Good day, ladies and gentlemen, and welcome to CF Industries' First Quarter of 2024. All participants will be in the 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 one on your touchtone phone. I would now like to turn the presentation over to the host for today, Mr. Martin Jarosick, with CF Investor Relations. Sir, please proceed. Good morning, and thanks for joining the CF Industries Earnings Conference Call. With me today are Tony Will, CEO; Chris Bohn, Executive Vice President and Chief Operating Officer; and Bert Frost, Executive Vice President of Sales, Market Development, and Supply Chain. CF Industries reported its results for the first quarter of 2024 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 your 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. Thanks, Martin, and good morning, everyone. Yesterday afternoon, we posted results for the first quarter of 2024 in which we generated adjusted EBITDA of $460 million. Our performance reflects a challenging quarter for our production network. Plant outages caused by severe cold in January, as well as other unplanned downtime, resulted in significant loss of production and maintenance activity. Even with the production outages and associated expenses, our business generated strong cash flow for the quarter. Net cash from operations from the first quarter was $445 million, and free cash flow was approximately $200 million. Longer term, we expect the global energy cost structure to continue to provide a significant margin of opportunities for our North American production network and for clean energy to provide a growth platform for the company. As a result, we expect to have significant free cash flow available to both invest in growth and return capital to shareholders. We remain focused on disciplined investments in clean energy that offer returns well above our cost of capital. These include decarbonization projects within our existing network and potential new low-carbon ammonia capacity. We also remain committed to returning capital to shareholders through our dividend and share repurchases. In the first quarter, we returned $445 million, including repurchasing 4.3 million shares. We have approximately $2.2 billion remaining on our current share repurchase authorization, which we intend to complete by the end of next year. With that, let me turn it over to Bert, who'll discuss the global nitrogen market conditions in more detail. Bert? Thanks, Tony. The global nitrogen market has experienced rapidly changing dynamics throughout 2024, including in North America. The spring application season began earlier than normal in late February, with demand for ammonia applications brought forward from the second quarter into the first. Poor weather at the end of March subsequently stalled fieldwork and fertilizer purchases, with the region now on a normal application and planting pace. Overall, we expect nitrogen demand in North America to be positive, with approximately 91 million acres of corn planted. Good soil moisture supports higher application rates than in previous years, and farm economics remain constructive, though weaker than the record highs from previous and recent years. We believe the spring ammonia season will see fewer tons of ammonia applied this year. However, total ammonia application volumes for the fertilizer year, which runs from July 2023 through June 2024, should be comparable to previous years given the strong fall ammonia season. As the pace of spring application season has normalized, the lineup for urea and UAN imports for the region has grown. These tons will be necessary to meet expected demand given low inventories in the region to start the year and production disruptions in January. Even with the imports, we expect that inventory in the North American nitrogen channel across all products will be low at the end of the season. This activity is occurring as the global nitrogen market supply position has loosened, leading to lower global prices than we saw earlier this year. Lower imports of urea to India, including the impact of low volumes taken in the recent tender, lower than expected or deferred demand in Europe and other countries, and good production from the Arab Gulf and North Africa all played a role. We do not believe demand during the spring season in North America will resolve the length in the global nitrogen market by itself. As North America hits its traditional pricing reset in the summer, Brazil, India, and China will provide the most important signals regarding the state of the market. We project that urea consumption and imports in Brazil will grow in 2024, maintaining that country's status as the world's largest importer of urea. India will remain a major importer of urea, though they have lower requirements today, reflecting their commitment to increase domestically produced urea. China continues to prioritize low fertilizer prices for their farmers, with export restrictions playing a significant role in that effort. We expect China to export approximately four million metric tons of urea this year, but actual volumes will depend on the timing and duration of when exports are allowed. Even with these sources of near-term uncertainty, North American producers remain firmly positioned on the low end of the global cost curve. Forward energy curves continue to show spreads between North America and Europe, which is home to the industry's marginal high-cost production, remaining wider than historical averages. As a result, we expect attractive margin opportunities for our network