CF Industries Holdings, Inc.

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. To pose a question at any time, please press 01 on your touch-tone telephone keypad. If you wish to be removed from the queue, you may press 02. I would now like to return the presentation over to our host for today, Mr. Martin Jurasek with CF Investors Relations. Sir, please proceed.

Good morning, and thanks for joining the CF Industries Earnings Conference Call. With me today are Tony Will, CEO, Chris Bone, CFO, and Bert Frost, Senior Vice President of Sales, Market Development, and Supply Chain. CF Industries reported its results for the first quarter of 2022 yesterday afternoon. On this call, we'll review the results, discuss our outlook, and then host a question and answer session. Statements made on this call and in the presentation on our website that are not historical facts are forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied in any statements. More detailed information about factors that may affect your performance may be found in our filings with the SEC which are available on our website. Also, you will find reconciliations between GAAP and non-GAAP measures in the press release and presentation posted on our website. Now, let me introduce Tony Will, our President and CEO.

Thanks, Martin, and good morning, everyone. Yesterday afternoon, we posted our financial results for the first quarter of 2022, in which we generated a quarterly record adjusted EBITDA of $1.65 billion. Our trailing 12-month net cash from operations was $3.7 billion. and free cash flow was $2.8 billion. These results reflect continuing outstanding performance by the CF Industries team against a backdrop of a very tight global nitrogen supply-demand balance and wide energy spreads between North America and marginal production in Europe. We ran our assets extremely well. Our North American manufacturing plant set first quarter production records for gross ammonia, UAN, and diesel exhaust fluid. We leveraged our extensive distribution network to serve customers in the Corn Belt and expanded our logistics capacity to serve customers on the east and west coasts. Most importantly, we did this safely. Our trailing 12-month recordable incident rate was 0.25 incidents per 200,000 labor hours, significantly better than industry averages. This level of exceptional execution will continue to serve our customers and shareholders well, as we expect the global nitrogen supply-demand balance to remain tight for the foreseeable future. Nitrogen demand will continue to be underpinned by the world's need to replenish global grain stocks. We believe it will take at least two years and possibly longer to accomplish this. At the same time, high energy costs in Europe and Asia are likely to lower global operating rates at certain times of the year, so we expect nitrogen supply to remain tight, with the marginal ton being very high cost. Russia's invasion of Ukraine has exacerbated both demand and supply situations, first by impairing Ukraine's grain production and exports, and second by creating uncertainty about natural gas price and availability in Europe. Taken together, these factors make it likely that global nitrogen supply-demand balance will stay tighter for longer. Given these market dynamics, coupled with our position on the low end of the cost curve, we expect to generate significant free cash flow in the coming years. This will enable us to invest in our clean energy growth initiatives while also returning substantial cash to shareholders. We are excited about growth opportunities we see in the clean energy applications of ammonia. Earlier this week, we announced in conjunction with Mitsui, a potential new blue ammonia facility in North America. We also continue to advance both our green and blue ammonia projects at our Donaldsonville, Louisiana facility. We expect to begin making green hydrogen and green ammonia in 2023. and have up to 1.7 million tons of blue ammonia production beginning in 2024. These are important steps forward in the development of this exciting new market opportunity, one where we are clearly leading the way. In a moment, Chris will provide more details on our approach to capital allocation moving forward, including our capital expenditure outlook and our return of capital program. But first, let me turn it over to Bert, who will discuss the global nitrogen outlook in more detail. Bert?