global urea MMBtu to the of risen China's tons exports nitrogen tons X in global urea the against exporters regions has of moving net of of from X.X reflecting deliver increases further more At China's from the dollar has exports. XX elsewhere. from urea planning the freight and the as to role XX% global helped this XX% ton just freight metric has terms. ton nearly factors decline factors that that While shrinking the are Mexico impact as the have anticipate in pressure oil we up is to India been Chinese already dollar. U.S. U.S. in weaker pushed X.X. of ship producing vessels in The and to increased for for they is in Currencies Dutch XXXX. million gas has will Brazil Australia, and are in marketplace by these fertilizer Chinese some tightening costs metric risen also the a the country. metric time Middle-East urea significantly given impact Turkey.

in of well periods we've be effectively the the conditions XXXX. the in the maximize our America turn All of With prices unsustainable to in were margin where expect price includes year higher leverage that market these call flexibility our the for the to the to year resets global nitrogen through ability spring we're sustaining they our and above the when and saw will at environment, a to similar This levels we traditional over half I ability in North of completion in point in levels navigate factors of XXXX. future. CS the positioned following into applications confident systems summer overall second to We're the this the demonstrated Dennis. you and

Dennis Kelleher

The EBITDA Bert. and loss per our adjusted per share a adjusted fourth share items the $X.XX the of EBITDA Thanks, loss $X.XX, XXXX. $XXX $XXX detailed for account and company was of After taking diluted into million. reported for diluted million our in the fourth of press release, was quarter quarter

in the gain million Oklahoma $X large one-time impact of venture of of unrealized mark-to-market resulting new the U.S. the Our gas gain It income from a joint facility. net tax $XXX million includes also on included million and adjustments on legislation. [indiscernible] our natural derivatives tax $XX a sale benefit a

Let the principal moment components; first of more revaluation tax me onetime rate $XXX of tax new $XXX reflect item the a benefit detail. million impact law tax new test that is The XX%. tax the take million of liability net outline a our the our to includes to is due federal deferred sheet balance a lower two in statement U.S. and it to benefit income on

is the tax On reduction the deferred balance net reflected the this sheet by liability. in

we repatriation paid four fully with a commencing credit tax of eight tax one Second, refundable we third paid years. the over XXXX. tax year four be tax [ph] the XXXX. spread $XX the the first onetime Approximately during they $XX profits, by years includes repatriation expense this and two it the will alternative across on remaining thirds final Offsetting minimum are previously million deemed associated million

operating been asset. a from taxes. generated tax On cash the XXXX in income deferred receivable balance federal cash have long-term to pay sheet credits reclassified not a net assets AMP we U.S. in tax and did therefore prospected From other tax losses

and taxable XX's low As settle state accounts higher margins tax for the expect to income, rate to taxes in markets improved on and we mid higher experience foreign range federal our cash income. longer-term which our into roll

of actions $XX approximately our about reduced debt payments all December XXXX our XXXX we $XXX this annual $X.X bonds, interest by XXXX interest expense would redeeming $XXX mentioned billion Tony At As debt for bonds of our million $XXX these in of by XX%. reduce and or be purposing by level approximately million million million.

million for and I Our million our cash $XXX credit revolving undrawn. regarding understanding as and is provide $XXX of cash subjective XXXX, in equivalents for other this expectations now that was and our changes market thoughts will facility December some conditions.

With likely this XXXX results. explained of provide our far products the XXXX development exceed for generally remarks. of our closing that is higher have So XXXX period the been same prices than will it heard XXXX, because for Tony and we believe some have financial and that results in all will our earlier,

Anthony Will

Dennis. Thanks,

plants ammonia generation company. free phosphate and enhance that from doing offerings I In of when global In different their and the of delivered years we the our XX thank company new This questions, in full employees X all want product company to a the today when CF's is to operations so year. we've safety, and improved It's anniversary and very different call grown for a cash capacity quarter time, developed ago. business, CF XXnd decades fourth we the than vastly exited the the for flow work seven I it to over presence. ago. founding, then Monday begins past Before synergies also the consistently joined marks CF XX, open expanded

CF. the do enduring performance of Our what culture ability our about hasn’t this is result to have changed The people built.

corporate Our to Stuart ever made and operational agile forward-looking have our and CF These safety culture disciplined more industries excellence, commitment before. drives efficient, chip. capital allocation and than

the to we in opportunities operator market the world meet Our most of are and in ahead. We the make chemical comes with are companies Instructions] commodity to will Piken questions. Cleveland Research. from best Michael that of and first positioned open to years the call well one question we challenges [Operator With the the the

line is Your now open.

