CF Industries (CF) 16 Feb 222021 Q4 Earnings call transcript

Company Profile

Participants

Martin Jarosick	Investor Relations
Tony Will	Chief Executive Officer
Bert Frost	Senior Vice President of Sales, Market Development & Supply Chain
Chris Bohn	Chief Financial Officer
P.J. Juvekar	Citi
Steve Byrne	Bank of America
Christopher Parkinson	Mizuho
Adam Samuelson	Goldman Sachs
Joel Jackson	BMO
Jeff Zekauskas	JPMorgan
Michael Piken	Cleveland Research
John Roberts	UBS
Vincent Andrews	Morgan Stanley

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 Full Year and Fourth Quarter 2021 CF Industries Holdings Earnings Conference Call. My name is Tawanda and 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. [Operator Instructions] I would now like to turn the presentation over to the host for today, Mr. Investor CF with Jarosick Relations. Martin Sir, please proceed.

Martin Jarosick

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

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

Tony Will

a through $X.X we all possible and our two cash of billion. Yesterday rapidly adjusted of billion in exceptional of record North manage to CF results events for nearly the adeptly in generated Industries safe gas history, severe XXXX, maintenance UK, of in the morning, the of navigated operations EBITDA the our company’s flow completed for good Do Consistent were results our These cash company everyone. activity net the which did cost billion, and culture, afternoon, made this performance product. $X.X level in we Right and responded highest weather with Martin, of our by changing team. posted marketplace free runaway America, We It Thanks, $X.X way. we from

our X.XX by Our spread measure, incident but XXX,XXX expected labor challenges hours, foreseeable of was differentials that the future, year-end strong incidents drove by the are execution remarkable these given in rate results per year. recordable any terrific the outstanding demand, to team. and truly of factors high-energy XXXX into persist namely the Several outstanding

component. trading next for while this next the use drove Let's With $X improving with led year, strong the well. least December demand to see we agricultural prices for at demand Significantly at strong grain ag demand year years. and XX industrial robust start economic corn two recovery as high $X.XX

demand driven slowing last months economy last year-over-year, the seen inflation be years have inflation to side, and the have two X% doesn't On appear two seen that industrial -- down. the at

between North for opportunity suggests of our margins nitrogen differentials which industrial at us to a fourth production the America the Energy pace. and exceeded Europe for quarter, $XX So achieve torrid provided high-cost overall for continue Asia will per most demand for global ag record the and combination strong MMBtu and of spread demand products.

billion global record quarter to us those second particular, credit to effort an export result for XXXX Two regions, XXXX. factors maintenance during potential. into Storm in repurchases in rapidly availability global continuing on took spreads of On of highs. several our deferred us Turnarounds important to led this remain an enacted exact head roughly was look keep energy supply site. their investment-grade spike impacted nitrogen flow. price in shareholders activities that in markets, and The further limitations a unusual XXXX. dividends. because maintenance significantly a and weeks curtail The activity natural cash catch-up or an reduced and of and Russia, strong time, generation employees of $XXX This supply home to confidence nitrogen contractors balance record well long-term last adding all-time scheduled through terms at deliver XXXX range continue American the limiting producing for Ida Winter which down including provided bands, North of Uri paid outcome adding provide global sheet. COVID we supply. of and top demand for an further of increasing Turkey. coming and desire about in the very amount these producers reached in cash pandemic company million and backdrop Asia, this attractive to were environment Egypt time ensure in for Those half of of when the supply. production. nitrogen the $XX pressures, safe $XX was The to China, and energy year, spreads million return the of both We while As of the quarter, outright These demand weather America, to EBITDA And the reducing cash enabled the Hurricane in and caused to $XX prices debt the surging, free XXXX opportunity shut ratings, of out in This lot $X the countries and of at year predictable forward, constrained North by $XX plans a Europe balance of XXXX the a significant and to give and the exceeding fourth high to MMBtu differentials dynamics for came in set events a energy gas extremely and above in capital return originally or was $XXX market and year share in negatively per production to affordability to prices.

earlier, honed decade. past last said runway market bring To dynamics of plenty of believe ahead. the we unique I this over have the we environment, year As capabilities

have in investments that and Slide network, industry's by on our low-cost Slide -- American natural underscores is under people, position shown growth X built the highest-performing of how Our provides amplified as manufacturing XX this materials. safety Slide North the advantage gas us.

able a margin we capture opportunities As the front result, us. significant are to of in

in me turn Now outlook to detail. discuss will Bert? the nitrogen let it Bert, who over global more

