CF Industries (CF) 13 Feb 202019 Q4 Earnings call transcript

Company Profile

Participants

Martin Jarosick	Vice President, Investor Relations
Tony Will	President and Chief Executive Officer
Bert Frost	Senior Vice President, Sales, Market Development and Supply Chain
Chris Bohn	Senior Vice President and Chief Financial Officer
Christopher Parkinson	Credit Suisse
Stephen Byrne	Bank of America
John Roberts	UBS
Don Carson	Susquehanna Financial
Joel Jackson	BMO Capital Markets
Jeremy Rosenberg	Morgan Stanley
Mark Connelly	Stephens
Jonas Oxgaard	Bernstein
P.J. Juvekar	Citi
Michael Piken	Cleveland Research
Adam Samuelson	Goldman Sachs
Andrew Wong	RBC Capital Markets
Jeff Zekauskas	JP Morgan
Chris Willis	Exothermic Global

Call transcript

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

Operator

Good day, ladies and gentlemen, and welcome to the CF Industries Holdings Fourth Quarter and Full Year 2019 Results and Conference Call. My name is Michelle. I'll be your coordinator for today. [Operator Instructions]

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

Martin Jarosick

With Good full and Chain. year and. Martin Bohn, Vice for CFO; And CEO; Frost, Tony conference of thanks Industries CF Jarosick, Sales, CF. Relations Investor Vice the and joining President today and Chris Supply I'm are Will, for call. morning me Senior fourth President Bert earnings quarter Development Market

Industries XXXX we'll a reported Industries its CF in CF review yesterday call, On this question-and-answer and our quarter full discuss afternoon. results fourth host the outlook results detail, then year and session.

outcomes the assumptions which be call in materially may any of our are More are guarantees what detailed or may statements. expressed in Therefore, about found on predict. this on made differ difficult website are our statements performance our These statements. is presentation future SEC, that affect performance implied Statements factors to historical are forward-looking that with that facts available in and information and our actual the website. and not on may and involve are results not from uncertainties risks, filings

presentation Also, measures in and and you GAAP our posted non-GAAP on find website. release press will the reconciliations between

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

Tony Will

converted billion morning, $X.X Thanks year. EBITDA a year results into for nearly for XXXX, in the we increase Martin the our and free everyone. of XXX posted million XX% good XXXX. full adjusted cash, generated in night, Last our efficiently We EBITDA cash financial generating which over over we

EBITDA industry. of our Slides the on efficient we're into converter in shown and cash Xof the materials As X most

outstanding price, yield. higher lower impact costs natural we for the the and the team. year-over-year flow product These reflect results the free execution CF of Additionally, have best gas company, realizations by cash

all quarter. well set production in ammonia record plant new and the operated our fourth a quarterly extremely year We

Most product of year, than and full impressively, For XX.X we volumes million of sales tons this all the XX.X safely. we delivered tons. ammonia more did produce million

incidents month work rate the This Our the incident X.XX is per XXX,XXX rate XXXX was CF. end XX at hours. year recordable rolling ever at end of lowest

achievement. We to top day. at And I are their CF of priority proud makes who everyone every safety tremendously thank this want

a above delivered which Slides X member fertilizer return peer of we shareholder on for XX. of as see XXXX, XX%, year was one you total each In group the year, well can and our

these our best the shareholder over three, total were outperformed have five, and we overall returns. peer We seven performing group single index XX years time And periods. one of company one, with for

long-term structural out peers performance strengths to relative the our We consistent reflects believe enduring of our this company. and operational

advantages which Our demand is provide we grow. that for a and structural non-discretionary nutrient to continues are clear,

in import are North in gas and nitrogen the natural lowest world low due We cost American among the to plentiful access regions. dependent cost of our operate we and to producers

also We and created in for have by advantages assets our our operational our investing company people.

have and highest have the rate meet maximize in sites utilization between quickly profits. We to products America our flexibility the production to and demand North switch ammonia

advantages These capabilities to have America's cash enabled have most efficiently flow. network. also extensive outstanding logistics significant North distribution generate We in us

record shareholders. to years of beginning in the and $X company track the to build nearly position increase the in our on participation sheet, best we XXXX, to value the Since shareholder creating in this cash of our nitrogen strengthen have billion balance in long-term return cash shareholder to industry ahead. are believe continue deployed business we We

management company. disciplined XXXX to of on reliable remain focused and and forward operations the we Looking safe

with expect year in product structures the do per operational we product to As we've cross said believe ton before, this one million will our deliver each and and sales consistently performance volumes XX lowest XX our industry. of between we controllable tons

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

Bert Frost

of energy second XXXX the This Since increased second half a year the low growing pressure the XXXX Tony. and during strong part spot volume bright highlighted prices India and the of Global into production global of of by in conditions XXXX supply startup in prices to latter global have industry and start despite record of nitrogen into domestic tendered nitrogen for urea of capacity. Thanks favorable flat urea demand the availability. half Brazil. XXXX. India operating supported rates new and was the imports a due higher

