CF Industries (CF) 5 May 222022 Q1 Earnings call transcript

Company Profile

Participants

Martin Jarosick	Investor Relations
Tony Will	Chief Executive Officer
Bert Frost	Senior Vice President, Sales, Market Development and Supply Chain
Chris Bohn	Chief Financial Officer
Adam Samuelson	Goldman Sachs
P.J. Juvekar	Citi
Josh Spector	UBS
Chris Parkinson	Mizuho Securities
Michael Piken	Cleveland Research
Steve Byrne	Bank of America
Andrew Wong	RBC Capital
Vincent Andrews	Morgan Stanley
Jeffrey Zekauskas	JPMorgan
Joel Jackson	BMO

Call transcript

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Operator

Good day, ladies and gentlemen, and welcome to the CF Industries' First Quarter 2022 Earnings Conference Call. My name is Michelle, 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 our host for today, Mr. Investor CF with Jarosick, Relations. Martin Sir, please proceed.

Martin Jarosick

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

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

Tony Will

first for $X.XX record good and of quarterly billion. the results Martin morning in Thanks quarter financial which we everyone. afternoon, of generated our XXXX, Yesterday EBITDA adjusted a we posted

against backdrop spreads in and supply/demand well. continuing Europe. CF production $X.X our global extremely tight net flow $X.X of billion. results marginal America Our a outstanding between billion balance, reflect the cash team very trailing and and was was the ran energy operations by We Industries performance wide assets North cash XX-month These from nitrogen free

network to the customers set and importantly, logistics fluid. first corn the leveraged serve records West distribution belt manufacturing quarter to safely. and diesel Coasts. exhaust customers for expanded this American on We serve UAN, our East ammonia, Our Most and in extensive production did North our plant gross we capacity

stocks. recordable execution level rate high to labor At two Asia possibly be than foreseeable continue demand we XXX,XXX at per customers serve better exceptional to by as tight This of times nitrogen operating to industry remain shareholders energy We our at time, Our the was the certain the to take and X.XX underpinned incident Nitrogen replenish lower year. will grain of the the for in it averages. same hours, years expect balance well supply/demand Europe trailing XX-month incidents global costs world's rates this. global will accomplish to continue least future. will likely to need significantly and and global believe longer are

tight to So, has we Ukraine and marginal the of with invasion high time supply remain supply exacerbated demand expect being Russia's situations. very nitrogen cost. both

second, and First, Ukraine's about exports; Europe. by and price uncertainty grain gas natural and by availability impairing creating production in

longer. for global factors likely will tighter supply/demand make together, these that balance Taken stay it nitrogen

to curve, energy Given enable will coupled years. to dynamics, to the these also of cash end significant in us generate position low our invest cash shareholders. coming initiatives This in cost we market our with the flow substantial the returning while clean on free expect growth

week, the are facility energy in in clean blue Earlier We of announced potential new opportunities conjunction with about growth in North we Mitsui, this applications excited ammonia. ammonia America. a we see

and projects green to continue Donaldsonville, also facility. advance ammonia blue at our Louisiana our both We

first, the one million XXXX. ammonia exciting where of We up the market important nitrogen leading In XXXX expect will outlook expenditure production capital global new of development way. detail. turn our will tons blue discuss green in outlook program. more more provide this our begin have Bert, and on to the But in in beginning in Bert? over who a to return clearly me Chris allocation steps capital X.X hydrogen forward, and and are capital opportunity, making green moment, our including let These approach ammonia forward details we to it moving are of to

Bert Frost

stage and for Farm who of are Tony. strong higher in includes all farmers incomes. wheat, costs, Thanks, returns forecast be setting year will despite growing North input corn, historically farm rice. America to crops This high cotton another the be for

least line on improved time As the stocks-to-use global coarse ratios record have replenish longer, prices highs. continued it X, replenish supporting last over toward strong We getting been slide trend see months, agricultural-led and years grain has not nitrogen-consuming two grain crop believe you yields not shorter. nitrogen. for global six demand stocks, to The at stock can driving more fully will take to

We continue to acres nitrogen-consuming this of expect healthy crops year. planted

acres returns corn cooperates. crop our to Looking XXXX million futures, which exceed those projection in of for States United in planted if at corn million new the XX of of XX weather soybeans, supports

During customers prepare to network helping the were for first leveraged the serve by that able our coming flexibility this quarter, our we ensure of team to demand.

at Our UAN highest we level rail years, in large and capacity. increased utilization its was

to believe has We East Coasts. flagged of serious Rail some also and farm in export nitrogen we become to urea typical challenges. our those high customers world's the quarter, U.S. also that a demand volume continue and will our issue to chartered UAN income second three We Jones and for destinations. Act times to work largest prices efficiently through crop drive service vessels the move of the West strong in

regular first the months. India in by recent We coming to expect activity the the a urea tender be cadence of in tender

strong urea remain increase catalysts significantly many not the in term Brazil near availability. also to XXXX. see to in project nitrogen in We global supply We consumption do

resume the half to China expect year. We urea in second of the exports

Europe Marginal difficult Chinese the large volumes decisions Hemisphere impact continue cannot control urea Southern the food in on the focus the environmental how natural unclear is production under during be off-season that be will costs it keeping coal-based Northern to if balancing operating inflation will export gas However, given to the and high. face Hemisphere of government's production.