Bert Frost

low-cost to the global need point We Global continued believe stocks. replenish extended and grain underpinned fundamentals balance supply of nitrogen for tight demand Tony. like CF to and by period Thanks, industry demand Industries. conditions robust, nitrogen global producers remains operating positive an a

global ammonia on million demand our drive United global planted project season of can and helped stocks-to-use will our activity at nitrogen demand the prices expect fully We and fertilizer same urea see We today yield. to demand. lower high believe diesel wheat, we across stocks, expectations two you strong demand continued and core this impact to America. XX leads increased to sales our acres grains strong level seasons is outlook, fall to for strongest course it in this fluid. year economic trend high industrial is as for As yields At year, growing incomes. maximize High crop supporting This apply emissions and agricultural for more with of ratios demand volumes application XXXX. that both control high XXXX, Slide we and and a least supporting the demand inventory farm DES States, products, production farmers that time, cotton incentivized greens for exhaust Against this global in canola believe for strong record corn take had replenish coarse XXXX driving X, This be million continued important the for grain North remain are low, low. along another in strong reflects global growth XX plantings since product. planting of will ammonia, to of

Europe continue costs expect the to gas producers prices high regulations with rates. areas Looking Asia, these of operating challenged affect lower environmental in tightening by China. profitability along lead natural we ahead, to supply to and should This and global in remain and in coal

for marginal you see to can curves natural energy gas spreads producers Additionally, American forward XX. suggest in as compared Europe, North slide on producers favorable continued

for fertilizer well-positioned season spring are application the ahead. We

with our quarter. which the we We order are book, to pleased began fourth in prices build peak at

few at operating is to weeks. meet over North in network we in look that, the me leveraging With our applications Chris. high turn America manufacturing level, begins to to forward let a distribution and a fertilizer and planting Our call and demand capabilities logistics as

Chris Bohn

Bert. Thanks,

reflect EBITDA UK net $X.X $XXX non-cash was billion company to the reported million million share. billion. operations. and EBITDA XXXX, $XXX $X.XX diluted to EBITDA For of or our common over stockholders charges impairment just attributable earnings related was Net approximately and $X.X per adjusted of earnings pre-tax

expired and of the billion, allowed For opportunistically XXXX, million nearly us In and attributable net earnings EBITDA quarter EBITDA financial results share the program fourth accelerate capital $X million, XXXX, at we return XXXX. million million we XXXX. X.X have repurchased billion at the in $XXX EBITDA of company These fourth that flow shareholders the Since was billion. free repurchased $XXX end shares to the were to common repurchase quarter completing end Adjusted $X.XX effectively $X.X and shares. quarter, was both XX were the cash records. to adjusted of stockholders for

return share on to return continue repurchases We an and of for capital. important tool view as

As count. at cash outstanding XX time, XX, share invested flow, and to you the can lowering grow on have in business over the the same free we decade, see slides last the while

base, a above on us As energy cost share cash a a asset XXXX. At to same cash of billion doubling that share offer our flow investments basis strong result, believe program compared our of remain time, record disciplined free shareholders free build on repurchase returns prior our in We back to performance. new we the accrued focused the capital. their flow $X.X more have this participation per platform in provides on clean

year, have We these and the global of work blue XXXX. to at for green installation growth production the with ammonia. at and projects accelerate construction begin dehydration Donaldsonville of begun in blue expected of ammonia to We This are the we'll believe market equipment enable Donaldsonville well on on a project ammonia. completion timed compression green

around to the companies economies and We our leading in in with discussions decarbonizing role have productive share ammonia's energy clean world. also attributes, belief its who continue

million these the have through Our $XXX we installation capital estimated of XXXX to for committed of projects. equipment ammonia CapEx Donaldsonville for to and Yazoo includes in $XXX green compression $XXX and blue City. million million at and projects spending XXXX, And expenditures dehydration

years. few also of sheet, balance strong XXXX. positive the company CapEx the to $X maintenance reducing the to and the billion committed by industry with We multiyear remain billion plans debt stable for a $X.X XXXX next from We gross middle on start outlook,

gross ahead also years production supporting typical million to volumes of to compared levels We ammonia in million return expect X.X sales the XX XXXX. to tons, to higher

As that, up free Q&A. the a in before deploy result, ahead. to will we call provide excess cash some we Tony have expect to years open closing flow With remarks to significant the

Tony Will

Chris. Thanks

at your everyone XXXX. Before an thank I we CF to move on Industries for questions, to want outstanding

Our performance and would their dedication. commitment without possible not be

last business year in to results at lowering and grow have capacity count. the share the the investing highlight Our success while our we had same generation, time, cash

We are all-time outstanding. low for an currently at shares

slides per to our given XX% appears you to of truly just In is cash that, encourage talking cash on record and and But a coupled all what the bullish equity Despite XX, about. undervalued spectacular. free with yield. flow our is look level. fact, beginning. us is our share flow really below exactly With count, lowest free cash year through our almost I'm see has IPO XX, party our materials our is what flow, exciting I'd for share XX very

We investment-grade. have and reduced are our and debt levels fixed charges again

will and We with couple call in the ever. share and and With includes and to of requirements now pretty grain suggest short, prices modest which cash we open things that, have generation questions. started. investments opportunity, good, have just count are energy capital our for decarbonization. getting lowest are the we Futures our over at significant a energy are margin runway spreads In long sitting only years, next clean and ahead we we your operator,

Operator

of line Thank Citi. you. from Juvekar [Operator Our Instructions] with the first question comes P.J.

line open. is Your

P.J. Juvekar

hi, good Yes, morning.