in the near and longer term. With that, let me turn the call over to Chris. Thanks, Bert. For the first quarter of 2024, the company reported net earnings attributable to common stockholders of approximately $194 million or $1.03 per diluted share. EBITDA was $488 million, and adjusted EBITDA was approximately $460 million. The production outages that we experienced earlier this year affected our results in two significant ways. Maintenance expenses were approximately $75 million higher in the first quarter of 2024 compared to the first quarter of 2023. Additionally, we had approximately 160,000 fewer tons of ammonia available to upgrade in the quarter compared to the same quarter last year. This equates to approximately 275,000 tons of urea that we would otherwise have been able to produce and sell at higher margins. The production issues were contained to the first quarter, and our network is operating at our typical high utilization rates today. We currently project that gross ammonia production for 2024 will be approximately 9.8 million tons, which reflects normal acid utilization rates moving forward. Our forecast for 2024 capital expenditures remains approximately $550 million. Capital expenditures were higher in the first quarter of 2024 compared to the first quarter of 2023, primarily due to a large planned turnaround event. We are making continued progress on our clean energy initiatives. Commissioning activities for our green ammonia project are nearing completion. We intend to purchase 45V compliant renewable energy certificates to pair with the startup of the electrolyzer to enable green ammonia production and maximize the value of the hydrogen production tax credit. Additionally, construction of the carbon dioxide dehydration and compression unit at Donaldsonville is progressing well. We believe it'll be ready for startup in 2025, at which point our partner, ExxonMobil, will be able to begin transportation and permanent sequestration of up to two million tons of CO2 from the facility per year. This will not only significantly reduce our carbon emissions but also enable low-carbon ammonia production and generate substantial 45Q tax credits. Our evaluation of low-carbon ammonia capacity growth continues with potential partners and offtakers. We have made additional progress on our autothermal reforming ammonia plant and flue gas capture FEED studies. These should be complete before the end of the year and will be an important component of our final investment decision. We continue to emphasize a disciplined approach based on the return profile of new capacity, the technologies needed to meet customers' carbon intensity requirements, and the global demand outlook. With that, Tony will provide some closing remarks before we open the call to Q&A. Thanks, Chris. Before we move on to your questions, I want to thank everyone at CF Industries for their hard work during the difficult first quarter of 2024. In particular, the team did an outstanding job restoring our network to full utilization rates and, most importantly, doing so safely. Our 12-month recordable incident rate at the end of the quarter was 0.36 incidents per 200,000 labor hours, significantly better than industry averages. Despite the challenges we faced earlier this year, we believe CF Industries is well-positioned for the years ahead. In the near term, the global energy cost structure remains favorable to our North American production network. Longer term, disciplined investments in low-carbon ammonia production provide a robust growth platform for the company. Taken together, we expect to drive strong cash generation and continue to create substantial value for long-term shareholders. With that, operator, we will now open the call to your questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. We will pause momentarily for our roster to assemble. The first question comes from Chris Parkinson with Wolfe Research. Please go ahead. Good morning, everyone. Tony, it's been a while since I think anybody's asked you this, but what are your latest thoughts across the organization on the global cost curve? I mean, obviously, it seems things have very much normalized in Europe. It seems, obviously, you have this back-and-forth debate in terms of timing on Chinese markets, and then, obviously, there's been a lot going on in India as well. So when you put all these things together, once again, I don't think anybody's really focused on this for years and years, what's CF's latest and greatest on how we should be thinking about this over the next year or two? Thank you. Yeah, Chris. I think that we believe going forward there are some significant challenges for a number of the production facilities in Europe. Our expectation is that utilization rates there will continue to be challenging, and we would expect some of those assets to permanently close. I think that the combination of some challenges in Europe and other places in the world, Trinidad is both running out of gas and with gas costs climbing as each of the existing contracts rolls off. You've got challenges in parts of Asia and Latin America as well. You look at all of that, and you see somewhat of a tightening out of the existing production network. You combine that with the fact that there is not enough new production under construction at the moment to meet the traditional growth in normal applications, and we see a tightening of the S&D balance going forward with Europe and Asia being at the fairly high end of the cost curve. And so there'll be periods of time where