Chinese This India market, demand urea Demand to additional remain favorable our rates March India and tender with along early with from entering exchange brought effect prices XXXX, next expectations should in year. the expected April. strong energy exceeding or exports lower the urea in of the the

We urea imports recent country. and Brazil and urea also increase the of demand Petrobras ammonia complex XXXX in expect planted a by over to idling corn acres that supported in additional

quarter. were demand. Orleans North fourth at XXXX. New the has reflected saw have appreciated begin prices of to industry nitrogen per North year-over-year we at take begun Barge world, to as has recently XXXX Urea in compared of year. potential nitrogen start America as Just of values prices $XXX ton, the the start stock like the barge spring ton the $XXX in the lower rest This prices American the been of throughout per

year-over-year. are However, even prices with lower still the today increase

this Additionally, last to imports lower adjust than North of of as trade and influx tariffs. to European to point America due a UAN an at the impact prices are flows priced discount in Union urea year at

for challenging if most farmers a typical lows. in whole corn is decade will over planting Last in ammonia a and acres fall farm acres We in improved America should saw plant and we we prices. application expect prevent spring in record poor US a weather. see demand due to upcoming weak income XXXX year, costs at the increase nitrogen strong an during however, season are input North planting Despite farmers result This year believe the as which conditions. season, support

of support planting of in the the an million continue crops. XX demand will nitrogen to We XX range should for We States believe Crop in million the consuming acres planted favor corn this be increase estimate nitrogen. features to acres. in United

for also positive poor seasons. active we We ammonia products, spring season well ahead. typically which following for upgraded spring see We're ammonia, application fall as the see expect as greater prepared well demand demand

While are for spring planting our for extensive opportunities CF normal expectations conditions, and our each capabilities. leverage to brings distribution new logistics

whatever successful for ready a look with are working our for We arises application forward to and spring season. customers

call the that to let Chris. turn With me over

Chris Bohn

Thanks Bert.

of share. per reported common to earnings stockholders For million the $XXX the full year $X.XX diluted net XXXX, company or attributable of

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

prices. factor in half performance supported true natural especially Lower in This compared XXXX. despite natural XXXX lower financial to gas second in costs the year-over-year were was results significantly substantial lower when our prices product our a gas

we impact product partially Looking This ahead of to continue particularly year-over-year offset gas expect to half a to costs lower tailwind, should provide in the the XXXX prices. natural the year. of first

Our full million. was by year net flow and was operating cash billion approximately $XXX activities $X.X provided free cash

deploy we shareholders repurchased line XXXX, in for standing gross long XXX continue to $XXX In our We we million redeemed $X $XXX dividends million priorities. in with shares million debt, to returned billion. through We capital and our debt X.X to million. lowering

were million. sheet. $XXX million on million the equivalents the year with cash balance stated cash balance in line the target of is sheet of on end This to As a and our result, $XXX at of the cash $XXX

million we need reduced this the liquidity the undrawn significantly to fixed business our our charges, through cycle. run Given revolver, believe provides $XXX and the we

investment return will Looking ahead to prudently the manage XXXX, balanced capital in the and business. have we to allocate pursue we increasing approach participation includes continue grade. company, to shareholder to underlying taken our This

Slide shareholder increased through have you XX% we on growth nearly XXXX, our X% participation see of shares end as of by and the repurchasing initiatives, Since nearly outstanding can XX.

flow we most our attractive grade a believe our price strong in free remains share current shares industry. investment the generation, Returning priority. the also to cash Given and our investment are

to improved greatly of credit an a have fixed billion million their XXXX, the couple entered the We debt Since annual charges just $XXX our compared basis. by year and lowered and reduced $X.XX on flexibility, we of financial ago. beginning have approximately years by metrics with

strengthen remaining our a the XXXX before is flexible maturity the well sheet and of and $XXX for that will positioned on secured note of million grade further also We our strong We case investment future. to date. are will balance our senior achieve committed the this goal believe redeeming or for

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

Tony Will

Chris. Thanks,

acres. increase product you've to move continue XXXX. As QX our your the Before compared gas CF trend costs Chris, despite you at questions, year But in movements in to we on to company much lower movements lower we they QX can focus and energy a Their costs half impact Bert reliability product to want The and everyone gas throughout operating more periods thank are as XXXX I success in heard both than by the our work year-over-year product continues pressured of expected to their the on and customers costs. this safety, to great results from XXXX see of corn year be should the sensitive XX. delivering offset as partially of prices and our for expect are have lower Slide of on drive prices prior to to first in for global prices

our $XXX would nature the expect the is within in So fall sometimes in free XXXX still we highly reminder of on in cash year the of over the understanding somewhere to flow XXXX early as million XXXX, in range EBITDA free play and today, that of full a commodity rather both XXXX and of we and year cash as results. prices, EBITDA generated and flow. most global focus sit would part unpredictable XXXX, and we with our But than here for XXXX volatile

on would our the continuing grade, investing continue deployment expect So program, the our of to that industry. investment most share given while buyback attractive regaining shares executing in in priorities we capital

the in term, our best among company remains the world. Longer position

non-discretionary are Our produce We structural nitrogen. clear. the only nutrient advantages

we flow build our We us drive long-term American our generation record through in We operate creating have believe value to competitors. important to cost enable continue cash the low track free shareholder compared will North advantages regions. superior natural cycle dependent the and strong these to gas access of to on and