Tony Will

P.J. morning Good

P.J. Juvekar

progresses? And you how question. you nitrogen if gas see prices down? Quick come XXXX European Post European were prices react? global to would assuming prices urea do winter, And are for and what gas as

Tony Will

think I forward where mean the trading. I our is information are best markets

$XX Henry TTS differentials at a for for locations value. to between JKM look energy on in mean, look the you what And clearly, spreads, $XX to down, pricing. our low-cost the Hub obviously, That for NBP UK, the in remarks, margin or Europe production So, I expect this And expected then the Asia. be my of opening energy I provides those at happens there for -- are in But on said huge opportunity come you base. is American we'd compression that's if not happens if to betting happen. North speculating way market spread spreads

Bert Frost

gas to $XXX metric have portion I'd curves of looking forward ton ammonia producer, from say, to on Tony capacity at going challenged. efficiencies mentioned margin incredible and producers, European American when a That's cost North you Yes, full most global a cash at for the range. or a of the of they're what an $XXX substantial that opportunity the be troubled still the

and UAN. And then so that, therefore, urea on to should pass

correction second the thought of is very CF. that acceptable think the today a for range the higher in in And will least so, year are than be the for what out of there half at I projections

Tony Will

And is backdrop, energy pretty supply. pace think economic at the is in sources not against other strong new Europe P.J. And is, generating thing, the continuing global pandemic. that I aftermath recovery of of a the

gas as economic activity to going there's or what's and it's no supply, prices So, as in energy a drive high, clear not Europe. drop in long remains prices

P.J. Juvekar

renewable Great. ammonia, Great. discuss by ammonia next green in Thank electrolyzers? really cost you prices? on engineering your then color. secondly, And given and of your update as good you design green of your you. you electricity That's can plant your year, new that And progress any technological made build Thanks.

Tony Will

Yes.

design that. So we're the do We're designing our property the providers licensing to not the and actually from electrolyzers. IP intellectual

coming green record. ammonia. low-cost We gas producing proven The are where four reliability because off options the the and ammonia got in of cost going it's approach five conventional has of remains, ammonia have sequestering the and COX with is ammonia a times conventional to alkaline-water North that cost particularly But to plant. been access of good green we've tested and for of producing America,

future near in but I is real green think because term, it's gas-rich, I So longer regions -- like think energy-starved North some got in in a it's like blue going I potential, really regions natural I the term Europe, has think America, to dominate. ammonia low-cost think

Operator

Thank you.

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

open. Your line is

Steve Byrne

Thank Yes. you.

And had first how did far volumes, quarter that the you and second of would volumes booked? going you already volume when say forward, For your would much quarter say your majority really How fourth that are of happen? you booked?

Bert Frost

NOLA quarter, I for So launched $XXX looking we took and book the orders Fill at $XXX then for for the or UAN range, fourth of remember the round And in substantial at second $XXX if launched that. a UAN we correctly.

blend $XXX, at so, the average QX back average a the QX And you around and and of look QX that was orders. of if QX

the attractive prices orders Looking at into QX, book at today in the publications taking very were for we forward you're in levels. our QX seeing

-- inventory a back being a or to to those is going a that farmer interior basis in that retail look to at at you levels. the tranche from basis, when I'm it built Now take

the at or we up the on in they're taking of to levels Ammonia, of volume on bought cost, that's of the UAN cost at the farmer absolute and centers around peak probably sold farm -- some corn blended we selling cost the selling not incremental So attractive peak at available discussion the at very $X that the ended going retailer and began $X,XXX. is that's sitting that forward corn. $X.XX some around $XXX at

QX. price in And that then there. $XXX, built was think so was QX Urea, into for saw and quarter blended cost early the average and I you the our

that we very of prices. urea QX shipping at majority out will booked in the be attractive So

built sold level. So you've $X,XXX that has ammonia time. seen QX been that over at $X,XXX to

so that then model structure. out can And you kind of

Steve Byrne

else to if maybe Chris, then, on to this little repo? you out billion are some underperforming or there might we on And looking you're view share a interested you whether Bert. not, capital at your you, assume at be And be going deployment. quarter what acquiring, looking Thank there guys a might and-- wanted continue bit you expansions? are $X.X stranded hear are brownfield Should any assets in specifically that that

Chris Bohn

Yes.

