CF Industries Holdings, Inc. (NYSE:CF) Q2 2020 Earnings Conference Call - Final Transcript

Aug 06, 2020 • 11:00 am ET


CF Industries Holdings, Inc. (NYSE:CF) Q2 2020 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to the CF Industries Holdings' First Half and Second Quarter 2020 Results and Conference Call. My name is Jenny; I'll be your coordinator for today. [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 proceed.

Martin Jarosick

Good morning, and thanks for joining the CF Industries' first half and second quarter 2020 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 first half 2020 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.

Tony Will

Thanks, Martin and good morning everyone. Last night, we posted our financial results for the first half of 2020, in which we generated adjusted EBITDA of $808 million. These results underscore the resilience of our business model and the outstanding performance of the CF team. In the midst of a difficult and uncertain environment, we maintained our focus on safe and reliable operations, worked closely with all of our partners to avoid disruptions due to the pandemic and delivered company record first half sales volumes. These efforts exemplify our team's sustained operational excellence, which along with our position on the low end of the global cost curve drives our cash generation. On a trailing 12-month basis, we have produced more than 10 million tons of gross ammonia, sold roughly 20 million product tons and generated $973 million in free cash flow. Most importantly, we have done all of this safely. Our rolling recordable incident rate at the end of June was 0.31 incidents per 200,000 labor hours, which is a new record low for the company. Protecting the health and wellbeing of our employees, particularly during the COVID-19 pandemic remains our top focus. Our safety culture, along with the safety protocols we've put in place, have kept the number of employees, who have tested positive for the virus to a small number and we have not experienced any known transmission within a CF location. We continue to have in place numerous precautionary measures across our network to protect our employees and those critical