even reduced Natural suggests but due and have see gas limited North forward outlets, this shipping. as positioned America to spreads can natural at well We in logistics to costs environment, favorable increased. to expect North vessel insurance in production curve sanctions, gas Russian XX. remained compared marginal energy continued port rate fertilizer arranging as in CF and difficulty Industries producers producers you for on export to continue slide American internal Europe,

with plant largely a their Farmers short proven amount have in continue spring able the on for as fertilizer season, they window their time, are acres planting that of to weather so to We delayed has far. work requirements weather once customers application opens. that

distribution customers network to meet we first demand prepared are most the extend call will and turn Chris. applications, While that expertise the and emerge our side-dressed me planting. over leverage to for after With let will top-dressed that, the

Chris Bohn

Bert. Thanks,

XXXX, $X.X first earnings share. the flow cash adjusted attributable billion XX-month the EBITDA $XXX was $X.XX cash free $X.XX of and $X.X common trailing per stockholders was reported The was was quarter billion. diluted company billion. billion of to For EBITDA $X.XX net million, and from operations or net

free for through and moving cash free you expectations substantial in company's Given want our walk flow today I capital confidence are generating allocation forward. our cash long-term the we the to flow outlook;

of the of in our cycle. after we've April, First, and our us final fixed $XXX we This and charges million done level notes. reached $X we gross the years repaid of the financial flexibility debt over XXXX long-term billion now debt on the work provides lowering target with through

as to $XXX remain capital planned progress. are the expenditures to million investments of our energy We in in $XXX as clean range This well initiatives includes estimate activity, in expect per year. million that maintenance

Green orders the all to significant facility equipment. COX project us Donaldsonville be initiated. at compression and construction is to enabling of blue complete at once The We and in continue to have volume advance of market to sequestration the with the placed first ammonia Donaldsonville expected major is Ammonia XXXX, be for Complex dehydration

The excited in to joint in through this two pursue organic We investments we the commitment our leveraged with FEED and ammonia FID clean energy low-carbon be ammonia market nearly ammonia will beginning next joint and existing will a clean effort of Mitsui. disciplined believe emerging of global in we're ongoing network the transition to the support decarbonized blue to XXXX. While to our growth the related capacity investment measured, support capacity, supply with XX-XX venture a study in years to provide create shortly venture energy.

on repurchases. The in two these share capital, reduction the to dividend calls expect the decision outlook factors: in Given main to positive modest and cycle was by relatively reduction, eliminate repurchases frictional to the to shareholders by share the generation XX% costs achieved, business. other cash fixed capital across and through ample initiatives dividend the our increase have for through significant charges return and driven Board's we we have more quarterly debt to

way an also We a continue important return on to capital. as and return view of provide to share repurchases shareholders

first to this Based greater share repurchase to outlook, quarter. free expect increase quarter. the the the for quarterly to positions on repurchased annualized flow approximately program our Along our ratable portion basis. us for on This of an the portion $XXX our X.X than the we we shareholders During billion return dividend, represented $XXX ratable shares million. repurchase to $X higher million with share million quarter, program cash generation of per

Tony as in open prepared some we provide Q&A. at the to closing before to the we will levels With also We are shares opportunistically past. that, additional repurchase attractive have remarks call

Tony Will

Chris. Thanks,

entire to we their to outstanding CF I Industries the Before work the on team want during questions, recognize quarter. for at your move here

to in the providing is the North of the results the critically to for industrial critically applications. that strong global in serve than The fertilizer has has we continues be grow underscored area. over demand network in grain North confirmed of Ukraine and particularly last of new ever. Industries, to stocks. role progress both and today blue work focus to chain agriculture replenish Industries CF the poised and a including ammonia sector, ammonia American the to issues our even clean this also for our excited role and as several and safely as world. leader Russia's manufacturing green demand, about is for emerging energy years ammonia coming in Our play on The customers, The only for supplying be applications food in Europe, farmers this It CF important world next as importance year belief in well meet operating supply the will leveraging our a we of distribution more increases important rest the geopolitical the American invasion years. will are significantly role collectively that

your to to and we We them capitalize and both the the in value before questions. shareholder longer will on tremendous meaningful that, us have now we open create opportunities call operator, near With intend to term.

Operator

Thank sir. you,

[Operator Samuelson We will session with comes Sachs. question Goldman begin question-and-answer from the Adam The Instructions] first

Please line Your is open. proceed

Adam Samuelson

Yes. Thanks. Good morning, everyone

Tony Will

Good morning, Adam.

