CF Industries (CF) 18 Feb 212020 Q4 Earnings call transcript

Company Profile

Participants

Martin Jarosick	IR
Tony Will	CEO
Chris Bohn	CFO
Bert Frost	SVP-Sales, Market Development and Supply Chain
Chris Parkinson	Credit Suisse
John Roberts	UBS
Michael Piken	Cleveland Research
Bria Murphy	BMO Capital Markets
Adam Samuelson	Goldman Sachs
Steve Byrne	Bank of America
Ben Isaacson	Scotiabank
Mark Connelly	Stephens
Jonas Oxgaard	Bernstein
Andrew Wong	RBC Capital Markets
Sean Gilmartin	Barclays
Rikin Patel	Exane

Call transcript

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Operator

Good day, ladies and gentlemen, and welcome to the Full Year Results Conference Call. My name is Crystal. I will be your coordinator for today. At this time, all participants are in a listen-only mode.

We will facilitate a question-and-answer session towards the end of the presentation. now for turn today, would to presentation I host the Mr. Instructions] like the to over [Operator Martin Jarosick with CF, Investor Relations. Sir, please proceed.

Martin Jarosick

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

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

Tony Will

everyone. Thanks, Martin, morning, and good

date, sites. There for came plans of with sales the and safety, amazing best the to within to highlight execution of our financial COVID-XX people ammonia set all-time yet no transmissions for known team keep us. global was have pandemic, for company jump to challenges hurled on team into production along no everyone we a of our our entire manage We implemented to who I To this want Before any through at how facilities. XXXX despite and business. our playbook I across developed our that volumes all areas records CF results, safe

the across lost network the whole ended entire only for and injuries year. On time we year four recordable the zero the injuries front, safety with

the million operations an also we tons. As is typically of are with record productive proved XX.X and safe ammonia case, more again production all-time that

Our logistics all-time up. million and work and keep sales all. XX rose great sales to the the and a performance team Thank Truly records it of tons. and challenge for set remarkable by over shipping product you

yesterday results, Turning to our EBITDA afternoon, XXXX now also we which adjusted of performance. terrific financial posted billion, we $X.XX generated

Looking are optimistic ahead, XXXX. very about we

steeper prices positive will energy Midwest a job The navigating and done curve. nitrogen but the plains crop strong challenges. significantly in in cost another usual, has current pricing conditions a higher Bert and year with a responding global coupled much demand Europe, we a With us, is at Asia through these than describe have southern thrown as team are seeing fantastic the outlook and crisis to new prices As the global the moment, in commodity more robust ago. in environment,

for across been further tightening based with North season in Disruptions nitrogen in result to the nitrogen operations America. communications our have should planting plant the quickly this gas been close our spring and We on have able suppliers. industry widespread of adjust supply U.S.

clean already energy are commitment XXXX. economy. to the Additional Longer-term, on the support pleased we strong an with making are for progress our we

follow and the will unique technology with announcement. demand partners, discussions advance will the for carbon our and discuss it new seen Bert? that, I capital we me then to let for our closing before to some position talk financial over ammonia value global return about to also Bert, will how providers of With continue and who nitrogen comments. low turn allocation green the underscore These opportunities Chris capabilities. and our develop and have market, broad We since outlook

Bert Frost

with positive, demand producers driven low-cost they've steeper like tighter are dynamics Tony. XXXX. Thanks, demand and commodity and Strong most global curve since the are CF, been nitrogen by prices supply crop cost nitrogen creating Global a today, a high balance.

reach XXXX prices demand Global Farmers America seen recent for in they're significantly coarse North multi-year broad-based. futures result, in a and As near-term risen both and robust nitrogen-consuming values. and have months is well grains have contracts. highs above

seen expected and supply global by we've than corn, lower For China. high demand led

in use since is XXXX. the ratio to that for our U.S. corn the million This continue to projecting the most corn potential. year we at the of positive year a million planted demand its stocks particularly balance expect this XX Through marketing in regions, to upside with acres XX be projection India supports As Brazil. growing the USDA will the and result, level lowest year, of

India volumes average will be five-year XX year. in tender well close the above the expect of to metric and tons million urea year We this last to

X million For similar Brazil, we million approximately to urea project XXXX to imports last tons to metric year. be of X.X

