CF Industries (CF) 31 Oct 192019 Q3 Earnings call transcript

Company Profile

Participants

Martin Jarosick	VP, IR
Anthony Will	President, CEO & Director
Bert Frost	SVP, Sales, Market Development & Supply Chain
Christopher Bohn	SVP & CFO
Adam Samuelson	Goldman Sachs Group
Christopher Parkinson	Crédit Suisse
P.J. Juvekar	Citigroup
Vincent Andrews	Morgan Stanley
Benjamin Isaacson	Scotiabank
Patrick Fischer	Barclays Bank
Joan Tong	Stephens Inc.
John Roberts	UBS Investment Bank
Joel Jackson	BMO Capital Markets
Steve Byrne	Bank of America Merrill Lynch
Jonas Oxgaard	Sanford C. Bernstein & Co.
Michael Piken	Cleveland Research Company
Donald Carson	Susquehanna Financial Group
Brandon Dempster	Consumer Edge Research

Call transcript

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Operator

Good day, ladies and gentlemen, and welcome to the 9-Month and Third Quarter 2019 CF Industries Holdings Earnings Conference Call. My name is Kevin, and I'll be your coordinator for today. [Operator Instructions].

I would now like to turn the presentation over to your host for today, Mr. Martin Jarosick, CF Investor Relations. proceed. please Sir,

Martin Jarosick

me and President Industries Kevin, I'm Thanks joining Supply Bert CF. for Jarosick, Chris Will, Thank CFO; Chain. Sales, Bohn, and good Market Third CF and With for Relations X-Month President Senior Call. are Quarter the Tony Vice CEO; Vice you, Frost, Investor morning. today of Earnings Martin and Conference Development

and actual which the results yesterday of affect may in are These reported call statements X-month expressed this discuss detailed difficult uncertainties the performance presentation GAAP Also, and session. the between and may that or to website. will our filings on statements. may afternoon. historical in guarantees not results you On risks, its in in XXXX that review future question-and-answer this with Industries and website not website. CF our materially that is assumptions on reconciliations are CF outlook information quarter are are any implied outcomes predict. statements. non-GAAP our press More on be available industry's found detail, our release forward-looking find a then and our posted on from we'll factors what call, measures the third are and host facts involve and in Therefore, results performance about our made Statements SEC, differ presentation and

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

Anthony Will

EBITDA our nitrogen billion, logistical taking this results it Last customers business. our items the first natural nine our ensured through our higher all to in safely. well, assets release. Thanks, the generated execution costs which and and XXXX, lower night, when where CF detailed posted Throughout for of managed the year-over-year after reflect received it. team. of earnings especially they good Most results months Martin, of want we $X.X and strong across global all did gas challenges we These account highlight in morning, prices, adjusted we our year, into have great everyone. of needed financial elements work I and the continued product run importantly, we

was Our than better X.XX averages. significantly for incident work hours, rate XXX,XXX recordable XX-month incidents industry rolling

positive Our work, adjusted point a fundamentals, generate drove team's great continue year, combined to EBITDA cash with free increase EBITDA into efficiently industry the and to in convert XX% we last this available compared we flow.

basis, million, flow XX-month trailing a our cash provides is with today our yield On of flow which X%. investors free cash $XXX an industry-best free

believe the structural we free we because to generate will flow our of enduring and an before, said advantages. generation operational set global of cash on we've is through That's most superior capability As our cash built cycle competitors. compared

in natural operating the America the structural North access North advantages best largest low-cost distribution region, long-term to clear: American for gas, the growth Our import-dependent in and North and nitrogen. demand and American production are network

cycle. the we to and through by We focused cumulative clearly growth. actively operational our disciplined also assets our this evident of make margin on choices do We effect performance. this and the The managing advantages drive investing is in that people, consistently further our increasing in company

America. plant the North ammonia We utilization in highest have asset

We reduced per XXXX. controllable since cost have ton

detail. which significant in a We SG&A the industry, reduction Chris more percent driven we have and discuss as lowest have our among will in sales our expense of charges, in fixed

superior generation. Slide of cash the our demonstrates impact X

balance both driven and These through share shareholders actions reduced the of repurchases sheet the XXXX. for we Over accretive dramatically shareholder nearly cash last debt, and also of have years, outstanding accretion returning since our significant our strengthened form while growth, in dividends. business increased have the to X participation XX% shareholders our

operational record deliver performance in expect million year. we build sales ahead, between and believe XX volumes this track each product our will million to and tons consistently We on Looking XXXX XX.X beyond.