the capital with deployment. start I'll So

mentioned we've in on free several the over of And and capital expect going on opportunistic of to the in return amount cash the an look talked about I flow the based of return side, share given our you the just remarks, can repurchases as of few a sort shareholders. through. And see So next prepared shares. And we from past the having at that, years. of in ratable stream really quarters that volatility opportunistic we then, stream,

to that far. You back have go don't

couple You just move days could the a probably strong. are even how we of go extremely when back and fundamentals see

free where on there'll some of have, probably given talked So his can too, it the have the now, cash at Steve, year, make the and mentioned remarks, we right historically, Tony that, cash But that through balances repurchases. be flow. probably and next year, share cash as about, larger think periodically throughout maybe throughout really couple great. on we opportunities than the not based we And in times, are higher we'll the years, you all calls

a $XXX then on And to additionally, the historic that's have notes. levels. million very ratable just We close the remaining CapEx XXXX

assets ammonia half grow. say were the assets. And -- that there is Related deploy. versus result out side, believe our growth probably specifically We we'll at that where to will opportunities, here, to are there is evaluate. would be available trading some a are demand, to they're back a whether what there's have organic discount that, a as continue decade the -- that inorganic now, always, trading you'd we substantial at going new assets as fundamentally So the or And right to not at of time that over much of to and to what expectation we amount and look look builds new going be. do in building

I over those opportunities present think part few the sheet that's themselves, prepared when balance order our getting to the past in years that of them. we're important hit

Operator

you. Thank

question comes the with of next Christopher line Mizuho. from Parkinson Our

is Your line open.

Christopher Parkinson

much. Great. very you Thank

naturally, solar flow correlation urea. unit there's You near on the and the and to SSDs you hit end earlier can between trade respective intermediate-term But And on an just quickly should little comment UAN XXXX? tighter a are then different investors UAN going It are forward? these things relationship bit that given in just modeling things days. seems how also the just in be developments,

color be any would So you. helpful. Thank

Tony Will

fact Let there's me and I'll But some to economic the trading. easier on say high-level upon production more maximize the have it's to where by the And per are nitrogen -- and at was intensity types basis. producers activity also we're to I'd for trading in capital slate farmer different depending a on and Russia. over and premium of UAN, on premium. bit basis. the lot trading that I for premium, UAN back thoughts, a of to be certain trade a that agronomic efficacy subsidized a UAN make related move there, products at and get both just crops. around of starting to urea give it fact opportunity ought valuable to fair it that while unfair things And more to an you where to equivalent producing Chris. ought trade some and we be margin The for directly is really turn some should our significant ability Trinidad more going it unit practices a in like pretty was more suggested Bert There's a efficiency around to to in order see favors use, not that therefore, countries that certain particularly think, costs dumping they to specifics, But a and

on math where our me if and at production. kind we're So are looking pretty surprise UAN the others dramatically same today, similar in reducing UAN in And doing given where wouldn't trading urea versus a you that much fact, it urea is trading going ammonia full thing. see of and world today,

But to even kind matters. tend over to they of turn more and that time, not it I'll more for the it's really things over that these benefits spot out specifics. price offer. So the longer-term It's some relationship instantaneous Bert and

Bert Frost

articulated Neal and Hey, the of American new XXX% that trading terms been good XXXX to CF billion and is in the assets in of What North production $X correct. from of XXXX anticompetitive where UAN farmer, Trinidadian additional Tony dumping not that available morning, and the nature Russian majority on invested Port of UAN in behavior benefiting due it and be structural supply. and with Chris. Donaldsonville the the the to incremental has of supply capacity should

now that or capacity available is those to idle So, being supply utilized needs.

has our that the have healthy another needs. supply Canada. Coast supply we're now East looping unit system had more We've much unit to take in around how that where now vessel very the East trains would thing built able we're up way I and that California the California share Same on those to into will say so a additional active is to vessel move all And coasts. ship and almost contracted moved and trains of tanks the tonnage our it around to Coast build and to weekly those we with

able utilize are reflection So, a capacity. our more even direct better field, which how we're moving playing are of now trade and flows position a to

so is supply farmer. American the And that to

price maintained due UAN today we've higher a to for we've paying high the So, The exports, decreased gas are discount imports. high costs Europeans ammonia a price. even to and the world

in so that on flowing And product based direction should economics. be

So, we we we -- prepared have how see so have flows. But and will adequately staffed. that

vessels. We service already you about railcars have now the our X,XXX as I told in with

in supply the QX United that with QX States. see you'll to additional reflected So, and

Christopher Parkinson

as curves so Chinese long supply on prepared all some color. least but forward as and Tony in the the uncertainty well say, two costs, at over a the given remarks, your hit parts next, just That’s your about XXXX, let's moving of this updated this intermediate of rates some I XXXX coming in what cost the can are follow-up facility for happens just on investors you a on. thinking always as export And There also would feedstock you just helpful focus recent on some just we can when for be depending new operating XXXX? and XXXX, for for were offer excystations ultimately years closures. And mid-year marginal think urea your who We industry? year, term capacities thoughts suppose, some your cost entire

could you greatly updated us if mosaic, So, give would appreciated. of the be just picture it on kind the -- Thank you.

