CF Industries Holdings, Inc.

Good day ladies and gentlemen and welcome to CF Industries first half and second quarter of 2023 earnings conference call. 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 touchtone phone. I would now like to turn the presentation over to the host for today, Mr. Martin Jarosik with CF Investor Relations. Sir, please proceed.

Good morning, and thanks for joining the CF Industries Earnings Conference Calls. With me today are Tony Will, CEO, Chris Bone, CFO, and Bert Frost, Executive Vice President of Sales, Market Development, and Supply Chain. CF Industries reported its results for the first half and second quarter of 2023 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'll find the 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.

Tony Will Thanks, Martin, and good morning, everyone. Yesterday afternoon, we posted results for the first half of 2023, in which we generated adjusted EBITDA of over $1.7 billion. Our trailing 12-month net cash from operations was $3.2 billion, and free cash flow was $2.1 billion. These results reflect outstanding execution by the CF Industries team against the backdrop of robust demand. Our plants ran extremely well, and we leveraged our unique system flexibility to maximize results, given the high volume of just-in-time purchasing that took place. We sold more product than we produced and ended the first half with low inventories. As you will hear from Bert in a moment, we believe we are really well positioned for the remainder of 2023 and into 2024. While our safety performance remained good by most measures and comparisons, we It is not where we expect it to be. Our 12-month rolling reportable injury rate at the end of June was 0.54 incidents per 200,000 labor hours. Ashraf and his team are focused on this, not to manage the number, but to ensure that all of our people go home in the same condition as when they came to work every day. Looking forward, changes in the energy markets have steepened the global nitrogen cost curve and extended the margin advantage available to our North American manufacturing network. As you can see on slide 7, we enjoy a $300 to $400 per ton margin advantage versus European and high-cost Asian production. Given a structural advantage, as well as our industry-best operating rates and unique network flexibilities, we expect to drive strong cash generation in the years ahead. This will enable us to make disciplined investments and growth opportunities while also returning substantial capital to shareholders. In that vein, we remain focused on our clean energy growth platform, which has been well served by the collaborations and partnerships we have developed. We expect to make a final investment decision on a new-build clean ammonia plant later this year in conjunction with our partners in that project. This approach significantly reduces risk to CF and ensures that the new production volume is consumed in new sources of emerging demand rather than creating an overhang in the market. We also continue to return significant capital to shareholders. Over the last 12 months, we returned $1.3 billion to shareholders through dividends and share repurchases, which was more than 60% of our free cash flow. Looking ahead, as we continue to execute on our current $3 billion share repurchase authorization, we are committed to taking advantage of dips in our share price opportunistically, amplifying the rewards to our long-term shareholders. With that, let me turn it over to Bert, who will discuss global nitrogen market conditions in more detail.