Adam Samuelson

I'll blue done why other And highest And So project rough the in decision ranked cost through hoping you around more the you pursue capital been in to you study in opportunity project next a the the US how little even would the understanding and have still one maybe green the would you priority that that have Mitsui. dig portfolio? some maybe could Mitsui FID things provide decade ammonia you have of you've can there. ammonia thought blue the in -- a lit have go greenfield announce this, yes, FEED and with I it at maybe done to versus about maybe as about full Gulf a was bit of year, capital the how on leave first with to parameters to kind have --

Tony Will

basically that a be of bit greenfield one long-term Adam, regardless like the reasons with a the to facility of brownfield production than last some blue green a at zero at produce events is for from for want Hurricane combination reason facility us combined I Donaldsonville And had that little like very entire out agreements of And project a weeks. location geographic location with of a we give geographically ammonia why different for and of reasons Ida the with can three Yes, we such supply continuity and reliable, it carbon ammonia came we it's it separation having that when the of instead separate counterparties. do that's going Donaldsonville D'ville. into think the the through why of really enter ammonia year weather to low supply and blue put took

of conviction not of why that demand as to into is blue area this the upgrades future. plant very In we Mitsui's a and strong opposed ammonia an only out full-blown as terms it everything, really with to as both but well fertilizer emerging ours speaks demand, get as

we given the the both think the rest carbon a Donaldsonville a believe adjusting world of capital. most to it or $X that, FEED on me US handle today, much of this. so surprise regulatory minus We of better the the it's place, that rest But the structured need to much but out to or this. basically based And both mentioned we're world And does does, of stage particularly and is us taking experience, marketplace project have move think Port greenfield export-oriented can plus The at the going Mitsui not wouldn't reason is going cost be. it's for And of for really we facility, tons really partner had capabilities our serve of is neighborhood the or of that's overall inflation really world through But five billion get and for us. skill critically well. set years. Neal, leverage the a those the and going if will XX/XX in paced facility I you we're investment of, where an that economics and a international what as kind important just -- is the into recent we from an brings for a remember, of on cost the over that

plant in but amount of about capital that XX -- of doesn't That's of money. feel last about generated good I talking million the go $XXX amount, affordable the shareholders. imminently though that terms perspective But relatively So prospects door like ratably profile the a about significant $X.X the we year in a it's free return fantastic given our not the years. fact that mean, a next and crazy months, for that, think over five billion the and really money out cash even flow as having a it's a from for I you're

Adam Samuelson

helpful really you. on. That’s it color. Thank I’ll pass Okay.

Tony Will

Thanks.

Operator

Thank you. P.J. is Citigroup. from The queue next question the in with Juvekar

open. we hear is response. can Your P.J., not line

P.J. Juvekar

Sorry about Chris. and that. Good morning Bert Tony,

Another quick the going top City, and ammonia D'ville mind blue current blue ammonia on think Mitsui. in your you for with this of or Yazoo up, your blue demand at facility is On XXQs ammonia -- question the do your give really incremental it industry, cover cover you cost financially others And these that some can can in this because details agree incremental make on the attractive? and chemical don't you credits? costs, with incremental can Thank cost the you XXQ you. can

Tony Will

think a difference the from and the ammonia industrial I using between process reformer. P.J., the of of that the we emitters extract as of big anyway. stream production two-thirds process, It's the that and from the production ammonia rest capture production most byproduct of COX the comes steam is Yeah, methane ammonia waste a process

And really operates, the that baked looking it's the and capturing that stream need. costly incremental into the some aspect But how sequestration with. sequestration of capital begin of most plant urea And excess of at so don't the up suitable compression wells. production geological injection In dehydration we're instances, for we and that cost COX what already COX into just that's we've so COX is captured for end COX the and already the -- venting ammonia is COX that. to we use others that an we because intensive

still you're plenty announced of to just tax or some costs And dehydration and capital favorable million. roughly whether brand-new well. money leaves looking $X at a place, in incremental going the the current compression. some additional transport there's compression we of doing $XXX $XX very credit then as a which of injection in at as within us, to for it's the we be of put costs so XXQ return basically on earn or we're probably million the a But plant, facility framework same conventional COX the the greenfield per to incremental to for be And facility, blue available down and that $XXX that only neighborhood of for dehydration And adding going need there. ton Donaldsonville, is it's utility to we're and

on $XXX the XXQ So And attractive it again, return again, very of provides another kind a that call roughly million. credit profile for basis, tax us.

pretty of landscape that's most the is in why advantage terms production to the XXQ likely ammonia industrial unique of So take in able credit.

justify credit I gas think based if you're to were to in you order blue doing other talking a $XXX capture need you today's things, to about the technologies. probably or $XXX that on ton it to get

and Now costs where today, much capital blue you the I XXQ But on tax a we forward credit. be reduce think do operating higher to will likely need gas. that and improvements ongoing going there are developments

not capture so much that given encumbered COX. we're that by Fortunately, we already

P.J. Juvekar

for along. Tony. Great. Thank will it pass the you detailed explanation, I

Operator

you, Chris The from comes Mizuho from Thank question next Securities. Parkinson sir.

is open. next And comes with question Spector line Your the Josh from UBS.