we need to bid some of that production in just to meet global demand. So I think it provides a very constructive backdrop for our North American-focused production network. And we remain excited about what the long-term holds for us and even the near-term for that matter. Got it. Just a real quick follow-up, and I apologize for the ultra-short-term question, but obviously, your organization had to go through a lot during the first quarter. Can you just give us kind of just one additional update on just how we should be thinking about where you stand operationally? I assume Bert's team had to move a lot of product suboptimally towards the end of the quarter. When we think about the process back to normality, are we basically already there yet, and you can instill the confidence that we should just be focusing on market pricing right now, or how should we be ultimately thinking about your pathway forward for the remainder of 2024? Thank you. Yeah. I think as you look at the first quarter, as Chris said, there was kind of two primary factors that impacted us. One was because we had significant outages, both weather-related and other downtime. We ended up with less production of ammonia, and we have existing industrial ammonia contracts that obligate us to kind of meet those needs first. And Waggaman was one of the facilities that experienced some downtime in the quarter. And so we had to make sure that we were meeting the customer commitments out of that facility and other industrial customers as well. What that meant was, as Chris mentioned, there was ammonia that we were producing that normally we would have upgraded to urea and/or UAN that we needed to ship out as industrial ammonia, which generally is at a bit of a lower margin than agricultural ammonia or ag-based urea or UAN. The loss of production was both the opportunity cost of loss of absolute tons but also the opportunity cost associated with not being able to upgrade product for higher-margin urea than we normally would. As Chris mentioned, we were able to go ahead and get the plants back up and running and have been running sort of at normal operating utilization rates since the beginning of the quarter. We're back to kind of normal operations. Therefore, I think what's been transpiring in the way of spot pricing is appropriate for and our volumes is appropriate for the second quarter. Chris, the only additional thing I would add to what Tony said is not only that it was discrete production issues contained to Q1, but also where the product mix was and being produced, we had incremental distribution costs that went over and above the margin loss that Tony spoke about and also the $75 million approximate higher maintenance expense. So it was a pretty tough quarter from that, but all of that, as he said, is sort of in the rearview mirror, and our distribution and production assets are back to their historical levels. Thank you so much. Thank you. The next question comes from Joel Jackson with BMO Capital Markets. Please go ahead. Hi. Good morning. Just a couple of things you can maybe ask sorry, answer. Are you really open for Q2 here for gas? Maybe talk about we've seen, obviously, prices come down well below $2. Where are you standing there for Q2 into Q3? And then you talked about 9.8 million tons of gross ammonia production in 2024. What is your view that what you can do in 2025 for gross ammonia production with hopefully some improvements at Waggaman and these issues in Q1 behind you? Yeah, Joel, good morning. This is Bert. And on gas, yes, we are wide open. And we do have fixed contracts that are gas-based that we'll fix in the beginning of the month. And we do have bases that we've covered in places more of a winter item. We'll have some Q1 gas purchases trail into Q2. But in effect, the gas values that you're seeing and through the various hubs, you can bleed into your model, and that's what we're doing. Yeah. From a production standpoint, Joel, I think you can look at 2025 and going forward similar to what we had announced earlier this year, that sort of the circa 10 million tons of gross ammonia production. And then based on where the margin potentials are, that's going to change the product mix related to the total product that we do. But give or take 100,000 tons on either side of that is generally where we look to produce. Thank you. The next question comes from Andrew Wong with RBC Capital Markets. Please go ahead. Hey, good morning. Thanks for taking my question. So my first one is really on blue plant. I understand the plan is to go with mostly sales that are based on a fixed-margin type offtake. I'm just curious, how does the ammonia market pricing affect your thinking on the investment decision there? Well, Andrew, as you know, once we make an investment decision, if we decide to move forward with it, it's going to be approximately four years between when that decision is made and when production commences. So what's happening in the very near-term ammonia market from a pricing perspective is an important starting point, but what you really need to do is project where we are four years going forward and take a look at what we think the S&D balance will be at that time. We do expect the S&D balance to tighten, as I talked about earlier, both in terms of existing production capacity that will not be running at historic utilization rates, principally in Europe and some in Asia and Latin America, but also because the new capacity that is currently under construction doesn't meet traditional growth of, call it, 