Tony Will

Bert, go ahead.

Bert Frost

at against $XX the structural with plants is XX%. on When one also globally interests with at you gas Europe in producer. cost unevenly United the those on running gas the conversely of Asian running look the going operating is job great XX% $XX an world this that's at what's supply but what's in of the at we with world roughly States capacity Ashraf And is operating for that with does to the rates, XXX%, with gas China rates, built distributed the going and same

their Chinese look imports, at gas India price. of having you And that. supply say importer, same so they're is is XX% And type I'd XX% the that today LNG to paying gas of -- pay

of therefore, India below what be So, their natural modeled that a lot levels larger imports. requiring run the people in of in tender and think community investment you rates have it's I see

as supply what's prices. And global a high so the time for demand. a constantly in in That's of of had well driving level things first moving lack as a -- history, these and we've are

acceptable and That's their had they production in we forward paid positive highest on and the inventory so forward. that. tender, prices the – are price second production the India a so good are so $XXX with very previous – pricing high, inventories but low attracting. Why? they those Because their world what's have of not price see the world. going a And of capacities, and the one, and low That's we're this around of looking moderating in going a why reflection need costs in half ton. on

Tony Will

of of ton and point, that in certain what back terms in are is. in say, be and terms European also competing Bert's I'd producers LNG But production very marginal of terms going to comparable Asian to dependency, high-cost

to very is and their think afraid the I access we don't trying and man and therefore, think that's there's although, going of coal China to this boogie be I there also into supplier return don't them on global serious marketplace. – to environmental manage a controls, out and the I'm export come, product expect their emissions to about stage. not

And so what really a that's like even American time. is compress they And telling us a of huge are a over North producer $XXX seen that, energy curves. XXXX, never ton in is today's for for differential forward still $XX basis from industry margin ammonia. and if to on the differentials XXXX has prolonged of of per really those spreads energy this Look, period

really industry. these a huge So we're the North this in unique for fact production is of time margin opportunities years American that, talking about four three or

Christopher Parkinson

much. you Thank very

Operator

Thank you.

the Sachs. Samuelson Our Adam next from of Goldman question comes with line

is Your line open.

Adam Samuelson

of some urea, are the meaningful and production same certainly, buying cost provided, in gas not ammonia, thing all frame much price just cost as today? is Good UAN Bert, the product the on curve cost to seaborne end ammonia, color in curves you. you I we very it how urea, terms between the differences maybe products the of products the follow-up of the actually because about expensive terms telling on Thank the cost curve? hoping different Because morning. some Tony, separately, that curve just current of could actually of how I of is global and proportion if different UAN, think the what distinctions amongst think relates of to curve Yes. And the you just help high dynamics? there was is actually at kind

Tony Will

see ammonia I that mean, the I minute more and And for pricing. equation urea in Gulf think of a would I a relatively do pricing story out at look and you Yeah. UAN this consistent extract at regard.

to I try shorts rogue by a see is do America, of other things. a going to and North you to where think, or take either the manipulate period during what a market in it's with position, build certain want traders there's ground urea, or tendency time to not particularly

the And we're lot prices price don't anxious other provides reflects season. as at And pretty a certainly, really underlying think you volume not the not those so like discounted of transacting there's because a kind to on products. get relative of to and what that we forward that nitrogen into book value out the looks go growing

first so, ammonia think much if place that at starts you'll quick. can got And then you them structure you're ammonia soon and pretty higher a sell just making to you it make And and at supply ammonia, because make on really global up the do is prices drying urea, if pretty remember, margin urea I look more as to ammonia.

response XX million is going So economics I Europe wouldn't things, question mentioned When tighten and production all it's the off-line because much, of products. tons a across to look for which but up fourth you energy by prices. high third have that during quarter the of market seismic ammonia year last had at these about to kind very this that of on a of fixate broader in the while the really I price And on earlier, instantaneous underpin a it. impact

because some clearer value at much trading really and products. is the a Ammonia there to tell discontinuities dominate really costs, trade if activity story. curve or that's should And is that So where very doesn't of high those ultimately of short-term in picture. urea and some sloppiness supply there's a the some view of running going is, energy products significant our the portion

Bert Frost

is the market a years. markets, that like last at second able you on States, look the the subsidies Brazil the it's further outputs then best end make just is crop to to an products prices look of amazing prices. XX And the going because when prices. levels of crop the the total insurance, And When support the profitability United of to opportunity be lower second yield. in pay Yes. farmers some has you of for but even even the relative corn profitable year in at inputs going of today to these for the Europe at subsidize and be are to subsidized still on money at And these India, commentary

when demand we articulated. solid curve you look at output, a as we've side basis for the production so as future on dynamics the And have structural well side the for the very cost like the