Your line proceed. is open. Please

Josh Spector

the my for market. the Thanks some made you that around that the of China factors China least convinced moves half. the your of that drives urea there'll curious I the are past mean comes material in from taking that your out over assumptions not, whether six second or be know months? seem some about Hi. thinking, I they've I'm given don't what gating Yeah. some of exports question. just hits at

Bert Frost

those there through an publications continued XXXX. looking of information how into externally today was a announcement those or Good and desire This government's and Yeah. is morning. going factors And of internally are think and gating Bert. I control that really the enforcement possibly impacted. inflation on with today or trade for what's to pronounced is real about And bans not export some that the with in

tons out. the previous ban out, So June The they'll export lifted. was clear position in not that come will it's be come will when how many

coming significant of N&P controlled, on seen of both global market. the very is international is tight internally to have so China China. a And has almost a taken control we we've XX% traded What seen about what portion been so off what market. of the the product, China represents half out is of trade, price the And

of to again, the product keeping a controlling costs reflection So farmers and that China. in

on open governmental that that basis. and on, on exporting not happen. marginal basis, be So we've will incentives producer from as economic should again, But probably a a action that they been economically an

that, half say just let's X X million could probably So be today. It than expected we to at had million less it or tons. looking

Josh Spector

Very you. helpful. Thank

Operator

from proceed. Thank with next Chris Please the Mizuho you. question And Securities. Parkinson is

Chris Parkinson

– you me? Can Great. hear hopefully

Tony Will

Yeah. can We hear you.

Operator

Yes, sir.

Chris Parkinson

right. All

All checking. Just right.

think So of I Tony posing the and there you Chris, is generate years. I you low-risk versus with the you're rolling about, opportunities. mean, seems lot forth all have to juggling what about high-return, go should all How But and a Chris buybacks, think some say, three brownfields, two the think conclusion five, the smaller, these last of clear. capital to two, suite, both projects you're about over spreads. return shareholders next obviously, versus cash a of like let's pretty free back hit you're flow year we we still – lot three to looking period, the could balance over versus it share three which of on. to When a opportunities allocation

to you. long-term really I'd color? some appreciate So intermediate Thank

Chris Bohn

is This Chris here. Yeah, Chris, thanks. speaking

our free dividend will and the amount years. the able everything projects. That I be out, just increased from As that for point number you to as couple ammonia couple remarks, share will we to a we'll the cash have the also But flow we blue next we dollars. of projects have happening these million that over announced that did that of take the of are repurchases in hundred do be a of laid outlined, Tony out and

outlook other projects here. had we've generation. be one just that we've this at the the will Bert and as $X of XX-month flow see, greater. Over thing we're even consistently projects. inorganic – there's laid think that out that We about we talking is some organic mentioned, I billion past look of almost free the cash And period,

at two opportunities opportunities, the that going think the into lot of repurchase So do million also in year here. at volatility not of get of but portion, years not do for lot growth capital about, to year, ratable to the some quite us favorable is this share also And only but about and of be One plans shareholders. the we where which to only I the a is talked our opportunistic I piece. think we given in a talked the bit things. it and in we're move $XXX different of price, share coming is return provides out this to can looking potential then return And that get shares a we

Tony Will

if of Chris, though the are We I agree we small moved into just And of relatively the business I said. now just Chris of Bohn in ratings, amount $X would with well we But that. our carrying, desired add, level and the very strength But yet. everything haven't billion. and we're comfortable investment-grade at been at we're look debt think that there how feel you with the performing we long-term we're even of debt

as reduction, minus so to the months, free X earmarked to cash did so pointed debt $XX decided million door additional this forward plus we're million we have capital project, I And adds of flow. range ammonia really per as already. a don't said, even million new million Chris XX to that that's out $XXX it per last in billion $XXX call Chris the $XXX it, ultimately on year kind as roughly, capital We of of out, year. we've or going And of said, to $X.X $XXX blue move if

above. leaves that shareholders. capital based is amount very all on of can for business do we to think I of still And So, performing, a how the return healthy the

Chris Parkinson

obviously, quick completely There's producers, major and a of UAN and some now Central on are mean as with of I Europe obviously the off-line. just different a going market. follow-up. lot Eastern And dynamics cut it. Got the

the last outlook are just about see but Tony Bert, the of quarter. you us spreads term but favorable, seems for other evolving? It urea obviously, got, Thank any also thinking year. that's how UAN greatly your be how considerations have a mix couldn't the not just thoughts lot and intermediate a to on this of evolved appreciated. but And and think you. lot additional as You've help trade well, over pretty I it's just end season unit would versus which like

Tony Will

you two there's just then it we're quick chemicals, is for mixed over I'll Bert. capital return things an I production be urea. turn a that efficiencies than process. It of where in from of my It cents a UAN. the to Yes, that a product tremendous urea it but with of insecticides herbicides it's UAN, also efficacy and to compared them also in a can in standpoint with offers valuation the to think application is or or make belongs or But more involved significantly seeing one other great fungicides to farmers give terms whether I'll appropriate whatever the more costly product given gives agronomic some

International largely think that illegally was Department Commerce in premium by fact urea that it's and product grower, the Therefore, cost to to a trade, generally Trinidadians. the that's at basis. duties the of per to benefits nitrogen producer. put the the again, And where a is, Russians it of auto the Commission being dumped provides and it on higher on I and the because speaking, Trade so And the unit