1.5%-2% within the nitrogen markets, let alone any new applications for clean ammonia going into either electricity generation or into marine fuels or some of the other applications that are beginning to develop. So as we look forward, the development of those new markets is an important input as well as just our assessment of where the S&D balance is going to be on a global basis. And so again, where we are today is a starting point, but it's not really that useful in determining what the future's going to look like four to five years out. Okay. That's fair. And maybe just going on to clean ammonia market and demand, it's been a few years here now since we started talking about it, and it feels like things have started to develop over the past couple of years. So as we get closer and closer to some of these use cases that are maybe later 2020s into 2030, do you have a sense on how to quantify that demand? Let's say by the time we get to 2030, and what would be the primary use cases by then? Would that still be coal firing and power generation, maybe marines coming up a little bit faster? Just curious to hear that. Yeah. So there have been, I believe it's five power stations in Japan that have been kind of approved for conversion to be coal-firing ammonia. Those include two from JERA and three others. And so the assessment of the volume of ammonia that would go into those applications, assuming only a 20% dosage rate, is about two million tons a year. So that's a pretty sizable increase in terms of demand, and that would be expected to be online by, call it, 2030, if not before. Additionally, we see demand beginning to develop both in terms of marine, but also Bert can talk about some of the things that we're seeing in the way of using a decarbonized fertilizer product for certain applications in ag, not only for CPG companies but also to develop a traceable sustainable aviation fuel as well as ethanol that will meet the California Low Carbon Fuel Standard. That's exactly that, Tony. In terms of the low-carbon value chain, we see developing for ag and the pull-through that will take place from the CPGs and consumers. But when you look at whether that be corn or wheat, the principal consuming crops for nitrogen, as low or no-carbon ammonia is passed through corn to the ethanol plant, which is decarbonized, you have a very good upside for a decarbonized product coming from that corn value chain of starch, ethanol, fructose, and the same thing with the wheat value chain. So we're working on that with several players, and more to come. That's great. Thank you very much. Thank you. We have the next question from Adam Samuel, sorry, that's Adam Samuelson with Goldman Sachs. Please go ahead. Yes. Thank you. Good morning, everyone. Morning, guys. Morning. Maybe picking up on that last topic, Bert, earlier this week, the Treasury Department issued kind of the rules for the new 40B tax credit for sustainable aviation fuel. That tax credit will change next year, but the rules would presumably be somewhat applicable. And one of those requirements for ethanol to jet was the requirement to use climate-smart agriculture, of which one of the requirements was the use of enhanced efficiency nitrogen fertilizer by corn growers. And I would just love to hear your perspective on kind of how kind of disruptive that could be to the existing domestic nitrogen market and how available enhanced efficiency nitrogen fertilizer I know there's a bunch of things that fall under that, but what could that do to domestic demand by product or form, both opportunity and risk, as you think about the CF network? I don't view it as a threat. I view it as an opportunity because as the first mover with low-carbon ammonia and as the largest ammonia supplier to corn production in North America, that's just right up our wheelhouse. And so working with the co-ops, CHS, Land O'Lakes, and others, as well as the ethanol producers, POET, ADM, CHS, those are the people that will drive through their management area. And our area, our responsibility is, as we started with decarbonized product, but we have the pipeline through a terminal. It's traceable. It's producible. It's manageable. And so each of these steps, we're getting tighter and better. And that timeframe that I would have thought was longer dated is, I would think, being pulled closer. And so there is some more development. We'll be communicating this over the next quarters and years, but that's where I see this going. Climate-smart agriculture, regenerative agriculture, precision agriculture, there's a lot of names for this. A lot of this is already being utilized, some of it incorporating, obviously, the seed companies and the crop protection. So our whole industry is working towards this future that's coming, and we're going to play a vital part of it. That's helpful. If I could just ask a follow-up on the spring demand here, obviously, the ammonia side of things is more complete. Can you talk about kind of where we are on UAN from a side-dress and top-dress perspective and kind of when you start to think that in-season pull will really start to materialize? So we're just getting started. As we talked about, planting and product movement and fieldwork did start early. It was a surprise in February and early March. And then the rainy, cold weather came through in March, delaying again fieldwork and applications and planting. And now, I would say we are on a good pace with very good soil moisture from the Texas Panhandle up through into Canada. So the UAN season really hasn't started, and