We project the for next additions nitrogen demand the X net over will years, and capacity outpace that global global supply balance. continue demand to further tightening

for curve We world. believe years to of returns and drive compared gas remains American attractive and the along operational the generation rest strong sheet the North will natural Additionally, very these our cash with forward superior continue in balance to ahead. the excellence factors, shareholder

position over will let who market to about outlook. cover that, With and our me offer turn Chris closing conditions our remarks. some current Bert? more financial Bert, talk before will I Then it

Bert Frost

Thanks, year perform high the for at a well quarter, the spring during us Tony. The remainder to continued XXXX. CF and positioning of team level the third

season met the as poor in year. in we foremost, drawn was America and customer in July out needs weather earlier application First North to the spring due

we the in the met with strong we extended demand. launched what building program, a This third essentially well-received on good included fill book. was products well, we was produced than a as order UAN about shipped later Following focused a spring, for quarter. normal and month which and positive other Demand

fall As the a quarter ahead gives application low the levels. us seasonally as result, inventory spring months seasons This and the in develop. at flexibility ended we

Looking year's corn we in time. plantings futures and to comparable corn The at at soybean-to-corn U.S. spring, is supports ratio continue United ratio XXXX States. current plantings last in to the higher strong anticipate this

fall our ammonia already We a acres believe corn fall to started customers ready expecting nutrient given begin season, application season has for in pricing. are some expected We ammonia positive and are strong areas. attractive which the

does application ample in the how season position the believe will to we we will positive meet needs product good it. a will be. capacity If the spring. open, good to farmers fall take always, advantage of If storage weather customer drive window have opens, window As not a

will and we in for this into market. nitrogen been into China saw the global be prices bid producers healthy We remarkable continue that the Global marginal expect has year has XXXX. tons demand additional the stability required to in overall

ton similar XXXX. price urea term, to can you industry Gulf be positive. average curve global cost remain the Slide on delivered that fundamentals per As for see suggests Longer XXXX to U.S. for the our XX, projection will

said, limited currently global X from an ahead. at the believe keep even to Henry should of XXXX number continue XXXX net NYMEX growth NYMEX MMBtu. Hub curve, over lower annual Not American that also construction. North end production our Tony October firmly majority projects We the Average support expect years for we As global all given additions bigger advantage of per are margins futures $X.XX gas become the be this of in it XXXX. through to than the only XXXX will that low natural compared the CF will years, of capacity will to demand above low-cost next under cost settlements the

balance of years the believe will forward positioned for grow and we company positioning the look and and our XXXX. global We demand continues with CF developing see industry dynamics the customers the to the rest we near term the even more. term. over that As the to in working for into XXXX well tighten supply in is ahead, advantage margin our longer

With over call that, let Chris. the to me turn

Christopher Bohn

Thanks, diluted Bert. XXXX, million the common reported attributable nine In share. or $X.XX of to earnings company net per stockholders first months the of $XXX

Our both $X.X billion. approximately EBITDA adjusted were and EBITDA

cash activities was $XXX billion by net flow free XX-month operating $X.X trailing million. was cash approximately Our provided and

dividend the the at by $X the and balance sheet billion. Cash cash sheet of for in $XXX quarter X.X has million $XXX on million the and in interest. capital noncontrolling approximately Since year, on of $XXX balance about were $XXX expenditures, investing million end beginning $XXX sustaining cash issuing equivalents the million, the over million million shares increased distributing payments to after repurchasing

that strong billion our cash cash generation in notes liquidity approximately outlook was and will cash we positive remaining position, which senior equivalents, this we the May $X.X XXXX. our month Given $XXX in due as in into redeem XXXX, of earlier yesterday and million announced

allocate to years capital will secured our grade. order our in fixed in the support They is million December. focus investment on the long-term will by the Retiring to gross Additionally, produce have this step taken redeem debt provide balanced prudently senior over reducing approach greatest and last last that our night, charges notes flexibility billion. the XXXX manage return to announced we through company, latest cycle. we -- the the we and also $XXX reduce These us $X.XX capital of actions X debt

annual the below XXXX million. $XXX payments level As have without our includes have reducing $XXX million been $XXX charges to of goal annualized due to on This interest Nitrogen you XXXX. the annualized about repurchases also interest includes elimination payments Terra be lower since million, of as well can share which our unitholders. in we taken see cash than distribution would achieves Slide It they dividend payments fixed as steps the lower of XX, will by

years at 'XX industry also These has and expenditures have have the kept Not $XXX we this capital per focused recovery capital million reliability. and expenditures from improved conditions our with but utilization past the supported credit on safety actions, the XXXX few for of rates, trough along greatly Additionally, has only metrics. our their industry-leading asset year. around our

result, a case we have investment-grade built believe As ratings. to strong earn a we

will call Tony that, remarks closing provide we With Q&A. before open to some the