Michael Piken

of that, a UAN Maybe your flows of dynamic in color arrive on the can when we of little terms with kind the imports the the trade and to time sort start current give bit would and season, can the need U.S. to in on does market guarantee that Urea kind you great. level be for us of if [Indiscernible]

Bert Frost

you Institute The mid-march make with believe a UAN on and and imports that market where move the has and we Diego on current in get there are the behind or arrival April by I and the have expect as then in to be feel customers TFI, San and we late market we're interact and barge right in we how so of from those a place, the get to worse by to have that vessels when early we a are just means just you just water Fertilizer car probably rail wouldn’t we The our urea to to return good say that lagging right for watching into continue. a And need window and behind imports vessels just maybe are and very is lagging to up we a been Midwest. those on at mid to it and meetings

additional we yet the that online and wait come that United see this States so capacity or come online is has However how and plays in and to own has to have others been our there coming out.

we this Kansas next we top we start in dress probably or we market, importer for off so firmer, and bit start have applications get firm a be in in they getting bit would early is position market have away to normally into the it dry kick that and a bad weeks Romania so would good. are applications the and seen reset Southern already and settled risk that I June that then were arriving expect of a lead have have the rain an week we two them yet Oklahoma in think the as late Pricing if in but starting in spring could Illinois expected or put it's are Texas some penalize too pretty position they say I is probably the is little in have to we spring little July.

Operator

question Our Andrews with Stanley. next comes Vincent Morgan from

Unidentified Analyst

This Neil a in morning. Ammonia is upside stronger in demand of volume Good do and still given was less ammonia quarter or urea Vincent. lead calling the lot there fall sprint seems pent-up that the in you running in up It that to is urea from could think in the the the demand?

Bert Frost

exports the have pretty the fall there that generally markets, and your there the a so did the application more of quite the market applications and as fall are up still well shipments markets are are spring industrial Mosaic East, markets as some is had Canada we fall are agreement did fall Dakotas. our there well ice certain go fall Nebraska is ammonia certain well a ammonia in states in Canada to We as bit the and includes We but big in pretty spring but in applications ammonia. industry on fall, but well with are very good very did that our that contracts record as think

ready also and still large believe UAN of will believe some UAN that end UAN, at we're application. urea we we that today, the think spring don’t but for price nor attractive applications that spring upside I fairly impact will and has still have So, a this ammonia

Anthony Will

the the outside ammonia think I if the that Bert the the said, that had application, at went don’t spring bit a versus of little lot statistically and its aggregate down 'XX think terms think amount numbers was don’t in demand industrial, of at fall fall, the sort we we of its but fall improvement 'XX the volume of historical as in for ag you I of all. robbing nutrient of a of look

Operator

you. Thank

America. Our comes next Steve Bank from Byrne question of with

open. is line Your

Steve Byrne

at do much alone So environmental is how there roster slower running the rate XX -- capacity your they of last likely that it tons would initiatives have they XX% this say assume been the and years, this come you that your of Chinese there slide say last like to you deck is there, whatever has does two that market in sub that’s that get look tight have visibility because is China, account for that operating down for capacity not view could the on back have I one facilities a the rate to inventory million to there spring. of is stream in