we've been positioning product, utilizing our logistics team with additional tons of UAN through our terminals and our customers' terminals. And we expect that, and I would say now going forward, and it should be fairly heavy because the opportunity, the upside, the pricing structure of where UAN is today compared against the price of corn on the forward for December at, let's say, $4.60-$4.70, it's attractive. We would expect, with the lower volume of spring ammonia applied, that will then move to UAN. That's very helpful. I'll pass it on. Thank you. Thank you. The next question comes from Steve Byrne with Bank of America. Please go ahead. Yeah. Thank you. I'd like to continue that discussion there, Bert. You had production issues this year. You had less imports into the U.S. China's exports of urea the first couple of months were almost zero. We were thinking that there was going to be some strength going into the application season, but yet over the last month, pricing has fallen. Just curious what you think of that. Has there been less application rates of nitrogen than maybe you expected, or was there significant ammonia application in the fall that may have reduced some of the near-term demand, or is this a shift towards UAN? Curious of your view of where that price trajectory on slide eight goes. Yeah. Welcome to my confusing world because that is exactly you've listed the dynamics that we deal with every day that really were confusing. And then just pointing to the CF system of what Tony and Chris articulated with the difficulties with the weather and the production and the maintenance issues that created, on the sales side or at least the commercial side, different product allocation and movements. And I give a lot of credit to our logistics team for moving that product around. But yes, when you look at the overall market, and I would have expected what you thought coming in, a strengthening market or at least a firm market, but a lot of work has gone into detail this, and you've really had some pullback in demand in some areas. I would say the EU, when you look at Italy, Germany, Belgium, France on this year basis and on a fertilizer year, both a fall in demand along with Mexico, Philippines. Then this India tender that took place where they had a tender, had three million tons put into the tender, announced 750,000 tons of purchases with LOIs issued, and then canceled that well, not canceled, but cut it to 350,000 tons. The traders and producers that had positions allocated towards that then had to move that into the market and got aggressive. And that coupled with some additional production coming on in different places, but also India, Russia, Iran, and Nigeria coming back on production because several places were limited on gas, probably overwhelmed a little bit the second-quarter market. So what we would have thought was tight inventory is probably looser inventory. The U.S. won't resolve that long, but lower prices tend to incent additional demand. As we work through Q2, I think we'll still be in the state where we are today with pricing probably aligned plus or minus where we are today and work towards the back half of the year. Okay. Thank you for that. And just a question on the green ammonia plant that you're commissioning. Just curious if you've signed any contracts for that product and any of your partners in Japan or South Korea interested in bringing green ammonia into their facilities, or do they really prefer the blue? Well, the volume is not really sufficient to be able to meet the application for coal firing. We're only going to be able to make about 20,000 tons a year. Even the smallest of the power stations is going to require somewhere in the neighborhood of 350,000. Because that is part of a broader program with some incentives provided by the government, they are going to be, I think, focused on the most economically available decarbonized product. So that's going to be a blue product as opposed to green. But we are in conversations with a number of companies, particularly some companies in Europe that are focused on the extremely low-carbon attributes of the green product. And we need to begin making it and very likely building some level of inventory for probably half a year before we've got sufficient volume to be able to ship. So more to come on that, Steve, but we're excited about being able to both start that plant up as well as what the future holds for us. We're looking at two options. Like Tony said, as we build inventory, that could be for a vessel to a customer that wants only zero-carbon product, or it could go up to one of our terminals, which our terminals are about that size, where we could isolate an area with zero-carbon ammonia, again, back to the corn value chain. Working on several different fronts at this time. Very good. Thank you. Thank you. The next question comes from Josh Spector with UBS. Please go ahead. Yeah. Hi. Good morning. So I wanted to ask on all the projects you guys are evaluating, so particularly, I guess, with JERA converting to a JDA, how many separate plants are you now considering at this point? And I guess, as you look at all these separate agreements, could that combine together to be more off-takes from a smaller number of plants? And would CF be interested in a very small stake and maybe more of an operator role, or do you see yourself as requiring majority control over the facilities you built? Yeah, Josh. While we're evaluating a couple of different projects, principally, what we're looking at is different