As of Henry From about price. XXXX the than This demand the JKM both price price to was the XXXX, gas times impacts. gas July Dutch LNG U.S. TTF number Hub increasing July a the X Asian - natural December increased and cost curve to natural had steepened significantly. greater

First, producers. margin low-cost increased for opportunities

lower other this commodity will to nitrogen in their regions. contributed the and the prices to construction need rise key factors. and those of underpin term, incent prices driver ammonia but increase faster parts by crops Longer-term, will Over be believe world. several demand of growth. to import We applications. clean creating production pressured for level for the into a global not rebuild highest-cost even further for more plants to In Second, to the leading demand demand stock an margins, near significant producers we the demand in market. driven the require tighter of Europe will from market energy This tighten expect ammonia enough the operating global emerging greenfield Asia until for only rates global energy time, and

to any have flexibility conditions believe that necessary and disruption let or final with spring the the to We to built leveraging optionality recent ensure to We as working are forward our our arise. the with And requirements that, in for U.S. weather me season the we they application our looking call - customers well-positioned address our challenges make their that we as spring. as that overcome. met system customers these were approach that make turn over and Chris. are We to the preparations

Chris Bohn

Bert. Thanks

million. was or attributable $XXX was operating stockholders was $X.XX free $X.XX reported nitrogen adjusted lower gas compared and billion global before. SG&A $X.X share. EBITDA year company the These The the free natural efficient - costs common earnings partially results year-over-year global approximately diluted prices, to Net by offset and also cash year-over-year was activities lower into XXXX, continued and EBITDA cash. provided demonstrate cash For EBITDA net nitrogen billion. to $X.XX per $XXX and higher of of our results million billion volume flow reflect sales conversion by

of can in more highest see among into the than XX% which free our XXXX, on EBITDA peers. As adjusted rate Slide is we our cash X, converted you

continues priorities. to conversion our and support Our free capital cash structure allocation

our that decided we grade remain $X.XX secured This repay the the positioning our are press will early, in lower debt on million we noted billion on gross company December. our $XXX the to to energy growth and due remaining as have release, strategy. focused we to in notes As senior execute investment clean

invest debt to time. the in We will growth reduce We energy remain further excited the profile. gross continue to over to opportunity given evaluate return opportunities clean expected

to return repurchases through quarterly to at levels. continue and dividend We will our our also cash shareholders attractive opportunistic

activities XXXX, the expenses for million. capital and year be We in of expenditures want share in return for to - XXXX year that range and $XXX our to at This anticipate ammonia As of we look maintenance our green ahead to reflects associated a expectations the project a of planned normal level ahead. I the the some will the first with ahead Donaldsonville. of turnaround

XXXX SG&A to level We levels to also return expect closer XXXX. to than a

expect $XXX along XX with This to the lower repayment lower result to year with XXXX. interest and around start likely will will X.X cash our curtailments, tons. than schedule of be we the maintenance ammonia in to to annual in the million planned recent inventories gross gas-driven notes. XXXX Our product sold expense million With million fall production tons

the product indicated million in between be overall As release, tons. we XX.X press sales will we volume million and believe XX

costs XXXX. based Additionally be we higher XXXX on our forward in somewhat than natural project in curves, gas will

given margins expect this Bert to pricing that outlook we year the positive described. improve However, nitrogen

the call EBITDA will costs. closing Slide realized impact As Q&A. in increases With some you higher greater a can XX, Tony have we than urea much remarks before open price on provide on natural gas realized see that, for our

Tony Will

Chris. Thanks

for Before everyone a on want we truly positive of execution to your commitment our on safety the to the focus very are again CF unwavering about tremendous feel Their I XXXX. year our foundation to thank move and We questions, success. values and ahead. at

as growth are demand for provides are a And us hydrogen with of longer we positioned As key continue have a fuel. will for a clean will energy decade. and focus for North most a in uniquely America nearly world. providing exciting on described, clean be ammonia, a clean where enabler the we industry better Bert developing be in decarbonization applications nitrogen to Economies a prospects the dynamics favorable seen in energy producers for hydrogen leader term, to ammonia global solution critical

announcement seen the for tremendous longer-term carbon opportunities open growth will ahead to With to direction a our questions. see and operator, now interest for shareholder our strategic last value. clean in since will low your substantial We that platform we ammonia. provide This and call have fall