Anthony Will

make in come some of of and down shrink into it sense. on get to ultimately to that cost of to are basis facing doesn’t the high the rigs, result and reducing to on China, like gas given what of likelihood you there We curtailment this the scrubbing most a come summer, of denominator that could those to or turn just over so to in as capacity up that export they the the price that is gas of associated to think is the the import expect don’t So, plants are that be continue difficulty] terms kind just the volumes think product in on available the and kind back, in The as of I'll with where down is back emissions a global trading that relative elimination Bert. are winter going to but sort going set of [technical really of versus the plants depending I comeback. shows we L&G plants combination the production spring of the environmental and

Bert Frost

coupled the you believe think production this, are look from have we they supply they’ve you will demand we rate they that Gulf we they and that some on factors when and some where be and operating late imported announced continue, already going that's especially with ports. and I we’re requirements. we in little think Northern continue output the think watching and believe a are covered do that bit that their They to Iranian inventory to meet challenged build inventory, spring an programs will

Operator

you. Thank

Our with comes Capital BMO from next question Joel Markets. Jackson

Your line is open.

Joel Jackson

the versus and the price benchmark, of urea give half Looking see the in for our the some versus could you going the UAN, NOLA of to on your premiums second of the at mix and little the half year, first been idea what best in realization some some of market of ships export year can have a bit we you've that some achieved domestic and the of versus benchmark? can be

Anthony Will

to XXX closer increase at an probably just we end at above UAN We into your roll today's get in into numbers you quarter in remember as vessel will always those quarter that like, or the probably prices NOLA. you from prepared the in short like what price as also at through bring market $XXX and so have those to is in read $XXX selling as numbers Joel Arab in NOLA remarks UAN looks to and said short-term discount to spring to per as at a the we've it Gulf, parity increase in so when urea basis about you a we moved with per closer volumes believe urea. plus prices the our we've that term needs probably fourth today on needs were and the value and are be roll the to and

Operator

Markets. with Andrew comes next Our RBC from Capital question Wong

Andrew Wong

the a while today about the and very per provided for look positive commentary just price up So, ton the you so things point range I we reconcile than cost marginal together like meaningfully at sounded the think. market where the curve When maybe I the are costs maybe is above at process looks those year-over-year market publish to where $XX cost a more trying only has turning is? for

Anthony Will

what tried on year's the curve we've we of it historically a we've quarter during to updating call then third our lot to do cannot next cost year. done So is as of part and the out put

embedded it, the the generated so locations material in was was so and has for that page timeframe on XX X.X the page which of publish October but is of RMB And in exchange back in the kind curve cost curve XX in rate our Hub X.X assumptions and what's the November, September kind basis buying differentials gas is where we're gapped favorable way down not a shown in versus there of lot in come and gas $X.XX also today us. also and has Henry $X.XX has out actually or a and the for of

So, into on gas were $XX. putting what million $XXX differential of alone factors top look forward is XXXX basis just versus we 'XX curve 'XX and the about favorable at versus as XXXX a in gas plus in call and that $XX maybe meanwhile rate I of curve the the cost to curve end $XX exchange increases ocean free into it the can

think course created for opportunity year. XXX A to us us into our of generation nitrogen tailwind a for urea about of price million and of the about kind So, of incremental and participate EBITDA pretty you the if translates has improving things those the in favorable environment. balance of $XX over

we've said in pretty the why that's are us more from hearing than past. commentary you positive So some

given back don’t we there gases were We what think year, to European reset going of a were for there we're cost structures, where quarter in this we normal expect Chinese be XXX year we also last comfort urea although the to and be world where months about last us up. year, to were combination pretty don’t Both four as half optimistic get well of the makes they anywhere that almost indications favorable the close last months, year. first the belief year as ends where lows our that three simply

Operator

Thank you.

Our Bank. Ben with next Scotia question Isaacson

is line Your open.