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

Operator

will As Suisse. answer yourself should question queue. questions, And comes question to that have call, additional Parkinson first you time questions from the the Credit a Our allows. to ranch we you Christopher one ask on [Operator limit that ask as we Instructions] of courtesy you we additional others

is Your open. line

Christopher Parkinson

thank you much. Great, very

you. efforts. your it in you including evolution And USs UAN as appreciated. how progress just of you can the well as XXXX, America, that, net then about global the just would and flows market, if them made in on kind your trade the regarding you've the out be also Regarding market greatly hit see Latin talk Thank moving perspective, of of And the US? from development could position, you

Tony Will

Good has to the morning, America seeing product, we're that market it its very as ability. in blend and UAN We and believe flexibility due is And been South mentioned. growth adaptability place taking you that good a growing.

what contentions disruption the Trinidadian. UAN to We lot this what will is recent changes in that that and that And of the the will. result. market tail this be correct European in and as just have decision a really Russian regarding continue last So caused as at that export that think the some exported Union and the don't or the issues we fair a or end sanctions blocked of flows. global – has think XXXX believe Europe year, year, Russian nor taken that disputes I there of was. we well place But a we nor place to the has we And most into came the product, don't

that the position that markets. or in products our Since make while focused those so situation different up XXXX on different we brought companies XXXX. been flows rebalance to to of takes And We've develop markets. developing is production it to before we for brought and the for production a different the different end up

Chile, Mexico, those were of as market Europe. XXXX shipping South we million projected out. from five that been outside And on to Brazil, and years our there that have in America ton in growth working every been as we existed well and what growing in shipping we've Argentina, of markets not year ago. will be much And Argentina all Colombia, So a

to the then to we've different with do ammonia, look at so balanced CFs able well UAN decisions as we made sub portfolio, of product and the When we we make what products start because and been we producing maximizing and are construction facilities, those today UAN utilizing sub flexibility had and constructing in the – capabilities less was new we tremendous products urea of acid or nitric like UAN. or you DEF

business of into customer you've developing a pursuing explained well market, I in portfolio, coasts, more as bringing our just interior new the some and UAN as rebalancing in So west the CF America. terminals east seen what reflection on less the South

So we today, believe we're urea would where going you're and we see we're over very – feel And than time to price and like is under or greater product prepared, execute to to opportunities. rebalance on a that a well on it's good focus be and us that believe we continue urea. equal differential growth UAN

Operator

Our next Byrne Stephen comes America. question from Bank of of

is line Your open.

Stephen Byrne

you inventories. Yes, say on US, demand look continuing just When you be out spring at channel topic, in may the the at, this Bert. look

of into at look imports the lineup You US. coming the

remain and these affected to in get book products? urea Do you the you spring your potential the for outlook And short? for do these conversely your UAN have forward sales how products could expect see long that

Bert Frost

and played not in defensive Good and preparing I and morning, to but company optimistic, that's Steve always position. always eventualities put a the negative so game for I'm

ground, community combination happened with when but So the what – the always inventories per as to starts first products, terminals. our has a ammonia outlying spring. that what being farm round especially has and the not you block moving to but ammonia other product end ice base the as ammonia the of states. some had needs the you the through it's of terminals so a at X ton load ammonia, adequate just million providers only generally And look has think producing upgraded of product what to about and for are we've fall building explained. we a for moved well that transition poor to We states Nebraska been year season, as been the Channel

healthy XX million urea, for And ton exceeding have ammonia million XX so around tons. million range UAN, demand to XX that we're million to projecting a in around X

UAN for a And today, demand America that is North around so market, global number. quarters three of

what at some in into of on looking and we so coastal have reflected that's the up And has too especially much in, market. And received the come pricing, markets.

so added capacity. And others have we added we've balance? to Well, domestic and need do capacity

X imports And probably million probably a reflected ton tons that. we're UAN requirement bit so million And there's and urea. about importing that's X to of and little in again, and million We're a pricing over X And and needs substantial positioning with look been lineup, in materialize brought that the production storage still we're demand what's we for preparing what's date our interior to you in product. if and have to to meet. and

to good and And book to so order on build book that round on we need in continue and have just third time a and people round product when order going second in inventory. for have that we're place

the positive is interior. the outlook our for So especially spring, for

Operator

comes question of John next Our from Roberts UBS.