Operator

[Operator comes Credit Chris Instructions] Suisse. Parkinson with first from Your question

Chris Parkinson

few year, for there apologize in global looking a producers for cases few out times U.S. let's disruptive indicating more say like of planting, that especially present, prices mid U.S. they longer inland just But a opportunity sold stability And an at at if not demand the throughout which to and in even elsewhere, is some of mid-April are morning. is a the bit and in oriented suppliers past cargos the seasons, send 'XX should to extra 'XX, least this lot Good shorter-term through spring. - a they're a which, bit seem question. prices tendency all due but I over ammonia

the emerging say let's different thoughts are what past very you dynamics broad on in just Thank the versus 'XX few much. So seasons? your

Bert Frost

are tons don't that that number cargoes have But and sometimes have I because incremental ton has or taken been This issue that you at then has the corrections also good Good coming, morning, and is May and increased say, offline. which in pretty today, year's related more market. not. correction I in be but And may it probably operating when Bert that risk-off been in America, overwhelming the extra and And see that turnarounds others those of or last at April, have Europe, place happened. those that and a we and a was you that been gas imports North supply may have timing, region not necessarily wicked June, in a we're than online as year, past running some costs places look to like situation, come levels, last of supply, taken Asia different related below our think Chris. I question have a and then in saw been can market. with is much a there a would COVID to as see positive other that an has look has we of a have

as So and lot January cargoes short that a in a February of taking and Brazil, increased and Brazil has few and up countries supply plus other Thailand we are as demand need with well supply and India factors those still Turkey have three additional we'll that in soaked and Europe.

and that spring we in levels are depending experiencing away, to the that thaw likelihood probably which getting and on on the speed weeks Midwest, into quickly. that make the sure today river adequate are the is production we're window tons that so six planting, only frozen we the offloaded of ability focused to supply customers the that So line time there. and sure cargo river very extra those place the now right is at positioned making gas for right with of our are approach - today the of snow and falling that right and have rivers why get supply in is as the froze That on this we closing situation

Operator

question next UBS. John Your with from comes Roberts

John Roberts

any anything you rights In away ammonia-related activities and to participate facilities? Coalition, fertilizer the since the exclusive would new CF Hydrogen you're in only participant, existing from Forward do have your

Tony Will

energy about hydrogen as trying clean the advance source. really So of and adoption a is coalition coming together to

other in In participation fact, trying real producers. by to have we limit no interest

think demand be In to appropriately. adequate fact, critical develop going is having for to supply I a enabler availability

So the across long support really and of programs focused kinds and we're actually policy to get similar all trying solutions working forward. standards it will of rally with think and us in decisions I trying being because to others made, movement going term, developing support hydrogen on which are and some can we're and that for benefit develop demand to

in to four In to last current the we I our business, mentioned remarks, evaluating of the and as there wake opportunities for looks terms in of willingness attractive what our announcements participate outside us long of of outreach of our has prepared as always growing walls network interest return significant October. the and as projects been and the think in interest profile is, kind we're

I continue that And to doing. a have to types the to expect opportunities fully lot would we're of expand us of so, things

Operator

comes Your with question the line next of Research. from Michael Cleveland Piken

Michael Piken

Just guys into that demand of strength we much XQ stood got be higher of do was on on volumes Thanks. the fall just and wanted understand the XXXX, fall? pulled are of total application you from bit, going tonnage rates? see for in your season to the forward Or expectations your to the how XXXX think beyond little that because much how spring you big lost might a

Chris Bohn

little to to it then bit try turn over a Michael, I'll Bert. jump in and

impact the COVID to were folks given our by is exposure trying reducing last larger contractors come that of on our the situation I to much number we had think year, the we minimize that sites.

way in maintenance, activity or so turnaround tried And push. to anything the scheduled could differ we that of we

utilization scope have of our And a the with assets of we so because or either pushed couple reduced of up significant we into we turnarounds that ended higher XXXX. dramatically very entirely did

And an ammonia all-time set so record. production that was help part of what

year. we XXXX, have the at slate were normal last things look we the of but that as So activity, turnaround not from only also deferred

largest in is this year. So available by reduction that contributing far the for to factor sale tons the

plants we aware, you're run XX/X/XXX. As the

we what and there's pretty the we not year the And lower produce produce than the the course or if so, - has you're at impact bit turnaround in of last inventory terms just activity, much sell year year, sell production more over that we less of of is stick, year, There were end the available. in starting little a that's the small large. position a we but the