Anthony Will

Chris. Thanks,

adjusted your on generated XXXX, how year. XX% future. On truly thinking basis, fantastic million provide questions, comments to last is $XXX increasing flow, a want about had I with a free to we're X Before summary of we first EBITDA a year-on-year. quarters frame We of we move which some cash the to great XX-month

generated objective industry. metrics repurchases an flow annual With EBITDA forward. last the and per of share of end well That free all We below retired XX million going million accomplishes $XXX our expense into conversion we returned in efficiency that to year our bringing in will drops have also back the have of have approximately the by million and cash sheet through the shareholders this balance we to debt our highest investment-grade $XXX additional interest cash the months, $XXX year. free of

excited about for outlook we're ahead, our XXXX. Looking

always While that similar think pieces, XXXX. XXXX be moving there to are will overall we

to we from volumes explained, our expect we've sales year-to-year. As similar be

be sheet, a as all lower, be repaired since Our the for we in average Hub for Henry available free growth another to will us nutrient value-creating expect range generate projects XXXX. fantastic all similar be cash year to curve or And in our have of gas will to we costs cost NYMEX we XXXX. deploy natural shareholders. flow curve XXXX the suggested already return balance XXXX forward prices which to means, And in global

in by in now grade, the for we at forward accretive driving shareholders the by balance X time. same driven our share This sheet company investment machine. growth last our value years XX% a while in and balance repurchases, to further investing fixing additional is efficient With accretive sheet repurchases. and accretion invest shareholder continuing highly share to look We've cash-generating our growth over

call will operator, now that, questions. to we open the your With

Operator

[Operator Instructions].

Our Samuelson with Sachs. first question Goldman Adam comes from

Adam Samuelson

about on And think to some drivers I'd just Tony, and fall. repay fall you've first, dynamics to we trade Bert, a counter prices have and what to guess, that to then perspective the get follow-up discount NOLA interested I would the the market mean, just I offshore near-term to if healthy so pretty in be your urea and So on of on could. this a or month just we at kind somewhat -- the just the destinations of seen get kind of seasonally the as after started get back some decision that views get I that parity? -- debt, under last

Anthony Will

the a market CF a when FOB to in industry metric ton operating and today, $XXX we've the $XXX short range. you Gulf-type probably NOLA we performance market, as the on $XXX at of of seen stable overall, year ton at So X-month to look $XXX that range look fairly same and the

of market, in numbers goes of changes. this global think India been those and last a in surprise, some of so or tenders it's month some I and of bid has the some but off the coming a to a tons to so due -- we've do And bit the

the increase. -- purchased numbers as the seeing seen but You've India increase volume well number export Chinese

so energy to out so would export million to at with X have export, out is at X.X the coming of predicted there million now. probably the you X we down China. million look of coming It at devaluation, Why it's doubling a ton a X.X has out million happening? of ton Looking to And the being then X.XX cost about coal, turned probably cost around And be X%. will averaging China. that production RMB,

ton cost the So sell it's producers some It and has another Chinese the metric to producers a $XXX around higher X%. of at FOB. allowed

through So it into through you've low in the gas the and Europe market, QX. those made have tons had and summer costs

tons are So operating into few globally, that the kind traded combined, million which pushed has not a a more an annually, you average tons ton, that rates exportable probably had metric finite there's market of higher XX of but mix.

million urea that demand their on looking last to and needed parity happen that's we've to think And at significantly could go in higher. then have XX that where anomaly. will averaging, figure $XX ammonia -- over more international tons another And tender to at traded push from the and below and million two, step $XXX million behind probably we say, and or million demand think we're the We're a positive we tons demanded maybe recently, will XX $XX below $XXX is products corn, Europe with let's $XX been trying even increased acres million -- probably very out so international incremental today XXXX we an I'm there. that season number continued X.X below or XX of see to a with so ton to and coming then imports, upgraded short or is the market. India, X in, demand Brazil. so coming We another Brazil another year, what

don't market to through -- that. bridge I could So over last we're quarter, that -- this position but this able is lasts our think that's

be the spring. of have there's buying then left to what We in a available. space we'll done, We see inventory happens and think lot

