CF - Earnings call transcript Q1 2018 | CF Industries Holdings, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and thank you for standing by, and welcome to the First Quarter 2018 CF Industry Holdings Earnings Conference Call. My name is Huey, and I'll be your coordinator for today. I would now like to turn the presentation over to the host for today, Martin Jarosick, with CF Investor Relations. Sir, please proceed.

Martin A. Jarosick

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

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

W. Anthony Will

night, $XXX morning for EBITDA which, good of and the Martin, in items taking our earnings quarter detailed everyone. we of first results release. Thanks, posted in million account into XXXX, Last our the financial adjusted after generated we

shipments. a to of We on capital balance million as $XXX higher of the also working of cash in inventory a sheet, top which spring temporary added delayed increase from is result

and product by strong spring natural and delayed nitrogen cold we wet As CF inventory across the shipments. despite gas global weather is applications higher execution capitalizing delayed the and This prices to fertilizer on extra QX cash and out. where levels Northern in reflects It North costs Hemisphere. team, delayed will lower and continue American shipments progress fall, the the back that in pull solid quarter purchases performance

down multiple XX-month we the rate of continued rate is of ever equal focus. disruptions last outstanding at per plants along X.X well. to turnarounds to quarter across tons a to It than Donaldsonville to of through continued more because hours. plant, plant employees' as our run tribute Despite with first and system, This was our supply our performance produced very lowest ammonia, recordable the rolling X.XX the below And year. activities commitment, well averages. our quarter work of and XXX,XXX safety focus industry gross their our incidents is be incident million electricity to ongoing maintenance Our and

continue we our North location Additionally, cost access advantage American low growing. enjoy the natural is gas to benefits as of to structural from

falling. While costs were other parts the rising, energy of many world in were ours

to of lower inland In differentials. basis fact, gas the majority favorable natural had during the plants Hub Henry our quarter, due costs than

situation persist. favorable expect this to We

most to Our to have in natural of in-region America. increasing lower ever access some costs. is the extract at assets the and rapidly ability North productive Technology gas gas improving basins

along and expect with demand North result, to that flexibility with gas, asset Through exports. global lows safety Two Brazil due availability. been natural gas in the are our China XXXX. in demand supply year-over-year drive of environmental remain limited in growing and environment, Eastern favorable regions, consistent the and XX% utilization impact dramatic first the the high China. for performance and nitrogen interrupted network, to Eastern But over we quarter more Europe. seeing of our we cash gas XXXX. As curve. the unprofitable at by low a end our quarter, in high the Along access the American notably period plants and reduced in production low-cost urea cost cost strength ever The are the will to balance of American first factors expected close to best-in-class has helped our global driven generation support this year prices than same increased is and and of supporting exports impact Trinidad decline Chinese to these above urea Chinese Europe were China urea of energy best global the The Producers illustrated and factors not well regulation the urea enforcement. later in face is North lower the for in long-term, prices production This is nitrogen. the

the underway, expect forward. With to going benefit already disproportionately recovery in nitrogen we

Dennis call let remarks. position detail. market our Bert Now, some closing in I me about the environment turn financial Bert? who over will more before talk to the offer current discuss Then will

Bert A. Frost

spring first Thanks, the Tony. in XXXX. impact delayed given of Weather The the Northern pronounced dominant started applications fertilizer season parts across was early weather North quarter. Wet was cold the for industry particularly how and Hemisphere. of a in theme application in the delays these America

We are environment. prepared for this well

of Our should be we strong. has tons done more than to Indeed, million in that meet urea customers' and the months. ammonia, needs X the storage a over next team demand great have our North UAN, two leveraging America job

the Despite today consumption situated better plantings nitrogen farmers expect anticipated up technology side-dress apply delayed Growers and We plantings. apply to be equal the pre-plant post-plant far in to ammonia. we to later have they to given seen are unable North pre-plant crop because the of have applications approximately Further, of weather. last and ammonia given on employ. spring, to year America reduced catch option

in rail all early to products anticipate believe all the areas normal, supply to demand trucking will and volume constraints significant challenged also lighter tighter ammonia this We to service, strong windows. We poor the stretched spring application for of be by resources, logistical make order than for applications. the ability industry's upgraded up