open. Your line is

John Roberts

see of reinvestment that future the on industry some broadly? ammonia thoughts Thank that Coast that you. more might new consider off Could we you what Gulf from we your gain the kind mean project may for the and sign or where a Do situation economics? one expansion

Tony Will

their expand returns SCR great along pipeline that better to perspective their this business. because get as utilization kind a worthy get products, and Yeah. if off on is air as of a taker, got and – pipeline, build they Good long of good credit you you've very can that new a to your the get they get project, is John. hydrogen existing morning, production My

your So can I to do absolutely wants it. product understand why

of off the need actually are back their products of to reasonable takers that of sense. end up clear suggests rate who And that project. understanding north our on order in of it's that think as the if a they ammonia sponsors to per kind to isn't kind in I And a close are $XXX you Tampa is from of process today return this make ammonia makes the anywhere less project ton dramatic getting Tampa increase pricing, number. the

is well. to So on of our my where because and really based actually on that amount that rest the a comp earn But great along it's bet hope that the the on is world, there's making for that business line to prices energy they lot in are a and return that suggest down global of would to that's project coming it's the hard that up a would other people stepping that. And ammonia not certainly a me see hard is bet that on be of double in today. I it's production believe

Operator

Our next of Don Susquehanna question comes from Carson Financial.

Your line is open,

Donald Carson

this what Bert, or ammonia demand Yes, much trying spring. get How you in the up? for urea of UAN? additional of to a just much think ammonia much we missed are how and sense to they'll versus fall season make the How do application make growers have up the implications

Bert Frost

got 'XX Yeah, in had Canada, The 'XX 'XX, started due looking in fall loads a never compared tier Canada, a in northern wet weak fall just Illinois some wonderful of North trend at And the was delayed we it of December But had snow. area, of of out then Minnesota, warming fall and that southern we Dakota the tier. then the everywhere. to 'XX, and southern south. kind weaker to cold was the in that In and the the area. the in in run north got

be 'XX. of which well that of and So a into bit right bit ammonia expecting okay, most really didn't is spring. Midwest, priced tons And hundred have product made move we're where a expect little probably urea thousand a is for for today, as was higher in And value precise as I ammonia. would is a need throughout we upgraded to we products normal spring is Iowa several say UAN now what number, up that the with will

practices what our plays, balanced to in see to will value going seems apply what XXXX pretty what approach and it's why be work well. plays, interesting So farmers that's to tradition

Operator

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

open. line Your is

Joel Jackson

what flipping maybe have especially a had everyone. were your and urea realizing and arbitrary you this benchmarks. between or for question the kind I ago. of discount, you've four you goes NOLA and In In back really the a price five versus years premium for some to good premiums UAN. some NOLA up about down 'XX UAN a morning, good seen price somewhat few numbers of quarters, last would and was Hi, realizations benchmark a of achieved 'XX

import lets guess that and a I going in that these on of want of maybe ask, of sort than is premiums now there market premium So consistent understand something good book I to achieve Thanks. in dynamic terms your sort export me better benchmarks that to the help you the dynamic or

Tony Will

that experiences Yeah, we goal and mean, incentive of the was our my response but Industries. way people give job a the put I we've and towards talent really team and Joel, want utilizing – credit an internal be respond have I we've have over effort and like team CF to flipping which talent time diverse to is languages positions the skills team would works with an in different towards the program as built years works actually and same and everybody done the of team, takes – that a the some great betterment and some I where and

product So we're direction or focused we if – the with really every on day. urea better and on all helps for CF, what's have those same that focus rowing in are that conversation more leaders UAN

our identified which there and and early is issue we unique assets. later because issues have capitalize distribution been been river to have logistical other system logistical of the on able or The

have Northern we what And position then is so to Donaldsonville. as the we so in as it company the in well past. seeing And the and in differentiated Iowa, Canada helps we're production put as that prepared

so those a advantages chosen arbitrage to combination in imports we export, against company that spot. and when So of have a all is good factors us to exports we've put the that

Operator

comes Our and from next Vincent Morgan question Andrews Stanley.

Your line is open.

Jeremy Rosenberg

Jeremy is Rosenberg Thanks on this question. guys, for my taking Vincent. Hey

X about coronavirus. if China and get could seeing Just we've your in China. million free more to up want X brought on been and weaken potentially coronavirus to X export want demand saw million but up just to the to and fun even expectations that ask million, Thinking domestic urea your thoughts from Thanks. for one I not there. X on on I tons export to million n the headlines were

Tony Will

it yesterday deeper What additional see probably we're than spread we unfolding. with scary as and impact it's announced farther, is deaths is and was understanding. the disclosures further because So the

that? are national that made It's when work please the The show potential So risking government to for family what ability is troubling the from to demands operate. the your today or to to impact being your up Chinese injury members. is you're you of duty

the to are levels? virus call its is Will into logistics be extends production. time that growth. So their that and feed of ability And for at just opened on protein in short and then our and reports mines from impact the to today today, on inventory low so take levels feed the and our and deliveries keep moving move

where shipments And exports to so not pantheon you thing urea potential probably the of is very unravel high. does this in is needs the rank

more it's the I so think province, And Hubei phosphate. out not to comes its urea going be much of