technology pathways to get us to a very low-carbon intensity solution. And realistically, at least at this time, we're focused on one plant as opposed to multiple plants and doing the evaluation, as I said. Should that be just a straight SMR? Should it be an SMR with flue gas capture? Should it be an ATR? Kind of what's the right technology to deliver on both an OpEx and CapEx basis the most competitive returns for us and our partners? On the second question about the role that we would play, I think we are open to a variety of different structures, some of which would have us with a majority control, and other structures might have us on equal footing or even, as you say, more of an operator of the asset but with a smaller equity participation. So we're pretty open to different ways of structuring the agreements. And we're in those discussions at the same time as doing the technology evaluation, but we're really only looking at building one plant initially and seeing how the market develops. Then we'll make some decisions as that continues moving forward. Thanks. That's helpful. I guess just to clarify on my part, I guess I'm thinking about the Mitsui JV announced earlier, now JERA, JDA. Are those just different tranches of the same plant? Those aren't two separate plants you're looking at then? Initially, they were different based on the type of technology, but certainly, it's our hope that we can find a way to have all of our partners participate in the same project and that be something that we can combine together and aggregate demand so that we have a home for more rather than fewer of the tons coming off of that project. Yeah. I would also say, Josh, that all three of the FEED studies that we have ongoing, the SMR, the ATR, and then the flue gas, all the partners that Tony just spoke of are all participants in that, even though the JDAs and the MOUs may look different. So all the partners are working collaboratively to determine what we need to do from a carbon intensity standpoint. How does that influence the technology we choose? And And as Tony said, and then really the contract for difference and the economics that come out of that in the end. Listen. Thank you. Thank you. The next question comes from Ben Isaacson with Scotiabank. Please go ahead. Thank you very much, and good morning. Just one question from me. Tony or Bert, can you talk about the situation in Russia when it comes to nitrogen supply? If we break down ammonia, urea, and nitrates, where are we right now in terms of supply? Where have we come from, and where are we going? And I'm also referring to the pipeline that's being built right now. Thank you. Yeah. Ben, good morning. This is Bert. The situation in Russia is as cloudy and clear as it's ever been. It's a little bit of a dichotomy. It's difficult because there are some places in the world that will not accept Russian product, and so there are places that are. The largest happens to be the United States, which is surprising with where we are geopolitically. The other is the EU. What has happened over the last year since the invasion has been just a reorganization of the distribution channel for Russian product. A lot goes to Brazil, a lot goes to North America or not even Canada, actually just the United States, and then to Europe. With the recent restrictions on ammonium nitrate, a lot of that was stored in St. Petersburg. Probably a decision or as a reflection of some of the capabilities of the Ukrainians to cause disruptions, they have canceled some of that movement or all of that movement out of those ports and are reorganizing how they'll be able to export. That has created a little bit of a shortage of ammonium nitrate in some markets. With ammonia, you're right. The pipeline that used to go through Ukraine was stopped during the war and has been stopped and probably is not operable today. That was through Uzhhorod. So they have developed a new export corridor through the port of Taman. And they're working to get the Togliatti tons out through that. That's a Black Sea port. That we expect to happen probably in Q3. Going from, let's say, 500,000 tons of exports out of the Baltics will probably convert to a couple million tons, 1.5-2 million tons probably over the next year, and probably positioning that product in the Mediterranean, Morocco, and different places. Urea and UAN, a lot of that UAN they produce comes to NOLA and the East Coast as well as Europe. And that's probably on a looking at the statistics for the United States, UAN imports from Russia are up. From Trinidad, they're down. But that balance of UAN is probably okay. And that's about it. I think what we're going to see out of Russia is trying to get those tons out. They've put out some export restrictions, but I think those are manageable, and we'll see what happens going forward. Yeah. I mean, I think to tag along on that one just for a second, it's kind of shocking. I think actually, Yara made mention of this as well in their call. But what's kind of shocking is that there's been all of this focus on not funding the Russian war machine and not buying Russian gas. And yet, the U.S. is arms wide open to take urea and UAN coming out of Russia, which is effectively just natural gas that's been converted. And so it's the U.S. that's funding the very war effort over there that, on the one hand, it condemns. It's absolutely shocking, but I think that's not surprising given the political climate over here and the fact that we're in an election year. You see some of that going on, I'd say, in Europe