to factors these across second higher segments the enable of last year. All should capture of to compared prices us most quarter

the prices over barge averaged higher than per about the ton XXXX. $XX the period barge urea of quarter, or in of prices quarter In the have nearly higher next year first compared same five second before. NOLA they ton weeks – averaged $XX the the quarter, Over to per urea XXXX, first NOLA averaged

in North a global second ton quarter. during discount per to discourage prices NOLA These traded the continue a Even average in NOLA excessive respectively. with remain imports and will to prices first we through world, international XX% July grown these region and imports American the barge highest below and UAN urea an future. XX% foreseeable be However, region. parity imports for quarter, American prices third at declines, February import-dependent remain will of parity. has into North urea the that fallen an at the the the from $XX urea spread has

first because over the the to flexibility assets, the The with weather, the these And have to play Dennis. but for We're and quarter meet and well-prepared our customer company's was team, me call two challenging strengths. months of turn into next needs. let that, challenges

Dennis P. Kelleher

expenditures first per first EBITDA of release, and reflected the reported million. Nitrogen XXXX to to of held million earnings the the Subsequent in in million. in were as to in $XXX In Thanks, XXXX. remaining the quarter the of EBITDA $X.XX $XXX high-cost hand million XX. for press our quarter Bert. of was generated for this After the of will cash first diluted our be end purchase of flows. company debt March sheet of $XX subsequent XXXX purchase Interest $XXX units on the share million was impact quarter, we quarter publicly in to $XX L.P. compared and XXXX, quarter of year the adjusted sorry of cash into of $XXX during account taking balance end the quarter cash second The detailed Company, our Terra quarter cash the We the $XX our of the of net million million common and used – equivalents rose the $XXX to cash all Capital December of to $X.X repayment due on expense – items first million. billion of our

the new approximately million to year, to to expect For $XXX continue we million $XXX for activities. spend

now number planned other XXXX. them regarding we of are The will felt later and some turnarounds thoughts in market I said a to conditions. that to of have be have understanding begin. subject most we impact on when to scheduled changes will XXXX XXXX, our in of until not for expectations this capital higher As this previously, is our these year expenditures compared provide

have generally costs expect higher gas have than be the in in will in to this XXXX So XXXX. year product we gas natural trend same far prices than that been so we far period been expect continue. lower also Natural XXXX in our XXXX, our and and prices favorable

EBITDA earlier, on production we impact that, Tony into turnarounds account, Q&A. XXXX a call in some in these we second I factors volumes have exceed mentioned closing we XXXX more than As open XXXX will of believe that modest is have With the will will the XXXX, results. provide half remarks our this likely our all the of before to it adjusted and Taking year. for

W. Anthony Will

Dennis. Thanks,

focus, it times, everyone thank their But sure your never kept quarter. the application for I for safely, Before positioned we appeared arrived. made the would At this to move to hard it and worked questions, that team on well their when at come. season work CF spring we were want

As patterns out Weather but product one view said another, it may to our and past move a full-year today, basis. business the we into of have we continues this in true and be six-month and we a shipments applications recovery. we an efficiently favor. on quarter a low pricing application and with cost course make. we cyclical our the going year, to safely XX/X, basis And its or Nitrogen has are plants Gas what differentials over season ship in of XXX. is roughly begun run

about well, now the is will finally ahead. very Our plants and the excited opportunities running With that, to are open we We're upon call us. your questions. operator, spring

Operator

sir. you, Thank

come of Adam go ahead. Goldman Our Sachs. queue the from will first in Please line with question Samuelson

line Your open. is now

Adam Samuelson

And shipments think that guys planting, second UAN about how, could of more maybe out pricing need applications and can ammonia helpful. and two start in in June, seen markets? mean, people little size how in risk given the those discussion potentially the help the May, that markets and would for urea spring July? to imports to bit and the we those lower top-dress a you the And of we've as the I and to could quarter, about Just if side even into be play next the what late products, inland do both months

Bert A. Frost

an is late, it years been does has This my in we've ammonia the back Adam. and morning, movement. Good seen had latest go generally America, early and Yeah. In North And XX springs is spring. down. some some odd this We've Bert.