Operator

Our comes Christopher from Suisse. with next Parkinson Crédit question

Christopher Parkinson

well any flow the Given brownfield in of the the generation. potential remind Europe. M&A? priorities buybacks, allocation outside you U.S. share your there X around as cash there potential -- few for -- capital some as magnitude been of there's including have also us as potential been of as on high-return the floating Just well are of latter, low-risk, for assets news just Can a

So the bases U.S.? just larger asset do your bit willingness your as stance outside can to on you comment well something a on as of general

Anthony Will

get net mean, Yes, the I time we our into the even comfortable, during sheet comfortable with a a I very of 'XX, to managed trough to sustainability from sheet back pretty And kind significantly for annual investment-grade the charges there. fixed it's 'XX, in rating, And we we very have of look, recent of want that's that said a level balance Chris. I that, with be an long got capital we're think still cycles. balance think of and through conditions think representative we're trough investment-grade sort metrics. allocation down cash-flow-positive We've kind announcement, of of perspective, we'd down conditions. those the

then number we maintain sustaining this in operating capital; us, two believe to where highest what be, rates would that for if would our behind way we two. accretive for is was that industry obviously, value in once on got the that assets number plants, and shareholders, buy be So a growth look call our the at, capital can ammonia we is number we've creates one

today. given then And look return I mechanism, we that share shareholders place pretty of in robust preferred of have the those in dividend to absence things, as cash already the think doing to we that's our in a form repurchases

then all around. day, of of realize assets geographic spread able of them I to to end clustering more the that nitrogen together, is our in which priorities. if larger a you're than our run all synergies number the to against, feel a considering long and asset it's at got kind point. assets down best We're of really I is got effects that's share. we'd network expansion. capabilities where be a buy really they've to the value at organizational places. price to when comes think you leverage we And for But already world, we as But of you've think creating of what's do our better believe be it start own our to the So well place alternative upon there's open can we open back depends as set from shareholders relatively because it base

overpaying So poor we of instead our for quality buy more of just own. assets,

Operator

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

P.J. Juvekar

a on falling increased of metric puts prices exports think in the coal lid whatever about China urea talked Just quickly, you curve. think And on your about per and do you then talked Bert, question you prices, ton. a cost $XXX I range that

to curve the cost the at prices Because U.S. to most is to in of the market Your India. Is look way urea mind? Chinese exports the right that your go delivered

your I that? on maybe get can So thoughts

Bert Frost

So a discussion. is evolving regarding and this changing increased constantly a that China lid, and is

If we United of impact go saw you back down NOLA dominating years prices in the of several peak they and XX%, driving That that to the significant impact, exports XX% were short of where a ton trade. the to States. was $XXX a the global

think a range But issue. taking capacity, our where is know. at off probably And say look [ph]. as in all or of they you when is desirable? million. in operating with in of to capacity that where I XX our it's devaluations peak the then today happening X these they there's the are that what's the rates place changes would XXs Is estimate million evolving due the recent low so conflicts were capacities, I be I off when in the a hit you look publications. probably And as has coming sustainable? China at XX China, per some XX% estimates better would don't positively trade The that questions, trading tons

We XX% think operating to range. the in they're low-XX

XX swing So constant, ag fairly volume. Industrial, export what that available million then is when metric look makes today, tons. it's also constant. to XX fairly probably and million you at And the

we of a discussions. don't significant amount in say of So some our And to investor move see tons. we the times capability many

I assets and those assets energy air. these basically time If very continuing them to an to do very attractive it's you And idle a expensive and both water and China think pollute that's appropriately, idled back and export don't from into of bring period don't thing over production. to difficult

think I of million these China at So that X levels. economically, not million today stable export attractive to to I And it X think, at that is tons. range is

on at the cost producer North do it curve, and American yes, And participant. your question, second look we're because we primarily

happen. our percent market tons their They are basically Asia. really to probably in to that's North trade Chinese not And happening, America on won't XX-plus North now But That's want of to tons peak, tons so came are America. with staying restricted we those right, at the America. million in it focus X.X you're North staying

has they're some to X I So India going away, X million if tons X again, to that balancing, maybe market then probably to rest Iranian X demand, draw and curve. drive million the million and see from from tons, Iran go as for And of and XX does think ARM million X we the -- sanctions North global cost million at that's fairly China been still from Gold that tons million consistent to world the metric the the export Africa.

