LSB Industries, Inc.

Greetings. Welcome to the LSC Industries fourth quarter 2021 conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Fred Bonacore. Thank you. You may begin.

Thank you, Stacey, and good morning, everyone. Joining me today on the call are Mark Bierman, our Chief Executive Officer, and Cheryl McGuire, our Chief Financial Officer. Please note that today's call will include forward-looking statements, and because the statements are based on the company's current intent, expectations, and projections, they are not guarantees of future performance, and a variety of factors could cause the actual results to differ materially. As this call will include references to non-GAAP results, Please see the press release in the investor section of our website, lsbindustries.com, for further information regarding forward-looking statements and reconciliations of non-GAAP results to GAAP results. At this time, I'd like to go ahead and turn the call over to Mark. Mark? Thank you, Fred.

We're very happy to have the opportunity to speak with you today about our 2021 fourth quarter results. We posted record results for our fourth quarter and full year as we continue to run our plants reliably, which enabled us to capitalize on the strong market environment for our products on both sides of our business. First, I'd like to thank all of our employees for making this another excellent quarter and for their strong commitment to improving and growing our business. A lot of hard work has gone into bringing it to this point, and I'm excited about what we can accomplish with our balance sheet and the market backdrop. As you all know, our number one focus is safety. We want all of our employees and contractors to go home safe every day, and we are committed to providing a safe and healthy workplace for all our employees and stakeholders by implementing high safety standards to avoid any potential risks to people, communities, assets, or the environment. Our 12-month rolling recordable incident rate at the end of 2021 was 1.15 incidents per 200,000 man-hours. However, our goal is zero, and so we have work to do to get there. The entire team is committed to improvement, and we expect an improved safety performance in 2022. On page five of our presentation, we summarize the key drivers for our agricultural end markets. Commodity prices continue to trade well above year-ago levels. Most relevant to our business, the price of corn continues to trade at near eight-year highs. The strong pricing is a result of multiple factors, including ethanol consumption and production, which is currently near pre-pandemic levels as the U.S. miles driven, continue to recover from pandemic shutdowns, as well as the impact of historically dry conditions in the western U.S. and South America, which have constricted global corn supplies. The USDA continues to estimate that nearly 93 million acres were planted in 2021. This represents a 2 million acre increase from the previous year end. and with the exception of 2016, was the highest level of planting since 2013. For 2022, we're expecting a similar, albeit mostly lower level of plantings of approximately 92 million acres, which should continue to support strong demand for fertilizers as farmers seek to maximize yields. Along with the strong corn market fundamentals, nitrogen prices have been driven to multi-year high levels by constraints on global ammonia production resulting from a variety of factors. Most recently, in the third and fourth quarters, a sharp increase in the price of natural gas, the primary feedstock in the production of ammonia and derivative nitrogen products, prompted cuts to production at a number of facilities across Europe. While gas prices in the U.S. increased significantly over the past year, our prices have only seen a minor increase relative to the inflation that Europe has experienced, creating an advantage for North American nitrogen producers. On page six, we highlight some end market trends contributing to the robust year over year improvement in our industrial and mining end markets. As many of you are aware, our industrial business tends to be contract based, which gives us good visibility into our sales for upcoming quarters and insulates us from input cost inflation, particularly for natural gas, enabling us to maintain our favorable margins. During the fourth quarter, we continue to ramp up our nitric acid sales volumes related to the long-term supply agreement that we commenced at the beginning of 2021. As you can see on the slide, the demand dynamics for our key industrial and mining end markets remain solid, despite recent disruptions on the industrial side from the widespread supply chain issues in the U.S. Overall, the demand and pricing trends we're currently seeing on both sides of our business make us very optimistic for the continued strong profitability and cash flow for 2022. Now I'll turn over the call to Cheryl, who will discuss our Q4 and full year results and our first quarter outlook. Cheryl.