challenges that Over more last the has ammonia the thinking. think from I this moved fall. years, spring And to several

looking days. we're seen at over door out we week, the today, last probably the we've As last lot of ammonia a are go where XX

to as as a forward, risk there side-dress volume remarks, look two that ammonia application. move at But could or anticipate do the that months is we said prepared down. I to so And in my a of to pre-plant ammonia I go – some post-plant the pre-plant a of

pounds per putting you pounds might Now, instead down per pounds XXX XXX of acre. acre, down XXX pounds to put XX to

you'll move And that think if into logistical you're urea during right, that XXX,XXX tons be that will probably exactly hold ammonia, expand does as tons lose that to tons UAN. premium So, X those and could the happen, rush Midwest I to UAN. some see period or if XXX,XXX either Because you of the of products. additional million transition in

or large will to and pretty planting week percentage report coming next seed's but in and to ground to going that having the positive and signal planted, be months, the acres need we're couple we'll acceleration big get, move the I the out We next that it's a in going a So, a we're UAN. fast. and urea with think the into to planted see that

Operator

you. Thank

of queue in of will line with Steve question next Please come ahead. America. Byrne from the go Our Bank

is Pardon me, line now Your Steve. open.

open. check Please your mute. is line Your

Stephen Byrne

Can Bert. hear Hi, me? you

Bert A. Frost

can. We

Dennis P. Kelleher

We can.

Stephen Byrne

Okay.

second I, get quarter shortfall you there. of on volume Would you that in just your of Sorry intentional you some were below say year the back first following holding in could may some that up saw sales questioning tight you well your knowing line that prior that. just have as imports somewhat levels? been about had spot the on of that quarter

Bert A. Frost

Yeah.

the really into the the are looking As year, America, or beginning lower. part States you're United of since at since and they imports into July North

XX% said, urea for UAN. I XX% As and respectively and

weather some through online result I QX. and yes, QX will industry come of will in moved capacity move of that the We from but our normal a have domestic be anticipation probably just tons seen of then a as did build tons into from new and said. additional there spring QX as inventory we And

tight, especially So be the I to yes, Midwest. expect do up it in

Operator

you. Thank

Citi. with Our from question will in Please line Juvekar next come the queue P.J. ahead. go of

is now line open. Your

P.J. Juvekar

Thank Yes. you.

that talked And So, a about, quarter, to XQ happen. NOLA that moved in go a is discount discount it's now so discount you're in And bigger quick all think, a didn't no lobbying positive a last you looks I the XQ because the like grown should to And And again. question. to, last compared to has can U.S. NOLA at saying attract imports. compared imports. the premium, a discouraging quarter. XQ it that sorry,

I'm a your there disconnect, is premium this you on explain issue? a little So, little Can down discount and comments drill confused. and

W. Anthony Will

around and had whether But interesting over other this on regardless of Yeah. a oil P.J., became an you and there's that they ahead Bert I'll to years the of to couple enamored share of up. America in start, here different let of over Middle there a bit is notion outgrowth me sort this of it wanted if they going starting but producers the of have a number sort market or throw go notion in back follow maintain the look production phenomenon market which minute to philosophy of out. going was of fact this with to share in in time, this is they And an don't sort be of fair then Eastern new a that things, I regions. production North know and

on tons with it's the ton and a those index of signed others on of they'd so, said tons, are they've basically And put tons by of of community table minus we take on coasts And places a ceiling actually on that happened a the better a result from they already so perspective attract of I importers effectively, here pricing, over tons coming deliver kind tendering off-take of to of basis. going and NOLA a bit ship basis. But to here. be and these off netback X better as trading X% those of in that what's there's we're one that leaving agreements, far kind instead, a regardless. long-term because it committed of an had So, incremental or a that to a particular, the and to to contracts NOLA a just then bunch FOB there's number those result money think is are number signed the Saudis, the been much and too out haven't that go because number

fair export those keep drop sell turn in it. and places the perspective, cheap the Now, And taking and tons importers' money right, And save a on a Saudis to the because money from the their effectively world. who the pockets. barge. around They making could other it is money this price. coffer. of they of they're Saudis great a deal, they the tank backs They They're in then, own of out bit otherwise

that's of own little they'll So, of But and that we think over here. their do take the going to time, actually start up a are they'll to time. things more in interest, wise instead some importers interest over in the