Bert Frost

higher had and season, time look and fall season a fall good or I that where - have and did products, application volume amongst price price what purpose. high, Regarding for weather for to the each we the we the to to we very would yield farmers just on now seasons 'XX, spring going helped, had consuming good crops, lost when that back say it's and due the was for be One, attractive acreage with ammonia the but also fall and the or probably structure you is with several and today available seasons movements QX today. overall, good the extraordinary we're 'XX, projecting additional years 'XX nitrogen of to

So a healthy very we're anticipating spring.

also time making I employees, being on customers we sure also as as have our product in as so we well focus can of that have a safety, receive think and but making product, COVID sure you environment been their the remember, has our been will tons and and healthy our move well we December that on projected to have polar Tony QX the with are looking out which we spring prudent for but projected the pretty moving was as be to a in action and said, prepared come, supply into additional anticipate spring took available to we vortex spring. of well this

Operator

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

Bria Murphy

This assume debt, ammonia build capital should million Thanks on Joel. From in is paying a my we be Murphy Bria prioritized decade? you standpoint, this for Thanks. dry for later question. for $XXX less on projects allocation will powder as taking the down green buybacks be

Tony Will

Yes.

back projects. in the higher what looking opportunistic thing go the a to in back at is level I building looked at little as we're repurchase our powder. more dry capital think, look return return one it shareholders, business at our investing at past, being little at a of in we and And bit we've we'd that more

probably having debt Additionally, a shareholders. allocation reduction back more approach to both and measured capital to

is swung a to $XX $XX. you where at quite If it now the look prices share year, from past our at bit

the So look sheet to good it on do pretty balance the capital in we we which could go way we in is opportunities that. our if we at in have some order see

Operator

next with Goldman Sachs. Samuelson Adam question from comes Your

Adam Samuelson

hoping especially spike Yes. impact the a gas? be week, with lost in product I the and that the Bert, in last much own think a - has that and with America industry only happened Thanks. prices you in whole, in on parts gas in was on but Texas than the what much Good the you not kind particular last Tony, the more color, maybe you gas to might where how think do as morning, not of And do think and just they your environment Chris, market how everyone. are? little production operations the have just bit the might domestically North days might plans just

Tony Will

here dramatically and production, loss Bert organization bit. sing kind out Henry So going of of Hub. to the little and had for like affect Adam, him already But most hedged great we crazy, it I'm of that gas praises hedging impacts and us, terms some basis not but do those he in going to decisions in given because a blew of I'm over us I'm markets to ongoing it, made of going going procurement to off the while runs and they terms things. is Bert that to talking talk it turn let do availability the his let gas about local Bert cost in basis didn't really so

Bert Frost

Tony. Thanks, Yes.

week we the supply for of we an it I'd and six it's limitations supply-driven first own pricing a Regarding we eight got and gas in this more then where gas when last then saw say, and demand-driven a the surge in was week, our Asia weeks situations. made up exciting, been that products and curtailments to to had week January, market go

so, of the think is the but group, what a we our an and as very for small we I you come we hit are the we're we with been years benefit it's positions, communicate our going a well of on what very when gather did situation and But impact. with and and is make plants some nail the we head going plants quickly think what around on decisions together were around evolving ascertain and gas team, are number And with work what the did do plants they we've together was operating to down, and will and I up. still could

so unrelated both numbers those plants internal have not have turnarounds that's and too turnaround have number do. of to been run on gas. that and external, those And And to a been extended been we've trying that there to difficult

we with if and you it is many can in tons. in come have this they an were production to several to shout some And safely, was there care the and lost tonnage and been do ready probably at all tonnage And shut also we're out customers communicate hundred process taking we're up an down situation, when came production our appropriately. CF And we have think buying of plants sure urea, not ammonia we once it of our several so I and market then will in these Kansas, But purchased when hundred you a back and have our them not make how is and probably appropriate again. thousand upgrades, and take where tons. and you're appropriately the that things so open still commitments, meeting but been to of Texas still to that amount have that's those on manage thousand team again confidence Oklahoma, basis together, active up very cold

