CF Industries Holdings, Inc.

Good day, ladies and gentlemen, and welcome to CF Industries 2022 full year and fourth quarter financial results. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. We will facilitate a question and answer session towards the end of the presentation. To pose a question at any time, please press star, then 1 on your touch-tone phone. I would now like to turn the presentation over to the host for today, Mr. Martin Jarosky with CF Investor Relations. Sir, please proceed.

Good morning, and thanks for joining the CF Industries Earnings Conference Call. With me today are Tony Wells, CEO, Chris Bone, CFO, and Bert Frost, Senior Vice President of Sales, Market Development, and Supply Chain. CF Industries reported its results for the fourth quarter and full year of 2022 yesterday afternoon. On this call, we will 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 our 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 results for the fourth quarter and full year of 2022 that reflected a phenomenal year at CF Industries, highlighted by outstanding execution from our team. Our plants ran extremely well, producing nearly 10 million tons of ammonia, and most importantly, we continued to operate safely. At the end of the year, our 12-month recordable incident rate was 0.33 incidents per 200,000 labor hours. well below industry averages. Against the backdrop of a persistently tight global nitrogen supply-demand balance, these achievements led to extraordinary results. We produced record full-year earnings, record fourth quarter and full-year adjusted EBITDA, and record full-year free cash flow. We also made significant progress decarbonizing our network and furthered our leadership position in low-carbon ammonia production. Over the last 12 months, we signed an MOU with Mitsui for the development of a new blue ammonia production facility, our Bluepoint Complex in Louisiana. We signed a CO2 transportation and sequestration agreement with ExxonMobil. We signed an MOU with Jera for the supply of low-carbon ammonia, and we recently signed an agreement with BP to purchase certified low-methane emissions natural gas. all of which put CF industries at the forefront of decarbonization and sustainability within the nitrogen industry. Turning to the market, the last 18 months have been a particularly volatile period for our industry. High energy prices, geopolitical events, and economic weakness leading to reduced industrial demand affected both nitrogen production rates and nitrogen prices. In the near term, we expect continued volatility in the global nitrogen market, As we look at the first half of 2023, we believe typical spring demand in the northern hemisphere is going to be weighted to the second quarter as buyers have taken a wait-and-see approach to their nitrogen procurement. CF Industries Network, with our combination of in-market production, extensive storage and logistics capabilities, and export optionality, is well-suited to navigate this type of environment. Longer term, we continue to see a positive operating environment for the company. Industry fundamentals remain strong. Resilient demand driven by the need to replenish global grain stocks, significant energy spreads between North America compared to Europe and Asia, and the emergence of demand for low carbon ammonia as a clean energy source are all very favorable for our cost-advantaged network. As a result, we expect to continue to generate substantial free cash flow in the years ahead. This will enable us to both invest in growth and return capital to shareholders. We are enthusiastic about the growth opportunity that low-carbon blue and green ammonia provides for our company and believe our MOU with Jera demonstrates tangible emerging demand for low-carbon ammonia as a clean energy source. We will continue to focus on disciplined investments to decarbonize our network and accelerate our ability to produce low-carbon blue and green ammonia to help meet this developing new demand. Alongside these growth investments, we expect to continue returning substantial capital to shareholders. In 2022, we returned nearly 60% of our free cash flow, $1.65 billion, to shareholders through share repurchases and dividends. And in the last two years, we have reduced our outstanding share count by 11%. We expect to further leverage the $3 billion share repurchase program recently authorized by the Board to continue building on this track record. and providing our long-term shareholders with ever-increasing participation in our business. With that, let me turn the call over to Bert, who will discuss the global nitrogen market conditions in more detail.