Bert A. Frost

and and you've to a fact which barges think I Tony of mentioned, we think, in, late sooner. and that, month market, spring, we that don't had an I that in come up would of we these the anticipate. extra Like discount a tons, also are discount I spring. anticipated said, around a I evaporated the think have pressured And didn't normal pile XXX,XXX

Operator

you. Thank

with next will queue the question BMO line in come of Jackson Joel Capital Markets. Our from

open. Please go is ahead. line Your

Robin Fiedler

those Thanks. acres? for expect you much half taking of segments? in similar first corn the expect urea, should destruction my shift Thanks demand a poor higher and on year-over-year indicate demand in year-over-year volumes UAN with the QX nitrogen the Joel. weather to Hi. This we from how expectation And you Robin is for and question. due would When to lower year-over-year,

Bert A. Frost

Regarding acres year, the demand that. projecting XX XX what of to to above we're corn were bit million USDA is similar projecting. million little Last destruction, we a

of you so, And North structure constant. end crops when look in total at pretty America, consuming it's the

acres million at in up last extrapolate And similar and the consumption million. up down in I corn total to to fairly Canada, as we United XX canola States, XX acres acres staying will year. in what so, said as that Wheat it's cotton wheat forward Texas to region, be, the then down,

And CF, inventory, America. should what we Specific stable. see aggregate but will higher especially similar we fairly so, in last some then to produce. anticipate we if as said, Tony bled And volumes that demand And North yes, be have produce we will the be for off QX in to excess volumes we year.

Operator

you. Thank

Vincent question Andrews go with Stanley. Please Our will next line ahead. of from in come the queue Morgan

open. is Your line

Vincent Stephen Andrews

and these Tony, cap everyone. of the semantical correct wrong. of But around in you being your of talk in me then your and company chemical right, little about maybe them capabilities I'm to operate I'm lot of quote. here, a morning, strategy deck seem the fairway so at least within slides the new quarter, if ability allocation you and Thank strategic assets a being if there's last a I'm about good versus leading and and sort slides couple be growth sort so pursue some to or a forth, there's

So, I just head the where things Are now? is How sort at talk be it or of a what little bit time what could interested in fertilizer on fairway of is wonder right about over your outside now. you if doing you might strategic wide all there relative just this? you're to is

W. Anthony Will

was in from our been transparency changed. the has and BlackRock get This would a of capabilities our of Yeah. strategic Vincent, number investment forward, our fairway response say, was and a strategy and a of this topics, for of articulation a bit of this the why I seven from to bit that of you as and disclosure years. New and one And strategy good always back has bit of five to a context said, And this we some fair York about kind more longstanding of comptrollers reason going on not strategy. morning. Part for just others. we've desire, was put the talked kind little community this a in strategic – specific asking City or crisp was which

And about process only articulating want there's at retirement, thing on refresh of a actually we is crisp that having bit to nothing is this. a in The members new some that on been board close So, ones. we're a of and paper that's We've the then new one it. and doing time pen pretty about it of that members put because have of to off of getting to don't had add moving our board big board. long-serving you slug and are new a part bunch

off, transparent I do to with. And the to And we board what strategy do skills open is what you're what your into leads that looking and part we then very then is hallmark can a and in so and talk members, it need be replace when sort skills good what rolling investors. of our to are way evaluate with good you in the of about terms of interaction and a for able what those of organization, is, capabilities think, for governance

in nothing new what's there's world here going about be that's outside with So, trying very other the than transparent we're to on.

fairway, leverage think say what's create our within we that capabilities our open. to is about we is somewhat wherever I value something As core can would strategic

but And world. we've got Now, think back we assets maybe believe our a think best we investment this that have little buying shares. said, i.e. other we that are I collection the the biased regard, to I nitrogen in of against in own alternatives always compare

else of identifiable, about an up Those on screaming get to And to So, face there that, opportunity that of be would priced to set things in sense. that fairly begin reason in bar assets it to tangible, synergies. in nitrogen we're there's to makes deal to an to other that a is absolute it, with, quick to and of invest of The terms and are more need are look either would puts than low deals from clear, out with like lot what that. or the show high very often us our things want would be something everyone easily and kinds look capture different would likely than say not have have assets. in problem to something a yeah, why just screaming at other hesitant pretty it a own

asset a think there's a it's So, to into saying investing doing got more us really threshold assets be our pretty high something to to pretty own because other our way base. long of it's get about we a than – like

Operator

Thank you, sir.