Tony Will

kind to as into around take because piece in And this end got we've urea on up be run we've more our the I which think mix full UAN, been that us for operational huge principally weather, of of the of plants, got urea we purchasing UAN X producing tremendous flexibility have anyway, Oklahoma basically driven. - to terms plants product us Ammonia which Donaldsonville gives by an it the all or are at granular that other and flexibility impacted tend were ability

at urea in us higher than not of that purchases disruptions, to think any but a we gives of there kind order with us provide only the UAN of about running cover flexibility backfill, have Bert in past lot talked So to agree the for a about Bert. mix maybe diesel anyway, I but

to and I weather in could or disruptions that of place plants of months. some in weeks plants that have from protections will none area steam see note of or other could kinds think you the those extend tracing cold

So North of American result could in terms the the of tightening as be a outages noticable weather. supply of

Operator

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

Steve Byrne

either of or blend that interim? your the those will in customers going. been stool ammonia various fuel with your ships gray have the a couple to how markets and for potential, years, as opportunities power would be electrolyzers which you view are there talked be you see most blue about as likely prospective that those is for of do or a multiple has blend longer-term green ammonia, as won't have those likely to sales its a you fuel stream on when to given more Curious, on production? customers having would legs in ammonia you hear end of discussions Tony, see it the And curious whether for

Tony Will

Yes, Steve.

COX being way the I think of ammonia, that to green means first away which think calling that actually captured is is produce think we far I So by of able produce then ammonia we're through ammonia resultant I before carbon sequestered ton we not will likely we're Because blue blue where we and conventional where do what And be that from sequestration. produce ammonia. that our forward the within improvement transition gray hydrogen get also conventional green, talked momentum carbon lot blue the Council and both or emissions to one ammonia significant. of then transition the is and to overall toward Hydrogen using a a reducing as get is you about as things And we've you further and ammonia at and notion ammonia gray so benefits. producing

absolutely to really, but energy transition plants So and believe particular plays deck hydrogen kind applications to of heavy ammonia chips. including of of in conventionally I believe abate and applications, some a that announcements really the Maersk, don't these think where many, is all we're industries I others. of in some putting and with many our represent those role, begin firmly will that across week very ammonia Houston And going industries, starring But one in including this ammonia you've a then portion up that significant produced think I industry. blue, end there transportation from like power is sector quickly green seen to gray I a hard ultimately just

carbon of getting energy applications we're inputs So to much very transportation in think a for there if also growers. that terms input, carbon is have available people shipping farm going are interest to the of farmers. and be low we because the in carbon the lower soil into significant you use a And are are is sequestration value And initial a many lot and utility believer be there I fuel. as to big going

same And blue value the a farmer. real that conventional structure basically so provides when for, ammonia produce can as we cost to

these we're also agriculture. think I So in areas for transportation industrial only core products but not utility traditional and demand of market see our to going in

Operator

question with comes Ben Scotiabank. from next Isaacson Your

Ben Isaacson

now required energy at Tony, much they've or solar, whether think EV federal the really the of about the wind the support market? it's state new in of talk levels. you you accelerated over benefits, or or government and are decade, all from whether and just where will either and Can depreciation? this past is about support growth accelerate the through both green the Thank the technology of it's federal good that right ammonia, Where tax very getting how help subsidies, that you growth morning. government you right ethanol now significant any or when terms

Tony Will

Yes.

some XXQ the up the there there funds, for also that lot R&D and not So, existed is place of extent hydrogen. freed There tax but credits solar the dollars wind being currently, to are available. are yet that for same are a for subsidies in

So fuel to helping this be, implementation opposed start and see for I providing would the more side support and minute they I hydrogen migration. you'll carrot of a develop a stick to augment tax, because think if further there shift expect to the be you the industry a economic quicker pain, incentives only carbon be for a not don't, strong as and we piece side and of as equation think real and to but support or trade is frankly, and the cap going much really will of other place we that development to if put in people the

administration in hopeful putting place that hydrogen we're firm real So a the carbon and ammonia. can and there very with new commitment carbon adoption movement that be because around cost accelerates a low that the I just of towards think

Operator

with Connelly Stephens. Mark from comes question next Your

Mark Connelly

are just We've export of hear about not people I'm while. quite your again what the to but which be a for regular duties, used talk started probability to that? a thing sort a of saying curious about China