I of the price marginal XXXX. out China because comfortable exports don't China the producer that's on and further in But marginal predicting just the had out than And So exports tightening be and more And we're differential fewer the in of confident exacerbate expected producer has market. think when of situation. will with a in XXXX. was that we we're why did area. see China come that We that repeating this phosphates will anyway. more tons overall, been limited first

Bert Frost

I Yeah, agree. completely

because urea those the I where you're or out impact is – says to see a coal impacting reduction be I places labor demand and the on as plants, of going a to are in think side, bird people got still supply hours. think eat, whether demand it's so mines that going coming China to this this on opposed if anything, to negative are from negatively

but kind it from supply, will would of to be a up. a relative like it we net tighten urea humanity but it this So expect probably nothing positive, to has perspective, ever

Tony Will

protein feed and then and grains to States I'd the the United China, And exports then from oil we're Brazil. seeds positive positive and say

So the that's areas I materializing – going from unfold, to those has China. but that again, the are needs see be thing to would

Operator

next question Mark from of comes Stephens. Our Connelly

Your line open. is

Mark Connelly

Thank you products you. or any of that's it's urea to expect on where whether having if somebody yours or else's? in rates it some I'm going a We've markets. have impact just freight in seen increases number curious if impacts

Bert Frost

Yes, at felt. impact the we at the were turn NOLA, costs of IMO we're such net substantial some liquid because those the the more rates to out in year. saw as benefit costs – domestic we'll States. is increases is coming coming – And we have some you're South And then a we being increases further of producer the exports believe looked right, for think the we there increased America United to

so or the does out either it's but us, will short-term, or costs that for $XX tons longer NOLA the those would balance is a curve structural for that a seen west think it and we've And bids – positive. bringing substantial to term, that net coast, east add into our $XX, in I cost so add

Operator

Our next Bernstein. question of comes from Jonas Oxgaard

is line open. Your

Jonas Oxgaard

Hi, good of the Are price you at rates is Looks like lock national low to in do levels; morning. borderline any thoughts is now low trying are these in continuing strategy? kind absurdly America North gas long-term? about to spot there

Bert Frost

low $X.XX. Hub, been CF question. to lower. as Yeah. It's is trading No, as about weighed the $X.XX Where Henry basis today good it's at gas is even

thankful play The that natural you year, or gas chosen we're the spot basis the can have or that's thereof you're out very weather the sometimes of are do we've the mitigation a play time placed combination. you're do and Then gas. and years to is over But daily North January, gas American where right. responsibility and $XXX being you where high a in and or have vortex blows question polar risk like what United and the a team procurement be cavities and period is is a to in States. to seen American it's storage do these in combination be price. February, from throughout we $XX during November, December, demand winter, the March lock So sometimes There's pulling they the locking producer North for nice we place that's into cold very

and And or positive than company Net-net and or for gas that realizing are how seen LNG played so we we've the curve generation game can't and of values places protecting pipelines exports a demand of gas balanced better materialize. of it limited prudent, realized you've I is combination is a and out go that availability us so until combination there to but that the the achieve increased get excess for power of worth market a because company. end acquire – predicted that's built

Tony Will

price you But this I to week, low of In our snowing although as high. it's at been last of the instead Chicago, close we're view is here point. a be continues probably production in look coming mild getting winter, we there's pressure think to the winter, storage sit today, but levels as Jonas gas end have very increased, of it's number the days cold

taking month daily And of terms long-term or to so in we're ahead buying positive very as lock opposed positions.

starts out can't values forward two three the because today's though, years in issue is you or the curve at years out terms increasing. other of The lock curve,

of that's bit optimistic low costs And we how very the a said, there's year. balance so terms about a why bag mixed as But of little approach of the gas structurally Bert through in it. we're

Bert Frost

spread forward to the and NBP is to like do Asia and Europe I JKM. the What and

and position and you good at markets throw of America in a for on positions spread, cost just for Western again based being That's each for look puts freight $X the the South when forwards that, North you rates to markets. a we expand future. and on the question out $X very previous the well America If as to us at

Operator

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

Your open. line is

P.J. Juvekar

Yes. Hi. Good morning.