Operator

Morgan with question next Stanley. from Andrews comes Our Vincent

Vincent Andrews

if some those to sort come lower you thoughts to the forward, wondering have There appears cost gas be have capacity for latest more Just then the some moving not? any facilities going of Indian on of parts And some there of back. them to on them. potential been available

just latest helpful? and thoughts greatest So there would be your

Anthony Will

plant there to that's and be in and the Yes, and question, next year. India-driven with our been Minister we'll it's revamp. following Modi's a decision industry These revamping also additions, and we've policy and issue are basically. just not new -- visited, be constructions, industrial and these previous We Prime as evolving India-centric an

and to are plant to today plans. for these that Now Matix infrastructure pipelines idled. there you is are built The And and not support have running. be still new plans

they come So on. will

the not of done natural is a a American hit be Longer down our specific that positively tons. inexpensive. in S&D case. in Asia, forward. the projections good net term. is and think long-term And be globally, to today, will And short think driving shale imports, We globally that I a have China. of impacted which going gas going the North I producers to will have them to The million job term, Europe couple But going be down probably in some that's India beneficiary a

these curve. as or plants cost believe gets it not, willing to they extraordinary Indian And won't. and to the government the an back so to And amount subsidize we

million And that so continue million I let's to tons, in to that's more years. think X or but will range, X probably, import demand in this X X say, be a

come. So more to

Operator

comes with question Ben next from Our Isaacson Scotiabank.

Benjamin Isaacson

Can growth; new coal $XX.XX in one not about prices other government go? see Why a you China, $XX.XX, the On talk really now year, the And on the can couple I up years gone manage about range, down? come talk they look and hand, when the within developing? from, $XX.XX. supply at we start demand does of have to this of coal they've you actually keeping how a hand, with at ago prices at they're how think low they you

Bert Frost

that's I globally cost costs, look and traded two, product; the driven you of three, If product. to production; that's things: mean, commodity, the cost several the by move at coal another the cost receive one, and the to

that And domestically so that place don't they any the -- but is. believe Australia Chinese we bringing costs as the in as stay other from both could, they portion low it can in are and downturn

And from decrease a much range the so further don't in operating we see we're today. broader

up. issue, source positively that would there say to production less, right as for that, we would is that there's longer And over up, that, would their is the to But going shale announcement driving trying of And And positively we increase other going gas a the that which is be fuels probably midterm future. then shipping, a source, term, us through economy still coal been fuel fuel believe time, additional opportunities. we and be source costs plants think and in. China what the issue global of going their it's see energy growing. I right bunker the changes that's -- The for and are costs the

goes. how that see we'll So

Anthony Will

China, end a the down an the of I day that is prices other still LNG to economy. on in is, MMBtu viable. thing at would coal-driven I fallen to be with dramatically come coal has equivalency, the order mean, having add And I think to price

are there for ends have Bert's think, to prices increasing a utilization. factors coal bunch is, -- that ultimately, is supporting on pressure I coal, while that back external demand think, some we so up there. of there provided point, And And

So we're curve, the end concerned something the not doing top of terribly about cost dramatic.

Operator

with Duffy comes question from next Our Barclays. Fischer

Patrick Fischer

around America. Just question a North demand in

the in fall about we starting short the quarter spring. we season, So application year, bad talked in the about fourth talked window last all the

Given year, to, the nitrogen? your in $XX we this much add? of versus crops last we does of we then much how planted of let's over year X buckets how X growth bump corn think XX the next shorted next American more nitrogen you could break that on do say, incremental XX So you get North North market the buckets And America, out? the if if kind the million midpoint help acres months those months,

Bert Frost

a is demand, type. from the next. is to it lose absolutely So only use American necessary, We it at North or the through say season looking nutrient you nitrogen that one can't it it's and carry

row, upgrade, we a did moved not was had ammonia wet. and and season, QX that was it in to fashion, spring couple down of When in the up at lot and make was and year, in we've of and urea spring. moved difficult, of but we form a a the It ammonia UAN. a XXXX, last right, some get to needed good those you're So that

imported is we producer low that I front throughout and system, applied, QX both in So with What don't exited do number in and believe that But it. inventory. I think of the we the retail me. have total I inventory shorted don't

a in And we mid-December we're It's in so through early backyard, years, to to Chicago, today the most today, for we've application applied ammonia when would not looking out ammonia it's our conducive least window in trend. but at and snowing. and look warming generally

in to adds at look end And assets logistical season and if challenge. then into more least through we're and there's unable and the be that Nebraska ability said But production we CF, that, make value makes is temperatures that much to to of product that we the timing eventuality it to do in that even -- done. that to my as a and our Illinois the I ability believe into have Iowa conducive distribution Southern remarks, a spring, and that prepared game. get and to And move going market I know market, our at quickly