Tony Will

back they're needs One, level, since 'XXs - going of higher let's these with last the has around tons going coming year you operate again sort coal some is XX to to look to we it of high-cost they're be with on metric rate and if the to what's gas $X. fallen million, probably China producing at majority low where but XX-XX, the of to gas, Asia exporting a in $X plants, When all and peaked in and say, at Yes. American countries, to India going to between XX that operating low South see, XX% XXs coal those million levels. five,

small seen they them see that's but million minimum don't years tons Right we going be this January, when in So several now, pursuing were whereas export overwhelming amounts. December, back have we over you tonnage go if aggressively were position February, them to X year. market, they exporting the

And further in the range it but projecting China the India participation X that will next they're that a interesting in level. what to supply for four so aggressively demand exports around been We're weeks saying tons we've have level and similar this of that expect we million be be tender date about are balance. few and will they high will supports what at bidding see fairly that to

Operator

comes next question Oxgaard from with Your Jonas Bernstein. of the line

Jonas Oxgaard

versus your slide And don't have intriguing. you mind. Your is a if question on I utilization two-part competitors

could this mean, you suggest plants on the for that consolidation, is as not value And does better? I there other simply is follow-up, industry, what a just you proposition consolidate touch a guys for run to differentiator? First, what to that but just

Tony Will

morning, Good Jonas.

would what is So culture. of the things, one I couple a attribute to of it is - I which think

predictive preventative first efficient We've to or go try small before translates my whether in facilities plants. these prepared as they as break-fix and to plants we into means, a it's on model fix to talked a of in take only we during vibrations of and and any maintenance profiles. identify algorithms And of that or heat very I do very lot but deployed not and then poor remarks, opposed the operations. culture of kind well changes about begin help maintenance part a down safe to operations on issues and much us which productive till of also that technology bearing as at have operating them break also they So in run issues, our ahead sign

materials. And of significant the Page hot, into up we'll so end a the back of kind off for numbers what loop to here maintenance back-end us then of and doing plant minor X where you the the it keeping down, bit. hit see allows losing taking on making cooling production that is, getting fixes some a instance, our it front-end without

into plays scale. the that thing is other the it think I

some of able efficient that very vintage, are between Given very out parts plants unique equipment maintain I kinds leverage terrific can and to the get of that in and quickly that number our similar we're talent back spare in terrific we have have or expertise, think ammonia it's move and rotating a And areas other we pool attract is of we us. pretty honestly, of. whether facilities that can forth to

think you of in the those So significant absolutely leverageable it's to see drive and I other a utilization assets. ultimately are things transferable things X, and you combination and difference can be all utilization know that asset Page on of I capacity those think

a were. us from One to the of Terra the things right we've change efficiently XXXX seen - the while take in did an but as approach every they with that Donaldsonville invest back standpoint, procedures, maintenance in as for CF acquired culture, historical get plants they're that bit the Medicine is were plants now in operation to Hat producing

expect of synergy the how when a things if so we're kind at and ultimately could I evaluating that we think what has and equipment to utilization scalable which but not absolutely order running. look historically forth, culture do opposed of some there that's one out it fair value as change real to new investment it of overnight, is of asset is transferable, prop is to bring, we that get think bit we in I potential, a been So

Operator

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

Andrew Wong

XX what a next to market roles other over carbon kind producer, enroll could play aside starting a as of Just in market CF develops five, years? low the being from the

Tony Will

Yes.

In addition railcars, pretty significant us it's assets other docs barges allow shipping infrastructure, play role. to and whether our a and network or of to terminals production,

transportation the too of while and which of thing, terms ag we and I now, logistics in to, of do priority, downstream if - do consider sort right can and the type within we table framework. bring storage, transportation, take And wholesale, the terms that take operate well perspective of and getting something I our how ourselves sales don't it. certainly anything it's view production sweet spot from we we'll think value far wouldn't business the retail of off but think that an hydrogen or I in is actual of fits

improperly of standards deterrent approaches because we're and focused clean into for hard that adopted. working today ammonia first we're worldwide allow the a very kind things so and right of that of to for I or organizations with on helping set development the to we've really really is develop done that of in One hydrogen adoption migration poorly are think, and could the be a technologies that these different number of a make standards sure the