-- I as this UAN speaking, And urea. so our should level think trade to expectation generally and premium at

our going of it forward, kind I'll over of plans Bert. to In turn terms

Bert Frost

out and at or precipice what quarter is in first in trading long of to of will spread planting continues we're market, in we is corn the a Australia as taking a are And Argentina, outlook higher And way to production South and And degree, is it there as and restrictions urea. in Chris, The some a late UAN grains through India that States in will as with continue interior. demand looking applications, million and in that take of the constrained. lesser America. feed million and the favorable. to to America, of acres said, place nitrogen. on UAN the seeing have the and and is Brazil in North the And maintains, rely that. Tony continued of we do UAN going of benefited and move out is North XX favoring Yes, world But corn on of demand product flow to United over to Ukraine, The of growth what Russia to wheat especially. which America. to those lot XX and is coming urea. supply moved And we're where with premium a the remain markets we that at Europe

today global from spreads against and $X gas the in produce at With past. America, to the taking TTF place have it they $XX Europe, participate $X the to difficult is North in in as market

most urgently world. in from States to possibly So what's flows the needed a we expect UAN then food-constrained a trade to change, as especially go result of and Russia United

Chris Parkinson

It’s Thank great so much. detail. you

Operator

next comes you. One queue Thank in Piken. from question the sir. Michael the And moment

Michael Piken

issues up delayed and have you Thanks. what's bit standpoint do mean, sufficient in-market I season, little with on storage lines. spring kind the some I Midwest. of a your of your on a in guys happening Catch how with logistical the is the from playing potentially rail guess, role the ammonia delayed for outlook planting some into And urea, the the a spring. of

Bert Frost

rail when and Bert. delays center or the good Union issues went Hey, and And some from carriers. a morning, ago other the of front with public have right, so some been Pacific you're we logistical week Michael.

to that and in solutions rail that have working whether been today. have place, progress railcars our providers with be service and is good We a in work

access our additional geared as we've and needed West up well cool or the in weather, we've just potential up the our because to because my the we've supply What weather. place it delays and on to ammonia. go talked capability delayed gets taking customers to about which ramped been UAN, as to East to expand with America mentioned production, of we that, in vessels we've with as any movements. wet delays so North impacts I large quarters. remarks Coast with has And previous that prepared and communicating then And of think fully had to fields, is I capacity But UAN

still will you today the closer necessarily quickly and railroads in especially And we And to ground. do we be But of don't as distribution our putting with impacts the real going today, the do potential think what do May network. conversations can late applied of if have go are seed middle I enough you're We to so of on planting. have it, to portion to very get with to customers think our asking a move the ammonia but place? to us And challenged. ground, good rely I yield in ammonia the of you're the be

we yes, product. have storage. sufficient Yes, So we sufficient have

running nitrogen capacity long to our sure we our at make hours XXX% very customers that plants with supply nutrients they are the and working We that need.

Operator

question. with next comes next in the queue Byrne. Okay. go the from question Steve The We'll

proceed. line open. Your Please is

Steve Byrne

wanted so secure a fixed return? so could a the the I this you price Mitsui. to utilities, long-term they or a ask with to Yes. think be contracts about just at maybe little that Do POX bit a fixed fixed either will Japanese project with project a tolling you all ultimately this or capital, give unit And that fee can on the that autothermal capture pass-through COX? is this with you gas able

Tony Will

providers. say Yes, Steve. review stroke I'd Hi, in and negotiations with final short various we're technology still

think taking here. And couldn't terms But we're we things I that the of that vendor approach as determinations. final I So at. into make those particular be taking announced we we in have the the partner all consideration and haven't happier those we're

capabilities there contacts. of region no think access partner their than knowledge out I there's to in with their and better and have the Mitsui

a very, for very of discussing alternatives, are more we of number about earns fair we're being and we're strong more return terms a in of about different that a deployed not the consideration but -- out that gas into the position, really things different come. talked pleased we're that think But in it. of a rate question and We're certainly to plus of us. arrangement a number there's I of one taking capital is the you on

tuned. stay So

Steve Byrne

big free to for just Would of much options in outlook repo a go you you and use more dry you're aggressive opportunities your any pretty thus and leaves down expansions? cash want you flow, do a a relative the see maybe your want on And share what engage keep open that in you do your then share have say capacity commitment repo, to or a opportunity gap. aggressive And/or keeping question as powder to case could more you road? the M&A about

Tony Will

the we're given all billion The here, above. is I authorization of of generating put much now that Board's focused it's on $X.X is the if our we'll news now right don't through where want Steve, the so surprised be think then we're But we're that we there it first one in repurchase that cash, good Yes. generating And pretty cash, and so is be of on our get we heels another order expectation put much the to short it. here. in debt

Chris Bohn

backed shares things, by different a the do stepped XX I I of Yes. both as lot fundamentals. and $X I'm a Steve inorganically. worth all XX-day seen just we volatility trading earlier, a that standpoint, million share organically, Tony that with enough period. December, that the to in we from really on aren't our where We've way one, bought of within mentioned there's back heavy like the repurchase pretty in shares that to see But think that

what plenty doing flow with to really cash we wouldn't mentioned, and the do see in to surprised a return So with free repurchases should these generation and opportunity manageable activity a type share of have capital. of that be from CapEx Tony pretty some along we is of we band, where I as disconnects when that, years next way. But see see even few