Tony Will

morning. Good

P.J. Juvekar

production mentioned lower incented energy year. you prices So last nitrogen

that XXXX sure for does seems As And then prices to mean global start energy year? I it What heard even just make want lower. right. production this we like I are that you

I Bert just outbreak. that that heard result make a this China, pork expect you you. as said of sure grains more and think I want of imports I Thank virus you right. into to

Bert Frost

question was the So speculation.

would would if rate and and with is need was of a Therefore, so peak their clearly at That's that unable value produce I potential that need, with vegetables that protein to of corn, wheat the value was, the outcome increased entering question – fruits. answer And move to about they line is replace going they're imports. because outcomes and potential be be production demand, would the then a augment where in thinking. carbohydrate which the be was value as yield impact and and or market, now urea spring the into the that

your – exports a in as as production as of export higher in on but curve, increased output end flexion Regarding or happened that question increased combination yes, prices. well

entered As price the $XXX. XXXX we was NOLA

was XXXX entered for we s $XXX urea. As it

The next went tons to metric averaged ton came a out FOB, tender India the FOB. one metric Chinese ton $XXX tender $XXX at that and was a

run our time prices of excess So We prices product and for those to higher. XX takes in the and level what product or – going run lower at believe production. will energy shutting and low China the that year-on-year. enough. XX% gas has the let's questions and how correct prices slowdown we in higher like And trade and with and inability market fell an was as down make expectations a on to some to between say that's value and we're it static values progress numbers I bring the get correction in place some to which a just and plant so of that's think internally. then tons extraneous produced, exported some Petrobras of attractive were what and be other while it over were market. values And higher are I consumed happened doesn't capacity and guess million tons has where Therefore make our we're we experiencing Brazil, think a of to that LNG based XX% that seeing others

Operator

from Our next of Cleveland Research. question Piken comes Michael

is line open. Your

Michael Piken

you strategy I UAN talk they're reached a the customers out. the expectations of and to of wanted of you a your Hi, summer about of program and on and US how to not about your program. I know sort could some kind and little how underwater initial just balance bit to here Maybe talk you the imports your sure making fill had sort recent program fill of had us keep need you the that versus needs in

balance. a tricky Thanks. Now, it's always

Bert Frost

places large a this we Yeah, volume some a do is focused built are relationships, for American and export timing higher the is periods. that demand or to directed, we when participant, when attractive North demand percent our and attended we arbitrage XX some we're low an market of of attractive, we value a plus in And but in in the and are period as those great participate market. example, is utilize

our States. UAN been and So United focused strategy has on is the

logistical were to able expansion, capacity we so However, previous our weren't to had and before reach due years areas added capacity. we there in – we difficulties

in in we we're be have of other are have rebalanced then participating. tanks that other We should our system some where targeting access leasing some markets California worked of think some adding tanks where already then with we areas to and participate some logistics some those and owned, tanks and should our in converting providers we areas started places

And Cincinnati a in a is example. good market. tons very today not good active thousand Cincinnati, were hundred for CF, We several its

we're in our feel that. like We produced about with so good grow the favored what to customers. continue work will where we'll is We that domestically we logistically pretty tons our remainder and utilizing export, then areas

we production, We the have farmer. farmers farmer coops a conversation and the That to so out the with make retailer, serving we'll where and – competitor conversations, business and are that's is they're that to an customers from marginal directly and sure in to hundred and tons a our economics the that's year. combination they and that some money. money those are appropriately what continue is understanding few competing serve want the to wholesaler, And make are a Russian the serve need that. you're of customer that position do imports. They tons against of priced we're extensive to and We per ton coastal per and list million Trinidadian generally make our year right in then products to our markets

Operator

Sachs. Our Samuelson next Goldman Adam from of comes question

Your open. line is

Adam Samuelson

mean, of everyone. UAN side, I those to Tony getting other price I disparity Yes, different response producers get closes and range. different they are at in of discount demand NOLA just the the light principal with urea. UAN might it's do I'm domestically over the price XXX a continuing prices Bert, about was to and Are the now kind in producers think to focus, thanks. say UAN cost to underwater? how on Russia we where be on XXX kind these trying levels and/or Good at this curve. time. Maybe trading mean, in are hoping I of of such US, about the thoughts think rationalization that how capacity your morning, obviously Trinidad, the forced big some just there

Tony Will

take going – at probably are But standpoint, mean, most I that that I risk has rolled happened Caribbean of to sort NGC I give my the off contracts view you of have is or levels. be indexed real quick Trinidad I I'll the it think, the economic is rolling don't for over one higher and companies with price is the off know, on to that favorable Bert renegotiation I'll an my this the throw and region kind answer. most think or are gas of from Yeah, then because the

pretty I longer a is You've island on being those that option no challenge a And seen that Europe of a given on destination couple a result More. competitive for plants big that the of production, close not think actually any as really puts plants.

fine. to Russian US, in we're Relative and still the production

that product structure to ton and ammonia look having still attractive very excess is at a the us to on a relative to well make for you $X margin of it's per ammonia. superior nutrient UAN, still If

be in that AN are more making producing think producers that their urea, of making and an some do UAN into the great Russian DEF as more And upgraded liquor, like a things I opportunity with know types acid and ability us. to think into flexibility and margin I urea for out products turns nitric and anyone has system not doing well. to different product other upgrade some we