Ben Isaacson

they for gas the able region. on been contract to gas to of may down your and any due gas were on the play, thoughts in closed, what's that pricing. your be be bridge you not having outlook there, plants shut the the ammonia fill Are ask over and in recently issues So producer the status spread supplier bid

Anthony Will

we five right in We have contract XXXX, we London fact down our have the our we an does gas. right XXX% pleased cost through that. plant about of longer competitive it to that pretty upheld a and North XX% think America place We Gas pretty extend, And disputing challenges around has there a just where that they extend based in through getting on and natural contract and so, do our I on global half a Trinidad requirements compared we're give our kind so additional being the that have nitrogen we of that one to structures production from production years the of won, and sizable term unilateral of gas say based to be all Company low-cost right gas then and plant basis original and was arbitration bad from recognized and on that do economics and challenged went one NGC to source. thing, XXXX, limited up see to have rest rather ammonia we're a the a prospective, on not ran that’s plant the as [indiscernible] one it NGC

impact on constructive has we're So, that pretty the overall.

Operator

Thank you.

Our Adam next from question Goldman comes Samuelson with Sachs.

open. line Your is

Adam Samuelson

upside are outlook, understand other. come around think here, that prices and offshore how about and how started puts mean by trajectory or up way well that short little downside be outlook meanwhile one think I made be outlook really thinking about imports things product, from really kind to just of the kind a little market you off setting wanted the to the could bit, urea, bit as UAN, you're about may the to ammonia you price highlighted could about UAN, U.S. urea the takes the it base spring have to which a talk but trying the change the it, and risk down ammonia the

Anthony Will

some at Just we're and that but and XXX,XXX looking the conditions possible the with just Oklahoma, I represents type are that starting tons drought in that urea. having really may negatives, area Kansas XXX,XXX to Texas said and total like weather be of

So for not greater see that that big we're move then to in on applications goes the and in market would a a rallies spring even impact you XX-million-ton then P&W. plantings that and just your Canada urea price would believing and if of

we position. urea do have be today, believe and imports probably on to is behind place that that look well So, other in plants needs of operated demand, to some optimally at we the it we're in and not be not satisfy product when our

We moving and without the vessel yet has of and at but get been coast at look will again have have a XXX to case a a of and on and we the there also position a that’s up in to or with we goes probably about are at amount it's into were the are that XXX the North probably per just the working trading at on get in need operating been get exported are plans range the inventory that all the positions to the structure the and short American significant of product not XXX Midwest operating we've pricing we do way out global lands coast margin on into look and place that where operated down from we today again other capacity you the tin around NOLA of barge number. well, to have have there a and traditionally when exceed ton harder product capacity, UAN product Gulf has markets our I and discount liquid product either been and UAN been east the not our and that believe the to units also not as Eastern urea which at XXX some position trading operated it to you imports in Midwest.

spring into especially us. for we've season as a early moved be we believe that And could if so, dynamic good application our very it's

are higher those price prices and of over than the seeing reflection during as probably the on we a weaken QX periods phosphate But has have of range demand and had of market we're hit Northern come were and industrial of down we a Asian especially will back bit. plants that extended low have floor last turnaround well operate so it and demand prices that's correct so nice turnaround that the moderated ammonia some international since in year. believe lot a healthy QX ammonia You on as market in on Africa a

Bert Frost

of terminal call that of bunch other the there already alone prices Midwest a price international one is shipped ship plus and Mosaic for this the one the international XXX,XXX to if the that's which against to year kind a co-relation because is we don’t The and year or ended our exposed a we're gas to agreement and so ammonia that because really anyway. XXX,XXX terms impact trade weren’t of between gas you there of to arrangement export in not ammonia base vessel tons Adam and between ammonia things can't where Ammonia able and because because for to product we supply the have that last was on a that's deal to ammonia contract less ammonia that means it one having ammonia and is not is that that up looking the year shipping get kind not that we're where of work exports plus will there the we at

we price even pretty So, though weakening the good is are change. news that it's insulated against

Operator

Stephens. from with next comes Our question Mark Connelly

Unidentified Analyst

Hi, [indiscernible] this Mark Connelly. for is

weak the if do wondering likely that the during U.S. still in or more your on we Thank Just to applications dollars support balance? you. would imbalance [ph] you back see remained past think net market U.S. exports that season