Steve Byrne

you. Thank

Operator

Please comes next in Andrew you. queue the The from Wong Capital. RBC with question proceed Thank

Andrew Wong

Hi, good morning.

project So has carbon what ammonia with here? the there for you been of kind agreements forward long-term have any market with change kind maybe confidence in or some a you and potential the low of customers move around pretty large to of more gave that's potential conversations

Tony Will

to through large co-fired mean likely be having And I conversations Korea what are the others are think see the And then both zero-carbon begins, applications. all in developing spread. are technology, got that daily for we and potential would going Japan electricity emissions. as customers innovations coal I generation. say kinds quantities first but where and because with it's ammonia pretty on we're it's to that fuel, that of for epicenters Yes. a basis I two being with And working and marine

in the the think is I could pretty, it say, realistic I of places that are the the And marine those developing. would world that ammonia so And assumptions where today. used see we amount demand is double large, application with so

And intent we're partner on Again, the go think got two we've really applications. so, focused Mitsui this. from front lead to with them. after to our on And is right I the those

Andrew Wong

any just the Okay. spring the prices you of That's export as are And slower. just bit a we're start near-term with operations great. of some you seeing more and be the to And around sales exit question, may view then, the also that weather the higher internationally, year? planting levels, then, wet season Do on inventory the have season? this considering little kind we given maybe more more

Bert Frost

Yeah.

applications So when Texas, -- from this is are we're north, I'd move have Iowa week, said Kansas. Canada. just already in in and of taking as be to and say, south for looking Bert. of Oklahoma cotton, planting. strong we the canola. we're I Dakotas very earlier, And we'll, corn, the be, as rice, up then And going the precipice that And in whether and next place And the market, you'll applications, stages at wheat, you're at

people to our we with solid, they're customers and well where those. with why And And And logistical they do make our we're opportunities daily. the when ship. the where strong and have want continue we we in moving have highly have move very locked to and at supplied. we That's up. globally. assets our it's it's relationships to prepared so States And Canada, are looking most to We're we're urgently valued. leverage and it's that look to product, And in where each at, of conversations needed going sure inventory United throughout

the of And to opportunities and next positive continue for for -- the CF, years. be, say, so when for we will we very next the they're I'd believe, look at couple

Andrew Wong

Great. Thanks.

Operator

question last queue Vincent Thank Andrews. The time [Operator is I at you, in from have this Instructions] sir.

Please Your proceed. open. line is

Vincent Andrews

at the maybe situation. about us about a Mitsui I on a billion phases just are that maybe could over it, sort add little ask an what a about bit the don't I but could tell Could there. despite $X want Tony, through a few you there? opportunity so $X much total are we expansion multiple period site? questions talk much anticipating you how it too little of billion number. and mean bit you you. the And maybe just you time? extended you maybe guess for more Thank of potential have much volume are this I by And Could more looking the you that is, capabilities how Is start to

Tony Will

Yeah, you bet, Vincent.

some are this been dictate with states and that process we We've like at So that areas different end a should have in we actually in identified, is. the local advanced governments, regional couple a and up. anything ultimately state in competitive got pretty conversations both different levels, of sites else be will where

can the plant. acquisition extensions and identified export-oriented. beyond multiple and end sites terms is to that that down appropriate And so boom if a say, based we supporting The access putting are units units, five is on of the because have fantastic to would it that deepwater that dock it the possible of wherever economic capable terms four get we this in I path we're been to to up significant best that with logistics original land make heading when

that And package again, really the here want the, that that's go or negotiating because too so attractive. more into way come a export straws looks in on to of deal terms our marketplace. strokes focus much specific don't in around I location we're And the short

Vincent Andrews

But the on for any billion, No, to get just Okay. you're amount insight think of there? $X volume you understood. going

Tony Will

$X I really volume Ammonia about would different we Neal if sort low have X the the different firms of rates $X.X kind is slightly new volume and plant again, Yes. the But it tons state-of-the-art think, to level of, the that's you terms forth. range, and provider Port would the of mean million haven't ammonia of in that think higher the end million be, finalized we're what plant a year the today. of I be new and and targeting. But the it, approaches really equivalent so Donaldsonville technology in X

Vincent Andrews

much. very Thanks great. Okay,

Operator

The queue sir. have you, I Jeffrey last from question the Thank in JPMorgan. from is Zekauskas

open. is line Your

Jeffrey Zekauskas

yield nutrients. so coming all trade the production constraints constraint crops in major the fertilizer There's major Do think year? any of much. effect much global will over three very that on have you and these Thanks in the