Ben ahead. will next from question Scotiabank. with of line come Our go Please the Isaacson

Your line is open.

Unknown Speaker

Thanks taking question. It's for my Oliver Ben. on for

over couple last couple Chinese seems urea removal for years? your policy, years. What's trend going I been applications of well. to Chinese just There's direct demand the these, subsidies, weak and has demand as a we're eroding of forward demand environmental been over So, the NPK seeing now the the quite view over be on and guess corn some next which

W. Anthony Will

grains I a China oilseeds produce think due of importing challenged is but to to they're anyway on production going – due – water. the to but necessarily not necessarily grains, oilseeds significant nutrients to of challenged not be amount

You to of commodity nitrogen there N is of a melted granular they consumed remember tend of majority China part just and the have is for be XX% remember to a The as which are fruits is crops. put into and have that's imports you the to urea moving reality, and NPK the the vegetables an NPK. towards N is and but for that that's crops, change PK in their the

lot think see demand of be denominator's this lot come because of and little now agricultural self-sufficiency, range. and permanently. the changed bit as and and up in come operating moving around of We've offline offline, for down for So, a million capacity XX rates as use the the low production to watching nitrogen tons, as total has several being of be seems in built and in We've million stable, if higher estimated production China the we've deficit. seen seen to the a in stable China been production tons. we XX years, are actually Today, towards China a of state go for context We XX%. it's their a XX-plus-percent a industrial they

continues We're the less supply-and-demand should Asian better to Americas, what basis available it's to tons the going the term. structurally improve which the supplied NOLA by happening will evolve. and for East, be pricing China story positive the where for is think more So be Middle in longer structure global tons

Operator

Thank sir. you

next will Our from line with Please Chris go in Credit queue the of question come ahead. Parkinson Suisse.

Christopher is basis Suisse line - whatsoever hedging? (USA) terms as your Oklahoma. of LLC Thank gas Securities a Parkinson to developments it natural Credit When of long-term thoughts You've Your you. open. changes needs, S. favorable you been think any in your about in there on pertains has lot seen

way been appreciated. you're has the hedging basis? long-term So, there any Thank Just be you. would change even any thinking color about there

W. Anthony Will

the to of little ask on then comment technical a resourcefulness there lot a going innovation developments But I'll these capability have that's and on days. engineering both weigh and we and happening this. of confidence and in Dennis are high bit Bert pipeline are the the quickly degree in a not of that

entire being up into regions, gas so, that's And some doing of them lowest that it's cost system. in certain is of particular backing what Oklahoma our gas in one the

of forward may the disappear on shows the in differential, that hedge and significant in hedge. also you look to that the able differential, differential but that to basis that's eventually think that terms being collapses terms up when persist pipeline we so, forward out new of capacity when And in near-term, basis likely gas if

to we're to than and on a deep in what freeze-up out it. basis. because facility it we a look it is So, bit but want to We it basis which prone it like the little a feeds little particularly was bit spread much challenges evaluate do run Dennis hedge we'll places we you do there – do here But something and more Courtright though it's guys more our Henry to... weather do at not and during be might winter. on basis Hub Dawn anxious It's opportunistically. likely

Dennis P. Kelleher

which to is plants. I collapse $X.XX and a only Woodward the thing currently range. No, agree And which the that extremely terms to $X.XX, is and $X.XX in even our scoop maybe has you is QX purchase in gas said what going, It's happened Verdigris feeds developing of the stack in story Oklahoma that attractive. allowed us it's

And able said is to there's the providing Midwest, is you in and and see Midwest net layer have we're in in highest basis not pricing it's in positive structure the to to only as Tony when the so North net but we'll achieve logistical the cost we're America structurally evaluating us farmer, we cost gas to industry that that Great margin what now opportunities the the if the the some cost lowest the location to deliver and world. place be. we're

Operator

you. Thank

will the question come Our next Piken of line from Michael with Cleveland Research.

proceed You may your question please.