Anthony Will

season and these that incur as mean is those policy driven by as are generally growth are short-term and changes driven well structural economies. they and I or opportunities rates various economic in Well, be to interest by what perceived economic issues

around out of or dollar we're control. while could spending coming be Washington what with for weak the so, quite lack of especially fiscal a with seeing And fiscal

United the And and money produce moves enters calculating on driven remarks, CF the and we as we're so, prepared if in obviously market as a market, are I make focused balancing however view our when will international export well going you as more we mechanism, export don’t more. said we what we look to as an we we even can States, at imbalance pretty

that roll a North customers draw as we that we market to docks down as so we XX/X states United important business, constantly us opportunities and America industrial is the product, our be to we deep our for can the we are is with of then And a out as be time. international to this available consistently through a in and which we of spring look then [indiscernible] book point at we up And market vessels layered our receiving load at nice able our how because have season and worked work water several with our into demand. at natural in look part build in of there terms an the agricultural cycle. And

And or of attractive so, America backs the for the net whether year. yes, when we’ve last us, are Europe, even Asia all South above done

will we come So, it we’re believe ready company. back do for that it attractive be for the and eventually net if does

Operator

Thank you.

comes from Christopher Credit Parkinson Suisse. next question Our with

is line Your open.

Christopher Parkinson

our ahead especially see of given more America? next to still and you've generally deployment of the process feel industry reduction, you. want degree don’t deleveraging I and overall relatively potential stable. thinking what the Do we are consolidation to necessary is significant but as now limit of is stages get market rate North in the the the and undertaken you consequent own what you Thank role myself your as should capital interest

Anthony Will

XXXX where is want for XXX a get amount rest have foot, the out deployment And consistent very a that I think leverage we sustainable taken relatively to will status rate. of one pretty the out bonds of to cycle. the are down feel it then high been interest on across saying one that us the of we business take we a capital place million to role the at of

opportunities, another units buy CLP went And of a [TN] that we that XXX with just say little so bit we out about obviously other more under would million XXX will and then both million cash and opportunity I add start kind perfect of thinking will here broadly in to back and represented also a flow for home it our it out us office. a free cost efforts on reduction basis simplifying will there, terms just the in in tremendous because structuring were

can offensive So, what it and in would turn capital saying, way. start I more deploying

consolidation us others. we're the where seen are pleased as others. and [OFAC] go prices a of SEPA for with certain the UK starts industry there than company, really kind you it's U.S. more going a subject and to stuff more really U.S. were tremendous being in and others, it. on in regions and other that difficult we’re likely and think regions function We're clear that that’s than require to the open to trade But world I with and market when And has of a terms benefit difficult than to our some is of outside challenges of been inevitable acquisition happening. what

are law. places operate our that and on interpretation think keeping with we ways focused culture will the stripped We where can we in the of in and

that So some extent. limits to unites to

Operator

question next comes Carson Susquehanna. with Donald Our from

Donald Carson

that if be new to same noted buyer going imports down then know years? quarter one which Bert the on you’ve of hedging XXXX is prices talked has their on break how for have lower as significantly U.S. just about lead in past ongoing now. I gases from relatively policy that that market forward the capacity is through XX% that's of done tenant XX in situation how be And kind XXX this are would domestic so inventories what's contracts a you psychology of clarification XX% lower the channel of they've said your two I started the should you've industrial last to what third is nationally your to hedged your the un-hedged and

Anthony Will

the first. let answer So, me gas question

announcement correct you're You and where changed. not from in that are hedged previous we're that our has correct

gas puts collapse things where production associated look we monthly So going these very-very ourselves gas or has the never we the mentioned current per made the build day very committee. TWI the and of available rate consumption the never even at a hedges it's us with is to to gas resource basis us and we Chris are people fall today's Tony going or environment XX and not and for with it the look more so the around coming you feel position and activity to stay where position XXXX on in be almost $XX but and through attractive XXXX at with for into that comfortable our in say good this online the with opportunity and base oil so as is it at on production that's hitting now