Bert Frost

is lot we've world's spring. I production the have in on the Sea trying the needs needs some and place be And together that to and answer Northern products, of put to And Europe of movements processed oilseeds the the rest what's that's of Black to to Jeff. And you're asking happen when for good out limits with taking and Hemisphere with going at work in grains think a quantitatively and and increase the that all nutrients. the the restrictions Hey, of products make ability in -- constrained question and on look even to morning, globally been Bert. that This been world you you to expectations to decisions asked curves. doing on ship, just forward

supplied and it I very moves weather South January then thereafter. harvest crop. helpful for in having October, America, plants would and good think a North crop be in December, bountiful the who September, then fully America to November, we're to second And

sanctions urea, constrained and on restrictions of lack potential us, and China, be governmental to you've going these from of could then materialize war because XX% of Sea Ukraine out of of of the and supply. When then of limitation --and it -- of urea with it's you So restrictions can because the and Russia, XXX% shipments factor out XXXX Belarus then With or shortages nutrients. in it's out the issue. a Black taken out what's

probably will think more products, are things your imports. planting ammonium of impacts you of exportable then move probably yield happen. sulfate food have some have maybe price that impact to third that countries different to world around, will still will that. So, require some use non-dollar-denominated applications to need to That's I and do

well watching, capable And nutrients grain as distribution companies, talking of our on to a paying the to sure things and partners, time that we're companies as are are the be supplying very reasonable these to and with close we're of so that industry companies whether processing at make supplying that we attention forefront cost.

Jeffrey Zekauskas

Okay.

mentioned call You of in TTF the an the price at that $XX Europe the MMBtu. start was

strategy curve, in at view philosophical I the a it's Do think for So the coming describe gas? shipments of next what's ammonia could two today, Europe have the you terms Black look out the them, XXs. in and If in you Russia gas, of And about have hedging you Sea, you questions what's do I a of year, the urea Baltic? of out of guess coming are in out state stuck there. or there

Tony Will

it you'll that quartile and as on curve. marginal are be of runs in tons that's logically be result to Europe more lower ends times down going it, Europe. view our situation during on of spread if $XX per XX ongoing pretty supply-demand America cost those part operating fourth the Jeff, the that running year And So even making to and will native out intermittently, ammonia when a because is the see up third ton of an $XX of tight MMBtus of way which times of between the basis. cost And globally don't production you assets even view of the is rates periods coming why if ammonia. not as it is is the Europe, gas, supply the in collapses and North spread XX our -- And count tons million high then self-sufficient European Russian of

value it's obviously, just even You're On the billion for and only logistics us upgrades get into on And talking that's $XX before twice you that. ammonia the the an value a network. $XX a of spread about spread. $X.X

Jeffrey Zekauskas

Yeah.

Tony Will

that the to curves carries the of looking we're of as assets as the the our kind what pretty de overall generation energy make North America us business. that give freight minimis the of profitability in confidence about at are going this So volume. enterprise drives production lot they well UK And company. terms really contribution the the cash ammonia this a of of It's forward in terms of

it's So, our when profitable And business, we assets do profitable it's so. do so. UK when business plants are to we're okay also not and to off-line taking those running our okay European

ought curve so is try position we to on cost And speaking, sit a of buyers our off to they more and sit global daily not we cycle want be, Europe, in because the there think the curve. plants given hedging generally take view those cost gas in given to on where gas they on where and long cycle

Bert Frost

your to and this But Bert. is question general on gas and hedging

just the are Tony market it today, but is over North of appropriately. And it the $XX, spread of to with that $XX and are Europe positioning still forward like globally, from component students is even We key we our ourselves as to curve, America behooves fertilizers, watching and the $XX. cost. And on $XX, buying said, diligently us be that

fall see you're the So absence to to winter, coming be this in constrained approach production to challenged. winter Russian that's I European gas be think of continue very and it's going going as why and especially we

place there's where they're change internally limit has the in market, perm that of out are invasion a think of move the tracking taken and you to yes, the loading -- shipments, limitations. and be capabilities to what's loaded. producers we loaded logistical Siberia being coming where flexibility it's due about I whether several the Russian that Your and area tremendous away And external that's as take to And Russian movements being question and the ports. the the are of there or

Mykolaiv, Sea other in load no accessed. get but ports, has Black with like they're north, that Those others the had ports are been places and or and you available. Odesa through that been have there. Russian So to longer not have that ports thing Same in owned product Riga

costs pushing was inability vessel to we $XX process potash they on up. think, process and become vessels a -- move get you on, to has outlets will And of and Pete That backup of to capabilities more take the Then in ton few that and a nitrogen is move consistently down available you St. then than an that before. $XXX insurance probably pricing to not as load when just a the material did top logistics, phosphate vessels ports XX% of a backup to ago. I that those storage close of inability desiring like thereby a less so Brazil layer to port out as it's and or Today, forward. months

top continue constrain roll and as and And so production forward. Russian be do issues XXXX to sanctions we to applied forward these will through the sanctions if on continue of

Jeffrey Zekauskas

so much Thanks

Operator

in with the you. from Thank question comes Jackson The Joel queue proceed. BMO. next Please

Joel Jackson

farmers seen, Can mean, look talk at about morning. this for you any higher-yielding then? good spring. acres seeing seeing in lower-yielding us between Hi, back any when you've dialing Bert, please you I versus maybe you're difference maybe anybody, rates application let nitrogen any anything trends are acres we or know?

