CF Industries Holdings, Inc. (NYSE:CF) Q4 2019 Earnings Conference Call - Final Transcript

Feb 13, 2020 • 09:00 am ET


CF Industries Holdings, Inc. (NYSE:CF) Q4 2019 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to the CF Industries Holdings Fourth Quarter and Full Year 2019 Results and Conference Call. My name is Michelle, I'll be your coordinator for today.

[Operator Instructions]

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 the host for today, Mr. Martin Jarosick with CF, Investor Relations. Sir, please go ahead.

Martin Jarosick

Good morning and thanks for joining the CF Industries full year fourth quarter earnings conference call. I'm Martin Jarosick, Vice President, Investor Relations for CF. With me today are Tony Will, CEO; Chris Bohn, CFO; and Bert Frost, Senior Vice President of Sales, Market Development, and Supply Chain. CF Industries reported its full year and fourth quarter 2019 results yesterday afternoon.

On this call, we'll review the CF Industries results in detail, 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'll 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.

W. Anthony Will

Thanks, Martin. And good morning everyone. Last night, we posted our financial results for the full year 2019, in which we generated adjusted EBITDA of $1.6 billion, a nearly 15% increase over 2018. We efficiently converted our EBITDA into cash generating over $900 million in free cash for the year.

As shown on Slide 6 and 7 of our materials, we are the most efficient converter of EBITDA into cash in the industry. Additionally, we have the best free cash flow yield. These results reflect the impact of lower year-over-year natural gas cost for the company, higher product price realizations and outstanding execution by the CF team.

We operated our plant extremely well all year and set a new quarterly ammonia production record in the fourth quarter. For the full year, we produced more than 10.2 million tons of ammonia and delivered sales volumes of 19.5 million product tons. Most impressively, we did all this safely. Our 12 month rolling recordable incident rate at the end of 2019, was 0.48 incidents per 200,000 work hours. This is the lowest year end rate ever at CF. We are tremendously proud of this achievement, and I want to thank everyone at CF who make safety their top priority every day.

In 2019, we delivered a one-year total shareholder return of 13%, which was well above each member of our fertilizer peer group for the year, as you can see