Operator

question Duffy with comes Barclays. next from Your Fischer

Sean Gilmartin

for morning, for Sean thanks question. this on is This taking Duffy Gilmartin the and

has China what Just difficult end the grain China. a of happening rates sense to in historically strong, and has on side, been kind demand particularly a from triangulate on is bit to wanted our difficult corn so a get been

So XXXX wanted will if your of this standpoint, what to Appreciate strength? and it. that get sense of I kind in the level of demand China persist so a is color. through from just drive out view Thanks your for sustainable/will

Tony Will

haven't in efficiently market of participant that they is you helping grains the or the When in look operate really and at our buying that around. did feed to seeing year at product system stepping least we're China, are system which ethanol, the big been now last incremental they more and they a move and them degree

believe We it property we the very drawn there. that in that that there drew down stockpile down a herd through that years, you're place down that they low after So pork, needed never sure. rebuilding to place several drew production with swept were to the and last hog the decimated flu swine and the But was of Asian level. was seeing take rebuilding a of that take China

fuel as those corn U.S. Chinese for the U.S. China still two of States in continuing and houses do So kind in together as the Brazil system the to for price demand trading to are places which is that through coupled was very level and for XXXX able see or into corn, world, U.S. profitable of other and accelerated from the the - or beyond. United the yields import not being fire that healthy we corn and just The and processing groups.

think economic to I also, going then it to. they on continue on need basis, an are will a demand So and basis,

Operator

with Your Andrews Stanley. Vincent next question Morgan comes from

Unidentified Analyst

for on [indiscernible] Vincent. for Thanks taking my is question. This

maybe Sorry what it's the so look to for you forward order forward? come to prices degree, back your and to book at maybe spring the

Tony Will

logistical there be been of we we so we've Yes. are it need that And adequate, look how order an market at and were our would think CF, of on explosion kind through happened. earlier it's When we we we February, because manage forward, obviously, in to like you continue you you - values in the Spring, a spring. have have values just and I January through seen manage for secure in assets there and operate, said book we expect the selling out and believe comments spring - carrying earlier some us an to that did safe book that plans that's to to that forward attractive and has to appropriately sell is

so positioned. like we're where I And

in and the at and with planting sell rail truck have position tonnage months our get we by pipeline, our We have process market to as next the we terminals, of into in probably are opened be in barge, through and several place moving in tons our we'll we active the agreements now customers season. available logistically

Operator

Patel Your Rikin next with question comes Exane. from

Rikin Patel

taking question. for my Thanks

global in think what urea term, Greenfield You sorts you of long more demand locations day, mentioned the capacity other will requires America? in low-cost high-cost production. currently the new that like I'm incentivize curious just North price

Tony Will

know classify low-cost don't necessarily America as that I would a location. North I Well,

from low-cost whether and of capital you're plant standpoint, facilities standpoint cost it of levels that with gas it's someplace America costs North building think there or from is capital at supply free, challenges the constructing off the new else. variable operating are significant matter but in I a better the gas some and doesn't

place that the new I added are currently the being is would where to regions continue to expect kind So capacity next of round additions. the see

plus make incentive are just and needs for to of in can't year pricing Nigeria, contract little we you're of depending that, you Russia, would of be can can Iran, off the construction of on kind natural lower expect $XXX than math to so both think bite costs work. really upon where do And construction. and full a happening. are construction that's at see if what gas, maybe new will those talking but North OSTK, you political plenty you where But the that kind ammonia supply America, that $XXX forth, sort a rates So risk, places with bit of based leverage provide I likely at you

here. again, to I going other places see you additions, it So you're before see think

Bert Frost

operating assets, When are and XX Trinidad won't. it's what's than at some building the these are plant, are place though it's to Bolivia it in old and building secure XX were these less years not of what it, of coupled long-lived there places where years or the older, and assets, take, in - supply think don't XX, a and that operates are XX and many Asia, have with should gas operating and happening XX, South I environment. is steps of just you secure like a and America, none they additional plant mentioned those gas ours in political probably be operating. in not They they're Brazil, look even the are Venezuela, wrong they and Tony Mexico built

how think I asset where the is move payback. as going going you that an your investor, So a and challenge will to how to you are have and are it build, long

Operator

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

Martin Jarosick

weeks. look various for Thanks, the everyone you that speaking up at are next conferences coming virtual joining few to with forward and us the over we

Operator

Thank you concludes call. Ladies participating. today's conference this and for gentlemen,

You may disconnect. now

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