Michael Leith Piken

Yeah.

dynamic. Just wanted to on touch base bit your a little

sort I has always urea in UAN any quite bit prices Do one Typically of know lag potential UAN to they trade or I do held sort of have spring one a little don't off but stay pricing. bit of there. thoughts the NOLA till urea. but you early they, UAN bit prices to any till? know know, on early come You you then a think have kind the through firm are tends they and to there, where a think but thoughts reads of on sort it's little they'll

W. Anthony Will

something we've said as level urea has Iowa to about We're Canadian of earlier and It's likely UAN holding achieving UAN. have in of What ammonia contrary. UAN, And our you're and going industry about been we how nice premium our this has ourselves as lower are transition the urea and as I the well to do you that for about most encouraged talked dynamic we're volume premium quite where in see UAN. this for as the if whole production like would I well on with at positioned premium. is So, spring. as our the The Midwest times. collapse, that's firmed production, a dynamic

the range UAN just for you and what two so Midwest, range bit between the has that as because, of spread in the a for widen the, currently happen, $XXX, little urea as in and gets will $XXX into $XXX you'll UAN UAN, products even move see the in we're numbers NOLA, up you do and trading likely number traditional urea, off the said, can higher. high as dropped most maybe So, you as favor

so, unfold. And see we'll that

months fill. couple another want we have about We before talk of to

So, we'll next leave to the that conference lay that call. –

Operator

sir. you, Thank

Please question next from Markets. Andrew ahead. of Our RBC go line come will with Wong the Capital

Andrew Wong

question. my Hey. Good taking Thanks morning. for

slide just not a same like the looking thinking on XX. as it like last new, just XXXX, are slide So, it's few know demand. I questions capacity additions but it's looks and at the demand the outpacing time, supply I'm

tightens pricing does what next XXXX XXXX considerably. So, a beyond and Does too online. that oversupplied? look up really a bit that for And then, prices little for prices a the because more recovery because and term, longer But – more mean market couple there's being built I low notion in longer-term market's years year? the that the that there's ago, nitrogen are coming projects mean Thanks. there's the projects still getting mean, What does does just that no it indicate market? new like

W. Anthony Will

supply just are seeing points. global in a announcing seen economic and the operate happen low the But permanently inability structural that of other of continue market our anticipate for demand situation from demand in that a and significant opportunity Petrobras an move the China look in you the new and gas Yes, are on locations and and plants globally few the oversupplied cost in and consumption tons new logistical at come OPZ they're look growth that Ukraine. the when market. and things Iran nuances offline pricing you the into These at to X% get and side. generally in the some off been to type to and industrial in the always at international But worldwide, cost, there We have growth have that market. to range When on being structure producer. supply you we've relative Nigeria the projections in then, will industry producer, cost, domestic and the this the demand with X% do we're come add to that available we're coming Brazil.

maybe So, good go heading into as trend do not – we tightening maintaining but XXXX. a it we see into a

Dennis P. Kelleher

Yeah.

I'd know, capacity is thing you slide. is that Andrew, a do this other as on the net think is I as say, this our, addition we

in closures nets pretty as closed potential it And, We can put coming what perspective that So, closures. an estimate till be count we're closures. it's there stuff we out actually we we going announcement what do clear wait as from it is typically, against to see basically pretty conservative what we to in before really be.

there the be upside So, chart as some we've next closures I in is, this the and few than to here. estimated think, could magnitude larger years unfold

W. Anthony Will

look exactly, to things in right of as gone at point I on come. that what's think you Trinidad Dennis, To shape the now

marginally struck And only more on a so, made do off if molecules in be was sounds for it's challenged, kind Atlantic LNG being the at several it. So, unprofitable I squeaking that and offered contract plant equally rounds come they've a couldn't turnaround there. but train contracts because fact eventually TNC lack gas months of look into to of of think like They curtailed a up the not Trinidad, going that particularly to gas saying that the that you of terms as continue next deal it's afford by. the were a they that

this pretty into there chart. view forward, that world is and of that our the today going producers are areas decline substantial So, rapid baked that's may experience pretty are some not

Operator

gentlemen. you, Thank

line come the Please go of Our next question Jonas with Bernstein. ahead. will from Oxgaard

Your is line open.

Jonas I. Oxgaard

Good morning, guys.

W. Anthony Will

Jonas.