Bert Frost

beef articulated a and to you heavy know, domestically Sure. inability we've and At as as ethanol not and out. Russia I $X as attractive. the rate corn North a well seeing. well XX% and and mean of incredibly its current XX close domestic for are -- to because price that actually is demand exports America. wheat position move the I attractive question, and issues operating question running those now at have beef XXX don't the about being with their -- as Ukraine and pork, that's protein drive at corn even of and we're beef XXX XXXX And today, domestic XXXX And global looking a no, at

we're seeing no, not a applications. So decrease in

late. soil a going as where And very delayed said tight is earlier, is is shines. be window. It And and as temperatures to CF it as well However, nitrogen I application is of this PNK. logistical

in We the don't. the and capabilities all place that positions have others

lot busy that hours calling tell and customers a of long and to and sitting can we're have you down promptly. to I working wanting happens. products And we So, sure move make

Joel Jackson

possibly you the years over for Talk maybe $X $XXX five billion part little a could new spend Chris, bit question rate ask million that your this of million capital or differently. year, $XXX JV. Tony, about ratable about allocation a talked about quarter

said of your best be generate much years ever next the cash might going bunch in but free dollars little going You're don't want in be much here. to this mean peak for? already. year a on the say have is so that not this the build a more have to you as looks so that sheet cash to balance seen why Like -- just I is you in I project say, other this going this in you're here, let's people And billions have. or this call you to good not peak, the of on what like seeing really Why it guess aggressive is are buyback?

Tony Will

be lot energy hasty call the let's the lot top and left Well, a of of you the uncertainty of a out I too think see runway, there's it persists, that kind the the the the gas cycle. got, not pressures demand longer mean this terms And to and a spreads availability. I there. the of more grain is in of side situation obviously terrible you've longer which both conflict. longer But availability, side of as as and supply tragic, with these well cost because

is to situation. hesitate I the a one-year so would – call And this

go best the belief drops of one weeks our when a balance repurchase we But so then performance in And a that dropped Chris are the to program, course billion if carry bit share the of the and see the some the a gives basis very capacity we year And we ended share we actually and connected us cash we position. of in back is price in to are returning in dividend think it us a have ago, fundamentals drops discontinuities it. to the absolutely the is a little like of couple business. still catching ratable the strong when I means there puts now a in rumor the of stock, is And When of financial a over of lot a and up that enviable time, that want to be day. that not between And from as day, focused be extra share of price ceasefire, the going that be ratable $X and in to on was that. that, on to time there we of portion interest volatile shareholders. said, shareholders. capitalize able through sheet we our of to the highly $XX

we that's I average taking a we did fourth think many as like attractive they us when see the of shares pretty at price $XX-some, as in quarter, out move. did the

continue can this so, to got organization do base return of chunk of we just the think, here. And the company again value and cash big that basis the on and proves, that fact a and we've a that asset ratable I

Joel Jackson

Thank you.

Operator

from Thank you. question, queue And the comes P.J. last Juvekar. the

Your open. Please line is proceed.

P.J. Juvekar

Yes. taking for you my Thank morning. question. Hi, good

to on last and in So in looking year. dividend the I XXXX this XXXX, which five your Because my a signal you a mean have back, cyclical years. company. dividend, question per you earned that's is XX%, substantially, big would XXXX from increased not $X.XX

that on sort you. to signaling my are up mean, the nitrogen That's have make So stepped allocation. of you capital question Thank I move, that permanently. markets

Chris Bohn

some would the and those some I prior even to about are are have events for past One, tightening. think say, stepped has geopolitical is And over that that of reasons. things given the supply do we Chris. there's year. P.J., Bert seeing Tony where, Yeah, of here the up two the been that we this market constraints was nitrogen talking

it's what So reduce down. additionally, to aggregate charges in over our think is I saw dividends. bit even team have our charges, of Ashraf maybe we've and And but our and then that the we than we've manufacturing to fundamental had we a through what shift not the done work seen fixed year only time. The amount longer dollars share our costs even on where But seeing mantra controllable time we've that a both a lower had fixed that reduction, out last the his three going outlook on repurchase all of for debt for then, get over additionally, years really through is work done the the ago.

then those us nitrogen together, think see that, you when of to increase to in comfortable without all I made and their it. with outlook And greatly. with think feel well shifting approval the allowed our dividend things work very we fixed So it's market really the fundamentally where changing the I charge all Board us is that coupled

Tony Will

are dividend S&P the at from we -- that is want that relevant and the is a should frankly factor, the relevant believe, and and perspective, we comparable dividend trading add companies P.J., of based financial just to one old the other on that where our would and trade shares under to, I dividend and yield was And other range. X% be yield performance not certainly it outlook, low-end as to and is

some up dividend fundamentals, surprise wouldn't at if And a price, so you while again low see share it and charges I'm based industry meaning not Chris forecasting yield, on point. that that longer lower me another said, increase, the go as term a it wouldn't fixed both factors as well high better

that marketplace are how So this all we of of we're think evidence I very And bullish that in moves making we're in. feel forward. business looking tangible the the about we're

P.J. Juvekar

you. Thank

Operator

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

Martin Jarosick

joining conferences. forward and in Thanks, person at to seeing everyone, for us morning, hopefully, upcoming this you, we look

Operator

this gentlemen, today's and teleconference. concludes Ladies

disconnect. now may You

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