them is we positioned a larger the a at truck a psychology got and we've of collapsed retail them. the lot if of inventory trader in the United the import punish people why pricing in of our access because interesting States That's a provide why time, year we February and lot On a came last bringing well or and is of material taking into wholesale I early take and lot that late March group United customers States urea for we with structurally as barge down because to NOLA ourselves low customers time, and there positioned to that hesitation positions June the works of say distributing think throughout pick-up large and at communication in believe into with stayed losses a railcar customer our our per and and time, to they and there QX. ton want that well weak-by-weak that And at opportunity. that just want steadily of$XXX early were are and I as positions entered in of incurred our a May a

overall would would XX wholesale I and participate averse positively NPNK million trader way XX of participate ourselves to that in preparing we going good to corn, this of in wheat, [ph] market to have applications say the levels lower levels that group spring as this good I we're the inclined but but risk retail of higher to and acres soybeans So, classify buy believing a are of year.

Operator

from with Citi. Juvekar question next Our comes P.J.

P.J. Juvekar

importer mentioned Thank in an post strategically drop you. you the much don’t online? export secondly to high of happens potential how for become if Couple prices near-term. is I has And guess in China coal capacity back you cost price on market? China player talk And that questions China. want comes that about here coal and Can winter? the you there

Anthony Will

coal of helping P.J mine. a On hand what the the managing of of side, bit output little at the coal terms is government part production on in

you of quite some on So have days see in mines number And rates additionally, restrictions defiantly bit. closed the astronomical operating been of that have there up gone the a is number. the see coal number has and borne

think I the stated against Now through pretty all they and had. to the they side going of the could more zombie companies way the the that conversion coal which is policy what has trend, of some are both that from they the get remaining much that sure reverse try industry rid make been profitable that’s but problems

an from desire environmental prospective up to the strong review is clean there kind Additionally, environment and submissions.

on there So, on go will one, being back exchange the and rail to are I economics the coal plants subsidies we and the electricity you coal so there another, back factors China are don’t to think price out down that extent China. notion being lot tons to And putting just being those of up again. rate and running factors reduction chemical see lot another marketplace that in one, believe impacting that of that’s the the is there, are of feed for going into of elimination a its global are to to instead of basis, to going tons. the plants the supply production a that’s continues population going that And of soak driving need the

are ultimately because to SMB from further our result outstanding it's there be to that’s of going tons so, going up buying And prospective tighten overall and an balance. the

it's currently Again, [indiscernible] direction. was was it like basis If you in in is the really of like ton and there XXXX 'XX see XXX. terms going turning and up a around structure it don’t look the $XXX XXX a at that other a on we per ton cost that increase dramatic in to almost

Operator

[Operator next from with comes John UBS. Roberts Instructions] question Our

Your open. is line

John Roberts

know XX all the may and well. firms really that and good Are you start On capacity up capacity is all beyond companies XXXX experience most market players. that of these to up all those almost have records in by online track with of bringing emerging slide don’t be

Anthony Will

comes if world we're are new Italian thinking in from that so through plans then groups in it these whether and they Generally, -- the believe or support You -- scale we what’s you in builds that with these the be major substandard I [indiscernible] with contract coming are equipment we German, the not back look on in think various of terms do articulated. regions terms capabilities. holding

Bert Frost

if these different other some in of to the that the up in that believe you sort experience. to actually if look tended later America. a would likely with to North I as cases more adverse other what have think experience we that things doing at here companies see some places that’s thing look had cost thought is John you you've in hard than we've things you of business see started compared I sort here of America It's have of might that add to this, are North people what experience, that experience the at and in

Operator

today. Ladies call Thank like to Martin I gentlemen, time turn all we back for Jarosick to questions and over remarks. for you. Mr. the have would closing the that is for

Martin Jarosick

Thanks, with us the on speaking this everyone, joining for next you various months. morning. forward conferences call to We at look in the few

Operator

participation Ladies and in gentlemen, concludes thank today's conference. today's you for your program. This

Everyone, now day. disconnect. may You a great have

CF Industries (CF) 15 Feb 182017 Q4 Earnings call transcript