I would for -- market, say, continue corn. So attractive going going And that's to acres think what we protein the to XX that's this be corn-to-bean I what's on is the million attractive. of ratio in

Operator

next with from Stephens. Connelly Mark Our question comes

Joan Tong

morning. Good Tong on Joan This Mark. for is

Just question tech trend. any -- quick in the ag newer nitrogen technology or in interest some their way like application a pre-buying? well nitrogen the affecting of question It you focus on is or seems farmers those as application of practice, products ag area are affecting general. digital key in as nitrogen seeing of Are new applying buying or

Anthony Will

in the to and everything at testing phase, the it's could in When you theoretical look new is these the starting what practical. the they're new technologies or things, different put that and and be biostimulants out or in biologicals

And good in with and XRs is for not apply; over and this funding when are groups And think, years I focused are so changes improvements practices. with supporting. spread companies and education amongst that's is ag; good issues being, of And just around the on us, especially also and to have and seeing, custom the application. seen watershed environmental we What no, precision we that amongst with the the the -- soil such place, the until at moisture rate to optimal which temperatures right the applicators, and starting profile application you ammonia nitrogen. very the we education going time, right you're seeing right practices. at is there's which right in product on farming whole a the right [ph], are our industry, And fall right when see the hold about that temperature that of now don't

a looked have they able see to accompanying were good good these we these achieve boost, the farmer farmer producer in new economy. if you'll for nitrogen and And think is And the consumption what then to that technologies, they're and yield so promoting, being I global as compete American the positive which at we North or changes. for low-cost

Operator

comes with question John next Roberts UBS. Our from

John Roberts

Back to capital the earlier question allocation. on

get capacity kind new or order you When up to on some downtimes the opportunities. we'll magnitude do debottleneck low-cost major some have the typically more? think you your of see plants coming of XX% expansions New plants, for first of

Christopher Bohn

the no, now based operating not standpoint price a settling of debottlenecks John, at interesting is of has investment. as return ammonia on ammonia on look terribly globally issue been I a plants we rates and proposition from lately, right a think where ammonia Tampa

And there potentially we and significant -- per benefit is upgraded side. nutrient said, at UAN, from capacity just going uplift it the of the the any overall band. are say, a kind debottlenecking form add and efficient year. take upgrade of perspective wouldn't margin But it to into us nitrogen. in of the S&D, urea that ton within from nutrient doesn't that relatively $XXX that Now looking would is ton products, of on million ammonia a or an I outside million It debottlenecks are, that our those fit largely global the changes $XXX to cost

those flow business about. think really the certainly looking or things we've at change talked on it what doesn't are the I So cash we're considering, that and dynamic but

Operator

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

Joel Jackson

in your for could couple some to the you frontrunners the change a of the there's have concern in been risk how way. would frontrunners. primary, Democratic next And appetite switch strategy get fracking started stance? political a the you about think it's In here We of see states change a out of Have to about want to change Or could if little win And fracking. of in maybe if hedging? kind has what in the that things? that expressed that gas things work of one bit while that of you of the your ahead a

Bert Frost

real a thing. I by within think mean, government a level, individual that's not whether actually -- Supreme exists -- that question I whether state's of more office federal of I the requires authority as because or there's rights be that some more to a espoused that's Yes. versus issue, think or it's a that's Court-related at that

if made. macro business expect a It that kind exists economy affect but of actually. to decide. something wouldn't other within it's that to U.S. I'd And obvious us actually not whole. only office, kind I actually I decision up. of lot -- as that, say, it's not expect the don't show So I was but don't I that that rhetoric, to like it And a a is think people, for our that's think, of huge power economy

Operator

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

Steve Byrne

impact price longer closure, terms because the your now? Tony, you it's you this shifting. that just to product just look talking ask competitors a about differential to you? wanted you Magellan this ability of the it need higher bit a ammonia. about year, of more slim to does in it you move more shift can also looks corn time in gross that ammonia, you costs, little wanted a nutrient maybe at at just of if more for tons pipeline belt were -- to about some term? impact lead I on a you And so little Or of ask does move by product, to to related ammonia ammonia And out have distribution does a than have Do just margins pretty bit ammonia? the your