I intensive more people urea, return on to term that might capital the switching see view a you're growth over that a think longer is incremental term, are you've you the rate investing is the it today because got where UAN farmer over term given in it. terms So otherwise stop it toward to our values to make right, longer in in process near capital of the – is UAN earn fair of incremental a

to once margins or trade the Bert said net even back flow of of neutral and UAN. positive get get – you we so expect And kind would between kind through to as to rebalance earlier, urea UAN

took kind on is this the it of where saw in think I what and 'XX came trade – year for new to two or we like and 'XX capacity So flows a kind to legs under with going sea rebalance. And for Bert? us get of same and us our things now to European situation. right the globally UAN and on the anti-dumping really

Bert Frost

think it's No, good. I

Operator

Benjamin next Our Scotiabank. question comes Isaacson from of

Your open. line is

Unidentified Analyst

Ziad this Thanks for Ben. question. for is Hi, on taking my

levels other in that. – tons application were million inventories inventory Thank earlier. of farmers talking week what consuming products you where maybe are season the about about end levels back ammonia. those Could up I system bit believe little specific of you were have describing the for the kind maybe and X kind you. ammonia people as specific of to make like Just to talk that about adequate to demands a you light how been where inventory to dragging now of them

Tony Will

an And standpoint locations storage The ones three really tons. generally the the than for Coke, not while speaking, at are that or market. ammonia the on inventory that it because is or XX have CF terminals in y cap there's sitting plant producers major system storage some XXX,XXX it's and more most it's cryogenic part tanks Nutrien a from with there's

And inventory looks producers a there's so the three majority that what terms sits limit the of of in and the vast with like.

to So to X given tons you resupply relatively out, a in fall, be to the week get you million – order those need some of tanks. need able actually

in get being end than you one ton the where it's the situation and then to is in able if of up not terms more dump it to weather going cooperating a So resupply spring, push get in and tank toward ready amount to ammonia need to fall think because nutrients full is the we weak, of and said the the farmers upgraded system. relatively That go. given tank products the you you simply can't situation that from

and how whether you not see have last you're like begin for fields anywhere application in to situation open dependent tons terms the think is how a lasts you tons up that X of million of get to to X I really had kind get long early the we out. So spring, million if and upon ammonia going close to

Bert Frost

logistics a demand is it's look or industrial and your how we you customers and and a – with When combination that or have at as as system balanced, exports. day well in those others our that ratable XXX – that supply

options. system or then plants our our or of benefit benefit and logistical rebalancing the we've exporting have shipments to gives terminals and our the So we through that been

barges, lease take with we the providers that about We whatever we our very rail and place good spring move have ammonia or be products. the that to have ready. own the We work will have ammonia truck cars pipeline, we will our feel in

Operator

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

open. is line Your

muted, telephones your If please unmute.

Andrew Wong

about Hey, good morning, sorry that.

with maybe picking profile area? do over in done raise maybe last investor that the has years, up can in ESG what a interest its highlight can just or CF of So to lot Thanks. couple you already

Tony Will

ESG mean, I Yeah, five here or focused that there's perspective, an we're think I four from planks on.

for and vast emissions. estimated greenhouse XX% XX% look upon for is, even that majority to global from emissions. somewhere of XX% very responsible agency is use. aggregate is at XX% The is a that carbon perspective, first product the of certainly reason from And of a that between gas agriculture actually is to, though nitrogen which land that The depends – beneficial comes

are sequestering to carbon in carbon you a have lot you're forward. releasing and the those carbon for you sequester order as so acres, mechanism cutting further us down And furthermore cultivate of going don't to

nitrogen And in feed so less need growing to to acre, lower the allows density you increase you use much by nitrogen carbon order producing you use, the to producing in a acres in per not down increase footprint yield and means population. the crop population, is world's of and nitrogen trees that which are world the cutting net-net order and and than using feed

a product So on actually is that's number that instead basis is of net beneficial one, our negative. which

a The second And producer with turning got coal based the global carbon Chinese lowest we're again, you've And our particularly among plants, plants issue is is, perspective. down. shut on good with that, sort globally. intensity from that new of our plants

instead of So one writ questions you think locally. to very ask, have of is large I this those

in other addition nitrogen Now teaching that in in farmers invested but or also R have a program, four to to a reduce product environment, focused oxide plus are high kind intensity that, very which the management loss emissions practices is from best both perspective. to on that of we're carbon heavily the and the of use responsible creates nitric volatilization way reduce

act locally And then kind our looks footprint order our finally a we investing asset what in of like base in sort of to are reduce further of on basis.

across reports a we from that look an a doing, very of on you that GRI yes And I we're so, those if comprehensive transparency on and think have actually things basis on the the we're basis of comprehensive or line number of GRI all index reporting ESG standpoint just companies few a a exemplary item instead on and We're perspective. basis. spot disclosure one of

we ESG our profile. feel about So good very

Operator

Our next comes Jeff from Morgan. JP of Zekauskas question

open. is line Your

Jeff Zekauskas

a imports you of very fertilizer XXXX Brent costs of difference secondly, of and much the versus period? in India. the large ago first see the year nitrogen of into to price year gone that quarter do in don't $XX I there barrel the half for were very know urea India how Since And to do you from the much. has How Thanks think XXXX, year, makes the curve? And global of the beginning $XX. fourth of urea imports a