as well where there's a lot of Russian nitrogen that's finding its way into Europe, and it's just supplanting what used to be gas. Maybe just a quick follow-up on that. Can you talk about Ukraine? I mean, before the invasion, I think in 2014, Ukraine was a major exporter. Where do they stand right now? Are they self-sufficient? Are they a net importer? So it's actually when you take into account the acres that are planted and applied and harvested against probably the previous. Let's go back, maybe not 2014 as far back, but before the war. You've got a loss of acres, obviously, in the contested area especially, which is good agricultural land. But you have several plants that are offline. And OPZ plant in Odessa, they're trying to. I just read they're trying to bring that back up. Although that one was struggling economically even well prior to the war. So that one has always been sort of up and down again. There are gas questions on gas supply, and yes, they have imported product. It's a question of, I think, getting through the current crisis to see where we are coming out of it. Thank you very much. Thank you. The next question comes from Ben Theurer with Barclays. Please go ahead. Hey. Yeah. Good morning, and thanks for taking my question. Just wanted to follow up a little bit on the global dynamics, and thanks for all the comments on Russia. But coming back to China and India to a degree. So in your press release, you kind of alluded to China probably going to be back exporting some four million tons, also India being a little more aggressive on the internal supply, and you've talked about the tender and the implications. So if you think about it, those two markets coupled with what you just said on Russia, how does that kind of level set the pricing? How do you think about pricing going forward in the medium term if cost curves stick where they are right now, just given that potential supply out of China and India on top of the Russian you just mentioned? Well, the good thing is it's a global market. And you have, in a global market today, a lot of production in dispersed countries and also a lot of consumption in dispersed countries. And in a growing population or a growing need to feed the world and the benefits of nitrogen for pollution control, which are growing not only in DEF but in power generation and with clean energy, you have demand. So let's just take urea. Today's urea market is about 55 million tons of globally traded on a vessel out of about 190 million tons of production. And so when you look at China and our number of four million metric tons of possible exports, that's less than 10%. You look at India, and India has been a major player in the importation of urea and the support of the global urea price, but they're falling from imports of 7-9 million tons, and we're projecting 5.5-6.5. So that is being taken out of that global trade. But the countries that are growing, and Brazil is growing significantly, we project them to be eight million tons. Just 15 years ago, that was around three million tons. So the countries that are increasing, Argentina, Australia, Brazil, Ethiopia, South Africa, Turkey, Thailand, those countries have grown this year in their urea consumption. The price of urea today at around $300 is highly attractive for agricultural and production control. The challenge, I think, for India or excuse me, for China going forward is the export controls that are in place. The new controls are such that you have to have prepayment, a shipment date, a destination, a product price, and all that set up in a contract before applying for the CIQ application. Then prepayment has to take place before the cargo moves to port. That's a very difficult transactional structure to have China, I think, even hit the four million tons. I think we're a little vague in our comments because it's a little opaque right now in the market on how it's going to develop. But China, I think, will play in the international market once their spring season is over, and then we'll see how the pricing develops from there. Okay. And then just a quick follow-up on that industrial versus agriculture use, the impact you had in the first quarter, that shift towards the lower profitability on the industrial use just because of fulfilling those contracts. Has that already normalized now that we're early May? So that was really just kind of a one-time, "Should we think about that volume balance to be more normal and not as skewed towards the raw ammonia because of the industrial needs? Yeah. As we talked about, a lot of the issues that occurred in Q1 were discrete to Q1 and that those are passed us both from a production and also a sales perspective. But as you mentioned, we did take 167,000 tons of what would normally have been upgraded to urea, which, as I said in my remarks, would be about 275,000 tons of urea. So you see the urea decrease in sales and the increase we had in ammonia. But when you put that on a nutrient margin basis of what the quarter was for the industrial ammonia versus the ag urea, you're looking at something that was almost about a $30 million margin impact. And that combined with that $75 million of approximate maintenance expense really is what set the quarter back. But again, can't emphasize enough that those are discrete items to Q1. Okay. Perfect. Thank you very much. Thank you. The next question comes from Richard Garchitorena with Wells Fargo. Please go ahead. Great. Thanks for taking my question. I just wanted to ask about Waggaman. You mentioned that the facility