Jonas I. Oxgaard

NOLA, inefficient there global on arbitrages? And trade be that, there an follow is it these done for opportunity to to simply do system. Eastern apart up? close guys very in to shape the Curious, Is for can anything persistent Middle producers that a be up you seems with these to from discounts waiting

W. Anthony Will

Donaldsonville's to got very do Midwest got up to mean, opportunity a sort Donaldsonville carefully. I want Do send we So to cargo do the to we the good we of export we've and and set do an of export, that. very look incremental Yeah. docks it? from ability want into or

have the we'll So basis us urea. get regular given fact a on trading. better is ahead go where here for happening, to I would a and been we And say, that's somewhat to when that netbacks export NOLA chance D'ville,

way to itself years a work for come to expect things those in they're couple will take on per one fully up and for Middle of it's it to realize we'd the basically the when do, sorted producers out. Those $XX start probably table, it's things but I get things ton possible. leaving most that Eastern think when that the wake renegotiation. And going changing they'll economic they up those them

Operator

Thank you sir.

Mark Stephens go question Please with from next Our ahead. Connelly comes Incorporated.

Your line open. is

Joan Tong

Good morning. Mark Joan is for This Connelly. Tong

export just on are Donaldsonville wondering export do of there export any up running you if talk answers finding can at just there tonnage in about. the with question or customers? staying Are sort your beyond capabilities I'm limitations what this the or any from with just that point? Just you ramp and fully capabilities

W. Anthony Will

the and exporting. year water, you're and is have the not of million. the Latin out quite did exports as of UAN world, and as Europe close ability tends tons establishing a Donaldsonville achievable, used of X of sense his it Latin opportunities We be team UAN, million export UAN or easily NOLA into because exports X not there while a at now urea being X at to a and because additional done is to urea we product areas got as probably Midwest we've of Bert it cash as Yeah. little opportunity get to On a shipping up as it right we've but great as it have over job relationships bit are or it, coming widely quite the same by trading lot front. in to of and the of on to also America million, is in continue done much the look and lot the where last makes cost get the to probably place to it places in the other discount a with to America get around kind most

So, it gives us a lot of optionality. Bert, you want to?

Bert A. Frost

as we No, will the to that's the We for can we We we flexibility like like it make developed company. export opportunities. the it. as We're gives company, as profitable decisions the necessary. like netback and the much driven. And relationships

doing we'll So, it. keep

Operator

you. Thank

line question Falcao the ahead. Our with HSBC. will of Alexandre Please from come next go

line is open. Your

Alexandre Pfrimer Falcao

your further question. – delays seems the guidance. affect or It like the numbers, a you it's to just prices, – second going when England is the able weather really to if With provided in for you guys it Thanks the up quarter, more of your having year? quarter guidance like picking contract like you the is the we are respect for first not be outlook Is than seems for that oil reassess to any do going not assumption? and when surge the – positive fair think the

W. Anthony Will

to we try Well, this even weather ranges estimate volatile we or not tight – and to point subject numbers and other don't – pretty because business give vagaries. is

were the we way is the where our driving a factors to were as which and so and it, is, in what Dennis cost the trading, which call to of It's nitrogen with results. time we energy on are was of is provide consistent directional are that the And to what we after position discuss America, fourth where kind last information, major use quarter then elsewhere, a profile gas think demand that of kind did. so try North costs kind

I update as consistent. And direction. – information, in if long were different I you going And guidance, our so I know, we're don't pretty think it's wouldn't expect say a directional it to when providing to update be as

same from You'll don't ranges. to just this to level we in likely providing But thing have we're not us in that industry call. the go a That's hear the precision specific going given numbers volatility. of next the or

Alexandre Pfrimer Falcao

more was favorable than those But that it you provided Okay. you views, before? first when environment say would is that a

W. Anthony Will

gas before, said know into And versus little has the I a think the when mean, don't demand not we think tons second. delayed quarter all to that produce. lot But that dramatically has been expect moderated first pricing we where is of of move that I a changed to but the were. bit continue and that we I we I out again,

our that know been substantive don't there has outlook. I a So, in change

Operator

Thank you.