Tony Will

price to Brent gas import and with deal LNG me oil it position favorable is doubt handle throw more real Jeff, does that the coal. And year a ago. things price index anthracite globally directly. first seen a other receiving actual affect costs the bit. on, a – today as Bert to I'll And question Bert coal based production little over you down, said which and in whether fact that's That Chinese marginal not going as price really let indicated, Chinese, or is or were you've anthracite about coronavirus of it's Brent coming India, than no strength think they coal anyone the in is there's part still

third has end like high other the a the for relative flat curve to stayed of gone some or windfall of up or bit cross fourth more So what looks in people quartile. a early

down. So to it's deal with Brent not really that you the pricing the come has affecting Bert want today, global Indian fact situation.

Bert Frost

Sure.

include year, higher. little So are production India, close the flat, and you surprise increase a stocks when tons a increase stayed X% a over million XX to to the the to upside, so XX% previous bit tons, importing almost XX relatively about

themselves seasons feed growing demand, country the exciting regarding and a good and and and in an things Modi monsoon big got are some government infrastructure investments, educated India they've of population terms to place in consumption with So base, good healthy population. taking then

pattern, I being we look another being world. kind country import when largest April of same forward, at – probably tender and expect whether late the and of the we the running on early continued at So equal the March, look going importing in

late. have And kind naphtha said early issues generally of plants end, plants been There are in come not two suspect. those overall old supplies, feedstock been But at especially so are production year, some are come that on. the that sure stream and plants are the there this on base will there to when year. with And have next then

prepared rates have increased Brazil we not – even so remarks an growth good production stable in been with eight both years in supply. and in too increase of of of five so production and the XXXX, fairly necessarily we've to And growth last much India their terms or in and really, and see things run the mentioned they our demand over in

Tony Will

India despite new flat. mentioned relatively with aggregate Bert the Yeah, production thing this that earlier within that India to in saw on remain is coming one you production respect

to be that And or run impact this is I older importing, plants fact at and a so that you that sign very think negatively optimistic seen economic them haven't not going S&D means whether it's to around India's because the the just forward. so imports balance of relative they're production global problems

Operator

Willis question comes next Exothermic of from Chris Global. Our

Your is open. line

Chris Willis

just some doing the and for production, little we the was a I'm cut idol, I maybe length the Good market taking products curious fall morning. wondering just and the some the the wouldn't spring question. things potentially just big was up of – And bit tender the as back what production throttle you with tighten into there's derivative back some in Thank to have idle spring? recognize offing. a the move in bit UAN your in rationale I Why to you market? about ammonia a in the – pretty behind a

Tony Will

wouldn't programs. our and Thank then the bit there's handle side off, production that I'll enough elsewhere to basis because curtail, a I'll assets expect there global the first. let turn ones the world. is Bert out the market one lowest supply and you, UAN the the talk our should Chris. production producer We're I first sufficient on in among be the last on not about if cost absolute a And were globally so that move to to there we

and our up certainly US. the world stream and efficiency the the around among in And the on so factor all in and is our the business model asset time highest production utilization, is highest

equivalent basically ammonia able utilization are competitors of to able compared And of achieve levels, those to rates kind the we're an that additional our plant to get American because North of kind of production we worth the achieve.

XX% huge competitive low it's a seeing margin kind margin shut even from out the situation for for advantage full standpoint And would about segment, basis we're to still achieve not that the businesses we that which industrial a the result. full business down, of year think just in being that we attractive So ammonia generated talk our us. is gross outstanding very remarkable there in an a year year for be last that depressing a about pretty a capital is on margin when of that's And the ammonia, and the to at for it. producer product you a first XX% still gross goes lot into again, pretty prices to last

Bert Frost

and Regarding equally. we seeking are communicate messages customers, to with our always the different effectively tender, treating UN ways customers our

some times to of a when what's where conversation specific so attractive allows to a hundred several to then so point small quotes that thousand willing us select receiving than have and or offers with And want kind where several we're and people there and are price and a ready tons and with in buy that. and mind have period up to tender or directly larger through are we customers go even we as a announcing as

utilized interactions and as interactions, are logistical And as a values that that think these we've make different points And to times. we're positioning the second want now to interact well form we make used much so a that as of and quality dialogue and This possible that sure we're conversation for sparks unique correctly. I company static to that because it's commodity, all different buying have isn't and at time different a that's our as conversations. a is time commodity have further a but at why we're to market

Operator

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

Martin Jarosick

to for at today. everyone the follow We and up upcoming conferences. joining look your us seeing Thanks, forward you calls

Operator

today's presentation. concludes This

have You day. may a Everyone great disconnect. now

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.