Adam Samuelson

us thinking can that That's down still Louisiana. or helpful. what Can that capture you're carbon that happen XXQ forward? just and getting help evaluating to just would ensure And play And XXQ about that really you about credit? Okay. take would think to the into separately, in how has before all move that what you're it maybe sequestration actually

Tony Will

engineering for and engaged in Board that We've have the are beginning move to some the the compression dehydration with We of engineering larger and place preliminary to are engaged authorization detailed in. equipment. done orders and forward pieces

we to to we a want to on do because going believe blue that be able decarbonize be our there's premium the and be produce. to even network we'll So, returns, the we the it's and attractive probably expect that XXQ existing to very credit, to in to ammonia next able And that be X under right also still years. thing X.X online it is

anything are steam going commencing But of get more we're we're then excited proposals attractive. So for that or some turned have other the full actually about increased to approval that. But we're like We're policy, and reasons, some those price if been a It's of look of carbon forward lot into investments talked to be needs moving done. construction. about waiting that the on not else even that ahead.

Chris Bohn

on VI. confident going And with then Class Class Yes. there's a transport and feel about initially the EOR it sequestration side, whether lot activity and we the VI, be more

expect some quite of specifically of with in that. the a those on plants, few and locations in discussions Donaldsonville of City. We're different groups So should Yazoo some the we and our

to projects going a these good either. very provide view at their to investment. And risk we as as even said, existing, don't returns Tony that the So

Adam Samuelson

All I’ll right. Great. color. That's really helpful on. Thank it pass you.

Operator

you. Thank

Our BMO. next with Jackson question comes the line of Joel from

Your line is open.

Joel Jackson

looking of at gas of or Europe Is just and curve morning. urea European it wanted a on not Good cost Adam's the question, urea, NOLA, Bert discrepancy gave. to advantage I ship costs between what take that support you simple? seeing don't and follow-up answer to is why and bit a that Hi. we're for such in some the Tony big arbitrage

Bert Frost

we as market Bert, gain commitment to and that premium the supply end supply that need But is we utilize we've system the that and our is But believe such here and American and to well. made possible. is balance an the and This demand farmer, there a opportunity. distribution is

that We're them We the evaluate in at timing today. and and arbitrage opportunities of for seen continue looking And commitments. we all at those past, have to looking you've and time against exported. the against our us act opportunities or

Tony Will

because high that, on some I'd even for those things. of pretty are Joel, of say top freights vessel But

to far than as terrific as on at that are look got both production we've margin now. basis per those it, of we and right well is urea because just As products maximize here ammonia, UAN sell event a unit keep opportunities superior

we our So, And tend driven we're back be production. focused. net to dialing back really urea

So focus freight go we'll about a us. not is. do and really costs opportunities production chain as lot When of urea and are that. supply up export, for for you Bert's think there's the if of us and demurrage domestic point, continue on that then to as products to cost manipulated keep you that means vessel But good that to

Joel Jackson

my Chris, different. -- And guidance. give is second Tony, question CF you doesn't

is that. you a guidance. -- last to the You of at I dabble what over gave handful maybe QX all some near-term like look bit guidance. quarter, going -- started is you the to in of mean, giving little QX sorry, But sorry, going look quarters, know current to

earnings you lower higher think into be similar, And that give input decide QX about is, part like? far or then QX why than of might talk to did question will So do any of can what that, look QX? the kind so you you not

Tony Will

much was So we thought both Well, order well evolving completely not book we on ground product that we did in let gas like we that give to Historically, full-year pretty we our price off prices it, me safe press so had which announcing missed as start guidance. we call, on were guidance. are we like And movement November, had year. earnings we a off QX kind was we when forward as was XX%. last were a that by given four and weeks and release here of later, rapidly solid of There going everything pretty felt with. had

of why we volatile so that's last you XXXX ahead wrong. Suffice environment it give And pricing were within that is XXXX, it say look XXXX of entered because us. we four we're So year. where if was entering at weeks, don't to for versus we we're guidance span really where the a we the where miles got that fantastic year

about sit excited today. where So we're pretty we

Joel Jackson

you. Thank

Operator

you. Thank

next of question the comes Jeff from with Our Zekauskas line JPMorgan.

Your line is open.