Anthony Will

the of mean, quarter would the for virtually couple Yes, more are a than I Steve. numbers going think on because quarter ammonia. would third the no third really things agricultural ammonia on. I focus on has I I X-month

driven which not just is Tampa the -- be don't which kind moved And general. of industrial out. were off that has -- more low, of price And which much so been contracts, pay because in ammonia in they pretty about further all why quarter why of pricing, we're they tend really that Tampa-based ammonia excited to the debottleneck the

upgrade We of our plans do run capacity. XXX% at kind

good excess volume coke Clearly, with very ton you've again a announced reducing debottlenecks what big the amount when to why got I to and we're And a able think to earlier, distribution doing second upgrade, be and we network quarter moved so movement. have. you and for the have a you've down, very more debottleneck ammonia were going lot end and they of by the think, realization we pipeline to ammonia of some about is that had be going going And Enid good saw to shift expansion, that's that have we're Magellan seen the urea is that But market of I that John. if ammonia. great asked which price in

You've make anhydrous other people upgraded products. seen moves into away from

being that ammonia the able export in for it. to barge the benefit have system verdigris able out be use of and either We plant, to to of elsewhere or

so structure application. terminal really market And I cost the a of flexibility But lift spring people season, around try to of system. big and application think plants we nice fair are but tends dependence us moves to during end to reduce a the provide ammonia for bit other still have relative be the to our their and making to the is the moving

see mentioned Chicago, increased in on As I'm of of spring. get season get here we're the upgraded But just we what as fall going in in tons as it's Bert so look the not much into we application window snowing, fall a the to you the year. sure don't this put earlier, value ammonia way out

Christopher Bohn

Steve, you indicative, ammonia is the as mentioned, prior X the the gross the it's look And only add, part -- thing line with you of you'll is months at really a segment, was for quarter. more I at as if Chris, but this the large adjusted probably in much depreciation, is looking would see that at that and pretty look year that margin, Tony

bit. Additionally, a the up tons are little

Tony period. higher As is mentioned, that QX maintenance a

have we quarter. than So would a in output ammonia typical slightly higher had we

Operator

Oxgaard with from comes question next Jonas Our Bernstein.

Jonas Oxgaard

is can how renegotiating pricing? current looks there running the material raw what prices, at Is tell Trinidad as room and that you're going that in well. equity it's through From line negative like into for Or the plant thinking environment? current your ammonia I at your about margins,

Anthony Will

Yes.

plant a that negative related that our there from in year current, XXXX of withholding million that which that. the was $XX.X that through about most at venture is to you're down part, taxes to the amnesty related for we, to joint portion Jonas, think, the program partnership, I settlement tax related seeing and Trinidad agreed with margin that the a along our was

look I a related given cash producing think it's there at ammonia of the still cost cash asset, the is gas you well. as margin, to when natural down at Trinidad that

Bert Frost

of few Company extended. that our ago have of a National about that one extension we announced, people been -- X-year think, the year Gas Trinidad actually look, with had we're I And NGC,

with so had price annualized through kind their and at gas the historical of island renegotiate. And Most commensurate buying is have to which other of the deals. Carib-based we're producers the have contracts on

So we're said, results Chris on producers a operating a onetime relative the to issue And we're as cost an -- think seeing the you're believe that's as -- and to I there tax other the in a position ongoing favorable issue. island. we is opposed performance

Operator

Michael Cleveland question next Our with Piken Research. from comes

Michael Piken

seems a program, you sort little program about fill kind going of of are wanted terms had going in and of it next bit thinking program, sales the or guys but UAN situation. talk UAN versus -- How fourth expect not timing might we fill I quarter about in going know I build a forward, have the challenging the efforts been a prices year? increase to the more but you forward. good to little like bit what

Anthony Will

Yes.

we in our of the inventory still launched and allows full trucks, my week operate to fairly planting as pleased the barges we a in we're late with distribution well and to market. because the applications was July healthy participating prepared remarks, when vessels well were the fill into last we said because the spring in pleased and I continued program being first July, August. international -- as carried and utilize we we were plants late wet So And in us of week as be low built railcars, which assets, program book

say, look well we're looking And we QX, into, I into positioned. as today, would we're so think I very

inventory continued has mentioned, our I As to stay low.