had some downtime from weather in January. I was wondering if you can give us an update in terms of how the ramp-up has been since you had closed the acquisition integration of that asset into your facilities. And have you been able to get utilization rates up to sort of typical CF average levels as it was maybe lower than that prior to your ownership? Yeah. You bet. So we had an outage, and we took that opportunity to conduct the turnaround that was kind of scheduled for later in the year. And so we were able to take advantage of that downtime. But prior to that and, in fact, post-turnaround, we're operating at rates that reflect north of what nameplate capacity has been on that or is on that unit. And so that reflects kind of more traditional operating rates for CF across our network. And I'd say the integration has gone remarkably well. The team at Waggaman has worked extremely well with the rest of the CF network. And I think it's that kind of partnership and coordination that has led to some of the improvements we've made in terms of on-stream factor and operating rate at the location. So we couldn't be more happy about the acquisition and, in fact, particularly at the value of it given where new assets look like they're trading and what the cost of new construction is. So we're really pleased with adding Waggaman into the portfolio. Okay. Great. And then just on the press release on the JDA with JERA, just curious in terms of so if capacity ends up being 1.4 million tons, JERA procurement of 500,000 tons, so how should we think about that available 900,000 tons? Given JERA is going to be taking potentially a 48% stake, do they get sort of percentage of that amount as well? Are you looking at as potentially merchant sales, or are you looking to lock that up? I know you had said earlier that you basically have four years from decision to production. So maybe how you think about how much you want to get locked up before you get into that sort of development of that project. Thank you. Yeah. So I think just starting, the encouraging thing is that about 500,000 tons has a home already for it. And as you mentioned, with the next four years, and that provides a lot of opportunity to find basically sales for the remaining amount along with keeping a little bit for merchant. But the one thing with JERA is that 500,000 is just for one particular unit at their coal plant facility. And they have multiple units they're looking at. In addition to that, as you look at what's going on with the JERA test right now, which is a commercial test going on, which is performing to expectations, you could see other areas that JERA has within Asia also converting to a 20% ammonia injection into the coal along with some other additional players that are looking at it that Tony mentioned within Japan as well. So I think we're just on the first few innings of where that demand side goes. But I would say that we're very encouraged that we have a large portion of it already taken. Additionally, as Bert mentioned, you're just seeing more and more activity come along, whether it's through the power gen, the marine, or the sustainable aviation fuel, or even just on the legacy agricultural business where decarbonized product is going to have a home from a supply standpoint. So we're pretty encouraged by what we have and what we're seeing going forward. Thank you. The next question comes from Aron Ceccarelli with Berenberg. Please go ahead. Hello. Good morning. Thanks for taking my question. I wanted to ask you, in the scenario where you go ahead with both the Mitsui plant and the JERA one or, say, a combined one, how should we be thinking about your capital expenditure phasing for the next three to five years? Thank you. Yeah. So I think as Chris mentioned in our last earnings call, the FEED study for an SMR, steam methane reformer, kind of a copy of Ammonia 6 at Donaldsonville, was about $2.5 billion. And then there would be roughly another $500 million for scalable infrastructure that could be leveraged against additional plants on-site. So all in, for the first one, it would be circa $3 billion. Now, that does not include if it was required flue gas capture. And we are still in the middle of a FEED study to evaluate what it would look like to do an autothermal reformer or an ATR. And so more to come in terms of what the cost of a different approach or different technologies are. But if we had both, let's say, JERA and Mitsui and CF kind of all aligned on one particular project, and it was a third, a third, a third, that would be kind of $1 billion per company to do the SMR spent over, call it, four-ish type of years. Now, if it's 50% for us and 50% for somebody else, then that increases to $1.5 billion. It just kind of scales appropriately. But it's in that order of magnitude, and it's spread over 4-5 years of cash outflow. So while it's a meaningful amount of cash compared to the amount of free cash that we're generating, we still have plenty of free cash available to be able to return cash to shareholders in the form of dividend and share repurchases. It's not going to impede us from being able to execute our return of capital program and other incremental growth opportunities that we have. Thank you very much. Thank you. Ladies and gentlemen, that is all the time we have for questions for today. I would like to turn the call back to Martin Jarosick for closing remarks. Thanks, everyone, for joining us today. We look forward to seeing you at upcoming conferences. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.