Please go Roberts Our in John comes UBS. queue next the with the ahead. question line from of

line open. Your is

John Roberts

skeptical, you Do have consultant you. a seems refinery but I've on Thank hard some balance is perspective, thoughts envision. to China's corn Yes. seen recent China with going forward plant? any corn that pretty But EXX. say it's I've from ethanol presentations been

W. Anthony Will

that new corn to as move and then as satisfy at additional would to up this China need change center. and of go has an When There that you would stock be degraded well is next demand ethanol would production. looked mythical the about that Brazilian and construction corn or look for at – an heard yes, it's excess is we plans or taking probably place We've best probably exciting that use our of have aged in imports that because the a the that stock corn corn would some, be not of ethanol corn. and

ethanol supply scale construction sense. only makes cleanup movement as the well would these think of out I the excess not dual of timing to their of And oxygenate and the they as as the have Brazil their aware the but size not environmental own. I'm assets and exact for our And so part an as of production

this come more on So I there's story. think to

Operator

am queue, into line no I Thank I showing Please ahead, you, – time, have say comes sir. Jonas presenters, questions one as there, the from your this open. with question that we in Oxgaard that came go At additional additional just is Bernstein.

Jonas I. Oxgaard

guys. Hey,

how – or have right is there in what from saying Looking been in in now seeing that while. XXXX at you the very on incremental most of Chinese winter, closures you that that closures, in last that XXXX the well, deck? we'd lot – expect slide or and are of seems bit deck little hasn't about early implying it closures I'm XXXX, just haven't Not on we've been a and your guys But you're working it, particular like those in slide the slide your most you on heard you China XXXX. more. a fact, a in there talk Can to updated

W. Anthony Will

those ourselves closed was Well, we things in that to Jonas convince I we earlier point put permanently that slides are our tend can actually until was down. the that that don't made stuff which

that ago. and the delay wrong like, are regulation increased gone Chinese China aggressive we perhaps you're that, rate dynamic people the enforcement, are perspective And exchange an just and we and to our in where from in going today more on two an would've Okay? And may overall higher thought a also a the addition to is But was years versus way that's subsidies reductions year the we half, and seeing seeing so process. be in what coal are seeing prices. go in it seeing

those we're comfortable to all our a really count closed. as But that closures ourselves it's time. actually additional going dynamics process through So direction once that we is get can closure that of only again, confirmed such point the in

Operator

Thank of the you. And we do go your is with open. have line an line now additional ahead, Juvekar follow-up from Citi. P.J. Please

P.J. Juvekar

had back. to in producers I Yes, equipment control capacity shutdowns other some that hi, the and shutdown among think And some clearly, declined, plants, pollution question But another down you installing on and China appreciate this bring XX%. control exports. industries, issues. there, for in Exports are said getting where been capacity, relocating China this capacity China has they're shutting pollution over

may you this but forward away, urea in of right looking happen do that? risk not again, there's think Now,

W. Anthony Will

of as the I of big sizeable the profitable, from coal an behind just industries other of all out it's emissions And and outside coming by to smaller central the happens there's dynamic you've mines within out and a a got urea water zombie same and urea. government pretty a industries of leave of emissions particularly been get true been the because user rid plant environmental particular the Part healthy, in and playing itself sizeable matter it of sector. well. the out the that's push perspective. is air quality don't There's, that that coming there see is pretty footprint

net you so don't then looks then and their toll, see when energy urea top when again, cost it's it. That's in look in what that what pretty heavy at it's And to importing a production doing when environmental we a just you're happening. like exporting LNG relative negative it taken the on to is structure high environmental affecting order importing And pretty and loss producing coal of at like self-sustainability And food from excess $XX-plus export form of toll. production. a urea a their at of arbitrage. effectively terms effectively It's in not it takes

that So be of we big together, on to capacity you marketplace. all don't think slug that rack this going when of that Chinese the just there's back comes

Operator

remarks. presenters, time, Martin this I am the over questions showing in at Jarosick for I'd And additional closing to call you. no Thank the turn to queue. like

Martin A. Jarosick

joining us this conferences at for look everyone Thanks morning. to May. We forward you in seeing

Operator

to of for us joining Thank your And you for participation. you all you, today. attendees Thank our call. presenters. This today's thank does conclude

disconnect. Have now day. wonderful may You a

CF Industries (CF) 3 May 182018 Q1 Earnings call transcript