bound about, a It and -- in been the what as But NOLA. that interior. traded little margin has this UAN maybe the we And on costs. the spread close gas are talking it's the has believe low high on spring, a in ranged look towards side. publications bit have larger to already we We interior reflecting

makes that demand. year, So the and much go we're just last it challenging in if ground. it to very in ammonia constructively the is to onto the unable UAN And down, as positive, get again,

in planning that participate we're market. so to And

things. some done we've Now

in that correct EU, the been the You're sanctions communicating about. we've UAN, which

expanding cut So tons we've exports of decreased majority to been the United markets. in you in of a our EU and distribution almost those reach Belgium And being our can participation lot in different and places, we've see France numbers, the our from we've repurposed half, the that States. and

continuing or America, future if a the prepared we're smaller to that future. North think And in we do well, we heavily And so and way participate on the we way market. in will think do but small for that that is reliant international

Operator

Susquehanna question with Financial. Carson from Our comes next Don

Donald Carson

Just a year. for question next on outlook your price

some are there's urea all this flat, how Are You netbacks very your of in you strong talked, river prices that pricing Bert, the thought diesel a about might comment a these but then you belt you by was advantage of quickly, taking be just offshore out of of currently? XXXX? repeat expecting higher NOLA exports in in And to the increasing because that year some due corn issues?

Bert Frost

were the that's projecting looking saying our to XXXX to fairly business. puts look benign we of close outlook, curve cost think the in is price will due comments what move to So the the and we and at review we're tons And where the and fairly and takes that capable XXXX. of

was territories, comment. So there they pay of means traverse to more already has yes, they NOLA storage. until a stuck River close can close if longer they place. barges northern and that River it and to are the up do, spring no have taken up

to and a Again, difficult spaces. makes low, think of P&K a little we into get are? lot bit dry which inventory for it are urea is in inventories the where So space, we

positive So will we that us. outcome think for a be

production export market. and exports, storage over we're have XX% just the we would But it's bend exports values relative weren't to to on and our then in to participate lot comparing XXXX currently We about when ambivalent ship from the to We're in go, to to in continued these North where Medicine last pine you question achieve where off previous a of the from available If look and XXXX, in we there Neal, our our space they facilities. to America. tons are -- more Port values our at what the margin-driven. Hat month, could stay

overseas, $X, we So $X out up, load of $X of it ship we we'll more can Donaldsonville. and if can get a lot or product

Anthony Will

premium, logistical the end about of challenges which the kind viewing given did market blow question the next year. that during of we're kind how Don, spring, out And and

and have, right when of in NOLA that direction but kind that we the Middle And given kind short windows a think high or of to that of have think, I of of else, values got of I the last a transportation terms terms space. capture the to parts better What you're trading and in same imports international we as is smoothness of the how the assist periods there's you've spring of by to little more bit and if more what spread or coming East production at we world. couple that someplace years the replenishment distribution embedded what And can end what's volatility get very are find other pay exporter at network always the this of because in to operations you the runs, power opposed really such to required when for. that's more shines. demanded an the market that discount market particularly seen the few during going least the expect the out the is typically really is demand now willing and means

to of that's to resupply when able shines. So going means to enough sort the be North and America at further not this relative network paying which market, is to imported point, tons in the again, that, our attract system stress that's

a the lag that perspective, from international bad prices little our thing. QX during quarter, of the not relative markets. demand low Net-net, So the bit sort fact to that's volume a

Operator

Research. Brandon Dempster comes Edge from with question Consumer Our next

Brandon Dempster

the about in wanted that rather talk maybe horizon? bid to in maybe in hit more point America sustain X- what thinking have I maybe capacity? And price you a think to that's the would or you'd just to or North is greenfield range that X-year

Anthony Will

them happening. don't send see building just just one, -- interested I a way, it cost. plant I'm I in to replacement -- and come them our happy And Well, we'll that. do again, sell at anyone that's

it. urea of in about off you're I over that, up if year on think are then just costs Russia And get labor building because building Nigeria north here are uncontrollable going to $XXX even for to average you better think than full to sustainably you're prices got still or a do you here. so

Christopher Bohn

in they spending order And to a on sustainable $XXX teens on return that's for comment, labor and equipment. Tony's to just would I type think, price be in build something what above get that's low of

Operator

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

Martin Jarosick

everyone Thanks for and joining the us, we forward you upcoming at conferences. look to seeing

Operator

today's gentlemen, presentation. and conclude does this Ladies

day. and may wonderful have disconnect, You now a

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