Jeff Zekauskas

Thanks when that States of tariff another would into the -- the you are got [indiscernible] UAN would tariffs what Akron on actually of -- United much. at another, right. very basis? up tariffs, companies. you look from have what an divide on work All higher level has proposed different and sort EuroChem would the or on different are would Russia, percentage how percentage have imports placed the has can lower be are tariffs are calculation suggested Russian the average the on that tariffs There -- companies. placed Russian And the different or one

Bert Frost

the year, Commission, Department of goes determine adjudicated we in this And June that last was it International all the the brought unanimously. process, step. Then so we where next case won Trade by on we Commerce to accounts forward and and are the to in

final so of known. the be still in will results that And we're middle process where the

I date. QX or have beginning QX, the at of expect don't We end the exact of

basis were findings, they all is won, good. though anticompetitive. And were of that so they We those dumping, the

supply so demand, is companies. Trinidadian States. America. I United I roughly, imports different different and the million demand into United States and for would levels yes, roughly generalization a take are there's the into North X say, X it tons million And And of Russian tons of for to would there imports of And UAN

XX we you some have we're those States, earlier, said million so replace capacity, those. out. And like the United of and extract tons latent Canadian that imports, the So production, you I able -- have to

that happen tons United and be fully some will be what so South to we to redirected and will this other whether is or And production. be that by through markets that the States Europe, case, America American supplied expect North those of

Tony Will

Yes.

have which key in is really standpoint point logistics make the that's North satisfy here, that's -- to the efficient from happen. American and most producers that the America. North to right the everything else, ability a demand really way the of think I all And

domestic of far and as take don't can care anticipate there as we longer-term any producers local that -- so from that should market. goes And in be because imports producers the larger Russian Trinidadian

Jeff Zakauskas

very you Okay. much. Great. Thank

Operator

you. Thank

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

line Your is open.

Michael Piken

then the are like people tons million offering. to imports to there the so bit last NOLA wanted just I US. that amount the despite about looks were to but of little pace the fact up million like discount a X respect like been that into tons, urea about also took at of imports the And the or tender, year-to-date a rest with total Yes. world. the seems talk India -- they X.X it has It were of of about number looked it

production So there this shift great. or imports any UAN the domestic how would a producers, is in kind And increase do you trade of in going? these function toward flows see color of among be

Tony Will

is through XXXX XXXX, through a through of January. correct imports so so the you're of give our through I'll that July February which July year, say, to-date in So and estimates. July fertilizer on you, June, June let's

to a as on year-to-date arrived that we're September that October, in was so or reflection were are year as October, higher and -- of prices imports November, basis that three-year higher and well say, basis for let's and higher at compared from, the East in Middle level. Our North a a last a departed Africa shipments

lows. to XXXX and of were America due And that remember North lower coming hurricane into to historical to XXXX the in that have was we project inventories year production of to you at June due July However, some turnarounds. for also the fertilizer

today tons and take estimate million estimates year take before. from production, the you out comparative as than over add and or around are basis inventory the add X.X that X So back the But million less out you're probably tons. or over

million about market have tons. tons. million you America the import remember, to Now is to X.X XX North We million or in UAN roughly the urea XX.X the

available the So North behind capacity Brazil make those and might imports might late shippable order to or India have a replace up to need put have significant the they Europe to water And still come up. we the on of America production to those is to basically vessels amount soaked the and there. go tenders that or or

see going we for not fairly the So dynamics. only those positive forward, world on environment for but a based North America

Michael Piken

clarify inventories, probably nameplate into if what that guess, Thanks. XX number but then And getting year you your think in of production terms into XXX% production. remarks, as potentially range we terms commentary just of the you thinking like came should X.X tons then produce the to up Thanks. I in from assuming I'm of million to be total with low or I more to mentioned a could back this later the guys volume you you million of just to wanted follow-up. capacity. about a product that? tons ammonia I in of year, and shift urea UAN XXXX for gross And in

Tony Will

it think of about with. nutrient though tons bit. product ammonia yes, report lines. little sort tons Well, even less up really up the you We make segments tons a goes But back urea certainly nutrient end with production net-net, but we begin ammonia to more terms go And of in UAN into the as you tons, product also tons. UAN, shift you to

million typically XX.X is going somewhere order for more And gone there. little probably is slate plant X.X range maybe in Michael, right has ammonia manage XX Bert our million then a and now, and said, million And But to and range that netbacks just stretch. product from down to on anywhere you The the few Ince million is the a looking bit tons probably is to continues XX us. XX in as maximize tons. outside upgrade to million in XX we're UK here million so be So a at the likely. very that because to

said, low into to still ends overall. the coming the product As you think like in range what depending looking up XX% we're XX% the I would probably upon inventories mix year.

much of So for it's a us. pretty year normal

Chris Bohn

would with I is thing The only lower the little an bit Yeah. from a add UK ammonia production. being plants

from profitability UK that is that If you minimis recall, really, de before comes mentioned level. we've the that pretty from the

what So mentioned to the even historically. with million XX saw we Tony is being margin be really, going the of, comparable below to still that benefit

Michael Piken

you. Thank

Operator

you. Thank

comes from Our line Roberts with John question the of next UBS.

line open. Your is

John Roberts

buy Maybe get you another stock us you maybe might some you. attempt Thank guardrails much back. to to give how on

green you're the over like XX% If the flow stays cash free the a earlier at share green and stock line yield, look the reduction light could -- the XX, years? figures of slope in XX least

Bert Frost

be don't out for say a shows going as obviously, outlook share But shows would to XXXX XXXX, remainder into where think price I what we're I the John, is, only of very they're and now to side. and to XXXX is repurchasing free what that cash going share flow we're an our but an our the per what Well, on that give not actual you've very true yield that is pointed undervalued. opportunistic number the point

really I I'd in year. to the the opportunities and our back think point shares volatility throughout

also on deploying will lot be we of is on that of not going the this and to it of have free cash The see only don't So year be that, volatility while the the share flow comes repurchase. we we calls but when a to that where to just CapEx throughout on year based other things, capital different shares. timing yield, the

Tony Will

And Yeah. just would amplify that. I

I in to that's a his be movement where we if our going that going opportunistic. be for want position of we're some to this of And sort a there's said remarks, to in is really in negative to longer the benefit shareholders. that think Chris And there's ratable. component our there share position is a capitalize price, of in term earlier a be then As component on a

ratable going And and of we're chug to is will a out. continue so this that in time along portion day And be just right. the day to there -- when but is aggressive

John Roberts

gas be we Nutrien prices? this capacity supply and high majors before like seem and think you industry a by more to bit oil do long you little is doesn't response the having how take like then it's going the global announcements a or oil to there start to And ammonia the and where Yara,

Tony Will

stream. the Yeah. the thing by four actually to years I time announce a decide on probably until I you it's mean, important project, here five think is, you're to

less are is important So to important where the longer-term decision that you today's going believe is what what's S&D more What's prices trading. is and about balance happen.

a begin is in firmly the capacity going critical and as when hydrogen construction. process. to also supply. role demand question new to of discount mentioned existing are that that said, a we Chris to And that well kind now, and de-carbonizing right Chris trades is you The As exceed build earlier, believe at do going ammonia economies play

Australia the past, ammonia in capture it think it, a is to see we and S&D plants the think the in in past. existing going from built. But have more built, and you'll going think opposed that the to production I you been green relative immediate you form by you In build as clean that flow, think you're they've buying there's So world you at discount, for purpose possibly or the have announcements those either energy to time of what And preserve you're assets is – coming. as But And around going more come been production the fertilizer can announcements to being ammonia about a the find and ammonia happened if get East are balance, carbon happened you they're get like new. like different I Europe. decade. need back that sequestration are built end blue to I plants this that in cash ones Middle how

plants” those not what And and see substantially building in of. that's to fertilizer less is be more cost tend be point those The energy-oriented those on so than we'll more think plants. complex. tend to And I “fertilizer fully-integrated –

And and North of America interest you not low-cost also them. got We've a really places in start you'll to future around already the it's think, I where plant But think in so projects. blue And access seeing too John, there's announcements there. far of one go you've before raft seen green natural probably some a real I gas. the few very want plentiful is build to only world a

got We in have in framework, to the sequestration. we've legal regulations the place order right regulatory carbon facilitate and and

to blue become for the and ideal the place so the energy And a clean I this of for really significant really develop is source part think, production world.

John Roberts

Thank you.

Operator

Thank you.

next Morgan with line Andrews question Stanley. the comes from of Our Vincent

open. Your line is

Vincent Andrews

I'll of Thanks one leave for the taking my at lateness hour. given it question. the

XXXX any parameters that maybe Given there over how now of for everything sort thinking few Is consideration the the given the maturity rather refinancing earnings next paying we've outlined the it the you power balance are discussed. years? for than And down? sheet you about

Chris Bohn

Yeah.

I – don't there's Vincent. think change think that, any to I

that's of the we Our wavelength enough and and sheet really it us, allowing looking have $X balance is see advantage to at opportunities so over a we goal it's can billion, take as a do said, longer strong those. we where

able not may came been on both historically, taking sometimes go little to when a we have in think much debt feet. I opportunities those too

So right take now, refinancing there's balance from nothing billion the changed than those. at sheet to XXXXs those $X our in that's out be commitment rather

Tony Will

still all looking year do. other I maturities on forward -- the the impeding the marketplace what $XXX is million all take us the other out seeing doing mean coming want and the things. from in things good do it's is not based news to the can we're We we next due of easily

just out while year. sheet, balance that we million returned added look $XXX and debt took we $XXX of million billion $X to shareholders, the capital back last you If and year, to of to was last

we've like of all to looking do do the we're feeling of to us. front based in again, capacity So things here, we're got environment op on the

Vincent Andrews

much. very Thanks Great. Okay.

Operator

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

Martin Jarosick

have we we everyone, few in continuing Thanks, the next conferences look forward up at conversations us, weeks. joining and coming for to the

Operator

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

You may now disconnect.

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.